- …gives Chinese-based firm control over Wassa mines
Golden Star Resources (GSR) has entered into a definitive agreement worth US$470 million with Chifeng Jilong, which will see the Chinese-owned firm acquire all its issued and outstanding shares.
Shareholders of the embattled mining firm will receive total consideration, payable in cash, of a 24% premium over the closing price of GSR shares on the New York Stock Exchange (NYSE) as of October 29, according to a statement announcing the deal.
“The Consideration represents a 24.1% premium over the closing price of the Golden Star Shares on the NYSE American as of October 29, 2021, a 37.2% premium based on the volume-weighted average price of the Golden Star Shares on the NYSE American over the 20 trading days ending October 29, 2021, and a 51.5% premium based on the volume-weighted average price of the Golden Star Shares on the NYSE American over the 60 trading days ending October 29, 2021,” the statement reads in part.
The acquisition will put Chifeng Jilong firmly in charge of GSR’s operation of the Wassa underground mine, with Chief Executive, Andrew Wray saying, “This offer, and the healthy premium being paid relative to recent trading levels, reflect the progress made in defining the future growth profile at Wassa as well as the repositioning of Golden Star with a streamlined corporate and financial structure.
We believe that the transaction will benefit all of our stakeholders, with shareholders receiving an attractive premium in return for the future growth potential, and with Wassa forming part of Chifeng’s larger portfolio of gold mines there will be a larger capital base to help deliver that growth.
Chifeng has a proven track record as a responsible operator and is well-positioned to build on the platform and reputation we have worked hard to establish. We look forward to working with Chifeng over the coming weeks to close this transaction and transition to the new team,” he added.
Board of Directors of GSR unanimously approved the transaction and has, in a similar fashion, recommended that shareholders of the mining firm vote in favour of the transaction.
Commenting on the deal, and with particular emphasis on the Wassa mines, President of Chifeng, Lyu Xiaozhao expressed excitement about the mine’s prospects.
“We are delighted to acquire Golden Star and its Wassa gold mine in Ghana which hosts a very significant gold resource endowment. Our team is very enthusiastic about working at Wassa and we are very confident in our ability to build on the solid foundations that Golden Star has established.
We intend to invest significant financial and human capital into Wassa to realize the mines’ full potential and in doing so expand our operating footprint into West Africa. Chifeng has an established track record as a safe and sustainable operator and is focused on creating value that will provide long-term benefits to all of our stakeholders including the people of Ghana,” he explained.
GSR, in its interim report for the year, indicated that it had invested $12 million into the Wassa mine for in-fill drilling and development, ahead of planned future production expansion.
