Sale of our business is mutually beneficial to all stakeholders – Golden Star CEO

Sale of our business is mutually beneficial to all stakeholders

The Chief Executive Officer of Golden Star Resources, Andrew Wray, has said that the company’s sale to a Chinese mining firm, Chifeng Jilong Gold Mining Co. Ltd., will prove mutually beneficial for shareholders as well as the community in which its sole mine is situated – Wassa – and consequently the wider Ghanaian economy.

According to him, the takeover by Chifeng Jilong, which he described as “having more cash on its balance sheet than the value of Golden Star”, will lead to a rapid expansion of operations at the mine; which he said Golden Star would have been unable to match due to resource constraints.

He made this known during a media engagement following announcement of the deal, wherein he said that the premium paid on the US$470million deal is a testament to the growth prospects at the Wassa mine. “From a company perspective, our strategy has always, very publicly, been we believe Wassa should be part of a bigger business to have that level of diversification of risk,” he said.

“On this occasion, they are paying a premium beyond the market price – and that creates an opportunity for our shareholders. Fundamentally, that scale in mining, as with many other businesses, is very important. This now puts Wassa into a bigger business and they have other assets which can help fund the growth of Wassa; and they have access to capital far beyond what Golden Stars can access, and this points to the growth potential of Wassa,” he explained.

Mr. Wray added that barring any unforeseen turn in events, the deal should be completed in an estimated two to three months following majority shareholder and regulatory approval in Toronto, New York, Shanghai and Accra, with a shareholder meeting projected to take place on December 22.

Touching on structure of the deal, he said 37% of the sum is being put up by a fund “within one of the major Chinese banks”; and stated that the financing structure should make the regulatory approval processes move quicker on the Chinese side.

Employee welfare

The mining firm’s CEO stated that adequate measures have been put in place to ensure current employees are properly catered for. He noted that severance packages will be paid out to employees, and those in the country – whose expertise Chifeng will rely on – will have new contracts renegotiated to avoid a repeat of employees being on substantially varying degrees of contracts.

“One of the clear messages I have received from employees at Wassa over time has been that the two different contract structures caused friction. There is a lot of benefit in having a single structure going forward… This is something employees asked to be done, but was a pretty significant investment that Golden Star was not in a position to do – and the transaction now creates an opportunity for that.”

On his part, Chief Operating Officer, Graham Crew, speaking from Wassa said that employees and other stakeholders have been sensitised on need and benefits of the impending deal, and stated that community-based initiatives undertaken by Golden Star will continue for the duration of their intended lifecycles.


Golden Star, on Monday, posted revenue of US$64.3million for third-quarter of the year, with corresponding capital expenditure totalling US$13.3million. This comes as production for the period totalled 38.7 thousand ounces from Wassa at an All-In Sustaining Cost (AISC) of US$1,299 per ounce, with the company adding that it is on track to deliver on the upper-end of the revised production guidance of 145-155koz for 2021.

“Paste fill test work continued during the quarter with the completion of filling a second test stope. Test results for the 28-day curing period show improved strength compared to the first test stope, and these meet the design criteria. A full restart of the filling operations is subject to strength results after the 56-day curing period, which is due in Q4 2021,” a statement detailing the results read.

News of the takeover deal appears to have had no material impact on the firm’s shares on the Ghana Stock Exchange, as its price remained unmoved at GH¢9.50. Ironically, the share price of Chifeng Jilong was down 1.82% at ¥16.73 on the Shanghai Stock Exchange; and Golden Star was trading at 0.81% lower on the Nasdaq as at the time of going to press.

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