Chifeng Gold and unnamed partner to buy Golden Star for $470 mln

Global Gold Mining

01/11/2021 13:08

Nov 1 (Reuters) - China's Chifeng Jilong Gold Mining
 600988.SS , also known as Chifeng Gold, on Monday said it and
an unnamed co-buyer had agreed to purchase all of Ghana-focused
miner Golden Star Resources  GSC.TO  for a total $470 million in
cash.
    The agreement marks Chifeng's second attempt to gain a
foothold in the West African country after walking away in April
from a deal to buy Resolute Mining's  RSG.AX  Bibiani gold mine,
saying it had not received timely information about the
termination of the mining lease.  urn:newsml:reuters.com:*:nL1N2MC0PL
    Chifeng said on Monday that its Chijin International unit
would buy 62% of Golden Star at $3.91 per share, equating to
about $291 million. The unnamed third party will contribute a
further $179 million and take a 38% stake, it added.
    Golden Star owns 90% of the Wassa gold mine in southwest
Ghana, with the remainder owned by the Ghanaian government. The
mine produced 168,000 ounces, or 4.76 tonnes, of gold in 2020
and has proved and probable reserves of 1.09 million ounces,
Golden Star's website shows.
    In its own statement, Golden Star cited CEO Andrew Wray as
saying the deal would provide a larger capital base to help to
deliver growth at Wassa.
    The company also said the agreed price represented a 24.1%
premium over its closing share price on the New York Stock
Exchange  GSS.N  on Friday.   
    "We intend to invest significant financial and human capital
into Wassa to realise the mine's full potential, and in doing so
expand our operating footprint into West Africa," Chifeng
President Lu Xiaozhao was quoted as saying in the statement.
    Outside China, Chifeng already operates the Sepon gold and
copper mine in Laos and in September agreed to invest A$2
million ($1.5 million) in Australia's Metalstech  MTC.AX .
 urn:newsml:reuters.com:*:nFWN2QG0QW
    The Golden Star transaction is expected to close in January
2022, both companies said.   
($1 = 1.3307 Australian dollars)
    

 (Reporting by Tom Daly
Editing by Helen Reid and David Goodman
)
 ((tom.daly@thomsonreuters.com; +86 10 5669 2119;))