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

Global Gold Mining

01/11/2021 13:49

* Purchase price of $3.91/share is 24.1% premium to Friday's
close
    * Golden Star owns 90% of Wassa gold mine in southwest Ghana
    * Chifeng had previously sought to buy Ghana's Bibiani mine

 (Adds bullet points, detail on mining lease expiry)
    Nov 1 (Reuters) - China's Chifeng Jilong Gold Mining
 600988.SS , known as Chifeng Gold, on Monday said it and an
unnamed co-buyer would purchase all of Ghana-focused miner
Golden Star Resources  GSC.TO  for a total $470 million in cash.
    The move is 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 its Chijin International unit has agreed to buy
62% of Golden Star at $3.91 per share, equating to about $291
million. An 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,
Golden Star's website shows.
    The 30-year Wassa mining lease expires in September 2022 but
Chifeng said the government had confirmed it will approve an
extension if an application for one is made.
    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," 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;))