Chinese gold firm, Chifeng Jilong Gold, has agreed to acquire majority stake in Ghanaian focused gold mining company Golden Star Resources (GSR).
The acquisition by Chifeng Jilong Gold, according to a statement issued by Golden Star Resources in Accra yesterday involved an all-cash offer of $470 million for GSR.
“Golden Star Resources and Chifeng Jilong Gold Mining are pleased to announce that they have entered into a definitive agreement pursuant to which Chifeng has agreed to acquire all of the issued and outstanding common shares of Golden Star by way of a statutory plan of arrangement under the Canada Business Corporations Act,” the statement said.
According to the statement, shareholders of GSR pursuant to the transaction would receive total consideration, payable in cash of $3.91 per Golden Star Share which equates to approximately $470 million on a fully-diluted, in-the-money basis.
“The consideration represents a 24.1 per cent premium over the closing price of the Golden Star Shares on the New York Stock Exchange (NYSE) as at October 29, 2021, a 37.2 per cent premium based on the volume-weighted average price of the Golden Star Shares on the NYSE over the 20 trading days ending October 29, 2021 and a 51.5 per cent premium based on the volume-weighted average price of the Golden Star Shares on the NYSE over the 60 trading days ending October 29, 2021,” the statement.
The sale of GSR to Chifeng Jilong Gold, the statement said had been unanimously approved by the Board of Directors of Golden Star adding that it was important that Golden Star shareholders unanimously vote in favour of the acquisition of the company.
“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,” the statement said.
“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,” Andrew Wray, CEO of GSR said.
“We would like to thank the Board of Directors, and management team of Golden Star for supporting Chifeng with this important transaction. 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,” he said.
“We intend to invest significant financial and human capital into Wassa to realise 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,” Lyu Xiaozhao, President of Chifeng Jilong Gold said.
BY TIMES REPORTER
