Golden Star Resources take over: employees assured of payment of severance package

The Chief Executive Officer of Golden Star Resources (GSR), Andrew Wray, has assured that enough measures have been put in place to ensure that the current employees of the mining firm are properly catered for as plans are advanced for a takeover by a Chinese mining firm, Chifeng Jilong Gold Mining.

He said the payment of severance package to the current employees had been captured in the takeover agreement between the two companies adding that those whose expertise Chifeng would rely on, would be offered new contracts.

Golden Star Resources on Monday announced that China’s Chifeng Jilong Gold Mining has agreed to purchase all of the company’s shares for a total of $470 million in cash.

The Transaction according to a statement issued by Golden Star Resources would be consummated through Chifeng’s majority-controlled subsidiary, Chijin International (Hong Kong) Limited.

According to the statement, shareholders of GSR under the transaction would receive total consideration, payable in cash of $3.91 per Golden Star Share.

“One of the clear messages that I have received from employees from Wassa over time has been that the two different contract structures caused friction. There is a lot of benefit of having a single structure going forward… This is something that 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,” he said during a virtual media encounter on Tuesday.

Mr Wray explained that the sale of the mine to the new investor would ensure that the mine is developed to realize its full potential which would be of a great benefit to the host community.

The sale,he said, was mutually beneficial for shareholders, as well as the community in which its sole mine is situated – Wassa, and consequently the wider Ghanaian economy.

“The new investor is having more cash on its balance sheet than the value of Golden Star and it will lead to a rapid expansion of operations at the mine, which Golden Star would have been unable to match due to resource constraints,” he said.

He said the premium paid on the $470 million deal is a testament to the growth prospects of the Wassa mine.

“From a company perspective, our strategy has always, very publicly been, that 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 that can help fund the growth of Wassa and they have access to capital far beyond what Golden Stars can and it points to the growth potential of Wassa,” he explained.

The Chief Operating Officer, Graham Crew, said employees and other stakeholders excited about the takeover.


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