Golden Star Resources Ltd has sold 90% of its interest in the Bogoso-Prestea Gold Mine to Future Global Resources (FGR) Limited.
FGR will pay $55 million upfront with a further contingent component of up to $40 million staggered payments.
This is to ensure that FGR focuses investment capacity on the asset itself while providing Golden Star with exposure to its long-term growth potential.
The total transaction could rise up to $95 million and is expected to be completed no later than September 30, 2020.
FGR will assume Bogoso-Prestea’s assets and liabilities with Blue International Holdings Limited, the major shareholder of FGR, acting as guarantor for the payments.
Operations are planned to continue at the Prestea underground operation.
Golden Star acquired the Bogoso concessions and its associated infrastructure in 1999. Three years later, it bought the Prestea concession from the joint venture between the Government of Ghana and the Ghana National Mineworkers Union. Prestea had been in intermittent production since the 1890s, producing over 9 million ounces of gold from underground mining techniques.
FGR intends to review the entire Bogoso-Prestea project portfolio, which includes the significant refractory sulfide resource, and an extensive tenement package with exploration potential.
The sale strengthens Golden Star’s balance sheet and allows the company to accelerate the growth and development of the large resource base at the Wassa mine, and increase exploration activities in the wider Wassa-HBB project area.
President and Chief Executive Officer of Golden Star, Andrew Wray, noted that the sale brings fresh focus and investment capacity to the asset while enabling them to concentrate their financial and technical resources on accelerating the delivery of value from its Wassa mine, as it continues to develop into a large-scale, long-life and cash generative underground mine.
For his part, Chief Executive Officer of Future Global Resources,Glenn Baldwin, said his firm was delighted to acquire the Bogoso-Prestea Gold Mine as their first production asset.
FGR looks forward to engaging with the workforce, communities, and the government of Ghana to develop constructive and sustainable partnerships.
“We have confidence in the potential for additional discoveries and extensions to the underground mineral resources, through which we hope to generate real value by investing in the workforce and our relationships with local stakeholders,” he noted.
Future Global Resources (FGR) was established by in 2020 to build a globally diversified mining company that invests in, develops, and operates long-life mineral resources, to stimulate economic development.
Its initial focus is on Africa, leveraging the credentials of the board, executive and shareholders on that continent.
FGR says it is committed to the principles of community and environmental sustainability.
Its principal shareholder is Blue International Holdings Limited, a UK-based private investment holding company and the largest investor in Joule Africa Limited, a developer, owner and operator of sustainable power projects in sub-Saharan Africa.