Golden Star is the owner and operator of the Wassa underground mine in the Western region of Ghana, West Africa
Chifeng Jilong Gold has agreed to acquire Golden Star. (Credit: Steve Bidmead from Pixabay)
Chifeng Jilong Gold Mining has agreed to acquire gold mining company Golden Star Resources in a deal valued at around $470m.
Through its majority-controlled subsidiary Chijin International (Hong Kong), Chifeng Jilong will complete the acquisition of Golden Star.
Golden Star is the owner and operator of the Wassa underground mine in the Western region of Ghana, West Africa.
The company started production from the surface operation at Wassa in 2005, while Wassa Underground entered into commercial production in January 2017.
Golden Star holds a 90% stake in the mine, while the remaining stake of 10% is owned by the Government of Ghana.
The transaction is expected to place Wassa into a larger platform with the financial capability to speed up investment in growth.
Golden Star CEO Andrew Wray said: “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.”
Chifeng intends to fund the acquisition through current cash balance and committed debt facilities. The transaction is expected to be completed in January next year.
Canaccord Genuity acted as exclusive financial advisor to Golden Star, while Fasken Martineau DuMoulin and Davis Graham & Stubbs served as Canadian and the US legal advisors, respectively.
Chifeng operates five mining assets, including the Sepon gold mine in Laos. The company purchased Sepon in 2018, before spending significant capital to redevelop the gold processing facility to double its future gold production.