Wassa gold mine in Ghana to come under Chinese ownership following $470 million sale

Chifeng Jilong Gold Mining has agreed to acquire Ghana-focused gold miner Golden Star Resources via a statutory plan of arrangement for US$470 million.

The deal, which is to be executed by a majority-controlled unit of China’s Chifeng, will see Golden Star shareholders receive $3.91 for each share held.

Chifeng president Lyu Xiaozhao said that Golden Star’s Wassa gold mine in Ghana hosts a very significant gold resource endowment.

TSX-listed Golden Star owns and operates the underground Wassa mine in the Western Region of Ghana with a 90% stake. The remaining interest is held by the Ghanaian Government.

“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,” Xiaozhao said.

Meanwhile, 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.”

@ABNetworkOnline