Golden Star Resources owns the Wassa gold mine (above). (Photo: Golden Star Resources)
Chifeng Jilong Gold Mining Co. Ltd. plans to acquire all of the shares of Golden Star Resources Ltd. for a $470 million cash consideration. The offer represents a 24.1% premium over the closing price of the Golden Star shares on the NYSE as of October 29. The transaction will be consummated through Chifeng’s subsidiary, Chijin International (Hong Kong) Ltd. The Golden Star board unanimously approved the transaction and recommended Golden Star shareholders vote in favor of the transaction.
Golden Star owns and operates the Wassa underground mine in the western region of Ghana. Wassa produced 168,000 ounces (oz) of gold in 2020. The mine began as an open-pit operation in 2005 and eventually transitioned to an underground mining operation using sub-level longhole open stoping. Commercial production was achieved at Wassa Underground on January 1, 2017. Ore is processed at a carbon-in-leach plant, which has a processing capacity of 2.7 million metric tons per year (mt/y). It’s currently operating at 70%-80% of its design capacity, as the underground operation does not produce as much ore as the open-pit mine did.
“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,” Chifeng President Lyu Xiaozhao said. “We intend to invest significant financial and human capital into Wassa to realize the mines’ full potential and in doing so expand our operating footprint into…”
Wassa has a measured and indicated resource of 29.3 million mt grading 3.8 g/mt gold, which equates to 3.5 million oz of gold. Development of the large inferred mineral resource, the southern Extension zone. Given the scale of the resource, the company was exploring the potential to increase the mining rate to fill the mill.
Chifeng operates five mining assets, including the world-class Sepon gold mine in Laos. In 2018, Chifeng acquired Sepon before undertaking significant capital expenditures to redevelop the gold processing facility to double its future gold production.
Subject to the various approvals required, the transaction is expected to close in January 2022.
