Chifeng Gold and unnamed partner to buy Golden Star for $470m

China’s Chifeng Jilong Gold Mining, known as Chifeng Gold, on Monday said it and an unnamed co-buyer would purchase all of the Ghana-focused miner Golden Star Resources for a total $470-million in cash.

The move is Chifeng’s second attempt to gain a foothold in the West African country after walking away in April from a deal to buy Resolute Mining’s Bibiani gold mine, saying it had not received timely information about the termination of the mining lease.

Chifeng said its Chijin International unit has agreed to buy 62% of Golden Star at $3.91 a share, equating to about $291-million. An unnamed third party will contribute a further $179-million and take a 38% stake, it added.

Golden Star owns 90% of the Wassa gold mine in southwest Ghana, with the remainder owned by the Ghanaian government. The mine produced 168 000 oz, or 4.76 t, of gold in 2020, Golden Star’s website shows.

The 30-year Wassa mining lease expires in September 2022 but Chifeng said the government had confirmed it will approve an extension if an application for one is made.

In its own statement, Golden Star cited CEO Andrew Wrayas saying the deal would provide a larger capital base to help to deliver growth at Wassa.

The company also said the agreed price represented a 24.1% premium over its closing share price on the New York Stock Exchange on Friday.

“We intend to invest significant financial and human capital into Wassa to realise the mine’s full potential,” Chifeng President Lu Xiaozhaowas quoted as saying in the statement.

Outside China, Chifeng already operates the Sepon gold and copper mine in Laos and in September agreed to invest A$2-million ($1.5-million) in Australia’s Metalstech.

The Golden Star transaction is expected to close in January 2022, both companies said.

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