Golden Star Resources, the operator of the Wassa mine in Ghana has realized a slump in gold revenues for Q3 2021 by 13 per cent as total revenue for the quarter was US$64.3 million compared with US$74.2 million in the same period in 2020.
This also reflects a slight decline in gold revenues compared with revenues accumulated in Q2 2021 (US$64.4 million), at an average realized gold price of US$1,676 while total cash available at the end of the quarter was US$50.5 million.
Gold production for Q3 2021 totaled 38.7 thousand ounces from Wassa, at an all-in sustaining cost (AISC) of US$1,299 per ounce. Total production for the nine months of the year was 116.8 thousand ounces at an all-in cost of US$1,193 per ounce. Also, the company indicated that it is on track to deliver on its recently revised guidance of 145,000-155,000 ounces for 2021.
The repayment of the US$51.5 million convertible debenture resulted in a reduction of the company’s cash position by $22.3 million in Q3 2021 to US$50.5 million with net debt of US$32.0 million in line with the previous quarter.
Andrew Wray, Chief Executive Officer of Golden Star, commented:
“The cash settlement of the US$51.5 million convertible debentures in August 2021 was a key milestone for the Company as it represented the final step in a two-year process to restructure the balance sheet which was aimed at removing short dated facilities and reducing the cost of capital.
“We now have a clean balance sheet with the US$90 million Macquarie Revolving Credit Facility as our only debt product and a cash position of US$50.5 million for a conservative overall level of net debt.”
Andrew Wray, Chief Executive Officer, Golden Star
Sale of Golden Star Resources to Chifeng Jilong
Additionally, the company has announced a takeover by Chifeng Jilong Gold Mining Company Limited in an all-cash offer valued at US$470 million. The transaction is however subject to the approval of 66⅔ per cent of the votes cast by Golden Star Shareholders at the special meeting of shareholders which is expected to be held prior to the end of the year.
Among the highlights of the transaction, existing employment agreements and the terms and conditions of employment of all Golden Star employees will be respected by Chifeng Jilong.
Within six months of the closing of the transaction, Chifeng intends to complete a restructuring and has committed to make all severance payments due to such employees as part of such restructuring. Similarly, the current community engagement and corporate social responsibility (CSR) programmes around Wassa will continue to be a key focus for Chifeng.
It would be recalled that earlier this year, Chifeng Jilong in a similar transaction to purchase Resolute Mining’s Bibiani gold mine canceled the agreement half-way through, noting that it did not receive timely information from Resolute Mining about a termination of its mining lease. An action which the Minister for Lands and Natural Resources, Hon. Samuel Abu Jinapor sanctioned, indicating that it was warranted since the Ministry was not in the known of the transaction.
Thus, this transaction between Chifeng Jilong and Golden Star Resources appears to have met the necessary requirements of the Ministry, thereby reaching this far.
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