DENVER, Sept. 20 /PRNewswire/ -- Golden Star Resources Ltd. is pleased to announce that all approvals necessary to close the transaction with Barnato Exploration Limited (``Barnex'') and commence mining at Prestea have been obtained. The approval of the Government of Ghana, Reserve Bank of South Africa and the shareholders of Barnex, all of which have been obtained, were required for the transaction with Barnex, which closed in escrow on September 11, 2001.
Golden Star had previously announced the grant by the Government of Ghana of a mining lease for the surface portion of the Prestea property, granted on June 29, 2001. Subsequently the Company has completed an environmental impact statement and lodged an environmental bond. The necessary permits from the Chief Inspector of Mines and the Ghana Environmental Protection Agency required for the commencement of mining over the northern part of the Prestea concession, which neighbors Golden Star's Bogoso mine and processing plant, were obtained on September 19, 2001.
In readiness for the commencement of mining, Golden Star commenced surveying and grade control drilling on the Prestea property early in September 2001. In addition, a haul road from the Bogoso processing plant to the Bogoso/Prestea concession boundary has been completed. Effective immediately, Golden Star will commence preparations for mining at Prestea and expects the first ore to be available for processing within one month. Ore mined from the Prestea property will be processed at the existing Bogoso processing plant.
Golden Star's President and CEO, Peter Bradford, commented that: ``Prestea delivers a gold resource to Golden Star, which, when combined with the known sulfidic gold resources at Bogoso, we expect will underpin gold production from Bogoso and Prestea through to at least 2011. The commencement of mining at Prestea therefore marks a turning point for Golden Star. Prestea capitalizes on the infrastructure and processing plant acquired through the 1999 acquisition of Bogoso.''
BACKGROUND
The Prestea property lies immediately south of and adjacent to the Bogoso property in Ghana. Golden Star is completing two transactions, one with Barnex and one with Prestea Gold Resources Limited (``PGR''), to remove all prior claims on the property, which thereby allowed the Government of Ghana to grant a new, undisputed, mining lease over the property, which it did on June 29, 2001.
Pursuant to the agreement with Barnex, Golden Star has issued Barnex 3,333,333 common shares at a deemed price of US$0.60 per share and 1,333,333 warrants to subscribe for Golden Star common shares at a price of US$0.70 per share for three years. In addition, Golden Star will pay a royalty to Barnex on the first 1,000,000 ounces of production from Bogoso and Prestea as more fully described in the Company's press release of June 22, 2001. The royalty will vary, according to a gold price formula, from a minimum of US$6.00 per ounce at gold prices less than US$260 per ounce to a maximum of US$16.80 per ounce at gold prices at or above US$340 per ounce.
Under the PGR transaction, Golden Star will pay US$2.1 million in cash to PGR, of which US$0.5 million has already been advanced to PGR. Golden Star will then have the option until 180 days after closing to acquire a 35% interest in the underground operations of PGR by the payment of a further US$1.9 million to PGR. The mining rights below a depth of 200 vertical metres were granted to PGR in a separate mining lease, also granted on June 29, 2001. The PGR transaction is subject to the completion of definitive documentation and the approval of the Ghana Government. The PGR transaction is expected to close in October 2001, once all of the closing conditions, mainly relating to representations by PGR, have been met.
Golden Star holds a 90% equity interest in the Bogoso gold mine in Ghana, a 30% equity interest in the Omai gold mine in Guyana, and a 50% interest in the Gross Rosebel gold project in Suriname. In addition, the Company has other gold and diamond exploration interests in the Guiana Shield in South America and in West Africa. Following the transaction with Barnex, Golden Star has approximately 47 million shares outstanding. The Company is listed on the Toronto Stock Exchange under the symbol ``GSC'' and trades on the OTC Bulletin Board under the symbol ``GSRSF''.
This press release includes statements that are both historical and forward-looking in nature. The forward-looking statements involve risks and uncertainties, including those relating to exploration, the establishment of reserves, the recovery of any reserves, future gold production, future costs of production, future permitting and future operations. Please refer to a discussion of these and other risk factors in Golden Star's Form 10-K and other Securities and Exchange Commission filings.
For further information, please contact: Peter Bradford, President and CEO, +1-303-894-4613, or Allan Marter, Chief Financial Officer, +1-303-894-4631, both of Golden Star Resources Ltd., +1-800-553-8436
