12
Business News Mon, 9 Nov 2020

Golden Star employees agitated over plan to include them as 'capital assets' in sale of company

Employees of Golden Star Resources (GSR), a mining company operating two gold mines in Ghana, have raised concerns over plans to include them as capital assets in a transfer of company ownership deal.

The workers also say GSR is relinquishing the cost to revamp its Bogoso Prestea mine and the environmental rehabilitation liabilities of about $53 million to a non-listed private mining company.

Golden Star Resources sold one of its subsidiaries in a deal that has been criticised by the employees as putting profits over people by trading both the employees and other assets with a buyer and with no regard for the future survival of the mine.

In a petition sighted by GhanaWeb, they have criticised the new owners, Future Global Resources (FGR), of denying them status as permanent employees of the company.

"We as workers are not part of the capital assets on the balance sheet transferred to you as a buyer in the recent acquisition of the mine. For us to be a part of your acquisition, the place would have to be Bristol or Liverpool, England and the time would have to be in the 18th century. This is sovereign Ghana in the 21st century and that shall not be the case," the employees said in the petition.

They say they have been denied their legitimate severance entitlement and the opportunity for legal engagement with the buyer, contrary to the employment contract agreement between permanent employees and GSR.

The employees are calling on Government of Ghana act swiftly in the business decision of GSR, the precedence risk the sale presents to the Ghanaian employees and the risk to the micro economy of Prestea Huni-Valley Municipality.

Following the initial sale announcement on July 27, 2020, employees highlighted, with grave concern, that the buyer does not have any credentials in the mining industry unlike the likes of Newmont, Anglogold Ashanti, Goldfield and Barrick to run a mine with the largest concession in Ghana.

According to the employees, the three critical issues that arise from the sale are: the risk of losing the mine in the hands of an inexperienced and non-listed mining company reverting $53million rehabilitation liability to government, an attempt by Golden Star Resources to violate employment agreements with employees and a precedence of selling or trading Ghanaian workforce between foreign investors.

Employees and community request to government

Employees and the entire communities of Bogoso Prestea and its catchment are calling on the government and Parliament to act swiftly to save the mine and the communities and secure the entitlement of employees by doing proper post-sale due diligence of the sale and its content, and to ensure that GSR does the needful required by law.

About GSR and its Intent for the sale

GSR acquired Bogoso Prestea Mine in 1999 when employees had been properly severed by the then Bogoso Gold Limited. All employees were issued with letters of disengagement with contractual severance agreement package and were offered new appointment letters to sign as an indication of their consent of new employment with the buyer (GSR).

In 2002, the Bogoso Mine made good profit, purchased the Satellite Gold Mine at Wassa Akyempim which was renamed as Wexford and later named as Golden Star Wassa Limited. GSR then operated these two major mines (Wassa Mine and Bogoso Mine) in Ghana. The two mines operated concurrently with support to each other in the area of finance and labour.

During the third quarter of 2018, Lamancha investment group bought majority shares (30%) and became the major shareholder for GSR at a time when Bgogoso Prestea mine was struggling to get a positive cash flow while its sister Wassa Mine was making good profit and supporting the Bogoso Prestea Operations.

On record, Bogoso Prestea mine had supported the Wassa Mine between 2014-2016 when the mine was in negative cash flow until 2018 when the Wassa production experienced positive cash flow. Lamancha’s business model from their website publications emphasises on short term organic growth for their acquired mining firms and they were poised to achieve that.

In 2019, Lamancha appointed the then CEO of Lamancha as the CEO of GSR. On assuming office as the CEO of GSR, Mr Andrew Wray culled the old GSR executive team and replaced them with a new team predominantly from the Lamancha group. About 70% of all investment announcements made after the third quarter of 2018 by GSR was used to develop the Wassa mine.

Six months after assuming office, Mr Andrew Wray, the CEO indicated that the Bogoso Prestea mine is on a negative cash flow and hence impacting on the entire GSR business cash flow, meanwhile, the same CEO directed most capital investments to the Wassa Mine.

On 27th July 2020, the CEO announced the pre-acquisition preconceived ultimate plan of the sale of Bogoso Prestea Mine and to no other mining firm but a newly formed 8-month old mining company with no mining experience anywhere in the world.

This new mining firm Future Global Resources is a private firm, non-listed on any stock exchange and has no traceable and credible website. This is the firm the largest mining concession in Ghana was sold to by Golden Star Resources and at the detriment of the workforce and the mining community.
Source: www.ghanaweb.com