DENVER, October 16 /CNW/ - Golden Star Resources Ltd. (AMEX: GSS)(TSX:GSC)
today announced that it has entered into an option agreement with Riverstone
Resources Inc. ("Riverstone") whereby Riverstone will have the right to
acquire Golden Star's 90% interest in the Goulagou and Rounga properties in
To exercise the option, Riverstone is required to spend Cdn $4 million on
exploration programs on the Goulagou and Rounga properties over the next four
years, and may then purchase Golden Star's interest for $18.6 million in cash
or Riverstone common shares. In addition, Golden Star will receive up to two
million shares of Riverstone over the term of the option and will receive two
million common share purchase warrants of Riverstone at exercise prices of Cdn
$0.30 to Cdn $0.45. Golden Star would retain a production-related net smelter
return royalty of up to 2%.
Golden Star acquired the Goulagou and Rounga property interests through
the December 2005 merger with St. Jude Resources Limited. A local partner owns
a 10% participating interest. Upon the granting of a mining permit, the
Government of Burkina Faso will receive a statutory 10% carried interest.
Peter Bradford, President and CEO of Golden Star said, "We are pleased to
be partnering with Riverstone, who have properties near Goulagou and Rounga,
and are therefore well placed to progress the exploration of the enlarged
ground position. The transaction follows on the recent agreement with AMI
Resources Inc. whereby AMI have acquired a right to our 54% interest in the
Obuom property in Ghana in exchange for 2.85 million shares of AMI, a 2% NSR
royalty and an option to participate in all future financings of AMI."
Bradford continued, "While we continue to believe that Obuom, Goulagou
and Rounga are properties of merit, this rationalization of our exploration
portfolio is intended to allow Golden Star to focus its exploration
expenditures and management on projects that will have a more immediate impact
on Golden Star."
Golden Star holds a 90% equity interest in Golden Star (Bogoso/Prestea)
Limited and Golden Star (Wassa) Limited, which respectively own the
Bogoso/Prestea and Wassa open-pit gold mines in Ghana. In addition, Golden
Star has an 81% interest in the currently inactive Prestea Underground mine in
Ghana, as well as gold exploration interests elsewhere in Ghana, in other
parts of West Africa and in the Guiana Shield of South America. Golden Star
has approximately 233 million shares outstanding.
Statements Regarding Forward-Looking Information: Some statements
contained in this news release are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Investors are
cautioned that forward-looking statements are inherently uncertain and involve
risks and uncertainties that could cause actual results to differ materially.
Such statements include comments regarding planned exploration activities and
expenditures. Factors that could cause actual results to differ materially
include timing of and unexpected events during exploration; unfavorable
results of exploration; an election by Riverstone not to proceed with or to
delay exploration or development; technical or permitting issues; and
decreases in the gold price. There can be no assurance that future
developments affecting the Company will be those anticipated by management.
Please refer to the discussion of these and other factors in our Form 10-K for
For further information:
For further information: Golden Star Resources Ltd. +1-800-553-8436
Bruce Higson-Smith, +1-800-553-8436 Vice President, Corporate Development Anne
Hite, +1-800-553-8436 Investor Relations Manager