Golden Star granted licence

Denver — Ghana’s Ministry of Lands, Forests and Mines has granted a mining lease to Golden Star Resources (GSC-T) for the Prestea property.

The Denver-based junior has the right to mine surface mineralization to a depth of 200 metres for the next 30 years. The material will provide additional oxide feed for the mill at the Bogoso gold mine, 12 km away.

Before taking possession of the property, Golden Star must complete separate agreements with South African-based Barnato Exploration (Barnex), which previously operated the mine, and Prestea Gold Resources, a worker-owned company.

Western Areas, which controls 89% of Barnex, says it intends to vote in favor of the transaction, which calls for Golden Star to issue 3.3 million shares and 1.3 million warrants in return for the property. The warrants are exercisable at US70 per share over three years.

In addition, Golden Star will pay a sliding-scale royalty to Barnex on the first million ounces produced. The royalty ranges from US$6 per oz. at gold prices less than US$260 per oz., to US$16.80 per oz. at prices above US$340.

Golden Star plans to pay Prestea Gold US$2.1 million, US$500,000 of which has already been advanced. The former also has the option to acquire a 35% stake in the underground operation for US$1.9 million. The option is good for 180 days after the closing of the surface agreement.

Prestea Gold was granted the right to mineralization below 200 metres at the same time that Golden Star received its mining lease.

Golden Star controls a 70% interest in Bogoso, though shareholders have already approved a proposal to acquire an additional 20% interest in the mine, currently held by Australia’s Anvil Mining. This transaction, which would give Golden Star a 90% stake in Bogoso, has yet to be approved by the government of Ghana and by the Toronto Stock Exchange. The government holds the remaining 10% of Bogoso.