Golden Star puts toe in Ivoire (April 18, 2005)

West African gold producer Golden Star Resources (GSC-T) has inked an agreement with the state mining enterprise in Ivory Coast to acquire a 90% interest in the past-producing Afema property.

Eden Roc Mineral operated Afema between 1993 and 1998, during which time it produced 125,000 oz. gold. The property lies on the extension of a Birimian volcano-sedimentary belt, which hosts the Chriano and Bibiani gold deposits across the border in Ghana.

The agreement gives Golden Star six months in which to investigate the deposit; the company can then elect to buy out the state agency, Socit d’tat pour le Developpement Minire (Sodemi), for US$1.5 million. The government would retain a direct 10% interest and Golden Star would have 90%.

Sodemi would keep a price-indexed royalty on any production, with a base value of 2.5% when gold prices are between US$375 and US$450 per oz.

Golden Star plans to spend US$500,000 on exploration before the option period expires and US$3.5 million over the following three and a half years if the company picks up the option.