Boards approve merger of Star, SA

The boards of Golden Star Resources (TSE) and South American Goldfields (TSE) have agreed to a merger.

Pending shareholder and regulatory approval, the two juniors will merge on the basis of one common share of Golden Star for each 3.25 common shares of South American. The shares of the surviving company would then be consolidated on a 2-for-1 basis leaving 12.3 million shares outstanding (15.1 million on a fully diluted basis).

South American recently hit a new 52-week low of 42 cents; Golden Star is trading at about $1.10.

Both companies are exploring for gold and diamonds in Guyana. Golden Star also has a 35% stake in the Omai gold project.