Led by brokers Canaccord Capital and BMO Nesbitt Burns, the private placement consisted of 17 million units priced at C$3 apiece. A unit comprises one share and half a warrant. A whole warrant entitles the holder to buy another share for $4.60 for 48 months.
The warrants will be listed on the Toronto Stock Exchange under the ticker symbol gsc.wt.a.
Proceeds are earmarked for exploration, acquisitions and development work.
Golden Star now has 105 million shares outstanding, for a market capitalization of C$278 million.
Based in Littleton, Colo., the company has three major assets in Ghana: a 90% interest in the Bogoso-Prestea open-pit gold mine; a 54% managing interest in the Prestea underground mine; and a 90% stake in the former Wassa heap-leach mine.
A lower-than-expected profit is expected for 2002, though annual results will not be posted until late March.
Production in the fourth quarter was hampered by delays in obtaining environmental permits to mine at the high-grade Plant-North deposit, part of Bogoso-Prestea.
Golden Star produced 12,240 oz. gold in October 2002, 8,493 oz. in November 2002, 13,921 oz. in December 2002, and 17,680 oz. in January 2003.
In the fourth quarter, it produced and sold 34,654 oz. gold at a cash operating cost of US$221 per oz., bringing the total production for 2002 to 124,399 oz. gold at a cost of US$193 per oz.
For 2003, Golden Star predicts it can boost its output to 140,000 oz. at a cash operating cost of US$185 per oz., all of which will be sourced from the open pits at Plant-North.
At Wassa, the company expects to complete a feasibility study by mid-2003, so production could possibly resume there in the third quarter. With a capital injection of some $14 million, the mine has the potential to produce 120,000 oz. per year.
Two second-hand grinding mills have been acquired for Wassa.
In 2003, Golden Star intends to spend $11 million on exploration work in Ghana.
The company also has exploration properties in South America’s Guiana shield, through 73%-owned subsidiary Guyanor Ressources.
Be the first to comment on "Golden Star closes $51m financing (February 24, 2003)"