Reaching beyond its major asset base in Ghana, Denver-based producer
The first joint-venture agreement allows Golden Star to earn a 51% interest in the Sierra Leone gold properties of London-based
The properties, named Pampana, Sonfon and Nimini, comprise six licences totalling 500 sq. km in the central portion of the West African country.
Golden Star may boost its stake to 65% by funding a feasibility study, and to 85% by funding commercial mine development. At that time, Mano River would have a 15% participating interest plus a 2% net smelter return royalty.
The deal is expected to close in January 2004, with exploration set to follow.
The most advanced of the three properties is Pampana, 150 km east of the capital, Freetown. Geologically, Pampana is characterized by crustal-scale gold-mineralized shear zones found in the southern end of the Sula Mountains greenstone gold belt. The property includes the Yirisen gold project, a 3.8-km-long, 200-metre-wide, north-east-trending gold system that remains open along strike.
Golden Star’s second joint-venture agreement is with privately held Geo Services International at the latter’s 250-sq.-km Mininko property in southeastern Mali. The property is 250 km southeast of Bamako in the Morila-Syama corridor, within the Southeast Mali Birimian belt.
There, Golden Star may earn a 51% interest by spending up to US$2.6 million, and an 82.5% interest, subject to certain conditions, by funding project development.
Work at Mininko in 1980 by the United Nations outlined a 1,000-by-600-metre gold-in-soil anomaly. This was later confirmed by additional work carried out by the UN, BHP Billiton, and Newmont Mining.
Further exploration of the property is expected to begin soon.
In Ghana, Golden Star has its 90%-owned Bogoso-Prestea open-pit mine, which is slated to produce at least 160,000 oz. this year at a cash operating cost of US$175 per oz., as well as 90% of the revived Wassa gold project, where the company is putting the finishing touches on a new mine and carbon-in-leach mill.
Golden Star recently bought back a gold-indexed royalty worth about US$16.80 per oz. from South African-based Barnato Exploration in return for 2.75 million Golden Star shares valued at around US$12 million.
Golden Star now has 109 million shares outstanding, for a market capitalization of $1 billion.
Mano River, for its part, also has diamond assets in Sierra Leone and Liberia, and further gold assets in Liberia, Guinea and Tanzania.
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