Golden Star Resources (GSL-T) has transferred its production royalty on the Rosebel gold mine in Suriname to its 52.8%-owned subsidiary Guyanor Ressources (GRL.B-T) in return for US$12 million in cash.
Cambior (CBJ-T) owns and operates the open-pit mine, which achieved commercial production in the first quarter and is expected to yield 245,000 oz. gold this year at a cash cost of US$184 per oz.
Guyanor will pay Golden Star US$6 million on closing and another US$6 million six months later. Golden Star will receive further payments if production at Rosebel exceeds the current mine plan of 2 million oz. of attributable gold production. These additional payments could total up to US$20 million if a total of 7 million oz. of attributable gold production is achieved.
The Rosebel royalty will entitle Guyanor to 10% of the amount by which the gold price exceeds $300 per oz., calculated on the gold production from the soft and transitional-rock ore. From any production from hard rock, the royalty is calculated on gold prices above $350 per oz.
After drifting for years, Guyanor had spent most of 2004 in restructuring, and the Rosebel royalty acquisition is now its only significant source of positive cash flow.
“This is the first step along an exciting road for a revitalized Guyanor,” says James Dunnett, Guyanor’s director general.
Guyanor is a French company that trades on the TSX and the Paris Bourse’s Nouveau Marche. It holds a portfolio of gold exploration and development properties in the French Overseas Territory of French Guiana.
It has about 45 million shares outstanding, and recently traded in the mid 20 range.
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