Partners
The companies will make an initial combined payment of US$6.5 million, with additional payments to follow. The payments will total no more than US$10 million. Cash flow from the operation is expected to finance the payments.
The deal was modified from the original agreement, which stipulated a purchase price of US$12 million.
Golden Star will receive 100% of the cashflow until it recoups its acquisition costs, including interest. Golden Star and Anvil will then receive 78% and 22% of the cash flow, respectively. After that, Golden Star will receive 70% of mine production; Anvil, 20%; and the government of Ghana, 10%.
The mine is expected to produce 120,000 oz. gold next year at a cash operating cost of less than US$200 per oz. The mine contains proven and probable reserve of 186,900 oz. gold in 1.9 million tonnes of oxide and transitional ore grading 2.6 grams per tonne. The mine has another 3.6 million tonnes of mineralized material averaging 2.6 grams, equivalent to an additional 300,000 oz.
The property’s potential lies in the underlying sulphide material. Previous work outlined a sulphide resource exceeding 10 million tonnes averaging 3.3 grams per tonne.
The partners have already begun exploring for more oxide targets and plan to spend US$2 million on a prefeasibility study. Golden Star and Anvil are evaluating the possibility of processing this material using bio-oxidation. Capital costs for the project could run as high as US$20 million.
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