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La Mancha trades US$125.7m for 30% of Golden Star Resources

The Golden Star Resources Limited has entered into a strategic relationship with Luxembourg-based gold investment firm, La Mancha  Holdings, that will see the latter invest US$125.7 million into the mining giant in exchange for 30 per cent shares.

The board of directors of the Golden Star Resources has approved the transaction, paving the way for shareholders’ approval at a yet-to-be announced Extraordinary General Meeting (EGM).

The investment is the first of its kind in the firm which has two operations in the country – the Wassa Underground and Prestea Underground mines, both in the Western Region.

Beyond strengthening the company’s balance sheet, the investment will empower the Golden Star Resources which focuses on mining in Africa to explore for more ore deposits at the two sites in Ghana.

The explorations will help to confirm more viable ore deposits in the company’s license areas, thereby increasing the life of mine of the two operations.

The Executive Vice-President and Chief Operating Officer of the Golden Star Resources, Mr Daniel Owiredu, told the Daily Graphic in Accra that the investment also promised more value to communities and the government.

In addition to guaranteeing the jobs of employees, Mr Owiredu explained that the expected increased production resulting from the investment would lead to increased employment for persons in the surrounding communities.

More gold productions will also mean that the government will earn more revenue through royalties, corporate taxes and other statutory payments, he said.

As a result, he described it as a win-win transaction that shows the faith La Mancha has in Golden Star’s operations and the competences of its management.

The successful approval of the transaction will allow La Mancha to appoint a maximum of three directors to the Golden Star’s board.