TORONTO, July 26, 2016 /PRNewswire/ - Golden Star
Resources Ltd. (NYSE MKT: GSS; TSX: GSC; GSE: GSR) ("Golden Star"
or the "Company") announces the pricing of US$65.0 million aggregate principal amount of
7.0% convertible senior notes due 2021 (the "Notes") pursuant to
applicable U.S. and Canadian private placement exemptions. As part
of the offering, the Company has entered into exchange and purchase
agreements with two holders of its 5.0% convertible senior
unsecured debentures due June 1, 2017
to exchange approximately US$40.0
million principal amount of the outstanding convertible
debentures for an equal principal amount of newly issued Notes (the
"Exchange"), with such principal amount being included in the total
aggregate principal amount of the offering of the Notes. The
Company will not receive any cash proceeds from the Exchange. The
Notes offering is expected to close on August 3, 2016, subject to customary closing
conditions.
The Notes will be senior unsecured obligations of the Company,
will bear interest at a rate of 7.0% per annum, payable
semi-annually on February 1 and
August 1 of each year, beginning on
February 1, 2017, and will mature on
August 15, 2021, unless earlier
repurchased, redeemed or converted. The Notes will be convertible
at any time at the option of the holder, and may be settled, at the
Company's election, in cash, common shares of the Company, or a
combination of cash and common shares. The initial conversion rate
of the Notes will be 1111.1111 common shares of the Company per
US$1,000 principal amount of Notes,
which is equivalent to an initial conversion price of approximately
US$0.90 per common share. The initial
conversion price represents a 20% premium to the price per common
share in the concurrent public offering of the Company's common
shares described below. The conversion rate will be subject to
adjustment upon the occurrence of certain events.
The Company intends to use the net proceeds from the offering of
approximately US$22.7 million,
together with the net proceeds from a concurrent public offering of
US$30.0 million, or 40,000,000, of
its common shares, of approximately US$28.0
million (subject to an over-allotment option to increase the
gross proceeds of the public offering by up to US$4.5 million, or 6,000,000 common shares,) (the
"Equity Offering") to strengthen its balance sheet by retiring
certain of its outstanding indebtedness, including through the
repurchase of its 5.0% convertible senior unsecured debentures in
privately negotiated transactions and the repayment of its secured
medium term loan facility with Ecobank Ghana Limited, and will use
any remaining funds for general corporate purposes.
The Notes are only being offered in the United States to qualified institutional
buyers in accordance with Rule 144A under the U.S. Securities Act
of 1933, as amended (the "U.S. Securities Act") and to non-U.S.
persons outside the United States
in reliance on Regulation S under the U.S. Securities Act. The
Notes are only being offered in Canada to accredited investors pursuant to
exemptions from the prospectus requirements of applicable Canadian
securities laws.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall it
constitute an offer, solicitation or sale in any jurisdiction in
which such offer, solicitation or sale is unlawful. The Notes and
the common shares issuable upon the conversion of the Notes have
not been and will not be registered under the U.S. Securities Act
and may not be offered or sold absent registration or an applicable
exemption from the registration requirements of the U.S. Securities
Act, and in Canada will be subject
to a four month restricted period from the issue date of the
Notes.
The Company has applied to list the common shares to be issued
pursuant to the Equity Offering and the common shares issuable upon
conversion of the Notes on the Toronto Stock Exchange ("TSX") and
the NYSE MKT. For the purposes of TSX approval, the Company
intends to rely on the exemption set forth in Section 602.1 of the
TSX Company Manual, which provides that the TSX will not apply its
standards to certain transactions involving eligible interlisted
issuers.
Cautionary Note Regarding Forward-Looking Information
This press release contains "forward looking information" within
the meaning of applicable Canadian securities laws and
"forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995, concerning
the business, operations and financial performance and condition of
Golden Star. Generally,
forward-looking information and statements can be identified by the
use of forward-looking terminology such as "plans", "expects", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", "believes" or variations of such words
and phrases (including negative or grammatical variations) or
statements that certain actions, events or results "may", "could",
"would", "might" or "will be taken", "occur" or "be achieved" or
the negative connotation thereof. Forward-looking information
and statements include, but are not limited to, the completion of
the Notes offering; the completion of the exchange; the anticipated
pricing and completion of the Equity Offering; the planned use of
proceeds for the Notes offering; the planned use of proceeds from
the Equity Offering; and the planned reliance on the exemption set
forth in Section 602.1 of the TSX Company Manual.
Forward-looking information and statements are made based upon
certain assumptions and other important factors that, if untrue,
could cause the actual results, performances or achievements of
Golden Star to be materially
different from future results, performances or achievements
expressed or implied by such statements. Forward-looking
information and statements are subject to known and unknown risks,
uncertainties and other important factors that may cause the actual
results, performance or achievements of Golden Star to be materially different from
those expressed or implied by such forward-looking information and
statements, including but not limited to: risks related to
international operations, including economic and political
instability in foreign jurisdictions in which Golden Star operates; risks related to current
global financial conditions; risks related to joint venture
operations; actual results of current exploration activities;
environmental risks; future prices of gold; possible variations in
Mineral Reserves, grade or recovery rates; mine development and
operating risks; accidents, labor disputes and other risks of the
mining industry; delays in obtaining governmental approvals or
financing or in the completion of development or construction
activities and risks related to indebtedness and the service of
such indebtedness. Please refer to the discussion of these
and other factors in our Annual Information Form for the year ended
December 31, 2015. Although
Golden Star has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking information and statements, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
information and statements. Forward-looking information and
statements are made as of the date hereof and accordingly are
subject to change after such date. Golden
Star does not undertake to update any forward-looking
information and statements that are included in this press release
except in accordance with applicable securities laws.
SOURCE Golden Star Resources Ltd.