TORONTO, Aug. 3, 2016 /CNW/ - Golden Star Resources Ltd.
(NYSE MKT: GSS; TSX: GSC; GSE: GSR) ("Golden Star" or the
"Company") announces the closing of its previously announced
underwritten public offering of common shares at a price of
US$0.75 per share. The underwriters
for the offering exercised in full their option to purchase an
additional 6,000,000 common shares. As a result, a total of
46,000,000 common shares were sold by the Company for gross
proceeds of US$34.5 million.
The Company also announces the closing of its previously
announced private placement of US$65.0
million aggregate principal amount of 7.0% convertible
senior notes due 2021. As part of the offering of convertible
senior notes, the Company exchanged US$42.0
million principal amount of its outstanding 5.0% convertible
senior unsecured debentures due June 1,
2017 for an equal principal amount of newly issued
convertible senior notes. The principal amount exchanged is
included in the total aggregate principal amount of senior
convertible notes issued. The Company did not receive any cash
proceeds from the exchange.
The Company intends to use the net cash proceeds from the
offering of common shares of approximately US$32.4 million, together with the net cash
proceeds from the private placement of convertible senior notes of
approximately US$21.2 million, to
strengthen its balance sheet by retiring certain of its outstanding
indebtedness, including through the repurchase of additional 5.0%
convertible senior unsecured debentures due June 1, 2017 in privately negotiated
transactions, repayment of its secured medium term loan facility
with Ecobank Ghana Limited, and to use any remaining funds for
general corporate purposes.
André van Niekerk,
Executive Vice President and Chief Financial Officer of
Golden Star, commented:
"The closing of the two offerings represents an important
milestone in Golden Star's
transformation into a lower cost gold producer. With these
transactions we reduced our debt, strengthened our balance sheet
and unlocked a robust financial future for our shareholders. We
expect strong cash flow in the coming years through our expanding
gold production and anticipate further cost reductions, further
solidifying Golden Star's financial
position. With the first stopes blasted at Wassa Underground
in early July 2016 and the balance
sheet improved, we now look forward to the next key milestone in
our transformation: the commencement of production from the high
grade Prestea Underground Gold Mine in mid-2017."
The offering of common shares was made through an underwriting
group led by BMO Capital Markets as sole book-running manager,
which included National Bank Financial Inc., Scotia Capital Inc.
and CIBC Worlds Markets Inc. The common shares were sold pursuant
to an effective registration statement, including a base shelf
prospectus and supplement, that has been filed with the U.S.
Securities and Exchange Commission, and a base shelf prospectus and
supplement that that has been filed with applicable Canadian
securities regulators. The convertible senior notes were sold
pursuant to applicable U.S. and Canadian private placement
exemptions.
In connection with the offerings, the Company has relied 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.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities.
Company Profile
Golden Star is an established
gold mining company that owns and operates the Wassa and Prestea
mines situated on the prolific Ashanti Gold
Belt in western Ghana,
Africa. Listed on the NYSE MKT,
the TSX, and the GSE, Golden Star is
strategically focused on increasing operating margins and cash flow
through the development of two high grade, low cost underground
mines both in conjunction with existing open pit operations. The
Wassa Underground commenced pre-commercial production in mid-2016
and the Prestea Underground is expected to commence production in
mid-2017. Both projects are fully funded and on track to begin
production as expected. Production in 2016 is expected to be
between 180,000–205,000 ounces of gold with costs of US$815-US$925 per ounce.
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 planned use of
proceeds from the offering of common shares and private placement
of convertible senior notes; the transformation of Golden Star into a lower cost producer; and
expansion of production and reduction of costs.
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.