Private gold investment company La Mancha Holding has completed the previously announced $125.7m strategic investment in Canadian gold mining firm Golden Star Resources through a private placement.
In return for the investment, Golden Star issued 163,210,500 common shares, which represent around 30% of its outstanding share capital, to La Mancha.
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The proceeds from the placement are expected to enable the company to tap growth opportunities in Africa and also bolster its balance sheet.
Golden Star Resources president and CEO Sam Coetzer said: “This strategic investment from La Mancha secures Golden Star’s platform for growth as a leading African gold producer.
“It will allow us to expedite our exploration and expansion programmes at both our Wassa Underground and Prestea Underground Gold Mines as well as providing us with a funding position to participate in the consolidation of the African gold mining sector.
“It is transformative for our balance sheet, providing both strength and flexibility as we move forwards, and it verifies the strong potential of our assets and the calibre of our management team.”
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By GlobalDataPursuant to the terms of the transaction, two new directors nominated by La Mancha have joined Golden Star’s board.
Following the investment, La Mancha is now the largest shareholder in Golden Star.
Golden Star owns and operates two high grade, low cost underground mines, namely Wassa and Prestea in Ghana, West Africa.
The company’s gold production guidance for this year stands at 225,000-235,000oz at a cash operating cost per ounce of $790-830.
