Golden Star Resources Ltd. (GSS) recently came completing the sale of its stakes in the Bogoso-Prestea Gold Mine in Ghana to Future Global Resources Limited (“FGR”).
The company sold 90% of its interests in Bogoso-Prestea to FGR. As per the initial terms of the agreement, initial $5 million cash consideration was due at closing of the agreement, but going through further discussions, both companies agreed to amend the commercial terms. Companies agreed not to change the consideration but commercial terms has been deferred by up to six months to March 30, 2021 pending finalization of FGR’s reclamation bonding process. At the completion of the agreement FGR will take over Bogoso-Prestea as well as its subsidiaries along with commitment to take on all assets and liabilities.
As per the amended agreement, the companies agreed on the deferred payment of all cash consideration. Now the initial cash consideration amount of $5 million is payable on March 30, 2021 or on the date at which FGR files its reclamation bond with the Environmental Protection Agency, whichever comes first. Also an amount of $10 million is due to be paid in cash on July 31, 2021 whereas $15 million to be paid in cash on July 31, 2023.
FGR also agreed to pay GSS a payment of up to $40 million subject to reaching certain milestones related to the development of the Bogoso Sulfide Project (the “Contingent Payment”). The Contingent Payment will become due either FGR formally decides to proceed with the Bogoso Sulfide Project or upon extraction of an aggregate of 5% of the sulfide resources. At the end of 2019, those resources were measured and indicated to nearly 1.76 million ounces while inferred resources were 0.07 million ounces.
The quantum of Contingent Payment will be determined on the basis of average spot gold price for preceding 90 days from the date of FGR’s decision to proceed with the project.