Market Exclusive

Golden Star Resources Ltd. (USA) (NYSEMKT:GSS) Updates On Fundraiser As Wassa Enters Commercial Production

Golden Star Resources Golden Star Resources Ltd.Golden Star Resources Golden Star Resources Ltd.

Golden Star Resources Ltd. (USA) (NYSEMKT:GSS) is raising additional capital by selling new shares in a deal arrangement with group of underwriters including BMO Capital Markets and Scotia Capital.

The company said the underwriters have agreed to purchase 27.3 million shares of its common stock at a price of C$1.10 apiece. With that, the transaction would yield slightly more than C$30 million in gross proceeds for Golden Star Resources. However, Golden Star Resources has set aside additional 4.1 million shares for the underwriters to purchase in case of strong demand for the stock leading to overallotment.

As such, if the underwriters exercise their option to purchase additional shares to cover overallotment, Golden Star Resources expects to generate C$34.5 million in gross proceeds. The transaction is expected to close on February 7, though the closing is subject to regulatory approval and customary conditions.

Putting the funds to use

Though Golden Star Resources didn’t provide an estimate of net proceeds it expects from the transaction, the company shared details on how it intends to spend the equity offering funds. The top priority is funding the company’s exploration projects. Additionally, Golden Star Resources expects to use the funds to meet capital expenditure needs at its Wassa and Prestea goldmines. If there are still more funds level, Golden Star Resources would use the money to retire a portion of its outstanding convertible notes and for working capital.

Wassa mine enters commercial production

Golden Star Resources said it has begun commercial production at its Wassa mine. The company promised to update on the production results, terms of production and operating costs later this month.

 “Golden Star Resources anticipates that it will benefit from Wassa Underground’s lower cost production resulting from the higher grade ore being fed into the Wassa processing plant,” said Golden Star Resources CEO Sam Coetzer.

Golden Star Resources will announce its full year 2016 production results, including the production results for Wassa Underground, and its full year 2017 guidance in terms of production, operating costs and capital expenditures later in January 2017.

The stock is up more than 426% since 12 months ago, but the stock declined 4.1% to $0.842 in the last session.

Exit mobile version