TORONTO, Oct. 9, 2020 /PRNewswire/ - Golden Star
Resources Ltd. (NYSE American: GSS) (TSX: GSC) (GSE:
GSR) ("Golden Star" or the "Company")
is pleased to announce the amending and upsizing of the senior
secured credit facility ("the Credit Facility" or "the Facility")
with Macquarie Bank Limited entered into by the Company on
October 17, 2019. All monetary
amounts refer to United States
dollars.
Highlights
- Credit Facility extended to $70
million, representing a $20
million increase on the $50
million outstanding balance on the Facility
- Amortization profile rescheduled with the $5 million quarterly principal repayments
deferred to commence in September
2021
- Upsizing of the facility and deferral of the amortization
schedule create $35 million of
additional liquidity ahead of the maturity of the convertible
debentures in August 2021
- Interest charge remains unchanged at LIBOR plus
4.5%
- As part of the amendment of the Facility, Golden Star has entered into zero cost collars
for a total of 87,500 ounces over 2021 and 2022 with a floor price
of $1,600 per ounce and an average
ceiling of price of $2,182 per
ounce
Andrew Wray, President and
Chief Executive Officer of Golden
Star, commented:
"The amendments to the Credit
Facility and the recently announced completion of the sale of the
Bogoso-Prestea operation combine to further strengthen our balance
sheet. The restructuring of the Credit Facility creates
$35 million of incremental liquidity
which, combined with the $15 million
of proceeds from the sale of the Bogoso-Prestea operations due to
be received by July 2021, results in
$50 million of additional liquidity.
Should it be required, this provides us with the solution to
satisfy the repayment of the convertible debentures on maturity in
August next year. In turn, our current cash position and ongoing
cash flow generation from Wassa enable us to focus on stepping up
our investment in drilling and development at Wassa together with a
broader exploration program on a number of targets on the highly
prospective Ashanti belt.
The extension of the gold price protection program to the end of
2022 secures an attractive floor and ceiling price for the period,
further de-risking the Company's ability to deliver on its
financial obligations while also looking to explore the options to
capitalize on the large resource and latent mill capacity at
Wassa."
Upsized Credit Facility - $70
million
The Credit facility has been upsized to
$70 million, allowing the Company to
re-draw the two $5 million repayments
that were made in June and September
2020 and an additional $10
million of new capacity which will be made available in
conjunction with the redemption of the convertible debentures
maturing in August 2021.
Rescheduled principal repayment profile
The Credit
Facility has been amortising at a rate of $5
million per quarter with two principal repayments having
been made so far in 2020. The restructuring of the Facility
includes a rescheduled amortization profile which defers the next
quarterly repayment to September
2021. These quarterly repayments will then continue to
December 2023 when the remaining
balance of the Facility will be settled by a $25 million bullet payment.
Hedging
As a condition of amending the Credit
Facility, the Company has extended its gold price protection
hedging program into 2021 and 2022 by entering into zero cost
collars with Macquarie Bank Limited on a total of an additional
87,500 ounces with a floor price of $1,600 per ounce and a ceiling of $2,176 per ounce in 2021 and $2,188 per ounce in 2022. These additional
positions will mature at a rate of 10,937.5 ounces per quarter from
January 2021 to December 2022.
Together with the existing zero cost collar structures, the
Company currently has gold price protection in place for 100,100
ounces at an average floor price of $1,587 per ounce and an average ceiling price of
$2,158 per ounce.
Company Profile:
Golden
Star is an established gold mining company that owns and
operates the Wassa underground mine in Ghana, West Africa. Listed on the NYSE
American, the Toronto Stock Exchange and the Ghanaian Stock
Exchange, Golden Star is focused on
delivering strong margins and free cash flow from the Wassa
mine. As the winner of the Prospectors &
Developers Association of Canada
2018 Environmental and Social Responsibility Award, Golden Star remains committed to leaving a
positive and sustainable legacy in its areas of operation.
Statements Regarding Forward-Looking Information
Some statements contained in this news release are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and "forward looking
information" within the meaning of Canadian securities laws and
include but are not limited to, statements and information
regarding the receipt by Golden
Star of the proceeds of the sale of Bogoso-Prestea and the
potential amount thereof; the Company's ability to repay the
convertible debentures maturing in August
2021, to repay the quarterly principal repayments of the
Facility from September 2021 and to
deliver on its financial obligations, generally; and the
acceleration of the Company's investment at Wassa and in its
exploration pipeline. 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. Investors are cautioned that forward-looking
statements and information are inherently uncertain and involve
risks, assumptions and uncertainties that could cause facts to
differ materially. Such statements and information are based
on numerous assumptions regarding present and future business
strategies and the environment in which Golden Star will operate in the future,
including the price of gold, anticipated costs and ability to
achieve goals. 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: gold price volatility; discrepancies between actual and
estimated production; mineral reserves and resources and
metallurgical recoveries; the ability to complete the sale
transaction and realize the anticipated benefits therefrom; the
ability to obtain all necessary consents and approvals for the sale
transaction; mining operational and development risks; liquidity
risks; suppliers suspending or denying delivery of products or
services; regulatory restrictions (including environmental
regulatory restrictions and liability); actions
by governmental authorities; the speculative nature of gold
exploration; ore type; the global economic climate; share price
volatility; foreign exchange rate fluctuations; risks related to
streaming agreements and joint venture operations; the availability
of capital on reasonable terms or at all; 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 including financial and other
risks resulting from the impact of the COVID-19 global pandemic;
actual results of current exploration activities; environmental
risks; future prices of gold; possible variations in mineral
reserves and mineral resources, grade or recovery rates; mine
development and operating risks; an inability to obtain power for
operations on favourable terms or at all; mining plant or equipment
breakdowns or failures; an inability to obtain products or services
for operations or mine development from vendors and suppliers on
reasonable terms, including pricing, or at all; public health
pandemics such as COVID-19, including risks associated with
reliance on suppliers, the cost, scheduling and timing of gold
shipments, uncertainties relating to its ultimate spread, severity
and duration, and related adverse effects on the global economy and
financial markets; 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; litigation risks; and risks related to indebtedness and
the service of such indebtedness. 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 future developments
affecting the Company will be those anticipated by
management. Please refer to the discussion of these and other
factors in Management's Discussion and Analysis of financial
conditions and results of operations for the year ended
December 31, 2019 and in our annual
information form for the year ended December
31, 2019 as filed on SEDAR at www.sedar.com. The
forecasts contained in this press release constitute management's
current estimates, as of the date of this press release, with
respect to the matters covered thereby. We expect that these
estimates will change as new information is received. While
we may elect to update these estimates at any time, we do not
undertake any estimate at any particular time or in response to any
particular event.
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SOURCE Golden Star Resources Ltd.