Golden Star takes over Dunkwa property

Three property deals have expanded the land package held by Golden Star Resources (GSC-T) around its Bogoso and Prestea gold mines on the Ashanti trend in Ghana.

In the first of the three deals, Golden Star has bought the Mampon gold property, about 40 km northeast of Bogoso, from Ashanti Goldfields (ASL-N). Mampon, which has a probable reserve of 1.5 million tonnes grading 5 grams gold per tonne, is currently awaiting a production permit from the Ghanaian government, which had been held up by restrictions on mining in areas reserved for forest production.

In a related transaction, Birim Goldfields (BGI-T) is selling Golden Star its 90% interest in the Dunkwa land package, which surrounds the Mampon deposit. Dunkwa consists of two exploration licences: Asikuma, which surrounds Mampon, and Mansiso, which adjoins both Asikuma and Golden Star’s Bogoso property. Golden Star also assumes Birim’s right to a royalty from the Mampon deposit, which depends on the size of the mineral reserve outlined on Mampon.

The Mansiso property hosts the small Opon gold deposit, with a probable reserve of 108,000 tonnes grading 2 grams per tonne.

Birim gets US$3.4 million for its holding in Dunkwa and retains a variable royalty based on the quarterly average of the London afternoon gold fix. At prices of US$300 per oz. and less, the royalty is 2%, increasing to 2.5% at gold prices below US$350, to 3% at prices up to US$400, and to 3.5% at prices above US$400. The first 200,000 oz. of production at Mampon is exempt from the royalty.

The property transactions need the approval of the Ghanaian government, which owns a 10% interest in all the properties.

In the third deal, with Australian gold producer Resolute Mining, Golden Star has bought the Obotan mill for US$4.3 million. The mill equipment, including a carbon-in-leach circuit, will be moved to Bogoso to permit milling of non-refractory gold ores while the existing Bogoso mill is converted to process refractory sulphide ore using bio-oxidation.

Golden Star says its expansion plans at Bogoso, including buying and moving the Obotan mill, adding a bio-oxidation circuit, and expanding the present mining fleet, will cost about US$60 million.