Golden Star puts toe in Ivoire (March 29, 2005)

West African gold producer Golden Star Resources (GSC-T) has inked an agreement with the state mining enterprise in Cte d’Ivoire to take up a 90% interest in the Afema gold property in the southeastern part of the country.

Afema, formerly operated by Eden Roc Mineral between 1993 and 1998, produced about 125,000 oz. gold and lies on the extension of a Birimian volcano-sedimentary belt that hosts the Chriano and Bibiani gold deposits across the border in Ghana.

The agreement gives Golden Star a six-month period to investigate the deposit; at the end of the six months the company can elect to buy out the state agency, Socit d’tat pour le Developpement Minire (Sodemi), for US$1.5 million. The government would retain a direct 10% interest and Golden Star would have 90%.

Sodemi would keep a price-indexed royalty on any production, with a base value of 2.5% when gold prices were between US$375 and US$450 per oz.

Golden Star’s current plans are for US$500,000 in exploration work before the option period expires, and US$3.5 million over the following three and a half years if the company picks the option up.