UPDATE: Golden Star delays and sells

Golden Star Resources (GSC-T, GSS-X) announced a delay in financial filings and a big share sell-off on Thursday, Mar. 16.

Golden Star’s chief financial officer, Allan Marter, says Golden Star is no longer looking to take-over Moto Goldmines (MGL-T) and consequently sold its six million shares in the Perth-based junior.

Moto operates the Moto goldfields exploration project in the northeastern Democratic Republic of Congo (DRC).

“We like the the DRC, we like the company and we like the property,” Marter says. “But we don’t think we’ll be taking them over.”

Along with the growing robustness of both Moto’s deposit in the DRC and its share price, has come a recent listing on London’s AIM index. Marter says it looks as though Moto is gathering enough steam to bring the property to production itself.

Golden Star sold its shares for $7.50 per share.

The sale gives Golden Star net proceeds of $45 million. The sale should realize roughly $30 million in capital gain for Golden Star, which will be recorded as income in the first quarter.

Golden Star acquired the shares and warrants in October 2004, and exercised all the warrants.

In Toronto on Thursday the company’s shares were down 1.15% or 4 to $3.43 on roughly 1.6 million shares traded.

Golden Star used to same press release to announce a delay in filing its annual report on form 10-K for the year ended December 31, 2005, until the end of the month.

The company says the additional time is needed to complete analysis of accounting for certain derivative contracts of its subsidiary, EURO Ressources S.A., and to determine whether certain contracts — which have since the first quarter of 2005 been accounted for as qualifying for hedge accounting under Canadian GAAP — are properly accounted for under hedge accounting requirements.

Golden Star owns approximately 53% of EURO, and the financial results of EURO are consolidated with those of Golden Star.

If previous reporting is changed to the mark-to-market method, Golden Star’s loss for 2005 could be increased by an unrealized, non-cash charge of up to US$6.4 million. There would be no impact to the 2005 loss if the contracts are determined to qualify for hedge accounting.

The company says all other work required to complete the audit for 2005 and the filing of Golden Star’s Form 10-K is essentially complete and no further delay to the filing is expected once the EURO matter is resolved.

Golden Star holds a 90% equity interest in the Bogoso/Prestea and Wassa open-pit gold mines in Ghana. In addition, Golden Star has an 81% interest in the currently inactive Prestea Underground mine in Ghana, as well as gold exploration interests elsewhere in Ghana, in other parts of West Africa and in the Guiana Shield of South America.