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Regional News of Tuesday, 27 July 2021


FGR takes steps to secure future of Bogoso Prestea mine

FGR said it has recently stepped in to settle an outstanding ongoing employee dispute FGR said it has recently stepped in to settle an outstanding ongoing employee dispute

Future Global Resources (FGR) has said in a statement dated 20 July 2021 that it has 'discovered material inaccuracies' in the information provided by Golden Star Resources (GSR), which “FGR relied upon in deciding to acquire the Bogoso Prestea mine.”

The financial impact of those inaccuracies is “significant”, FGR said, adding it “will continue to investigate the inaccuracies.”

FGR said it notified GSR of the inaccuracies last week and required GSR to “indemnify it in respect of the resulting financial losses it has sustained, in accordance with the provisions of the Bogoso Prestea purchase agreement.”

Separately, FGR said it has recently stepped in to settle an outstanding and ongoing employee dispute relating to severance payments owed to staff at Bogoso Prestea, which resulted in repeated industrial actions.

In the absence of GSR’s participation, FGR said it “negotiated with the staff to reach an agreement on severance, which resulted in a peaceful return to operations and the cessation of the ongoing legal action.”

“FGR claims the cost of this settlement from GSR given that GSR has responsibility for this matter under the purchase agreement,” the statement signed by Kwabena G. Kugblenu noted.

FGR said in light of the above, it “was not contractually obliged to make the payments that would otherwise be due on 16 July 2021 and will not be making the payment otherwise due on 31 July 2021.”

“FGR and its major shareholder, Blue International Holdings Limited, are, and have been, in full compliance with the purchase agreement and their contractual obligations,” the statement added.

On 27 July 2020, Golden Star Resources Ltd. announced that it had entered into a binding agreement for the sale of its 90% interest in the Bogoso-Prestea Gold Mine in Ghana to Future Global Resources Limited (“FGR”) for a purchase price of US$55 million with a further contingent component of up to US$40 million.

On Wednesday, 21 July 2021, Golden Star Resources Ltd. announced that FGR defaulted on its obligation to pay the company's wholly-owned subsidiary, Caystar Holdings, $15 million of the purchase price relating to the sale of Golden Star's 90% interest in the Bogoso-Prestea Gold Mine to FGR under the share purchase agreement dated 26 July 2020, as supplemented by a letter agreement dated 30 September 2020, and amended by a first amending agreement dated 28 March 2021, and a second amending agreement dated 31 May 2021 (collectively, the "Share Purchase Agreement").

FGR, the statement said, has claimed that it is entitled to set off its obligation to make such payment under the Share Purchase Agreement as a result of various alleged breaches of the Share Purchase Agreement, a claim which Golden Star and Caystar believe to be completely without merit.

Caystar also demanded that FGR's major shareholder, Blue International Holdings Limited ("BIH"), pay the amount of $15 million pursuant to the guarantee made by BIH in the Share Purchase Agreement.

In the event payment is not received from BIH, Golden Star and Caystar are evaluating all available avenues of recourse in order to seek full recovery of amounts owed by FGR under the Share Purchase Agreement, the statement from Golden Star noted.

Golden Star is an established gold mining company that owns and operates the Wassa underground mine in the Western Region of Ghana.

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.