Prestea Acquisition Back on Track

DENVER, May 24 /PRNewswire/ -- Golden Star Resources Ltd. is pleased to announce that it has reached an agreement with Prestea Gold Resources Limited (``PGR''), which paves the way for the acquisition of the Prestea surface concession in Ghana. The agreement is subject to the approval of the Government of Ghana and the negotiation of a separate agreement with Barnato Exploration Limited (``Barnex'') in respect of their rights and claims to the Prestea concession.

PGR is a Ghanaian company that was formed in 1998 by the ex-employees of Barnex with the intent of continuing to operate the 100 year-old underground mine at Prestea after Barnex had decided to close the mine in late 1998. PGR initially obtained a six-month ``sub-lease'', that was subordinate to the mining lease over the Prestea concession that was held by Barnex. On November 1, 2000, following the decision by government to abrogate Barnex's rights to the Prestea concession, government granted PGR a new mining lease over the Prestea concession for a period of 15 years, a decision which is disputed by Barnex.

Under the agreement Golden Star has now reached with PGR, the mining lease granted to PGR in November 2000 will be surrendered. Golden Star and PGR will then make application to Government for the granting of two new mining leases, a surface mining lease to a depth of 200 vertical metres in favor of Golden Star and an underground mining lease below a depth of 200 vertical metres in favor of PGR. The parties have also reached broad agreement on the mitigation measures that will be undertaken by Golden Star on the underground mine infrastructure that may be impacted by surface mining at Prestea.

The commercial terms that have been agreed, are that (i) Golden Star will separately negotiate with Barnex to arrive at a commercial settlement of their claim arising out of the purported abrogation of their rights on October 25, 2000, and (ii) Golden Star will pay an option payment to PGR at closing of US$2.1 million, which will give Golden Star the right, but not the obligation, to make a further payment of US$1.9 million to PGR to acquire a 35% interest in PGR and the right to manage the underground mine.

Golden Star signed a letter of intent with Barnex in August 2000 to acquire their rights and obligations in Prestea for a total consideration of US$12 million. This letter of intent expired, following the purported abrogation of Barnex's rights on October 25, 2000. Negotiations with Barnex to arrive at a final agreement are in progress, as are discussions with the Government of Ghana to obtain the necessary approvals and consents for the arrangements with PGR and Barnex.

Mr. Bradford, President and CEO of Golden Star commented: ``The issues related to the Prestea acquisition have been complex and difficult to overcome, but the Company's persistence has paid off. The obvious synergies between Bogoso and Prestea cannot be ignored, and therefore it has been in our interest and in the interest of government and the various Prestea stakeholders for Golden Star to have persevered. The considerable quantity of mineralized material being acquired at Prestea will result in an immediate extension of the mine life at Bogoso of at least five years, using the existing processing plant.''

The acquisition of the Prestea concession is subject to the finalization of (i) definitive documentation with PGR, (ii) an agreement and definitive documentation with Barnex, and (iii) the necessary consents and approvals of the Government of Ghana.

Golden Star holds a 70% equity interest (and is in the process of acquiring an additional 20% interest) in the Bogoso gold mine in Ghana, a 30% equity interest in the Omai gold mine in Guyana, and a 50% interest in the Gross Rosebel gold project in Suriname. In addition, the Company has other gold and diamond exploration interests in the Guiana Shield in South America and in West Africa. Golden Star currently has approximately 38 million shares outstanding. The Company is listed on the Toronto Stock Exchange under the symbol ``GSC'' and trades on the OTC Bulletin Board under the symbol ``GSRSF''.

The above forward-looking statements involve risks and uncertainties including those relating to exploration, the establishment of reserves, potential mine development, the recovery of any reserves, the price of gold and the Company's ability to continue as a going concern. Please refer to a discussion of these and other factors in Golden Star's 10-K, 10-Q and other Securities and Exchange Commission filings.

For further information, please contact: Golden Star Resources Limited, 800-830-9000, Peter Bradford, President and CEO, 303-894-4613, or Allan Marter, Chief Financial Officer, 303-894-4631.