Golden Star Resources Ltd. (USA) (NYSEMKT:GSS) is pleased to announce that yesterday it successfully closed the $150 million financing with Royal Gold, Inc. (“RGI”) and its wholly-owned subsidiary RGLD Gold AG (“RGLD”) announced on May 7, 2015.
The $150 million financing consists of a $130 million stream transaction with RGLD and a further $20 million term loan from RGI. Golden Star expects to receive the initial upfront payment of $40 million from RGLD in relation to the stream and a further $20 million from RGI in a term loan by close of business today.
Golden Star will immediately retire the full outstanding $38 million on its Ecobank loan I, once funds have been received from RGI and RGLD. The initial upfront payment was reduced from $55 million to $40 million as the Company’s drew down $15 million on its existing $25 million Ecobank loan II in advance of the conclusion of the financing. The full amount of the stream transaction remains $130 million and the effective date remains April 1, 2015.
Funds received will facilitate development of Wassa and Prestea underground mines which are expected to be in production by late 2016. Work on both of these projects is progressing well. The remaining finance from the stream transaction is expected to be received incrementally as the projects’ construction advances. The Company expects to receive the remaining $90 million in quarterly payments between September 2015 and September 2016.
The Company’s financial results will be released after market close today, July 29, 2015, at which time a full update on the development projects will be provided.
Golden Star’s financial advisor with respect to the gold stream and loan transactions was BMO Capital Markets. (Original Source)
Shares of Golden Star Resources closed yesterday at $0.235. GSS has a 1-year high of $0.57 and a 1-year low of $0.16. The stock’s 50-day moving average is $0.30 and its 200-day moving average is $0.29.
On the ratings front, Canaccord Genuity analyst Rahul Paul maintained a Buy rating on GSS, with a price target of $0.70, in a report issued on May 14. The current price target implies an upside of 191.7% from current levels. According to TipRanks.com, Paul has a total average return of -25.1%, a 15.6% success rate, and is ranked #3691 out of 3718 analysts.
Golden Star Resources Ltd through its subsidiary is engaged in production of gold in Ghana, West Africa. The Company also conducts gold exploration in West Africa and South America.