Chifeng Jilong Gold Mining has agreed to acquire Canadian firm Golden Star Resources, via a statutory plan of arrangement for $470m.

According to the definitive agreement, Golden Star Resources shareholders will receive $3.91 from China’s Chifeng for each share held.

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The deal will be executed by Chijin International (Hong Kong) Limited, a majority-controlled unit of Chifeng.

Golden Star owns and operates the Wassa underground mine in the Western Region of Ghana with a 90% stake. The remaining interest is held by the Ghanaian Government.

Chifeng president Lyu Xiaozhao said that Golden Star’s Wassa gold mine in Ghana hosts a very significant gold resource endowment.

Xiaozhao said: “We intend to invest significant financial and human capital into Wassa to realise the mines’ full potential and in doing so expand our operating footprint into West Africa.”

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Golden Star CEO Andrew Wray said: “This offer, and the healthy premium being paid relative to recent trading levels, reflect the progress made in defining the future growth profile at Wassa, as well as the repositioning of Golden Star with a streamlined corporate and financial structure.

“We believe that the transaction will benefit all of our stakeholders, with shareholders receiving an attractive premium in return for the future growth potential, and with Wassa forming part of Chifeng’s larger portfolio of gold mines there will be a larger capital base to help deliver that growth.”

Golden Star’s board has unanimously cleared the deal, recommending shareholders vote in its favour.

The deal is pending various approvals, with completion anticipated in January 2022.