Golden Star Resources Ltd is pleased to announce the completion of the strategic investment by La Mancha Holding S.à r.l. ("La Mancha"), a Luxembourg-incorporated private gold investment company.
The relationship secures Golden Star's platform for growth in Africa, while also strengthening the Company's balance sheet.
This comes after the two companies agreed to enter into an agreement, where La Mancha has committed to investing approximately the $125.7 million cash into Golden Star through a private placement and in exchange, for approximately 30% of the outstanding share capital on a non-diluted basis.
Following the receipt of the funds on Monday, October 1, 2018, La Mancha has been issued the 163,210,500 Golden Star common shares, on a non-diluted basis after giving effect to La Mancha’s investment.
Commenting on the investment, Sam Coetzer, who is the President and Chief Executive Officer of Golden Star said, “this strategic investment from La Mancha secures Golden Star’s platform for growth as a leading African gold producer. It will allow us to expedite our exploration and expansion programs at both our Wassa Underground and Prestea Underground Gold Mines as well as providing us with a funding position to participate in the consolidation of the African gold mining sector. It is transformative for our balance sheet, providing both strength and flexibility as we move forward, and it verifies the strong potential of our assets and the calibre of our management team.”
With their investments, La Mancha has the right to nominate up to three representatives to Golden Star’s Board of Directors and two nominees who are Andrew Wray, Chief Executive Officer of La Mancha, and Graham Crew with immediate effect.
Therefore the company has nominated a third Director at the next Annual General Meeting or earlier in the event of a vacancy.
Mr. Coetzer commenting on the new board members said, “I am delighted to welcome Andrew and Graham to our Board and I am confident that their combined operational, corporate and financial experience in the mining industry will be beneficial as we focus on delivering the next phase of Golden Star’s growth across Africa.”
The long-term nature of the strategic relationship is demonstrated by La Mancha’s agreement to a two-year equity lock-up on the Golden Star shares, as well as to certain customary standstill provisions.
La Mancha also has anti-dilution rights, which provide the ability for La Mancha to maintain its approximate 30% equity stake in Golden Star, and customary registration rights.
Golden Star’s shareholders approved the private placement by La Mancha at a special meeting held on September 17, 2018, with 98.95% of votes cast in favour of the transaction.
Profile of New Board Members
Andrew joined La Mancha as Chief Executive Officer in early 2018. He was most recently Chief Financial Officer of Acacia Mining and has nearly ten years of direct mining experience.
Prior to that, Andrew worked with the Corporate Finance team at JP Morgan Cazenove.
He has over 15 years of experience in advising companies in capital-raising activities and other strategic objectives. Prior to joining JP Morgan, Andrew worked for the Kuwait Investment Office in London, having dealt with its portfolio of investments in Spain.
Andrew holds an Honours Degree from University College London.
Graham has over 25 years of operational, technical and corporate experience in the mining industry.
A mining engineer by background, he is General Manager Mining for Barminco Limited, a global underground mining services provider, and he previously held the position of General Manager of the Bulyanhulu mine for Acacia Mining.
Prior to that, he was the Operations Manager for La Mancha’s Australian operations for five years and he has held a number of other technical positions for mining companies in various geographies.
He has a strong track record of transforming operations through the development of vision and strategy and disciplined implementation and he has experience of construction projects, due diligence, project evaluation and project financing.