Golden Star Provides Update Regarding the Sale of Bogoso-Prestea

Rhea-AI Summary

Golden Star Resources Ltd. (NYSE American: GSS) reports that Future Global Resources Limited (FGR) has defaulted on a $15 million payment related to the sale of Golden Star's 90% interest in the Bogoso-Prestea Gold Mine. FGR claims the right to withhold payment due to alleged breaches of the Share Purchase Agreement, which Golden Star disputes. Caystar Holdings has also sought payment from FGR's major shareholder, Blue International Holdings Limited, under a guarantee. Golden Star is exploring legal avenues for full recovery of the amount owed.

Positive

• Golden Star is actively pursuing legal action to recover the $15 million owed, showcasing a proactive stance on debt recovery.
• The company maintains its commitment to strong margins and free cash flow from its Wassa underground mine.

Negative

• FGR's default on payment raises concerns regarding the financial stability of the transaction and potential impacts on cash flow.
• The ongoing dispute may lead to prolonged legal challenges, potentially diverting resources and attention from core operations.

TORONTO, July 19, 2021 /PRNewswire/ - Golden Star Resources Ltd. (NYSE American: GSS) (TSX: GSC) (GSE: GSR) ("Golden Star" or the "Company") announces that Future Global Resources Limited ("FGR") has defaulted on its obligation to pay the Company's wholly-owned subsidiary, Caystar Holdings ("Caystar"), $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 July 26, 2020, as supplemented by a letter agreement dated September 30, 2020, and amended by a first amending agreement dated March 28, 2021 and a second amending agreement dated May 31, 2021 (collectively, the "Share Purchase Agreement"). FGR 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 has also demanded that FGR's major shareholder, Blue International Holdings Limited ("BIH"), pays 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.

All references herein to "$" are to United States dollars.

For further information, please visit www.gsr.com

Company Profile:

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

Statements Regarding Forward-Looking Information

Some statements contained in this news release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and "forward looking information" within the meaning of Canadian securities laws and include but are not limited to, statements and information regarding:  actions that may be taken to seek payment and the recovery of amounts owed to Caystar under the Share Purchase Agreement, and the receipt by Golden Star of the deferred consideration and/or contingent payment under the Share Purchase Agreement, and the potential amount and timing thereof. Generally, forward-looking information and statements can be identified by the use of forward-looking terminology such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes" or variations of such words and phrases (including negative or grammatical variations) or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative connotation thereof. Investors are cautioned that forward-looking statements and information are inherently uncertain and involve risks, assumptions and uncertainties that could cause facts to differ materially. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which Golden Star will operate in the future, including the price of gold, anticipated costs and ability to achieve goals. Forward-looking information and statements are subject to known and unknown risks, uncertainties and other important factors that may cause the actual results, performance or achievements of Golden Star to be materially different from those expressed or implied by such forward-looking information and statements, including but not limited to: gold price volatility; discrepancies between actual and estimated production; mineral reserves and resources and metallurgical recoveries; mining operational and development risks; liquidity risks; suppliers suspending or denying delivery of products or services; regulatory restrictions (including environmental regulatory restrictions and liability); actions by governmental authorities; the speculative nature of gold exploration; ore type; the global economic climate; share price volatility; foreign exchange rate fluctuations; risks related to streaming agreements and joint venture operations; the availability of capital on reasonable terms or at all; risks related to international operations, including economic and political instability in foreign jurisdictions in which Golden Star operates; risks related to current global financial conditions including financial and other risks resulting from the impact of the COVID-19 global pandemic; actual results of current exploration activities; environmental risks; future prices of gold; possible variations in mineral reserves and mineral resources, grade or recovery rates; mine development and operating risks; an inability to obtain power for operations on favorable terms or at all; mining plant or equipment breakdowns or failures; an inability to obtain products or services for operations or mine development from vendors and suppliers on reasonable terms, including pricing, or at all; public health pandemics such as COVID-19, including risks associated with reliance on suppliers, the cost, scheduling and timing of gold shipments, uncertainties relating to its ultimate spread, severity and duration, and related adverse effects on the global economy and financial markets; accidents, labor disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; litigation risks; the quantum and timing of receipt of the proceeds from the sale by the Company of its interest in Bogoso-Prestea; and risks related to indebtedness and the service of such indebtedness. Although Golden Star has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information and statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that future developments affecting the Company will be those anticipated by management. Please refer to the discussion of these and other factors in Management's Discussion and Analysis of financial conditions and results of operations for the year ended December 31, 2020 and in our annual information form for the year ended December 31, 2020 as filed on SEDAR at www.sedar.com. The forecasts contained in this press release constitute management's current estimates, as of the date of this press release, with respect to the matters covered thereby. We expect that these estimates will change as new information is received. While we may elect to update these estimates at any time, we do not undertake any estimate at any particular time or in response to any particular event.

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SOURCE Golden Star Resources Ltd.

FAQ

What happened with Future Global Resources and Golden Star Resources on July 19, 2021?

On July 19, 2021, Golden Star announced that Future Global Resources defaulted on a $15 million payment related to the sale of the Bogoso-Prestea Gold Mine.

What claims did FGR make regarding the payment to Golden Star Resources?

FGR claimed it was entitled to set-off its payment obligation due to alleged breaches of the Share Purchase Agreement, which Golden Star disputes.

How much money is Future Global Resources Limited supposed to pay to Golden Star Resources?

FGR is obligated to pay $15 million to Golden Star Resources as part of the sale agreement.

What actions is Golden Star taking to recover the owed amount from FGR?

Golden Star, through its subsidiary Caystar, is evaluating all available avenues of recourse to seek full recovery of the $15 million owed.