GOLDEN Star has extended a credit facility by $20m to $70m in order to tackle the possible repayment of a convertible debenture that falls due in August next year, as well as to fund the development of its Wassa gold mine in Ghana.
Funds from the credit facility will also be put towards exploration as the company focuses on organic growth options. Earlier this month, Golden Star completed the sale of its other Ghana mine, Prestea.
Andrew Wray, CEO of Golden Star, said in an announcement today that the credit facility extension would create $50m in liquidity.
It comes though with a requirement to extend the firm’s hedging programme to a total of just over 100,000 oz of gold (including the existing programme) over the next two years.
Wray said an additional 87,500 oz of gold was hedged to support the credit facility extension. The new hedges have a floor price of $1,600/oz and a ceiling of $2,176/oz in 2021 and $2,188 per ounce in 2022. These additional positions will mature at a rate of just over 10,000 oz per quarter from January 2021 to December 2022.
The overall average floor price of the firm’s hedging programme is $1,587/oz and an average ceiling price of $2,158/oz.
Said Wray: “The extension of the gold price protection programme to the end of 2022 secures an attractive floor and ceiling price for the period, further de-risking the company’s ability to deliver on its financial obligations while also looking to explore the options to capitalise on the large resource and latent mill capacity at Wassa”.