Chifeng Jilong Gold to Acquire Golden Star in an All-Cash Offer Valued at US$470 Million

Canada NewsWire

TORONTO, Nov. 1, 2021

TORONTO, Nov. 1, 2021 /CNW/ - Golden Star Resources Ltd. (NYSE American: GSS) (TSX: GSC) (GSE: GSR) ("Golden Star" or the "Company") and Chifeng Jilong Gold Mining Co., Ltd. (SHSE: 600988) ("Chifeng") are pleased to announce that they have entered into a definitive agreement (the "Arrangement Agreement") pursuant to which Chifeng has agreed to acquire all of the issued and outstanding common shares of Golden Star ("Golden Star Shares") by way of a statutory plan of arrangement ("Plan of Arrangement") under the Canada Business Corporations Act (the "Transaction"). The Transaction will be consummated through Chifeng's majority-controlled subsidiary, Chijin International (Hong Kong) Limited (the "Purchaser").

HIGHLIGHTS:

   -- Pursuant to the Transaction, holders of Golden Star Shares ("Golden Star 
      Shareholders") will receive total consideration, payable in cash, of 
      US$3.91 (equivalent to approximately C$4.85) per Golden Star Share (the 
      "Consideration"), which equates to approximately US$470 million on a 
      fully-diluted, in-the-money basis. 
   -- The Consideration represents a 24.1% premium over the closing price of 
      the Golden Star Shares on the NYSE American as at October 29, 2021, a 
      37.2% premium based on the volume-weighted average price of the Golden 
      Star Shares on the NYSE American over the 20 trading days ending October 
      29, 2021 and a 51.5% premium based on the volume-weighted average price 
      of the Golden Star Shares on the NYSE American over the 60 trading days 
      ending October 29, 2021. 
   -- The Board of Directors of Golden Star has unanimously approved the 
      Transaction and is unanimously recommending that Golden Star Shareholders 
      vote in favour of the Transaction. 
   -- The Board of Directors of Golden Star has received an oral opinion from 
      its financial advisor, Canaccord Genuity Corp. ("Canaccord Genuity"), 
      that, as of the date of such opinion and subject to the assumptions, 
      limitations and qualifications set out in such opinion, and such other 
      matters as Canaccord Genuity considered relevant, the Consideration to be 
      received pursuant to the Transaction is fair, from a financial point of 
      view, to the Golden Star Shareholders. 
   -- All directors and officers of Golden Star, as well as La Mancha Star 
      Investments S.a.r.l., which collectively hold approximately 33.4% of the 
      Golden Star Shares, have entered into voting support agreements with 
      Chifeng pursuant to which they have agreed to, among other things, vote 
      in favour of the shareholder resolution approving the Transaction. 
   -- All directors and senior officers of Chifeng, as well as Chifeng's former 
      Chairman, Mr. Zhao Meiguang, and his relatives and associates, who 
      collectively hold approximately 25.1% of the currently issued and 
      outstanding common shares and/or securities of Chifeng carrying a voting 
      right in the capital of Chifeng ("Chifeng Shares"), have entered into 
      voting support agreements with Golden Star pursuant to which they have 
      agreed to vote in favour of the Chifeng shareholder resolution approving 
      the Transaction (to the extent a Chifeng shareholder vote is required). 
   -- Subject to the various approvals required, the Transaction is expected to 
      close in January 2022. 

Andrew Wray, Chief Executive Officer of Golden Star, commented:

"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. Chifeng has a proven track record as a responsible operator and is well positioned to build on the platform and reputation we have worked hard to establish. We look forward to working with Chifeng over the coming weeks to close this transaction and transition to the new team."

Lyu Xiaozhao, President of Chifeng, commented:

"We would like to thank the Board of Directors, and management team of Golden Star for supporting Chifeng with this important transaction. We are delighted to acquire Golden Star and its Wassa gold mine in Ghana which hosts a very significant gold resource endowment. Our team is very enthusiastic about working at Wassa and we are very confident in our ability to build on the solid foundations that Golden Star has established. We intend to invest significant financial and human capital into Wassa to realize the mines' full potential and in doing so expand our operating footprint into West Africa. Chifeng has an established track record as a safe and sustainable operator and is focused on creating value that will provide long-term benefits to all of our stakeholders including the people of Ghana."

Key Benefits to Golden Star Stakeholders

   -- Premium of 37.2% to the 20-day VWAP of the Golden Star Shares on the NYSE 
      American. 
   -- All-cash offer that is not subject to a financing condition. 
   -- Strong deal certainty with voting support agreements entered into by: 
   -- The directors and officers of Golden Star and La Mancha Star Investments 
      S.a.r.l., Golden Star's largest shareholder, representing a total of 
      approximately 33.4% of the Golden Star Shares; and 
   -- The directors and senior officers of Chifeng (including for greater 
      certainty, the current Chairman of Chifeng) and Chifeng's former Chairman, 
      Mr. Zhao Meiguang, and his relatives and associates, representing a total 
      of approximately 25.1% of the Chifeng Shares. 
   -- Removes future dilution, commodity, expansion and execution risk. 
   -- Places Wassa into a larger platform with the financial capability to 
      accelerate investment in growth, to the benefit of all of our Ghanaian 
      stakeholders. 
   -- Chifeng has agreed to fully respect employment agreements and the terms 
      and conditions of employment of all Golden Star employees. To that effect, 
      within six months of the closing of the Transaction, Chifeng intends to 
      complete a restructuring and has committed to make all severance payments 
      due to such employees as part of such restructuring. Likewise, the 
      current community engagement and CSR programmes around Wassa will 
      continue to be a key focus for Chifeng. 

Board of Directors' Recommendation

The Board of Directors of Golden Star has unanimously approved the Transaction and unanimously recommends that Golden Star Shareholders vote in favour of the Transaction at the Golden Star shareholder meeting (as defined below). The Board of Directors of Golden Star has received an oral fairness opinion from Canaccord Genuity which states that, as of the date of such opinion and subject to the assumptions, limitations and qualifications set out in such opinion, and such other matters as Canaccord Genuity considered relevant, the Consideration to be received pursuant to the Transaction is fair, from a financial point of view, to the Golden Star Shareholders.

In addition, the Board of Directors of Chifeng has unanimously approved the Transaction and unanimously recommends that Chifeng shareholders vote in favour of the Transaction at the interim meeting of shareholders of Chifeng, if required (the "Chifeng Shareholder Meeting").

Transaction Summary

The Transaction will be subject to the approval of 662/3 per cent of the votes cast by Golden Star Shareholders at the special meeting of shareholders (the "Golden Star Shareholder Meeting"). The Golden Star Shareholder Meeting is expected to be held prior to the end of the year.

The Transaction may also be subject to the approval of 662/3 per cent of the votes cast by shareholders of Chifeng at the Chifeng Shareholder Meeting. The Chifeng Shareholder Meeting, if applicable, is expected to be held prior to the end of the year.

Further details of the Transaction and the Arrangement Agreement will be set out in the management information circular that will be prepared and mailed to Golden Star Shareholders in connection with the Golden Star Shareholder Meeting. Additional information regarding the rationale for the recommendations made by the Board of Directors of Golden Star and how Golden Star Shareholders can participate in and vote at the Golden Star Shareholder Meeting will also be provided in the management information circular. Golden Star Shareholders are urged to read the management information circular and other relevant materials in their entirety when they become available.

As noted above, pursuant to the Transaction, each Golden Star Shareholder will receive the Consideration for each Golden Star Share held by such shareholder. In addition, as part of the Transaction and as further detailed in the Plan of Arrangement made in accordance with the Transaction, each deferred share unit and each performance share unit of Golden Star that is outstanding immediately prior to the effective time of the Transaction will be acquired for cancellation in consideration for a cash payment equal to the Consideration. Additionally, each in-the-money common share purchase option that is outstanding immediately prior to the effective time of the Transaction will be acquired for cancellation in consideration for a cash payment equal to the product obtained by multiplying (i) the amount by which the Consideration exceeds the exercise price by (ii) the number of Golden Star Shares underlying such in-the-money option. All amounts are subject to applicable withholding taxes.