Golden Star Reaffirms Merits Of Proposal To IAMGold
Business Editors
DENVER--(BUSINESS WIRE)--GSS GSC.TO--
Encouraged by Positive Capital Markets Response
Golden Star Resources Ltd. ("Golden Star") (AMEX:GSS) (TSX:GSC)
today said it was encouraged by the reaction of IAMGold shareholders
to its proposal and reaffirmed the merits of a business combination
with IAMGold Corporation ("IAMGold") (AMEX:IAG) (TSX:IMG).
"We are encouraged by the positive market response to our proposal
and the enthusiastic reaction of IAMGold's shareholders", said Peter
Bradford, President and Chief Executive Officer of Golden Star.
"Golden Star is disappointed that the board of directors of IAMGold
has elected so quickly not to pursue our proposal".
"We continue to believe that Golden Star's proposal is clearly
superior for IAMGold shareholders when compared with the proposed
business combination between IAMGold and Wheaton River Minerals Ltd.
("Wheaton River"). Although we would have preferred receiving board
support we remain committed to our proposal subject to receiving
appropriate support from IAMGold's shareholders and we are optimistic
about receiving that."
The proposal Golden Star has made to IAMGold is a business
combination whereby shareholders of IAMGold would receive 1.15 Golden
Star common shares for each IAMGold common share, being a premium of
13% to IAMGold shareholders based on the closing market prices for the
common shares of IAMGold and Golden Star on the Toronto Stock Exchange
on May 27, 2004, immediately prior to Golden Star's proposal.
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*T
A summary of the merits of the Golden Star Proposal include:
Golden Star-IAMGold IAMGold-Wheaton River
------------------- ---------------------
Premium 13% to IAMGold 25% to Wheaton River
IAMGold Shareholder 53% 26%
Participation
(Fully-Diluted)
Accretion/Dilution Accretive to IAMGold Dilutive to IAMGold
(NAVPS)
Management Experienced explorers, Lack of operating
developers and operators depth
Production Pure gold Gold, copper and
silver
Synergies US$8 million None
*T
Golden Star's Response to IAMGold's Stated Reasons for not
Pursuing the Golden Star Proposal
Long Term Prospects of Golden Star-IAMGold
- The West African operational fit of Golden Star's assets with
those of IAMGold is very attractive particularly when compared to the
wide geographical dispersal of Wheaton River's assets
- Golden Star has an experienced management team with a history of
successfully acquiring, constructing and operating gold mining assets
in West Africa. IAMGold and Wheaton River offer limited operational
and development experience
- Under Golden Star's proposal the combined company remains a pure
gold play whereas an IAMGold-Wheaton River combination will involve a
mix of base metals which trade at lower valuation multiples
- The Golden Star proposal will create a new, substantially
unhedged intermediate gold producer focused on West Africa with
growing production of approximately 800,000 ounces in 2005 and beyond
Financial Strength of Golden Star-IAMGold
- The Golden Star proposal offers a strong balance sheet with
approximately US$200 million in cash and cash equivalents
- In addition, potential synergies resulting in cost savings
estimated at approximately US$8 million annually have already been
identified
Accretion
- The Golden Star proposal offers immediate and long term value to
IAMGold shareholders as it is accretive to net asset value per share
immediately and to cash flow per share from 2006 onwards
Development Opportunity
- Golden Star has an enviable portfolio of exploration and
development projects which provide a superior growth profile, and an
experienced management team in place to deliver
Formal offer
- While the IAMGold board has declined to pursue our proposal, we
remain optimistic that the shareholders of IAMGold will continue to
support our proposal
Superior Proposal
- In taking the position that our proposal does not represent a
"Superior Proposal" as defined in the arrangement agreement governing
the IAMGold-Wheaton River transaction, the IAMGold board does not
appear to have taken into account the change in the gold price and
more specifically in the IAMGold share price since March 30, 2004, the
date the IAMGold-Wheaton River transaction was announced
- As the value of Golden Star's proposal is equivalent to $10.26
per IAMGold share based on the closing price of Golden Star shares on
the TSX on March 30, 2004, we continue to be of the belief that our
proposal constitutes a "Superior Proposal"
- The IAMGold-Wheaton River arrangement agreement may have
inappropriately restricted the IAMGold board's ability to consider
alternative proposals
- The failure to postpone the June 8th meeting to consider the
IAMGold-Wheaton River transaction may deny shareholders of IAMGold an
opportunity to obtain greater value for their IAMGold shares
About Golden Star
Golden Star holds a 90% equity interest in the Bogoso/Prestea
open-pit gold mine and the nearby Wassa gold project, which is
expected to commence production mid-year. Both mines are located in
Ghana in the immediate vicinity of two of IAMGold's joint venture
mines. In addition, Golden Star has a majority interest in the
currently inactive Prestea Underground Mine on the Bogoso/Prestea
property, as well as gold exploration interests elsewhere in West
Africa and in the Guiana Shield of South America. Golden Star has
approximately 139 million common shares outstanding.
Cautionary Statements
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.
Investors are cautioned that forward-looking statements are inherently
uncertain and involve risks and uncertainties that could cause actual
results to differ materially. Such statements include comments
regarding estimated production, synergies and the accretive nature of
the proposed transaction, the benefits of the transaction proposed by
Golden Star and the development potential of Golden Star's properties.
Factors that could cause actual results to differ materially include
timing of and unexpected events during construction, expansion and
start-up; variations in ore grade, tonnes mined, crushed or milled;
variations in relative amounts of refractory, non-refractory and
transition ores; delay or failure to receive board or government
approvals; timing and availability of external financing on acceptable
terms; technical, permitting, mining or processing issues;
fluctuations in gold price and costs; lack of IAMGold shareholder
support for the transaction proposed by Golden Star; the business of
Golden Star and IAMGold may not be integrated successfully or such
integration may be more difficult, time-consuming or costly than
expected; expected combination benefits from the Golden Star/IAMGold
transaction may not be fully realized or realized within the expected
time frame. 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 our Form 10-K
for 2003. 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 and that actual
results will vary from these estimates, possibly by material amounts.
While we may elect to update these estimates at any time, we do not
undertake to update any estimate at any particular time or in response
to any particular event. Investors and others should not assume that
any forecasts in this press release represent management's estimate as
of any date other than the date of this press release.
This press release does not constitute an offer to buy or sell, or
the solicitation of an offer to buy or sell, any of the securities of
Golden Star or IAMGold. Such an offer may only be made pursuant to a
registration statement and prospectus filed with the U.S. Securities
and Exchange Commission and offer to purchase and circular filed with
Canadian securities regulatory authorities. Golden Star plans to file
with the U.S. Securities and Exchange Commission a Registration
Statement on SEC Form S-4, and expects to mail an Offer Circular and
Prospectus to IAMGold stockholders concerning the proposed business
combination with IAMGold. WE URGE INVESTORS AND SECURITY HOLDERS TO
READ THE REGISTRATION STATEMENT, THE OFFER CIRCULAR AND PROSPECTUS AND
ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC AND CANADIAN
SECURITIES REGULATORY AUTHORITIES, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders will be able to obtain the
documents free of charge at the SEC's website, www.sec.gov. In
addition, documents filed with the SEC by Golden Star will be
available free of charge from Golden Star Investor Relations, 10901
West Toller Drive, Suite 300, Littleton, Colorado USA 80127-6312,
telephone no. (303) 830-9000.
KEYWORD: NEW YORK
INDUSTRY KEYWORD: MINING/METALS
SOURCE: Golden Star Resources Ltd.
CONTACT INFORMATION:
GOLDEN STAR RESOURCES LTD.
Peter Bradford
President and Chief Executive Officer
+1 303 894 4613
OR
GOLDEN STAR RESOURCES LTD
Allan Marter
Senior Vice President and Chief Financial Officer
+1 303 894 4631
OR
GOLDEN STAR RESOURCES LTD
Bruce Higson-Smith
Vice President Corporate Development
+1 303 894 4622
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