Golden Star Resources Ltd. declared that it has repaid in full its loan with Ecobank Ghana Limited ("Ecobank").

The loan, which was a $25 million medium-term facility, became available to the company in Sep 2014. Earlier, the company had paid back $3 million. The proceeds from the facility were utilized for the advancement of the Wassa Gold Mine, including the progress of a feasibility study for the Wassa Underground Gold Mine. The mine is an important part of the company’s strategy to become a high grade, low cost, non-refractory gold producer.  The first stope was blasted at Wassa Underground on Jul 10, 2016, thereby marking the start of pre-commercial production at the mine.

The remaining $22 million of the loan, as well as all accrued interest on it, has now been repaid in full using proceeds from the financing transaction closed on Aug 3, 2016.  The repayment of Ecobank loan is anticipated to save roughly $600,000 in interest charges during the remainder of 2016.  It is also expected to have a favorable impact on Golden Star's cash flows, as the company was due to utilize its operating cash flows to pay $8.4 million to Ecobank by the end of 2017.

The repayment of the loan is an important step by the company to strengthen its balance sheet.

The shares of the company closed 1.3% higher at 76 cents on Aug 18.

GOLDEN STAR RES Price

 

GOLDEN STAR RES Price | GOLDEN STAR RES Quote

Golden Star currently carries a Zacks Rank #3 (Hold).

Some better-ranked companies in the gold mining space include New Gold, Inc. (NGD Quick QuoteNGD - Free Report) , B2Gold Corp. (BTG Quick QuoteBTG - Free Report) and AngloGold Ashanti Ltd. (AU Quick QuoteAU - Free Report) , all sporting a Zacks Rank #1 (Strong Buy).

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