Golden Star closes $6-million financing

Edmonton-based Golden Star Resources (TSE) recently locked up exploration funds for a number of South American properties through a private placement of 2.1 million special warrants at $2.85 each.

The warrants entitle holders to receive one common share and one common share purchase warrant. Two warrants give the holder the right to buy an additional share at $3.25 until June 15, 1993, increasing to $3.50 until Dec. 15, 1993. Gross proceeds of $6 million will be used for exploration on the company’s Mazaruni alluvial diamond property and Mahdia alluvial gold property. Both are in Guyana.

Golden Star also plans to conduct exploration programs on its Suriname properties.

Earlier this year, Golden Star was awarded exploration concessions on two blocks of ground in Suriname. The first agreement gives the company the exclusive right over a 2-year period to explore an area covering 781 square miles.

The second agreement covers the exploration rights over a 66-square-mile area for a period of five years.

Both Suriname concessions contain a number of gold prospects. Separate from its new concessions, Golden Star is now conducting deep trenching on its Gross Rosebel property in Suriname to test a large gold-mineralized zone.

Mike Halvorson, a spokesman for Golden Star, said sampling to date has returned an average gold grade of about 0.064 oz. per ton.

Halvorson said the extensive weathering on the property makes trenching relatively easy and will allow the company to design a drilling program scheduled to begin in October.

At its Akaiwong property in Guyana, Golden Star had expected to begin drilling on June 1, but will not be able to get a drill rig on site until a number of bridges to the property are reconstructed. The property hosts a large gold-mineralized intrusive with an overlying saprolite. Golden Star’s Mazaruni alluvial diamond project includes four non-contiguous exploration licences covering 77 square miles in the Middle Mazaruni River drainage system.

The company has spent about US$3.3 million on exploration on the concession to date, outlining a number of areas containing diamond-bearing gravels although no economic deposits have been located.

Golden Star’s principal asset is a 35% interest in the Omai project in Guyana. Cambior (TSE) owns a 60% interest in the project while the government of Guyana holds the remaining 5%. Cambior also has the right to purchase an additional 10% of Omai from Golden Star.