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Golden Star Resources: How The Acquisition Stacks Up Against Prior Deals

Taylor Dart profile picture
Taylor Dart


  • Golden Star Resources received an offer to be acquired by Chifeng Jilong Gold Mining in November, with the stock valued at $470 million.
  • This equates to a valuation of ~$431/oz on reserves and ~$133/oz on measured & indicated resources, and roughly ~1.40x P/NAV based on reserves at Wassa.
  • While the price tag appears steep, the NPV (5%) was based on a fraction of the total resource base, or ~1.1 million ounces of a total ~11.7 million-ounce resource base.
  • This deal at a price tag was a solid deal for Chifeng Jilong, and provides a better idea of what the going rate is for Tier-3 jurisdiction ounces with single-asset producers.
Mine work underground

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It's been a busy year for M&A in the gold sector (GLD), with more than ten deals, a sharp increase from what was already a busy year in 2020. One of the most recent deals was the acquisition of Golden Star

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Taylor Dart profile picture
"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."- John Hammerslough You can access more in-depth research, my current portfolios, my top-12 miner rankings, GDX buy/sell signals, new positions I am entering/exiting, plus proprietary sentiment indicators updated weekly for gold miners in my newsletter below. Returns Link: https://imgur.com/a/sreY6SzSubscription LinksMonthly: https://buy.stripe.com/7sI14d4b92vFdUc15cAnnual: https://buy.stripe.com/4gw28h0YXeen7vObJP - Disclosure: I am not a financial advisor. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading or investing.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AEM, AGI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

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Comments (2)

Hi Taylor. Another good article with solid arguments. One of the best articles on small African mining companies in the gold business. I used to own True Gold and Roxgold. I couldn't believe the price paid in Roxgold acquisition by Fortuna. In this case Golden Star is just too small of the company in a problematic country in order to get better price. On the other hand Chinese deal with jurisdictional issues, the way that western miners are unable to execute, therefore this sale is accretive to the Chinese.
thanks for the article.Your comparisons are very useful,especially for me who have several lebel 3 miners(including Golden Star)
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