e424b5
Filed Pursuant to Rule No. 424(b)(5)
Registration No. 333-102225
PRELIMINARY SHORT FORM PROSPECTUS
NOTE: THIS PRELIMINARY SHORT FORM PROSPECTUS
WILL BE DISTRIBUTED ONLY OUTSIDE THE UNITED STATES
A copy of this preliminary
short form prospectus has been filed with the securities
regulatory authorities in each of the provinces of British
Columbia, Ontario, Alberta and Manitoba but has not yet become
final for the purpose of the sale of securities. Information
contained in this preliminary short form prospectus may not be
complete and may have to be amended. The securities may not be
sold until a receipt for the short form prospectus is obtained
from securities regulatory authorities.
The information in this prospectus is not complete and may be
changed. This prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted.
|
Filed Pursuant to Rule No. 424(b)(5)
Registration No. 333-102225
No securities regulatory authority has
expressed an opinion about these securities and it is an offence
to claim otherwise. This short form prospectus constitutes a
public offering of these securities only in those jurisdictions
where they may be lawfully offered for sale and therein only by
persons permitted to sell such securities. Information has been
incorporated by reference in this short form prospectus from
documents filed with securities commissions or similar
regulatory authorities in Canada. Copies of documents
incorporated herein by reference may be obtained on request
without charge from the Secretary of the Company at 10579
Bradford Road, Suite 103, Littleton, Colorado 80127-4247 or
by accessing the Companys disclosure documents available
through the internet on SEDAR at www.sedar.com.
Preliminary Short Form
Prospectus
|
|
NEW ISSUE |
February 3, 2003 |
GOLDEN STAR RESOURCES LTD.
Cdn$3.00 per Unit
13,400,000 Units
This short form prospectus, which we may also
refer to as this prospectus, qualifies the distribution of an
aggregate of 13,400,000 units of Golden Star Resources Ltd. (the
Company) at a price of Cdn$3.00 per unit. Each unit
consists of one common share and one-half of one common share
purchase warrant in the capital of the Company. Each whole
warrant will entitle the holder to purchase one additional
common share for a period of four years at a price of Cdn$4.60.
The common shares and warrants, which we may also refer to as
unit warrants, can be resold as separate securities immediately
following their purchase pursuant to this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price to Public |
|
Underwriters Fees(1)(2) |
|
Proceeds to the Company(3) |
|
|
|
|
|
|
|
Per unit
|
|
|
Cdn$3.00 |
|
|
|
Cdn$0.165 |
|
|
|
Cdn$2.835 |
|
Total(4)
|
|
|
Cdn$40,200,000 |
|
|
|
Cdn$2,211,000 |
|
|
|
Cdn$37,989,000 |
|
|
|
(1) |
The Company has agreed to pay to the underwriters
an amount in cash equal to 5.5% of the gross proceeds of the
units sold to them.
|
|
(2) |
As additional consideration, the Canadian
underwriters will also be granted non-transferable common share
purchase warrants to purchase that number of common shares equal
to 5.5% of the units sold under the offering at a purchase price
of Cdn$3.00 per share, expiring fifteen months from the closing
of the offering. This prospectus also qualifies the distribution
to the underwriters of these warrants, referred to in this
prospectus as the underwriters warrants. See Plan of
Distribution.
|
|
(3) |
Before deducting expenses of the offering,
estimated to be Cdn$l.
|
|
(4) |
The Company has granted to the Canadian
underwriters an underwriters option, exercisable in whole
or in part, to purchase up to an additional 3,600,000 units sold
at the offering price set forth above at any time up to two days
prior to the closing of the offering. If the Canadian
underwriters exercise the underwriters option in full, the
total price to the public with respect to such units will be
U.S.$7,063,200 or Cdn$10,800,000, the total underwriters fees
will be U.S.$388,476 or Cdn$594,000, and the net proceeds to the
Company will be U.S.$6,674,724 or Cdn$10,206,000. This
prospectus qualifies the distribution of the common shares and
unit warrants issuable upon exercise of the underwriters
options. See Plan of Distribution.
|
The units are being offered concurrently in the
United States on a best efforts basis, with no minimum number or
dollar amount requirement, pursuant to an agency agreement dated
l, 2003 among Canaccord Capital
Corporation (USA) Inc. and BMO Nesbitt Burns Corp., as the
U.S. agents, and the Company, and in Canada on a firm commitment
basis for 100% of the units, with the number to be reduced by
the number sold in the United States, pursuant to an
underwriting agreement dated l,
2003 among Canaccord Capital Corporation, BMO Nesbitt Burns
Inc., as the Canadian underwriters, and the Company. The
Canadian underwriters and the U.S. agents are collectively
referred to as the underwriters.
The price per unit was determined by negotiation
among the Company and the underwriters. The Company has
allocated Cdn$2.78 for the common share and Cdn$0.22 for the
half common share purchase warrant comprised in each unit. The
outstanding common shares of the Company are listed for trading
on the Toronto Stock Exchange, or the TSX, under the symbol
GSC and on the American Stock Exchange, or AMEX,
under the symbol GSS. On January 31, 2003 the
closing price of the common shares on the TSX was Cdn$2.84 and
on AMEX was U.S.$1.89. The common shares of the Company also
trade on the Berlin Stock Exchange under the symbol
GS5.
The Canadian underwriters, as principals,
conditionally offer the units initially offered in Canada and
those units which are initially offered in the United States and
which are subsequently acquired by transfer from the U.S.
agents, if any, subject to prior sale if, as and when issued and
delivered by the Company and accepted by the Canadian
underwriters in accordance with the conditions contained in the
Canadian underwriting agreement and subject to the approval of
certain legal matters on behalf of the Company by Field Atkinson
Perraton LLP, and on behalf of the Canadian underwriters by
Stikeman Elliott LLP. The underwriters may effect transactions
which stabilize or maintain the market for the common shares at
levels other than those which might otherwise prevail in the
open market. See Plan of Distribution.
The Company has applied to list the common shares
and unit warrants distributed under this prospectus on the
Toronto Stock Exchange and to list the common shares on the
American Stock Exchange. Listing will be subject to the Company
fulfilling all of the listing requirements of the Toronto Stock
Exchange and the American Stock Exchange.
Subscriptions in Canada will be received subject
to rejection or allotment in whole or in part and the right is
reserved to close the subscription books at any time without
notice. Closing of the offering is expected to occur on or about
February 14, 2003 or such other time as may be agreed upon
by the Company and the underwriters. Certificates representing
the common shares and unit warrants comprised in the units will
be available for delivery at closing.
This prospectus will also be filed as a form of
prospectus supplement to the U.S. Prospectus (the U.S.
Prospectus) attached as Schedule A hereto, included
in a Registration Statement on Form S-3 filed by the
Company with the United States Securities and Exchange
Commission. The Registration Statement of which the U.S.
Prospectus is a part was filed on December 27, 2002 with
the United States Securities and Exchange Commission and became
effective on January 27, 2003.
TABLE OF CONTENTS
|
|
|
|
|
|
|
Page |
|
|
|
ELIGIBILITY FOR INVESTMENT
|
|
|
i |
|
DOCUMENTS INCORPORATED BY REFERENCE
|
|
|
1 |
|
CURRENCY AND EXCHANGE RATE INFORMATION
|
|
|
3 |
|
STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
|
|
|
3 |
|
THE COMPANY
|
|
|
4 |
|
DESCRIPTION OF SECURITIES
|
|
|
7 |
|
PRICE RANGE OF OUR COMMON SHARES
|
|
|
9 |
|
DILUTION
|
|
|
10 |
|
RISK FACTORS
|
|
|
11 |
|
PLAN OF DISTRIBUTION
|
|
|
13 |
|
CONSOLIDATED CAPITALIZATION
|
|
|
17 |
|
USE OF PROCEEDS
|
|
|
18 |
|
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
|
|
|
18 |
|
INTERESTS OF EXPERTS
|
|
|
20 |
|
AUDITORS, TRANSFER AGENTS, REGISTRAR AND WARRANT
TRUSTEE
|
|
|
21 |
|
LEGAL MATTERS
|
|
|
21 |
|
PURCHASERS STATUTORY RIGHTS OF WITHDRAWAL
OR RESCISSION
|
|
|
21 |
|
SCHEDULE A U.S. PROSPECTUS
|
|
|
22 |
|
CERTIFICATE OF THE COMPANY
|
|
|
C-1 |
|
CERTIFICATE OF THE CANADIAN UNDERWRITERS
|
|
|
C-2 |
|
ELIGIBILITY FOR INVESTMENT
In the opinion of Field Atkinson Perraton LLP,
counsel to the Company and Stikeman Elliott LLP, counsel to the
Canadian Underwriters, based on legislation in effect as of the
date hereof and subject to compliance with the prudent
investment standards and general investment provisions and
restrictions of the statues referred to below (and, where
applicable, regulations and guidelines thereunder) and, in
certain cases, subject to the satisfaction of additional
requirements relating to investment or lending policies or goals
and, in certain cases, the filing of such policies or goals, the
securities offered by this prospectus, if issued on the date
hereof, would not be precluded as investments under the
following statutes:
Insurance Companies Act (Canada)
Pension Benefits Standards Act, 1985 (Canada)
Trust and Loan Companies Act (Canada)
Insurance Act (Ontario)
Loan and Trust Corporations Act (Ontario)
Pension Benefits Act (Ontario)
Trustee Act (Ontario)
Employment Pension Plans Act (Alberta)
Insurance Act (Alberta)
Loan and Trust Corporations Act (Alberta)
Financial Institutions Act (British Columbia)
Pension Benefits Standards Act (British Columbia)
The Insurance Act (Manitoba)
The Pension Benefits Act (Manitoba)
In the opinion of Field Atkinson Perraton LLP,
counsel for the Company and Stikeman Elliott LLP, counsel for
the Canadian Underwriters, as of the date hereof, the common
shares and unit warrants comprised in the Units are qualified
investments for the purposes of the Income Tax Act
(Canada) (ITA) for trusts governed by registered
retirement savings plans, registered retirement income funds,
registered education savings plans and deferred profit sharing
plans (collectively, Deferred Income Plans) within
the meaning of such Act. In the opinion of such counsel, based
in part on a certificate of an officer of the Company as to
certain factual matters, the common shares and unit warrants
comprised in the Units will not, on the date hereof, be
foreign property for the purposes of Part XI of
the ITA for Deferred Income Plans and other persons subject to
tax under Part XI of the ITA and the Regulations thereunder.
i
DOCUMENTS INCORPORATED BY REFERENCE
The Company files annual and quarterly financial
information, material change reports and other information with
the securities commissions or similar authorities in each of the
provinces of Canada (collectively, the Commissions).
The following documents filed with the Commissions are
specifically incorporated by reference into, and form an
integral part of, this prospectus:
|
|
1. |
the Annual Report on Form 10-K dated
March 25, 2002 for the year ended December 31, 2001;
|
|
2. |
the managements discussion and analysis of
the Company dated March 25, 2002;
|
|
3. |
the Management Proxy Circular of the Company
dated April 22, 2002;
|
|
4. |
the audited consolidated annual financial
statements of the Company for the financial years ending
December 31, 2001, 2000 and 1999;
|
|
5. |
the material change report dated January 17,
2002 relating to the completion of a private placement of
11,516,000 units in the Company;
|
|
6. |
the material change report dated May 22,
2002 relating to the completion of the sale of the
Companys interests in the Gross Rosebel, Headleys and
Thunder Mountain Properties in Suriname and Omai Gold Mines
Limited in Guyana to Cambior Inc.;
|
|
7. |
the material change report dated June 14,
2002 relating to filing of the Companys preliminary short
form prospectus;
|
|
8. |
the material change report dated June 17,
2002 relating to the Company receiving approval to be listed on
the American Stock Exchange;
|
|
9. |
the material change report dated June 20,
2002 confirming listing on the American Stock Exchange;
|
|
|
10. |
the material change report dated June 27,
2002 regarding the completion of the acquisition of the Yaou and
Dorlin properties in French Guiana and the disposition of the
Companys interests in the Gross Rosebel, Headleys and
Thunder Mountain properties in Suriname and the Companys
30% interest in Omai Gold Mines Limited in Guyana to Cambior
Inc., and containing pro forma financials giving effect to the
disposition of the Companys interests;
|
|
11. |
the material change report dated July 3,
2002 relating to the filing of the Companys amended and
restated preliminary short form prospectus in Canada and
registration statement in the United States;
|
|
12. |
the amended material change report dated
July 11, 2002 regarding the completion of the acquisition
of the Yaou and Dorlin properties in French Guiana and the
disposition of the Companys interests in the Gross
Rosebel, Headleys and Thunder Mountain properties in Suriname
and the Companys 30% interest in Omai Gold Mines Limited
in Guyana to Cambior Inc., and containing pro forma financial
statements, including a compilation report thereon, giving
effect to the disposition of these interests;
|
|
13. |
the material change report dated July 23,
2002 relating to the filing of the Companys final short
form prospectus in Canada and registration statement in the
United States;
|
|
14. |
the material change report dated July 31,
2002 relating to the completion of the prospectus offering in
the United States and Canada with the sale of 16.1 million
units at Cdn$1.90 per unit for gross proceeds of Cdn$30.6
million;
|
|
15. |
the material change report dated August 8,
2002 relating to the Companys earnings for the first six
months of 2002;
|
|
16. |
the material change report dated
September 10, 2002 relating to the finalization and
execution of the documentation with respect to the acquisition
of the 90% beneficial interest in the Wassa project;
|
|
17. |
the material change report dated
September 19, 2002 relating to the completion of the
acquisition of the 90% beneficial interest in the Wassa project;
|
1
|
|
18. |
unaudited interim financial statements for the
nine months ended September 30, 2002 together with
managements discussion and analysis of financial condition
and results of operations for such periods;
|
|
19. |
the material change report dated
December 13, 2002 relating to the completion of a private
placement of 3,440,000 units of the Company at $1.25
(approximately Cdn$1.95) per unit for gross proceeds of
$4.3 million (approximately Cdn$6.7 million);
|
|
20. |
the material change report dated
December 30, 2002 relating to filing of a shelf
registration statement in the United States;
|
|
21. |
the material change report dated January 31,
2003 relating to the Corporation entering into an agreement with
respect to this offering; and
|
|
22. |
the press release dated February 3, 2003
relating to 2002 production.
|
All documents of the type referred to in the
preceding paragraph (excluding confidential material change
reports) that are required to be filed by the Company with the
Commissions after the date of this prospectus and prior to the
completion or withdrawal of this Offering, shall be deemed to be
incorporated by reference into and form an integral part of this
prospectus. The documents incorporated or deemed incorporated by
reference herein contain meaningful and material information
relating to the Company and prospective subscribers for units
should review all information contained in this prospectus and
the documents incorporated by reference before making an
investment decision.
Any statement contained in a document
incorporated or deemed to be incorporated by reference herein or
in any subsequently filed document which also is or is deemed to
be incorporated by reference herein shall be deemed to be
modified or superseded for the purposes of this prospectus to
the extent that a statement contained herein, or in any other
subsequently filed document which also is incorporated or is
deemed to be incorporated by reference herein, modifies or
supersedes such statement. The modifying or superseding
statement need not state that it has modified or superseded a
prior statement or include any information set forth in the
document that it modifies or supersedes. The making of a
modifying or superseding statement shall not be deemed an
admission for any purposes that the modified or superseded
statement, when made, constituted a misrepresentation, an untrue
statement of a material fact or an omission to state a material
fact that is required to be stated or that is necessary to make
a statement not misleading in light of the circumstances in
which it was made. Any statement so modified or superseded shall
not be deemed in its unmodified or superseded form to constitute
a part of this prospectus.
Copies of documents incorporated herein by
reference may be obtained on request without charge from the
Secretary of the Company at 10579 Bradford Road, Suite 103,
Littleton, Colorado 80127-4247, at (303) 830-9000.
We have not authorized any other person to
provide you with information different from that contained in
this prospectus or the U.S. Prospectus. Information on any of
the websites maintained by us does not constitute a part of this
prospectus or the U.S. Prospectus.
2
CURRENCY AND EXCHANGE RATE
INFORMATION
Unless otherwise indicated, all references to
$ or dollars in this prospectus refer to
United States dollars. References to Cdn$ in this
prospectus refer to Canadian dollars.
The noon rate of exchange on January 31,
2003 as reported by the Bank of Canada for the conversion of
Canadian dollars was Cdn$1.00 equals $0.654. We use this
exchange rate for calculations appearing in Use of
Proceeds and Dilution that include conversion
of Canadian dollar amounts to United States dollars.
STATEMENTS REGARDING FORWARD-LOOKING
INFORMATION
This prospectus and the U.S. Prospectus and other
documents incorporated by reference herein contain
forward-looking statements, within the meaning of
Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, with
respect to our financial condition, results of operations,
business, prospects, plans, objectives, goals, strategies,
future events, capital expenditure, and exploration and
development efforts. Words such as anticipates,
expects, intends, plans,
believes, seeks, estimates,
may, will, and similar expressions
identify forward-looking statements. Although we believe that
our plans, intentions and expectations reflected in these
forward-looking statements are reasonable, we cannot be certain
that these plans, intentions or expectations will be achieved.
Actual results, performance or achievements could differ
materially from those contemplated, expressed or implied by the
forward-looking statements contained or incorporated by
reference in this prospectus and the U.S. Prospectus. Please
refer to the Risk Factors section of this prospectus
and to Statements Regarding Forward-Looking
Information and Risk Factors in the U.S.
Prospectus attached hereto as Schedule A for a more
detailed discussion of factors which could cause actual results
to differ materially from forward-looking statements.
3
THE COMPANY
References to we, our and
us mean Golden Star Resources Ltd., its predecessors
and consolidated subsidiaries, unless the context requires
otherwise.
We are an international gold mining and
exploration company. Since 1999, we have sought to move from a
primarily exploration focus in South America, to a primarily
production and exploration focus in West Africa. We own 90%
interests in two properties in Ghana, the Bogoso/ Prestea open
pit mine and related properties and the Wassa project. We
operate the Bogoso/ Prestea mine, with ore mined at the Prestea
property being processed at the Bogoso processing plant. We also
own an approximately 54% managing interest in the currently
inactive Prestea underground mine. We are conducting a
feasibility study with a view to entering into production at the
former Wassa mine, which was shut down by its former owner in
2001. In addition, through our 73% owned subsidiary, Guyanor
Ressources S.A., we have interests in several gold exploration
properties in French Guiana.
In the second quarter of 2002, we sold our most
significant exploration property in South America, the Gross
Rosebel project located in Suriname, to Cambior Inc., our
partner in the project. We still have a number of exploration
properties and interests in South America, but we are not
presently committing significant resources to the development of
these properties.
We were established under the Canada Business
Corporations Act, or the CBCA, on May 15, 1992 as a
result of the amalgamation of South American Goldfields Inc., a
corporation incorporated under the CBCA, and Golden Star
Resources Ltd., a corporation originally incorporated under the
provisions of the Business Corporations Act (Alberta) on
March 7, 1984 as Southern Star Resources Ltd.
Our principal executive offices are located at
10579 Bradford Road, Suite 103, Littleton, Colorado
80127-4247, and our telephone number is (303) 830-9000. Our
registered and records office is located at: c/o Koffman Kalef,
19th Floor, 885 West Georgia Street, Vancouver,
British Columbia, Canada V6C 3H4.
The Companys head office is located outside
of Canada. Although the issuer has appointed Koffman Kalef,
Suite 1900, 885 West Georgia Street, Vancouver,
British Columbia and Field Atkinson Perraton LLP, 1900,
350 7th Avenue S.W., Calgary, Alberta as
its agents for service of process in the Provinces of British
Columbia and Alberta respectively, it may not be possible for
investors to collect judgments obtained in Canadian courts
predicated on the civil liability provisions of securities
legislation.
4
Intercorporate Relationships
The Company also owns the following material
subsidiaries, and the Companys current corporate structure
is set out below (all entities are 100%-owned, unless otherwise
noted):
Note:
|
|
(1) |
Societe des Mines de Yaou & Dorlin is
owned 50% by Guyanor Ressources SA and 50% by Golden Star.
|
Growth Strategy
Since 1999, we have focused primarily on the
acquisition of producing and development stage gold properties
in Ghana and on the exploration, development and operation of
these properties. As a result, we have established reserves at
Bogoso/ Prestea which we expect to produce an average of
approximately 135,000 ounces per annum for an estimated mine
life of approximately ten years. If the feasibility study at our
Wassa property is favorable, we plan to commence development of
Wassa mid-year. If we are able to fast-track development and
start-up, we believe that Wassa could commence production in
early 2004. However, there can be no assurance that the
feasibility study will be favorable, that development and
start-up can be completed in early 2004, or that our production
goals will be achieved.
Our objective is to grow our business to become a
mid-tier gold producer (which we understand to be a producer
with annual production of approximately 500,000 ounces) over the
next few years. Due to higher gold prices and our improved
financial condition, we believe we are better placed to pursue
the acquisition of producing, development and advanced stage
exploration gold properties and companies, primarily in Ghana
and elsewhere in Africa. We are actively investigating potential
acquisition and merger candidates, some of which have indicated
to potential acquirors or their advisors that they or certain of
5
their properties are available for acquisition.
However, we presently have no agreement or understanding with
respect to any potential transaction. Acquisition and merger
transactions in our business are often initiated and completed
over a particularly short period of time.
We also intend to significantly increase
exploration activities and expenditures on our current
exploration properties, primarily in Ghana, as well as on
properties we may acquire.
Recent Developments
Fourth Quarter and 2002
Production
We produced and sold 34,654 ounces of gold at a
cash cost of approximately $221 per ounce in the fourth quarter
of 2002, bringing total 2002 production to 124,399 ounces of
gold at a cash cost of approximately $193 per ounce. We
calculate cash costs in accordance with the Gold Institute
Standard calculation of cash operating cost, which includes
mining, stripping and development costs, third party smelting
information costs and by-product credits and excludes royalties
and production taxes. Based on our preliminary unaudited
estimates, we expect to report positive earnings however, due to
lower than expected fourth quarter production, our earnings are
expected to be lower than previously forecast.
Our fourth quarter production was lower than we
had anticipated due primarily to delays in obtaining final
environmental permits to mine at the higher grade Plant-North
deposit at our Bogoso/ Prestea operation in Ghana. We began
production at Plant North in November, resulting in increased
gold production in December and January.
|
|
|
|
|
|
|
|
Ounces of Gold |
Month |
|
Produced and Sold |
|
|
|
2002
|
|
|
|
|
|
October
|
|
|
12,240 |
|
|
November
|
|
|
8,493 |
|
|
December
|
|
|
13,921 |
|
2003
|
|
|
|
|
|
January
|
|
|
17,680 |
|
Estimated 2003 production is approximately
140,000 ounces of gold at a cash cost of approximately $185 per
ounce from our open pit mining operations at the Plant-North
deposit at Bogoso/ Prestea.
Wassa Development
We expect the Wassa feasibility study to be
completed in mid 2003, and to continue exploration during 2003.
If the feasibility study is favorable and required approvals are
obtained, we expect to commence development in the third quarter
of 2003 and gold production in the first quarter of 2004.
2003 Exploration Plans
We plan to increase our exploration expenditures
to approximately $11 million in 2003, focused primarily on
the Companys producing and development stage properties in
Ghana. We plan to spend approximately $3.9 million on
exploration in the Bogoso/ Prestea area, including approximately
$2.3 million in exploration in the Prestea underground
mine. In 2002, we increased our joint venture interest in the
Prestea underground mine from 45% to 54% through our
expenditures on the property, pursuant to the dilution
provisions in our joint venture arrangements. We expect 2003
exploration expenditures at Wassa to total approximately
$1.0 million, with an additional $0.7 million
anticipated for early stage exploration initiatives on our
exploration concessions in Ghana. We expect to spend up to
$5 million for follow up work programs on our other current
properties in Ghana and on a broad based assessment of the
geological and exploration potential of the Ashanti trend in
Ghana.
We expect to continue to hold our exploration
stage properties in South America. We expect that our 73% owned
subsidiary, Guyanor Ressources SA, will acquire additional
exploration properties. Positive soil
6
geochemistry results on our Saramacca property in
Suriname are scheduled for follow up reconnaissance exploration
work in 2003.
DESCRIPTION OF SECURITIES
Our authorized capital includes an unlimited
number of common shares and an unlimited number of first
preferred shares, without nominal or par value, issuable in
series.
Common shares
As of January 31, 2003, 87,696,002 common
shares were issued and outstanding. All the issued common shares
are fully paid and are not subject to any future call or
assessment. The common shares issued in this offering will be
issued with certain rights as provided in the rights agreement
between us and CIBC Mellon Trust Company. Please see the
U.S. Prospectus attached as Schedule A
hereto Description of Common Shares for
further details.
First preferred shares
As of January 31, 2003, there are no first
preferred shares issued. Please see the U.S. Prospectus
attached as Schedule A hereto Description
of Preferred Shares for further details.
Warrants
We have warrants outstanding to purchase a total
of 15,823,367 common shares, consisting of: (i) warrants to
purchase 831,000 common shares, exercisable until
August 24, 2003 at an exercise price of $1.75;
(ii) warrants to purchase 1,333,333 common shares,
exercisable until September 6, 2004 at an exercise price of
$0.70; (iii) warrants to purchase 333,334 common shares
exercisable until July 19, 2005 at an exercise price of
$0.70; (iv) warrants to purchase 860,000 common shares,
granted December 12, 2002, exercisable for a period of two
years from the date of grant at an exercise price of $1.50;
(v) warrants to purchase 8,050,000 common shares, granted
July 24, 2002, exercisable for a period of two years from
the date of grant at an exercise price of Cdn$2.28;
(vi) warrants to purchase 770,000 common shares, granted
July 24, 2002, exercisable from July 24, 2003 to
July 24, 2005 at an exercise price of Cdn$2.28; and
(vii) warrants to purchase 3,645,700 common shares, granted
January 11, 2002, exercisable for a period of two years
from the date of grant at an exercise price of $0.70.
Unit warrants
Each unit will include one-half of one common
share purchase warrant. A whole unit warrant will entitle the
holder to purchase one common share at an exercise price of
Cdn$4.60 per share. The unit warrants will generally be
exercisable at any time for four years after the closing of this
offering.
The unit warrants will be issued in registered
form under a warrant indenture between us and CIBC Mellon Trust
Company, as the warrant trustee. We will appoint the principal
transfer office of the trustee in Vancouver as the location at
which the unit warrants may be surrendered for exercise,
transfer or exchange. The warrant indenture will, among other
things, include provisions for the appropriate adjustment in the
class, number and price of the common shares to be issued upon
exercise of the unit warrants upon the occurrence of certain
events, including any subdivision, consolidation or
reclassification of our common shares, the payment of stock
dividends and our amalgamation.
The common shares underlying the unit warrants,
when issued upon exercise of a unit warrant, will be fully paid
and non-assessable, and we will pay any transfer tax incurred as
a result of the issuance of common shares to the holder upon its
exercise.
We are not required to issue fractional shares
upon the exercise of a unit warrant and you may not exercise
one-half of one unit warrant or any other fraction thereof. The
holder of a unit warrant will not possess any rights as our
shareholder until he or she exercises the unit warrant.
7
A unit warrant may be exercised upon surrender of
the warrant certificate on or before the expiry date of the unit
warrant at the office of the warrant trustee, with the exercise
form found on the back of the warrant certificate completed and
executed as indicated, accompanied by payment of the exercise
price (by money order, wire transfer, bank draft or certified
check payable to the order of Golden Star Resources
Ltd.) for the number of common shares with respect to
which the unit warrant is being exercised.
For a holder to exercise the unit warrants, there
must be a current registration statement in effect with the
United States Securities and Exchange Commission and
qualification in effect under applicable state securities laws
(or applicable exemptions from state qualification requirements)
with respect to the issuance of common shares. We have agreed to
use our best efforts to cause this or another registration
statement with respect to the common shares issuable upon
exercise of the unit warrants under the Securities Act of 1933
to become and remain effective in anticipation of and before the
exercise of the unit warrants and to take such other actions
under the laws of various states as may be required to cause the
sale of common shares or other securities upon exercise of unit
warrants to be lawful. Under certain circumstances, we may
redeem the unit warrant by paying to the holder cash equal to
the difference between the market price of the common shares on
the exercise date and the exercise price of the unit warrant. We
will not be required to honor the exercise of unit warrants if,
in the opinion of our board of directors with the advice of
counsel, the sale of securities upon exercise would be unlawful.
The foregoing discussion of material terms and
provisions of the unit warrants is qualified in its entirety by
reference to the detailed provisions of the warrant indenture, a
copy of which may be obtained by contacting the Company.
For the life of the unit warrants, the holders
thereof have the opportunity to profit from a rise in the market
price of the common shares without assuming the risk of
ownership of the common shares underlying the unit warrants. The
warrant holders may be expected to exercise their unit warrants
at a time when we would, in all likelihood, be able to obtain
any needed capital by an offering of common shares on terms more
favorable than those provided for by the unit warrants.
Furthermore, the terms on which we could obtain additional
capital during the life of the unit warrants may be adversely
affected.
8
PRICE RANGE OF OUR COMMON SHARES
At the beginning of 2001, our common shares were
listed on the Toronto Stock Exchange under the trading symbol
GSC and on the American Stock Exchange under the
trading symbol GSR. Our shares were de-listed from
the American Stock Exchange on January 26, 2001, and
immediately began trading on the OTC Bulletin Board under the
symbol GSRSF. Our shares were relisted on the
American Stock Exchange effective June 19, 2002 under the
trading symbol GSS. As of January 31, 2003,
87,696,002 common shares were outstanding and we had 1,224
shareholders of record. On January 31, 2003, the closing
price per share for our common shares, as reported by the
Toronto Stock Exchange was Cdn$2.84 and as reported by the
American Stock Exchange was $1.89.
The following table sets forth, for the periods
indicated, the high and low market closing prices per share of
our common shares as reported by the Toronto Stock Exchange, the
American Stock Exchange and the OTC Bulletin Board.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Toronto Stock |
|
American Stock |
|
|
Exchange |
|
Exchange(1) |
|
|
|
|
|
|
|
High |
|
Low |
|
|
|
|
Cdn$ |
|
Cdn$ |
|
High |
|
Low |
|
|
|
|
|
|
|
|
|
2003:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter (through January 31, 2003)
|
|
|
3.49 |
|
|
|
2.84 |
|
|
|
2.29 |
|
|
|
1.88 |
|
2002:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
2.90 |
|
|
|
0.86 |
|
|
|
1.90 |
|
|
|
0.54 |
|
|
Second Quarter
|
|
|
3.58 |
|
|
|
1.70 |
|
|
|
2.42 |
|
|
|
1.05 |
|
|
Third Quarter
|
|
|
2.70 |
|
|
|
1.34 |
|
|
|
1.80 |
|
|
|
0.84 |
|
|
Fourth Quarter
|
|
|
2.90 |
|
|
|
1.66 |
|
|
|
1.90 |
|
|
|
1.04 |
|
2001:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
0.76 |
|
|
|
0.43 |
|
|
|
0.50 |
|
|
|
0.28 |
|
|
Second Quarter
|
|
|
1.15 |
|
|
|
0.45 |
|
|
|
0.72 |
|
|
|
0.29 |
|
|
Third Quarter
|
|
|
1.45 |
|
|
|
0.62 |
|
|
|
0.90 |
|
|
|
0.42 |
|
|
Fourth Quarter
|
|
|
1.46 |
|
|
|
0.88 |
|
|
|
0.97 |
|
|
|
0.55 |
|
2000:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
2.35 |
|
|
|
1.17 |
|
|
|
1.63 |
|
|
|
0.81 |
|
|
Second Quarter
|
|
|
1.80 |
|
|
|
1.22 |
|
|
|
1.19 |
|
|
|
0.81 |
|
|
Third Quarter
|
|
|
1.35 |
|
|
|
0.85 |
|
|
|
0.94 |
|
|
|
0.56 |
|
|
Fourth Quarter
|
|
|
1.15 |
|
|
|
0.62 |
|
|
|
0.75 |
|
|
|
0.38 |
|
|
|
(1) |
Data for the period from January 26, 2001 to
June 18, 2002 reflects trading on the OTC Bulletin Board.
|
We have not declared or paid cash dividends on
our common shares since our inception. Future dividend decisions
will consider our then-current business results, cash
requirements and financial condition.
9
DILUTION
The difference between the initial public
offering price per common share and the pro forma net tangible
book value per common share after this offering constitutes the
dilution to you. Net tangible book value per share is determined
by dividing our net tangible book value (total tangible assets
minus total liabilities) by the number of common shares
outstanding.
At September 30, 2002, our net tangible book
value was $44.2 million, or $0.53 per common share, under
Canadian generally accepted accounting principles, which we
refer to as Canadian GAAP ($41.4 million, or $0.49 per
common share, under United States generally accepted accounting
principles, which we refer to as U.S. GAAP). After giving
effect to the sale of the 13,400,000 units and the receipt of
the net proceeds at an initial public offering price of Cdn$3.00
or $1.96 per unit and attributing no value to the unit warrants,
our pro forma net tangible book value as of September 30,
2002 would have been $69.1 million or $0.71 per common
share under Canadian GAAP ($66.2 million or $0.68 per
common share under U.S. GAAP). This represents an immediate
increase in the net tangible book value of $0.18 per common
share under Canadian GAAP ($0.19 per common share under
U.S. GAAP) to existing shareholders and an immediate
dilution in net tangible book value of $1.25 per common share
under Canadian GAAP ($1.28 per common share under U.S. GAAP) to
the purchasers of the units in the offering.
The following table illustrates the per share
dilution to you:
|
|
|
|
|
|
|
|
|
|
Canadian GAAP
|
|
|
|
|
|
|
|
|
Initial public offering price
|
|
|
|
|
|
$ |
1.96 |
|
|
Net tangible book value per share as of
September 30, 2002
|
|
$ |
0.53 |
|
|
|
|
|
|
Increase attributable to new investors
|
|
|
0.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net tangible book value after offering
|
|
|
|
|
|
|
0.71 |
|
|
|
|
|
|
|
|
|
|
Dilution per share to new investors
|
|
|
|
|
|
$ |
1.25 |
|
|
|
|
|
|
|
|
|
|
Dilution as a percentage of offering price
|
|
|
|
|
|
|
64 |
% |
|
U.S. GAAP
|
|
|
|
|
|
|
|
|
Initial public offering price
|
|
|
|
|
|
$ |
1.96 |
|
|
Net tangible book value per share as of
September 30, 2002
|
|
$ |
0.49 |
|
|
|
|
|
|
Increase attributable to new investors
|
|
|
0.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net tangible book value after offering
|
|
|
|
|
|
|
0.68 |
|
|
|
|
|
|
|
|
|
|
Dilution per share to new investors
|
|
|
|
|
|
$ |
1.28 |
|
|
|
|
|
|
|
|
|
|
Dilution as a percentage of offering price
|
|
|
|
|
|
|
65 |
% |
10
RISK FACTORS
An investment in the units involves a high
degree of risk. You should consider the following discussion of
risks, and the discussion found under Risk Factors
in the U.S. Prospectus attached as Schedule A hereto, in
addition to the other information in this prospectus before
purchasing any of the units. In addition to historical
information, the information in this prospectus contains
forward-looking statements about our future business
and performance. Our actual operating results and financial
performance may be very different from what we expect as of the
date of this prospectus. The risks below address some of the
factors that may affect our future operating results and
financial performance.
The development of our Wassa property in Ghana
is subject to a number of uncertainties.
We are in the process of completing a feasibility
study regarding the possible development of and commencement of
production at our Wassa property in Ghana using conventional
carbon-in-leach processing techniques. We cannot assure you that
the results of the Wassa feasibility study will be favorable or
that development or production will commence when we currently
anticipate. If the feasibility study is favorable, we cannot
assure you that development will be completed at the cost and on
the schedule predicted in the feasibility study, or that
production rates or costs anticipated in the feasibility study
will be achieved. Any development of our Wassa property is
subject to all of the risks described in this prospectus and the
US Prospectus attached as Schedule A hereto,
including Risk Factors Operational
Risks The development and operation of our mining
projects involve numerous uncertainties in the related
prospectus.
The technology, capital costs and cost of
production of sulfide reserves and mineralized material at
Bogoso/ Prestea are still subject to a number of uncertainties,
including funding uncertainties.
For risks associated with Bogoso/ Prestea, please
see the US Prospectus attached as Schedule A hereto
Risk Factors-Operational Risks- The technology, capital
costs and cost of production of sulfide reserves and mineralized
material at Bogoso/ Prestea are still subject to a number of
uncertainties, including funding uncertainties in the
related prospectus.
The Companys activities are subject to
complex laws and regulations that can adversely affect operating
and development costs, the time of operations and/or the ability
to operate
Our mining operations and exploration and
development activities are subject to extensive Canadian, U.S.,
Ghanian and other foreign, federal, state, provincial,
territorial and local laws and regulations governing
exploration, development, production, exports, taxes, labour
standards, waste disposal, protection of the environmental,
reclamation, historic and cultural resources preservation, mine
safety and occupational health, toxic substances, reporting and
other matters. We are currently evaluating the impact of
compliance with Statement of Financial Accounting Standards
No. 143, Accounting for Site Restoration and
Abandonment Liability.
Investors in this offering will have no
opportunity to evaluate the merits or risks of any future
acquisition undertaken by us prior to making an investment
decision about purchasing the units.
As a key element of our growth strategy, we have
stepped up the active pursuit of acquisitions of producing,
development and advanced stage exploration properties and
companies. We are actively investigating potential acquisition
and merger candidates. Acquisition and merger transactions in
our business are often initiated and completed over a
particularly short period of time. Risks related to acquiring
and operating acquired properties and companies, discussed
elsewhere in this prospectus and the U.S. Prospectus, could have
a material adverse effect on our results of operations and
financial condition. In addition, to acquire properties and
companies, we would use available cash, incur debt, issue our
common shares or other securities, or a combination of any one
or more of these. This could limit our flexibility to raise
capital, to operate, explore and develop our properties and to
make additional acquisitions, and could further dilute and
decrease the trading price of our common shares. Investors in
11
this offering will have no opportunity to
evaluate the merits or risks of any future acquisition
undertaken by us prior to making an investment decision about
purchasing the units. Except as required by applicable laws and
regulations, our shareholders may have no opportunity to
evaluate future acquisitions before they are completed.
Risks inherent in acquisitions that we may
undertake could adversely affect our growth and financial
condition.
We are actively pursuing the acquisition of
producing, development and advanced stage exploration properties
and companies. Acquisition transactions involve inherent risks,
including:
|
|
|
|
|
Accurately assessing the value, strengths,
weaknesses, contingent and other liabilities and potential
profitability of acquisition candidates;
|
|
|
|
Ability to achieve identified and anticipated
operating and financial synergies;
|
|
|
|
Unanticipated costs;
|
|
|
|
Diversion of management attention from existing
business;
|
|
|
|
Potential loss of our key employees or the key
employees of any business we acquire; and
|
|
|
|
Unanticipated changes in business, industry or
general economic conditions that affect the assumptions
underlying the acquisition.
|
Any one or more of these factors or other risks
could cause us not to realize the benefits anticipated to result
from the acquisition of properties or companies, and could have
a material adverse effect on our ability to grow and on our
financial condition.
You will suffer immediate dilution of your
investment, and are subject to future dilution by the exercise
of currently outstanding options and warrants.
We anticipate that the initial public offering
price of the units will be substantially higher than the net
tangible book value per share of our common shares after this
offering. As a result, based on a public offering price of
Cdn$3.00 or $1.96, you would incur immediate dilution of
approximately $1.25 in net tangible book value calculated in
accordance with Canadian generally accepted accounting
principles and $1.28 calculated in accordance with United States
generally accepted accounting principles for each common share
included in the units you purchase.
Currently, there are options outstanding to
purchase up to 5,607,544 common shares at prices from Cdn$0.60
to Cdn$3.14 per share under our stock option plans and warrants
outstanding to purchase up to 15,823,367 common shares at a
weighted average exercise price of $1.21 per share. If currently
outstanding options or warrants to purchase our common shares
are exercised, your investment will be further diluted.
The existence of outstanding rights to
purchase common shares may impair our ability to raise capital
in the future.
After completion of this offering, 6,700,000
common shares will be issuable upon exercise of the unit
warrants issued in this offering at a price of Cdn$4.60 per
share, 737,000 common shares will be issuable upon exercise of
the underwriters warrants at a price of $3.00 per share
and, in the aggregate, approximately 21,400,000 common shares
will be issuable on exercise of other warrants, options and
other rights to purchase common shares at prices ranging from
Cdn$0.60 to Cdn$4.60. During the life of the warrants, options
and other rights, the holders are given an opportunity to profit
from a rise in the market price of our common shares with a
resulting dilution in the interest of the other shareholders.
Our ability to obtain additional financing during the period
such rights are outstanding may be adversely affected, and the
existence of the rights may have an adverse effect on the price
of our common shares. The holders of the warrants, options and
other rights can be expected to exercise them at a time when we
would, in all
12
likelihood, be able to obtain any needed capital
by a new offering of securities on terms more favorable than
those provided by the outstanding rights.
You may not be able to exercise your unit
warrants if we do not maintain an effective registration
statement and, upon exercise, we may have the right to pay you
the difference between the exercise price and the market price
instead of registering the underlying common
shares.
We are required to use best efforts to maintain a
registration statement relating to the offer and sale of the
common shares underlying the unit warrants and to qualify the
unit warrants for sale in jurisdictions in which the unit
warrant holders reside unless an exemption from such
registration or qualification exists. If registration is not
maintained, the holders of the unit warrants may not be able to
exercise them. We have the right, but not the obligation, so
long as our common shares are listed on a securities exchange or
there are at least two independent market makers, to pay a
holder exercising the unit warrants the difference between the
exercise price and the market price of the common shares on the
date of exercise in lieu of registering the underlying common
shares.
There is no public market for the unit
warrants.
Prior to this offering, there was no public
market for the unit warrants. We do not plan to list the unit
warrants in the United States. We have applied to the Toronto
Stock Exchange for approval of the warrants for listing, subject
to fulfillment of all the listing requirements of the Toronto
Stock Exchange. However, there cannot be any assurance as to the
liquidity of the public market for the unit warrants or that an
active public market for the unit warrants will develop. If an
active public market does not develop, the market price and
liquidity of the unit warrants may be adversely affected.
The value of the unit warrants is derived
from and dependent on the value of our common
shares.
An investment in the unit warrants is highly
speculative, and we cannot assure you that the warrants will
maintain any significant value in the future. The value of the
warrants will be indirectly derived from the value of the common
shares underlying the warrants, and the value of the warrants
and the underlying common shares may be adversely affected by a
number of factors beyond our control, as more fully described in
the section entitled Statements Regarding Forward-Looking
Information and in the other risk factors described in
this prospectus and the U.S. Prospectus.
PLAN OF DISTRIBUTION
Underwriting
We have entered into an agency agreement dated
l, 2003 with Canaccord Capital
Corporation (USA) Inc. and BMO Nesbitt Burns Corp., as the U.S.
agents, to offer the units in the United States on a best
efforts basis. We have also entered into a Canadian underwriting
agreement dated February l,
2003 with Canaccord Capital Corporation and BMO Nesbitt Burns
Inc., as the Canadian underwriters, under which the Canadian
underwriters have agreed to purchase 70% and 30%, respectively,
of the 13,400,000 units offered by this prospectus. The
obligations of the Canadian underwriters under the agreement may
be terminated at their discretion on the basis of their
assessment of the state of the financial markets and may also be
terminated upon the occurrence of certain stated events. The
Canadian underwriters are, however, obligated to take up and pay
for all of the securities if any of the securities are purchased
under the agreement.
Subject to the terms of the Canadian underwriting
agreement, we have agreed to issue and sell and the Canadian
underwriters have agreed to purchase on or about
February 14, 2003, or such other date as may be agreed
upon, 100% of the units offered at a price of Cdn$3.00 per unit
for a total consideration of Cdn$40,200,000 payable in cash
against delivery of certificates. The price of the units was
determined by negotiation between us and the Canadian
underwriters. Any units sold by the U.S. agents under the
U.S. agency agreement will reduce the obligation of the
Canadian underwriters to take up and pay for
13
units in an equal amount. The Canadian
underwriters may sell units to the U.S. agents pursuant to the
inter-dealer agreement described below. The Canadian
underwriting agreement provides for us to pay the Canadian
underwriters a fee of Cdn$0.165 per unit (including for units
distributed pursuant to their underwriters option), which
will be paid out of our general funds.
The Canadian underwriting agreement also provides
that we will indemnify the Canadian underwriters against certain
liabilities and expenses, including liabilities under applicable
securities legislation, or will contribute to payments that the
Canadian underwriters may be required to make in respect
thereof. We have been advised that, in the opinion of the United
States Securities and Exchange Commission, indemnification for
liabilities under the Securities Act of 1933 is against public
policy as expressed in the Securities Act and is therefore
unenforceable.
Subject to the terms of the U.S. agency
agreement, we have appointed the U.S. agents to offer the
units for sale to the public in the United States, on a best
efforts basis at a price of Cdn$3.00 per unit. The
U.S. agency agreement provides for us to pay the
U.S. agents a fee of Cdn$0.165 per unit, which will be paid
out of our general funds. The U.S. agents have not committed to
purchase a minimum amount of units under the U.S. agency
agreement.
The obligations of the U.S. agents under the U.S.
agency agreement may be terminated at their discretion upon the
occurrence of certain stated events. The U.S. agency agreement
also provides that we will indemnify the U.S. agents against
certain liabilities and expenses, including liabilities under
the U.S. Securities Act of 1933, or will contribute to
payments that the U.S. agents may be required to make in respect
thereof. We have been advised that, in the opinion of the United
States Securities and Exchange Commission, indemnification for
liabilities under the Securities Act of 1933 is against public
policy as expressed in the Securities Act of 1933 and is
therefore unenforceable.
We have agreed to pay the legal fees of the
underwriters as well as certain other out-of-pocket expenses.
The underwriters have entered into an
inter-dealer agreement among themselves that permits, subject to
the terms and conditions set forth in such agreement, one group
of underwriters to purchase units from or through the other
group and to offer them for resale. The price and currency of
settlement of any units so purchased will be determined by
agreement between the selling and purchasing groups of
underwriters at the time of any such transaction. Any such units
purchased by the underwriters will be offered on the terms set
forth in this prospectus.
The underwriters have advised us that they
propose to offer our units to the public initially at the
offering price set forth on the cover page of this prospectus
and to selected dealers at such price less a concession of not
more than Cdn$0.08 per unit. The underwriters and selected
dealers may reallow a concession to other dealers, including the
underwriters, of not more than Cdn$0.08 per unit. After
completion of the initial public offering of the units, the
offering price, the concessions to selected dealers and the
reallowance to their dealers may be changed by the underwriters.
The underwriters have informed us that they do
not expect to confirm sales of our units offered by this
prospectus to any accounts over which they exercise
discretionary authority.
Underwriters option
We have granted the Canadian underwriters an
option to purchase an additional 3,600,000 units at the price to
the public as set forth on the cover page of this prospectus
less the underwriters fee, exercisable until two days
before the closing of this offering. This prospectus also
qualifies and registers for distribution any units that are
issued pursuant to the exercise of the underwriters
option. We will be obligated, pursuant to the Canadian
underwriters option, to sell these additional units to the
Canadian underwriters to the extent the option is exercised. If
any of these additional units are purchased, the Canadian
underwriters will sell the additional units on the same terms as
the other units in the offering. Under the inter-dealer
agreement, the Canadian underwriters may allocate any portion of
additional units purchased upon exercise of the option to the
U.S. agents to sell in the United States.
14
Stabilization
In connection with the offering, the underwriters
may engage in stabilizing transactions, over-allotment
transactions and syndicate covering transactions in accordance
with Regulation M under the United States Securities
Exchange Act of 1934, as amended. Stabilizing transactions
permit bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum.
These stabilizing transactions and
syndicate-covering transactions may have the effect of raising
or maintaining the market price of our common shares and
warrants or preventing or retarding a decline in their market
price. As a result, the price of our common shares and warrants
may be higher than the price that might otherwise exist in the
open market. These transactions may be effected on the Toronto
Stock Exchange, the American Stock Exchange or otherwise and, if
commenced, may be discontinued at any time.
Pursuant to policy statements of the Ontario
Securities Commission, the underwriters may not, throughout the
period of distribution under this prospectus, bid for or
purchase common shares or the warrants. The foregoing
restriction is subject to certain exceptions including a bid or
purchase permitted under the by-laws and rules of the Toronto
Stock Exchange relating to market stabilization and passive
market making activities; and a bid or purchase made for and on
behalf of a customer where the order was not solicited during
the period of the distribution, provided that the bid or
purchase was not engaged in for the purpose of creating actual
or apparent active trading in, or raising the price of, the
common shares or the warrants. All of these transactions must
also be effected in accordance with Regulation M under the
United States Securities Exchange Act of 1934, as amended.
Underwriters Compensation
We have agreed to pay the underwriters a fee
equal to Cdn$0.165 for each unit sold (or 5.5% of the gross
proceeds).
We have also agreed to issue non-transferable
warrants to the Canadian underwriters to purchase a number of
common shares at Cdn$3.00 per share equal to 5.5% of the total
number of units sold in this offering, including those units, if
any, sold pursuant to the underwriters option. Assuming
all units offered are sold and the underwriters option is
not exercised, warrants to purchase 737,000 common shares will
be issued to the Canadian underwriters. These warrants will be
exercisable during the 15 month period beginning at the
date of closing and may not be sold, transferred or
hypothecated. The common shares underlying these warrants will
be registered, and we will cause the registration statement to
remain effective until the earlier of the time that all of the
underwriters warrants have been exercised and the date
which is 15 months after the date of closing.
The holders of the underwriters warrants
will have, in that capacity, no voting, dividend or other
stockholder rights. Any profit realized by the Canadian
underwriters on the sale of the securities issuable upon
exercise of the underwriters warrants may be deemed to be
additional underwriting compensation. During the term of the
underwriters warrants, the Canadian underwriters are given
the opportunity to profit from a rise in the market price of our
common shares. We may find it more difficult to raise additional
equity capital while the underwriters warrants are
outstanding. At any time at which the underwriters
warrants are likely to be exercised, we may be able to obtain
additional equity capital on more favorable terms.
Determination of Offering Price
Before this offering, there has been no public
market for the units or the warrants contained in the units. The
initial public offering price of the units offered by this
prospectus and the exercise price of the
15
warrants were determined by negotiation between
us and the underwriters. Among the factors considered in
determining the initial public offering price of the units and
the exercise price of the unit warrants were:
|
|
|
|
|
the market price of the common shares;
|
|
|
|
our history and our prospects;
|
|
|
|
the industry in which we operate;
|
|
|
|
gold prices and trends;
|
|
|
|
our past and present operating results;
|
|
|
|
the previous experience of our executive
officers; and
|
|
|
|
the general condition of the securities markets
at the time of this offering.
|
The offering price stated on the cover page of
this prospectus should not be considered an indication of the
actual value of the units. That price is subject to change as a
result of market conditions and other factors, and we cannot
assure you that the units, or the common shares and unit
warrants contained in the units, can be resold at or above the
initial public offering price.
16
CONSOLIDATED CAPITALIZATION
The following table sets forth our consolidated
capitalization (i) as of the dates indicated and
(ii) as adjusted to reflect our completed sale of
13,400,000 units, assuming the underwriters option is not
exercised. The following table should be read in conjunction
with the audited consolidated financial statements and
accompanying notes for the year ended December 31, 2001 and
the unaudited nine months ended September 30, 2002,
incorporated by reference in this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at Dec. 31, |
|
As at Sept. 30, 2002 |
|
|
2001 |
|
(unaudited) |
|
|
|
|
|
|
|
($000s) |
|
($000s) |
|
($000s) |
|
|
|
|
|
|
|
|
|
|
|
Actual |
|
As Adjusted |
|
|
|
|
|
|
|
Canadian GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Loans
|
|
$ |
7,513 |
|
|
$ |
3,410 |
|
|
$ |
3,410 |
|
Convertible Debentures
|
|
|
2,358 |
|
|
|
|
|
|
|
|
|
Long Term Bank Debt
|
|
|
|
|
|
|
1,951 |
|
|
|
1,951 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders Equity
|
|
|
9,871 |
|
|
|
5,361 |
|
|
|
5,361 |
|
|
Common Share(3)
|
|
|
168,308 |
|
|
|
196,891 |
(1) |
|
|
221,736 |
(1)(2) |
|
Convertible Debentures
|
|
|
545 |
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
(156,511 |
) |
|
|
(152,666 |
) |
|
|
(152,666 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,342 |
|
|
|
44,225 |
|
|
|
69,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
$ |
22,213 |
|
|
$ |
49,586 |
|
|
$ |
74,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at Dec. 31, |
|
As at Sept. 30, 2002 |
|
|
2001 |
|
(unaudited) |
|
|
|
|
|
|
|
($000s) |
|
($000s) |
|
($000s) |
|
|
|
|
|
|
|
|
|
|
|
Actual |
|
As Adjusted |
|
|
|
|
|
|
|
U.S. GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Loans
|
|
$ |
7,513 |
|
|
$ |
3,410 |
|
|
$ |
3,410 |
|
Convertible Debentures
|
|
|
2,411 |
|
|
|
|
|
|
|
|
|
Long Term Bank Debt
|
|
|
|
|
|
|
1,951 |
|
|
|
1,951 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders Equity
|
|
|
9,924 |
|
|
|
5,361 |
|
|
|
5,361 |
|
|
Common Share
|
|
|
165,833 |
|
|
|
193,921 |
(1) |
|
|
218,766 |
(1)(2) |
|
Other(3)
|
|
|
1,316 |
|
|
|
1,512 |
|
|
|
1,512 |
|
|
Deficit
|
|
|
(165,616 |
) |
|
|
(154,040 |
) |
|
|
(154,040 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,533 |
|
|
|
41,393 |
|
|
|
66,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
$ |
11,457 |
|
|
$ |
46,754 |
|
|
$ |
71,599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
(1) |
Changes to share capital in the nine months ended
September 30, 2002 reflect our issuance of an aggregate of
(i) 11,516,000 common shares pursuant to a private
placement of units that closed in January 2002,
(ii) 547,915 common shares issued pursuant to the exercise
of incentive stock options, (iii) 3,444,278 common shares
issued upon debenture conversions, (iv) 450,000 common
shares issued in payment for services, (v) 107,000 common
shares issued for management bonuses, (vi) 16,100,000
common shares issued in the public offering that closed in July
2002, and (vii) 2,535,960 common shares issued pursuant to
the exercise of common share purchase warrants.
|
|
(2) |
Amounts shown do not include (i) 3,440,000
common shares issued in a private placement of units that closed
in December 2002, (ii) 28,000 common shares issued in
January 2003 pursuant to the exercise of incentive stock
options, (iii) 267,300 common shares issued in January 2003
pursuant to the exercise of common share purchase warrants,
(iv) 5,607,544 common shares issuable on the exercise of
outstanding stock options, or (v) 15,823,367 common shares
issuable on the exercise of outstanding warrants.
|
|
(3) |
Other includes the cumulative foreign
currency translation adjustment and accumulated comprehensive
income.
|
17
USE OF PROCEEDS
We estimate that the proceeds that we will
receive from the sale of the 13,400,000 units offered by this
prospectus will be approximately Cdn$37,989,000 or $24,844,806,
based on an initial public offering price of Cdn$3.00 per unit
after deducting the underwriters fees and before estimated
offering expenses of $l. If the
underwriters option is exercised in full, we estimate that
we will receive additional net proceeds of approximately
Cdn$10,206,000 or $6,674,724 after deducting the
underwriters fees and before estimated offering expenses.
We intend to use the net proceeds for
exploration, acquisitions, development activities and general
corporate purposes. The amount and timing of any use of the
proceeds will depend on various factors, including gold prices,
production costs, the quality of the ores that we produce and
business growth including acquisitions and exploration.
Pending the use of the proceeds of this offering,
we intend to invest the net proceeds of this offering in
treasury bills or short-term, investment grade, interest-bearing
securities.
CERTAIN CANADIAN FEDERAL INCOME TAX
CONSIDERATIONS
In the opinion of Field Atkinson Perraton LLP,
counsel to the Company, and Stikeman Elliott LLP, counsel to the
Canadian underwriters, the following summary describes, as of
the date hereof, the principal Canadian federal income tax
considerations under the ITA that should be considered by
prospective purchasers hereunder.
This summary is based on the current provisions
of the ITA, all specific proposals to amend the ITA publicly
announced by the Minister of Finance (Canada) prior to the date
hereof, and counsels understanding of the current
administrative and assessing policies of the Canada Customs and
Revenue Agency (the CCRA). No assurance can be given
that the proposed amendments to the ITA will be enacted in their
current proposed form or at all. This summary does not otherwise
take into account or anticipate any change to the law or
administrative practice, whether by legislative, governmental or
judicial action.
This summary applies only to persons who are
resident in Canada under the ITA, who acquire, hold and dispose
of common shares and unit warrants as capital property, and who
deal at arms length and are not affiliated with the
Company, or Holders. Common shares and unit warrants will
generally be considered to be capital property to a person
provided that the person does not hold such securities in the
course of carrying on a business of dealing in securities and
has not acquired such securities in a transaction or
transactions considered to be an adventure in the nature of
trade. Depending on a persons particular circumstances,
common shares may be deemed to be capital property where the
election in subsection 39(4) of the ITA has been made by a
Canadian resident eligible to make such election.
This summary is not applicable to the Holders
that are financial institutions (as defined in the ITA) for
purposes of the mark-to-market rules in the ITA.
Holders to whom such rules are applicable should consult their
own tax advisers. This summary does not take into account
foreign, provincial or territorial tax legislation or
considerations, which may vary from the Canadian federal income
tax considerations described herein.
This summary is of a general nature only, and
is not a complete analysis of all possible income tax
considerations that may be applicable to a Holder. This summary
is not intended to be, nor should it be construed as, legal or
tax advice to any particular Holder. Accordingly, prospective
Holders should consult their own tax advisers with respect to
their particular circumstances.
For the purposes of the ITA, all amounts relating
to the acquisition, holding or disposition of the common shares
and warrants, including dividends, adjusted cost base
(ACB) and proceeds of disposition, must be converted
into Canadian dollars based on the prevailing United States
dollar exchange rate at the time such amounts arise. In
computing a shareholders liability for tax under the ITA,
any cash amount received by a shareholder in United States
dollars must be converted into the Canadian dollar
18
equivalent, and the amount of any non-cash
consideration received by a shareholder must be expressed in
Canadian dollars at the time such consideration is received.
Acquisition of Common Shares and Unit
Warrants
It is necessary to allocate the total purchase
price for the units on a reasonable basis among the common
shares and unit warrants so acquired. The Company believes that
a reasonable allocation of the purchase price of Cdn$3.00 per
unit is Cdn$2.78 per common share and Cdn$0.22 per unit warrant.
While the Company believes that this allocation is reasonable,
the CCRA is not bound by this allocation.
The cost of any common shares purchased hereunder
by a Holder will be averaged with the ACB to the Holder of any
other common shares held by the Holder at that time, so as to
produce a uniform cost for all common shares held by that Holder.
Unit Warrants
Exercise of Unit Warrants
The exercise of unit warrants will not be a
disposition for the purposes of the ITA, with the result that no
gain or loss will be realized by a Holder upon the exercise of
unit warrants. A Holders aggregate cost of common shares
acquired on the exercise of unit warrants will be the aggregate
of the ACB to the Holder of the unit warrants so exercised and
the exercise price paid for such common shares. The cost of any
common shares acquired on the exercise of unit warrants by a
Holder will be averaged with the ACB to the Holder of any other
common shares held by the Holder at that time, so as to produce
a uniform cost for all common shares held by that Holder.
Disposition of Unit Warrants
A Holder who disposes of unit warrants will
realize proceeds of disposition equal to the fair market value
of the consideration received therefor, and will realize a
capital gain (or capital loss) in the amount by which such
proceeds of disposition, net of any costs of disposition, exceed
(or are less than) the ACB to the Holder of the unit warrants
disposed of. The tax treatment of capital gains and losses is
discussed in greater detail below under the subheading
Capital Gains and Losses.
Expiry of Unit Warrants
The expiry of unexercised unit warrants will
constitute a disposition thereof for nil proceeds of
disposition, resulting in the Holder realizing a capital loss
equal to the ACB to the Holder of the expired unit warrants. The
tax treatment of capital losses is discussed in greater detail
below under the subheading Capital Gains and Losses.
Disposition of Common Shares
Any gain (or loss) realized on the disposition of
common shares will be a capital gain (or capital loss) to the
Holder. The tax treatment of capital gains and losses is
discussed in greater detail below under the subheading
Capital Gains and Losses.
Capital Gains and Losses
A Holders capital gain (or capital loss)
from the disposition of any capital property is calculated as
the amount by which the Holders proceeds of disposition
exceed (or are less than) the aggregate of the ACB to the Holder
of the property disposed of and any reasonable outlays or
expenses incurred to make the disposition. The Holders
taxable capital gain (or allowable capital loss) is one-half of
this amount. The Holder must include any such taxable capital
gain in income for the taxation year of the disposition, and may
deduct any such allowable capital loss from taxable capital
gains realized in that same taxation year. Subject to detailed
rules contained in the ITA, any unused allowable capital loss
may generally be
19
applied to reduce net taxable capital gains
realized by the Holder in the three preceding and in all
subsequent taxation years.
Capital gains realized by a Holder who is an
individual may be subject to alternative minimum tax under the
ITA, depending on the individuals circumstances.
Recognition of capital losses otherwise realized may be denied
in various circumstances set out in the ITA, including
transactions involving affiliated persons (as defined in the
ITA). In addition, pursuant to detailed rules in the ITA, a
capital loss realized on the disposition of a share may be
reduced by the amount of certain dividends on that share
received or deemed to have been received by the Holder. Holders
realizing a capital loss should consult their own tax advisers
concerning these complex rules. Canadian-controlled private
corporations are subject to an additional refundable tax of
6 2/3% on the lesser of any such corporations
(i) aggregate investment income (including taxable capital
gains); and (ii) taxable income (less any amount claimed in
respect of the small business deduction) for the year. This
additional tax will be refunded to the corporation at the rate
of Cdn$1 for every Cdn$3 of taxable dividends paid while it is a
private corporation.
Dividends
In computing a Holders income, a Holder who
is an individual will be required to include in income the
amount of any dividends received or deemed to be received by the
Holder on the common shares. The Holder will, in respect of such
dividends, be subject to the gross-up and dividend tax credit
rules normally applicable to taxable dividends received from
taxable Canadian corporations (as defined in the ITA).
In computing its income, a Holder that is a
corporation will normally be required to include in income the
amount of any dividends on the common shares received or deemed
to be received by the Holder, but will normally be entitled to
deduct the amount of the dividends in computing its taxable
income. A Holder that is a private corporation (as defined in
the ITA) or a subject corporation (as defined in the ITA) may be
liable under Part IV of the ITA to pay a refundable tax of
33 1/3% of dividends received or deemed to be received on
the common shares to the extent that such dividends are
deductible in computing the Holders taxable income. This
tax will be refunded to the Holder at the rate of Cdn$1 for
every Cdn$3 of taxable dividends paid while it is a private
corporation.
INTERESTS OF EXPERTS
The financial statements incorporated in this
prospectus by reference to the Annual Report on Form 10-K
for the year ended December 31, 2001 have been so
incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
Certain data, of a scientific or technical
nature, regarding our mineral reserves and mineralized material
included in this prospectus or included in documents
incorporated by reference into this prospectus, have been
verified by our full-time employees, Mr. Dave Alexander,
Mine Planning and Engineering Superintendant, Ghana and
Mr. Mitchell Wasel, Exploration Manager, Ghana.
Messrs. Alexander and Wasel are each qualified
persons within the meaning of Canadas National
Instrument 43-101 Standards of Disclosure for Mineral
Projects. In addition to their employment with us,
Messrs. Alexander and Wasel hold options which are
exercisable into less than 1% of our outstanding common shares.
The statements of reserves, production and
mineral deposits at Bogoso/Prestea incorporated in this
prospectus by reference from our Annual Report on Form 10-K for
the year ended December 31, 2001 and an independent
Technical Report supporting our estimates of mineral reserves
and mineralized material at Bogoso/Prestea were prepared by
Messrs. Keith McCandlish, P.Geol., and Alan L. Craven,
P.Eng., of Associated Mining Consultants Ltd. dated
December 13, 2001 given on their authority as experts in
mining engineering and geology and as qualified
persons within the meaning of Canadas National
Instrument 43-101. Neither Messrs. McCandlish and
Craven nor any of the officers, directors and other employees of
Associated Mining Consultants Ltd. hold any of our common shares.
20
The statements of estimated mineralized material
for the Yaou and Dorlin properties incorporated in this
prospectus by reference from our Annual Report on Form 10-K
for the year ended December 31, 2001 were prepared by
Mr. Francis Clouston, former Project Assessment Engineer,
Cambior Inc., given on his authority as an expert in mining
engineering and geology and as a qualified person
within the meaning of Canadas National
Instrument 43-101. Mr. Clouston now works for Bogoso
Gold Limited and holds options which are exercisable into less
than 1% of our outstanding common shares.
The statements of mineralized material for the
Paul Isnard project incorporated in this prospectus by reference
from our Annual Report on Form 10-K for the year ended
December 31, 2001 were prepared by Mr. Declan
Costelloe, our former Manager Mining Geology, given on his
authority as an expert in mining engineering and geology and as
a qualified person within the meaning of
Canadas National Instrument 43-101.
Mr. Costelloes ownership of our common shares is less
than 1% of the outstanding shares.
AUDITORS, TRANSFER AGENTS, REGISTRAR AND
WARRANT TRUSTEE
PricewaterhouseCoopers LLP, Chartered
Accountants, are our auditors. The transfer agent and registrar
for our common shares and the warrant trustee for our unit
warrants is CIBC Mellon Trust Company at its principal office in
the City of Vancouver, British Columbia.
LEGAL MATTERS
Certain legal matters relating to the offering
and to the common shares to be distributed pursuant to this
prospectus will be reviewed by Field Atkinson Perraton LLP,
Calgary, Alberta and Davis Graham & Stubbs LLP, Denver,
Colorado on behalf of the Company and Stikeman Elliott LLP,
Toronto, Ontario and Dorsey & Whitney LLP, Seattle,
Washington and Toronto, Ontario on behalf of the underwriters.
As of the date hereof, the partners and associates of Field
Atkinson Perraton LLP, as a group, beneficially owned directly
or indirectly less than 1% of the issued and outstanding common
shares of the Company. As of the date hereof, the partners and
associates of Davis Graham & Stubbs LLP, as a group,
beneficially owned directly or indirectly less than 1% of the
issued and outstanding common shares of the Company. As of the
date hereof, the partners and associates of Stikeman Elliott
LLP, as a group, beneficially owned directly or indirectly less
than 1% of the issued and outstanding common shares of the
Company. As of the date hereof, the partners and associates of
Dorsey & Whitney LLP, as a group, beneficially owned
directly or indirectly less than 1% of the issued and
outstanding common shares of the Company.
PURCHASERS STATUTORY RIGHTS OF
WITHDRAWAL OR RESCISSION
Securities legislation in certain of the
provinces and territories in Canada provides purchasers with the
right to withdraw from an agreement to purchase securities. This
right may be exercised within two business days after receipt or
deemed receipt of a prospectus and any amendment. In several of
the provinces and territories, the securities legislation
further provides a purchaser with remedies for rescission or, in
some jurisdictions, damages if the prospectus and any amendment
contains a misrepresentation or is not delivered to the
purchaser, provided that such remedies for rescission or damages
are exercised by the purchaser within the time limit prescribed
by the securities legislation of the purchasers province
or territory. Purchasers should refer to applicable provisions
of the securities legislation of their province for the
particulars of these rights or consult with a legal advisor.
21
SCHEDULE A U.S.
PROSPECTUS
22
PROSPECTUS
$75,000,000
GOLDEN STAR RESOURCES LTD.
Common Shares
Preferred Shares
Warrants
Convertible Debt Securities
4,300,000 Common Shares
Golden Star Resources Ltd. (together with its
subsidiaries, Golden Star, we,
us, or our company) may offer and sell
from time to time up to $75,000,000 of our common shares,
without par value, preferred shares, without par value,
warrants, or convertible debt securities in one or more
transactions.
The selling shareholders may sell up to 4,300,000
common shares acquired in a private placement in December 2002,
which includes 860,000 common shares which may be issued upon
exercise of common share purchase warrants sold in the private
placement.
This prospectus provides you with a general
description of the securities that we or the selling
shareholders may offer. The accompanying prospectus supplement
sets forth specific information with regard to the particular
securities being offered and may add, update or change
information contained in this prospectus. You should read both
this prospectus and the prospectus supplement, together with any
additional information which is incorporated by reference into
this prospectus. For additional information on the selling
shareholders, the common shares and warrants owned by the
selling shareholders and the methods of sale, you should refer
to the sections entitled Selling Shareholders and
Plan of Distribution.
Our common shares are traded on the American
Stock Exchange under the symbol GSS, the Toronto
Stock Exchange under the symbol GSC and the Berlin
Stock Exchange under the symbol GS5.
References in this Prospectus to $
are to United States dollars. Canadian dollars are indicated by
the symbol Cdn$.
This prospectus may not be used to offer and sell
securities unless accompanied by the applicable prospectus
supplement.
The securities offered in this prospectus
involve a high degree of risk. You should carefully consider the
matters set forth in Risk Factors beginning on page
6 of this prospectus in determining whether to purchase our
securities.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
these securities, or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is January 27,
2003.
TABLE OF CONTENTS
|
|
|
|
|
Section |
|
Page |
|
|
|
Where You Can Find More Information
|
|
|
3 |
|
Incorporation of Certain Documents by Reference
|
|
|
3 |
|
Statements Regarding Forward-Looking Information
|
|
|
4 |
|
Our Business
|
|
|
5 |
|
Recent Developments
|
|
|
5 |
|
Risk Factors
|
|
|
6 |
|
Use of Proceeds
|
|
|
15 |
|
Selling Shareholders
|
|
|
15 |
|
Plan of Distribution
|
|
|
16 |
|
Description of Common Shares
|
|
|
17 |
|
Description of Preferred Shares
|
|
|
19 |
|
Description of Warrants
|
|
|
19 |
|
Description of Convertible Debt Securities
|
|
|
20 |
|
Ratio of Earnings to Fixed Charges and Preference
Amounts
|
|
|
27 |
|
Limitation of Liability and Indemnification
|
|
|
27 |
|
Legal Matters
|
|
|
28 |
|
Experts
|
|
|
28 |
|
You should rely only on information contained or
incorporated by reference in this prospectus. Neither we nor the
selling shareholders have authorized anyone to provide you with
information different from that contained or incorporated in
this prospectus.
Neither we nor the selling shareholders are
making an offer of these securities in any jurisdiction where
the offering is not permitted.
You should not assume that the information
contained or incorporated by reference in this prospectus is
accurate as of any date other the date on the front of this
prospectus or the dates of the documents incorporated by
reference.
2
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the reporting requirements of
the Securities Exchange Act of 1934, as amended (the
Exchange Act), and file annual, quarterly and
periodic reports, proxy statements and other information with
the Securities and Exchange Commission, or SEC. The SEC
maintains a web site (http://www.sec.gov) on which our reports,
proxy statements and other information are made available. Such
reports, proxy statements and other information may also be
inspected and copied at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the
public reference facilities.
We have filed with the SEC a Registration
Statement on Form S-3, under the Securities Act of 1933, as
amended (the Securities Act), with respect to the
securities offered by this prospectus. This prospectus, which
constitutes part of the Registration Statement, does not contain
all of the information set forth in the Registration Statement,
certain parts of which have been omitted in accordance with the
rules and regulations of the SEC. Reference is hereby made to
the Registration Statement and the exhibits to the Registration
Statement for further information with respect to our company
and the securities.
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE
The SEC allows us to incorporate by
reference our publicly filed reports into this prospectus,
which means that information included in those reports is
considered part of this prospectus. Information that we file
with the SEC after the date of this prospectus will
automatically update and supersede the information contained in
this prospectus and in prior reports. We incorporate by
reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act until all of the securities offered pursuant to
this prospectus have been sold.
The following documents filed with the SEC are
incorporated by reference in this prospectus:
|
|
|
|
1. |
Our Annual Report on Form 10-K for the year
ended December 31, 2001;
|
|
|
2. |
Our Quarterly Reports on Form 10-Q for the
quarters ended March 31, June 30 and
September 30, 2002;
|
|
|
3. |
Reports on Form 8-K/A filed on June 26,
2002, on Form 8-K filed on September 30, 2002, on
Form 8-K/A filed on November 29, 2002, on
Form 8-K filed on December 13, 2002, and on
Form 8-K filed on January 23, 2003; and
|
|
|
4. |
Our Registration Statement on Form 8-A,
filed June 18, 2002, which contains a description of our
capital stock.
|
We will furnish without charge to you, on written
or oral request, a copy of any or all of the above documents,
other than exhibits to such documents which are not specifically
incorporated by reference therein. You should direct any
requests for documents to Investor Relations, Golden Star
Resources Ltd., 10579 Bradford Road, Suite 103,
Littleton, Colorado, 80127-4247, telephone (303) 830-9000.
The information relating to us contained in this
prospectus is not comprehensive and should be read together with
the information contained in the incorporated documents.
Descriptions contained in the incorporated documents as to the
contents of any contract or other document may not contain all
of the information which is of interest to you. You should refer
to the copy of such contract or other document filed as an
exhibit to our filings.
3
STATEMENTS REGARDING FORWARD-LOOKING
INFORMATION
This prospectus and the documents incorporated by
reference in this prospectus contain forward-looking statements,
within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act, with respect to our
financial condition, results of operations, business, prospects,
plans, objectives, goals, strategies, future events, capital
expenditure, and exploration and development efforts. Words such
as anticipates, expects,
intends, plans, believes,
seeks, estimates, may,
will, and similar expressions identify
forward-looking statements. Although we believe that our plans,
intentions and expectations reflected in these forward-looking
statements are reasonable, we cannot be certain that these
plans, intentions or expectations will be achieved. Actual
results, performance or achievements could differ materially
from those contemplated, expressed or implied by the
forward-looking statements contained or incorporated by
reference in this prospectus.
The following, in addition to the factors
described in Risk Factors in the accompanying
prospectus supplement, are among the factors that could cause
actual results to differ materially from the forward-looking
statements:
|
|
|
|
|
unexpected changes in business and economic
conditions;
|
|
|
|
significant increases or decreases in gold prices;
|
|
|
|
timing and amount of production;
|
|
|
|
unanticipated grade changes;
|
|
|
|
unanticipated recovery or production problems;
|
|
|
|
mining and milling costs;
|
|
|
|
metallurgy, processing, access, availability of
materials and equipment, transportation of supplies and water
availability;
|
|
|
|
determination of reserves;
|
|
|
|
changes in project parameters;
|
|
|
|
costs and timing of development of new reserves;
|
|
|
|
results of current and future exploration
activities;
|
|
|
|
results of pending and future feasibility studies;
|
|
|
|
joint venture relationships;
|
|
|
|
political or economic instability, either
globally or in the countries in which we operate;
|
|
|
|
local and community impacts and issues;
|
|
|
|
timing of receipt of government approvals;
|
|
|
|
accidents and labor disputes;
|
|
|
|
environmental costs and risks;
|
|
|
|
competitive factors, including competition for
property acquisitions; and
|
|
|
|
availability of capital at reasonable rates or at
all.
|
These factors are not intended to represent a
complete list of the general or specific factors that may affect
us. We may note additional factors elsewhere in this prospectus,
in an accompanying prospectus supplement and in any documents
incorporated by reference into this prospectus and the related
prospectus supplement. We undertake no obligation to update
forward-looking statements.
4
OUR BUSINESS
We are an international gold mining and
exploration company. Since 1999, we have sought to move from a
primarily exploration focus in South America, to a primarily
production and exploration focus in West Africa. We own 90%
interests in two properties in Ghana, the Bogoso/ Prestea open
pit mine and related properties and the Wassa project. We
operate the Bogoso/ Prestea mine, with ore mined at the Prestea
property being processed at the Bogoso processing plant. We also
own a 45% managing interest in the currently inactive Prestea
underground mine. We are conducting a feasibility study with a
view to entering into production at the former Wassa mine, which
was shut down by its former owner in 2001. In addition, through
our 73% owned subsidiary, Guyanor Ressources S.A., we have
interests in several gold exploration properties in French
Guiana.
In the second quarter of 2002, we sold our most
significant exploration property in South America, the Gross
Rosebel project located in Suriname, to Cambior Inc., our
partner in the project. We still have a number of exploration
properties and interests in South America, but we are not
presently committing significant resources to the development of
these properties.
Our corporate headquarters are located at 10579
Bradford Road, Suite 103, Littleton, Colorado 80127 and our
telephone number is (303) 830-9000.
RECENT DEVELOPMENTS
On December 12, 2002, we completed a
non-brokered private placement of 3.44 million units at a
price of $1.25 per unit with gross proceeds of $4.3 million
(approximately $4.25 million, net). Each unit consists of
one common share and one-quarter of a warrant. Each whole
warrant entitles the holder to the right, for a period of two
years, to acquire one common share at an exercise price of
$1.50. The purchasers in this private placement included current
shareholders of Golden Star.
We expect to use the proceeds from the private
placement to make certain payments to the syndicate of banks
from which we acquired the Bogoso property in Ghana in 1999,
including settlement of a $2.0 million reserve acquisition
payment and early settlement of a $5.0 million contingent
payment which would be required a year after the commencement of
ore treatment from a future sulfide project at Bogoso, and for
general corporate purposes. The contingent payment obligation is
subject to uncertainties regarding financing, implementation and
start-up of a sulfide operation. We have reached an
understanding on these payments with the International Finance
Corporation, acting as representative of the syndicate, subject
to the final approval of the syndicate and the IFC Board.
5
RISK FACTORS
An investment in the securities involves a
high degree of risk. You should consider the following
discussion of risks in addition to the other information in this
prospectus before purchasing any of the securities. In addition
to historical information, the information in this prospectus
contains forward-looking statements about our future
business and performance. Our actual operating results and
financial performance may be very different from what we expect
as of the date of this prospectus. The risks below address some
of the factors that may affect our future operating results and
financial performance.
Financial Risks
Our business is substantially dependent on
gold prices.
The price of our common shares, our financial
results and our exploration, development and mining activities
have previously been, and may in the future be, significantly
adversely affected by declines in the price of gold. The price
of gold is volatile and is affected by numerous factors beyond
our control such as the sale or purchase of gold by various
central banks and financial institutions, inflation or
deflation, fluctuation in the value of the United States dollar
and foreign currencies, global and regional demand, and the
political and economic conditions of major gold-producing
countries throughout the world. If gold prices were to decline
significantly or for an extended period of time, we might be
unable to continue our operations, develop our properties or
fulfill our obligations under our agreements with our partners
or under our permits and licenses. As a result, we could lose
our interest in, or may be forced to sell, some of our
properties.
Furthermore, reserve calculations and
life-of-mine plans using significantly lower gold prices could
result in material write-downs of our investment in mining
properties and increased amortization, reclamation and closure
charges.
We have recently recorded substantial
losses.
We reported net losses of $20.6 million in
2001, $14.9 million in 2000, $24.4 million in 1999,
$22.2 million in 1998, and $26.6 million in 1997. We
were profitable in the first nine months of 2002 and continue to
operate profitably. However, numerous factors, including
declining gold prices, lower than expected ore grades or higher
than expected operating costs, could cause us to become
unprofitable. Any future operating losses may make financing our
operations and our business strategy, or raising additional
capital, difficult or impossible and may materially and
adversely affect our operations.
Our obligations may strain our financial
position and impede our business strategy.
We have total debts and liabilities as of
September 30, 2002 of $19.0 million, including
approximately $3.5 million payable to financial
institutions, $2.0 million due to the former shareholders
of Bogoso Gold Limited (BGL), as well as
$7.3 million in environmental rehabilitation liability and
other payables. We expect that our liabilities will increase as
a result of our corporate development activities. This
indebtedness may have important consequences, including the
following:
|
|
|
|
|
increasing our vulnerability to general adverse
economic and industry conditions;
|
|
|
|
limiting our ability to obtain additional
financing to fund future working capital, capital expenditures,
operating and exploration costs and other general corporate
requirements;
|
|
|
|
requiring us to dedicate a significant portion of
our cash flow from operations to make debt service payments,
which would reduce our ability to fund working capital, capital
expenditures, operating and exploration costs and other general
corporate requirements;
|
|
|
|
limiting our flexibility in planning for, or
reacting to, changes in our business and the industry; and
|
|
|
|
placing us at a disadvantage when compared to our
competitors that have less debt relative to their market
capitalization.
|
6
Our estimates of mineralized material and
reserves may be inaccurate.
There are numerous uncertainties inherent in
estimating proven and probable reserves and mineralized
material, including many factors beyond our control. The
estimation of mineralized material and reserves is a subjective
process, and the accuracy of any such estimates are a function
of the quantity and quality of available data and of the
assumptions made and judgments used in engineering and
geological interpretation, which may prove to be unreliable.
There can be no assurance that these estimates will be accurate,
that reserves and other mineralization figures will be accurate,
or that reserves or mineralization could be mined or processed
profitably. In 1998, we had to revise estimates of mineralized
material disclosed with respect to two of our projects.
Fluctuation in gold prices, results of drilling,
metallurgical testing and production and the evaluation of mine
plans subsequent to the date of any estimate may require
revision of such estimate. The volume and grade of reserves
mined and processed and recovery rates may not be the same as
currently anticipated. Any material reductions in estimates of
our reserves and other mineralization, or of our ability to
extract these reserves or mineralization, could have a material
adverse effect on our results of operations and financial
condition.
We currently have limited liquidity and
capital resources.
We have limited liquidity and financial
resources. Although at September 30, 2002 we held cash and
short-term investments of approximately $19.8 million, the
majority of this amount consists of proceeds from our July 2002
public offering. Our only internal source of funds is
operational cash flows from Bogoso/ Prestea. The anticipated
continuing exploration and development of our properties will
require significant expenditures over the next several years. We
expect that these expenditures will exceed revenues and free
cash flows generated by Bogoso/ Prestea during that period, and
therefore we will be required to use our excess cash and may in
the future require outside capital. Low gold prices during the
five years prior to 2002 adversely affected our ability to
obtain financing, and recurring low gold prices could have
similar effects in the future. We cannot assure you that in the
future we will be able to obtain adequate financing on
acceptable terms. If we are unable to obtain additional
financing, we may need to delay or indefinitely postpone further
exploration and development of our properties, and as a result,
we could lose our interest in, or may be forced to sell, some of
our properties.
The loss of any of our interests in exploration
and mining properties could give rise to write-offs of any
capitalized costs, and this would negatively impact our results
of operations. The impact would also be shown in reduction of
assets on our balance sheet, which in turn could impair our
ability to raise additional funds.
Implementation of a hedging program might be
unsuccessful and incur losses.
We are constantly reviewing whether or not, in
light of the potential for gold prices to fall, it would be
appropriate to establish a hedging or downside price protection
program against the production of gold to protect against such
decreases. To date, we have not decided to implement such a
program, although we have purchased and expect to continue to
purchase puts from time to time, which give us the right to sell
gold in the future at a fixed price. The implementation of any
hedging program may not, however, protect adequately against
declines in the price of gold.
In addition, although a hedging program may
protect us from a decline in the price of gold, it may also
prevent us from benefiting fully from price increases. For
example, as part of a hedging program, we may be obligated to
sell gold at a price lower than the then-current market price.
Finally, if unsuccessful, the costs of any hedging program may
further deplete our financial resources.
We are subject to fluctuations in currency
exchange rates, which could materially adversely affect our
financial position.
Our revenues are in United States dollars, and we
maintain most of our working capital in United States dollars or
United States dollar-denominated securities. We convert funds to
foreign currencies as payment
7
obligations become due. A significant portion of
the operating costs at Bogoso/ Prestea is based on the Ghanaian
currency, the Cedi. BGL is required to convert only 20% of the
foreign exchange proceeds that BGL receives from selling gold
into Cedis, but the Government of Ghana could require BGL to
convert a higher percentage of such sales proceeds into Cedis in
the future. In addition, we currently have future obligations
that are payable in Euros, and receivables collectible in Euros.
Accordingly, we are subject to fluctuations in the rates of
currency exchange between the United States dollar and these
currencies, and such fluctuations may materially affect our
financial position and results of operations. We currently do
not hedge against currency exchange risks.
Operational Risks
The technology, capital costs and cost of
production of sulfide reserves and mineralized material at
Bogoso/ Prestea are still subject to a number of uncertainties,
including funding uncertainties.
Based upon the completion of our sulfide mining
feasibility study for the Bogoso property in 2001 and its
subsequent review by a qualified, independent mineral reserves
consultant, the sulfide material on the Bogoso property and on
various portions of the Prestea properties has been included in
our proven and probable reserves as at December 31, 2001
and constitutes approximately 40% of our reserves. While the
sulfide feasibility study indicates that sulfide reserves can be
profitably mined and processed at gold prices at or above $275
per ounce, the cost to retrofit the Bogoso mill to process
sulfide ore would require a minimum of $20 million of new
capital. We cannot assure you that we will have access to
capital, whether from internal or external sources, in the
required amounts or on acceptable terms. While the processing
technology envisioned in the feasibility study has been
successfully utilized at other mines, we cannot assure you, in
spite of our testing, engineering and analysis, that the
technology will perform successfully at commercial production
levels on the Bogoso/ Prestea ores. We do not currently
anticipate start-up of sulfide processing operations prior to
2007, after currently known oxide and non-refractory ores are
exhausted.
Declining gold prices could reduce our
estimates of reserves and mineralized material and could result
in delays in development until we can make new estimates and
determine new potential economic development options under the
lower gold price assumptions.
In addition to adversely affecting our reserve
estimates and our financial condition, declining gold prices can
impact operations by requiring a reassessment of the feasibility
of a particular project. Such a reassessment may be the
result of a management decision or may be required under
financing arrangements related to the project. Even if
the project is ultimately determined to be economically viable,
the need to conduct such a reassessment may cause substantial
delays or may interrupt operations until the reassessment can be
completed.
We are subject to a number of operational
hazards that can delay production or result in liability to
us.
Our activities are subject to a number of risks
and hazards including:
|
|
|
|
|
environmental hazards;
|
|
|
|
discharge of pollutants or hazardous chemicals;
|
|
|
|
industrial accidents;
|
|
|
|
labor disputes;
|
|
|
|
supply problems and delays;
|
|
|
|
unusual or unexpected geological or operating
conditions;
|
|
|
|
slope failures;
|
|
|
|
cave-ins of underground workings;
|
8
|
|
|
|
|
failure of pit walls or dams;
|
|
|
|
fire;
|
|
|
|
changes in the regulatory environment; and
|
|
|
|
natural phenomena such as inclement weather
conditions, floods and earthquakes.
|
These or other occurrences could result in damage
to, or destruction of, mineral properties or production
facilities, personal injury or death, environmental damage,
delays in mining, delayed production, monetary losses and
possible legal liability. We may incur liability as a result of
pollution and other casualties. Satisfying such liabilities may
be very costly and could have a material adverse effect on our
financial position and results of operations.
Our mining operations are subject to numerous
environmental laws and regulations that can adversely affect
operating and development costs.
We cannot assure you that compliance with
existing regulations governing the discharge of materials into
the environment, or otherwise relating to environmental
protection, in the jurisdictions where we have projects will not
have a material adverse effect on our exploration activities,
results of operations or competitive position. New or expanded
regulations, if adopted, could affect the exploration or
development of our projects or otherwise have a material adverse
effect on our operations.
As a result of the foregoing risks, project
expenditures, production quantities and rates and cash operating
costs, among other things, may be materially and adversely
affected and may differ materially from anticipated
expenditures, production quantities and rates, and costs. In
addition, estimated production dates may be delayed materially.
Any such events could materially and adversely affect our
business, financial condition, results of operations and cash
flows.
The development and operation of our mining
projects involve numerous uncertainties.
Mine development projects, including our planned
projects, typically require a number of years and significant
expenditures during the development phase before production is
possible.
Development projects are subject to the
completion of successful feasibility studies, issuance of
necessary governmental permits and receipt of adequate
financing. The economic feasibility of development projects is
based on many factors such as:
|
|
|
|
|
estimation of reserves;
|
|
|
|
anticipated metallurgical recoveries;
|
|
|
|
future gold prices; and
|
|
|
|
anticipated capital and operating costs of such
projects.
|
Our mine development projects may have limited
relevant operating history upon which to base estimates of
future operating costs and capital requirements. Estimates of
proven and probable reserves and operating costs determined in
feasibility studies are based on geologic and engineering
analyses.
Any of the following events, among others, could
affect the profitability or economic feasibility of a project:
|
|
|
|
|
unanticipated changes in grade and tonnage of ore
to be mined and processed;
|
|
|
|
unanticipated adverse geotechnical conditions;
|
|
|
|
incorrect data on which engineering assumptions
are made;
|
|
|
|
costs of constructing and operating a mine in a
specific environment;
|
|
|
|
availability and cost of processing and refining
facilities;
|
9
|
|
|
|
|
availability of economic sources of power;
|
|
|
|
adequacy of water supply;
|
|
|
|
adequate access to the site;
|
|
|
|
unanticipated transportation costs;
|
|
|
|
government regulations (including regulations
relating to prices, royalties, duties, taxes, restrictions on
production, quotas on exportation of minerals, as well as the
costs of protection of the environment and agricultural lands);
|
|
|
|
fluctuations in gold prices; and
|
|
|
|
accidents, labor actions and force majeure events.
|
Adverse effects on the operations or further
development of a project may also adversely affect our business,
financial condition, results of operations and cash flow.
We need to continually obtain additional
reserves for gold production.
Because mines have limited lives based on proven
and probable reserves, we must continually replace and expand
our reserves as our mines produce gold. We currently estimate
that Bogoso/ Prestea has approximately ten years of mine life
remaining without the development of additional reserves, but
our estimates may not be correct. Our ability to maintain or
increase our annual production of gold will be dependent in
significant part on our ability to bring new mines into
production and to expand existing mines.
Gold exploration is highly speculative,
involves substantial expenditures, and is frequently
non-productive.
Gold exploration involves a high degree of risk
and exploration projects are frequently unsuccessful. Few
prospects that are explored end up being ultimately developed
into producing mines. To the extent that we continue to be
involved in gold exploration, the long-term success of our
operations will be related to the cost and success of our
exploration programs. We cannot assure you that our gold
exploration efforts will be successful. The risks associated
with gold exploration are:
|
|
|
|
|
the identification of potential gold
mineralization based on superficial analysis
|
|
|
|
the quality of our management and our geological
and technical expertise, and
|
|
|
|
the capital available for exploration and
development.
|
Substantial expenditures are required to
determine if a project has economically minable mineralization.
It may take several years to establish proven and probable
reserves and to develop and construct mining and processing
facilities. As a result of these uncertainties, we cannot assure
you that current and future exploration programs will result in
the discovery of reserves, the expansion of our existing
reserves and the development of mines.
We face competition from other mining
companies in connection with the acquisition of
properties.
We face strong competition from other mining
companies in connection with the acquisition of properties
producing, or capable of producing, precious metals. Many of
these companies have greater financial resources, operational
experience and technical capabilities. As a result of this
competition, we may be unable to maintain or acquire attractive
mining properties on terms we consider acceptable or at all.
Consequently, our revenues, operations and financial condition
could be materially adversely affected.
Title to our mineral properties may be
challenged.
Our policy is to seek to confirm the validity of
our rights to title to, or contract rights with respect to, each
mineral property in which we have a material interest. However,
we cannot guarantee that title to our properties will not be
challenged. Title insurance generally is not available, and our
ability to ensure that we
10
have obtained secure claim to individual mineral
properties or mining concessions may be severely constrained. We
have not conducted surveys of all of the claims in which we hold
direct or indirect interests and, therefore, the precise area
and location of these claims may be in doubt. Accordingly, our
mineral properties may be subject to prior unregistered
agreements, transfers or claims, and title may be affected by,
among other things, undetected defects. In addition, we may be
unable to operate our properties as permitted or to enforce our
rights with respect to our properties.
We depend on the services of key
executives.
We are dependent on the services of key
executives including our President and Chief Executive Officer
and a small number of highly skilled and experienced executives
and personnel. Due to the relatively small size of our company,
the loss of these persons or our inability to attract and retain
additional highly skilled employees may adversely affect the
exploration and development of our properties, which could have
a material adverse effect on our business and future operations.
Our insurance coverage may be
insufficient.
Our business is subject to a number of risks and
hazards generally, including:
|
|
|
|
|
adverse environmental conditions;
|
|
|
|
industrial accidents;
|
|
|
|
labor disputes;
|
|
|
|
unusual or unexpected geological conditions;
|
|
|
|
ground or slope failures;
|
|
|
|
cave-ins;
|
|
|
|
changes in the regulatory environment; and
|
|
|
|
natural phenomena such as inclement weather
conditions, floods and earthquakes.
|
Such occurrences could result in:
|
|
|
|
|
damage to mineral properties or production
facilities;
|
|
|
|
personal injury or death;
|
|
|
|
environmental damage to our properties or the
properties of others;
|
|
|
|
delays in mining;
|
|
|
|
monetary losses; and
|
|
|
|
possible legal liability.
|
Although we maintain insurance in amounts that we
believe to be reasonable, our insurance will not cover all the
potential risks associated with our business. We may also be
unable to maintain insurance to cover these risks at
economically feasible premiums. Insurance coverage may not
continue to be available or may not be adequate to cover any
resulting liability. Moreover, insurance against risks such as
environmental pollution or other hazards as a result of
exploration and production is not generally available to us or
to other companies in the mining industry on acceptable terms.
We might also become subject to liability for pollution or other
hazards which we cannot insure against or which we may elect not
to insure against because of premium costs or other reasons.
Losses from these events may cause us to incur significant costs
that could have a material adverse effect upon our financial
performance and results of operations.
11
Governmental Risks
As a holding company, limitations on the
ability of our operating subsidiaries to make distributions to
us could adversely affect the funding of our
operations.
We are a holding company that conducts operations
through foreign (principally African) subsidiaries and joint
ventures, and substantially all of our assets consist of equity
in such entities. Accordingly, any limitation on the transfer of
cash or other assets between the parent corporation and such
entities, or among such entities, could restrict our ability to
fund our operations efficiently. Any such limitations, or the
perception that such limitations may exist now or in the future,
could have an adverse impact on our valuation and stock price.
We are subject to changes in the regulatory
environment in Ghana.
Our mining operations and exploration activities
in Ghana are subject to extensive regulation governing various
matters, including:
|
|
|
licensing
production
taxes
water disposal
toxic substances
mine safety
|
|
development
exports
imports
labor standards
occupational health and safety
environmental protections
|
Compliance with these regulations increases the
costs of the following:
|
|
|
planning
designing
drilling
operating
|
|
developing
constructing
mine and other facilities closure
|
We believe that we are in substantial compliance
with current laws and regulations in Ghana. However, these laws
and regulations are subject to frequent change. For example, the
Ghanaian government has adopted new, more stringent
environmental regulations. Amendments to current laws and
regulations governing operations and activities of mining
companies or more stringent implementation or interpretation of
these laws and regulations could have a material adverse impact
on us, cause a reduction in levels of production and delay or
prevent the development or expansion of our properties in Ghana.
Government regulations limit the proceeds from
gold sales that may be withdrawn from Ghana. Changes in
regulations that increase these restrictions could have a
material adverse impact on us as Bogoso/ Prestea is our
principal source of internally generated cash.
The Government of Ghana has the right to
participate in the ownership and control of BGL, Wassa and the
Prestea underground joint venture.
The Ghanaian government currently has a 10%
carried interest in BGL, the Prestea underground joint venture
and the entity that owns the Wassa property. The Ghanaian
government also has or will have the right to acquire up to an
additional 20% equity interest in BGL and the Wassa entity for a
price to be determined by agreement or arbitration. We cannot
assure you that the government will not seek to acquire
additional equity interests in our Ghanaian operations, or as to
the purchase price that the Government of Ghana would pay for
any additional equity interest. A reduction in our equity
interest could reduce our income or cash flows from Bogoso/
Prestea and amounts available to us for reinvestment.
We are subject to risks relating to
exploration, development and operations in foreign
countries.
Certain laws, regulations and statutory
provisions in certain countries in which we have mineral rights
could, as they are currently written, have a material negative
impact on our ability to develop or operate a
12
commercial mine. For countries where we have
exploration or development stage projects we intend to negotiate
mineral agreements with the governments of these countries and
seek variances or otherwise be exempted from the provisions of
these laws, regulations and/or statutory provisions. We cannot
assure you, however, that we will be successful in obtaining
mineral agreements or variances or exemptions on commercially
acceptable terms.
Our assets and operations are affected by various
political and economic uncertainties, including:
|
|
|
|
|
the risks of war or civil unrest;
|
|
|
|
expropriation and nationalization;
|
|
|
|
renegotiation or nullification of existing
concessions, licenses, permits, and contracts;
|
|
|
|
illegal mining;
|
|
|
|
changes in taxation policies;
|
|
|
|
restrictions on foreign exchange and
repatriation; and
|
|
|
|
changing political conditions, currency controls
and governmental regulations that favor or require the awarding
of contracts to local contractors or require foreign contractors
to employ citizens of, or purchase supplies from, a particular
jurisdiction.
|
Illegal mining occurs on our properties, is
difficult to control, can disrupt our business and expose us to
liability.
In French Guiana and Ghana, artisanal miners have
been illegally working on our properties despite the fact that
we have hired security personnel to protect our properties. The
presence of illegal miners could lead to project delays and
disputes regarding the development or operation of commercial
gold deposits. The work performed by the illegal miners could
cause environmental damage or other damage to our properties, or
personal injury or death for which we could potentially be held
responsible.
Market Risks
The market price of our common shares may
experience volatility and could decline significantly.
Our common shares are listed on the American
Stock Exchange, the Toronto Stock Exchange and the Berlin Stock
Exchange. Securities of micro- and small-cap companies have
experienced substantial volatility in the past, often based on
factors unrelated to the financial performance or prospects of
the companies involved. These factors include macroeconomic
developments in North America and globally and market
perceptions of the attractiveness of particular industries. Our
share price is also likely to be significantly affected by
short-term changes in gold prices or in our financial condition
or results of operations as reflected in our quarterly earnings
reports. Other factors unrelated to our performance that may
have an effect on the price of our common shares include the
following:
|
|
|
|
|
the extent of analytical coverage available to
investors concerning our business may be limited if investment
banks with research capabilities do not continue to follow our
securities;
|
|
|
|
the limited trading volume and general market
interest in our securities may affect an investors ability
to trade significant numbers of common shares;
|
|
|
|
the relatively small size of the public float
will limit the ability of some institutions to invest in our
securities;
|
|
|
|
under certain circumstances, our common shares
could be classified as penny stock under applicable
SEC rules; in that event, broker-dealers in the United States
executing trades in our common shares would be subject to
substantial administrative and procedural restrictions which
could limit broker interest in involvement in our common shares;
and
|
13
|
|
|
|
|
a substantial decline in our stock price that
persists for a significant period of time could cause our
securities to be delisted from the American Stock Exchange, the
Toronto Stock Exchange and the Berlin Stock Exchange, further
reducing market liquidity.
|
As a result of any of these factors, the market
price of our common shares at any given point in time may not
accurately reflect our long-term value. Securities class action
litigation often has been brought against companies following
periods of volatility in the market price of their securities.
We may in the future be the target of similar litigation.
Securities litigation could result in substantial costs and
damages and divert managements attention and resources.
You may have difficulty or be unable to
enforce certain civil liabilities on us, certain of our
directors and our experts.
We are a Canadian corporation. Substantially all
of our assets are located outside of Canada and the United
States, and our head office is located in the United States.
Additionally, a number of our directors and the experts named in
this prospectus are residents of Canada. Although we have
appointed Koffman Kalef, Suite 1900, 885 West Georgia
Street, Vancouver, British Columbia and Field Atkinson Perraton
LLP, 1900, 350 - 7th Avenue S.W., Calgary, Alberta as
our agents for service of process in the Provinces of British
Columbia and Alberta respectively, it may not be possible for
investors to collect judgments obtained in Canadian courts
predicated on the civil liability provisions of securities
legislation. It may also be difficult for you to effect service
of process in connection with any action brought in the United
States upon such directors and experts. Execution by United
States courts of any judgment obtained against us, any of the
directors, executive officers or experts named in this
prospectus in United States courts would be limited to the
assets of Golden Star Resources Ltd. or the assets of such
persons or corporations, as the case may be, in the United
States. The enforceability in Canada of United States judgments
or liabilities in original actions in Canadian courts predicated
solely upon the civil liability provisions of the federal
securities laws of the United States is doubtful.
We do not anticipate paying dividends in the
foreseeable future.
We anticipate that we will retain all future
earnings and other cash resources for the future operation and
development of our business. We do not intend to declare or pay
any cash dividends in the foreseeable future. Payment of any
future dividends will be at the discretion of our board of
directors after taking into account many factors, including our
operating results, financial condition, and current and
anticipated cash needs.
Future sales of our common shares by our
existing shareholders could decrease the trading price of the
common shares.
Sales of a large number of our common shares in
the public markets, or the potential for such sales, could
decrease the trading price of our common shares and could impair
our ability to raise capital through future sales of our common
shares. We completed placements of units in January and December
2002 at prices significantly less than the current market price
of our common shares. Accordingly, a significant number of our
shareholders have an investment profit in our securities that
they may seek to liquidate. Substantially all of our common
shares not held by affiliates can be resold without material
restriction either in the United States, in Canada, or both.
The existence of outstanding rights to
purchase common shares may impair our ability to raise
capital.
As of December 23, 2002, approximately
20,291,277 common shares are issuable on exercise of warrants,
option or other rights to purchase common shares at prices
ranging from Cdn$0.60 to $1.75. During the life of the warrants,
options and other rights, the holders are given an opportunity
to profit from a rise in the market price of our common shares
with a resulting dilution in the interest of the other
shareholders. Our ability to obtain additional financing during
the period such rights are outstanding may be adversely
affected, and the existence of the rights may have an adverse
effect on the price of our common shares. The holders of the
warrants, options and other rights can be expected to exercise
them at a time when we would, in all likelihood,
14
be able to obtain any needed capital by a new
offering of securities on terms more favorable than those
provided by the outstanding rights.
USE OF PROCEEDS
Unless otherwise indicated in the applicable
prospectus supplement, we intend to use the net proceeds from
the sale of the securities offered under this prospectus for the
development of our mining properties in Ghana, acquisition and
development of additional properties or interests, working
capital and general corporate purposes. Pending the application
of the net proceeds, we expect to invest the proceeds in
treasury bills, investment-grade, interest-bearing instruments,
or other securities.
We do not expect to receive any proceeds from the
sale of common shares by the selling shareholders.
SELLING SHAREHOLDERS
This prospectus relates also to the sale of up to
4,300,000 common shares by the selling shareholders named in the
table below. The common shares were issued to the selling
shareholders or are issuable to them upon exercise of warrants.
The 3,440,000 common shares and 860,000 warrants were acquired
in a private placement completed on December 12, 2002. Each
warrant is exercisable for one common share at an exercise price
of $1.50 per share, subject to adjustment, and expires on
December 12, 2004. We are registering the common shares in
order to permit the selling shareholders to offer the shares for
resale from time to time.
The following table lists the selling
shareholders and the maximum number of common shares that each
may sell under this prospectus. This information has been
provided by the selling shareholders and is current as of
December 23, 2002.
The information provided in the following table
regarding common shares being offered and owned after the
offering assumes that each selling shareholder will sell all of
the common shares acquired in the December 2002 private
placement, including common shares issuable upon exercise of
warrants acquired in the December 2002 private placement. Each
selling shareholder may sell, transfer or otherwise dispose of,
at any time or from time to time, all or a portion of its common
shares in transactions exempt from the registration requirements
of the Securities Act. Each selling shareholder may sell none,
all or some portion of the common shares which it is eligible to
sell under this prospectus. The number and percentage of common
shares beneficially owned by each selling shareholder after an
offering of its common shares may differ substantially from the
information presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares Owned |
|
|
|
|
|
Common Shares Owned |
|
|
Before Offering |
|
Common Shares |
|
|
|
After Offering |
Name of Selling |
|
|
|
Underlying |
|
Common Shares |
|
|
Shareholder |
|
Shares(1) |
|
Percent(1)(2) |
|
Warrants(3) |
|
Being Offered(4) |
|
Shares(5) |
|
Percent(2)(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Vertical Ventures Investments, LLC
|
|
|
500,000 |
|
|
|
* |
|
|
|
100,000 |
|
|
|
500,000 |
|
|
|
0 |
|
|
|
* |
|
Van Eck International Investors Gold Fund
|
|
|
1,942,500 |
|
|
|
2.21 |
% |
|
|
83,500 |
|
|
|
417,500 |
|
|
|
1,525,000 |
|
|
|
1.74 |
% |
Van Eck Worldwide Hard Assets Fund
|
|
|
450,000 |
|
|
|
* |
|
|
|
90,000 |
|
|
|
450,000 |
|
|
|
0 |
|
|
|
* |
|
Van Eck Global Hard Assets Fund
|
|
|
210,000 |
|
|
|
* |
|
|
|
42,000 |
|
|
|
210,000 |
|
|
|
0 |
|
|
|
* |
|
Van Eck Hard Assets Fund LP
|
|
|
80,000 |
|
|
|
* |
|
|
|
16,000 |
|
|
|
80,000 |
|
|
|
0 |
|
|
|
* |
|
Van Eck Hard Assets Portfolio, Ltd.
|
|
|
20,000 |
|
|
|
* |
|
|
|
4,000 |
|
|
|
20,000 |
|
|
|
0 |
|
|
|
* |
|
Lockheed Martin Retirement
|
|
|
922,500 |
|
|
|
1.06 |
% |
|
|
24,500 |
|
|
|
122,500 |
|
|
|
800,000 |
|
|
|
* |
|
The Prudent Bear Fund
|
|
|
3,512,500 |
|
|
|
4.00 |
% |
|
|
250,000 |
|
|
|
1,250,000 |
|
|
|
2,262,500 |
|
|
|
2.58 |
% |
Tocqueville Gold Fund
|
|
|
4,098,600 |
|
|
|
4.62 |
% |
|
|
250,000 |
|
|
|
1,250,000 |
|
|
|
2,848,600 |
|
|
|
3.22 |
% |
|
|
(1) |
Includes common shares that would be owned by
each selling shareholder if all warrants owned by it were
exercised for common shares.
|
|
(2) |
Calculated based on 87,400,702 common shares
outstanding as of December 23, 2002.
|
15
|
|
(3) |
Includes common shares for which the warrants
acquired by the selling shareholders in the December 2002
private placement are exercisable, each whole warrant being
exercisable for one common share at an initial exercise price of
$1.50 per share and expiring on December 12, 2004. These
common shares are included in the number and percentage of
common shares owned before the offering. See footnote 1 above.
|
|
(4) |
The common shares being offered are the 3,440,000
common shares acquired by the selling shareholders in the
December 2002 private placement and the common shares to be
acquired upon exercise of the 860,000 warrants acquired by the
selling shareholders in the December 2002 private placement.
|
|
(5) |
Assumes that each selling shareholder will sell
all of its common shares being offered. In fact, each selling
shareholder may sell none, all or some portion of its common
shares being offered.
|
All expenses incurred with respect to the
registration of the common shares owned by the selling
shareholders will be borne by us, but we will not be obligated
to pay any underwriting fees, discounts, or commissions in
connection with the registration.
PLAN OF DISTRIBUTION
We and the selling shareholders may offer the
securities directly to one or more purchasers, through agents,
or through underwriters or dealers designated from time to time.
For these purposes, selling shareholders includes
donees, pledgees, transferees or other successors in interest of
a selling shareholder, pursuant to a gift, distribution, or
other transfer not constituting a sale. We and the selling
shareholders may distribute the securities from time to time in
one or more transactions at a fixed price or prices (which may
be changed from time to time), at market prices prevailing at
the times of sale, at prices related to these prevailing market
prices or at negotiated prices. We and the selling shareholders
may offer securities in the same offering, or we and one or more
selling shareholders may offer securities in separate offerings.
The applicable prospectus supplement will describe the terms of
the offering of the securities, including:
|
|
|
|
|
the offeror(s) of the securities;
|
|
|
|
the terms of the securities to which the
prospectus supplement relates;
|
|
|
|
the name or names of any underwriters;
|
|
|
|
the purchase price of the securities and the
proceeds to be received from the sale;
|
|
|
|
any underwriting discounts and other items
constituting underwriters compensation; and
|
|
|
|
any discounts or concessions allowed or reallowed
or paid to dealers.
|
In connection with the sale of securities,
underwriters or agents may receive compensation from us, from
the selling shareholders or from purchasers in the form of
discounts, concessions or commissions. The underwriters may sell
offered securities to or through dealers, who may also receive
compensation from purchasers of the offered securities for whom
they may act as agents. The selling shareholders and any
underwriters, agents and dealers participating in the
distribution of the securities may be deemed to be underwriters
within the meaning of the Securities Act, and any discounts or
commissions received by them from us or the selling shareholders
and any profit on the resale of the offered securities by them
may be treated as underwriting discounts and commissions under
the Securities Act.
If so indicated in the prospectus supplement, we
and the selling shareholders will authorize underwriters or
other persons acting as agents to solicit offers by certain
institutional investors to purchase securities from us and the
selling shareholders, as applicable, pursuant to contracts
providing for payment and delivery on a future date.
Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable
institutions and others, but shall in all cases be subject to
the approval of Golden Star. The obligations of the purchaser
under any such contract will not be subject to any conditions
except those set forth in the prospectus supplement.
16
We and the selling shareholders may provide
agents and underwriters with indemnification against certain
civil liabilities related to the selling of the securities,
including liabilities under the Securities Act, or contribution
with respect to payments that the agents or underwriters may
make with respect to such liabilities. Agents and underwriters
or their associates may engage in transactions with, or perform
services for, us in the ordinary course of business.
In connection with distributions of their common
shares or otherwise, the selling shareholders may enter into
hedging transactions with brokers, dealers or other financial
institutions. In connection with any hedging transactions,
brokers, dealers or other financial institutions may engage in
short sales of our common shares in the course of hedging the
positions they assume with the selling shareholders. To the
extent permitted by applicable law, the selling shareholders
also may sell these shares short and redeliver the shares to
close out such short positions.
We have agreed to pay all of the expenses
incident to the registration of the shares registered on behalf
of the selling shareholders, other than discounts and selling
concessions or commissions, if any. We have agreed to indemnify
the selling shareholders against certain liabilities, including
liabilities arising under the Securities Act.
Except as indicated in the applicable prospectus
supplement, the securities are not expected to be listed on any
securities exchange or market, except that we expect to list the
common shares on the Toronto Stock Exchange and the American
Stock Exchange. All debt securities, preferred stock and
warrants offered will be new issue securities with no
established trading market. Any underwriters to whom we sell the
debt securities, preferred stock and warrants for public
offering and sale may make a market in such debt securities,
preferred stock and warrants, but the underwriters will not be
obligated to do so and may discontinue any market making at any
time without notice. No assurance can be given as to the
liquidity of or the trading markets for any debt securities,
preferred stock or warrants.
The selling shareholders are acting independently
of us in making decisions with respect to the timing, price,
manner and size of each sale. We have not engaged any broker,
dealer or agent in connection with the distribution of these
shares. There is no assurance, therefore, that the selling
shareholders will sell any or all of their common shares. In
connection with the offer and sale of the shares, we have agreed
to make available to the selling shareholders copies of this
prospectus and any applicable prospectus supplement and have
informed the selling shareholders of the need to deliver copies
of this prospectus and any applicable prospectus supplement to
purchasers at or prior to the time of any sale of the shares
covered by this prospectus.
The common shares of the selling shareholders
which are covered by this prospectus may qualify for sale
pursuant to Section 4(1) of the Securities Act or
Rule 144 promulgated thereunder, and may be sold pursuant
to such provisions rather than pursuant to this prospectus.
DESCRIPTION OF COMMON SHARES
We are authorized to issue an unlimited number of
common shares, without par value. As of December 23, 2002,
there were 87,400,702 common shares outstanding.
Dividend Rights
Holders of our common shares may receive
dividends when, as and if declared by our board on the common
shares, subject to the preferential dividend rights of any other
classes or series of shares of our company. In no event may a
dividend be declared or paid on the common shares if payment of
the dividend would cause the realizable value of our
companys assets to be less than the aggregate of its
liabilities and the amount required to redeem all of the shares
having redemption or retraction rights, which are then
outstanding.
17
Voting and Other Rights
Holders of our common shares are entitled to one
vote per share, and in general, all matters will be determined
by a majority of votes cast.
Election of Directors
All of the directors resign before each annual
meeting of shareholders and are eligible for reelection.
Directors are elected by a majority of votes cast.
Liquidation
In the event of any liquidation, dissolution or
winding up of Golden Star, holders of the common shares have the
right to a ratable portion of the assets remaining after payment
of liabilities and liquidation preferences of any preferred
shares or other securities that may then be outstanding.
Redemption
Golden Star common shares are not redeemable or
convertible.
Rights Agreement
Rights to purchase our common shares have been
issued to holders of our common shares under a rights agreement
between us and CIBC Mellon Trust Company. One right is attached
to each common share. If the rights become exercisable following
the occurrence of certain specified events, each right will
entitle the holder, within certain limitations, to purchase one
common share for Cdn$200, subject to adjustment. In certain
events (including when a person or group becomes the beneficial
owner of 20% or more of any class of our voting shares without
complying with the permitted bid provisions of the
rights agreement or without the approval of our board of
directors), exercise of the rights would entitle the holders of
the rights (other than the acquiring person or group) to acquire
our common shares, or other securities or assets, with a market
value equal to twice the rights purchase price. Accordingly,
exercise of the rights may cause substantial dilution to a
person who attempts to acquire us. The rights, which expire on
June 30, 2004 (unless extended as provided in the rights
agreement), may be redeemed at a price of Cdn$0.00001 per right
at any time until a person or group has acquired 20% of our
common shares, except as otherwise provided in the rights
agreement. The rights agreement may have certain antitakeover
effects.
Other Provisions
All outstanding common shares are, and the common
shares offered by this prospectus or obtainable on exercise or
conversion of other securities offered hereby, if issued in the
manner described in this prospectus and the applicable
prospectus supplement, will be fully paid and non-assessable.
You should read the prospectus supplement
relating to any offering of common shares, or of securities
convertible, exchangeable or exercisable for common shares, for
the terms of the offering, including the number of common shares
offered, any initial offering price and market prices relating
to the common shares.
This section is a summary and may not describe
every aspect of our common shares that may be important to you.
We urge you to read our Articles of Arrangement and our bylaws,
because they, and not this description, define your rights as a
holder of our common shares. See Where You Can Find More
Information for information on how to obtain copies of
these documents.
CIBC Mellon Trust Company, The Oceanic Plaza,
1066 West Hastings Street, Suite 1600, Vancouver, BC V6E
3X1, is the transfer agent and registrar for our common shares.
18
DESCRIPTION OF PREFERRED SHARES
We are authorized to issue an unlimited number of
preferred shares, without par value. As of December 23,
2002, there were no preferred shares outstanding. Preferred
shares are issuable in such classes or series as are determined
by the board of directors, who have the authority to determine
the relative rights and preferences of each such class or
series. The board of directors has not designated any class or
series of preferred shares.
The issuance of preferred shares could adversely
affect the voting power of holders of our common shares, and the
likelihood that preferred holders will receive dividend and
liquidation preferences may have the effect of delaying,
deferring or preventing a change in control of Golden Star,
which could depress the market price of our common shares.
Unless otherwise indicated in the prospectus supplement, all
preferred shares to be issued from time to time under this
prospectus will be fully paid and nonassessable.
The prospectus supplement relating to the
preferred shares offered will contain a description of the
specific terms of that series as fixed by our board of
directors, including, as applicable:
|
|
|
|
|
the number of preferred shares offered and the
offering price of the preferred shares;
|
|
|
|
the title and stated value of the preferred
shares;
|
|
|
|
the dividend rate(s), period(s) and/or payment
date(s) or method(s) of calculation of such rates, periods or
dates applicable to the preferred shares;
|
|
|
|
the date from which dividends on the preferred
shares will accumulate, if applicable;
|
|
|
|
the liquidation rights of the preferred shares;
|
|
|
|
the procedures for auction and remarketing, if
any, of the preferred shares;
|
|
|
|
the sinking fund provisions, if applicable, for
the preferred shares;
|
|
|
|
the redemption provisions, if applicable, for the
preferred shares;
|
|
|
|
whether the preferred shares will be convertible
into or exchangeable for other securities and, if so, the terms
and conditions of the conversion or exchange, including the
conversion price or exchange ratio and the conversion or
exchange period (or the method of determining the same);
|
|
|
|
whether the preferred shares will have voting
rights and the terms of any voting rights, if any;
|
|
|
|
whether the preferred shares will be listed on
any securities exchange;
|
|
|
|
whether the preferred shares will be issued with
any other securities and, if so, the amount and terms of these
securities; and
|
|
|
|
any other specific terms, preferences or rights
of, or limitations or restrictions on, the preferred shares.
|
The applicable prospectus supplement will also
contain a discussion of the material United States federal
income tax considerations relevant to the purchase and ownership
of the preferred shares offered by the prospectus supplement.
The transfer agent for each series of preferred
shares will be described in the prospectus supplement.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt
securities, preferred shares, common shares or units consisting
of any combination of the foregoing securities. Each series of
warrants will be issued under a separate warrant agreement. The
applicable prospectus supplement will describe the terms of the
warrants offered, including but not limited to the following:
|
|
|
|
|
the number of warrants offered;
|
|
|
|
the price or prices at which the warrants will be
issued;
|
19
|
|
|
|
|
the currency or currencies in which the prices of
the warrants may be payable;
|
|
|
|
the securities for which the warrants are
exercisable;
|
|
|
|
whether the warrants will be issued with any
other securities and, if so, the amount and terms of these
securities;
|
|
|
|
the amount of securities purchasable upon
exercise of each warrant and the price at which and the currency
or currencies in which the securities may be purchased upon such
exercise, and the events or conditions under which the amount of
securities may be subject to adjustment;
|
|
|
|
the date on which the right to exercise such
warrants shall commence and the date on which such right shall
expire;
|
|
|
|
the circumstances, if any, which will cause the
warrants to be deemed to be automatically exercised;
|
|
|
|
any material risk factors relating to such
warrants;
|
|
|
|
if applicable, the identity of the warrant agent;
and
|
|
|
|
any other terms of such warrants.
|
Prior to the exercise of any warrants, holders of
such warrants will not have any rights of holders of the
securities purchasable upon such exercise, including the right
to receive payments of dividends, or the right to vote such
underlying securities.
Prospective purchasers of warrants should be
aware that special U.S. federal income tax, accounting and other
considerations may be applicable to instruments such as
warrants. The applicable prospectus supplement will describe
such considerations, to the extent they are material, as they
apply generally to purchasers of such warrants.
DESCRIPTION OF CONVERTIBLE DEBT
SECURITIES
This prospectus describes certain general terms
and provisions of our convertible debt securities. When we offer
to sell a particular series of convertible debt securities, we
will describe the specific terms of the series in a supplement
to this prospectus.
The debt securities will be issued under an
indenture between us and a duly qualified financial institution,
as trustee. Unless otherwise specified in a supplement to this
prospectus, the debt securities will be our direct, senior
unsecured obligations and will rank equally with all of our
other senior unsecured indebtedness. We have summarized select
portions of the indenture below. The summary may not contain all
the terms that are important to you. You should read the form of
the indenture that has been filed as an exhibit to the
Registration Statement of which this prospectus is a part.
Capitalized terms used in the summary have the meanings
specified in the indenture.
General
The terms of each series of debt securities will
be established by or pursuant to a resolution of our board of
directors and set forth or determined in the manner provided in
an officers certificate or by a supplemental indenture.
The particular terms of each series of debt securities will be
described in a prospectus supplement relating to such series.
The indenture does not limit the amount of debt
securities that we may issue under the indenture. The debt
securities may be issued in one or more series with the same or
various maturities, at par, at a premium,
20
or at a discount. We will set forth in a
prospectus supplement relating to any series of debt securities
being offered, the aggregate principal amount, prices and terms
of the debt securities. These terms may include:
|
|
|
|
|
the title of the debt securities;
|
|
|
|
the price or prices (expressed as a percentage of
the principal amount) at which we will sell the debt securities;
|
|
|
|
any limit on the aggregate principal amount of
the debt securities;
|
|
|
|
the date or dates on which we will pay the
principal on the debt securities;
|
|
|
|
the rate or rates (which may be fixed or
variable) per annum or the method used to determine the rate or
rates (including any commodity, commodity index, stock exchange
index or financial index) at which the debt securities will bear
interest, the date or dates from which interest will accrue, the
date or dates on which interest will commence and be payable and
any regular record date for the interest payable on any interest
payment date;
|
|
|
|
the place or places where principal, premium and
interest payments may be made on the debt securities;
|
|
|
|
the currency or currencies in which the debt
securities are issued and payable;
|
|
|
|
the conversion or exchange provisions applicable
to the debt securities;
|
|
|
|
any mandatory or optional redemption provisions
applicable to the debt securities;
|
|
|
|
any sinking fund or analogous provisions
applicable to the debt securities;
|
|
|
|
the denominations in which the debt securities
will be issued, if other than denominations of $1,000 and any
integral multiple thereof;
|
|
|
|
whether the debt securities will be issued in the
form of certificated debt securities or global debt securities;
|
|
|
|
the portion of principal amount of the debt
securities payable upon declaration of acceleration of the
maturity date, if other than the entire principal amount;
|
|
|
|
any provisions relating to any security provided
for the debt securities;
|
|
|
|
any additions or changes to, or deletions from,
the events of default, covenants or acceleration provisions
applicable to the debt securities;
|
|
|
|
the trustee for the series of debt securities and
any depositories, interest rate calculation agents, exchange
rate calculation agents or other agents with respect to the debt
securities; and
|
|
|
|
any other specific terms of the debt securities,
which may modify or delete any provision of the indenture as it
applies to that series.
|
We may issue debt securities that provide for an
amount less than their stated principal amount to be due and
payable upon declaration of acceleration of their maturity
pursuant to the terms of the indenture.
If we denominate the purchase price of any of the
debt securities in a foreign currency or currencies or a foreign
currency unit or units, or if the principal of and any premium
and interest on any series of debt securities is payable in a
foreign currency or currencies or a foreign currency unit or
units, we will provide you with information on the restrictions,
elections, general tax considerations, specific terms and other
information with respect to that issue of debt securities and
such foreign currency or currencies or foreign currency unit or
units in the applicable prospectus supplement.
Each debt security will be represented by either
one or more global securities registered in the name of The
Depository Trust Company, as depositary, or a nominee (we will
refer to any debt security represented by a global debt security
as a book-entry debt security), or a certificate
issued in definitive registered form (we will refer to any debt
security represented by a certificated security as a
certificated debt security) as set
21
forth in the applicable prospectus supplement.
Except as set forth under the heading Book-Entry Debt
Securities below, debt securities will not be issuable in
certificated form.
Book-Entry Debt Securities
Each global debt security representing book-entry
debt securities will be deposited with, or on behalf of, the
depositary, and registered in the name of the depositary or a
nominee of the depositary. The depositary has indicated it
intends to follow the following procedures with respect to
book-entry debt securities.
Ownership of beneficial interests in book-entry
debt securities will be limited to persons that have accounts
with the depositary for the related global debt security, which
we refer to as participants, or persons that may hold interests
through participants. Upon the issuance of a global debt
security, the depositary will credit, on its book-entry
registration and transfer system, the participants
accounts with the respective principal amounts of the book-entry
debt securities represented by such global debt security
beneficially owned by such participants. The accounts to be
credited will be designated by any dealers, underwriters or
agents participating in the distribution of the book-entry debt
securities. Ownership of book-entry debt securities will be
shown on, and the transfer of such ownership interests will be
effected only through, records maintained by the depositary for
the related global debt security (with respect to interests of
participants) and on the records of participants (with respect
to interests of persons holding through participants). The laws
of some states may require that certain purchasers of securities
take physical delivery of such securities in definitive form.
These laws may impair the ability to own, transfer or pledge
beneficial interests in book-entry debt securities.
So long as the depositary for a global debt
security, or its nominee, is the registered owner of that global
debt security, the depositary or its nominee, as the case may
be, will be considered the sole owner or holder of the
book-entry debt securities represented by such global debt
security for all purposes under the indenture. Except as
described below, beneficial owners of book-entry debt securities
will not be entitled to have securities registered in their
names, will not receive or be entitled to receive physical
delivery of a certificate in definitive form representing
securities and will not be considered the owners or holders of
those securities under the indenture. Accordingly, each person
beneficially owning book-entry debt securities must rely on the
procedures of the depositary for the related global debt
security and, if such person is not a participant, on the
procedures of the participant through which such person owns its
interest, to exercise any rights of a holder under the indenture.
We understand, however, that under existing
industry practice, the depositary will authorize the persons on
whose behalf it holds a global debt security to exercise certain
rights of holders of debt securities, and the indenture provides
that we, the trustee and our respective agents will treat as the
holder of a debt security the persons specified in a written
statement of the depositary with respect to that global debt
security for purposes of obtaining any consents or directions
required to be given by holders of the debt securities pursuant
to the indenture.
We will make payments of principal of, and
premium and interest on, book-entry debt securities to the
depositary or its nominee, as the case may be, as the registered
holder of the related global debt security. Golden Star, the
trustee and any other agent of ours or agent of the trustee will
not have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial
ownership interests in a global debt security or for
maintaining, supervising or reviewing any records relating to
beneficial ownership interests.
We expect that the depositary, upon receipt of
any payment of principal of, or premium or interest on, a global
debt security, will immediately credit participants
accounts with payments in amounts proportionate to the
respective amounts of book-entry debt securities held by each
participant as shown on the records of such depositary. We also
expect that payments by participants to owners of beneficial
interests in book-entry debt securities held through those
participants will be governed by standing customer instructions
and customary practices, as is now the case with the securities
held for the accounts of customers in bearer form or registered
in street name, and will be the responsibility of
those participants.
22
We will issue certificated debt securities in
exchange for each global debt security if the depositary is at
any time unwilling or unable to continue as depositary or ceases
to be a clearing agency registered under the Exchange Act, and a
successor depositary registered as a clearing agency under the
Exchange Act is not appointed by us within 90 days. In
addition, we may at any time and in our sole discretion
determine not to have the book-entry debt securities of any
series represented by one or more global debt securities and, in
that event, will issue certificated debt securities in exchange
for the global debt securities of that series. Global debt
securities will also be exchangeable by the holders for
certificated debt securities if an event of default with respect
to the book-entry debt securities represented by those global
debt securities has occurred and is continuing. Any certificated
debt securities issued in exchange for a global debt security
will be registered in such name or names as the depositary shall
instruct the trustee. We expect that such instructions will be
based upon directions received by the depositary from
participants with respect to ownership of book-entry debt
securities relating to such global debt security.
We have obtained the foregoing information
concerning the depositary and the depositarys book-entry
system from sources we believe to be reliable, but we take no
responsibility for the accuracy of this information.
Certificated Debt Securities
Transfer or Exchange of Certificated Debt
Securities. You may transfer or
exchange certificated debt securities at any office we maintain
for this purpose in accordance with the terms of the indenture.
No service charge will be made for any transfer or exchange of
certificated debt securities, but we may require payment of a
sum sufficient to cover any tax or other governmental charge
payable in connection with a transfer or exchange.
You may effect the transfer of certificated debt
securities and the right to receive the principal of, premium
and interest on certificated debt securities only by
surrendering the certificate representing those certificated
debt securities and either reissuance by us or the trustee of
the certificate to the new holder or the issuance by us or the
trustee of a new certificate to the new holder.
No Protection In the Event of a Change of
Control
Unless we state otherwise in the applicable
prospectus supplement, the debt securities will not contain any
provisions which may afford holders of the debt securities
protection in the event we have a change in control or in the
event of a highly leveraged transaction (whether or not such
transaction results in a change in control) which could
adversely affect holders of debt securities.
Covenants
We will set forth in the applicable prospectus
supplement any restrictive covenants applicable to any issue of
debt securities. Unless otherwise provided in the applicable
prospectus supplement, the following covenant will apply to all
debt securities.
|
|
|
Consolidation, Merger and Sale of
Assets |
We may not, unless the terms of debt securities
provide otherwise, consolidate with or merge with or into, or
convey, transfer or lease all or substantially all of our
properties and assets to, any person, which we refer to as a
successor person, unless:
|
|
|
|
|
we are the surviving corporation, or the
surviving entity (if other than Golden Star) or the acquiror of
our properties and assets is a corporation organized and validly
existing under the laws of any U.S. domestic jurisdiction
and expressly assumes our obligations under the debt securities
and the indenture;
|
|
|
|
immediately prior to and after giving effect to
the transaction, no default or event of default, and no event
which, after notice or lapse of time, or both, would become an
event of default, shall have occurred and be continuing under
the indenture; and
|
23
|
|
|
|
|
certain other conditions are met.
|
Events of Default
Unless otherwise provided in the applicable
prospectus supplement, the indenture defines an event of default
with respect to any series of debt securities, as one or more of
the following:
|
|
|
|
|
default in the payment of any interest upon any
debt security of that series when it becomes due and payable,
and continuance of that default for a period of 30 days;
|
|
|
|
default in the payment of principal of any debt
security of that series when due and payable;
|
|
|
|
an event of default occurs and is continuing, or
the failure by us to comply with any of the agreements contained
in the debt securities of that series or the indenture (other
than a covenant or warranty that has been included in the
indenture solely for the benefit of a series of debt securities
other than that series), which default continues uncured for a
period of 60 days after we receive written notice from the
trustee or from the holders of not less than 50% in principal
amount of the outstanding debt securities of that series as
provided in the indenture;
|
|
|
|
certain events of bankruptcy, insolvency or
reorganization of our company; and
|
|
|
|
any other event of default provided with respect
to debt securities of that series that is described in the
applicable prospectus supplement accompanying this prospectus.
|
No event of default with respect to a particular
series of debt securities (except as to certain events of
bankruptcy, insolvency or reorganization) necessarily
constitutes an event of default with respect to any other series
of debt securities. The occurrence of an event of default may
constitute an event of default under our bank credit agreements
in existence from time to time. In addition, the occurrence of
certain events of default or an acceleration under the indenture
may constitute an event of default under certain of our other
indebtedness outstanding from time to time.
If an event of default with respect to debt
securities of any series at the time outstanding occurs and is
continuing, then the trustee or the holders of not less than 50%
in principal amount of the outstanding debt securities of that
series may, by a notice in writing to us (and to the trustee if
given by the holders), declare to be due and payable immediately
the principal (or, if the debt securities of that series are
discount securities, that portion of the principal amount as may
be specified in the terms of that series) of and accrued and
unpaid interest, if any, on all debt securities of that series.
In the case of an event of default resulting from certain events
of bankruptcy, insolvency or reorganization, the principal (or
such lesser amount) of and accrued and unpaid interest, if any,
on all outstanding debt securities will become and be
immediately due and payable without any declaration or other act
on the part of the trustee or any holder of outstanding debt
securities. At any time after a declaration of acceleration with
respect to debt securities of any series has been made, but
before a judgment or decree for payment of the money due has
been obtained by the trustee, the holders of a majority in
principal amount of the outstanding debt securities of that
series may rescind the acceleration if all events of default,
other than the non-payment of accelerated principal and
interest, if any, with respect to debt securities of that
series, have been cured or waived as provided in the indenture.
We refer you to the prospectus supplement relating to any series
of debt securities that are discount securities for the
particular provisions relating to acceleration of a portion of
the principal amount of such discount securities upon the
occurrence of an event of default.
Subject to certain rights of the trustee, the
holders of a majority in principal amount of the outstanding
debt securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the trustee or exercising any trust or power
conferred on the trustee with respect to the debt securities of
that series. The indenture provides that the trustee will be
under no obligation to exercise any of its rights or powers
under the indenture at the request of any holder of outstanding
debt securities if the request conflicts with law or the
indenture, is unduly prejudicial to the rights of another holder
of debt securities of that series, or may involve the trustee in
personal liability.
24
No holder of any debt security of any series will
have any right to institute any proceeding, judicial or
otherwise, with respect to the indenture or for the appointment
of a receiver or trustee, or for any remedy under the indenture,
unless:
|
|
|
|
|
that holder has previously given to the trustee
written notice of a continuing event of default with respect to
debt securities of that series; and
|
|
|
|
the holders of at least a majority in principal
amount of the outstanding debt securities of that series have
made written request, and offered reasonable indemnity, to the
trustee to institute the proceeding as trustee, and the trustee
has not received from the holders of a majority in principal
amount of the outstanding debt securities of that series a
direction inconsistent with that request and has failed to
institute the proceeding within 60 days.
|
Notwithstanding the foregoing, the holder of any
debt securitys right to receive payment of the principal
of, premium and any interest on that debt security on or after
the due dates expressed in that debt security and to institute
suit for the enforcement of payment shall not be impaired or
affected without the consent of the holder.
The indenture requires us, within 120 days
after the end of our fiscal year, to furnish to the trustee a
statement as to compliance with the indenture. The indenture
provides that the trustee may withhold notice to the holders of
debt securities of any series of any default or event of default
(except in payment on any debt securities of that series) with
respect to debt securities of that series if it in good faith
determines that withholding notice is in the interest of the
holders of those debt securities.
Modification and Waiver
Golden Star and the trustee as to any series of
debt securities may modify and amend the indenture with the
consent of the holders of at least a majority in principal
amount of the outstanding debt securities of each series
affected by the modifications or amendments. The holders of at
least a majority in principal amount of outstanding debt
securities of the series affected may also waive compliance in a
particular instance with any provision of the indenture.
Nevertheless, in no event may a modification, amendment or
waiver, without the consent of the holders of each series of
affected debt security then outstanding:
|
|
|
|
|
reduce the amount of debt securities whose
holders must consent to an amendment or waiver;
|
|
|
|
reduce the amount of, or postpone the date fixed
for, the payment of a sinking fund or analogous provision;
|
|
|
|
reduce the rate of or extend the time for payment
of interest (including default interest) on any debt security;
|
|
|
|
reduce the principal of or premium on or change
the fixed maturity of any debt security or waive a redemption
payment or alter the redemption provisions with respect thereto;
|
|
|
|
make the principal of or premium or interest on
any debt security payable in a currency other than that stated
in the debt security;
|
|
|
|
reduce the principal amount of original issue
discount securities payable upon acceleration of maturity;
|
|
|
|
make any change to certain provisions of the
indenture relating to, among other things, the right of holders
of debt securities to receive payment of the principal of,
premium and interest on those debt securities and to institute
suit for the enforcement of any such payment and to waivers or
amendments; or
|
|
|
|
waive a default in the payment of the principal
of, premium or interest on any debt security (except a
rescission of acceleration of the debt securities of any series
by the holders of at least a majority in aggregate principal
amount of the then outstanding debt securities of that series
and a waiver of the payment default that resulted from such
acceleration).
|
25
Subject to the limitations discussed above, the
holders of a majority in principal amount of the outstanding
debt securities of any series may on behalf of the holders of
all the debt securities of such series waive any existing or
past default or event of default under the indenture with
respect to that series and its consequences, except a default or
event of default in the payment of the principal of, premium or
any interest on any debt security of that series or in respect
of a covenant or provision which cannot be modified or amended
without the consent of the holder of each outstanding debt
security of the series affected; provided, however, that the
holders of a majority in principal amount of the outstanding
debt securities of any series may rescind an acceleration and
its consequences, including any related payment default that
resulted from the acceleration.
Defeasance of Debt Securities and Certain
Covenants in Certain Circumstances
Legal Defeasance.
The indenture provides that, unless
otherwise provided by the terms of the applicable series of debt
securities, we may be discharged from any and all obligations in
respect of the debt securities of any series (except for certain
obligations to register the transfer or exchange of debt
securities of such series, to replace stolen, lost or mutilated
debt securities of such series, and to maintain paying agencies
and certain provisions relating to the treatment of funds held
by paying agents). We will be so discharged upon the deposit
with the trustee, in trust, of money and/or U.S. government
obligations or, in the case of debt securities denominated in a
single currency other than U.S. dollars, foreign government
obligations, that, through the payment of interest and principal
in accordance with their terms, will provide money in an amount
sufficient in the opinion of a nationally recognized firm of
independent public accountants to pay and discharge each
installment of principal, premium and interest on and any
mandatory sinking fund payments in respect of the debt
securities of that series on the stated maturity of those
payments in accordance with the terms of the indenture and those
debt securities.
This discharge may occur only if, among other
things, we have delivered to the trustee an opinion of counsel
to the effect that the holders of the debt securities of that
series will not recognize income, gain or loss for United States
federal income tax purposes as a result of the deposit,
defeasance and discharge and will be subject to United States
federal income tax on the same amounts and in the same manner
and at the same times as would have been the case if the
deposit, defeasance and discharge had not occurred.
Covenant Defeasance.
The indenture provides that, unless
otherwise provided by the terms of the applicable series of debt
securities, upon compliance with certain conditions:
|
|
|
|
|
we may omit to comply with the covenant described
under the heading Consolidation, Merger and Sale of
Assets and certain other covenants set forth in the
indenture, as well as any additional covenants which may be set
forth in the applicable prospectus supplement; and
|
|
|
|
any omission to comply with those covenants will
not constitute a default or an event of default with respect to
the debt securities of that series, or an event of covenant
defeasance.
|
The conditions include:
|
|
|
|
|
depositing with the trustee money and/or U.S.
government obligations or, in the case of debt securities
denominated in a single currency other than U.S. dollars,
foreign government obligations, that, through the payment of
interest and principal in accordance with their terms, will
provide money in an amount sufficient in the opinion of a
nationally recognized firm of independent public accountants to
pay and discharge each installment of principal of, premium and
interest on and any mandatory sinking fund payments in respect
of the debt securities of that series on the stated maturity of
those payments in accordance with the terms of the indenture and
those debt securities; and
|
|
|
|
delivering to the trustee an opinion of counsel
to the effect that the holders of the debt securities of that
series will not recognize income, gain or loss for United States
federal income tax purposes as a result of the deposit and
related covenant defeasance and will be subject to United States
federal income tax on the same amounts and in the same manner
and at the same times as would have been the case if the deposit
and related covenant defeasance had not occurred.
|
26
Covenant Defeasance and Events of Default.
In the event we exercise our option to
effect covenant defeasance with respect to any series of debt
securities, and the debt securities of that series are declared
due and payable because of the occurrence of any event of
default, the amount of money and/or U.S. government obligations
or foreign government obligations on deposit with the trustee
will be sufficient to pay amounts due on the debt securities of
that series at the time of their stated maturity but may not be
sufficient to pay amounts due on the debt securities of that
series at the time of the acceleration resulting from the event
of default. However, we shall remain liable for those payments.
For purposes of this discussion, foreign
government obligations means, with respect to debt
securities of any series that are denominated in a currency
other than U.S. dollars:
|
|
|
|
|
direct obligations of the government that issued
or caused to be issued such currency for the payment of which
obligations its full faith and credit is pledged which are not
callable or redeemable at the option of the issuer thereof; or
|
|
|
|
obligations of a person controlled or supervised
by or acting as an agency or instrumentality of that government
the timely payment of which is unconditionally guaranteed as a
full faith and credit obligation by that government which are
not callable or redeemable at the option of the issuer thereof.
|
Federal Income Tax Consequences and Other
Special Considerations
We will provide you with information on the
federal income tax and other special considerations applicable
to any of these debt securities in the applicable prospectus
supplement.
RATIO OF EARNINGS TO FIXED CHARGES AND
PREFERENCE AMOUNTS
As we have incurred losses in each of the periods
presented below, we had insufficient earnings in each of the
past five complete fiscal years to cover fixed charges, by the
following amounts (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FISCAL YEAR ENDED DECEMBER 31, |
|
1997 |
|
1998 |
|
1999 |
|
2000 |
|
2001 |
|
|
|
|
|
|
|
|
|
$26,584
|
|
$ |
22,248 |
|
|
$ |
24,366 |
|
|
$ |
14,881 |
|
|
$ |
20,584 |
|
For the nine months ended September 30,
2002, our ratio of earnings to fixed charges was 34:1.
As of the date of this prospectus, we have not
issued any preferred shares.
LIMITATION OF LIABILITY AND
INDEMNIFICATION
Section 124 of the Canada Business
Corporations Act provides for the indemnification of our
directors and officers. Under these provisions, we may indemnify
a director or officer, a former director or officer or another
individual who acts or acted at Golden Stars request as a
director or officer, or an individual acting in a similar
capacity, of another entity (the individual) against
all costs, charges, and expenses, including an amount paid to
settle an action or satisfy a judgment, reasonably incurred by
the individual in respect of any civil, criminal,
administrative, investigative or other proceeding in which the
individual is involved by reason of their association with
Golden Star or other entity, if he or she fulfills the following
two conditions:
|
|
|
|
a. |
acted honestly and in good faith with a view to
the best interests of Golden Star, or, as the case may be, to
the best interests of the other entity for which the individual
acted as director or officer or in a similar capacity at Golden
Stars request; and
|
|
|
|
|
b. |
in the case of criminal or administrative action
or proceeding that is enforced by a monetary penalty, the
individual had reasonable grounds for believing that the
individuals conduct was lawful.
|
We may advance funds to a director, officer or
other individual for the costs, charges and expenses of a
proceeding referred to above. The individual shall repay the
amount advanced if the individual does not fulfill the
conditions of sections (a) and (b) above.
27
With the approval of a court, we may indemnify an
individual, or advance funds, in respect of an action by or on
our behalf or by or on behalf of another entity to procure a
judgment in its favor to which the individual is made a party
because of the individuals association with Golden Star or
other entity against all costs, charges and expenses reasonably
incurred by the individual in connection with such action if the
individual fulfills the conditions in clauses (a) and (b)
above.
Notwithstanding the foregoing, an individual is
entitled to indemnification from Golden Star in respect of all
costs, charges and expenses reasonably incurred by the
individual in connection with the defense of any civil,
criminal, administrative, investigative or other proceeding to
which the individual is subject because of the individuals
association with us or other entity, if the individual seeking
indemnity:
|
|
|
|
a. |
was not judged by the court of other competent
authority to have committed any fault or omitted to do anything
that the individual ought to have done; and
|
|
|
|
|
b. |
fulfills the conditions set out in
clauses (a) and (b) referred to above.
|
Effective November 24, 2001 the provisions
of the CBCA relating to the indemnification of officers,
directors and others were significantly amended. Our bylaws were
amended and restated to reflect the changes to the CBCA. In
addition, our bylaws provide that we also shall indemnify any
such person in such other circumstance as the CBCA or law
permits or requires. We have entered into agreements with our
directors and officers indemnifying such directors and officers
to the extent permitted by the CBCA and our bylaws.
We maintain a directors and officers
liability insurance policy which insures directors and officers
for losses as a result of claims based upon the acts or
omissions as directors and officers of us, including liabilities
arising under the Securities Act of 1933, and also reimburses us
for payments made pursuant to the indemnity provisions under the
CBCA.
LEGAL MATTERS
Field Atkinson Perraton LLP of Calgary, Alberta,
Canada, has provided its opinion on the validity of the
securities offered by this prospectus.
EXPERTS
The financial statements incorporated in this
prospectus by reference from our Annual Report on Form 10-K
for the year ended December 31, 2001 have been audited by
PricewaterhouseCoopers LLP, independent auditors, as stated in
their report, which is incorporated herein by reference.
The statements of reserves, production and
mineral deposits at Bogoso/ Prestea incorporated in this
prospectus by reference from our annual report on Form 10-K
for the year ended December 31, 2001 have been so included
in reliance on the Qualifying Report on the Bogoso/ Prestea
Project, Ghana of Keith McCandlish, P.Geol., and Alan L. Craven,
P.Eng., of Associated Mining Consultants Ltd. dated
December 13, 2001 given on their authority as experts in
mining engineering and geology.
28
CERTIFICATE OF THE COMPANY
February 3, 2003
This short form prospectus, together with the
documents incorporated herein by reference, constitutes full,
true and plain disclosure of all material facts relating to the
securities offered by this short form prospectus as required by
the securities legislation of the Provinces of British Columbia,
Ontario, Alberta and Manitoba.
|
|
|
Peter J.L. Bradford
Peter J.L.
Bradford
President and Chief Executive Officer |
|
Allan J. Marter
----------------------------------------------
Allan J. Marter
Chief Financial Officer |
ON BEHALF OF THE BOARD OF DIRECTORS
|
|
|
Robert R. Stone
Robert R.
Stone
Director |
|
David K. Fagin
----------------------------------------------
David K. Fagin
Director |
C-1