A stand-off is gradually picking up between the incumbent and former owners of the Bogoso-Prestea gold mine, Future Gold Resources (FGR) and Golden Star Resources (GSR).
The growing impasse is evidenced by statements released into the public domain by both companies with FGR accusing GSR of providing it with material inaccuracies in information upon which it relied in deciding to acquire the Bogoso Prestea mine.
Further stating that it is going to investigate the said inaccuracies given their significant financial impact on the company.
GSR on the other hand, has accused FGR of ‘deliberately’ rescinding its decision to pay some $15 million which forms part of the purchasing price of its 90 percent interest in the Bogoso-Prestea mine.
According to GSR, FGR’s decision to not pay the said amount follows claims by FGR of various alleged breaches of the Share Purchase Agreement (SPA) between it and GSR.
In the banter of accusations made by both companies, FGR has made claims of settling the outstanding and ongoing employee dispute relating to severance payments owed to staff at Bogoso Prestea which resulted in repeated industrial actions by the workers.
FGR claims that in the absence of GSR’s participation in the severance payment dispute, FGR negotiated with the mine workers to reach an agreement on severance which resulted in a peaceful return to operations and the cessation of the ongoing legal action against GSR.
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This was after an industrial strike embarked by the mine workers lasted for 5 consecutive days.
FGR notes that despite making payments for the severance package of mine workers, it was not contractually obliged to do so under the Share Purchase Agreement (SPA) between it and GSR.
Indeed, checks made by norvanreports indicate that, FGR has held talks with workers of the mine and agreed to pay severance packages to the tune of $20 million.
The amount, norvanreports understands, was agreed to be paid in installments; 20 percent of the amount in October this year, 40 percent in October 2022 and the remaining 40 percent in 2023.
Read below statements of the two companies:
Press release by FGR
FGR Takes Steps to Secure the Future of the Bogoso Prestea Mine
Future Global Resources (FGR) has discovered material inaccuracies in information provided by Golden Star Resources (GSR), which FGR relied upon in deciding to acquire the Bogoso Prestea mine. The financial impact of those inaccuracies is significant. FGR will continue to investigate the inaccuracies.
FGR notified GSR of the inaccuracies last week and required GSR to indemnify it in respect of the resulting financial losses it has sustained, in accordance with the provisions of the Bogoso Prestea purchase agreement.
Separately, FGR has recently stepped in to settle an outstanding and ongoing employee dispute relating to severance payments owed to staff at Bogoso Prestea which resulted in repeated industrial actions. In the absence of GSR’s participation, FGR negotiated with the staff to reach an agreement on severance which resulted in a peaceful return to operations and the cessation of the ongoing legal action. FGR claims the cost of this settlement from GSR given that GSR has responsibility for this matter under the purchase agreement.
In light of the above, FGR was not contractually obliged to make the payments that would otherwise be due on July 16, 2021 and will not be making the payment otherwise due on July 31, 2021.
