Future Global Resources (FGR) – new owners of the Bogoso-Prestea gold mine – says it has discovered material inaccuracies in information provided by Golden Star Resources (GSR), upon which it relied in deciding to acquire the Bogoso Prestea mine.
According to a notice published on the website of Blue International Group – the parent company of FGR – the financial impact of the said inaccuracies are significant and as such it will investigate the inaccuracies.
The notice is believed to be in response to an allegation made against FGR by GSR.
GSR has claimed that FGR has rescinded its decision to pay some $15 million which forms part of the purchasing price of GSR’s 90 percent interest in the mine.
Making the disclosure via a press release sighted by norvanreports, GSR states 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.
“FGR has claimed that it is entitled to set-off its obligation to make such payment under the Share Purchase Agreement as a result of various alleged breaches of the Share Purchase Agreement, a claim which Golden Star and Caystar believe to be completely without merit,” read parts of the statement.
Per information contained in the press statement, GSR has demanded that Blue International Holdings (BIH) – the major shareholder of FGR – make the $15 million payment pursuant to the guarantee made by BIH in the SPA in view of the fact that FGR has declined to make the payment.
Adding that should BIH also decline to make the payment, GSR will consider all available avenues of recourse to recover fully all payments owed it by FGR under the SPA.
Read below details of the published notice on BIH’s website:
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.
