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UPDATE 1-Chifeng Gold and unnamed partner to buy Golden Star for $470 mln

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·2 min read
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* Purchase price of $3.91/share is 24.1% premium to Friday's close

* Golden Star owns 90% of Wassa gold mine in southwest Ghana

* Chifeng had previously sought to buy Ghana's Bibiani mine (Adds bullet points, detail on mining lease expiry)

Nov 1 (Reuters) - China's Chifeng Jilong Gold Mining , known as Chifeng Gold, on Monday said it and an unnamed co-buyer would purchase all of Ghana-focused miner Golden Star Resources for a total $470 million in cash.

The move is Chifeng's second attempt to gain a foothold in the West African country after walking away in April from a deal to buy Resolute Mining's Bibiani gold mine, saying it had not received timely information about the termination of the mining lease.

Chifeng said its Chijin International unit has agreed to buy 62% of Golden Star at $3.91 per share, equating to about $291 million. An unnamed third party will contribute a further $179 million and take a 38% stake, it added.

Golden Star owns 90% of the Wassa gold mine in southwest Ghana, with the remainder owned by the Ghanaian government. The mine produced 168,000 ounces, or 4.76 tonnes, of gold in 2020, Golden Star's website shows.

The 30-year Wassa mining lease expires in September 2022 but Chifeng said the government had confirmed it will approve an extension if an application for one is made.

In its own statement, Golden Star cited CEO Andrew Wray as saying the deal would provide a larger capital base to help to deliver growth at Wassa.

The company also said the agreed price represented a 24.1% premium over its closing share price on the New York Stock Exchange on Friday.

"We intend to invest significant financial and human capital into Wassa to realise the mine's full potential," Chifeng President Lu Xiaozhao was quoted as saying in the statement.

Outside China, Chifeng already operates the Sepon gold and copper mine in Laos and in September agreed to invest A$2 million ($1.5 million) in Australia's Metalstech.

The Golden Star transaction is expected to close in January 2022, both companies said.

($1 = 1.3307 Australian dollars) (Reporting by Tom Daly Editing by Helen Reid and David Goodman)