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Investors in GSR share offer to smile
with surging gold price
Accra, Jan. 3, Ghanadot/GNA - Prospective shareholders of
Golden Star Resources' (GSR) ongoing initial share offer in
the country are expected to benefit immensely from the
surging gold prices on the world market.
GSR, an international gold mining and exploration company,
which focuses primarily on mining, mine development and gold
exploration in Ghana, entered the Ghanaian market with a
discounted initial offer price.
The Initial Ghana Offer is pegged at GH¢3.00 per share,
which was at a discount to the closing price of GH¢3.36 on
the American Stock Exchange (AMEX) as at December 21, last
year.
The offer, which was to span December 5 to 21 last year, has
been extended to January 18 this year to enable more GRS
employees and Ghanaians to take advantage of the
opportunity.
Speaking to the Ghana News Agency on Thursday, Mr Mawuli
Hedo, an analyst with Strategic African Securities (SAS)
Finance Group, managers of the offer, predicted that 'the
current fledgling gold rally is expected to last for at
least a couple of years and will ultimately push GSR stock
price further up'.
He said investors would most likely invest in a gold stock
if the company was properly managed, un-hedged, had high
level of technology and low cost of extraction of gold.
Mr Hedo said: "The only logical reason to invest in gold
stocks, after you have done your due diligence and research
is the expectation that gold price will go higher."
He said GSR, which was expected to issues a total of
3,170,000 shares did not hedge against its gold production
and therefore the expected high gold prices would benefit
the company's shareholders.
"A hedging gold mining company makes private deals with
bankers to sell the gold it will mine in the future at a
fixed price regardless of whether the actual gold price in
the future turns out to be higher or lower than the agreed
upon contractual price," he explained.
Mr Hedo advised would be investors in a gold mining to
consider the company's reserves, saying it was good to see
reserves equal to at least 5-10 years worth of current
annual production for long-term investment.
"GSR's proven and probable gold reserves have increased over
the years, indicating that the expected high gold prices
will benefit investors," he said.
GNA
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