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Business & Finance | Apr 27, 2004

Resolute Mining Limited to sell stake in Obotan Plant

GNA

Accra, April 26, GNA - Resolute Mining, an Australian mining concern, says it intends to sell its Obotan Plant in the Western Region of Ghana and associated infrastructure to a Colorado-based Ghanaian gold miner, Golden Star Resources for a total consideration of 5.5 million dollars.

The deal includes the Company's 4.5 per cent stake in Red Back Mining, a junior operator in the country.

Resolute Mining Officials in Ghana told the Ghana News Agency Business Desk that the transactions, the equity of which is subject to Red Back's approval certainly represents possibilities for Red Back who have the undeveloped one-million-ounce Chirano Project in Ghana.

Resolute in the last couple of years has crystallized its Ghanaian investments shifting its gold focus to Tanzania, despite Chief Executive Peter Sullivan's claim that his Company would continue to devote resources to Ghana where it still has a couple of exploration projects. From all indications, there is Resolute's renewed accent on building a high profile in Tanzania.

Industry sources told the GNA that Red Back would prefer an approach from Golden Star soon because the former would likely need a partner to help fund the proposed approximately 40 million dollar Chirano Project or may even be amenable to a merger proposal.

It put Golden Stars' production around 130,000 ounces per annum from their Bogoso and Prestea mines, where it is expected to expand operations in the same direction that the Obotan Plant is headed. Gold Star sources said, "the Company's goal is to quickly grow its business in Ghana and regionally in West Africa, via a combination of acquisition and organic growth to become a mid-tier gold producer."

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