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Gold Star to take over Cote d’Ivoire oil concession and arranges financing

Published: 03:51 10 Mar 2009 AEDT

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Gold Star Resources Corp said it signed a letter of intent to acquire the hydrocarbon rights of Bengal Bight Ghana Ltd’s Tiampoum mining concession in Cote d’Ivoire. The concession covers an area of approximately 1,000 square kilometres in the District of d'Aboisso, southeastern Cote d'Ivoire, near the border with Ghana.

Bengal holds the concession as part of an underlying option agreement from Enchi-Proci CI, a legal corporation doing business under the laws of Cote d'Ivoire.

The southern half of the concession area covers much of the onshore extent of the Tano-Bassam Basin, which has seen a number of material oil and gas developments in recent years.

Recently, Tullow Oil PLC announced that it was proceeding with the offshore development of the Jubilee Field in the Ghanaian sector from which it expects production wells to flow 20,000 barrels of oil per day, with an ultimate upside potential of 1.8 billion barrels for the field, Gold Star said.

Following its acquisition of the Devon Energy assets in Ivorian waters adjoining those of Tullow in Ghana, Afren Oil now operates several material oil and gas fields, including the Kudu, Eland and Ibex, which lie immediately offshore and directly down-dip from Tiampoum, it said.

Gold Star will pay US$100,000 to Bengal and US$150,000 to Enchi-Proci to acquire the license outright, and it will issue 2 million common shares and 2 million warrants to Bengal; Bengal will receive a further up to US$300,000 when key production milestones are reached.

In addition, the company said it has arranged a non-brokered private placement of up to 10 million share units at CDN$0.15 each to raise a total of CDN$1.5 million of working capital, with each unit consisting of one common share and one share purchase warrant.

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