TORONTO, July 12, 2016 /CNW/ - Golden Star Resources (NYSE
MKT: GSS; TSX: GSC; GSE: GSR) ("Golden Star" or the "Company") is
pleased to announce that pre-commercial production has commenced at
its Wassa Underground Mine in Ghana ("Wassa Underground"), as scheduled.
The successful blasting of the first stope in the F Shoot of
Wassa Underground took place on July 10,
2016 delivering the first ore from the new underground mine
to the Wassa processing plant. This first stope was mined
using longitudinal longhole open stoping, utilizing remote control
scoops for ore loading and then hauled to surface via 50 tonne
trucks.
The first stope is in the upper part of the F Shoot, which is
one of the more moderate grade areas of the deposit. The
higher grade areas within the B Shoot are scheduled to be accessed
in early 2017.
Wassa Underground is expected to achieve commercial production
in early 2017, at which time it is expected to deliver 2,000-2,500
tonnes of ore per day. The development rate at Wassa
Underground is currently 10 to 12 metres per day and it is expected
to continue to increase throughout the second half of 2016.
Ore from Wassa Underground will be mined in conjunction with ore
from the Wassa Main pit and blended for feeding to the processing
plant.
Wassa Underground has Probable Mineral Reserves of
5,397,000 tonnes at a grade of 4.59 grams of gold per tonne for
796,000 ounces of gold. Wassa Underground is forecast to
produce 20,000-25,000 ounces of pre-commercial gold production in
2016 and it remains on track to achieve this. Production from
the combined Wassa Main pit and Wassa Underground operations is
expected to be 120,000-135,000 ounces of gold in 2016 and average
life of mine combined production is anticipated to be 163,000
ounces of gold per annum.
Golden Star's total production in
2016 is expected to be between 180,000-205,000 ounces of gold with
cash operating costs of US$815-US$925
per ounce (see "Non-GAAP Financial Measures" below).
Sam Coetzer, President and
Chief Executive Officer of Golden
Star, commented:
"I am delighted to announce that pre-commercial production
has commenced at our Wassa Underground mine. It is a credit to the
operational team at Wassa that we delivered the first ore from
Wassa Underground within the timeframe expected and it remains on
track to contribute 20,000-25,000 ounces of gold to our 2016
production. The blasting of the first stope at Wassa
Underground is the first of two major operational milestones that
we are targeting during the course of the next 12 months. The
second milestone will be the blasting of the first stope at Prestea
Underground, which is anticipated to occur in mid-2017. Once
these milestones have been achieved, Golden
Star will be well-positioned as a high grade, low cost gold
producer."
Golden Star will announce its
second quarter financial results after market close on July 27th, 2016, as previously
announced.
Company Profile
Golden Star is an established
gold mining company that owns and operates the Wassa and Prestea
mines situated on the prolific Ashanti Gold
Belt in western Ghana,
Africa. Listed on the NYSE MKT,
the TSX, and the GSE, Golden Star is
strategically focused on increasing operating margins and cash flow
through the development of two high grade, low cost underground
mines both in conjunction with existing open pit operations. The
Wassa Underground commenced pre-commercial production in mid-2016
and the Prestea Underground is expected to commence production in
mid-2017. Both projects are fully funded and on track to begin
production as expected. Production in 2016 is expected to be
between 180,000–205,000 ounces of gold with costs of US$815-US$925 per ounce.
Cautionary note regarding forward-looking information
This report contains "forward looking information" within the
meaning of applicable Canadian securities laws and "forward-looking
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995, concerning the business,
operations and financial performance and condition of Golden Star. Generally, forward-looking
information and statements can be identified by the use of
forward-looking terminology such as "plans", "expects", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", "believes" or variations of such words
and phrases (including negative or grammatical variations) or
statements that certain actions, events or results "may", "could",
"would", "might" or "will be taken", "occur" or "be achieved" or
the negative connotation thereof. Forward-looking information
and statements include, but are not limited to, information or
statements with respect to: the Company's strategy of
transforming its business to being a high grade, lower cost
producer; the timing for accessing higher grade ore and commencing
commercial production at Wassa Underground; the tonnes per day to
be delivered at commercial production; the increase in the
development rate at Wassa Underground; the timing of Prestea
Underground first production; Mineral Reserve estimates at Wassa
Underground, and production and cash operating cost estimates for
2016.
Forward-looking information and statements are made based upon
certain assumptions and other important factors that, if untrue,
could cause the actual results, performances or achievements of
Golden Star to be materially
different from future results, performances or achievements
expressed or implied by such statements. Such statements and
information are based on numerous assumptions regarding present and
future business strategies and the environment in which
Golden Star will operate in the
future, including the price of gold, anticipated costs and ability
to achieve goals. Forward-looking information and statements are
subject to known and unknown risks, uncertainties and other
important factors that may cause the actual results, performance or
achievements of Golden Star to be
materially different from those expressed or implied by such
forward-looking information and statements, including but not
limited to: risks related to international operations, including
economic and political instability in foreign jurisdictions in
which Golden Star operates; risks
related to current global financial conditions; actual results of
current exploration and development activities; environmental
risks; future prices of gold; possible variations in mineral
reserves, grade or recovery rates; mine development and operating
risks; accidents, labor disputes and other risks of the mining
industry; changes in governmental regulations and requirements;
delays in obtaining governmental approvals or financing or in the
completion of development or construction activities; the risks
related to indebtedness and the service of such indebtedness; and
the availability of financing on acceptable terms or at all. There
can be no assurance that future developments affecting the Company
will be those anticipated by management. Please refer to the
discussion of these and other factors in our Annual Information
Form for the year ended December 31,
2015. The forecasts contained in this press release
constitute management's current estimates, as of the date of this
press release, with respect to the matters covered thereby.
We expect that these estimates will change as new information is
received and that actual results will vary from these estimates,
possibly by material amounts. While we may elect to update
these estimates at any time, we do not undertake to update any
estimate at any particular time or in response to any particular
event. Investors and others should not assume that any
forecasts in this press release represent management's estimate as
of any date other than the date of this press release.
Non-GAAP Financial Measures
In this press release, we use the term "cash operating cost per
ounce". This term should be considered to be a non-GAAP
financial measure as defined in applicable Canadian and
United States securities laws and
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP.
"Cash operating cost per ounce" for a period is equal to "Cost
of sales excluding depreciation and amortization" for the period
less royalties and production taxes, minus the cash component of
metals inventory net realizable value adjustments divided by the
number of ounces of gold sold during the period. Golden Star uses cash operating cost per ounce
as a key operating indicator. Golden
Star monitors this measure monthly, comparing each month's
values to prior quarters' values to detect trends that may indicate
increases or decreases in operating efficiencies. Golden Star provides this measure to investors
to allow them to also monitor operational efficiencies of the
Company's mines. Since cash operating costs do not incorporate
revenues, changes in working capital and non-operating cash costs,
they are not necessarily indicative of operating profit or cash
flow from operations as determined under International Financial
Reporting Standards ("IFRS").
These non-GAAP financial measures are not representative of all
of Golden Star's cash expenditures
as they do not include income tax payments or interest costs.
There are material limitations associated with the use of such
non-GAAP financial measures. Since these measures do not
incorporate all non-cash expense and income items, changes in
working capital and non-operating cash costs, they are not
necessarily indicative of operating profit or cash flow from
operations as determined under IFRS.
Technical Information
The technical contents of this press release have been reviewed
and approved by S. Mitchel Wasel, BSc Geology, a "Qualified Person"
pursuant to National Instrument 43-101. Mr. Wasel is Vice President
Exploration for Golden Star and an
active member of the Australasian Institute of Mining and
Metallurgy. Additional scientific and technical information
relating to Wassa Underground is contained in the Company's
technical report, available at www.sedar.com, titled "NI 43-101
Technical Report on Feasibility Study of the Wassa open pit mine
and underground project in Ghana"
effective date December 31, 2014 and
filed on May 8, 2015.
SOURCE Golden Star Resources Ltd.