48,000 Metres of Drilling Planned
TORONTO, March 23, 2017 /PRNewswire/ - Golden Star
Resources Ltd. (NYSE MKT: GSS; TSX: GSC; GSE: GSR) ("Golden Star"
or the "Company") is pleased to announce its exploration strategy
for 2017.
HIGHLIGHTS
- Three key objectives of the 2017 exploration strategy are as
follows:
- To define additional Indicated Mineral Resources to increase
the supply of high grade, underground ore to the processing plants
in the near term
- To define additional Inferred Mineral Resources to increase the
lives of both of Golden Star's
operations in the medium term
- To identify the potential of Golden
Star's 1,156 square kilometre concession area to generate
targets for drilling and to establish long term production
potential
- First phase of 2017 exploration program is expected to comprise
48,000 metres ("m") of drilling – further drilling may be conducted
subject to the results received
- 171% increase to 2017 exploration budget from the Company's
previously announced 2017 exploration budget to $6.5 million for the first phase of drilling
- Drilling has begun on the initial targets, which include the
Prestea Underground Gold Mine ("Prestea Underground"), the Prestea
Open Pits and the high grade, Mampon deposit
Sam Coetzer, President and
Chief Executive Officer of Golden
Star, commented:
"During 2016 our focus was on delivering our two underground
development projects, but I am pleased that we are now in a
position to turn part of our focus back to exploration. I
believe strongly that our assets present an exploration upside
opportunity, with both Wassa Underground and Prestea Underground
having the potential to expand production on an annual basis and
extend their mine lives beyond the current seven and five years
respectively. I am excited that we have enlarged the size of
our exploration program for 2017 to crystallize these opportunities
and to drive our assets further along the value curve. If the
results of the first phase of the drilling program are positive, we
expect to allocate further funds for phase two of the exploration
program later in 2017 and I look forward to releasing the drilling
results during the course of the year."
2017 Exploration Strategy and Budget
The 2017 exploration strategy has three key objectives, which
focus on increasing the lives of Golden
Star's operations in the short, medium and long term.
Phase one of the program comprises approximately 48,000m of
drilling and further drilling may be conducted if the results of
the first phase are positive.
In its 2017 guidance for capital expenditures Golden Star stated that $2.4 million would be allocated to
exploration. However following the bought deal public
offering that was completed by the Company in February 2017, the Company decided to increase
its exploration budget for the first phase of 2017 drilling by 171%
to $6.5 million, consistent with the
use of proceeds provisions.
Breakdown of 2017 exploration budget by
asset1,2
Asset
|
Planned
Drilling (m)
|
Expected
Cost ($
million)
|
Prestea
Underground
|
|
|
West Reef extension
and definition drilling
|
11,630
|
1.2
|
Main Reef initial
drill testing on 17 to 21 Levels
|
4,600
|
0.6
|
South Gap and Tuapim
drilling from surface
|
5,250
|
0.7
|
Prestea Underground
Total
|
21,480
|
2.5
|
Prestea Open Pits
and Mampon deposit
|
|
|
Prestea South Pit and
Mampon expansion drilling
|
9,100
|
0.4
|
Prestea Open Pits and
Mampon Total
|
9,100
|
0.4
|
Wassa Underground
Gold Mine ("Wassa Underground")
|
|
|
B Shoot North
drilling from surface
|
3,000
|
0.4
|
B Shoot South step
out fences
|
10,000
|
2.7
|
242 trend step out
drilling
|
4,000
|
0.5
|
Wassa Underground
Total
|
17,000
|
3.6
|
TOTAL
|
47,580
|
6.5
|
|
Notes
|
1. This budget
includes drilling and assay costs but excludes exploration fixed
costs.
|
2. The above table
shows the Company's current plans with respect to its planned
drilling targets, the metres planned to be drilled and the
approximate costs thereof. However, the Company may determine it
appropriate to change the above drilling plan for various
business reasons.
|
To view diagrams showing the locations of the 2017 planned
drilling, please visit the following links:
http://www.gsr.com/operations/wassa/wassa-main
http://www.gsr.com/operations/prestea-underground
Prestea Underground
Golden Star believes that there
is potential to expand significantly Prestea Underground's current
Mineral Reserves of 490,000 ounces of gold (1.09 million tonnes at
13.93 grams per tonne). Based on these Mineral Reserves, the
mine is anticipated to generate production of 90,000 per annum
during a 5.5 year mine life. Previously it was possible only
to drill a small portion of the West Reef due to lack of
underground development and services. However, now that the
rehabilitation of Prestea Underground is almost complete,
Golden Star's exploration team have
commenced drilling from underground.
Golden Star believes that if
additional Mineral Resources can be delineated at Prestea
Underground, it offers the strongest potential for increasing
near-term production due to the under-utilized shaft and processing
plant. If additional ore is delineated, the Company expects
that Prestea Underground's production rate could be increased
substantially without the need to incur significant capital
expenditures for infrastructure upgrades.
2017 Targets
Phase one of the 2017 exploration program will have three key
targets at Prestea Underground. Firstly, the program will
focus on the extension and definition of the West Reef, with the
objective of assessing the opportunity to increase the supply of
high grade, underground ore to the processing plant in the near
term. This drilling commenced from underground in the first
quarter of 2017.
Secondly, the program will focus on the initial testing of the
Main Reef between 17 and 21 Levels; an area which has not been
drilled before by the Company. The objective of this drilling
is to evaluate the potential to include ore from the Main Reef into
the mine plan in the medium term and this drilling is expected to
commence in the third quarter of 2017.
Thirdly, the program will target the South Gap and Tuampim
areas. The South Gap is a two kilometre portion of the
Ashanti Gold Belt, located on the extreme southern end of the nine
kilometre area of historical Prestea Underground workings, between
the Bondaye and Tuapim shafts. The drilling will be conducted
from surface and it will test the Main Reef with the intention of
confirming the results of previously drilled intersections that
have demonstrated encouraging grades and widths of gold
mineralization. If the results are positive, the material
from the South Gap could extend Prestea Underground's life of
mine.
The total cost of phase one at Prestea Underground is expected
to be approximately $2.5 million.
Prestea Open Pits and Mampon deposit
The Prestea Open Pits and Mampon deposit are scheduled to be
mined during the first three quarters of 2017. Golden Star has previously increased the initial
mine life of the Prestea Open Pits through drilling and the
objective of the 2017 program is to define additional Mineral
Resources to extend production into the fourth quarter of 2017 and
potentially beyond.
Ore from the Prestea Open Pits and Mampon is expected to be
blended with high grade ore from Prestea Underground once it
commences production. Golden
Star had planned to modify the non-refractory processing
plant to reduce its capacity to process material from Prestea
Underground solely. However, as there is abundant excess
capacity in the plant, if further open pit ore is defined,
Golden Star could continue to blend
the two ores until the open pit ore is exhausted and then the plant
modifications could be undertaken at a later date.
2017 Targets
Phase one of the 2017 exploration program at the Prestea Open
Pits, the Mampon deposit and the nearby Aboronye deposit will
target Mineral Resource expansion. This drilling commenced in
the first quarter of 2017 and is expected to be completed during
the second quarter of 2017.
The total cost of phase one at the Prestea Open Pits and
Mampon/Aboronye deposits is expected to be approximately
$0.4 million.
Wassa Underground
Golden Star believes there is
strong exploration upside potential at Wassa Underground. The
first objective of the 2017 drilling program at this mine is to
both expand the Indicated Mineral Resources in order to increase
the supply of high grade, underground ore being fed to the Wassa
processing plant in the near term. The second objective is to
confirm that gold mineralization is continuous along strike, adding
additional Inferred Mineral Resources, which have the potential to
be mined in the longer term.
Similarly to Prestea Underground, if additional Mineral
Resources are delineated at Wassa Underground, then there would be
strong potential to increase near-term production. This is
due to the twin decline and processing plant, which both have
excess capacity, so it is anticipated Wassa Underground's
production rate could be increased significantly without the need
to incur substantial capital expenditures for infrastructure
upgrades.
2017 Targets
Phase one of the 2017 exploration program at Wassa Underground
is expected to focus on three key areas. Firstly, it will
test the extension of B Shoot North, which has the potential to
increase near term production from the mine. This drilling is
expected to commence in the second quarter of 2017.
Secondly, step out fences will be drilled with the objective of
ascertaining if the B Shoot is continuous to the South, down plunge
of the current Inferred Mineral Resources, for 10,000 metres in
total. This drilling is also expected to commence in the
second quarter of 2017.
Thirdly, the 242 trend (which has been mined previously as part
of the Wassa Main Pit) will be drilled with the objective of
increasing Wassa's Inferred Mineral Resources and to test the
potential to mine the 242 trend from underground. This
drilling is expected to commence in the second quarter of 2017.
The total cost of phase one at Wassa Underground is expected to
be approximately $3.6 million.
Regional Exploration
Golden Star has a large land
package in Ghana, with a total
concession area of 1,156 square kilometres. During 2017, the
Company plans to compile existing geophysical, geochemical and
geological information on these land packages and engage in a
process of target generation and prioritization. The drilling
results will be used to direct further exploration in subsequent
years, which has the potential to increase Golden Star's production profile in the longer
term.
Drilling Results and Phase Two
Golden Star expects to release
the results received from the various drilling programs during the
second, third and fourth quarters of 2017. The Company
anticipates that funds will be allocated for additional drilling,
subject to positive drilling results.
All monetary amounts refer to United States dollars unless otherwise
indicated.
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 Ghana, West
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 its two high grade, low cost underground mines both
in conjunction with existing open pit operations. The Wassa
Underground Gold Mine commenced commercial production in
January 2017 and the Prestea
Underground Gold Mine is expected to achieve commercial production
in mid-2017. Gold production in 2017 is expected to be
255,000-280,000 ounces with cash operating costs of $780-860 per ounce.
Cautionary note regarding forward-looking information
This press release 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 in this press release include, but are not limited
to, information or statements with respect to: the budgeted cost of
the Company's exploration program; the expansion of production on
an annual basis and extension of mine lives of Prestea Underground
and Wassa Underground beyond the current mine lives; the allocation
of further funds for phase two of the exploration program later in
2017; the objectives of the 2017 drilling program; the annual
production and mine life of Prestea Underground; the delineation of
additional Mineral Resources at Prestea Underground and potential
for increasing near-term production at Prestea Underground without
significant capital expenditures for infrastructure upgrades; the
key targets of the Prestea Underground 2017 drilling program; the
potential to include ore from the Main Reef into the mine plan; the
blending of ore from Prestea Open Pits and Mampon with high grade
ore from Prestea Underground; planned modifications to the
non-refractory processing plant at the Bogoso site to reduce its
capacity to process material from Prestea Underground, and the
possibility of undertaking these modifications at a later date; the
delineation of additional Mineral Resources at Wassa Underground
and the potential to increase near-term production at Wassa
Underground; the ability to increase Wassa Underground's production
rate without the need to incur substantial capital expenditures for
infrastructure upgrades; the drilling plan for each of Prestea
Underground, Wassa Underground, Prestea Open Pits and Mampon; plans
to compile existing geophysical, geochemical and geological
information on the Company's Ghanaian land packages and engage in a
process of target generation and prioritization; further
exploration in subsequent years and the potential increase in
Golden Star's production profile in
the longer term; the ability to increase the Mineral Reserves at
Prestea Underground; the ability to increase near-term production
at Prestea Underground by utilizing the excess capacity of the
existing infrastructure; the ability to extend production from the
Prestea Open Pits and the Mampon deposit beyond the third quarter
of 2017; the ability to increase the Indicated and Inferred Mineral
Resources of Wassa Underground; the ability to increase near-term
production at Wassa Underground by utilizing the excess capacity of
the existing infrastructure; the ability of the various elements on
the 2017 exploration program to commence within the expected
timeframes; and the timing of the release of the Company's
exploration results.
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; risks related to
joint venture operations; actual results of current exploration
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; delays in obtaining
governmental approvals or financing or in the completion of
development or construction activities and risks related to
indebtedness and the service of such indebtedness. Although
Golden Star has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking information and statements, there may be other
factors that cause results not to be as anticipated, estimated or
intended.
There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
information and statements. Forward-looking information and
statements are made as of the date hereof and accordingly are
subject to change after such date. Forward-looking information and
statements are provided for the purpose of providing information
about management's current expectations and plans and allowing
investors and others to get a better understanding of the Company's
operating environment. Golden Star
does not undertake to update any forward-looking information and
statements that are included in this news release except in
accordance with applicable securities laws.
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 ("NI 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 the
mineral properties referenced in this news release are contained in
the following current technical reports for those properties
available at www.sedar.com: (i) Wassa - "NI 43-101 Technical Report
on feasibility study of the Wassa open pit mine and underground
project in Ghana" effective date
December 31, 2014; (ii) Prestea
Underground - "NI 43-101 Technical Report on a Feasibility Study of
the Prestea Underground Gold Project in Ghana" effective date November 3, 2015; and (iii) Bogoso - "NI 43-101
Technical Report on Resources and Reserves Golden Star Resources
Ltd., Bogoso Prestea Gold Mine, Ghana" effective date December 31, 2013.
SOURCE Golden Star Resources Ltd.