Strongest quarterly production since cessation
of refractory operation
TORONTO, May 3, 2017 /PRNewswire/ - Golden Star
Resources Ltd. (NYSE MKT: GSS; TSX: GSC; GSE: GSR) ("Golden Star"
or the "Company") reports its financial and operational results for
the first quarter ended March 31,
2017.
HIGHLIGHTS:
- The first quarter of 2017 represents Golden Star's strongest
quarterly production since the cessation of the refractory
operation in the third quarter of 2015
- 9% increase in gold production to 57,795 ounces in the first
quarter of 2017 compared to the first quarter of 2016 ("Q1
2016")
-
- Record quarterly production from the Prestea Open Pits for the
third consecutive quarter at 26,446 ounces
- 46% increase in production from the Wassa Underground Gold Mine
("Wassa Underground") to 11,482 ounces compared to the fourth
quarter of 2016, as the mine continues to ramp up
- 365 days without a lost-time injury ("LTI") achieved at Wassa
Underground in March 2017
- Cash operating cost per ounce1 of $798 and All-In Sustaining Cost ("AISC") per
ounce1 of $977 in the
first quarter of 2017 – costs expected to decrease further as Wassa
Underground continues to ramp up and the high grade Prestea
Underground Gold Mine ("Prestea Underground") commences
production
- Capital expenditures of $16.7
million in the first quarter of 2017, with $10.3 million attributable to development capital
for Prestea Underground
- Cash provided by operations before changes in working
capital1 of $17.7 million
($0.05 per share) in the first
quarter of 2017 and mine operating margin1 of
$8.7 million
- Consolidated cash balance of $36.5
million at March 31, 2017,
with the Company remaining fully funded to deliver its capital
program and meet its 2017 debt repayments
- Golden Star is on track to achieve its full year 2017 guidance
in terms of gold production, cash operating cost per
ounce1, AISC per ounce1 and capital
expenditures
Notes:
|
1. See "Non-GAAP
Financial Measures".
|
Sam Coetzer, President and
Chief Executive Officer of Golden Star, commented:
"I am proud of how the Golden Star team continues to deliver
on our milestones as we progress along the path to becoming a high
grade, low cost, mid-tier producer. 'Doing what we said we
were going to do' is becoming a hallmark of our team and this is
underlined by the achievement of our strongest quarter of wholly
non-refractory production. Although our costs are lower than
those we achieved in the full year 2016, we are committed to
driving them down further still through the delivery of high margin
ounces from our two underground mines. Our focus is now on
bringing Prestea Underground into production, optimizing the
relationship between the open pit and underground operations at
Wassa and on gaining a better understanding of the upside potential
of our assets through our exploration program. We are on
track to achieve our 2017 guidance on all announced metrics and I
look forward to updating the market on exploration results as we
begin to look towards future growth."
First Quarter 2017 Conference Call Details
The Company will conduct a conference call and webcast to
discuss its results for the first quarter of 2017 on Thursday, May 4, 2017 at 9:00 am ET.
The quarterly results call can be accessed by telephone or by
webcast as follows:
Toll Free (North America): +1
877 201 0168
Toronto Local and International: +1 647 788 4901
Conference ID: 7182765
Webcast: www.gsr.com
A recording and webcast replay of the call will be available
from www.gsr.com following the call.
SUMMARY OF CONSOLIDATED OPERATIONAL AND FINANCIAL
RESULTS
|
|
|
|
Three Months
Ended
March 31,
|
OPERATING
SUMMARY
|
|
|
|
2017
|
|
2016
|
Wassa Main Pit gold
sold
|
|
oz
|
|
20,049
|
|
30,887
|
Wassa Underground
gold sold
|
|
oz
|
|
11,482
|
|
—
|
Prestea gold
sold
|
|
oz
|
|
26,613
|
|
21,782
|
Total gold
sold
|
|
oz
|
|
58,144
|
|
52,669
|
Total gold
produced
|
|
oz
|
|
57,795
|
|
53,217
|
Average realized gold
price
|
|
$/oz
|
|
1,179
|
|
1,159
|
|
|
|
|
|
|
|
Cost of sales per
ounce - Consolidated1
|
|
$/oz
|
|
1,029
|
|
890
|
Cost of sales per
ounce - Wassa1
|
|
$/oz
|
|
1,217
|
|
908
|
Cost of sales per
ounce - Prestea1
|
|
$/oz
|
|
806
|
|
863
|
Cash operating cost
per ounce - Consolidated1
|
|
$/oz
|
|
798
|
|
721
|
Cash operating cost
per ounce - Wassa1
|
|
$/oz
|
|
942
|
|
706
|
Cash operating cost
per ounce - Prestea1
|
|
$/oz
|
|
628
|
|
742
|
All-In Sustaining
Cost per ounce - Consolidated1
|
|
$/oz
|
|
977
|
|
880
|
|
|
|
|
|
|
|
FINANCIAL
SUMMARY
|
|
|
|
|
|
|
Gold
revenues
|
|
$'000
|
|
68,545
|
|
61,067
|
Cost of sales
excluding depreciation and amortization
|
|
$'000
|
|
51,406
|
|
41,058
|
Depreciation and
amortization
|
|
$'000
|
|
8,439
|
|
5,796
|
Mine operating
margin
|
|
$'000
|
|
8,700
|
|
14,213
|
General and
administrative expense
|
|
$'000
|
|
7,992
|
|
7,222
|
(Gain)/loss on
financial instruments
|
|
$'000
|
|
(2,333)
|
|
2,207
|
Net income
attributable to Golden Star shareholders
|
|
$'000
|
|
170
|
|
2,051
|
Adjusted net income
attributable to Golden Star shareholders1
|
|
$'000
|
|
3,411
|
|
8,538
|
Income per share
attributable to Golden Star shareholders - basic and
diluted
|
|
$/share
|
|
0.00
|
|
0.01
|
Adjusted income per
share attributable to Golden Star shareholders - basic
|
|
$/share
|
|
0.01
|
|
0.03
|
Cash provided by
operations
|
|
$'000
|
|
9,438
|
|
928
|
Cash provided by
operations before working capital changes1
|
|
$'000
|
|
17,725
|
|
10,767
|
Cash provided by
operations per share - basic
|
|
$/share
|
|
0.03
|
|
0.00
|
Cash provided by
operations before working capital changes per share –
basic1
|
|
$/share
|
|
0.05
|
|
0.04
|
Capital
expenditures
|
|
$'000
|
|
16,703
|
|
15,914
|
Notes:
|
1. See "Non-GAAP
Financial Measures".
|
OPERATIONAL PERFORMANCE
In the first quarter of 2017 Golden Star produced 57,795 ounces
of gold, representing the strongest quarterly production since the
refractory operation ceased in the third quarter of 2015.
Accordingly, it also represents the strongest quarter of wholly
non-refractory production since the Company's inception.
The Company's record quarterly consolidated gold production was
due to the third consecutive quarter of record gold production from
the Prestea Open Pits (26,446 ounces), which represents a 21%
increase compared to Q1 2016. It was also due to the impact
of the high grade, underground ore from Wassa Underground being
realized for the first time as the mine continues to ramp
up.
Commercial production was achieved at Wassa Underground on
January 1, 2017, and the mining team
began accessing the high grade B Shoot zone in late March
2017. Importantly, Wassa Underground also achieved one year
(365 days) without a LTI in March
2017, underlining Golden Star's commitment to safety and
employee well-being.
Golden Star's consolidated cash operating cost per
ounce1 was $798 in the
first quarter of 2017, an 11% increase compared to the first
quarter of 2016, due to higher mining costs at the Wassa Gold Mine
("Wassa"). The consolidated AISC per ounce1 was
$977, an increase of 11% compared to
Q1 2016 and the consolidated cost of sales per ounce1,2
was $1,029, an increase of 16%
compared to Q1 2016. Golden Star expects its costs to
decrease in the second half of 2017 as mining operations at Wassa
Underground begin accessing the higher grade, larger, transverse
stopes and the mine further adapts to being a combined open pit and
underground operation and commercial production commences at
Prestea Underground.
From a development perspective, the Company continued to reach
important milestones during the quarter. By the end of
March 2017, refurbishment of Prestea
Underground was in its final stages and development of the West
Reef had commenced. By May 2,
2017 the first raise had advanced by 124 metres, as planned,
and the processing of stockpiled ore from Prestea Underground began
in late April 2017. The total development advance is behind
schedule, due to commissioning-related infrastructure issues, but
blasting of the first stoping ore at Prestea Underground remains on
track to occur in the second quarter of 2017. Commercial
production is then anticipated to be achieved in the third quarter
of 2017.
The Company also commenced mining at the Mampon deposit in late
Q1 2017, which was a quarter earlier than expected. Ore from
Mampon is being blended with ore from the Prestea Open Pits and,
due to its high grade nature, it is expected to have a positive
impact on Golden Star's cash flow during the second and third
quarters of 2017.
Notes
|
1. See "Non-GAAP
Financial Measures".
|
2. Cost of sales is a
GAAP Financial Measure but cost of sales per ounce is a Non-GAAP
Financial Measure.
|
Wassa Gold Mine
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
2017
|
|
2016
|
WASSA FINANCIAL
RESULTS
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$'000
|
|
$
|
37,250
|
|
$
|
35,949
|
|
|
|
|
|
|
|
|
|
|
Mine operating
expenses
|
|
$'000
|
|
|
28,225
|
|
|
24,035
|
|
Severance
charges
|
|
$'000
|
|
|
954
|
|
|
113
|
|
Royalties
|
|
$'000
|
|
|
1,913
|
|
|
1,864
|
|
Operating costs
from/(to) metals inventory
|
|
$'000
|
|
|
1,482
|
|
|
(2,235)
|
|
Inventory net
realizable value adjustment
|
|
$'000
|
|
|
505
|
|
|
—
|
|
Cost of sales
excluding depreciation and amortization
|
|
$'000
|
|
|
33,079
|
|
|
23,777
|
|
Depreciation and
amortization
|
|
$'000
|
|
|
5,304
|
|
|
4,279
|
|
Mine operating
(loss)/margin
|
|
$'000
|
|
$
|
(1,133)
|
|
$
|
7,893
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$'000
|
|
|
3,033
|
|
|
8,538
|
|
|
|
|
|
|
|
|
|
WASSA OPERATING
RESULTS
|
|
|
|
|
|
|
|
|
|
Ore mined - Main
Pit
|
|
t
|
|
|
362,224
|
|
|
609,519
|
|
Ore mined -
Underground
|
|
t
|
|
|
153,862
|
|
|
—
|
|
Ore mined -
Total
|
|
t
|
|
|
516,086
|
|
|
609,519
|
|
Waste mined - Main
Pit
|
|
t
|
|
|
1,908,825
|
|
|
2,406,220
|
|
Waste mined -
Underground
|
|
t
|
|
|
54,117
|
|
|
—
|
|
Waste
mined
|
|
t
|
|
|
1,962,942
|
|
|
2,406,220
|
|
Ore processed - Main
Pit
|
|
t
|
|
|
501,368
|
|
|
640,940
|
|
Ore processed -
Underground
|
|
t
|
|
|
155,383
|
|
|
—
|
|
Ore processed -
Total
|
|
t
|
|
|
656,751
|
|
|
640,940
|
|
Grade processed -
Main Pit
|
|
g/t
|
|
|
1.27
|
|
|
1.64
|
|
Grade processed -
Underground
|
|
g/t
|
|
|
2.47
|
|
|
—
|
|
Recovery
|
|
%
|
|
|
93.1
|
|
|
94.1
|
|
Gold produced - Main
Pit
|
|
oz
|
|
|
19,867
|
|
|
31,273
|
|
Gold produced -
Underground
|
|
oz
|
|
|
11,482
|
|
|
—
|
|
Gold produced -
Total
|
|
oz
|
|
|
31,349
|
|
|
31,273
|
|
Gold sold - Main
Pit
|
|
oz
|
|
|
20,049
|
|
|
30,887
|
|
Gold sold -
Underground
|
|
oz
|
|
|
11,482
|
|
|
—
|
|
Gold sold -
Total
|
|
oz
|
|
|
31,531
|
|
|
30,887
|
|
|
|
|
|
|
|
|
|
|
Cost of sales per
ounce1
|
|
$/oz
|
|
|
1,217
|
|
|
908
|
|
Cash operating cost
per ounce1
|
|
$/oz
|
|
|
942
|
|
|
706
|
Notes
|
1. See "Non-GAAP
Financial Measures".
|
Wassa Operational Overview
Both the open pit and underground operations at Wassa were in
transition during the first quarter of 2017 as Wassa Underground
continued to ramp up and Wassa Main Pit adapted to operating on a
smaller scale and as part of a combined open pit and underground
operation. Both underground and open pit operations are
expected to increase production and reduce cash operating
costs1 as the year progresses.
Gold production from Wassa was 31,349 ounces in the first
quarter of 2017, an increase of 76 ounces compared to Q1
2016. In the first quarter of 2017, 63% of Wassa's gold
production (19,867 ounces) was attributable to the Wassa Main Pit
and 37% (11,482 ounces) was attributable to Wassa
Underground. Gold production in the same period of 2016 was
attributable entirely to the Wassa Main Pit as the blasting of the
first stoping ore at Wassa Underground did not occur until July
2016. Wassa Main Pit production decreased by 36% compared to
the same period in 2016 due to mining taking place in a lower ore
grade zone, in line with the mine plan.
Commercial production was declared at Wassa Underground on
January 1, 2017 and gold production
continued to ramp up during the first quarter. Wassa
Underground's production in the first quarter of 2017 represents an
increase of 46% compared to the fourth quarter of 2016.
In addition, underground mining rates during the first quarter
of 2017 exceeded Golden Star's expectations. The Company is
targeting a mining rate of 1,400 tonnes per day ("tpd") from Wassa
Underground in 2017, with the objective of ramping up to 2,200 tpd
in 2018, which is the mining rate outlined in the Company's
Feasibility Study for the mine. However the mining team
regularly achieved stronger daily mining rates during the first
quarter of 2017, with an average mining rate of 1,710 tpd, which
had a positive impact on productivity. Despite this strong
performance, Golden Star is maintaining its full year 2017
production guidance for Wassa Underground at this time.
Wassa reported a cash operating cost per ounce1 for
the first quarter of 2017 of $942, a
33% increase compared to the same period in 2016, primarily as a
result of higher mining costs. In 2016 Wassa Underground's
mining costs were capitalized as the mine had not yet reached
commercial production, but in the first quarter of 2017 the costs
associated with the underground operation were included in Wassa's
cash operating cost per ounce1 for the first
time.
During the first quarter of 2017, mining operations were
primarily in the F Shoot, the more moderate grade zone of the
deposit. In late March 2017
Golden Star began accessing the B Shoot, the higher grade zone of
the deposit, for the first time via longitudinal stoping.
This higher grade ore is anticipated to have a positive impact both
on Wassa Underground's production and mining costs in the second
quarter of 2017 and a further reduction in costs is expected from
the third quarter of 2017 once the Company begins accessing the
wider, transverse stopes of the B Shoot.
Wassa Main Pit's mining costs also contributed to the higher
mining costs during the period as mining operations were in an area
with a higher strip ratio. Additionally, higher cost
stockpile ounces were processed in the first quarter of 2017, in
contrast to a build-up in Q1 2016, and $1.0
million of severance expenses were paid during the quarter
as a result of the streamlining of the open pit mining and
maintenance teams as the open pit operation reduces in size.
Further severance charges are expected to be paid in the second
quarter of 2017 but this phase of streamlining is anticipated to be
concluded by the third quarter of 2017.
The cost of sales per ounce1 for Wassa in the first
quarter of 2017 was $1,217.
Notes
|
1. See "Non-GAAP
Financial Measures".
|
Prestea Gold Mine
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
2017
|
|
2016
|
PRESTEA FINANCIAL
RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$'000
|
|
$
|
31,295
|
|
$
|
25,118
|
|
|
|
|
|
|
|
|
|
|
Mine operating
expenses
|
|
$'000
|
|
|
16,828
|
|
|
17,412
|
|
Severance
charges
|
|
$'000
|
|
|
—
|
|
|
(184)
|
|
Royalties
|
|
$'000
|
|
|
1,610
|
|
|
1,296
|
|
Operating costs to
metals inventory
|
|
$'000
|
|
|
(111)
|
|
|
(1,243)
|
|
Cost of sales
excluding depreciation and amortization
|
|
$'000
|
|
|
18,327
|
|
|
17,281
|
|
Depreciation and
amortization
|
|
$'000
|
|
|
3,135
|
|
|
1,517
|
|
Mine operating
margin
|
|
$'000
|
|
$
|
9,833
|
|
$
|
6,320
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$'000
|
|
|
13,670
|
|
|
7,376
|
|
|
|
|
|
|
|
|
|
PRESTEA OPERATING
RESULTS
|
|
|
|
|
|
|
|
|
|
Ore mined
|
|
t
|
|
|
340,539
|
|
|
383,177
|
|
Waste
mined
|
|
t
|
|
|
583,062
|
|
|
1,145,325
|
|
Ore
processed
|
|
t
|
|
|
388,530
|
|
|
362,302
|
|
Grade
processed
|
|
g/t
|
|
|
2.31
|
|
|
2.21
|
|
Recovery
|
|
%
|
|
|
88.9
|
|
|
84.4
|
|
Gold
produced
|
|
oz
|
|
|
26,446
|
|
|
21,944
|
|
Gold sold
|
|
oz
|
|
|
26,613
|
|
|
21,782
|
|
|
|
|
|
|
|
|
|
|
Cost of sales per
ounce1
|
|
$/oz
|
|
|
806
|
|
|
863
|
|
Cash operating cost
per ounce1
|
|
$/oz
|
|
|
628
|
|
|
742
|
Notes
|
1. See "Non-GAAP
Financial Measures".
|
Prestea Operational Overview
Gold production from the Prestea Open Pits in the first quarter
of 2017 was 26,446 ounces, delivering record quarterly production
for the third consecutive quarter. This represents a 21%
increase compared to the same period in 2016 due to higher
throughput, higher ore grade processed and higher recovery
rate.
Prestea reported a cash operating cost per ounce1 of
$628 in the first quarter of 2017,
which represents a 15% decrease compared to the same period in
2016. This robust outperformance is a result of the strong
production delivered by Prestea and the consequent increase in gold
sold. The cost of sales per ounce1 at Prestea in
the first quarter of 2017 was $806.
During the first quarter of 2017 Golden Star commenced mining of
the Mampon deposit. Mampon is a high grade, oxide deposit,
approximately 65 kilometres to the north of the Company's
carbon-in-leach processing plant. Trucking of the higher
grade ore from Mampon began in early April
2017 and it is being blended with ore from the Prestea Open
Pits. The benefits of the higher grade ore from Mampon are
expected to be realized in Golden Star's cash flow in the second
and third quarters of 2017.
Prestea Underground Development
By the end of the first quarter of 2017, the refurbishment of
Prestea Underground was in its final stages and development of the
first stope of the West Reef had commenced. All five Alimak
raise climbers expected to deliver the targeted 650 tpd mining rate
were on site and the winder upgrades were complete, enabling an
increase in hoisting capacity to achieve the targeted production
rate in 2017.
By May 2, 2017 a total of 8,800
tonnes of ore had been hoisted and delivered to the processing
plant's run-of-mine pad. Processing of this ore commenced in
mid-April 2017 and it is being
blended with ore from the Prestea Open Pits and the Mampon
deposit. A total of 14,900 tonnes of waste have been hoisted
since August 2016.
By May 2, 2017 the first Alimak
had advanced 124 metres up the ore body from 24 Level towards 21
Level, as planned. The development of the second Alimak nest
is also complete and development of the second raise is expected to
begin in mid-May.
Underground development works continued with a total development
advance of approximately 1,010 metres completed by May 2, 2017. Although the development of
the first raise has progressed on target, the total development
advance is behind schedule, particularly in terms of footwall drive
development. This delay is as a result of
commissioning-related infrastructure issues, involving underground
haulage and water pumping, and the mine's relatively inexperienced
workforce. Golden Star is seeking to rectify these issues by
further upgrading key parts of Prestea Underground's
infrastructure, such as the pumping system, and by investing in
further training for employees.
Despite this delay, blasting of the first stoping ore remains on
track to occur in the second quarter of 2017, with commercial
production anticipated to be achieved in the third quarter of
2017.
Notes
|
1. See "Non-GAAP
Financial Measures".
|
Exploration
2017 Exploration Strategy
During the first quarter of 2017 Golden Star released its
enhanced exploration strategy for the year. The first phase
of the exploration strategy comprises 48,000 metres of drilling at
a cost of $6.5 million and further
drilling may be conducted subject to the results received.
The objective of the strategy is to increase the lives of Golden
Star's operations in the short, medium and long term. In line
with the strategy, drilling commenced at the initial targets during
the first quarter of 2017, which included Prestea Underground, the
Prestea Open Pits, the Mampon deposit and the nearby Aboronye
deposit, and the 242 trend at Wassa.
At Prestea Underground, the primary focus of the drilling
program is the extension and definition of the high grade West
Reef. The objective of this work is to assess the opportunity
to increase the supply of high grade, underground ore to the
processing plant in the near term. The drilling program is
also investigating the opportunity to include ore from the Main
Reef into the mine plan in the medium term and to explore the South
Gap and Tuapim areas.
At the Prestea Open Pits and Mampon deposit, the drilling
program is focused on defining additional Mineral Resources to
extend production into the fourth quarter of 2017 and potentially
beyond. Golden Star expects to release the initial results of
this drilling later in the second quarter of 2017.
Results from 2016 Wassa In-Fill Drilling Program
During the first quarter of 2017 the remaining results were
received from the in-fill drilling program at Wassa, targeting the
first planned transverse stoping areas in the B Shoot zone.
The previously released assay results confirmed the wide zones of
high grade gold mineralization and significant intercepts included
30.2 metres grading 15.3 grams per tonne ("g/t") of gold ("Au")
from 270.0 metres and 24.5m grading 12.1 g/t Au from 280.0
metres.
The drilling also targeted gaps in the current planned stopes to
determine whether the areas of higher grade mineralization are
continuous. The results from the most northern holes of this
program indicated that the deposit is open to the north and as
such, Golden Star will evaluate the viability of adding additional
stopes to the mine plan in this area.
FINANCIAL PERFORMANCE
Capital Expenditures
After investing significantly in its two underground mines in
2016, Golden Star continued to incur substantial capital
expenditures in the first quarter of 2017 as the Company further
advanced Prestea Underground towards production. Capital
expenditures totaled $16.7 million, a
5% increase compared to the same period in 2016. However
capital expenditures reduced by 30% compared to the fourth quarter
of 2016, reflecting the construction of Wassa Underground being
largely complete and the commencement of commercial production at
this mine.
Development capital accounted for 83% of capital expenditures
($13.9 million), with the majority
relating to Prestea Underground ($10.3
million). Other capital expenditures during the
quarter were incurred in order to bring the Mampon deposit into
production ($2.5 million), to fund
the continued development of Wassa Underground ($1.7 million) and for improvements to the Wassa
Tailings Storage Facility ($1.0
million).
First Quarter 2017 Capital Expenditures Breakdown (in
millions)
|
|
|
|
|
|
|
Item
|
|
Sustaining
|
|
Development
|
|
Total
|
|
Wassa Open Pit and
Processing Plant
|
|
|
|
|
|
|
|
Wassa Tailings
Expansion
|
|
|
|
$1.0
|
|
|
|
Wassa
Underground
|
|
|
|
$1.7
|
|
|
|
Other
Development
|
|
|
|
$0.3
|
|
|
Wassa
Subtotal
|
|
|
|
|
|
$3.0
|
|
Prestea Open Pit
Mines
|
|
$2.8
|
|
|
|
|
|
Prestea
Underground
|
|
|
|
$10.3
|
|
|
|
Other
Development
|
|
|
|
$0.6
|
|
|
Prestea
Subtotal
|
|
|
|
|
|
$13.7
|
Consolidated
|
|
$2.8
|
|
$13.9
|
|
$16.7
|
Other Financial Highlights
Gold revenues for the first quarter of 2017 totaled $68.5 million from gold sales of 58,144 ounces,
at an average realized gold price of $1,179 per ounce. This represents a 12%
increase in revenues compared to the first quarter of 2016, which
was due to higher gold production at the Prestea Open Pits, a 2%
higher realized gold price and the commencement of commercial
production at Wassa Underground.
Cost of sales excluding depreciation and amortization for the
first quarter of 2017 totaled $51.4
million, an increase of 25% from the same period in
2016. This was due primarily to higher mining costs at Wassa
as a result of Wassa Underground achieving commercial production,
as previously underground mining costs were capitalized. In
addition, there was a $4.8 million
increase in inventory charges in the first quarter of 2017 due to a
drawdown of stockpiles at Wassa and no build-up of inventory at the
Prestea Open Pits.
Depreciation and amortization expenses for the first quarter of
2017 totaled $8.4 million, a 46%
increase compared to the first quarter of 2016. This increase
is primarily a result of the commencement of depreciation on the
Wassa Underground assets, stronger production from the Prestea Open
Pits and lower Mineral Resource and Mineral Reserve estimates for
the Prestea Open Pits compared to 2016.
As a result, Golden Star reported a mine operating margin of
$8.7 million in the first quarter of
2017. This represents a decrease of 39% compared to the same
period in 2016 as a result of the higher cost of sales and the
higher depreciation and amortization expenses in the first quarter
of 2017.
General and administrative ("G&A") expenses for the first
quarter of 2017 totaled $8.0 million,
which included $4.7 million of
non-cash share-based compensation expenses reflecting the
improvement in the Company's share price. G&A expenses
excluding non-cash share-based compensation cost were $3.3 million in the first quarter of 2017, a 14%
increase compared to Q1 2016.
Golden Star recorded a fair value gain of $2.3 million on financial instruments in the
first quarter of 2017, compared to a loss of $2.2 million in the same period in 2016.
The gain was comprised of a $3.1
million non-cash revaluation gain on the embedded derivative
liability of the 7% Convertible Debentures, offset by a
$0.4 million non-cash revaluation
loss on warrants, a $0.2 million loss
on the conversion of the 7% Convertible Debentures and a
$0.2 million non-cash revaluation
loss on the 5% Convertible Debentures.
The net income attributable to Golden Star shareholders in for
the first quarter of 2017 was $0.2
million or $0.00 income per
share, compared to a net income of $2.1
million or $0.01 income per
share in the first quarter of 2016. The lower net income was
due primarily to a mining operating loss at Wassa, which was
partially offset by a higher mine operating margin at the Prestea
Open Pits and a fair value gain on financial instruments. The
mine operating loss at Wassa in the first quarter of 2017 was due
to lower production from the Wassa Main Pit as a result of mining
in a lower grade ore zone, higher mining costs associated with
underground mining and production from Wassa Underground affected
by mining in the lower grade F Shoot.
After certain adjustments, the adjusted net earnings
attributable to Golden Star shareholders1 was
$3.4 million, compared to
$8.5 million in the same period in
2016.
Cash provided by operations in the first quarter of 2017 was
$9.4 million or $0.03 per share, which compares to $0.9 million or $0.00 per share in Q1 2016. Cash provided
by operations before changes in working capital for the period was
$17.7 million or $0.05 per share, compared to $10.8 million or $0.04 per share in the same period of 2016.
The increase in cash provided by operations before working capital
was due primarily to a $10.0 million
advance payment from RGLD Gold AG ("RGLD") during the first quarter
of 2017 compared to $nil in the first quarter of 2016, and the
higher mine operating margin at the Prestea Open Pits. The
increase was partially offset by the mine operating loss at Wassa
in the first quarter of 2017 compared to the mine operating margin
for the same period in 2016.
The Company's consolidated cash balance was $36.5 million at March 31,
2017. Working capital used $8.3
million during the three months ended March 31, 2017, compared to $9.8 million in the same period in 2016. The
working capital changes in the first quarter of 2017 related to a
decrease of $8.3 million in accounts
payable and accrued liabilities, a $1.8
million increase in inventory, a $1.3
million increase in prepaid and other, offset by a
$3.1 million decrease in accounts
receivable.
For further information about Golden Star's operational and
financial performance, please visit the Financial and Operational
database at
http://apps.indigotools.com/IR/IAC/?Ticker=GSC&Exchange=TSX.
The data relating to the first quarter of 2017 will be available 24
hours after release at the latest.
Notes
|
1. See "Non-GAAP
Financial Measures".
|
Other Corporate Developments
Bought Deal Transaction
On February 7, 2017, the Company
completed a bought deal public offering of common shares which
resulted in 31,363,950 common shares being sold at a price of
C$1.10 per share for gross proceeds
of C$34.5 million (net proceeds of
C$32.7 million or $24.5 million).
The Company intends to use the net proceeds from the offering to
fund:
- Exploration projects on the Company's properties
- Capital expenditures at Wassa and Prestea
- The partial repayment of the Company's 5% Convertible
Debentures
- Working capital and general corporate purposes
Streaming Agreement with RGLD
During the first quarter of 2017, the Company received the final
advance payment of $10.0 million
pursuant to the gold purchase and sale agreement, as amended (the
"Streaming Agreement") with RGLD. Since the inception of the
Streaming Agreement in July 2015, the
Company has received total advance payments of $145.0 million. All advance payments
required under the streaming agreement have now been received from
RGLD.
$25 million Medium Term Loan
Facility from Ecobank
In March 2017, Golden Star,
through its subsidiary, Golden Star (Wassa)
Limited ("GSWL"), signed a commitment letter for a $25
million secured loan facility (the "Facility")
with Ecobank Ghana Limited. GSWL has twelve months from
the date of the commitment letter to drawdown the Facility, if it
wishes to do so, and the Facility will be repayable within 60
months of initial drawdown. There are no early prepayment
penalties. Interest on amounts drawn under the Facility would be
payable monthly at three month LIBOR plus a spread of 8.0% payable
in arrears. The Company anticipates that any drawdowns from
the Facility would be used for general working capital purposes and
as at May 3, 2017 Golden Star has not
made any drawdown.
Conversions of 7% Convertible Debentures
During the first quarter of 2017, $8.5
million principal outstanding of the 7% Convertible
Debentures were converted into 9,445,552 shares. In total,
$13.5 million principal outstanding
of the 7% Convertible Debentures has been converted into 15,002,218
common shares as at May 3, 2017. Total principal that remains
outstanding on the 7% Convertible Debentures is $51.5 million. During the first quarter of
2017, the Company recognized a $0.2
million loss on conversion of the 7% Convertible
Debentures.
Outlook
Golden Star remains on track to achieve its guidance on all
stated metrics for 2017. This includes consolidated full year
production of 255,000-280,000 ounces of gold at a cash operating
cost per ounce1 of between $780
and $860, an AISC per ounce1 of between
$970 and $1,070 and capital
expenditures of $63 million, which
includes the enhanced exploration budget.
Golden Star expects gold production to be weighted towards the
second half of the year, accordingly gold production in the second
quarter of 2017 is expected to be in line with the production
results for the first quarter of 2017. Consequently, Golden
Star anticipates that its cash operating cost per ounce1
and AISC per ounce1 will be higher during the first
half of 2017, due to the lower grade ore being fed to both
processing plants during this period.
Golden Star expects production to continue to expand and cash
operating costs1 to decrease further as both underground
development projects ramp up and the Company completes its
transformation into a high grade, low cost gold producer.
Notes
|
1. See "Non-GAAP
Financial Measures".
|
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 the third quarter of 2017. Gold production in 2017 is
expected to be 255,000-280,000 ounces with cash operating costs of
$780-860 per ounce.
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF OPERATIONS AND
|
COMPREHENSIVE
INCOME
|
(Stated in
thousands of U.S. dollars except shares and per share
data)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
68,545
|
|
$
|
61,067
|
|
Cost of sales
excluding depreciation and amortization
|
|
|
51,406
|
|
|
41,058
|
|
Depreciation and
amortization
|
|
|
8,439
|
|
|
5,796
|
Mine operating
margin
|
|
|
8,700
|
|
|
14,213
|
|
|
|
|
|
|
|
Other
expenses/(income)
|
|
|
|
|
|
|
|
Exploration
expense
|
|
|
672
|
|
|
442
|
|
General and
administrative
|
|
|
7,992
|
|
|
7,222
|
|
Finance expense,
net
|
|
|
2,793
|
|
|
2,106
|
|
Other
income
|
|
|
(174)
|
|
|
(78)
|
|
(Gain)/loss on fair
value of financial instruments, net
|
|
|
(2,948)
|
|
|
2,207
|
|
Loss on conversion of
7% Convertible Debentures, net
|
|
|
165
|
|
|
—
|
Net (loss)/income
and comprehensive (loss)/income
|
|
$
|
(250)
|
|
$
|
2,314
|
Net (loss)/income
attributable to non-controlling interest
|
|
|
(420)
|
|
|
263
|
Net income
attributable to Golden Star shareholders
|
|
$
|
170
|
|
$
|
2,051
|
|
|
|
|
|
|
|
Net income per
share attributable to Golden Star shareholders
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.00
|
|
$
|
0.01
|
Weighted average
shares outstanding-basic (millions)
|
|
|
359.0
|
|
|
259.9
|
Weighted average
shares outstanding-diluted (millions)
|
|
|
371.2
|
|
|
264.9
|
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED BALANCE SHEETS
|
(Stated in
thousands of U.S. dollars)
|
(Unaudited)
|
|
|
|
As
of
|
|
March
31,
2017
|
|
December 31,
2016
|
ASSETS
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
36,455
|
|
$
|
21,764
|
|
Accounts
receivable
|
|
4,159
|
|
|
7,299
|
|
Inventories
|
|
45,559
|
|
|
44,381
|
|
Prepaids and
other
|
|
5,728
|
|
|
3,926
|
|
|
Total Current
Assets
|
|
91,901
|
|
|
77,370
|
RESTRICTED
CASH
|
|
6,493
|
|
|
6,463
|
MINING
INTERESTS
|
|
222,715
|
|
|
215,017
|
|
|
Total
Assets
|
$
|
321,109
|
|
$
|
298,850
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
85,811
|
|
$
|
92,900
|
|
Derivative
liabilities
|
|
3,179
|
|
|
2,729
|
|
Current portion of
rehabilitation provisions
|
|
5,445
|
|
|
5,515
|
|
Current portion of
deferred revenue
|
|
19,635
|
|
|
19,234
|
|
Current portion of
long term debt
|
|
18,151
|
|
|
15,378
|
|
Current portion of
other liability
|
|
9,744
|
|
|
2,073
|
|
|
Total Current
Liabilities
|
|
141,965
|
|
|
137,829
|
REHABILITATION
PROVISIONS
|
|
70,757
|
|
|
71,867
|
DEFERRED
REVENUE
|
|
101,188
|
|
|
94,878
|
LONG TERM
DEBT
|
|
79,760
|
|
|
89,445
|
LONG TERM DERIVATIVE
LIABILITY
|
|
9,927
|
|
|
15,127
|
LONG TERM OTHER
LIABILITY
|
|
4,119
|
|
|
10,465
|
|
|
Total
Liabilities
|
|
407,716
|
|
|
419,611
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
SHARE
CAPITAL
|
|
|
|
|
|
|
First preferred
shares, without par value, unlimited shares
authorized. No shares issued and outstanding
|
|
—
|
|
|
—
|
|
Common shares,
without par value, unlimited shares authorized
|
|
780,248
|
|
|
746,542
|
CONTRIBUTED
SURPLUS
|
|
34,559
|
|
|
33,861
|
DEFICIT
|
|
(832,781)
|
|
|
(832,951)
|
|
Deficit
attributable to Golden Star shareholders
|
|
(17,974)
|
|
|
(52,548)
|
NON-CONTROLLING
INTEREST
|
|
(68,633)
|
|
|
(68,213)
|
|
Total
Deficit
|
|
(86,607)
|
|
|
(120,761)
|
|
Total Liabilities
and Shareholders' Equity
|
$
|
321,109
|
|
$
|
298,850
|
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Stated in
thousands of U.S. dollars)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
Net
(loss)/income
|
|
$
|
(250)
|
|
$
|
2,314
|
Reconciliation of
net (loss)/income to net cash provided
by operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
8,444
|
|
|
5,801
|
|
Share-based
compensation
|
|
|
4,715
|
|
|
4,344
|
|
Gain on fair value of
embedded derivatives
|
|
|
(3,131)
|
|
|
—
|
|
Recognition of
deferred revenue
|
|
|
(3,289)
|
|
|
(2,775)
|
|
Proceeds from Royal
Gold stream
|
|
|
10,000
|
|
|
—
|
|
Reclamation
expenditures
|
|
|
(1,491)
|
|
|
(1,532)
|
|
Other
|
|
|
2,727
|
|
|
2,615
|
|
Changes in working
capital
|
|
|
(8,287)
|
|
|
(9,839)
|
|
|
Net cash provided by
operating activities
|
|
|
9,438
|
|
|
928
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
Additions to mining
properties
|
|
|
(155)
|
|
|
(264)
|
|
Additions to
construction in progress
|
|
|
(16,548)
|
|
|
(15,650)
|
|
Change in accounts
payable and deposits on mine
equipment and material
|
|
|
(1,693)
|
|
|
(6,290)
|
|
Increase in
restricted cash
|
|
|
(29)
|
|
|
—
|
|
|
Net cash used in
investing activities
|
|
|
(18,425)
|
|
|
(22,204)
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
Principal payments on
debt
|
|
|
(846)
|
|
|
(2,271)
|
|
Proceeds from debt
agreements
|
|
|
—
|
|
|
3,000
|
|
Shares issued,
net
|
|
|
24,524
|
|
|
—
|
|
|
Net cash provided by
financing activities
|
|
|
23,678
|
|
|
729
|
Increase/(decrease)
in cash and cash equivalents
|
|
|
14,691
|
|
|
(20,547)
|
Cash and cash
equivalents, beginning of period
|
|
|
21,764
|
|
|
35,108
|
Cash and cash
equivalents, end of period
|
|
$
|
36,455
|
|
$
|
14,561
|
Non-GAAP Financial Measures
In this press release, we use the terms "cash operating cost per
ounce", "All-In Sustaining Costs per ounce", "cost of sales per
ounce", "cash provided by operations before changes in working
capital" and "adjusted net earnings attributable to
shareholders". These should be considered as non-GAAP
financial measures 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.
"Cost of sales excluding depreciation and amortization" as found
in the statements of operations includes all mine-site operating
costs, including the costs of mining, ore processing, maintenance,
work-in-process inventory changes, mine-site overhead as well as
production taxes, royalties, and by-product credits, but excludes
exploration costs, property holding costs, corporate office general
and administrative expenses, foreign currency gains and losses,
gains and losses on asset sales, interest expense, gains and losses
on derivatives, gains and losses on investments and income tax
expense/benefit. "Cash operating cost per ounce" for a period
is equal to "Cost of sales excluding depreciation and amortization"
for the period less royalties, the cash component of metals
inventory net realizable value adjustments and severance charges
divided by the number of ounces of gold sold during the
period. We use cash operating cost per ounce as a key
operating indicator. We monitor this measure monthly, comparing
each month's values to prior quarters' values to detect trends that
may indicate increases or decreases in operating efficiencies. We
provide this measure to investors to allow them to also monitor
operational efficiencies of the Company's mines. We calculate this
measure for both individual operating units and on a consolidated
basis. 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").
"All-In Sustaining Costs" commences with cash operating costs
and then adds sustaining capital expenditures, corporate general
and administrative costs excluding non-cash share based
compensation, mine site exploratory drilling and greenfield
evaluation costs and environmental rehabilitation costs. This
measure seeks to represent the total costs of producing gold from
current operations, and therefore it does not include capital
expenditures attributable to projects or mine expansions,
exploration and evaluation costs attributable to growth projects,
income tax payments, interest costs or dividend payments.
Consequently, this measure is not representative of all of the
Company's cash expenditures. In addition, the calculation of All-In
Sustaining Costs does not include depreciation expense as it does
not reflect the impact of expenditures incurred in prior periods.
Therefore, it is not indicative of the Company's overall
profitability. Non-cash share-based compensation expenses are
now also excluded from the Company's current method of calculating
All-In Sustaining Costs, as the Company believes that such expenses
may not be representative of the actual payout on the equity and
liability based awards. Non-cash share-based compensation expenses
were previously included in the calculation of All-In sustaining
costs. The Company has presented comparative figures to conform
with the computation of All-In Sustaining Costs as currently
calculated by the Company.
"Cost of sales" means cost of sales excluding depreciation and
amortization as shown on the Company's statement of operations plus
depreciation and amortization. "Cost of sales per ounce" for
the period is "Cost of sales" divided by the number of ounces of
gold sold during the period.
"Cash provided by operations before working capital changes" is
calculated by subtracting the "Changes in working capital" from
"Net cash provided by operating activities" as found in the
statements of cash flows. "Cash provided by operations before
working capital changes per share – basic" is "Cash provided by
operations before working capital changes" divided by the basic
weighted average number of shares outstanding for the period.
In order to indicate to stakeholders the Company's earnings
excluding the non-cash loss on the fair value of the Company's
outstanding convertible debentures, non-cash impairment charges,
and non-cash share based compensation, the Company calculates
"adjusted net income attributable to shareholders" and "adjusted
income per share attributable to shareholders" to supplement the
condensed consolidated financial statements. The adjusted
income per share attributable to shareholders is calculated using
the weighted average number of shares outstanding using the basic
method of earnings per share.
Changes in numerous factors including, but not limited to, our
share price, risk free interest rates, gold prices, mining rates,
milling rates, ore grade, gold recovery, costs of labor,
consumables and mine site general and administrative activities can
cause these measures to increase or decrease. The Company
believes that these measures are similar to the measures of other
gold mining companies, but may not be comparable to similarly
titled measures in every instance.
In the current market environment for gold mining equities, many
investors and analysts are more focused on the ability of gold
mining companies to generate free cash flow from current
operations, and consequently the Company believes these measures
are useful non-IFRS operating metrics ("non-GAAP measures") and
supplement the IFRS disclosures made by the Company. These 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 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.
For additional information regarding the Non-GAAP financial
measures used by the Company, please refer to the heading "Non-GAAP
Financial Measures" in the Company's Management Discussion and
Analysis of Financial Condition and Results of Operations for the
full year ended December 31, 2016,
which is available at www.sedar.com.
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: production,
profitability, cash operating costs, cash operating costs per
ounce, and AISC per ounce for 2017; the risk profile of the
Company; the ability to achieve 2017 production guidance in terms
of production, profitability, cash operating costs, cash operating
costs per ounce, AISC per ounce, and capital expenditures; the
timing for transforming, and the Company's ability to transform,
into a lower cost producer and the resulting reduction in cash
operating costs; sustaining, development and total capital
expenditures for 2017; future work to be completed at Prestea
Underground; the achievement of blasting the first stope at Prestea
Underground in Q2 2017; the ability of Prestea Underground to
commence commercial production in Q3 2017; the timing for
rehabilitation work, as well as pre-development and development
work and stoping, at Prestea Underground mine; the timing of and
amount of production from Prestea Underground; the anticipated
mining rate for Prestea Underground; the grade of ore from Prestea
Underground and Mampon; production from Wassa Underground; the
accessing of the transverse stopes of the higher grade B Shoot zone
at Wassa Underground in Q3 2017; reaching full production at Wassa
Underground in 2018; capital expenditures for the development of
Prestea Underground; the expected higher grade nature of the Mampon
deposit; the success of the Company's exploration results at Mampon
and the Prestea Open Pits; the impact of mining Mampon on the
Company's cash flow; the timing of the conclusion of commercial
production at Prestea Open Pits and Mampon; and ability of the
Company to extend production at the Prestea Open Pits and Mampon;
the timing of the release of the Company's drilling results; the
potential to expand the Mineral Resources of the Company through
further drilling; the Company's ability to reduce the level of its
debt, including through internal cash flow as the Company's new
underground operations ramp-up to full production; the Company's
intended use of the net proceeds from the bought deal public
offering; the Company's intended use of proceeds from the Facility;
and the ability of the Company to repay the 5% Convertible
Debentures and 7% Convertible Debentures when due or to restructure
them or make alternate arrangements.
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 and Quality Control
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 of Exploration for Golden Star and an active member
of the Australasian Institute of Mining and Metallurgy.
The technical contents of this press release have been reviewed
and approved by Dr. Martin Raffield,
P. Eng., a Qualified Person pursuant to NI 43-101. Dr.
Raffield is Senior Vice President of Project Development and
Technical Services for Golden Star.
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.
Cautionary Note to U.S. Investors
This news release has been prepared in accordance with the
requirements of the securities laws in effect in Canada, which differ materially from the
requirements of United States
securities laws applicable to U.S. companies. The terms "mineral
reserve", "proven mineral reserve" and "probable mineral reserve"
are Canadian mining terms as defined in accordance with NI 43-101.
These definitions differ from the definitions of the Securities and
Exchange Commission (the "SEC") set forth in Industry Guide 7 under
the United States Securities Exchange Act of 1934, as amended.
Under SEC Industry Guide 7 standards, mineralization may not be
classified as a "reserve" unless the determination has been made
that the mineralization could be economically and legally produced
or extracted at the time the reserve determination is made.
In addition, the terms "mineral resource", "measured mineral
resource", "indicated mineral resource" and "inferred mineral
resource" are defined in and required to be disclosed by NI 43-101;
however, these terms are not defined terms under SEC Industry Guide
7 and are normally not permitted to be used in reports and
registration statements filed with the SEC. Investors are cautioned
not to assume that any part or all of mineral deposits in these
categories will ever be converted into reserves. "Inferred mineral
resources" have a great amount of uncertainty as to their
existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an
inferred mineral resource will ever be upgraded to a higher
category. Investors are cautioned not to assume that all or any
part of an inferred mineral resource exists or is economically or
legally mineable. Disclosure of "contained ounces" in a resource is
permitted disclosure under Canadian regulations; however, the SEC
normally only permits issuers to report mineralization that does
not constitute "reserves" by SEC Industry Guide 7 standards as in
place tonnage and grade without reference to unit measures.
For the above reasons, information contained in this news
release or in the documents referenced herein containing
descriptions of our mineral deposits may not be comparable to
similar information made public by U.S. companies subject to the
reporting and disclosure requirements under the United States federal securities laws and
the rules and regulations thereunder.
SOURCE Golden Star Resources Ltd.