Fifth consecutive quarter of production
growth
TORONTO, Aug. 1, 2017 /CNW/ - Golden Star Resources
Ltd. (NYSE MKT: GSS; TSX: GSC; GSE: GSR) ("Golden Star" or the
"Company") reports its financial and operational results for the
second quarter ended June 30,
2017.
HIGHLIGHTS:
- 51% increase in gold production to 64,176 ounces in the second
quarter of 2017 compared to the second quarter of 2016 ("Q2
2016")
-
- Record quarterly production from the Prestea Open Pits for the
fourth consecutive quarter at 31,689 ounces
- 16% increase in production from the Wassa Underground Gold Mine
("Wassa Underground") to 13,288 ounces compared to the first
quarter of 2017, as the underground mining operations begin to
access the B Shoot zone and the mine continues to ramp up
- First production delivered from development ore from the high
grade Prestea Underground Gold Mine ("Prestea Underground")
- 18% decrease in cash operating cost per ounce1 to
$785 compared to the second quarter
of 2016
- 19% decrease in All-In Sustaining Cost ("AISC") per
ounce1 to $960 in the
second quarter of 2017 compared to Q2 2016
- Capital expenditures of $18.3
million in the second quarter of 2017, with $12.5 million (68%) attributable to development
capital for Prestea Underground
- 204% increase in mine operating margin in the second quarter of
2017 to $13.3 million compared to Q2
2016
- Net income attributable to Golden
Star shareholders in the second quarter of 2017 of
$13.9 million or $0.04 per share, compared to a net loss of
$22.0 million or $0.08 loss per share in the same period of
2016
- Consolidated cash balance of $25.9
million at June 30, 2017, with
the Company remaining fully funded to deliver its capital
program
- Consolidated full year 2017 gold production guidance maintained
at 255,000-280,000 ounces
Notes:
|
1. See "Non-GAAP
Financial Measures".
|
Sam Coetzer, President and
Chief Executive Officer of Golden
Star, commented:
"The second quarter of 2017 represents our fifth consecutive
quarter of production growth. I am also delighted to see our
operating costs continue to decrease, as we are beginning to see
the impact of our high grade underground ore being realized.
Our stated strategy since 2013 has been to develop multiple sources
of ore in order to reduce our risk profile and protect the Company
against temporary issues with any one source. This quarter
has underlined the importance of this strategy, as we have seen
compelling outperformance at two of our sources offsetting the
weaker than expected performance at the two others. At the
half year, we are on track to achieve our consolidated 2017 full
year production guidance and I look forward to updating the market
on exploration results as we look towards future growth."
Second Quarter 2017 Conference Call Details
The Company will conduct a conference call and webcast to
discuss its results for the second quarter of 2017 on Wednesday, August 2, 2017 at 10:00 am ET.
The quarterly results call can be accessed by telephone or by
webcast as follows:
Toll Free (North America): +1 866 393 4306
Toronto Local and International: +1 734 385 2616
Conference ID: 53427025
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
|
|
|
|
|
June
30,
|
OPERATING
SUMMARY
|
|
|
|
2017
|
2016
|
Wassa Main Pit gold
sold
|
|
oz
|
|
18,697
|
21,092
|
Wassa Underground
gold sold
|
|
oz
|
|
13,288
|
993
|
Prestea Open Pits
gold sold
|
|
oz
|
|
31,294
|
20,912
|
Prestea Underground
gold sold
|
|
oz
|
|
325
|
—
|
Total gold
sold
|
|
oz
|
|
63,604
|
42,997
|
Total gold
produced
|
|
oz
|
|
64,176
|
42,461
|
Average realized gold
price
|
|
$/oz
|
|
1,222
|
1,225
|
Cash operating cost
per ounce – Consolidated1
|
|
$/oz
|
|
785
|
959
|
Cash operating cost
per ounce – Wassa1
|
|
$/oz
|
|
980
|
975
|
Cash operating cost
per ounce – Prestea1
|
|
$/oz
|
|
585
|
943
|
Cost of sales per
ounce – Consolidated1
|
|
$/oz
|
|
1,012
|
1,121
|
Cost of sales per
ounce – Wassa1
|
|
$/oz
|
|
1,235
|
1,189
|
Cost of sales per
ounce – Prestea1
|
|
$/oz
|
|
785
|
1,053
|
All-In Sustaining
cost per ounce – Consolidated1
|
|
$/oz
|
|
960
|
1,185
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
June
30,
|
FINANCIAL
SUMMARY
|
|
|
|
2017
|
2016
|
Gold
revenues
|
|
$'000
|
|
77,335
|
51,457
|
Cost of sales
excluding depreciation and amortization
|
|
$'000
|
|
55,173
|
42,956
|
Depreciation and
amortization
|
|
$'000
|
|
8,893
|
4,136
|
Mine operating
margin
|
|
$'000
|
|
13,269
|
4,365
|
General and
administrative expense
|
|
$'000
|
|
1,953
|
8,645
|
(Gain)/loss on fair
value of financial instruments, net
|
|
$'000
|
|
(4,907)
|
18,071
|
Net income/(loss)
attributable to Golden Star shareholders
|
|
$'000
|
|
13,883
|
(22,034)
|
Adjusted net income
attributable to Golden Star shareholders1
|
|
$'000
|
|
7,703
|
1,433
|
Income/(loss) per
share attributable to Golden Star shareholders - basic
|
|
$/share
|
|
0.04
|
(0.08)
|
Income/(loss) per
share attributable to Golden Star shareholders - diluted
|
|
$/share
|
|
0.02
|
(0.08)
|
Adjusted income per
share attributable to Golden Star shareholders –
basic1
|
|
$/share
|
|
0.02
|
0.01
|
Cash provided by
operations
|
|
$'000
|
|
11,082
|
6,123
|
Cash provided by
operations before working capital changes1
|
|
$'000
|
|
14,198
|
19,293
|
Cash provided by
operations per share - basic
|
|
$/share
|
|
0.03
|
0.02
|
Cash provided by
operations before working capital changes per share –
basic1
|
|
$/share
|
|
0.04
|
0.07
|
Capital
expenditures
|
|
$'000
|
|
18,307
|
23,007
|
Notes:
|
1. See
"Non-GAAP Financial Measures".
|
OPERATIONAL PERFORMANCE
Overview
In the second quarter of 2017 Golden Star produced 64,176 ounces
of gold, representing the fifth consecutive quarter of gold
production growth. Accordingly, it also represents the
strongest quarter of wholly non-refractory production since the
Company's inception.
This compelling result was achieved as a result of the fourth
consecutive quarter of record gold production from the Prestea Open
Pits, including the Mampon deposit (31,689 ounces), which
represents a 51% increase compared to Q2 2016. Golden Star had expected to complete production
from the Prestea Open Pits in the third quarter of 2017 however
following positive drilling results, the Company now expects to
continue producing from the Prestea Open Pits until the end of the
fourth quarter of 2017.
The strong performance was also due to the impact of the high
grade, underground ore from the B Shoot zone of Wassa Underground
being realized as the mine continues to ramp up. The mining
team began accessing the high grade B Shoot zone at Wassa
Underground in late March 2017 and
accordingly, the head grade processed during the second quarter of
2017 was 22% higher than in the first quarter of 2017, as during
the first quarter the mining operations were accessing the more
moderate grade F Shoot zone. Daily mining rates also
continued to be stronger in the second quarter of 2017 than
anticipated.
Golden Star's consolidated cash
operating cost per ounce1 was $785 in the second quarter of 2017, an 18%
decrease compared to Q2 2016, primarily due to the 38% decrease in
the cash operating cost per ounce1 at the Prestea Gold
Mine2 ("Prestea").
The consolidated AISC per ounce1 was $960, a 19% decrease compared to Q2 2016 and the
consolidated cost of sales per ounce1 was $1,012, a decrease of 10% compared to Q2
2016. Golden Star expects its
costs to continue to decrease in the second half of 2017 as mining
operations at Wassa Underground continue to ramp up and with the
anticipated commencement of commercial production at Prestea
Underground.
From a development perspective, the Company experienced some
challenges during the second quarter of 2017. The original
installed pumping system at Prestea Underground began to come under
pressure due to the increased mining activity and as a result, the
Company took the decision to suspend hoisting in order to safeguard
the shaft infrastructure. By the start of the third quarter of
2017, the situation was rectified and hoisting had resumed, but the
suspension impacted the rate of waste development as the operations
team prioritized raise development. As a result of the
limited hoisting capacity, the first stoping ore is expected to be
blasted during the third quarter of 2017 and commercial production
is anticipated to be achieved during the fourth quarter of
2017.
Full Year 2017 Production Guidance
Gold production
At the end of the first half of 2017, Golden Star is on track to achieve its
consolidated full year 2017 guidance for gold production of
255,000-280,000 ounces. The Company produced 121,970 ounces
during the first six months of the year, which represents 46% of
the midpoint of the 2017 production guidance range (267,500
ounces). As stated at the time of the full year 2016 results and
the first quarter of 2017 results, Golden
Star expects gold production to be weighted towards the
second half of the year due to the ramping up of production from
both of the Company's underground mines, so Golden Star is confident in its ability to
achieve its guidance.
However as a result of stronger than expected performance during
the first half of 2017 at the Prestea Open Pits and Wassa
Underground and the weaker than anticipated performance at Wassa
Main Pit and the delay at Prestea Underground, the individual asset
production guidance is now as follows:
Asset
|
Original 2017
Production Guidance (ounces)
|
Revised
2017 Production
Guidance (ounces)
|
Wassa Main
Pit
|
85,000-95,000
|
65,000-70,000
|
Wassa
Underground
|
60,000-65,000
|
70,000-80,000
|
Wassa
Consolidated
|
145,000-160,000
|
135,000-150,000
|
Prestea Open
Pits
|
65,000-70,000
|
95,000-100,000
|
Prestea
Underground
|
45,000-50,000
|
25,000-30,000
|
Prestea
Consolidated
|
110,000-120,000
|
120,000-130,000
|
CONSOLIDATED
|
255,000-280,000
|
255,000-280,000
|
Cash operating cost1 and AISC1 per
ounce
Golden Star remains on track to
achieve its consolidated cash operating cost per ounce1
guidance. For the first half of 2017, the Company's cash
operating cost per ounce1 was $791, which is in the lowest quartile of the full
year 2017 guidance range ($780-860
per ounce). However, due to the revised individual asset
production guidance, the individual asset guidance for cash
operating cost per ounce1 is now as follows:
Asset
|
Original 2017
Cash
Operating Cost1
Guidance ($/oz)
|
Revised
2017 Cash Operating
Cost1 Guidance ($/oz)
|
Wassa
Consolidated
|
830-915
|
880-935
|
Prestea
Consolidated
|
715-780
|
680-725
|
CONSOLIDATED
|
780-860
|
780-860
|
Although the AISC per ounce1 for the first half of
2017 of $968 is below the lower end
of the original full year 2017 guidance range ($970-1,070 per ounce) the consolidated guidance
range has also been maintained at $970-1,070 per ounce. This is due to an
expected increase in sustaining capital at Wassa Underground during
the second half of 2017 as a result of the additional development
needed to maintain the higher than budgeted mining rates for
2017.
Capital expenditures
At the end of the first half of 2017, Golden Star had incurred $35.0 million of capital expenditures, which
represents 56% of the consolidated 2017 guidance for capital
expenditures of $62.5 million (which
includes the $6.5 million enhanced
exploration budget).
However as a result of the delay to commencing commercial
production, a portion of Prestea Underground's operating costs have
been reallocated to capital costs, which has led to an increase in
the capital expenditures for Prestea Underground in 2017.
Accordingly, consolidated 2017 guidance has been revised to
$69.3 million.
The breakdown of the revised capital expenditures guidance is as
follows:
Asset
|
Sustaining ($ million)
|
Development ($ million)
|
Total ($ million)
|
Wassa Main
Pit
|
2.6
|
2.3
|
4.9
|
Wassa
Underground
|
9.2
|
7.7
|
16.9
|
Prestea Open
Pits
|
4.3
|
0.6
|
4.9
|
Prestea
Underground
|
0.2
|
35.9
|
36.1
|
Exploration
|
-
|
6.5
|
6.5
|
CONSOLIDATED
|
16.3
|
53.0
|
69.3
|
Notes
|
1. See "Non-GAAP
Financial Measures".
|
2. The Prestea Gold
Mine refers to the combination of the Prestea Open Pits, the Mampon
deposit and Prestea Underground.
|
Wassa Gold Mine
|
|
|
|
Three Months
Ended
|
|
|
|
|
June
30,
|
|
|
|
|
2017
|
2016
|
WASSA FINANCIAL
RESULTS
|
|
|
|
|
|
|
Revenue
|
|
$'000
|
|
$
|
38,942
|
$
|
25,649
|
|
|
|
|
|
|
|
Mine operating
expenses
|
|
$'000
|
|
28,408
|
23,291
|
|
Royalties
|
|
$'000
|
|
2,024
|
1,361
|
|
Operating costs
from/(to) metals
inventory
|
|
$'000
|
|
2,948
|
(2,733)
|
|
Inventory net
realizable value adjustment
|
|
$'000
|
|
1,299
|
—
|
|
Cost of sales
excluding depreciation
and
amortization
|
|
$'000
|
|
34,679
|
21,919
|
|
Depreciation and
amortization
|
|
$'000
|
|
4,827
|
3,149
|
|
Mine operating
(loss)/margin
|
|
$'000
|
|
$
|
(564)
|
$
|
581
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$'000
|
|
3,611
|
13,413
|
|
|
|
|
|
|
WASSA OPERATING
RESULTS
|
|
|
|
|
|
|
Ore mined - Main
Pit
|
|
t
|
|
322,705
|
627,497
|
|
Ore mined -
Underground
|
|
t
|
|
143,702
|
23,492
|
|
Ore mined -
Total
|
|
t
|
|
466,407
|
650,989
|
|
Waste mined - Main
Pit
|
|
t
|
|
1,647,798
|
2,612,501
|
|
Waste mined -
Underground
|
|
t
|
|
28,826
|
16,984
|
|
Waste
mined
|
|
t
|
|
1,676,624
|
2,629,485
|
|
Ore processed - Main
Pit
|
|
t
|
|
490,159
|
556,776
|
|
Ore processed -
Underground
|
|
t
|
|
145,016
|
16,984
|
|
Ore processed -
Total
|
|
t
|
|
635,175
|
573,760
|
|
Grade processed -
Main Pit
|
|
g/t
|
|
1.23
|
1.16
|
|
Grade processed -
Underground
|
|
g/t
|
|
3.02
|
1.93
|
|
Recovery
|
|
%
|
|
94.6
|
94.0
|
|
Gold produced - Main
Pit
|
|
oz
|
|
18,873
|
20,550
|
|
Gold produced -
Underground
|
|
oz
|
|
13,288
|
993
|
|
Gold produced -
Total
|
|
oz
|
|
32,161
|
21,543
|
|
Gold sold - Main
Pit
|
|
oz
|
|
18,697
|
21,092
|
|
Gold sold -
Underground
|
|
oz
|
|
13,288
|
993
|
|
Gold sold -
Total
|
|
oz
|
|
31,985
|
22,085
|
|
|
|
|
|
|
|
Cost of sales per
ounce1
|
|
$/oz
|
|
1,235
|
1,189
|
|
Cash operating cost
per ounce1
|
|
$/oz
|
|
980
|
975
|
Notes
|
1. See "Non-GAAP
Financial Measures"
|
Fatality at Wassa Underground
Safety is of the highest importance to Golden Star and it is with deep sadness that the
Company reports a fatality at Wassa Underground on May 5, 2017. Investigations suggest that an
underground employee was struck by Load Haul Dump (LHD) equipment,
which was turning at the junction to join the main decline to exit
the mine.
Wassa Operational Overview
Gold production from the Wassa Gold Mine1 ("Wassa")
was 32,161 ounces in the second quarter of 2017, a 49% increase
compared to Q2 2016. 59% of Wassa's gold production was
attributable to the Wassa Main Pit (18,873 ounces) and 41% (13,288
ounces) was attributable to Wassa Underground. 95% of gold
production in the same period of 2016 was attributable to the Wassa
Main Pit, as only development ore was being processed from Wassa
Underground in the second quarter of 2016.
Wassa Main Pit production decreased by 8% compared to the same
period in 2016. This is as a result of mining slowing down in
the open pit as underground production was prioritized in the
processing plant and the mining operations accessed smaller zones
on the South East Main portion of Wassa Main Pit.
Wassa Underground's production in the second quarter of 2017
represents a 16% increase compared to the first quarter of
2017. Wassa Underground continued to exceed the expected
mining rate for 2017 of 1,400 tonnes per day ("tpd"), with an
average mining rate the first half of 2017 of over 1,600 tpd. This
is due primarily to the favourable ground conditions at Wassa,
which enabled the mining team to access larger stopes than planned
(up to 30 metres wide) via longitudinal stoping, without having to
do the additional development work that larger stopes usually
require.
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. The majority of the underground ore processed in
the second quarter of 2017 was from the B Shoot, although some
residual ore from the F Shoot stopes that were blasted toward the
end of the previous quarter was also fed to the plant, and as a
result, there was a 22% increase in grade in the second quarter of
2017 compared to Q1 2017. The grade is expected to increase
further as Wassa Underground's mining operations move deeper into
the B Shoot.
During the second quarter of 2017 the Wassa Underground
operations team delivered an updated version of the short term mine
plan, which covers an 18 month period and incorporates recent
drilling results. The new plan reported a 10% increase in mineable
tonnage and a 20% increase in ounces of gold compared to the
previous plan, focusing on panels (areas of stopes) from 720 Level
to 620 Level. The new plan delivers additional ore in the
immediate horizons between the 720 Level and the 695 Level, which
is expected to be mined via longitudinal stoping.
Efficiencies gained from less waste development and more ore
development are expected to allow for continued strong mining rates
at Wassa Underground. Due to the addition of new ore targets
on the current mining horizons, transverse stoping is expected to
begin after all of the longitudinal stopes have been mined.
Wassa reported a cash operating cost per ounce2 for
the first quarter of 2017 of $980, an
increase of $5 per ounce compared to
the same period in 2016, primarily as a result of higher mining
costs. These higher mining costs were due to the transition
into a combined open pit and underground operation, although
importantly the higher costs per ounce from Wassa Underground began
to normalize in the second quarter of 2017, compared to the first
quarter of 2017, as the mining costs per tonne continue to
optimize. The cost of sales per ounce2 for Wassa
in the second quarter of 2017 was $1,235.
Notes
|
1. The Wassa Gold
Mine refers to the combination of the Wassa Main Pit and Wassa
Underground.
|
2. See "Non-GAAP
Financial Measures".
|
Prestea Gold Mine
|
|
|
|
Three Months
Ended
|
|
|
|
|
June
30,
|
|
|
|
|
2017
|
2016
|
PRESTEA FINANCIAL
RESULTS
|
|
|
|
|
|
|
Revenue
|
|
$'000
|
|
$
|
38,393
|
$
|
25,808
|
|
|
|
|
|
|
|
Mine operating
expenses
|
|
$'000
|
|
20,860
|
18,654
|
|
|
|
|
|
|
|
Royalties
|
|
$'000
|
|
2,194
|
1,320
|
|
Operating costs to
metals inventory
|
|
$'000
|
|
(2,560)
|
1,063
|
|
Cost of sales
excluding depreciation
and
amortization
|
|
$'000
|
|
20,494
|
21,037
|
|
Depreciation and
amortization
|
|
$'000
|
|
4,066
|
987
|
|
Mine operating
margin
|
|
$'000
|
|
$
|
13,833
|
$
|
3,784
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$'000
|
|
14,696
|
9,594
|
|
|
|
|
|
|
PRESTEA OPERATING
RESULTS
|
|
|
|
|
|
|
Ore mined
|
|
t
|
|
351,860
|
306,157
|
|
Waste
mined
|
|
t
|
|
955,691
|
1,067,206
|
|
Ore
processed
|
|
t
|
|
370,928
|
377,636
|
|
Grade
processed
|
|
g/t
|
|
3.15
|
1.95
|
|
Recovery
|
|
%
|
|
88.4
|
85.9
|
|
Gold produced – Open
Pits
|
|
oz
|
|
31,689
|
20,918
|
|
Gold produced –
Underground
|
|
oz
|
|
325
|
—
|
|
Gold produced –
Total
|
|
oz
|
|
32,014
|
20,918
|
|
Gold sold - Open
Pits
|
|
oz
|
|
31,294
|
20,912
|
|
Gold sold -
Underground
|
|
oz
|
|
325
|
—
|
|
Gold sold -
Total
|
|
oz
|
|
31,619
|
20,912
|
|
|
|
|
|
|
|
Cost of sales per
ounce1
|
|
$/oz
|
|
785
|
1,053
|
|
Cash operating cost
per ounce1
|
|
$/oz
|
|
585
|
943
|
Notes
|
1. See "Non-GAAP
Financial Measures".
|
Prestea Operational Overview
Gold production from the Prestea Gold Mine in the second quarter
of 2017 was 32,014 ounces. This includes gold production from
the Prestea Open Pits (including the Mampon deposit) of 31,689
ounces (99% of Prestea's production), delivering record quarterly
production for the fourth consecutive quarter, and gold production
of 325 ounces from Prestea Underground, representing the first
ounces produced from development ore from the underground mine (1%
of Prestea's production). Prestea's performance in the second
quarter of 2017 delivers a 53% increase compared to the same period
in 2016 due to a 62% increase in grade processed and a 3% increase
in recovery rate, slightly offset by a 2% decrease in ore
processed. The substantial increase in head grade is as a
result of production commencing from the high grade Mampon deposit
and production of the first ounces from Prestea Underground.
At the end of the first half of 2017, Prestea had produced
58,460 ounces, bringing it within 10% of the lower end of its
original full year 2017 range (65,000-70,000 ounces).
Golden Star had expected to complete
production from the Prestea Open Pits during the third quarter of
2017, however following positive exploration results, the Company
now believes it will be able to mine additional ore and continue
producing from the Prestea Open Pits until the end of the fourth
quarter of 2017. As a result, Golden
Star has increased the full year guidance from the Prestea
Open Pits (including the Mampon deposit) to 95,000-100,000
ounces.
Prestea reported a cash operating cost per ounce1 of
$585 in the second quarter of 2017,
which represents a 38% decrease compared to the same period in
2016. This 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 $785.
Prestea Underground Development
By the end of the second quarter of 2017, the refurbishment of
Prestea Underground was in its final stages and development of the
second stope of the West Reef had commenced. All five Alimak
raise climbers were on site and the winder upgrades were complete,
enabling an increase in hoisting capacity to achieve the targeted
production rate in 2017.
By July 30, 2017 the first raise
development was completed. The raise had been screened and bolted
and longhole drilling had commenced for hanging wall cable bolt
installation. The second raise had advanced 132 metres and
the third and fourth Alimak nests are under construction. The first
stope is expected to be blasted during the third quarter of
2017.
During the second quarter of 2017 the original installed pumping
system at Prestea Underground began to come under pressure due to
the increased mining activity. As a result, the Company took
the decision to suspend hoisting in order to safeguard the shaft
infrastructure. The suspension impacted the rate of waste
development as the operations team prioritized the stope raise
development. Development material was stockpiled underground
allowing raise development to continue throughout the period.
By the start of the third quarter of 2017, the situation was
rectified and hoisting resumed.
As of July 30, 2017, 18,890 tonnes
of development ore and 18,264 tonnes of waste from Prestea
Underground have been hoisted and delivered to the processing
plant's run-of-mine pad. The average grade of the ore hoisted
is estimated at 5.3 grams per tonne ("g/t"). This ore has been
diluted from the average stope grade of 13.9 g/t because the raise
width extends outside of the average width of the orebody. Further
dilution of the hoisted ore grade comes from waste development on
24 Level, which has not been batched through the tramming and
hoisting system. It is expected that ore grades will rise towards
the Mineral Reserve grade as the project proceeds to the stoping
phase and the 24 Level waste development reduces.
Currently this ore is being blended and processed with ore from
the Prestea Open Pits and the Mampon deposit. The ore from
Prestea Underground has performed as anticipated in terms of
metallurgical recovery and its non-refractory nature. The
grades recorded from samples taken from the two raises, in-fill
drilling and muck samples have also continued to confirm the
expected grade profile of the West Reef.
Golden Star previously expected
to produce 45,000-50,000 ounces of gold from Prestea Underground in
2017. Due to the delays experienced, the Company now expects
to produce 25,000-30,000 ounces of gold. The reduction in
ounces from Prestea Underground is anticipated to be compensated
for by the extension to the mine lives of the Prestea Open Pits, so
the 2017 guidance range for total ounces produced from the two
Prestea operations has been increased by 10,000 ounces. It is
anticipated that the first stoping ore will be blasted at Prestea
Underground during the third quarter of 2017 and commercial
production will be achieved during the fourth quarter of 2017.
Notes
|
1. See "Non-GAAP
Financial Measures".
|
Exploration
During the second quarter of 2017, drilling was conducted at
both the Wassa and Prestea mines, in line with the 2017 exploration
strategy.
At Wassa, four surface rigs were employed during the quarter,
with two of these focused on assessing the potential extension of
the B Shoot zone to the North and South of the current ore
body. Five holes (1,845 metres) were drilled in total in this
area and the results are expected to be announced later in the
third quarter of 2017.
The first hole of a 200 metre step out program along the B and F
Shoot trends to the South was also initiated during the second
quarter of 2017. This had reached a depth of 913 metres at
June 30, 2017, and drilling was
completed at 1,192 meters by mid-July, 2017, with logging and
sampling having commenced. The directional drilling of a
daughter hole, which was wedged from the initial hole at 587
metres, has been commenced and similarly to the first hole, the
planned total depth for this hole is between 1,000 and 1,200
metres. As at July 30, 2017 the
second hole had reached a total depth of 675 metres.
A fourth rig conducted in-fill drilling during the second
quarter of 2017 in the planned Cut 3 pit design of the Wassa Main
Pit. The Company plans to use the results of the new
drilling, including grade control holes from surface and
underground, for a Mineral Resource model update and for year-end
Mineral Resource and Mineral Reserve statements.
At Prestea, one underground drill rig focused on in-fill
drilling the first five planned stopes of the West Reef ore
body. Twenty holes have been drilled (3,205 metres) and the
first 14 results from this program were disclosed in the Company's
news release dated July 6, 2017,
including 1.1m grading 75.7 g/t of gold ("Au") from 147.0 metres
and 2.0 metres grading 26.9 g/t Au from 148.2 metres. These
results confirm the previously modelled high grade nature, strong
continuity of gold mineralization and thickness of the West Reef
ore body (averaging 1.5 metres). Golden Star expects to begin the extension
drilling of the West Reef during the third quarter of 2017.
FINANCIAL PERFORMANCE
Capital Expenditures
Golden Star continued to incur
substantial capital expenditures in the second quarter of 2017 as
the Company further advanced Prestea Underground towards
production. Capital expenditures totaled $18.3 million, a 20% decrease compared to the
same period in 2016 as a result of the construction of Wassa
Underground being largely complete and the commencement of
commercial production at this mine on January 1, 2017.
Development capital accounted for 89% of capital expenditures
($16.3 million), with the majority
relating to Prestea Underground ($12.5
million). Other key capital expenditures during the
quarter were incurred to fund the continued development of Wassa
Underground ($1.9 million), for the
development of the Prestea Open Pits ($0.7
million) and at the Mampon deposit ($0.6 million).
Second Quarter 2017 Capital Expenditures Breakdown (in
millions)
|
|
|
|
|
|
|
Item
|
|
Sustaining
|
|
Development
|
|
Total
|
|
Wassa Open Pit and
Processing Plant
|
|
0.8
|
|
-
|
|
0.8
|
|
Wassa Tailings
Storage Facility Expansion
|
|
-
|
|
0.6
|
|
0.6
|
|
Wassa
Underground
|
|
-
|
|
1.9
|
|
1.9
|
|
Other
Development
|
|
-
|
|
0.3
|
|
0.3
|
Wassa
Subtotal
|
|
0.8
|
|
2.8
|
|
3.6
|
|
Prestea Open Pits
(including Mampon deposit)
|
|
1.2
|
|
0.2
|
|
1.4
|
|
Prestea
Underground
|
|
-
|
|
12.5
|
|
12.5
|
|
Other
Development
|
|
-
|
|
0.8
|
|
0.8
|
Prestea
Subtotal
|
|
1.2
|
|
13.5
|
|
14.7
|
Consolidated
|
|
2.0
|
|
16.3
|
|
18.3
|
Other Financial Highlights
Gold revenues for the second quarter of 2017 totaled
$77.3 million from gold sales of
63,604 ounces, at an average realized gold price of $1,222 per ounce. This represents a 50%
increase in revenues compared to the second quarter of 2016, which
was due to higher gold production at both the Wassa and Prestea
operations.
Cost of sales excluding depreciation and amortization for the
second quarter of 2017 totaled $55.2
million, an increase of 28% from the same period in
2016. This was due primarily to higher mining costs at Wassa
as it continues to transition into being a combined open pit and
underground operation. Wassa Underground also achieved
commercial production on January 1,
2017 and as a result, mining costs were higher in the second
quarter of 2017 than in the same period in 2016 as previously
underground mining costs were capitalized. In addition, there
was a $5.7 million increase in
inventory charges in the second quarter of 2017 due to a drawdown
of stockpiles at Wassa. This increase at Wassa was slightly
offset by the decrease in the cost of sales excluding depreciation
and amortization at Prestea as this mine experienced an
accumulation of inventories during the second quarter of 2017.
Depreciation and amortization expenses for the second quarter of
2017 totaled $8.9 million, compared
to $4.1 million in the second quarter
of 2016. This increase is primarily a result of the
commencement of depreciation on the Wassa Underground assets on
January 1, 2017 when the underground
mine achieved commercial production, stronger production from
Prestea 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 $13.3
million in the second quarter of 2017. This represents
a 204% increase compared to the same period in 2016 as a result of
the 50% increase in gold revenues.
General and administrative ("G&A") expenses for the second
quarter of 2017 totaled $2.0 million,
compared to $8.6 million in Q2
2016. The 77% decrease in G&A expenses is due to the
decline in non-cash shared based compensation in the second quarter
of 2017, whereas in the same period in 2016, non-cash share based
compensation accounted for $5.4
million of the total.
Golden Star recorded a fair value
gain of $4.9 million on financial
instruments in the second quarter of 2017, compared to a loss of
$18.1 million in the same period in
2016. The gain was comprised of a $4.0
million non-cash revaluation gain on the embedded derivative
liability of the 7% Convertible Debentures and a $1.0 million non-cash revaluation gain on the
warrants, offset by a $0.1 million
non-cash revaluation loss on the 5% Convertible Debentures.
The net income attributable to Golden
Star shareholders - basic for the second quarter of 2017 was
$13.9 million or $0.04 income per share, compared to a net loss of
$22.0 million or $0.08 loss per share in the second quarter of
2016. The significant increase in net income in the second
quarter of 2017 was due primarily to a higher mine operating margin
at Prestea and a fair value gain on financial instruments, compared
to a fair value loss in the same period in 2016. These were
partially offset by a mine operating loss at Wassa in the second
quarter of 2017 compared to a mine operating margin in Q2 2016.
After certain adjustments, the adjusted net earnings
attributable to Golden Star
shareholders1 was $7.7
million, compared to $1.4
million in the same period in 2016.
Cash provided by operations in the second quarter of 2017 was
$11.1 million or $0.03 per share, which compares to $6.1 million or $0.02 per share in Q2 2016. Cash provided
by operations before changes in working capital1 for the
period was $14.2 million or
$0.04 per share, compared to
$19.3 million or $0.07 per share in the same period of 2016.
The decrease in cash provided by operations before working
capital1 was due to a $20.0
million advance payment from RGLD Gold AG during the second
quarter of 2016 compared to $nil in the second quarter of 2017, and
the mine operating loss at Wassa in the second quarter of 2017
compared to a mine operating margin in the same period of
2016. The decrease was partially offset by a higher mine
operating margin at Prestea in the second quarter of 2017 compared
to Q2 2016.
The Company's consolidated cash balance was $25.9 million at June 30,
2017 and Golden Star remains
fully funded to deliver its capital program. Working capital used
$3.1 million during the second
quarter of 2017, compared to $13.2
million in the same period in 2016. The working capital
changes in the second quarter of 2017 related to an increase of
$2.3 million in accounts
receivable, a $0.5 million
decrease in accounts payable and accrued liabilities, a
$0.6 million increase in inventory,
offset by a $0.2 million decrease in
prepaids and other.
In March 2017, Golden Star's subsidiary, Golden Star (Wassa) Limited ("GSWL"), signed a
commitment letter with Ecobank Ghana Limited regarding a
$25 million secured medium term loan
facility. GSWL has twelve months from the date of the commitment
letter to make drawdowns on the facility. The Company anticipates
that any drawdowns from the facility would be used for general
working capital purposes and as at August 1, 2017, the Company
has made a single drawdown of $10
million, which is included in the consolidated cash balance
at June 30, 2017.
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 second quarter of 2017 will be available
24 hours after release at the latest.
Notes
|
1. See "Non-GAAP
Financial Measures".
|
Other Corporate Developments
Changes to Board of Directors
Following the Annual General Meeting on May 4, 2017, the Company welcomed the Honourable
Mona Quartey to the Board of Directors. Ms. Quartey has 26 years of
experience in risk management, treasury and corporate
finance. Based in Accra,
Ghana, she is the Managing Partner of BVM Advisory Services,
which acts as a consultant to both public and private sector
bodies. From July 2014 to
January 2017, she served as Deputy
Finance Minister in charge of Economic Strategy for the Ghana
Ministry of Finance and prior to that she held a variety of senior
roles in Ghana and in the United States of America.
Tony Jensen and Bill Yeates retired from the Board of Directors
at the conclusion of the annual general meeting.
Repayment of Remaining 5% Convertible Debentures
At the end of the second quarter of 2017 Golden Star repaid the
remaining $13.6 million principal amount of its 5.0%
convertible senior unsecured debentures due June 1, 2017 ("5%
Convertible Debentures"), plus accrued interest, in cash. All
of the 5% Convertible Debentures are now settled and no longer
outstanding.
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 fourth 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/LOSS
|
(Stated in
thousands of U.S. dollars except shares and per share
data)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
|
June
30,
|
|
|
2017
|
2016
|
|
|
|
|
Revenue
|
|
$
|
77,335
|
$
|
51,457
|
|
Cost of sales
excluding depreciation and amortization
|
|
55,173
|
42,956
|
|
Depreciation and
amortization
|
|
8,893
|
4,136
|
Mine operating
margin
|
|
13,269
|
4,365
|
|
|
|
|
Other
expenses/(income)
|
|
|
|
|
Exploration
expense
|
|
308
|
539
|
|
General and
administrative
|
|
1,953
|
8,645
|
|
Finance expense,
net
|
|
2,354
|
2,730
|
|
Other
income
|
|
(120)
|
(2,784)
|
|
(Gain)/loss on fair
value of financial instruments, net
|
|
(4,907)
|
18,071
|
Net income/(loss)
and comprehensive income/(loss)
|
|
$
|
13,681
|
$
|
(22,836)
|
Net loss attributable
to non-controlling interest
|
|
(202)
|
(802)
|
Net income/(loss)
attributable to Golden Star shareholders
|
|
$
|
13,883
|
$
|
(22,034)
|
|
|
|
|
Net income/(loss)
per share attributable to Golden Star shareholders
|
|
|
|
Basic
|
|
$
|
0.04
|
$
|
(0.08)
|
Diluted
|
|
$
|
0.02
|
$
|
(0.08)
|
Weighted average
shares outstanding-basic (millions)
|
|
376.2
|
273.1
|
Weighted average
shares outstanding-diluted (millions)
|
|
444.8
|
273.1
|
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED BALANCE SHEETS
|
(Stated in
thousands of U.S. dollars)
|
(Unaudited)
|
|
|
|
As
of
|
|
June
30
|
Dec
31
|
|
2017
|
2016
|
|
|
|
ASSETS
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
|
25,899
|
$
|
21,764
|
|
Accounts
receivable
|
6,429
|
7,299
|
|
Inventories
|
45,110
|
44,381
|
|
Prepaids and
other
|
5,411
|
3,926
|
|
|
Total Current
Assets
|
82,849
|
77,370
|
RESTRICTED
CASH
|
6,493
|
6,463
|
MINING
INTERESTS
|
233,289
|
215,017
|
|
|
Total
Assets
|
$
|
322,631
|
$
|
298,850
|
|
|
|
LIABILITIES
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
86,242
|
$
|
92,900
|
|
Derivative
liabilities
|
2,174
|
2,729
|
|
Current portion of
rehabilitation provisions
|
4,828
|
5,515
|
|
Current portion of
deferred revenue
|
17,828
|
19,234
|
|
Current portion of
long term debt
|
8,134
|
15,378
|
|
Current portion of
other liability
|
8,634
|
2,073
|
|
|
Total Current
Liabilities
|
127,840
|
137,829
|
REHABILITATION
PROVISIONS
|
71,659
|
71,867
|
DEFERRED
REVENUE
|
99,899
|
94,878
|
LONG TERM
DEBT
|
86,008
|
89,445
|
LONG TERM DERIVATIVE
LIABILITY
|
5,891
|
15,127
|
LONG TERM OTHER
LIABILITY
|
3,898
|
10,465
|
|
|
Total
Liabilities
|
$
|
395,195
|
$
|
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
|
780,261
|
746,542
|
CONTRIBUTED
SURPLUS
|
34,908
|
33,861
|
DEFICIT
|
(818,898)
|
(832,951)
|
|
Deficit
attributable to Golden Star shareholders
|
(3,729)
|
(52,548)
|
NON-CONTROLLING
INTEREST
|
(68,835)
|
(68,213)
|
|
Total
Deficit
|
(72,564)
|
(120,761)
|
|
Total Liabilities
and Shareholders' Equity
|
$
|
322,631
|
$
|
298,850
|
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Stated in
thousands of U.S. dollars)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
|
June
30,
|
|
|
2017
|
2016
|
OPERATING
ACTIVITIES:
|
|
|
|
Net
income/(loss)
|
|
$
|
13,681
|
$
|
(22,836)
|
Reconciliation of
net income/(loss) to net cash
|
|
|
|
provided by
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
8,902
|
4,141
|
|
Share-based
compensation
|
|
(1,273)
|
5,396
|
|
Gain on fair value of
embedded derivatives
|
|
(4,036)
|
-
|
|
Loss on fair value of
5% Convertible Debentures
|
|
134
|
15,677
|
|
Recognition of
deferred revenue
|
|
(3,096)
|
(2,831)
|
|
Proceeds from Royal
Gold stream
|
|
-
|
20,000
|
|
Reclamation
expenditures
|
|
(1,503)
|
(1,169)
|
|
Other
|
|
1,389
|
915
|
|
Changes in working
capital
|
|
(3,116)
|
(13,170)
|
|
|
Net cash provided by
operating activities
|
|
11,082
|
6,123
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Additions to mining
properties
|
|
(237)
|
(348)
|
|
Additions to plant
and equipment
|
|
(145)
|
-
|
|
Additions to
construction in progress
|
|
(17,925)
|
(22,659)
|
|
Change in accounts
payable and deposits on mine
|
|
|
|
|
equipment and
material
|
|
787
|
234
|
|
|
Net cash used in
investing activities
|
|
(17,520)
|
(22,773)
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Principal payments on
debt
|
|
(514)
|
(2,355)
|
|
Proceeds from debt
agreements
|
|
10,000
|
-
|
|
5% Convertible
Debentures repayment
|
|
(13,611)
|
(1,701)
|
|
Shares issued,
net
|
|
(3)
|
13,706
|
|
Exercise of
options
|
|
10
|
16
|
|
|
Net cash (used
in)/provided by financing activities
|
|
(4,118)
|
9,666
|
Decrease in cash and
cash equivalents
|
|
(10,556)
|
(6,984)
|
Cash and cash
equivalents, beginning of period
|
|
36,455
|
14,561
|
Cash and cash
equivalents, end of period
|
|
$
|
25,899
|
$
|
7,577
|
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 (excluding
pre-commercial production ounces 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 (excluding pre-commercial production ounces 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 interim 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 and
the Company's Management Discussion and Analysis for the three and
six months ended June 30, 2017, which
are 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: costs decreasing
further as Wassa Underground continues to ramp up and Prestea
Underground commences commercial production; the timing for the
cessation of production from the Prestea Open Pits; the timing for
blasting the first stoping ore and commercial production at Prestea
Underground; the weighting of gold production to the second half of
2017; production, cash operating cost, All-In Sustaining Cost and
capital expenditures guidance for full year 2017; the impact of
mining B Shoot on Wassa Underground's grade; mining plans for Wassa
Underground, including the Levels to be mined via longitudinal
stoping and the timing of transverse stoping; the efficiencies to
be gained from less waste development and more ore development on
mining rates at Wassa Underground; the grade profile of the West
Reef of Prestea Underground; ore grades rising towards the Mineral
Reserve grade as Prestea Underground proceeds to the stoping phase
and the 24 Level waste development reduces; the timing for
extension drilling of the West Reef; 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;
sustaining, development and total capital expenditures for 2017;
future work to be completed at Prestea Underground; the timing for
rehabilitation work, as well as pre-development and development
work and stoping, at Prestea Underground; 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 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 reduction in ounces from Prestea Underground
being compensated for by the extension to the mine lives of the
Prestea Open Pits; and the Company's intended use of proceeds from
the Ecoban medium term loan facility.
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 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.