TORONTO, Sept. 29, 2017 /PRNewswire/ - Golden Star
Resources (NYSE American: GSS; TSX: GSC; GSE: GSR) ("Golden Star"
or the "Company") is pleased to announce that stoping has commenced
at its high grade Prestea Underground Gold Mine in Ghana ("Prestea Underground").
The successful blasting of the initial ore from the first stope
in the West Reef ore body took place on September 27, 2017. The first stope is
being mined using mechanized shrinkage, utilizing Alimak raise
climbers, and it will be hauled to surface for processing via the
Central Shaft.
Since mid-April 2017 Golden Star
has been processing development ore from Prestea Underground and in
the second quarter of 2017 the mine delivered its maiden gold
production for Golden Star of 325
ounces.
Prestea Underground is expected to achieve commercial production
in the fourth quarter of 2017. The mine has Mineral Reserves
of 1.09 million tonnes at 13.93 grams per tonne of gold. It
is expected to produce 90,000 ounces of gold per annum at a cash
operating cost1 of $468
per ounce and an All-In Sustaining Cost1 of $615 per ounce over an initial mine life of 5.5
years.2 Exploration drilling is underway at the
mine with the objective of increasing the annual production rate
and extending the mine life.
Notes:
1. See "Non-GAAP Financial Measures".
2. Numbers are derived from the Company's Mineral Reserves and
Mineral Resources estimate as of December
31, 2016 and the technical report entitled "NI 43-101
Technical Report on a Feasibility Study of the Prestea Underground
Gold Project in Ghana", effective
November 3, 2015, filed under the
Company's profile on SEDAR at www.sedar.com.
Sam Coetzer, President and
Chief Executive Officer of Golden
Star, commented:
"I am delighted to announce that stoping has commenced at
Prestea Underground. We believe that this is the first time
that a production stope has been blasted since 2001 and it is a
historical achievement for both Golden
Star and the Prestea community in Ghana. I would like to thank
Martin Raffield, our SVP of Project
Development & Technical Services, Jerry
Agala, the General Manager of the Prestea mine, and the
development team for all of their hard work and dedication in
transforming a century old mine to a completely modern mine.
I would also like to thank our Chief Operating Officer,
Daniel Owiredu, and the operations
team for their commitment to achieving this important
milestone. The development of the next four stopes is
progressing well and we are on track to achieve commercial
production in the fourth quarter of 2017. Prestea Underground is
one of Golden Star's two cornerstone
mines and we will continue to build upon the momentum within the
Company to deliver a sustainable, mid-tier gold
producer."
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 American, 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
US$780-860 per ounce.
Non-GAAP Financial Measures
In this press release, we use the terms "cash operating cost per
ounce" and "All-In Sustaining Cost". 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.
"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.
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 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: the ability of
Prestea Underground to commence commercial production in Q4 2017;
the anticipated production rate for Prestea Underground; the
anticipated cost structure for Prestea Underground, including cash
operating costs per ounce and All-In Sustaining Costs; the grade of
ore from Prestea Underground; the Company's ability to transform
into a sustainable, mid-tier gold producer; and the Company's
production guidance for 2017.
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 or
forward looking statements that are included in this news release
except in accordance with applicable securities laws.
Technical Information
The technical contents of this press release have been reviewed
and approved by 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 property referenced in this news release is contained in
the following current technical report for this property available
at www.sedar.com: Prestea Underground - "NI 43-101 Technical Report
on a Feasibility Study of the Prestea Underground Gold Project in
Ghana" effective date November 3, 2015.
SOURCE Golden Star Resources Ltd.