Sixth consecutive quarter of production growth
and lowest cash operating cost per ounce1 reported in 7
years
TORONTO, Nov. 1, 2017 /CNW/ - Golden Star Resources Ltd.
(NYSE American: GSS; TSX: GSC; GSE: GSR) ("Golden Star" or the
"Company") reports its financial and operational results for the
third quarter ended September 30,
2017.
HIGHLIGHTS:
- 64% increase in gold production to 73,827 ounces in the third
quarter of 2017 compared to the third quarter of 2016 ("Q3
2016")
-
- Record quarterly production from the Prestea Open Pits for the
fifth consecutive quarter at 38,899 ounces of gold
- First stope blasted at the high grade Prestea Underground Gold
Mine ("Prestea Underground") in September
2017 and commercial production expected during the fourth
quarter of 2017
- 19% increase in production from the Wassa Underground Gold Mine
("Wassa Underground") to 15,877 ounces compared to second quarter
of 2017, as the mine continues to ramp up
- Golden Star plans to transition
Wassa to an underground-only operation in early 2018 to focus on
higher grade, higher margin ore
- 30% decrease in cash operating cost per ounce1 to
$671 compared to Q3 2016 – lowest
cash operating cost per ounce1 reported since second
quarter of 2010
- 26% decrease in All-In Sustaining Cost ("AISC") per
ounce1 to $848 in the
third quarter of 2017 compared to Q3 2016 – lowest AISC since
Golden Star began reporting of AISC
four years ago in the first quarter of 2013
- Capital expenditures of $17.9
million in the third quarter of 2017
-
- $9.7 million (54%) attributable
to development capital for Prestea Underground
- 2017 exploration program progressing well, with results from
both Wassa Underground and Prestea Underground confirming the
potential for Mineral Resource growth
- 365% increase in mine operating margin in the third quarter of
2017 to $26.9 million compared to Q3
2016
- Net income attributable to Golden
Star shareholders in the third quarter of 2017 of
$12.1 million or $0.03 per share, compared to a net loss of
$23.1 million or $0.07 loss per share in the same period of
2016
- Consolidated cash balance of $30.0
million at September 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
Sam Coetzer, President and
Chief Executive Officer of Golden
Star, commented:
"The third quarter of 2017 delivers our sixth consecutive
quarter of production growth and our lowest consolidated cash
operating cost per ounce1 in seven years. We
expect our margins to increase further still as we continue to ramp
up production from both high grade, underground mines and as we
transition to being an underground-only producer at both operations
during 2018. The third quarter has been an exciting period
for Golden Star on the exploration
front too, as we demonstrated that Wassa Underground is a larger
ore body than we previously estimated and that it remains open at
depth. The current exploration program is at an early stage
at Prestea Underground, but the initial results have been
encouraging and we should begin drilling down plunge later this
quarter to access the longer term targets. At the end of the
third quarter, we are on track to achieve our consolidated 2017
full year production guidance on all stated metrics and I look
forward to updating the market on further exploration results over
the coming months."
Notes: 1.
See "Non-GAAP Financial Measures".
|
Third Quarter 2017 Conference Call Details
The Company will conduct a conference call and webcast to
discuss its results for the third quarter of 2017 on Thursday, November 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: 91721286
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
September 30,
|
OPERATING
SUMMARY
|
|
|
|
2017
|
2016
|
Wassa Main Pit gold
sold
|
|
oz
|
|
16,122
|
20,229
|
Wassa Underground
gold sold
|
|
oz
|
|
15,877
|
2,202
|
Prestea Open Pits
gold sold
|
|
oz
|
|
39,176
|
22,930
|
Prestea Underground
gold sold
|
|
oz
|
|
3,204
|
—
|
Total gold
sold
|
|
oz
|
|
74,379
|
45,361
|
Total gold
produced
|
|
oz
|
|
73,827
|
44,974
|
Average realized gold
price
|
|
$/oz
|
|
1,233
|
1,286
|
Cash operating cost
per ounce – Consolidated1
|
|
$/oz
|
|
671
|
964
|
Cash operating cost
per ounce – Wassa1
|
|
$/oz
|
|
856
|
1,110
|
Cash operating cost
per ounce – Prestea1
|
|
$/oz
|
|
520
|
835
|
Cost of sales per
ounce – Consolidated1
|
|
$/oz
|
|
855
|
1,152
|
Cost of sales per
ounce – Wassa1
|
|
$/oz
|
|
1,083
|
1,355
|
Cost of sales per
ounce – Prestea1
|
|
$/oz
|
|
669
|
973
|
All-in sustaining
cost per ounce – Consolidated1
|
|
$/oz
|
|
848
|
1,153
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
FINANCIAL
SUMMARY
|
|
|
|
2017
|
2016
|
Gold
revenues
|
|
$'000
|
|
87,772
|
55,511
|
Cost of sales
excluding depreciation and amortization
|
|
$'000
|
|
53,502
|
44,608
|
Depreciation and
amortization
|
|
$'000
|
|
7,365
|
5,111
|
Mine operating
margin
|
|
$'000
|
|
26,905
|
5,792
|
General and
administrative expense
|
|
$'000
|
|
7,264
|
9,370
|
(Gain)/Loss on fair
value of financial instruments, net
|
|
$'000
|
|
3,446
|
5,784
|
Net income/(loss)
attributable to Golden Star shareholders
|
|
$'000
|
|
12,117
|
(23,110)
|
Adjusted net income
attributable to Golden Star shareholders1
|
|
$'000
|
|
19,827
|
1,148
|
Income/(loss) per
share attributable to Golden Star shareholders - basic
|
|
$/share
|
|
0.03
|
(0.07)
|
Income/(loss) per
share attributable to Golden Star shareholders - diluted
|
|
$/share
|
|
0.03
|
(0.07)
|
Adjusted income per
share attributable to Golden Star shareholders -
basic1
|
|
$/share
|
|
0.05
|
0.00
|
Cash provided by
operations
|
|
$'000
|
|
23,717
|
20,964
|
Cash provided by
operations before working capital changes1
|
|
$'000
|
|
23,941
|
21,500
|
Cash provided by
operations per share - basic
|
|
$/share
|
|
0.06
|
0.06
|
Cash provided by
operations before working capital changes per share –
basic1
|
|
$/share
|
|
0.06
|
0.07
|
Capital
expenditures
|
|
$'000
|
|
17,877
|
21,656
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
1.
See "Non-GAAP Financial
Measures".
|
OPERATIONAL PERFORMANCE
Overview
In the third quarter of 2017 Golden Star produced 73,827 ounces
of gold, representing the sixth 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 fifth
consecutive quarter of record gold production from the Prestea Open
Pits (38,899 ounces), including the Mampon deposit, which
represents a 71% increase compared to Q3 2016. It was also
due to the continued outperformance by the mining team at Wassa
Underground in achieving significantly higher daily mining rates
during the third quarter of 2017 than targeted for the year (1,400
tonnes per day ("tpd")). The average mining rate during the
period was over 2,200 tpd, which also represents a 40% increase
compared to the second quarter of 2017.
The third quarter of 2017 was also a notable quarter from a cost
perspective, as it delivered the lowest cash operating cost per
ounce1 in seven years and the lowest AISC per
ounce1 since Golden Star
began reporting this metric four years ago.
Golden Star's consolidated cash
operating cost per ounce1 was $671 in the third quarter of 2017, a 30% decrease
compared to Q3 2016, due to the 38% decrease in the cash operating
cost per ounce1 at the Prestea Gold Mine2
("Prestea") and the 23% decrease at the Wassa Gold Mine
("Wassa")3. The consolidated AISC per
ounce1 was $848, a 26%
decrease compared to Q3 2016, and the consolidated cost of sales
per ounce1 was $855, a 26%
decrease compared to the same period in 2016.
From a development perspective, the Company made robust progress
during the third quarter of 2017. The successful blasting of
the initial ore from the first stope in the West Reef ore body at
Prestea Underground took place in late September 2017. During
the third quarter of 2017 the mine delivered 3,204 ounces of gold
and production is expected to continue to ramp up as the mine moves
towards commercial production. This is anticipated to be
achieved during the fourth quarter of 2017.
At Wassa, Golden Star has decided
to delay the next pushback of Wassa Main Pit, Cut 3, until a time
when the gold price is higher and the open pit will deliver higher
margin ore. From early 2018 Wassa will become solely an
underground operation as the Company focuses on producing higher
grade, higher margin ounces that will generate the strongest cash
flow.
At the end of the first nine months of 2017, Golden Star had produced 195,796 ounces of
gold. This represents 73% of the mid-point of the Company's
full year 2017 guidance range for gold production.
Golden Star's consolidated cash
operating cost per ounce1 for the first nine months of
2017 was $747 and its AISC per
ounce1 was $924; both of
these results are below the bottom end of the full year guidance
ranges. Golden Star remains
confident that it can achieve its full year 2017 consolidated
guidance on all stated metrics.
Notes 1.
See "Non-GAAP Financial Measures"
2. The Prestea Gold Mine refers to the combination of the Prestea
Open Pits and Prestea Underground.
3. The Wassa Gold Mine refers to the combination of the Wassa Main
Pit and Wassa Underground.
|
Wassa Gold Mine
|
|
|
|
|
Three Months
Ended
September 30,
|
|
|
|
|
|
2017
|
2016
|
WASSA FINANCIAL
RESULTS
|
|
|
|
|
|
|
Revenue
|
|
$'000
|
|
$
|
39,556
|
$
|
25,958
|
|
Mine operating
expenses
|
|
$'000
|
|
27,980
|
22,473
|
|
Severance
charges
|
|
$'000
|
|
145
|
-
|
|
Royalties
|
|
$'000
|
|
2,033
|
1,488
|
|
Operating costs to
metals inventory
|
|
$'000
|
|
(603)
|
(20)
|
|
Inventory net
realizable value adjustment
|
|
$'000
|
|
606
|
—
|
|
Cost of sales
excluding depreciation and amortization
|
|
$'000
|
|
30,161
|
23,941
|
|
Depreciation and
amortization
|
|
$'000
|
|
4,481
|
3,464
|
|
Mine operating
margin/(loss)
|
|
$'000
|
|
$
|
4,914
|
$
|
(1,447)
|
|
Capital
expenditures
|
|
$'000
|
|
6,469
|
9,699
|
|
|
|
|
|
|
|
WASSA OPERATING
RESULTS
|
|
|
|
|
|
|
Ore mined - Main
Pit
|
|
t
|
|
395,623
|
561,343
|
|
Ore mined -
Underground
|
|
t
|
|
211,670
|
46,234
|
|
Ore mined -
Total
|
|
t
|
|
607,293
|
607,577
|
|
Waste mined - Main
Pit
|
|
t
|
|
1,436,889
|
2,674,220
|
|
Waste mined -
Underground
|
|
t
|
|
56,553
|
68,040
|
|
Waste mined -
Total
|
|
t
|
|
1,493,442
|
2,742,260
|
|
Ore processed - Main
Pit
|
|
t
|
|
457,232
|
653,337
|
|
Ore processed -
Underground
|
|
t
|
|
211,670
|
45,669
|
|
Ore processed -
Total
|
|
t
|
|
668,902
|
699,006
|
|
Grade processed -
Main Pit
|
|
g/t
|
|
1.20
|
1.08
|
|
Grade processed -
Underground
|
|
g/t
|
|
2.61
|
1.93
|
|
Recovery
|
|
%
|
|
93.1
|
93.4
|
|
Gold produced - Main
Pit
|
|
oz
|
|
15,847
|
20,088
|
|
Gold produced -
Underground
|
|
oz
|
|
15,877
|
2,202
|
|
Gold produced -
Total
|
|
oz
|
|
31,724
|
22,290
|
|
Gold sold - Main
Pit
|
|
oz
|
|
16,122
|
20,229
|
|
Gold sold -
Underground
|
|
oz
|
|
15,877
|
2,202
|
|
Gold sold -
Total
|
|
oz
|
|
31,999
|
22,431
|
|
Cost of sales per
ounce1
|
|
$/oz
|
|
1,083
|
1,355
|
|
Cash operating cost
per ounce1
|
|
$/oz
|
|
856
|
1,110
|
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
1.
See "Non-GAAP Financial
Measures"
|
|
|
|
|
|
Wassa Operational Overview
Gold production from the Wassa Gold Mine was 31,724 ounces in
the third quarter of 2017, a 42% increase compared to Q3
2016. For the first time gold production from Wassa
Underground accounted for 50% of Wassa's total production (15,877
ounces). 90% 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 during this time.
Wassa Underground's production in the third quarter of 2017
represents a 19% increase compared to the second quarter of
2017. The underground mine continued to exceed the
expected mining rate for 2017 of 1,400 tpd, with an average mining
rate during the third quarter of 2017 of over 2,200 tpd and during
the first nine months of the year of over 1,800 tpd.
However while the daily mining rate exceeded expectations, the
underground head grade delivered to the processing plant during the
third quarter of 2017 was lower than anticipated at 2.61 grams per
tonne ("g/t") of gold ("Au"). During the quarter Golden Star focused on improving the
understanding of the ore body through increased definition
drilling, geological interpretation and modeling. Most of the gold
production in the period exhibited high levels of dilution within
the designed stopes as a result of the definition drilling program
not being far enough ahead of the production plan. This
situation is being continuously improved through increasing the
number of drills and focus on the scheduling process. Early in the
fourth quarter of 2017, with the above changes implemented, higher
grades were returned in muck samples and in the ore being delivered
to the processing plant.
Production from Wassa Main Pit decreased by 21% compared to the
same period in 2016. This is as a result of mining operations
nearing the bottom of the current pushback, Cut 2, which means that
the pit area has become smaller and mining rates have become
lower.
Following an internal study to assess capital expenditure
requirements and margins in light of the current gold price,
Golden Star has decided to defer the
next pushback, Cut 3, until a time when the gold price is
higher. The purpose of this change is to focus on the higher
grade, higher margin underground ounces that are anticipated to
generate the strongest cash flow. Wassa will become an
underground-only operation in early 2018 and the throughput of the
processing plant will be reduced to approximately 3,800 tpd, with
the processing of ore alternated between the two ball mills,
resulting in increased availability. The mining rate of Wassa
Underground will be increased to 2,700-3,000 tpd, with the
potential to further expand in time. In order to achieve the
higher mining rate, four new underground haulage trucks have been
purchased and recently arrived in Ghana. A new stope drill is
also being commissioned and Wassa Underground's development
equipment is being upgraded. Golden
Star will provide further details on the planned transition
at Wassa during the first quarter of 2018.
Wassa reported a cash operating cost per ounce1 for
the third quarter of 2017 of $856, a
23% decrease compared to the same period in 2016, primarily as a
result of the 43% increase in ounces of gold sold. It
also represented a 13% decrease compared to the second quarter of
2017. The cost of sales per ounce1 for Wassa in
the third quarter of 2017 was $1,083.
Post period end, Shaddrack Adjetey Sowah was appointed as
General Manager of the Wassa Gold Mine. Prior to this,
Shaddrack was the General Manager of the Prestea Open Pits and he
has held a number of other senior roles within Golden Star during his 18 years with the
Company. Gary Chapman, who
held the role previously, has retired. The Board and
management team would like to thank Gary for his hard work and
dedication and wish him the best with all future endeavours.
Notes 1.
See "Non-GAAP Financial Measures".
|
Prestea Gold Mine
|
|
|
|
Three Months
Ended
September 30,
|
|
|
|
|
2017
|
2016
|
PRESTEA FINANCIAL
RESULTS
|
|
|
|
|
|
|
Revenue
|
|
$'000
|
|
$
|
48,216
|
$
|
29,553
|
|
Mine operating
expenses
|
|
$'000
|
|
22,113
|
19,959
|
|
Severance
charges
|
|
$'000
|
|
83
|
—
|
|
Royalties
|
|
$'000
|
|
2,901
|
1,515
|
|
Operating costs to
metals inventory
|
|
$'000
|
|
(1,756)
|
(807)
|
|
Cost of sales
excluding depreciation and amortization
|
|
$'000
|
|
23,341
|
20,667
|
|
Depreciation and
amortization
|
|
$'000
|
|
2,884
|
1,647
|
|
Mine operating
margin
|
|
$'000
|
|
$
|
21,911
|
$
|
7,239
|
|
Capital
expenditures
|
|
$'000
|
|
11,408
|
11,913
|
|
|
|
|
|
|
PRESTEA OPERATING
RESULTS
|
|
|
|
|
|
|
Ore mined
|
|
t
|
|
469,961
|
469,075
|
|
Waste
mined
|
|
t
|
|
1,024,836
|
1,212,431
|
|
Ore
processed
|
|
t
|
|
408,341
|
386,621
|
|
Grade
processed
|
|
g/t
|
|
3.60
|
2.20
|
|
Recovery
|
|
%
|
|
86.7
|
82.7
|
|
Gold produced - Open
Pits
|
|
oz
|
|
38,899
|
22,684
|
|
Gold produced -
Underground
|
|
oz
|
|
3,204
|
—
|
|
Gold produced -
Total
|
|
oz
|
|
42,103
|
22,684
|
|
Gold sold - Open
pits
|
|
oz
|
|
39,176
|
22,930
|
|
Gold sold -
Underground
|
|
oz
|
|
3,204
|
—
|
|
Gold sold -
Total
|
|
oz
|
|
42,380
|
22,930
|
|
Cost of sales per
ounce1
|
|
$/oz
|
|
669
|
973
|
|
Cash operating cost
per ounce1
|
|
$/oz
|
|
520
|
835
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
1.
See "Non-GAAP Financial
Measures".
|
|
|
|
|
|
Prestea Operational Overview
Gold production from the Prestea Gold Mine in the third quarter
of 2017 was 42,103 ounces. This comprises gold production
from the Prestea Open Pits (including the Mampon deposit) of 38,899
ounces (92% of Prestea's production), delivering record quarterly
production for the fifth consecutive quarter, and gold production
of 3,204 ounces from Prestea Underground (8% of Prestea's
production).
Gold production from Prestea Underground during the third
quarter of 2017 continued to be delivered from development
ore. The first stoping ore was fed to the processing plant at
the start of the fourth quarter of 2017, following the blasting of
the first stope on September 27,
2017, and therefore will be reflected in the production
results for the fourth quarter of 2017.
Gold production from Prestea in the third quarter of 2017 also
represents an 86% increase compared to the same period in 2016 due
to a 64% increase in grade processed, a 6% increase in ore
processed and a 5% increase in recovery rate. The substantial
increase in head grade is as a result of the contribution to
Prestea's production from the Mampon deposit and Prestea
Underground, which are both significantly higher grade than the
Prestea Open Pits.
Prestea reported a cash operating cost per ounce1 of
$520 in the third quarter of 2017,
which represents a 38% decrease compared to the same period in
2016. This outperformance is a result of the stronger gold
production, in particular from the Mampon deposit, and the
consequent increase in gold sold. The cost of sales per
ounce1 at Prestea in the third quarter of 2017 was
$669.
Prestea Underground Development
By the end of the third quarter of 2017, the refurbishment of
Prestea Underground was completed and commercial production is
expected to be achieved in the fourth quarter of 2017.
The longhole drilling of the first stope was completed during
the quarter and stope blasting commenced in late September
2017. As of October 31, 2017,
the second raise had commenced longhole drilling of cable bolts;
the third raise was at 124m; the fourth raise was about to commence
blasting; and the fifth Alimak nest was almost completed.
Major improvements to the ventilation system occurred during the
third quarter of 2017, with the breakthrough of the footwall drive
between the two crosscuts. Through-flow ventilation is now in place
at the raise developments, resulting in cooler temperatures, better
environmental conditions for loader operation and the removal of
the long ventilation ducts and fans in the crosscuts. The
breakthrough of the footwall drive has also exposed stope access
areas for the next 13 planned stopes.
As of October 31, 2017, a total of
29,500 tonnes of material had been delivered to the processing
plant. Of the 29,500 tonnes, approximately 12,100 tonnes was
ore from raise development. Since the raises have a width of
2.7 meters and the stopes are expected to be mined at a width of
1.7 meters, the expected average grade of the first three stopes is
approximately 16 g/t Au, which is higher than the reserve
grade. As ore and waste use the same pass system on 24 Level,
it was decided that to improve logistics and productivity during
the pre-commercial production period, ore and waste would not be
separated and that all mined material would be delivered to the run
of mine pad at the processing plant.
Notes 1.
See "Non-GAAP Financial Measures".
|
Exploration
The 2017 exploration program continued during the third quarter
of 2017, focusing on step out drilling at both Wassa and
Prestea.
Wassa Underground
Three surface drill rigs were employed at Wassa to test the
extents of the higher grade mineralization, up plunge to the north
of the current planned stoping areas in the B Shoot zone and down
plunge to the south of the current Inferred Mineral
Resources. It confirmed the ore body is larger than
previously estimated and remains open in both directions.
The drilling to test the northern extension comprised 15 holes
and totaled 4,164 metres ("m") and confirmed that the B Shoot
extends approximately 50 metres to the north. This suggests
the potential to add production to Wassa Underground's mine plan in
the near term. As previously reported, significant intercepts
included 14.9m grading 18.9 g/t Au from 294.0m in hole BS17DD002,
including 2.0m grading 91.8 g/t Au from 300.0m, and 23.8m grading
7.3 g/t Au from 289.9m in hole BS17DD003, including 4.0m grading
21.8 g/t Au from 293.0m.
The drilling to test the southern extension of the B Shoot is
expected to comprise 7,000m and include two mother holes with up to
four directional daughter holes being deflected from each of the
mother holes. Results received from the first mother hole
confirmed that the high grade zone extends approximately 200m to
the south of the current Inferred Mineral Resources.
Previously reported significant intercepts included drilled widths
of 23.8m grading 6.1 g/t Au from 1,001.0m and 21.7m grading 5.3 g/t
from 1,049.3m.
Following the completion of this first mother hole, three of the
four daughter holes have been deflected and drilling of the second
mother hole is expected to commence late in the fourth quarter of
2017. Results are pending for all of the daughter holes.
Prestea Underground
During the third quarter of 2017 drilling at Prestea Underground
focused on testing the extension of the West Reef to the north as
well as further delineating the West Reef through additional
in-fill drilling.
Five holes have been completed to date in the extension drilling
program, with the results of the first four holes received and
reported. These results confirm the extension of gold
mineralization to the north and represent the opportunity to add
new stopes, which have the potential to be mined during the next 18
months and add ounces to the short term mine plan. The
drilling was conducted from within Prestea Underground's workings
and comprised a total of 1,007m. Previously reported
significant intercepts included 0.5m grading 132.4 g/t Au from
174.7m in hole WR17-24-274S25 and 0.5m grading 67.20 g/t Au from
182.3m in hole WR17-24-274S19.
The results of 23 holes have been received and reported in the
in-fill stope definition drilling program to further delineate the
West Reef ore body, with seven of these holes received and reported
during the third quarter of 2017. The latest seven holes
comprised 947m of drilling and all the results received to date
confirm the previously modelled high grade nature and strong
continuity of gold mineralization and the thickness of the ore
body. Significant intercepts included 0.5m grading 87.6 g/t Au from
141.1m in hole WR17-24-274S1 and 1.5m grading 64.5 g/t Au from
144.2m in hole WR17-24-274S17.
Golden Star intends to excavate a
new drill chamber to the north of the current West Reef 24 Level
access. This is to enable the exploration team to access the
larger, longer term exploration target, which is the projected down
plunge extension of the high grade West Reef ore body. The
Company expects the drill chamber to be completed during the fourth
quarter of 2017, allowing for a further increase in drill
production from late 2017/early 2018 onwards. Drill
production is expected to increase during the remainder of 2017
through the mobilization of a second underground diamond drill
rig.
FINANCIAL PERFORMANCE
Capital Expenditures
Golden Star continued to incur
substantial capital expenditures in the third quarter of 2017 as
the Company further advanced Prestea Underground towards
production. Capital expenditures totaled $17.9 million, a 17% decrease compared to the
same period in 2016 as a result of the construction of Wassa
Underground being complete and the commencement of commercial
production at this mine on January 1,
2017.
Development capital accounted for 79% of capital expenditures
($14.2 million), with the majority
relating to Prestea Underground ($9.7
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 ($0.6
million) and for exploration drilling ($2.1 million at Wassa and $0.3 million at Prestea).
Third Quarter 2017 Capital Expenditures Breakdown (in
millions)
|
|
|
|
|
Item
|
|
Sustaining
|
Development
|
Total
|
|
Wassa Open Pit and
Processing Plant
|
|
1.4
|
2.1
|
3.5
|
|
Wassa
Underground
|
|
0.8
|
1.9
|
2.7
|
|
Other
Development
|
|
0.3
|
0
|
0.3
|
Wassa
Subtotal
|
|
2.5
|
4.0
|
6.5
|
|
Prestea Open Pits
(including Mampon deposit)
|
|
0.6
|
0.5
|
1.1
|
|
Prestea
Underground
|
|
0
|
9.7
|
9.7
|
|
Other
Development
|
|
0.6
|
0
|
0.6
|
Prestea
Subtotal
|
|
1.2
|
10.2
|
11.4
|
Consolidated
|
|
3.7
|
14.2
|
17.9
|
Other Financial Highlights
Gold revenues for the third quarter of 2017 totaled $87.8 million from gold sales of 74,379 ounces,
at an average realized gold price of $1,233 per ounce. This represents a 58%
increase in revenues compared to the third quarter of 2016, which
was due to higher gold production at both the Wassa and Prestea
operations. Gold revenues from Prestea increased by 63%
during the third quarter of 2017 due to gold sales from the Prestea
Open Pits increasing by 71% compared to the same period in 2016.
Gold revenues from Wassa increased by 52% during the third quarter
of 2017 compared to Q3 2016 as a result of a 43% increase in gold
sales.
Cost of sales excluding depreciation and amortization for the
third quarter of 2017 totaled $53.5
million, an increase of 20% from the same period in
2016. This was due primarily to higher mining costs at
Wassa. Wassa Underground also achieved commercial production
on January 1, 2017 and as a result,
mining costs were higher in the third quarter of 2017 than in the
same period in 2016 as previously underground mining costs were
capitalized. At Prestea, the increase in cost of sales
excluding depreciation and amortization was due mainly to higher
haulage costs for the material mined from the Mampon deposit.
Depreciation and amortization expenses for the third quarter of
2017 totaled $7.4 million, compared
to $5.1 million in the third 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 both
operations 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 $26.9
million in the third quarter of 2017. This represents
a 365% increase compared to the same period in 2016 as a result of
the 58% increase in gold revenues and both operations moving
towards a lower cost structure.
General and administrative ("G&A") expenses for the third
quarter of 2017 totaled $7.3 million,
compared to $9.4 million in Q3
2016. The 22% decrease in G&A expenses was due primarily
to the decline in non-cash shared-based compensation in the third
quarter of 2017.
Golden Star recorded a fair value
loss of $3.4 million on financial
instruments in the third quarter of 2017, compared to a loss of
$5.8 million in the same period in
2016. The loss in the third quarter of 2017 was comprised of
a $3.2 million non-cash revaluation
loss on the embedded derivative liability of the 7% Convertible
Debentures and a $0.2 million loss
recognized for the warrants.
The net income attributable to Golden
Star shareholders for the third quarter of 2017 was
$12.1 million or $0.03 income per share (basic), compared to a net
loss of $23.1 million or $0.07 loss per share (basic) in the third quarter
of 2016. The significant increase in net income in the third
quarter of 2017 was due primarily to a higher consolidated mine
operating margin and lower losses recognized on financial
instruments, compared to the same period in 2016.
After certain adjustments, the adjusted net income attributable
to Golden Star
shareholders1 was $19.8
million in the third quarter of 2017, compared to
$1.1 million in the same period in
2016. The higher adjusted net income for the period was
principally due to higher consolidated mine operating margin
compared to Q3 2016.
Cash provided by operations in the third quarter of 2017 was
$23.7 million or $0.06 per share (basic), which compares to
$21.0 million or $0.06 per share (basic) in Q3 2016. Cash
provided by operations before changes in working
capital1 for the period was $23.9
million or $0.06 per share
(basic), compared to $21.5 million or
$0.07 per share (basic) in the same
period of 2016. The increase in cash provided by operations
before working capital1 was due to a higher mine
operating margin at Prestea in the third quarter of 2017 compared
to Q3 2016 and a mine operating margin of $4.9 million at Wassa in the third quarter of
2017 compared to a mine operating loss of $1.4 million in the third quarter of 2016.
However it is important to note that $20.0
million of the $21.5 million
provided by operations in Q3 2016 was attributable to an advance
payment under the streaming agreement from RGLD Gold AG, therefore
the improvement in the operations' ability to generate cash during
the past 12 months is stronger than it might initially
appear.
The Company's consolidated cash balance was $30.0 million at September
30, 2017 and Golden Star
remains fully funded to deliver its capital program. Working
capital used $0.2 million during the
third quarter of 2017, compared to $0.5
million in the same period in 2016. The working capital
changes in the third quarter of 2017 related to an increase of
$3.9 million in inventory and a
$0.5 million increase in prepaids and
other, offset by a $2.2 million
decrease in accounts receivable and a $1.9
million increase in accounts payable and accrued
liabilities.
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 third quarter of 2017 will be available 24
hours after release at the latest.
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 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
$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
September 30,
|
|
|
2017
|
2016
|
Revenue
|
|
$
|
87,772
|
$
|
55,511
|
|
Cost of sales
excluding depreciation and amortization
|
|
53,502
|
44,608
|
|
Depreciation and
amortization
|
|
7,365
|
5,111
|
Mine operating
margin
|
|
26,905
|
5,792
|
|
|
|
|
Other
expenses/(income)
|
|
|
|
|
Exploration
expense
|
|
400
|
408
|
|
General and
administrative
|
|
7,264
|
9,370
|
|
Finance expense,
net
|
|
2,264
|
2,001
|
|
Other
income
|
|
(172)
|
(27)
|
|
Loss on fair value of
financial instruments, net
|
|
3,446
|
5,784
|
|
Loss on repurchase of
5% Convertible Debentures, net
|
|
-
|
12,048
|
Net income/(loss)
and comprehensive income/(loss)
|
|
$
|
13,703
|
$
|
(23,792)
|
Net income/(loss)
attributable to non-controlling interest
|
|
1,586
|
(682)
|
Net income/(loss)
attributable to Golden Star shareholders
|
|
$
|
12,117
|
$
|
(23,110)
|
|
|
|
|
Net income/(loss)
per share attributable to Golden Star shareholders
|
|
|
|
Basic
|
|
$
|
0.03
|
$
|
(0.07)
|
Diluted
|
|
$
|
0.03
|
$
|
(0.07)
|
Weighted average
shares outstanding-basic (millions)
|
|
378.0
|
325.3
|
Weighted average
shares outstanding-diluted (millions)
|
|
385.3
|
325.3
|
GOLDEN STAR
RESOURCES LTD. CONDENSED INTERIM CONSOLIDATED BALANCE
SHEETS (Stated in thousands of U.S. dollars)
(Unaudited)
|
|
|
|
|
|
As
of
|
|
|
September
30, 2017
|
December
31, 2016
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
29,954
|
$
|
21,764
|
|
Accounts
receivable
|
|
4,207
|
7,299
|
|
Inventories
|
|
48,896
|
44,381
|
|
Prepaids and
other
|
|
6,843
|
3,926
|
|
|
Total Current
Assets
|
|
89,900
|
77,370
|
RESTRICTED
CASH
|
|
6,493
|
6,463
|
MINING
INTERESTS
|
|
243,076
|
215,017
|
|
|
Total
Assets
|
|
$
|
339,469
|
$
|
298,850
|
LIABILITIES
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
87,169
|
$
|
92,900
|
|
Derivative
liabilities
|
|
—
|
2,729
|
|
Current portion of
rehabilitation provisions
|
|
3,254
|
5,515
|
|
Current portion of
deferred revenue
|
|
17,827
|
19,234
|
|
Current portion of
long term debt
|
|
12,533
|
15,378
|
|
Current portion of
other liability
|
|
10,801
|
2,073
|
|
|
Total Current
Liabilities
|
|
131,584
|
137,829
|
REHABILITATION
PROVISIONS
|
|
71,273
|
71,867
|
DEFERRED
REVENUE
|
|
95,634
|
94,878
|
LONG TERM
DEBT
|
|
82,779
|
89,445
|
LONG TERM DERIVATIVE
LIABILITY
|
|
9,061
|
15,127
|
LONG TERM OTHER
LIABILITY
|
|
5,178
|
10,465
|
|
|
Total
Liabilities
|
|
395,509
|
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
|
|
783,232
|
746,542
|
CONTRIBUTED
SURPLUS
|
|
34,758
|
33,861
|
DEFICIT
|
|
(806,781)
|
(832,951)
|
|
Equity/(Deficit)
attributable to Golden Star shareholders
|
|
11,209
|
(52,548)
|
NON-CONTROLLING
INTEREST
|
|
(67,249)
|
(68,213)
|
|
Total
Deficit
|
|
(56,040)
|
(120,761)
|
|
Total Liabilities
and Shareholders' Equity
|
|
$
|
339,469
|
$
|
298,850
|
GOLDEN STAR
RESOURCES LTD. CONDENSED INTERIM CONSOLIDATED STATEMENTS
OF CASH FLOWS (Stated in thousands of U.S.
dollars) (Unaudited)
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
|
2017
|
2016
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
Net
income/(loss)
|
|
$
|
13,703
|
$
|
(23,792)
|
Reconciliation of
net income/(loss) to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
7,373
|
5,114
|
|
Share-based
compensation
|
|
4,059
|
6,426
|
|
Loss on fair value of
embedded derivatives
|
|
3,170
|
3,341
|
|
Loss on fair value of
5% Convertible Debentures
|
|
—
|
1,920
|
|
Loss on repurchase of
5% Convertible Debentures, net
|
|
—
|
12,048
|
|
Recognition of
deferred revenue
|
|
(4,266)
|
(2,889)
|
|
Proceeds from Royal
Gold stream
|
|
—
|
20,000
|
|
Reclamation
expenditures
|
|
(2,157)
|
(1,325)
|
|
Other
|
|
2,059
|
657
|
|
Changes in working
capital
|
|
(224)
|
(536)
|
|
|
Net cash provided by
operating
activities
|
|
23,717
|
20,964
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Additions to mining
properties
|
|
(82)
|
(261)
|
|
Additions to plant
and equipment
|
|
(374)
|
—
|
|
Additions to
construction in progress
|
|
(16,655)
|
(21,395)
|
|
Change in accounts
payable and deposits on mine equipment and material
|
|
(2,194)
|
146
|
|
|
Net cash used in
investing activities
|
|
(19,305)
|
(21,510)
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Principal payments on
debt
|
|
(357)
|
(23,803)
|
|
Proceeds from 7%
Convertible Debentures, net
|
|
-
|
20,729
|
|
5% Convertible
Debentures repayment
|
|
—
|
(18,240)
|
|
Shares issued,
net
|
|
—
|
31,771
|
|
Exercise of
options
|
|
—
|
6
|
|
|
Net cash (used
in)/provided by financing activities
|
|
(357)
|
10,463
|
Increase in cash and
cash equivalents
|
|
4,055
|
9,917
|
Cash and cash
equivalents, beginning of period
|
|
25,899
|
7,577
|
Cash and cash
equivalents, end of period
|
|
$
|
29,954
|
$
|
17,494
|
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 metals net realizable value adjustment, royalties,
sustaining capital expenditures, corporate general and
administrative costs (excluding non-cash share-based compensation
expenses), and accretion of rehabilitation provision. 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
nine months ended September 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: transitioning to
underground-only operations at Wassa, the timing thereof and the
impact on the processing plant; the impact on costs and margins as
Wassa Underground continues to ramp up and Prestea Underground
commences commercial production; the timing for ramping up at Wassa
Underground; the size of the ore body at Wassa Underground; the
drilling of the second mother hole at Wassa Underground and the
timing thereof; the timing for commercial production at Prestea
Underground; the timing for commencing down plunge drilling at
Prestea Underground; the excavation of a drilling chamber at
Prestea Underground and the timing and impact thereof; production,
cash operating cost, AISC per ounce and capital expenditures
guidance for full year 2017; the ability to increase ore grades and
mining rate at Wassa Underground; 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; the timing of and
amount of production from Prestea Underground; the anticipated
mining rate for Prestea Underground; the grade of ore from Prestea
Underground; the timing of the release of the Company's drilling
results; and the timing for updating the market on further
exploration results and the planned transition at Wassa.
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.