TORONTO, March 29, 2018 /PRNewswire/ - Golden Star
Resources Ltd. (NYSE American: GSS; TSX: GSC; GSE: GSR) ("Golden
Star" or the "Company") announces that it has filed an updated
technical report pursuant to National Instrument ("NI") 43-101 for
its Bogoso/Prestea Gold Mine in Ghana entitled "NI 43-101 Technical Report
on Resources and Reserves, Golden Star Resources, Bogoso/Prestea
Gold Mine, Ghana" dated
March 28, 2018. This technical
report can be accessed under the Company's profile at www.sedar.com
and on the Company's website at www.gsr.com.
Previously, Golden Star filed
individual technical reports for its Prestea and Bogoso
mines. Although production ceased from the Bogoso mine in
2015, Golden Star has retained the
Bogoso licence area and consequently, the Company has chosen to
produce an updated, combined technical report that covers the
licence areas for both Prestea and Bogoso.
The technical report is based solely on the Mineral Reserves
within the Prestea licence area, including the Prestea Underground
Gold Mine ("Prestea Underground") and a small amount of open pit
and stockpile material that is planned to be mined in the first
half of 2018 and processed before the end of 2018.
In contrast to the Feasibility Study for Prestea
Underground1, the updated technical report includes
legacy reclamation costs for Bogoso, the costs related to
maintaining the full processing plant infrastructure2
and the additional general and administrative costs associated with
maintaining a larger land package3. Golden Star believes that exploration upside
potential exists on the Bogoso licence area, therefore the cost of
maintaining this licence area is worthwhile.
HIGHLIGHTS OF UPDATED TECHNICAL REPORT
- Net Present Value, assuming 5% discount rate, of $144
million at $1,300 per ounce gold price
- Estimated total free cash flow of $164
million
- Proven and Probable Mineral Reserves of 497,000 ounces of gold
(1.9 million tonnes at an average grade of 8.1 grams per tonne
("g/t") of gold ("Au"))4,5
-
- Planned underground mining production based on West Reef
Mineral Reserves of 463,000 ounces of gold (1.2 million tonnes at
an average grade of 12.35 g/t Au)5
- Average annual gold production of approximately 90,000
ounces6 for a life of mine ("LOM") of 5 years based on
existing Mineral Reserves and a production rate of 650 tonnes per
day
- Total LOM development capital cost estimate of $2.0 million and total LOM sustaining capital
cost estimate of $27.1 million
- LOM average cash operating cost per ounce7 of
$624
- LOM average mine site All-In Sustaining Cost per
ounce7 of
$754
Sam Coetzer, President and
Chief Executive Officer of Golden
Star, commented:
"The updated technical report confirms the strong economics
delivered by Prestea Underground in the 2015 Feasibility
Study. Through these two licence areas, Golden Star has access to thirty kilometres of
the highly prospective Ashanti gold trend and we believe there is
strong future value to be unlocked. As the Bogoso
concessions have the potential to be a core segment of the business
strategy going forwards, we continue to explore, secure and be
involved in community initiatives on the larger Bogoso land
package. Costs have been allocated to ensure the option value
to utilize the full capacity of the plant in the future remains
intact. I look forward to releasing results from the 2018
exploration program at Prestea Underground during the second
quarter of 2018, which we expect will begin to demonstrate the
upside potential of this mine."
Notes
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1.
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See report entitled,
'NI 43-101 Technical Report on a Feasibility Study of the Prestea
Underground Gold Project in Ghana', dated November 3,
2015
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2.
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The Feasibility Study
envisioned a production rate of 500 tpd, which would only require a
small portion of the current processing plant (with a capacity of
4,000 tonnes per day ("tpd")) to be maintained. Prestea Underground
is now targeting a production rate of 650 tpd and the Company
intends to reduce the plant capacity to this size, while
maintaining the larger plant infrastructure to retain the option to
increase the processing capacity again if further high grade ore
sources are defined
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3.
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These include,
amongst other items, the fees paid to the Government of Ghana to
maintain the licence, the cost of supporting community initiatives
on the larger land package and the cost of security for the larger
land package
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4.
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Includes Mineral
Reserve estimates for Prestea Underground, Mampon, Prestea South
and stockpiled ore
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5.
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Mineral Reserves are
calculated at a gold price of $1,250 per ounce and are as of
December 31, 2017
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6.
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This figure includes
forecast production from the Prestea Open Pits in the first half of
2018
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7.
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See "Non-GAAP
Financial Measures"
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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 in Ghana, West Africa. Listed on the NYSE American, the
Toronto Stock Exchange and the Ghanaian Stock Exchange,
Golden Star is focused on delivering
strong margins and free cash flow from its two high grade, low cost
underground mines. Gold production guidance for 2018 is
230,000-255,000 ounces at a cash operating cost per ounce of
$650-730. As the winner of the
PDAC 2018 Environmental and Social Responsibility Award,
Golden Star is committed to leaving
a positive and sustainable legacy in its areas of operation.
Statements Regarding Forward-Looking Information
Some statements contained in this news release are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and "forward looking
information" within the meaning of Canadian securities laws.
Forward looking statements and information include but are not
limited to, statements and information regarding: the Net Present
Value of the Prestea complex; estimated free cash flow of the
Prestea complex; average annual production and the life of mine of
the Prestea complex; the cash operating cost per ounce and mine
site All-In Sustaining Cost per ounce for the Prestea complex; the
life of mine development capital cost and sustaining capital cost
estimates for the Prestea complex; and 2018 production guidance and
cash operating cost per ounce guidance. 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. Investors are cautioned that
forward-looking statements and information are inherently uncertain
and involve risks, assumptions and uncertainties that could cause
actual facts to differ materially. There can be no assurance
that future developments affecting the Company will be those
anticipated by management. Please refer to the discussion of
these and other factors in Management's Discussion and Analysis of
financial conditions and results of operations for the year ended
December 31, 2017. Additional
and/or updated factors will be included in our annual information
form for the year ended December 31,
2017 which will be filed on SEDAR
at www.sedar.com. The forecasts contained in this press
release constitute management's current estimates, as of the date
of this press release, with respect to the matters covered
thereby. We expect that these estimates will change as new
information is received. While we may elect to update these
estimates at any time, we do not undertake any estimate at any
particular time or in response to any particular event.
Non-GAAP Financial Measures
In this press release, we use the terms "cash operating cost per
ounce" and "All-In Sustaining Cost per ounce". 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" 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, and "cash operating cost
per ounce" is that amount 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
metric. We monitor this measure monthly, comparing each month's
values to prior periods' 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 IFRS.
"Mine Site All-In Sustaining Costs" commences with cash
operating costs and then adds royalties, sustaining capital
expenditures, and accretion of rehabilitation provision. Mine
Site All-In Sustaining Costs do not include corporate general and
administrative costs. "Mine Site All-in sustaining costs per
ounce" is that amount divided by the number of ounces of gold sold
(excluding pre-commercial production ounces sold) during the
period. 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 Mine
Site 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.
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 amongst other things. 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, 2017, which is available
at www.sedar.com.
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 National Instrument 43-101. Dr. Raffield
is Senior Vice President Project Development and Technical Services
for Golden Star.
SOURCE Golden Star Resources Ltd.