TORONTO, Oct. 30, 2019 /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, 2019.
HIGHLIGHTS:
- Gold production for the third quarter: 49,392 ounces, 14% lower
than the same period in 2018, and 2% higher than the second quarter
of 2019 production of 48,422 ounces
-
- 34,565 ounces of gold production at Wassa Complex ("Wassa"), 9%
down from the third quarter of 2018, and 7% lower than the second
quarter of 2019 due to lower grades, partially offset by a planned
increase in productivity of 4,420 tonnes per day ("tpd") compared
to 3,430 tpd for the second quarter of 2019 and 3,410 tpd in the
third quarter of 2018
- 14,827 ounces of gold production at Prestea Complex
("Prestea"), 22% down from the third quarter of 2018, however this
was 34% higher than the second quarter production of 11,066 ounces
driven by 66% higher production from underground
- Gold revenue for the third quarter of 2019 totaled $69.5 million compared to $67.7 million in the same period in 2018, and
$61.9 million in the second quarter
of 2019
-
- Gold sales totaled 48,538 ounces in the third quarter of
2019
- Mine operating margin of $15.7
million compared to $10.2
million in the third quarter of 2018, and $8.7 million in the second quarter of 2019
- Net income attributable to Golden
Star shareholders for the third quarter of 2019 totaled
$6.0 million or $0.05 income per share (basic), compared to a net
loss of $3.2 million or $0.04 loss per share (basic) in the same period
in 2018 and compared to a net loss of $9.0
million or $0.08 loss per
share (basic) in the second quarter of 2019
- Cash operating cost per ounce1 of $888 and All-In Sustaining Cost ("AISC") per
ounce1 of $1,233 in the
third quarter of 2019, compared to $780 and $994,
respectively in the prior year period, and in line with
the second quarter of 2019 costs of $886 and $1,212 per
ounce1 respectively
- Cash position of $56.8 million as
at September 30, 2019
- Hedging program established to provide gold price protection
for the projected production from Prestea through September 2020
- Ani Markova appointed to Golden
Star's Board of Directors
- La Mancha given consent to acquire further shares in Golden
Star, up to a maximum shareholding of 35%
Subsequent to Third Quarter
- Senior secured credit facility with Macquarie Bank for
$60 million to refinance specific
debt facilities completed
- Planned office relocation from Toronto to London announced
- Nathalie Lion Haddad appointed
as Executive Vice President, Head of People and Peter Spora appointed as Executive Vice
President, Growth & Exploration
Notes:
|
1. See
"Non-GAAP Financial Measures"
|
Andrew Wray, Chief
Executive Officer of Golden Star,
commented:
"In the third quarter, performance at both
of our operations was in line with expectations, with production
and costs similar to the previous quarter. At Wassa, the lower
grades during most of the quarter were compensated by the increase
in throughput and we continue to focus on increasing the rates of
development and definition drilling in order to provide greater
flexibility to manage any grade variations in the future. At
Prestea, there are a range of initiatives currently underway which
are driving improvements to productivity and costs. In the longer
term, we are evaluating potential structural changes and
incorporating the recommendations of the operational review into a
redesigned life of mine plan. We are anticipating incremental
improvement in the fourth quarter and maintain both our cost and
production guidance for the full year."
INDEPENDENT OPERATIONAL REVIEW OF PRESTEA
CSA Global were selected to undertake an independent review of
the underground operations at Prestea. The initial findings of this
review indicated sufficient confidence in the mineral resource,
infrastructure and available skills for Prestea to be a sustainable
and profitable gold mine in the medium to long term. Following the
initial review, Phase 2 was initiated to assess how to incorporate
some of the key recommendations into the life of mine, such as
introducing a complementary mining method to the Alimak stoping,
and reducing the height of the Alimak stopes to improve dilution
and increase infill drilling. To begin the process of
estimating the capital cost and timeframe required to implement
these changes, CSA and the Prestea site team have designed a
conceptual mine plan (scoping level) including the recommendations
above. The conceptual mine plan confirms that Prestea is expected
to be a sustainably profitable mine with a combination of the
Alimak mining method and sub-level open stoping method, and
ore/waste handling system underground and at surface. The Company
is now refining this high level mine plan and expects an updated
life of mine plan in early 2020.
After the initial stage of CSA's review, Project Okode (Eagle)
was established involving the site management and technical and
operations personnel to fully plan, prioritize and implement CSA's
recommended short term operational improvements and site
initiatives with a focus on mining and maintenance. A number of low
cost initiatives identified in the review have progressed to the
planning and implementation stages, including tighter spaced
definition drilling, equipment selection for Alimak set up,
critical spares analysis, consumables monitoring and reduction,
improved communication and planning (for maintenance, mining and
inter-departmental), and optimized shaft and personnel scheduling.
Overall, the objectives of Project Okode are to improve equipment
availability, reduce Alimak cycle time, increase labour utilization
and reduce operating costs.
WASSA POWER PURCHASE AGREEMENT
On July 22, 2019, Golden Star signed a Power Purchase Agreement
with Genser Energy Ghana Limited ("Genser Ghana") for the supply of
power to the Wassa Complex. Genser Ghana builds, owns, and operates
distributed generation installations and fuel supply infrastructure
in Ghana and sells power and/or
steam to bulk customers either directly or over the national
interconnected transmission system in Ghana. Under this agreement, Genser Ghana
plans to build and operate two 15 megawatts Gas Turbines (the
"Wassa Genser Plant") adjacent to the Wassa Complex and plans to
initially supply 16 MW of nominal power to Wassa on a fixed-price,
life-of-mine contract. Genser Ghana has previously successfully
completed similar projects for other mining companies in
Ghana.
The Wassa Genser Plant will be fueled by natural gas from the
Ghana National Gas Company's Prestea Regulation and Metering
Station and delivered to site via Genser Ghana's pipeline, which
will be routed to reach the Wassa Genser Plant. Genser Ghana has
sized the Wassa Genser Plant with excess capacity to withstand any
future demand increase of the Wassa Complex. Phase I of operations
is expected to begin mid-2020. With this agreement, Wassa expects
to lower its power costs and improve the reliability and quality of
its power supply.
$60 MILLION CREDIT
FACILITY
On October 17, 2019, the Company
closed the $60 million senior secured
credit facility with Macquarie Bank Limited (the "Credit Facility")
previously announced in its July 31,
2019 news release.
Golden Star has used the proceeds
to refinance the Ecobank Loan III, Ecobank Loan IV, and the
long-term payable under the Vendor Agreement with Volta River
Authority. The remaining balance is available for general corporate
purposes.
The Credit Facility is repayable in $5
million quarterly installments, commencing on June 30, 2020. The final maturity date is
March 31, 2023. The interest rate is
4.5% plus the applicable USD LIBOR rate. The Credit Facility is
subject to normal course financial covenants including a Debt
Service Coverage Ratio of greater than 1.20:1 and a Net Debt to
EBITDA ratio of less than 3.00:1.
Third Quarter 2019 Conference Call Details
The Company will conduct a conference call and webcast to
discuss these results on October 31,
2019, at 10:00 am ET.
Toll Free (North America):
+1 833 231-8263
Toronto Local and International: +1
647 689-4108
Conference ID: 8759962
Webcast:
https://event.on24.com/wcc/r/2079878/C0F4584E0EBB842C024C8A32EFCC355F
and on the home page of the Company's website: www.gsr.com
A recording and webcast replay of the call will be available on
the Company's website: www.gsr.com following the call.
SUMMARY OF CONSOLIDATED OPERATIONAL AND FINANCIAL
RESULTS
|
|
Three Months
Ended
September 30,
|
OPERATING
SUMMARY
|
|
2019
|
|
2018
|
Wassa gold
sold
|
oz
|
33,875
|
|
38,295
|
Prestea gold
sold
|
oz
|
14,663
|
|
19,364
|
Total gold
sold
|
oz
|
48,538
|
|
57,659
|
Wassa gold
produced
|
oz
|
34,565
|
|
38,097
|
Prestea gold
produced
|
oz
|
14,827
|
|
19,016
|
Total gold
produced
|
oz
|
49,392
|
|
57,113
|
Average realized gold
price
|
$/oz
|
1,432
|
|
1,175
|
|
|
|
|
|
Cost of sales per
ounce - Consolidated1
|
$/oz
|
1,108
|
|
998
|
Cost of sales per
ounce - Wassa1
|
$/oz
|
923
|
|
817
|
Cost of sales per
ounce - Prestea1
|
$/oz
|
1,536
|
|
1,355
|
Cash operating cost
per ounce - Consolidated1
|
$/oz
|
888
|
|
780
|
Cash operating cost
per ounce - Wassa1
|
$/oz
|
732
|
|
613
|
Cash operating cost
per ounce - Prestea1
|
$/oz
|
1,249
|
|
1,110
|
All-In Sustaining
cost per ounce - Consolidated1
|
$/oz
|
1,233
|
|
994
|
All-In Sustaining
cost per ounce - Wassa1
|
$/oz
|
1,061
|
|
805
|
All-In Sustaining
cost per ounce - Prestea1
|
$/oz
|
1,630
|
|
1,367
|
|
|
|
|
|
Notes:
|
|
|
|
|
1. See "Non-GAAP
Financial Measures"
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
FINANCIAL
SUMMARY
|
|
2019
|
|
2018
2
|
Gold
revenues
|
$'000
|
69,504
|
|
67,738
|
Cost of sales
excluding depreciation and amortization
|
$'000
|
46,798
|
|
48,873
|
Depreciation and
amortization
|
$'000
|
6,979
|
|
8,659
|
Mine operating
margin
|
$'000
|
15,727
|
|
10,206
|
General and
administrative expense
|
$'000
|
5,491
|
|
6,166
|
(Gain)/loss on fair
value of financial instruments, net
|
$'000
|
(4,793)
|
|
629
|
Income tax
expense
|
$'000
|
5,244
|
|
4,151
|
Net income/(loss)
attributable to Golden Star shareholders
|
$'000
|
5,960
|
|
(3,178)
|
Adjusted net income
attributable to Golden Star shareholders1
|
$'000
|
6,961
|
|
3,011
|
Income/(loss) per
share attributable to Golden Star shareholders - basic
|
$/share
|
0.05
|
|
(0.04)
|
Income/(loss) per
share attributable to Golden Star shareholders - diluted
|
$/share
|
0.02
|
|
(0.04)
|
Adjusted income per
share attributable to Golden Star shareholders -
basic1
|
$/share
|
0.06
|
|
0.04
|
Cash provided by
operations
|
$'000
|
8,137
|
|
10,771
|
Cash provided by
operations before working capital changes1
|
$'000
|
11,898
|
|
7,947
|
Cash provided by
operations per share - basic
|
$/share
|
0.07
|
|
0.14
|
Cash provided by
operations before working capital changes per share -
basic1
|
$/share
|
0.11
|
|
0.10
|
Capital
expenditures
|
$'000
|
16,950
|
|
9,784
|
|
Notes:
|
1. See
"Non-GAAP Financial Measures"
|
2. Per share
data has been re-stated to reflect the share consolidation that was
implemented on October 30, 2018
|
OPERATIONAL PERFORMANCE
In the third quarter of 2019, Golden
Star produced 49,392 ounces of gold, 14% lower than the same
period in 2018 but a 2% increase over the second quarter of 2019.
Gold production from Wassa was 34,565 ounces for the third quarter
of 2019, a 9% decrease from the 38,097 ounces produced during the
same period in 2018. This decrease in production was primarily due
to a decrease in grade and recovery compared to the same period in
2018, partially offset by an increase in mining rate at Wassa
Underground.
Gold production from Prestea was 14,827 ounces in the third
quarter of 2019, a 22% decrease from the 19,016 ounces produced
during the same period in 2018. This decrease in production was due
primarily to lower than planned head grade at Prestea Underground
due to a combination of unplanned dilution and ore loss.
Consolidated cost of sales per ounce1 was
$1,108 in the third quarter of 2019,
11% higher than $998 in the same
period in 2018. Consolidated cash operating cost per
ounce1 was $888 in the
third quarter of 2019, 14% higher than $780 in the same period in 2018. Cash operating
cost per ounce1 at Wassa increased 19% in the third
quarter of 2019 as gold sold was 12% lower compared to the same
period in 2018 and mine operating expense increased due to a
significant increase in total tonnes mined which helped offset the
expected lower grades over the quarter. Cash operating cost per
ounce1 at Prestea increased 13% compared to the same
period in 2018 due mainly to a decrease in gold sold during the
period, offset partially by a decrease in mine operating expenses
as a result of cost reduction initiatives which drove a 26%
reduction in cash operating cost per ounce1 compared to
the second quarter of 2019. Production rates at Prestea Underground
increased compared to the previous quarter although they continue
to be lower than initially expected.
For the nine months ended September 30, 2019, consolidated
cash operating cost per ounce1 of $832 remained consistent compared to $831 per ounce in the same period in 2018.
Notes:
|
1. See
"Non-GAAP Financial Measures"
|
Wassa Complex ("Wassa")
|
|
Three Months
Ended
September 30,
|
|
|
2019
|
|
2018
|
WASSA FINANCIAL
RESULTS
|
|
|
|
|
Revenue
|
$'000
|
48,384
|
|
45,029
|
|
|
|
|
|
Mine operating
expenses
|
$'000
|
25,040
|
|
21,694
|
Royalties
|
$'000
|
2,579
|
|
2,309
|
Operating costs
(to)/from metals inventory
|
$'000
|
(246)
|
|
1,770
|
Inventory net
realizable value adjustment and write-off
|
$'000
|
—
|
|
232
|
Cost of sales
excluding depreciation and amortization
|
$'000
|
27,373
|
|
26,005
|
Depreciation and
amortization
|
$'000
|
3,879
|
|
5,284
|
Mine operating
margin
|
$'000
|
17,132
|
|
13,740
|
Capital
expenditures
|
$'000
|
13,768
|
|
7,033
|
|
|
|
|
|
WASSA OPERATING
RESULTS
|
|
|
|
|
Ore mined -
Underground
|
t
|
406,922
|
|
313,369
|
Waste mined -
Underground
|
t
|
106,700
|
|
73,327
|
Ore processed - Main
Pit/Stockpiles
|
t
|
27,470
|
|
77,386
|
Ore processed -
Underground
|
t
|
399,910
|
|
316,907
|
Ore processed -
Total
|
t
|
427,380
|
|
394,293
|
Grade processed -
Main Pit/Stockpiles
|
g/t
|
0.64
|
|
0.65
|
Grade processed -
Underground
|
g/t
|
2.84
|
|
3.69
|
Recovery
|
%
|
95.4
|
|
95.8
|
Gold produced - Main
Pit/Stockpiles
|
oz
|
514
|
|
1,580
|
Gold produced -
Underground
|
oz
|
34,051
|
|
36,517
|
Gold produced -
Total
|
oz
|
34,565
|
|
38,097
|
Gold sold - Main
Stockpiles
|
oz
|
56
|
|
1,778
|
Gold sold -
Underground
|
oz
|
33,819
|
|
36,517
|
Gold sold -
Total
|
oz
|
33,875
|
|
38,295
|
|
|
|
|
|
Cost of sales per
ounce1
|
$/oz
|
923
|
|
817
|
Cash operating cost
per ounce1
|
$/oz
|
732
|
|
613
|
All-In Sustaining
cost per ounce1
|
$/oz
|
1,061
|
|
805
|
|
|
|
|
|
Notes:
|
|
|
|
|
1. See
"Non-GAAP Financial Measures"
|
|
Wassa Operational Overview
Gold production from Wassa was 34,565 ounces for the third
quarter of 2019, a 9% decrease from the 38,097 ounces produced
during the same period in 2018. This decrease in production was
primarily due to a decrease in grade and recovery compared to the
same period in 2018, partially offset by an increase in mining rate
at Wassa Underground.
Mining rates at Wassa Underground increased to approximately
4,420 tpd on average in the third quarter of 2019. This represents
a significant increase over the second quarter, and was planned in
order to offset the lower grades that were mined in the quarter.
Underground ore processed increased 26% to 399,910 tonnes in the
third quarter of 2019 compared to 316,907 tonnes in the same period
in 2018.
Cost of sales excluding depreciation and amortization was
$27.4 million for the third quarter
of 2019, compared to $26.0 million
for the same period in 2018. The increase was due primarily to a
$3.3 million increase in mine
operating expenses, resulting from an increase in total tonnes
mined, as Wassa Underground has steadily increased its mining
rates, and a $0.3 million increase in
royalty expense due to higher gold revenue. Partially offsetting
these increases was a $2.0 million
decrease in operating costs from metals inventory, and a
$0.2 million decrease in inventory
net realizable value adjustment and write-offs.
Cash operating cost per ounce increased 19% to $732 from $613 for
the same period in 2018. The higher cash operating costs per ounce
in the third quarter of 2019 compared to the same period in 2018
were primarily a result of a decrease in gold sold and an increase
in mine operating expenses. All-in sustaining cost per ounce
increased 32% to $1,061 from
$805 for the same period in 2018
mainly due to a decrease in gold sold and an increase in sustaining
capital expenditures.
Prestea Complex ("Prestea")
|
|
Three Months
Ended
September 30,
|
|
|
2019
|
|
2018
|
PRESTEA FINANCIAL
RESULTS
|
|
|
|
|
Revenue
|
$'000
|
21,120
|
|
22,709
|
|
|
|
|
|
Mine operating
expenses
|
$'000
|
17,709
|
|
21,706
|
Severance
charges
|
$'000
|
13
|
|
6
|
Royalties
|
$'000
|
1,096
|
|
1,154
|
Operating costs
from/(to) metals inventory
|
$'000
|
607
|
|
(211)
|
Inventory net
realizable value adjustment and write off
|
$'000
|
—
|
|
213
|
Cost of sales
excluding depreciation and amortization
|
$'000
|
19,425
|
|
22,868
|
Depreciation and
amortization
|
$'000
|
3,100
|
|
3,375
|
Mine operating
loss
|
$'000
|
(1,405)
|
|
(3,534)
|
|
|
|
|
|
Capital
expenditures
|
$'000
|
3,182
|
|
2,751
|
|
|
|
|
|
PRESTEA OPERATING
RESULTS
|
|
|
|
|
Ore mined Open
Pits
|
t
|
178,498
|
|
67,238
|
Ore mined -
Underground
|
t
|
42,071
|
|
34,575
|
Ore mined -
Total
|
t
|
220,569
|
|
101,813
|
Waste mined - Open
Pits
|
t
|
288,701
|
|
182,103
|
Waste mined -
Underground
|
t
|
5,113
|
|
2,184
|
Waste mined -
Total
|
t
|
293,814
|
|
184,287
|
Ore processed - Open
Pits
|
t
|
179,343
|
|
307,482
|
Ore processed -
Underground
|
t
|
42,071
|
|
34,575
|
Ore processed -
Total
|
t
|
221,414
|
|
342,057
|
Grade processed -
Open Pits
|
g/t
|
1.62
|
|
1.12
|
Grade processed -
Underground
|
g/t
|
5.00
|
|
10.39
|
Recovery
|
%
|
86.9
|
|
84.0
|
Gold produced - Open
Pits
|
oz
|
8,415
|
|
8,148
|
Gold produced -
Underground
|
oz
|
6,412
|
|
10,868
|
Gold produced -
Total
|
oz
|
14,827
|
|
19,016
|
Gold sold - Open
Pits
|
oz
|
8,251
|
|
8,496
|
Gold sold -
Underground
|
oz
|
6,412
|
|
10,868
|
Gold sold -
Total
|
oz
|
14,663
|
|
19,364
|
|
|
|
|
|
Cost of sales per
ounce1
|
$/oz
|
1,536
|
|
1,355
|
Cash operating cost
per ounce1
|
$/oz
|
1,249
|
|
1,110
|
All-In Sustaining
cost per ounce1
|
$/oz
|
1,630
|
|
1,367
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
1. See
"Non-GAAP Financial Measures"
|
|
|
|
|
|
|
Prestea Operational Overview
Gold production from Prestea was 14,827 ounces in the third
quarter of 2019, a 22% decrease from the same period in 2018 but a
34% increase from the previous quarter. The decrease in production
over the prior year period was due primarily to lower than planned
head grade at Prestea Underground due to a combination of higher
dilution and ore loss.
Prestea Underground produced 6,412 ounces in the third quarter
of 2019 compared to 10,868 ounces in the same period in 2018, as a
result of a 52% decrease in ore grade processed, offset partially
by a 22% increase in ore tonnes processed. However, compared to the
previous quarter, underground production was 66% higher which was
driven by a 22% improvement in grade, a 13% increase in volumes and
improved recovery. In-fill, 25 metres spaced, drilling was
completed in the current mining blocks during the quarter and
Quality Assurance and Quality Control ("QAQC") of production
drilling accuracy was implemented, both of which helped to manage
dilution and improve production levels.
The Prestea Open Pits produced 8,415 ounces in the third quarter
of 2019, compared to 8,148 ounces in the same period in 2018. The
Prestea Open Pits was expected to complete gold production earlier
in 2019, however mining has continued throughout the third quarter
of 2019 with additional ore being sourced from the pits close to
Bogoso.
Cost of sales excluding depreciation and amortization was
$19.4 million for the third quarter
of 2019, compared to $22.9 million
for the same period in 2018. The decrease was due primarily
to a $4.0 million decrease in mine
operating expenses related to less throughput from Prestea Open
Pits, cost savings achieved through mining efficiencies, and a
$0.2 million decrease in inventory
net realizable value adjustment and write-off, offset by a
$0.8 million increase in operating
costs from metals inventory.
Cash operating cost per ounce of $1,249 increased 13% from $1,110 for the same period in 2018 and decreased
by 26% from $1,677 in the previous
quarter. All-in sustaining cost per ounce increased 19% to
$1,630 from $1,367 for the same period in 2018 and decreased
by 24% from the previous quarter. The increase in costs per ounce
for the same period in the previous year were primarily due to
lower gold sales in the period, offset partially by lower mine
operating expenses and operating costs from metals inventory.
EXPLORATION
Wassa
During the third quarter, the surface drilling of the southern
extensions of the Wassa Underground mine continued and was
completed in mid-September. A total of 22 holes were completed in
the third quarter with 12,636 metres being drilled. The 2019
drilling programs at Wassa resulted in an additional 59 holes for
approximately 45,000 metres. With this year's surface drilling
program at Wassa now being completed, the Company's geologists and
consultants have commenced the geological interpretations.
Drill results will be reported in the fourth quarter. The new
geological interpretations will be used for mineral resource
estimations that will be updated for year-end resource and reserve
statements. The drilling to date at Wassa has had three
goals, conversion of inferred resources to indicated, definition
and expansion of current inferred resources. Results have
been successful in converting portions of the inferred resources to
indicated as well as better defining mineralization at depth and
within the hanging and footwall of the main B Shoot mineralization.
Deeper drilling into the wide zones of mineralization at depth has
shown that instead of a single high grade mineralized zone there
are now four sub parallel zones and this new understanding will be
incorporated into the next resource grade estimation.
Father Brown
Drilling was completed on the Father Brown project in the second
quarter of 2019, totaling 28 holes for 14,500 metres. The drill
results have been used to update a conceptual resource model. A
scoping study review is currently being finalized by independent
consultants Entech. This review shows that the project does not
deliver sufficient returns at this point to move to a feasibility
study without further resource extension and definition drilling. A
number of further sensitivities will be undertaken to determine the
best way to take the project forward and allocate capital to
drilling (relative to other targets within the development
pipeline) during the fourth quarter of 2019.
Prestea Underground
During the third quarter, 8 additional holes were drilled
totaling 1,486 metres. Most of this drilling was infill drilling to
the north of the existing stopes on 24 Level. Upon completion of
this drilling a new resource block model has been created and this
will be the basis for a new mine plan which is currently being
developed with the assistance of a consultant. The updated
resources and reserves will be disclosed in the year-end Mineral
Resource and Reserve statements.
FINANCIAL PERFORMANCE
Financial Highlights
Gold revenue totaled $69.5 million
in the third quarter of 2019, compared to $67.7 million in the same period in 2018. Gold
revenue for the third quarter of 2019 was $1.8 million or 3% higher than the same period in
2018, due to a 22% increase in the consolidated average realized
gold price, partially offset by a 16% decrease in gold sold. Gold
revenue generated from Prestea decreased 7% mainly due to a
41% decrease in ounces produced from Prestea Underground as a
result of lower than planned grade due to a combination of
excessive dilution and ore loss, partially offset by a 23% increase
in average realized gold price. Gold revenue generated from Wassa
increased by 7% due to a 21% increase in average realized gold
price, partially offset by a 12% decrease in gold sold as a result
of a 23% decrease in grade as compared to prior year.
Consolidated cost of sales per ounce was $1,108 in the third quarter of 2019, 11% higher
than $998 in the same period in 2018.
Consolidated cash operating cost per ounce was $888 in the third quarter of 2019, 14% higher
than $780 in the same period in 2018.
Cash operating cost per ounce at Wassa increased 19% in the third
quarter of 2019 as gold sold was 12% lower compared to the same
period in 2018 and mine operating expense increased due to an
increase in total tonnes mined, as Wassa Underground has steadily
increased its mining rates. Cash operating cost per ounce at
Prestea increased 13% due mainly to a decrease in gold sold during
the period, offset partially by a decrease in mine operating
expenses. Production rates at Prestea Underground continue to be
lower than expected and have not been able to offset the lower
production at the Prestea Open Pits as planned, however several low
cost initiatives have been implemented in order to improve
productivity and help with dilution issues and ore loss such as
tighter spaced definition drilling, equipment selection for Alimak
set up, critical spares analysis, consumables monitoring and
reduction, improved communication and planning (for maintenance,
mining and inter-departmental), and optimized shaft and personnel
scheduling.
Cash operating cost per ounce at Prestea has improved compared
to the prior two quarters and is the best quarter this year. Cash
operating cost per ounce decreased 26% compared to the second
quarter of 2019, and decreased 15% compared to the first quarter of
2019.
Depreciation and amortization expense totaled $7.0 million in the third quarter of 2019
compared to $8.7 million in the same
period in 2018. The decrease in depreciation and amortization
expense for the three months ended September 30, 2019 was due
to decreases at both Wassa and Prestea. Wassa depreciation
decreased mainly due to an increase in the total recoverable gold
ounces over the life of mine of Wassa Underground, while Prestea
depreciation decreased due to a decrease in gold production.
General and administrative expense totaled $5.5 million in the third quarter of 2019,
compared to $6.2 million in the same
period in 2018. The decrease in general and administrative expense
for the third quarter of 2019 was due primarily to a decrease in
share-based compensation expense compared to the same period in
2018. Share-based compensation expense decreased in the period as
the final Performance Share Units ("PSU") vested in December 2018, therefore the Company did not
recognize a PSU expense in the current period. General and
administrative expense, excluding share-based compensation and
termination costs related to the change in senior management in
2019, totaled $4.6 million compared
to $4.0 million in the same period in
2018.
The Company recorded a gain of $4.8
million on fair value of financial instruments in the third
quarter of 2019 compared to a $0.6
million loss in the same period in 2018. The $4.8 million gain consists of $4.5 million related to a non-cash revaluation
gain on the embedded derivative liability of the 7% Convertible
Debentures and $0.3 million related
to a non-cash revaluation gain on the non-hedge derivative asset.
The $0.6 million fair value loss
recognized in the third quarter of 2018 was related to a non-cash
revaluation loss on the embedded derivative liability of the 7%
Convertible Debentures.
Income tax expense was $5.2
million in the third quarter of 2019 compared to
$4.2 million for the same period in
2018. The increase in income tax expense for the three and nine
months ended September 30, 2019 compared to the same periods
in 2018 relates to the increase in mine operating margin at
Wassa.
Net income attributable to Golden
Star shareholders for the third quarter of 2019 totaled
$6.0 million or $0.05 income per share (basic), compared to a net
loss of $3.2 million or $0.04 loss per share (basic) in the same period
in 2018. The increase in net income and income per share
attributable to Golden Star
shareholders in the third quarter of 2019 was mainly due to a
$5.5 million increase in mine
operating margin, a $0.7 million
decrease in general and administrative expenses, and a
$5.4 million increase in fair value
gain on financial instruments.
Net cash provided by operating activities was $8.1 million for the third quarter of 2019
compared to $10.8 million in the same
period in 2018. Cash provided by operations before working capital
changes (see "Non-GAAP Financial Measures" section) was
$11.9 million for the third quarter
of 2019, compared to $7.9 million in
the same period in 2018. The increase in cash provided by
operations before working capital changes was due primarily to a
$5.5 million increase in mine
operating margin.
On September 30, 2019 the Company
held $56.8 million in cash and cash
equivalents, the cash balance reduced by $9.3 million during the quarter from $66.2 million at the end of June 2019. The Company had a mine operating
margin before depreciation and amortization expense of $22.7 million. Excluding the non-cash recognition
of the deferred revenue, the mine operating margin before
depreciation and amortization expense was $20.1 million. The operations used $15.4 million of cash for capital expenditures
during the quarter and incurred $4.9
million on corporate general and administrative expense
excluding non-cash share based compensation and $1.0 million on reclamation expenditures. Debt
services payments totaled $5.3
million and the Company used $3.8
million of cash for working capital purposes during the
quarter. The exercise of options and interest
income contributed $0.9 million
resulting in a cash balance of $56.8
million at the end of the quarter. The Company held
$56.8 million in cash and cash
equivalents as at September 30, 2019 compared to $96.5 million in cash and cash equivalents at
December 31, 2018.
Capital Expenditures
Capital expenditures for the third quarter of 2019 totaled
$17.0 million compared to
$9.8 million in the same period in
2018. Capital expenditures at Wassa during the third quarter of
2019 comprised 81% of total capital expenditures and totaled
$13.8 million, which included
$4.2 million on exploration drilling,
$3.0 million on Wassa Underground
capitalized development, $2.0 million
on mobile equipment, $0.3 million on
the construction of a ventilation raise, $0.7 million related to the tailings storage
facility and the remainder on other equipment and capital
expenditures. Capital expenditures at Prestea during the third
quarter of 2019 comprised 19% of total capital expenditures and
totaled $3.2 million, which included
$1.7 million on sustaining capital
related to Prestea Underground, $0.2
million on exploration drilling and $1.4 million on other equipment and capital
expenditures.
Third Quarter 2019 Capital Expenditures Breakdown (in
millions)
Item
|
Sustaining
|
Development
|
Total
|
Wassa Exploration
Drilling
|
—
|
4.2
|
4.2
|
Wassa Main Pit and
Processing Plant
|
0.5
|
—
|
0.5
|
Wassa Tailings
Expansion
|
—
|
0.7
|
0.7
|
Wassa
Underground
|
4.0
|
2.4
|
6.4
|
Wassa Equipment
Purchase
|
0.8
|
1.2
|
2.0
|
Wassa
Subtotal
|
5.3
|
8.5
|
13.8
|
Prestea Exploration
Drilling
|
—
|
0.2
|
0.2
|
Prestea Open Pits and
Processing Plant
|
1.3
|
—
|
1.3
|
Prestea
Underground
|
1.7
|
—
|
1.7
|
Prestea
Subtotal
|
3.0
|
0.2
|
3.2
|
Consolidated
|
8.3
|
8.7
|
17.0
|
|
|
|
|
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
underground mines in Ghana,
West Africa. Listed on the NYSE
American, the Toronto Stock Exchange and the Ghana 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 2019 is 190,000 -
205,000 ounces at a cash operating cost per ounce1 of
$800-$850. 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.
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,
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
69,504
|
|
$
|
67,738
|
Cost of sales
excluding depreciation and amortization
|
|
|
46,798
|
|
48,873
|
Depreciation and
amortization
|
|
|
6,979
|
|
8,659
|
Mine operating
margin
|
|
|
15,727
|
|
10,206
|
|
|
|
|
|
|
Other
expenses/(income)
|
|
|
|
|
|
Exploration
expense
|
|
|
862
|
|
501
|
General and
administrative
|
|
|
5,491
|
|
6,166
|
Finance expense,
net
|
|
|
3,911
|
|
4,086
|
Other
expense/(income)
|
|
|
86
|
|
(1,105)
|
(Gain)/loss on fair
value of financial instruments, net
|
|
|
(4,793)
|
|
629
|
Income/(loss)
before tax
|
|
|
10,170
|
|
(71)
|
Income tax
expense
|
|
|
5,244
|
|
4,151
|
Net income/(loss) and
comprehensive income/(loss)
|
|
|
$
|
4,926
|
|
$
|
(4,222)
|
Net loss attributable
to non-controlling interest
|
|
|
(1,034)
|
|
(1,044)
|
Net income/(loss)
attributable to Golden Star shareholders
|
|
|
$
|
5,960
|
|
$
|
(3,178)
|
|
|
|
|
|
|
Net income/(loss)
per share attributable to Golden Star shareholders
|
|
|
|
|
|
Basic
|
|
|
$
|
0.05
|
|
$
|
(0.04)
|
Diluted
|
|
|
$
|
0.02
|
|
$
|
(0.04)
|
Weighted average
shares outstanding-basic (millions)
|
|
|
109.1
|
|
76.2
|
Weighted average
shares outstanding-diluted (millions)
|
|
|
123.3
|
|
76.2
|
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED BALANCE SHEETS
|
(Stated in
thousands of U.S. dollars)
|
(unaudited)
|
|
|
As
of
|
|
As
of
|
|
September 30,
2019
|
|
December 31,
2018
|
|
|
|
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
|
56,812
|
|
$
|
96,507
|
Accounts
receivable
|
5,681
|
|
3,213
|
Inventories
|
37,274
|
|
35,196
|
Prepaids and
other
|
4,873
|
|
5,291
|
Total Current
Assets
|
104,640
|
|
140,207
|
RESTRICTED
CASH
|
6,545
|
|
6,545
|
MINING
INTERESTS
|
298,008
|
|
270,640
|
DEFERRED TAX
ASSETS
|
—
|
|
595
|
Total
Assets
|
$
|
409,193
|
|
$
|
417,987
|
|
|
|
|
LIABILITIES
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
80,895
|
|
$
|
78,484
|
Current portion of
rehabilitation provisions
|
9,340
|
|
7,665
|
Current portion of
deferred revenue
|
12,351
|
|
14,316
|
Current portion of
long term debt
|
27,929
|
|
27,482
|
Current income tax
liabilities
|
2,235
|
|
—
|
Other
liability
|
—
|
|
6,410
|
Total Current
Liabilities
|
132,750
|
|
134,357
|
REHABILITATION
PROVISIONS
|
56,453
|
|
58,560
|
DEFERRED
REVENUE
|
101,314
|
|
105,632
|
LONG TERM
DEBT
|
67,447
|
|
73,224
|
DERIVATIVE
LIABILITY
|
3,138
|
|
4,177
|
DEFERRED TAX
LIABILITY
|
11,255
|
|
—
|
Total
Liabilities
|
372,357
|
|
375,950
|
|
|
|
|
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
|
909,846
|
|
908,035
|
CONTRIBUTED
SURPLUS
|
38,923
|
|
37,258
|
DEFICIT
|
(836,345)
|
|
(831,283)
|
Shareholders'
equity attributable to Golden Star shareholders
|
112,424
|
|
114,010
|
NON-CONTROLLING
INTEREST
|
(75,588)
|
|
(71,973)
|
Total
Equity
|
36,836
|
|
42,037
|
Total Liabilities
and Shareholders' Equity
|
$
|
409,193
|
|
$
|
417,987
|
|
|
|
|
|
|
GOLDEN STAR
RESOURCES LTD
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Stated in
thousands of U.S. dollars)
|
(unaudited)
|
|
|
|
Three Months
Ended
September 30,
|
|
2019
|
|
2018
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
Net
income/(loss)
|
$
|
4,926
|
|
$
|
(4,222)
|
Reconciliation of
net income/(loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
7,112
|
|
8,669
|
Share-based
compensation
|
614
|
|
2,164
|
Income tax
expense
|
5,244
|
|
4,151
|
(Gain)/loss on fair
value of 7% Convertible Debentures embedded derivative
|
(4,489)
|
|
629
|
Recognition of
deferred revenue
|
(2,645)
|
|
(4,154)
|
Reclamation
expenditures
|
(958)
|
|
(943)
|
Other
|
2,094
|
|
1,653
|
Changes in working
capital
|
(3,761)
|
|
2,824
|
Net cash provided by
operating activities
|
8,137
|
|
10,771
|
INVESTING
ACTIVITIES:
|
|
|
|
Additions to mining
properties
|
—
|
|
(85)
|
Additions to plant
and equipment
|
(98)
|
|
—
|
Additions to
construction in progress
|
(16,852)
|
|
(9,699)
|
Proceeds from asset
disposal
|
-
|
|
38
|
Change in accounts
payable and deposits on mine equipment and material
|
1,598
|
|
(426)
|
Net cash used in
investing activities
|
(15,352)
|
|
(10,172)
|
FINANCING
ACTIVITIES:
|
|
|
|
Principal payments on
debt
|
(2,661)
|
|
(4,112)
|
Exercise of
options
|
534
|
|
—
|
Net cash used in
financing activities
|
(2,127)
|
|
(4,112)
|
Decrease in cash and
cash equivalents
|
(9,342)
|
|
(3,513)
|
Cash and cash
equivalents, beginning of period
|
66,154
|
|
21,872
|
Cash and cash
equivalents, end of period
|
$
|
56,812
|
|
$
|
18,359
|
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 include
but are not limited to, statements and information regarding:
continuing to focus on increasing the rates of development and
definition drilling at Wassa; initiatives driving improvements to
productivity and costs at Prestea; the evaluation of potential
structural changes and incorporation of the recommendations of the
operational review into a redesigned life of mine plan at Prestea;
incremental improvement in the fourth quarter and maintaining both
cost and production guidance for 2019; an updated life of mine plan
in early 2020; Genser Ghana building and operating the Wassa Genser
Plant and supplying 16 MW of nominal power to Wassa and Phase I of
operations beginning mid-2020; lowering Wassa's power costs and
improving the reliability and quality of its power supply;
reporting drill results in the fourth quarter 2019; determining the
best way to take the Father Brown project forward; disclosing
updated resources and reserves in the year-end Mineral Resource and
Reserve statements; gold production of between 190,000 - 205,000
ounces in 2019; All-in Sustaining Cost and capital expenditures and
cash operating cost per ounce of $800-$850 for 2019.
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. 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 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, 2018 and in our
annual information form for the year ended December 31, 2018 as 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 news release, we use the terms "cash operating cost",
"cash operating cost per ounce", "all-in sustaining costs", "all-in
sustaining costs per ounce", "adjusted net (loss)/income
attributable to Golden Star
shareholders", "adjusted (loss)/income per share attributable to
Golden Star shareholders", "cash
provided by operations before working capital changes", and "cash
provided by operations before working capital changes per share -
basic".
"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, severance charges 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.
"Cost of sales per ounce" is equal to cost of sales excluding
depreciation and amortization for the period plus depreciation and
amortization for the period divided by the number of ounces of gold
sold (excluding pre-commercial production ounces sold) during the
period.
"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, materials and supplies write-off 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 or non-operating cash costs,
they are not necessarily indicative of operating profit or cash
flow from operations as determined under IFRS. Changes in numerous
factors including, but not limited to, 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. We believe 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.
"All-in sustaining costs" commences with cash operating costs
and then adds the cash component of metals inventory net realizable
value adjustments, royalties, sustaining capital expenditures,
corporate general and administrative costs (excluding share-based
compensation expenses and severance charges), and accretion of
rehabilitation provision. For mine site all-in sustaining costs,
corporate general and administrative costs (excluding share-based
compensation expenses and severance charges) are allocated based on
gold sold by each operation. "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 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. Share-based compensation expenses are also excluded
from the calculation of all-in sustaining costs as the Company
believes that such expenses may not be representative of the actual
payout on equity and liability based awards.
The Company believes that "all-in sustaining costs" will better
meet the needs of analysts, investors and other stakeholders of the
Company in understanding the costs associated with producing gold,
understanding the economics of gold mining, assessing the operating
performance and the Company's ability to generate free cash flow
from current operations and to generate free cash flow on an
overall Company basis. Due to the capital intensive nature of the
industry and the long useful lives over which these items are
depreciated, there can be a disconnect between net earnings
calculated in accordance with IFRS and the amount of free cash flow
that is being generated by a mine. 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.
Non-GAAP measures are intended to provide additional information
only and do not have standardized definitions under IFRS and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. These measures are
not necessarily indicative of operating profit or cash flow from
operations as determined under IFRS.
"Adjusted net (loss)/income attributable to Golden Star shareholders" is calculated by
adjusting net (loss)/income attributable to Golden Star shareholders for (gain)/loss on fair
value of financial instruments, share-based compensation expenses,
severance charges, loss/(gain) on change in asset retirement
obligations, and income tax expense. "Adjusted (loss)/income per
share attributable to Golden Star
shareholders" for the period is "Adjusted net (loss)/income
attributable to Golden Star
shareholders" divided by the weighted average number of shares
outstanding using the basic method of earnings per share.
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
three months ended September 30, 2019, which are available at
www.sedar.com.
Technical Information
The Mineral Reserve and Mineral Resource estimates have been
compiled by the Company's technical personnel in accordance with
definitions and guidelines set out in the Definition Standards for
Mineral Resources and Mineral Reserves adopted by the Canadian
Institute of Mining, Metallurgy, and Petroleum and as required
by Canada's National Instrument 43-101 - Standards of
Disclosure for Mineral Projects ("NI 43-101"). Mineral Reserve
estimates reflect the Company's reasonable expectation that all
necessary permits and approvals will be obtained and maintained.
Mining dilution and mining recovery vary by deposit and have been
applied in estimating the Mineral Reserves.
The Mineral Resource technical contents of this press release
have been reviewed and approved by S. Mitchel Wasel, BSc Geology, a
"Qualified Person" pursuant to NI 43-101. Mr. Wasel is Vice
President Exploration for Golden
Star and an active member of the Australasian Institute
of Mining and Metallurgy. The Mineral Reserve technical contents of
this press release have been reviewed and approved by and were
prepared under the supervision of Dr. Martin Raffield, Senior Vice President, Project
Development and Technical Services for the Company. Dr. Raffield is
a "Qualified Person" as defined by NI 43-101.
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 Resources and Reserves, Golden Star Resources,
Wassa Gold Mine, Ghana" effective date December 31, 2018; and (ii) Prestea Underground -
"NI 43-101 Technical Report on Resources and Reserves, Golden Star
Resources, Bogoso/Prestea Gold Mine, Ghana" effective date December 31, 2017.
Cautionary Note to US Investors Concerning Estimates of
Measured and Indicated Mineral Resources
This press release uses the terms "Measured Mineral Resources"
and "Indicated Mineral Resources". The Company advises US investors
that while these terms are recognized and required by NI 43-101,
the US Securities and Exchange Commission ("SEC") does
not recognize them. Also, disclosure of contained ounces is
permitted under Canadian regulations; however
the SEC generally requires Mineral Resource information
to be reported as in-place tonnage and grade. US Investors are
cautioned not to assume that any part or all of the mineral
deposits in these categories will ever be converted into Mineral
Reserves.
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SOURCE Golden Star Resources Ltd.