Wassa Underground delivers strong production
due to higher than expected grade and productivity
TORONTO, April 11, 2018 /CNW/ - Golden Star Resources
(NYSE American: GSS; TSX: GSC; GSE: GSR) ("Golden Star" or the
"Company") is pleased to announce its production results for the
first quarter of 2018.
HIGHLIGHTS
- 57,616 ounces of gold production in the first quarter of 2018,
in line with the first quarter of 2017 (57,795 ounces)
- Gold production by operation in the first quarter of 2018, as
follows:
-
- Wassa complex: 35,506 ounces
- Prestea complex: 22,110 ounces
- Stronger than expected production from the Wassa Underground
Gold Mine ("Wassa Underground") during the first quarter of
2018
-
- 12% increase in grade of underground ore to 4.54 grams per
tonne ("g/t") of gold ("Au") in the first quarter of 2018 compared
to the fourth quarter of 2017
- Average mining rate achieved of 2,400 tonnes per day ("tpd") in
the first quarter of 2018, exceeding the Company's average targeted
mining rate of approximately 2,300 tpd in first quarter of
2018
- Average mining rate of 2,600 tpd during March 2018
- Mining sequence at the Prestea Underground Gold Mine ("Prestea
Underground") continues to strengthen, with final draw down of the
second stope expected to commence in mid-April 2018
- Consolidated cash balance of $26.2 million as
at March 31, 2018
-
- Severance payments relating to the Wassa Main Pit workforce are
largely complete
- Golden Star is on track to
achieve its full year ("FY") 2018 consolidated gold production
guidance
Sam Coetzer, President and
Chief Executive Officer of Golden
Star, commented:
"At the end of the first quarter of 2018, Golden Star is on track to achieve its 2018 gold
production guidance. Wassa's strong performance following the
cessation of open pit production continues to confirm the
robustness of the underground operation, both in terms of grade and
productivity. The majority of the open pit workforce
severance charges are now behind us and we believe that Wassa's
performance will strengthen further as the year progresses.
At Prestea Underground, we remain confident in our chosen
mining method and in our ability to deliver high grade production
to plan. The mining sequence continues to improve and we
expect that by the middle of the second quarter of 2018, production
will have begun to ramp up. Golden
Star has two cornerstone assets and this provides us with
important flexibility as we transition the company into a primarily
underground-focused producer."
FIRST QUARTER OF 2018 PRODUCTION RESULTS
Golden Star produced 57,616
ounces of gold in the first quarter of 2018. At the end of
the period, the Company is on track to achieve its full year 2018
gold production guidance.
Despite the cessation of production from the Wassa Main Pit
during January 2018, gold production
during the first quarter of 2018 was in line with production in the
first quarter of 2017. This is primarily as a result of the
strong production from Wassa Underground.
As at March 31, 2018, Golden
Star had a consolidated cash balance of $26.2
million.
Wassa Complex
Gold production from the Wassa complex in the first
quarter of 2018 was 35,506 ounces. Although this represents a
15% decrease (6,495 ounces) compared to the fourth quarter of 2017,
the first quarter of 2018 was the first quarter of primarily
underground production (in the fourth quarter of 2017, the open pit
delivered approximately 50% of the total ounces), demonstrating the
robustness of the underground operation.
The grade of the underground ore in the first quarter of 2018
increased by 12% to 4.54 g/t Au, compared to the fourth quarter of
2017. Mining rates at Wassa Underground also continued to
exceed expectations, at approximately 2,400 tpd on average in the
first quarter of 2018, which represents a 26% increase compared to
1,900 tpd in the fourth quarter of 2017. During March 2018, the mining rate exceeded 2,600
tpd.
The targeted average mining rate for Wassa Underground in FY
2018 is 2,700-3,000 tpd, but the Company expected to achieve an
average of 2,300 tpd during the first quarter of 2018. The
mining team is well-positioned to continue to increase the tonnage
profile in 2018 and beyond, with the mining sequence working well
and an increasing number of stopes prepared and
developed.
Gold production ceased from the Wassa Main Pit in January 2018, as planned, however, stockpiled ore
will continue to be fed to the processing plant until the end of
the third quarter of 2018.
Prestea Complex
Gold production from the Prestea complex was 22,110 ounces in
the first quarter of 2018. At Prestea Underground, the
problems experienced with the blasting of the first stope, which
were described in the press release dated January 11, 20181, continued during
the period. As a result, the blasted ore from the first stope
contained higher than anticipated levels of dilution. However the
mining team learnt important lessons from the first stope and
further changes have been made to drill design patterns, blasting
practice, raise layouts and stope ventilation, in order to address
these dilution issues.
As a result, the performance of the second stope is expected to
be much stronger. The blasting of the second stope is
anticipated to be completed in the coming days and the final draw
down of ore is expected to commence in mid-April 2018. The
mucking of the swell ore from the second stope has begun and it is
performing in line with the grades forecasted in the block
model.
The operational management team at Prestea Underground has also
been strengthened during the first quarter of 2018, with the
objective of delivering continuous improvement to the mine's
performance. Golden Star's
management team expects the mine's performance to strengthen
significantly during the second quarter of 2018.
Notes
|
1.
|
See press release
entitled, 'Golden Star Achieves 2017 Production Guidance and
Provides Guidance for 2018', dated January 11, 2018
|
FIRST QUARTER OF 2018 FINANCIAL RESULTS
Golden Star is planning to release its Financial Results
for the first quarter of 2018 after market close on May 2,
2018. The Company's cash operating cost per
ounce2 and All-In Sustaining Cost per
ounce2 for the first quarter of 2018 will also be
reported at that time.
The Company will conduct a conference call and webcast to
discuss these results on May 3, 2018
at 09:30 am ET. The access
details are as follows:
Toll Free (North America): +1 866 393 4306
International: +1 734 385 2616
Conference ID: 9894939
Webcast: www.gsr.com
A recording and webcast replay of the call will be available at
www.gsr.com following the call.
Notes
|
2.
|
See "Non-GAAP
Financial Measures".
|
EUROPEAN GOLD FORUM
Golden Star will be attending the
European Gold Forum in Zurich,
Switzerland on April 17-19,
2018. Golden Star's President
and Chief Executive Officer, Sam
Coetzer, will be presenting on April
18, 2018 and a webcast of the presentation will be available
at www.gsr.com in the days that follow.
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 timing for
the final draw down of the second stope and Prestea Underground;
the ability to achieve FY 2018 consolidated gold production
guidance; production at Prestea Underground ramping up in the
second quarter of 2018; stockpiled ore from Wassa Main Pit
continuing to be fed to the processing plant until the end of the
third quarter of 2018; the ability to address dilution problems at
Prestea Underground; the management team's ability to continue
improvements to Prestea Underground's performance; and Prestea
Underground's performance during the second quarter of 2018
reflecting significant improvements compared to the first quarter
of 2018. 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", "will
be taken", "occur", "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 are included in our annual information form
for the year ended December 31, 2017
which was 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.
"All-In Sustaining Costs" commences with cash operating costs
and then adds the cash component of metals net realizable value
adjustment, sustaining capital expenditures, corporate general and
administrative costs (excluding share-based compensation expenses)
and accretion of rehabilitation provision. "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.
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.
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SOURCE Golden Star Resources Ltd.