TORONTO, May 6, 2020 /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 first quarter ended March 31, 2020.
Q1 2020 Highlights:
- There have been no confirmed COVID-19 cases across our
workforce and the operations have continued. Proactive management
controls have been implemented to mitigate the potential risk posed
by COVID-19 to our employees, host communities and operations.
- Q1 2020 production totaled 50.0 thousand ounces ("koz"),
compared to 53.3koz in Q1 2019.
- Wassa produced 40.3koz with the underground mining rate
averaging 4,320 tonnes per day ("tpd") of ore.
- Prestea produced 9.6koz as development aimed at bringing in a
second mining level later in the year progressed.
- The final Q1 2020 gold shipment was delayed due to changes in
commercial flight schedules related to COVID-19, resulting in a
4.3koz increase of doré on hand at the end of the quarter. The
shipment and sale was completed at the beginning of April 2020.
- The All-In Sustaining Cost per ounce sold ("AISC") was
$1,201 per ounce ("/oz"), or
$1,165 per ounce produced.
- Q1 2020 cash flow from operations totaled $13.4 million ("m") (before working capital
changes).
- Cash of $41.9m at March 31, 2020 and debt of $107.3m for net debt of $65.4m. Adjusted for the delayed shipment cash
was $48.1m with net debt of
$59.2m.
- As announced in the mineral resource and reserve update
(March 27, 2020), the Wassa
underground delivered significant mineral resource growth with
measured and indicated mineral resources increasing 18%, or 306koz
to 2.03 million ounces ("Moz") and the inferred mineral resources
increasing 19% (or 1.15Moz) to 7.1Moz.
Table 1 - Q1 2020 PERFORMANCE SUMMARY:
|
|
Q1 2020
|
Q1 2019
|
YoY %
change
|
Q4 2019
|
QoQ %
change
|
Production and
cost highlights
|
|
|
|
|
|
|
Production -
Wassa
|
koz
|
40.3
|
42.9
|
(6)%
|
41.3
|
(2)%
|
Production -
Prestea
|
koz
|
9.6
|
10.4
|
(8)%
|
11.3
|
(15)%
|
Total gold
produced
|
koz
|
50.0
|
53.3
|
(6)%
|
52.7
|
(5)%
|
Total gold
sold
|
koz
|
45.6
|
53.5
|
(15)%
|
53.4
|
(15)%
|
Average realized gold
price
|
$/oz
|
1,477
|
1,257
|
18%
|
1,410
|
5%
|
|
|
|
|
|
|
|
Cash operating cost
per ounce - Wassa1
|
$/oz
|
632
|
552
|
14%
|
615
|
3%
|
Cash operating cost
per ounce - Prestea1
|
$/oz
|
1,778
|
1,463
|
21%
|
1,616
|
10%
|
Cash operating
cost per ounce - Consolidated1
|
$/oz
|
860
|
731
|
18%
|
831
|
3%
|
All-In Sustaining cost
per ounce - Wassa1
|
$/oz
|
941
|
760
|
24%
|
959
|
(2)%
|
All-In Sustaining cost
per ounce - Prestea1
|
$/oz
|
2,248
|
1,865
|
21%
|
2,202
|
2%
|
All-In Sustaining
cost per ounce - Consolidated1
|
$/oz
|
1,201
|
976
|
23%
|
1,227
|
(2)%
|
Financial
highlights
|
|
|
|
|
|
|
Gold
revenues
|
$m
|
67.4
|
67.3
|
—
|
66.1
|
2%
|
Adj.
EBITDA
|
$m
|
17.2
|
18.5
|
(7)%
|
16.2
|
6%
|
Adj.
income/(loss)/share attributable to Golden Star shareholders -
basic1
|
$/share
|
(0.01)
|
0.02
|
(150)%
|
(0.03)
|
(67)%
|
|
|
|
|
|
|
|
Cash provided by
operations before working capital changes
|
$m
|
13.4
|
14.9
|
(10)%
|
9.4
|
43%
|
Changes in working
capital
|
$m
|
(9.8)
|
(15.5)
|
37%
|
3.7
|
(365)%
|
Cash outflow from
investing activities
|
$m
|
(15.1)
|
(11.3)
|
(5)%
|
(25.1)
|
(40)%
|
Free cash
flow
|
$m
|
(11.6)
|
(11.9)
|
(3)%
|
(12.0)
|
(3)%
|
|
|
|
|
|
|
|
Cash
|
$m
|
41.9
|
81.9
|
(49)%
|
53.4
|
(22)%
|
Net Debt
|
$m
|
65.4
|
17.4
|
276%
|
53.4
|
22%
|
Andrew Wray, Chief Executive
Officer of Golden Star, commented:
"At any time, the number one priority for us as a company is the
overall health, safety and wellbeing of our employees and host
communities. The COVID-19 pandemic has brought this sharply
into focus and it has been enormously gratifying to see the level
of dedication and collaboration between our employees, our host
communities and the Government of Ghana in focussing on this priority and at the
same time enabling mining operations to continue as an important
contributor to the local and national economies. I would like to
thank the Golden Star team across our two operations and in the
corporate offices for their diligent work in ensuring that
production is sustained through the implementation of controls
intended to protect our people and host communities, alongside
careful management of the supply chain and sales channels.
Given the unprecedented nature of the pandemic, it is pleasing
to see the operations deliver a first quarter production and cost
performance that is in line with our expectations, leaving us on
track to deliver on our guidance for 2020. Wassa continues to
deliver impressive volume growth and our focus remains on
accelerating development and definition drilling to deliver
improved operational flexibility and consistency. We also expect an
improvement in the grade profile as we go through the year, and
this is already being demonstrated in the current quarter.
We were saddened by the tragic accident at Prestea in March that
resulted in the fatality of a colleague. Following a thorough
investigation of the accident we are implementing corrective
actions to prevent similar incidents from occurring again. We are
also reinforcing our wider health and safety policies to continue
our commitment to building an engaged, safety focused culture.
We continued to invest in developing the new mining method and
mining area at Prestea as well as optimizing the existing Alimak
mining areas during Q1 2020. Performance remains challenging with a
lack of flexibility of the Alimak stoping area on the current 24
Level, with the new 17 Level long hole open stoping ("LHOS")
production due to come online in H2 2020. The 17 Level Decline
development is progressing with ore drives now in development,
setting up of infrastructure such as ventilation and maintenance
workshop, as well as a comprehensive operational readiness plan for
the new mining method. Some of the new fleet for this area has
already arrived at site, while other equipment is likely to see a
small delay given the current dislocation in global logistics.
Our cash position reduced by $11.5m in the quarter due to a $9.8m cash outflow to working capital,
$0.9m of non-recurring general and
administrative expense relating to the transition of the corporate
office to London, United Kingdom
and $0.6m of non-recurring other
expenditure. As such, on an underlying basis the business was near
cash break-even in Q1 2020, a period where we continued to invest
heavily in the longer term future of our operations. As the grades
improve at Wassa and the optimization of Prestea performance
progresses through the year, we expect to see improved cash
generation in the business."
First Quarter 2020 Conference Call Details
The Company will conduct a conference call and webcast on
Thursday, May 7, 2020 at 09.30 am ET.
Toll Free (North America): +1
833 231 8263
Toronto Local and International: +1 647 689
4108
Toll Free (UK): 0800 051 7107
Conference
ID: 7655568
Webcast:
https://event.on24.com/wcc/r/2161486/C9E0DE3F3C309757FB36D3724F57ACEF
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.
KEY EVENTS - Q1 2020
COVID-19 pandemic
- Safety - Golden Star continues to take a leadership position
and proactively manage risks associated with COVID-19 in
Ghana. As a major employer and
therefore catalyst for rural economic stimulus in our host
communities, we share the dual responsibility of knowing that our
continued operations are also critical to the health and well-being
of our workforce and the thousands of people that they support both
directly and indirectly. In cognizance of these over-lapping
responsibilities, our COVID-19 management is highly prevention
focused and proactive - to date there have been no confirmed
COVID-19 cases amongst our workforce. More information on our
COVID-19 management controls can be found at
www.gsr.com/responsibility/COVID-19
- Cash conservation - To mitigate the risk of an escalation of
the pandemic impacting on our balance sheet, non-essential spending
(such as exploration and spend on non-critical spares) has been
deferred until such time that the risk level is reduced, and we are
pursuing other cost improvement initiatives. All operational and
sustaining capital expenditure that is required to meet budgeted
production levels continues.
- Supply chain - Supply chains for the key consumables, including
cyanide, lime, grinding media, fuel and lubricants, remain intact
and are routinely monitored. Alternative suppliers have been
identified for essential supply chains, and additional medical and
pharmaceutical supplies and facilities have been secured. Lead
times on certain equipment, such as some of the new fleet for 17
Level at Prestea, have increased and we are factoring this into our
planning.
- Gold sales - The reduced number of commercial flights resulting
from the pandemic posed a risk to the Company's ability to
transport doré to refining facilities in South Africa. Alternative logistics
arrangements have been made and exports have been able to continue
through Q1 2020 and thereafter, albeit with some additional cost
and delay in sales.
- Executive Committee and Board remuneration - The Executive
Committee and the Board of Directors ("the Board") have elected to
implement a 25% deferral on their salaries and fees, respectively,
as part of the Company's pandemic management response plan with the
intention to preserve cash, together with a deferral of any bonus
payments due to the members of the Executive Committee relating to
2019. This will remain under review until such time as the
pandemic management response plan can be de-escalated.
- So far, our proactive response has minimized the impact of
COVID-19 on our operating performance but there is no assurance
this will continue to be the case and as a result we have also
implemented detailed contingency planning to preserve value in the
business in the event the operating environment deteriorates.
Wassa mining rates and grades
- Wassa continued to deliver higher than budgeted mining rates in
Q1 2020 while maintaining low per tonne unit costs. Mining rates
exceeded 4,320tpd through Q1 2020, which offset the impact of
mining in lower grade areas. The mining rate is expected to
continue to exceed 4,000tpd for the remainder of 2020 and the grade
is expected to improve during Q2 2020. We have also taken the
decision to selectively process some of our low grade stockpiles in
the current gold price environment by utilizing latent capacity in
our process plant. While this will not make a material difference
to overall performance it will contribute additional cash flow
which is valuable during the current uncertain environment.
Prestea optimization
- The current Alimak mining areas on 24 Level are being optimized
to improve orebody definition, reduce stope cycle time, and reduce
dilution. We expect Alimak performance to improve later in 2020
once the first fully optimized stopes (S16, S19 and N1) come into
production. Development has commenced on 17 Level for the
introduction of LHOS and ore drives are now starting to be
developed. The changes being made during 2020 aim to improve
operational flexibility and should result in an improved mining
rate in excess of 500tpd on a consistent basis. While the new
Alimak stopes are being developed, the Company is reliant on a
limited number of stopes, therefore any operational issues in these
stopes can have a significant impact on ore availability, as was
seen in Q1 2020.
Fatality at Prestea
- We were deeply saddened to report a fatal incident at our
Prestea underground operation in March. We continue to provide
support to the family and friends of Francis Enyimah in the wake of
this terrible incident. Corrective actions based on a detailed
investigation are being implemented and aim to prevent similar
incidents from occurring in the future. These policies and
procedures are being implemented in conjunction with the
Inspectorate Division of the Minerals Commission of Ghana.
Sustainability
- We released our Policy on Inclusion and Diversity in March to
mark International Women's Day and the 25th anniversary of the
adoption of the Beijing Declaration and Platform for Action (1995),
which is considered the most progressive blueprint for advancing
women's rights. The Policy was developed through engagement with
employees and the specialist human resources and community affairs
teams and has been ratified by the Board and endorsed by the
Executive Committee.
Updated mineral reserve and resource estimates
- The proven mineral reserve at Wassa increased by 87% to 228koz
due to increased definition and infill drilling, which resulted in
more than 12 months of mineral reserves being available in the
highest confidence reserve category supporting production in 2020
and 2021. The probable mineral reserve is 661koz for a total proven
and probable mineral reserve of 889koz at 3.7g/t.
- The group measured and indicated mineral resources increased by
5% to 4.5Moz of gold. The total inferred mineral resource increased
by 13% to 8Moz. This growth was led by Wassa Underground which
delivered a 306koz increase in the measured and indicated resources
to total 2.03Moz and a 1.15Moz increase in the inferred resource
which now totals 7.1Moz.
RECENT EVENTS - Post Q1 2020 period end
Class action
- A federal securities class action complaint was filed against
the Company in April 2020 before the
US District Court in the State of
California, USA, on behalf of persons or entities that
purchased or otherwise acquired the Company's common stock on the
New York Stock Exchange from February 20,
2019 through July 30, 2019
inclusive. The complaint alleges that the Company published false
and misleading statements to artificially inflate the price of its
common shares, thus violating the US Securities Exchange Act of
1934.
- The Company believes that these allegations are entirely
without merit and intends to vigorously defend the claim.
2020 PRODUCTION, COST AND CAPITAL EXPENDITURE GUIDANCE
UNCHANGED
With the progress made in our operations during Q1 2020, the
full year 2020 production guidance of 195-210koz and
AISC1 guidance of $1,080-1,180/oz remain unchanged. Our priority
remains the delivery of a range of operational initiatives aimed at
improving the consistency of the operations and visibility of their
longer-term potential.
Table 2 - 2020 Outlook: (as announced on January 22, 2020)
Asset
|
Gold Production
(koz)
|
Cash Operating
Cost1 ($/oz)
|
AISC1
($/oz)
|
Sustaining
Capital2 ($
millions)
|
Development
Capital2 ($
millions)
|
Total Capital
Expenditures ($
millions)
|
|
|
|
|
|
|
|
Wassa
Complex
|
155-165
|
620-660
|
930-990
|
23-25
|
19-21
|
42-46
|
|
|
|
|
|
|
|
Prestea
Complex
|
40-45
|
1,400-1,550
|
1,650-1,850
|
6.5-7.5
|
2.5-3
|
9-10.5
|
|
|
|
|
|
|
|
Capitalized
exploration
|
-
|
-
|
-
|
-
|
3.5
|
3.5
|
|
|
|
|
|
|
|
Consolidated
|
195-210
|
790-850
|
1,080-1,180
|
29.5-32.5
|
25-27.5
|
55-60
|
Notes:
|
1.
|
See "Non-GAAP
Financial Measures".
|
2.
|
Development capital
are those costs incurred at new operations and costs related to
major projects at existing operations where these projects will
materially increase production. All other costs relating to
existing operations are considered sustaining capital.
|
SUMMARY OF CONSOLIDATED OPERATIONAL AND FINANCIAL RESULTS -
Q1 2020
Group production from the two operations was 50.0koz in Q1 2020,
3.3koz (6%) lower than the 53.3koz in Q1 2019. Wassa produced
40.3koz of this and Prestea produced 9.6koz. On a consolidated
basis, the ore grade processed was 18% lower than in Q1 2019 which
was in part offset by an increase of 14% in tonnes processed.
Total gold sold amounted to 45.6koz for Q1 2020, 4.3koz lower
than production in Q1 2019 and 7.8koz (15%) lower than gold sales
in Q1 2019. The difference between production and sales in Q1 2020
was due to the rescheduling of the final Q1 2020 gold doré shipment
as a consequence of COVID-19 - the last shipment of the quarter was
successfully completed in the first week of April, 2020. The
subsequent shipments have continued without interruption, despite
COVID-19 related challenges.
The Q1 2020 AISC of $1,201/oz
reflects an increase of 23% compared to the Q1 2019 AISC of
$976/oz and a 4% increase on the AISC
reported for the full year in 2019 of $1,159/oz. Cash operating costs per ounce of
$860 reflect an 18% increase on Q1
2019 of $731 per ounce which was due
to:
- Lower volume production base
- Increased mine operating cost base as a result of higher mining
and processing volumes
- Inflationary pressure on labour and overhead cost
Furthermore, non-recurring corporate general and administrative
expenses incurred as part of the relocation of the corporate office
team from Toronto to London of $0.9m
or $20/oz and the impact of the
completion of the deferred shipment as reflected in the lower sales
base had a further adverse impact on AISC. AISC calculated on the
basis of gold ounces produced amounted to $1,165/oz for Q1 2020 compared to $975/oz in Q1 2019 and $1,163/oz for the full year 2019.
Wassa Operational Overview
Gold production
from Wassa was 40.3koz in Q1 2020, a 6% decrease from the 42.9koz
produced during the same period in 2019. The decrease is
predominantly attributable to the average feed grade of 2.83g/t
compared to 3.91g/t in Q1 2019. Throughput was increased to 438,725
tonnes in Q1 2020, 20% higher than the 366,790 tonnes achieved in
Q1 2019. This comprised of 419,373 tonnes from the underground,
compared to 326,747 tonnes in the same period in 2019. The Wassa
Underground mining rates have therefore increased to an average of
4,320 tpd in Q1 2020, 19% higher than the 3,630 tpd achieved in the
same period in 2019.
Recovery
Recovery from the Wassa processing plant
remained robust at 95.0% in Q1 2020, despite the 28% reduction in
the processed ore grade. The year-on-year change in the recovery
being limited to 1% demonstrates the low level of sensitivity to
grade at the operation.
Wassa Underground
Wassa Underground produced 39.9koz
of gold (or approximately 99% of Wassa's total production) in the
first quarter of 2020, compared to 42.1koz in the same period in
2019 (or approximately 98% of Wassa's total production). This 5%
decrease in production was primarily due to a lower underground
grade of 2.93g/t compared to 4.31g/t in Q1 2019. During Q1 2020,
mining at Wassa focused on lower grade areas in Panel 2. The higher
mining rates help to demonstrate the future potential of the mine
to increase production rates and allow for the inclusion of lower
grade areas in the mine plan. The continued investment in
development and definition drilling at the underground operation
through 2020 is expected to create flexibility and consistency in
the mining operations.
Wassa Main
Pit/Stockpiles
Low grade stockpiles from the
historical Wassa Main Pit were
blended with the Wassa Underground ore during the first quarter of
2020. This amounted to 19,352 tonnes at an average grade of 0.64
g/t and yielded 453 ounces of gold, compared to 806 ounces in the
same period in 2019. Given the current gold price environment, the
Wassa management team has identified the opportunity to process low
grade stockpiles. At the end of Q1 2020 there were an estimated
460,000 tonnes of low grade stockpiles available at an average
grade of 0.64g/t. The processing of these stockpiles will continue
for the remainder of the year unless the gold price environment
changes.
Costs
Cost of sales per ounce increased by 18% to
$852, cash operating cost per ounce
increased by 15% to $632 and AISC per
ounce increased by 24% to $941 for Q1
2020 in comparison to the same period in 2019 - this was
predominantly due to a decrease in gold sold as a result of the
lower average feed grade as well as deferral of the last shipment
of the quarter which resulted in a lower comparable sales base. The
increased corporate general and administrative costs allocated to
sites on a sold ounce basis has also impacted on Wassa's AISC. The
AISC reduces to $915/oz when
calculated on a production basis, rather than a sales basis.
Projects update
In order to equip the mine for its
future as a long life, low cost operation a number of projects are
being progressed in 2020. These projects included the following
initiatives:
- Electrical upgrade - This is a more significant infrastructure
project which is intended to support the mine plan for the next
five years. The civils related work for the installation of the
electrical substation is currently ongoing and is expected to be
completed in conjunction with the completion of the paste fill
project. Work to upgrade the underground electrical infrastructure
is progressing alongside the substation project.
- Paste fill plant project - The paste fill plant project at
Wassa continued to progress in Q1 2020 and it is currently at 69%
completion with long lead items ordered and early works contracts
now awarded. Construction of the paste fill plant is expected to be
completed in Q3 2020 with commissioning in Q4 2020. This project
will provide additional flexibility in the mine plan and assist
with our intention to increase mining rates in order to further
improve the scale and margins at the operation.
In the 2019 results press release we commented that there was
risk of delay to components and equipment relating to the paste
fill plant being shipped from China. That equipment is now in transit and is
not currently expected to impact the critical path for
construction.
Capital expenditures
Capital expenditures for Q1 2020
was $9.6m compared to $11.1m during the same period in 2019 as the
Wassa management team continued to focus efforts on critical
development spend in order to support the long term development of
the underground operation. Key capital spending included:
- $4.6m on the paste fill plant
project which is earmarked for commissioning during Q4 2020
- $4.0m on capitalized underground
development activities
- $0.4m on mobile equipment
- $0.2m on the electrical upgrade
project
Prestea Operational Overview
Gold production
from Prestea was 9.6koz in Q1 2020, compared with 10.4koz produced
during the same period in 2019. Although plant throughput of
132,301 tonnes is comparable to Q1 2019, the proportion of ore
processed from Prestea Open pits in Q1 2020 (76%) was 7% higher
than in Q1 2019. As the grade of the ore from the open pit is
significantly lower than ore from the Prestea underground mine
("Prestea Underground"), a lower blended feed grade of 2.63g/t was
delivered to the plant which impacted overall recoveries as
reflected in the lower recovery rate of 86%.
Prestea Open Pits
The Prestea open pits produced
4.0koz in Q1 2020, compared to 3.0koz in the same period in 2019.
Production from the open pits increased as a result of a 15%
increase in the feed grade to 1.52g/t and a 5% increase in ore
tonnes processed. Open pit mining continued throughout Q1 2020 and
is currently expected to be completed during Q2 2020 following the
completion of mining of the remaining oxide material. Open pit
mining comprises a number of small satellite deposits on the
Prestea/Bogoso land package which are continuously explored for
shorter term opportunities to supplement underground mining
activities.
Prestea Underground
Prestea Underground produced
5.7koz in Q1 2020 compared to 7.3koz in the same period in 2019.
This is due to a 17% decrease in ore tonnes processed to 32,196
tonnes and a 3% reduction in the feed grade to 6.09 g/t.
Stoping activities during the quarter continued to be focused on
the Alimak mining areas on 24 Level. Short term constraints in ore
availability and dilution resulted in lower tonnes and grade
mined.
Mining continues in the southern stopes on 24 Level, namely S13,
S14 and S15 in conjunction with the development of S16, S19 and N1
(the first northern stope). As highlighted in the Q4 2019 and Full
Year 2019 results, some of the higher grade ore locked up in S13
was expected to be released when mining progressed through S14 in
Q1 2020. As this was only partially realized, the ore was
predominantly sourced from S14, and S15 started to contribute ore
towards the end of the quarter. Development of 17 Level continued
in Q1 2020 ahead of the first LHOS ore being planned for later in
the year.
Costs
Cost of sales per ounce increased 10% to
$2,054, cash operating cost per ounce
increased 21% to $1,778 and the AISC
increased 21% to $2,248/oz for the
first quarter of 2020 compared with the same period in 2019. This
is attributable to the lower gold sales as a consequence of lower
underground production and the deferral of the last gold shipment
of the quarter (528 ounces). Furthermore, increased sustaining
capital costs and corporate general and administrative costs
allocated to sites on a sold ounce basis have negatively impacted
on the Prestea AISC. The AISC reduces to $2,210/oz when it is calculated on a production,
rather than a sales basis.
Capital expenditures
Capital expenditures for Q1 2020
was $2.6m compared to $2.1m during the same period in 2019.
Spending during Q1 2020 focused on lateral and decline development
at Prestea Underground ($1.2m) and
drilling and mining equipment ($0.7m)
relating to the introduction of LHOS on 17 Level.
Prestea Optimization Project
Following the
completion of CSA Global's independent review and phase 2 design,
the implementation of a revised mining plan continues to progress
at the Prestea Underground. Extraction of material from the 17
Level to the 21 Level has been redesigned for LHOS and development
has commenced with the new design using conventional equipment.
Orders have been placed to mechanize the LHOS zones which include a
development jumbo, long hole drill, an additional loader (scoop)
and a small truck to haul material back to 17 Level. The jumbo was
scheduled for delivery during H1 2020, following which the Company
expected to see significant improvement in development
productivity. While the delivery of the jumbo is still expected in
H1 2020, the COVID-19 pandemic has had an adverse impact on the
scheduling of certain drilling and mining equipment which may cause
a delay to 17 Level stoping activities. The first stope was planned
to come to production in Q3 2020, however, equipment and labour
hiring delays caused by the COVID-19 pandemic may move this to Q4
2020.
The Alimak production is currently focused on 24 Level. The
stopes have been redesigned to reduce the overall hanging wall span
as recommended by CSA Global, and investment in ventilation
infrastructure will now allow for production from both the southern
and northern stopes. The optimization initiatives aim to reduce
dilution and improve the stope cycle time. This is achieved by
reducing the height of the stopes where possible to improve travel
times and stope turnover rates. Where the height cannot be reduced
due to lack of access, the strike length of the stopes has been
reduced to improve stability. A slightly narrower Alimak platform
is being trialled in S16 and S19 to reduce overall dilution
levels.
At this point in time, the Company is investing in the
development of the optimized southern stopes in parallel with
establishing the northern stopes on 24 Level. These new stopes are
expected to come to production from Q3 2020, beyond which point it
is hoped that the improved mining flexibility and lower dilution
should start to transition the operation towards cash flow
breakeven by the year end.
EXPLORATION
In response to the COVID-19 pandemic, the Company proactively
scaled back field exploration activities in March 2020 and reduced contract staff by the end
of April 2020. As a consequence, the exploration spend in Q1
2020 was limited to $1.0m of which
$0.7m was expensed and $0.3m was capitalized.
Wassa
During the first quarter of 2020, exploration
activities focused on drill testing high-grade extensions of known
footwall zones to the main mining area (B-Shoot). Two holes
were drilled from Wassa Underground - these intersected the
interpreted projections of the mineralized structures demonstrating
significant alteration and structure, however, they were generally
only anomalous gold values of insufficient value to be economically
viable. The drill results are currently undergoing review and
the exploration team will be assessing whether further drilling is
warranted in the footwall zones later in the year.
Exploration activities for the remainder of H1 2020 will
concentrate on the compilation of the existing data sets to
delineate further targets to be tested in H2 2020 and beyond.
HBB (including Father Brown)
Prior to the suspension
of exploration activities in March
2020, the field work involved validation of prospects
budgeted for follow-up programs later this year. Five targets
were visited to conduct reconnaissance prospecting and mapping,
with a full set of results expected to be received in early Q2
2020. These targets were ranked as the top five prospects to
test further this year, with infill soil sampling and air core
drilling. The field exploration programs are planned to
resume once the Company removes travel restrictions and isolation
protocols resulting from the COVID-19 pandemic.
In 2020, the greenfield and brownfield exploration programs are
expected to focus on near mine targets in and around Wassa and
Prestea, as well as on regional exploration targets within the
Wassa-HBB Corridor. A total of $6.2m
($3.5m budget for capitalized
exploration and $2.7m for expensed
exploration) has been allocated for exploration programs across the
project portfolio.
FINANCIAL PERFORMANCE SUMMARY
Please see the separate financial statements and MD&A for
the detailed discussion on the Q1 2020 financial results.
Consolidated Financial Performance
Gold revenue was $67.4m in Q1
2020, in line with the $67.3m
achieved in the same period in 2019. Relative to Q1 2019, Q1 2020
benefited from an 18% increase in the average realized gold price
to $1,477/oz, offset by a 15%
decrease in gold sold to 45.6koz. Average realized gold price
for spot sales was $1,555/oz (Q1 2019
- $1,304/oz) whereas average realized
gold price per ounce for the stream arrangement was $806/oz (Q1 2019 - $874/oz). Gold sold was impacted by the
lower production base and the impact of the deferred shipment
following the change in the shipment scheduling caused by the
COVID-19 pandemic.
Cost of sales (excluding depreciation and amortization) totaled
$42.9m in Q1 2020 compared to
$43.8m in Q1 2019. Mine
operating expenses of $42.5m were
$2.5m higher compared to Q1 2019
primarily due to (i) increased mining and processing volumes which
translated into higher variable costs incurred and (ii)
inflationary pressures that impacted labour and overhead costs.
This was offset by the increase in inventory of $3.3m (Q1 2019 - increase of $0.8m) primarily due to the unsold gold on hand
at the end of Q1 2020.
Corporate general and administrative expense totaled
$5.7m in the first quarter of 2020,
compared to $3.2m in the same period
in 2019. The increase in corporate general and administrative
expense for the first quarter of 2020 reflects the $0.9m non-recurring cost incurred as part of the
relocation of the corporate office from Toronto to London. Non-recurring costs included (i)
duplicated staff costs and office-related expenditure, (ii)
consulting fees specific to the transition and specific relocation,
and (iii) recruitment expenses incurred associated with new
London based employees.
Severance costs related to the finalization of the Toronto restructuring have been classified as
part of Other expenses. The relocation of the corporate
office from Toronto to
London was completed in
April 2020.
Hedging
The Company originally established the
hedging program to provide gold price protection for the forecast
production from the Prestea mine over a 12 month period commencing
in August 2019. In February 2020 the hedging program was extended to
cover the production from Prestea through to the end of 2020. The
Company entered into zero cost collars on an additional 12,600
ounces with a floor price of $1,500/oz and a ceiling price of $1,992/oz. These positions mature at a rate of
4.2koz per month from October to December
2020.
As of the end of Q1 2020 the Company has gold price protection
in place for 37.6koz at an average floor price of $1,434/oz and an average ceiling price of
$1,831/oz.
Table 3 - Adjusted EBITDA and Earnings per share
|
|
Q1 2020
|
Q1 2019
|
Q4 2019
|
|
|
|
|
|
EBITDA
|
$m
|
18.5
|
15.0
|
(54.6)
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Loss/(gain) on fair
value of financial instruments
|
$m
|
(4.1)
|
3.9
|
3.0
|
Other
(income)/expense
|
$m
|
2.7
|
(0.3)
|
11.0
|
Impairment
charges
|
$m
|
-
|
-
|
56.8
|
Total
Adjustments
|
$m
|
(1.4)
|
3.6
|
70.8
|
Adjusted
EBITDA
|
$m
|
17.1
|
18.6
|
16.2
|
Adjusted net
income/(loss)
|
$m
|
(1.0)
|
2.0
|
2.2
|
Attributable to
non-controlling interests
|
$m
|
(0.2)
|
-
|
(5.8)
|
Adjusted net
income/(loss) attributable to shareholders
|
$m
|
(1.2)
|
2.0
|
(3.6)
|
|
|
|
|
|
Weighted average
number of shares
|
m
|
109.6
|
108.8
|
109.4
|
Adjusted net
income/(loss) attributable to shareholders per share
|
$/share
|
(0.01)
|
0.02
|
(0.03)
|
Restatement of adjusted net (loss)/income attributable to
shares
Effective January 1, 2020, the
share-based compensation expense and income tax expense will be
included in the determination of Adjusted net income/(loss)
attributable to Golden Star shareholders and Adjusted net
income/(loss) attributable to Golden Star shareholders - basic for
its per share. The tax effect of any change in estimates of
rehabilitation assets will now be excluded. The Adjusted net
income/(loss) attributable to Golden Star shareholders for the
three months ended March 31, 2019 was
restated from $9.3m to $2.0m to reflect this change. As a result,
Adjusted net income/(loss) attributable to Golden Star shareholders
- basic for the three months ended March 31,
2019 was also restated from $0.09 per share to $0.02 per share.
Items classified within the other (income)/expense line for the
three months ended March 31, 2020
include changes in the rehabilitation provision of discontinued
Prestea refractory operations of $2.1m, corporate relocation costs of $0.4m and a $0.2m
contribution to the Ghana Chamber of Mines as part of the overall
contribution by the Ghana Chamber of Mines to the Government of
Ghana for its relief efforts
against the COVID-19 pandemic.
Net income attributable to Golden Star shareholders for
Q1 2020 totaled $0.8m or $0.01 income per share (basic), compared to a net
loss of $1.9m or $0.02 loss per share (basic) in the same period
in 2019. This was due to a $1m
increase in operating margin as a result of the impact of the
higher gold price environment during Q1 2020, offset by lower
ounces sold and increased operating cost base and a non-cash gain
on the fair value of financial instruments of $4.1m in Q1 2020 compared to a non-cash loss of
$3.9m in Q1 2019. These were in
part offset by a $2.5m increase in
corporate general and administrative expenses, a $3.0m increase in other expense driven by a
non-cash change in rehabilitation estimates of the previous
refractory operations of Prestea and a $1.0m increase in income tax expense on Wassa
profits.
Adjusted net loss attributable to Golden Star
shareholders (see "Non-GAAP Financial Measures" section) was
$1.2m in Q1 2020, compared to the
adjusted net income attributable to Golden Star shareholders of
$2.0m for the same period in 2019.
Adjusted net loss attributable to Golden Star shareholders reflects
adjustments for non-recurring and abnormal items which are mostly
non-cash in nature. The decrease during the first quarter of 2020
compared to the same period in 2019 was primarily due to higher
corporate administrative expenses.
Net Cash Flow and Financial position
The table below
summarizes the uses of cash in Q1 2020 and the resulting impact on
the financial position of the Company:
Table 4 - Cash Flow and Net Debt Position:
|
|
Q1
2020
|
Q1
2019
|
Q4
2019
|
Net cash from
(used in), as per cash flow statement
|
|
|
|
|
Operating activities
(inc. working capital)
|
$m
|
3.5
|
(0.6)
|
13.1
|
Investing
activities
|
$m
|
(15.1)
|
(11.3)
|
(25.1)
|
Financing
activities
|
$m
|
0.1
|
(2.8)
|
8.6
|
Increase/(Decrease) in cash
|
$m
|
(11.5)
|
(14.6)
|
(3.4)
|
|
|
|
|
|
Cash position at
start of period
|
$m
|
53.4
|
96.5
|
56.8
|
Cash position at
period end
|
$m
|
41.9
|
81.9
|
53.4
|
|
|
|
|
|
Summary of debt
facilities
|
|
|
|
|
Macquarie credit
facility
|
$m
|
57.7
|
-
|
57.4
|
Convertible
Debentures
|
$m
|
47.6
|
45.2
|
47.0
|
Finance
leases
|
$m
|
2.0
|
1.8
|
2.4
|
Ecobank
facilities
|
$m
|
-
|
35.3
|
-
|
Vendor
agreements
|
$m
|
-
|
17.0
|
-
|
Gross Debt
Position
|
$m
|
107.3
|
99.3
|
106.8
|
Net Debt
Position
|
$m
|
65.4
|
17.4
|
53.4
|
The Company had $41.9m of
cash and cash equivalents and $107.3m
of debt, for net debt of $65.4m as at
March 31, 2020. The cash position reduced by $11.5m in the quarter, largely due to the
$9.8m of cash outflow to working
capital which includes the $3.4m
operating cost impact of the delayed final gold shipment of the
quarter. Pro-forma2 cash and cash equivalents including
unsold gold ounces as at March 31,
2020 amounts to $48.1m, when
adjusting for the delayed gold sale on a revenue basis.
Investing activities
Capital expenditure in Q1 2020
was $12.5m, in line with the
$13.1m in the same period in 2019.
There was an additional $2.6m of
cash outflow to accounts payable on capital items relating to Q4
2019, to bring the total investing activities in the quarter to
$15.1m. In Q1 2020 77% of total
capital expenditure was at Wassa with $9.6m being invested in the following projects
which support the long term development of the operation:
- $4.6m on the paste-fill
plant
- $4.0m on Wassa Underground
capitalized development
- $0.4m on mobile equipment
Capital expenditures at Prestea during Q1 2020 was $2.6m, the majority of which ($2.2m) was invested in sustaining capital related
to Prestea Underground, and $0.3m on
other equipment and capital expenditure. Other capital spend
included $0.3m which was incurred at
a corporate level, in relation to the new London corporate office.
The full year 2020 capital expenditure guidance remains at
$55-60m. The 2020 budget is at elevated levels in
order to fund the introduction of a new mining level and method at
Prestea, the Wassa paste plant construction and accelerated
maintenance and development at both mines. The Q1 2020 capital
expenditure was slightly below the budgeted levels as non-critical
spend was delayed as a result of the cash preservation initiatives
being implemented in response to the COVID-19 pandemic. The run
rate for the remainder of the year is expected to increase as
activity on underground development and the major projects
increases.
Notes
|
1.
|
See "Non-GAAP
Financial Measures".
|
2.
|
Pro forma cash and
cash equivalents were calculated to include 89% of the shipment
ounces unsold as at March 31, 2020 using the London Metal Exchange
AM fix on March 31, 2020 which amounted to $1,604/oz.
|
3.
|
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 Ghanaian Stock Exchange, Golden Star is focused on
delivering strong margins and free cash flow from its two
underground mines. Gold production guidance for 2020 is
195,000-210,000 ounces at a cash operating cost per ounce (please
refer to the Non-GAAP Financial Measures disclaimer) of
US$790-US$850. Since winning the PDAC 2018 Environmental
and Social Responsibility Award, Golden Star has remained 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: gold production, cash operating costs, and
AISC estimates and guidance for 2020 on a consolidated and per mine
basis; the Company's achievement of 2020 consolidated guidance; the
sources of gold production at Wassa Underground and Prestea
Underground during 2020; the expected range of consolidated gold
production for 2020; the expected allocation of the Company's
capital expenditures; the ability to expand the Company and its
production profile through the exploration and development of its
existing mines; the intended expansion of production and reduction
of costs; the ability of the Company to optimize its Prestea mining
operations and the timing thereof; the anticipated significant
improvement in development productivity as a result of the
optimization of the Prestea operations; the ability to improve cash
generation; expected grade and mining rates for 2020; the
introduction of LHOS at Prestea and the timing thereof; estimated
costs and timing of the development of new mineral deposits and
sources of funding for such development; the timing for completion
of mining from the Prestea open pits during 2020; the ability to
continue to ship gold across borders and to refine doré at the
South African refinery; the mining rate and grade from Wassa
Underground; the processing of low grade stockpiles at Wassa for
the remainder of the year; installation of the electrical
substation and upgrade of the underground electrical
infrastructure, and the timing thereof; completion of the paste
fill plant project and timing thereof, and expected resulting
flexibility in the Wassa mine plan and increased mining rates; the
ability to improve the scale of operations and margin at Wassa;
implementation of the brownfield and greenfield exploration
programs at Wassa and Prestea and the timing thereof; the
anticipated exploration activities for the remainder of of H1 2020;
the anticipated effectiveness of the Hedging Program over the next
12 months; the intended reduction of costs for the next twelve
months; the delivery of a range of operational initiatives that
improve the consistency of the operations and visibility of the
longer-term potential of the operations; the securing of adequate
supply chains for key consumables and medical supplies; the
effectiveness of corrective actions on preventing fatalities at
Prestea; the Company having sufficient cash available to support
its operations and mandatory expenditures for the next twelve
months; the Company continuing as a going concern including the
ability of the Company to realize its assets and discharge its
liabilities in the normal course of business; the potential impact
of the COVID-19 pandemic on the Company's operations and the
ability to mitigate such impact; and the availability of mineral
reserves in 2020 and 2021 based on the accuracy of the Company's
updated mineral reserve and resource models. 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. 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: gold price volatility;
discrepancies between actual and estimated production; mineral
reserves and resources and metallurgical recoveries; mining
operational and development risks; liquidity risks; suppliers
suspending or denying delivery of products or services; regulatory
restrictions (including environmental regulatory restrictions and
liability); actions by governmental authorities; the
speculative nature of gold exploration; ore type; the global
economic climate; share price volatility; the availability of
capital on reasonable terms or at all; 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; actual
results of current exploration activities; environmental risks;
future prices of gold; possible variations in mineral reserves and
mineral resources, grade or recovery rates; mine development and
operating risks; an inability to obtain power for operations on
favourable terms or at all; mining plant or equipment breakdowns or
failures; an inability to obtain products or services for
operations or mine development from vendors and suppliers on
reasonable terms, including pricing, or at all; public health
pandemics such as COVID-19, including risks associated with
reliance on suppliers, the cost, scheduling and timing of gold
shipments, uncertainties relating to its ultimate spread, severity
and duration, and related adverse effects on the global economy and
financial markets; 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; litigation risks; 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, 2019, the three months ended
March 31, 2020 and in our annual
information form for the year ended December
31, 2019 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 Press 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, deferred income tax expense, non-cash cumulative
adjustment to revenue and finance costs related to the Streaming
Agreement, and impairment. The Company has excluded the non-cash
cumulative adjustment to revenue from adjusted net income/(loss) as
the amount is non-recurring, the amount is non-cash in nature and
management does not include the amount when reviewing and assessing
the performance of the operations. "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
year ended December 31, 2019 and the
three months ended March 31, 2020,
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"). . All mineral
resources are reported inclusive of mineral reserves. Mineral
resources which are not mineral reserves do not have demonstrated
economic viability. 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 2019
and 2018 estimates of mineral resources were prepared under the
supervision of Mr. Wasel. The mineral reserve technical contents of
this press release, have been reviewed and approved by and were
prepared under the supervision of Matt
Varvari, Vice President, Technical Services for the Company.
Mr. Varvari 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 December 31, 2018; (ii) Bogoso/Prestea - "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.
Cautionary Note to US Investors Concerning Estimates of
Inferred Mineral Resources
This press release uses the term "inferred mineral resources".
The Company advises US investors that while this term is recognized
and required by NI 43-101, the SEC does not recognize it.
"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
Inferred Mineral Resources will ever be upgraded to a higher
category. In accordance with Canadian rules, estimates of inferred
mineral resources cannot form the basis of feasibility or other
economic studies. US investors are cautioned not to assume that any
part or all of the inferred mineral resource exists, or is
economically or legally mineable.
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SOURCE Golden Star Resources Ltd.