TORONTO, Feb. 23, 2016 /PRNewswire/ - Golden Star
Resources Ltd. (NYSE MKT: GSS; TSX: GSC; GSE: GSR) ("Golden Star"
or the "Company") reports its financial results for the fourth
quarter and full year ended December 31,
2015.
Fourth quarter and full year highlights include:
- 221,653 ounces of gold were sold during the year, exceeding
revised guidance
- 51,378 ounces were sold in the fourth quarter
- Full year consolidated cash operating costs1 were
$976 per ounce at the low end of the
revised guidance range
- $715 per ounce consolidated cash
operating cost1 for the fourth quarter - a five
year record for the Company and significant improvement from the
previous year
- All-in sustaining costs1 were $1,158 per ounce for the year and $896 per ounce in the fourth quarter
- $255 million of revenue generated
for the year including $56 million of
revenue in the fourth quarter
- Consolidated cash balance of $35
million at year end, with an additional $70 million available under the streaming
agreement and $3 million available
under the Ecobank II facility
- Cash generated by operations before changes in working
capital1 of $0.11 per
share in the quarter and $0.21 per
share for the year
- Wassa Underground development has advanced 1258 metres with
access to the newly discovered "F Shoot" now being established
- Prestea delivered better than expected results including a 22%
improvement in recoveries in the fourth quarter to recoveries
of over 83%
"Results for the fourth quarter continue to clearly
demonstrate our focus on transforming the Company into a low cost
producer," commented Sam
Coetzer, President and CEO. "The fourth quarter
operated exactly as planned and true to the vision we have strived
to achieve over the last few years. Golden
Star will now continue to operate the non-refractory open
pits at Prestea and Wassa. We will continue to advance our two
underground projects at Wassa and Prestea and expect to see the
first higher grade ounces reporting to the process facilities from
Wassa during the second half of 2016. Now that we have suspended
the refractory operations at Bogoso, our risk profile has improved
and we are now a leaner and less complex company. I am excited and
proud of what the team has achieved and our commitment to rebuild
our future in low cost production is becoming a reality. The
development of the Wassa Underground has advanced tremendously well
and we continue to find additional upside as we investigate more of
the orebody. At Prestea Underground we have now seen momentum in
the refurbishment of the infrastructure and I am confident that we
will deliver this project on time and on budget."
All references to currency are US dollars.
1 See "Non-GAAP Financial Measures".
Summary of Consolidated Operational and Financial
Results:
|
|
For the three
months ended
|
|
For the years
ended
|
|
|
Dec. 31,
2015
|
|
Sep. 30,
2015
|
|
Dec.
31,
2015
|
|
Dec.
31,
2014
|
Wassa gold
sold
|
oz
|
30,880
|
|
28,848
|
|
107,751
|
|
112,831
|
Bogoso / Prestea gold
sold
|
oz
|
20,498
|
|
23,050
|
|
113,902
|
|
147,957
|
Total gold
sold
|
oz
|
51,378
|
|
51,898
|
|
221,653
|
|
260,788
|
|
|
|
|
|
|
|
|
|
Average realized
price
|
$/oz
|
1,098
|
|
1,088
|
|
1,151
|
|
1,261
|
Cash operating cost
per ounce1
|
$/oz
|
715
|
|
988
|
|
976
|
|
1,090
|
All-in sustaining
cost per ounce1
|
$/oz
|
896
|
|
1,151
|
|
1,158
|
|
1,252
|
|
|
|
|
|
|
|
|
|
Gold
revenues
|
$'000
|
56,420
|
|
56,452
|
|
255,187
|
|
328,915
|
Cost of sales
excluding depreciation and amortization
|
$'000
|
39,354
|
|
55,199
|
|
245,494
|
|
304,912
|
Depreciation and
amortization
|
$'000
|
7,054
|
|
5,525
|
|
37,339
|
|
26,219
|
Mine operating
margin/(loss)
|
$'000
|
10,012
|
|
(4,272)
|
|
(27,646)
|
|
(2,216)
|
General and
administrative expense
|
$'000
|
2,521
|
|
3,299
|
|
14,281
|
|
16,367
|
(Gain)/loss on fair
value of 5% of Convertible Debentures
|
$'000
|
(1,658)
|
|
(4,911)
|
|
(1,712)
|
|
538
|
Impairment
charges
|
$'000
|
—
|
|
—
|
|
34,396
|
|
57,747
|
|
|
|
|
|
|
|
|
|
Adjusted net
income/(loss) attributable to Golden Star
Shareholders1
|
$'000
|
6,829
|
|
(10,831)
|
|
(30,359)
|
|
(12,234)
|
Net income/(loss)
attributable to Golden Star shareholders
|
$'000
|
13,781
|
|
(6,832)
|
|
(67,681)
|
|
(73,079)
|
Adjusted
earnings/(loss) per share – basic and diluted
|
$/share
|
0.03
|
|
(0.04)
|
|
(0.12)
|
|
(0.05)
|
|
|
|
|
|
|
|
|
|
Cash provided by
operations before working capital changes
|
$'000
|
29,725
|
|
38,508
|
|
53,437
|
|
4,541
|
Cash provided by
operations before working capital changes
|
$/share
|
0.11
|
|
0.05
|
|
0.21
|
|
0.02
|
Cash provided by
operations
|
$'000
|
12,633
|
|
45,341
|
|
60,148
|
|
2,411
|
Cash provided by
operations per share – basic and diluted
|
$/share
|
0.05
|
|
0.17
|
|
0.23
|
|
0.01
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$'000
|
13,726
|
|
17,789
|
|
57,051
|
|
33,655
|
1 See
"Non-GAAP Financial Measures".
|
|
|
|
|
|
|
|
|
Review of Financial Performance
Gold sold in 2015 was 221,653 ounces compared to 260,788 sold in
2014. At Bogoso / Prestea, 113,902 ounces of gold were sold,
a decrease from 147,957 ounce the prior year as a result of the
suspension of the refractory operations at Bogoso in the third
quarter of 2015. At Wassa 107,751 ounces of gold were
sold, a slight decrease from 112,831 ounces sold in 2014 which
included production from the Father Brown pit. Fourth quarter 2015
gold sold remained in line with the third quarter of 51,378
ounces.
Consolidated cash operating costs for the fourth quarter were
$715 per ounce, reduced by
approximately 28% from the third quarter. Cash operating
costs at both Wassa and Bogoso / Prestea reached five year record
lows of $625 and $849 per ounce, respectively. The decline in
costs was mainly driven by lower mining and processing costs and
the suspension of the high cost, energy intensive, refractory
operation in the third quarter of 2015. Consolidated cash
operating costs per ounce for the year totaled $976 per ounce in 2015, down 10% from
$1,090 per ounce in
2014.
Revenue for the full year 2015 was $255.2
million, lower than $328.9
million of revenue in 2014, driven in part, by the continued
decline in average realized gold prices and fewer ounces sold.
The average realized gold price in 2015 of $1,151 per ounce, was 9% below the average
realized price of $1,261 in 2014.
Corporate general and administrative expenditures of
$14.3 million in 2015 were reduced by
approximately 13% from the 2014 level of $16.4 million. The reductions were driven by
lower legal fees and lower share based compensation during the
year.
Cash provided by operations before changes in working capital
for the year was $53.4 million, or
$0.21 per share up significantly from
the prior year as a result of the proceeds received from the Royal
Gold Streaming Agreement. (For more information on this streaming
agreement see "Other Financial Activity")
Capital expenditures for the fourth quarter totaled $13.7 million, taking full year capital
expenditures to $57.1 million.
The consolidated cash balance was $35.1
million at December 31, 2015
with an additional $70 million
available under the streaming agreement and $3 million available under the Ecobank II
facility.
Other Financial Activity
Gold stream agreement and $20
million term loan
On July 28, 2015, the Company
successfully closed a $130 million
gold stream agreement ("Streaming Agreement") and $20 million loan financing with Royal Gold, Inc. ("RGI") and its wholly-owned
subsidiary RGLD Gold AG. The Streaming Agreement was subsequently
amended on December 30, 2015 to
provide an additional $15 million of
streaming advance payment with an option, subject to Golden Star satisfying certain conditions, to
access a further $5 million. The
Streaming percentages were adjusted as follows to reflect the
$15 million additional advance
payment: from January 1, 2016, the
Company will deliver 9.25% of the Mines' production to RGLD at a
cash purchase price of 20% of spot gold. From the earlier of
January 1, 2018 or commercial
production of the underground mines, Golden
Star will deliver 10.5% of production at a cash purchase
price of 20% of spot gold until 240,000 ounces have been delivered.
If Golden Star exercises its option
on the additional $5 million stream
advance, the stream percentage from the earlier of January 1, 2018 or commercial production of the
underground mines would be increased to 10.9% at a cash purchase
price of 20% spot gold until 250,000 ounces have been delivered;
thereafter, 5.5% of production at a cash purchase price of 30% of
spot gold will be delivered.
The Streaming Agreement is a contract for the future delivery of
gold ounces at the contracted cash purchase price. During the year
ended December 31, 2015, the Company
delivered 12,701 ounces of gold to RGLD. Revenue of
$12.5 million was recognized for the
year ended December 31, 2015,
consisting of $2.9 million cash
proceeds and $9.6 million of deferred
revenue realized.
Review of Operational Performance
Wassa Operations
|
|
For the three
months ended
|
|
For the years
ended
|
|
|
Dec. 31,
2015
|
|
Sep. 30,
2015
|
|
Dec. 31,
2015
|
|
Dec.
31,
2014
|
WASSA FINANCIAL
RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$'000
|
33,760
|
|
31,702
|
|
123,133
|
|
142,734
|
|
|
|
|
|
|
|
|
|
|
Mine operating
expenses
|
$'000
|
22,532
|
|
23,389
|
|
95,152
|
|
114,667
|
|
Severance
charges
|
$'000
|
—
|
|
1,013
|
|
1,816
|
|
—
|
|
Royalties
|
$'000
|
1,728
|
|
1,617
|
|
6,234
|
|
7,144
|
|
Operating costs to
metals inventory
|
$'000
|
(3,231)
|
|
(1,178)
|
|
(4,886)
|
|
(5,126)
|
|
Inventory net
realizable value adjustment
|
$'000
|
—
|
|
—
|
|
1,524
|
|
800
|
|
Cost of sales
excluding depreciation and amortization
|
$'000
|
21,029
|
|
24,841
|
|
99,840
|
|
117,485
|
|
Depreciation and
amortization
|
$'000
|
4,068
|
|
3,713
|
|
14,522
|
|
14,619
|
|
Mine operating
margin
|
$'000
|
8,663
|
|
3,148
|
|
8,827
|
|
10,630
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$'000
|
8,001
|
|
8,506
|
|
33,912
|
|
16,406
|
|
|
|
|
|
|
|
|
|
WASSA OPERATING
RESULTS
|
|
|
|
|
|
|
|
|
|
Ore mined
|
t
|
806,153
|
|
728,046
|
|
2,849,061
|
|
2,656,064
|
|
Waste
mined
|
t
|
2,924,040
|
|
2,658,218
|
|
10,631,663
|
|
12,398,568
|
|
Ore
processed
|
t
|
620,047
|
|
635,332
|
|
2,495,176
|
|
2,629,029
|
|
Grade
processed
|
g/t
|
1.77
|
|
1.51
|
|
1.46
|
|
1.41
|
|
Recovery
|
%
|
93.9
|
|
92.9
|
|
93.4
|
|
92.7
|
|
Gold sold
|
oz
|
30,880
|
|
28,848
|
|
107,751
|
|
112,831
|
|
Cash operating cost
per ounce1
|
$/oz
|
625
|
|
770
|
|
838
|
|
971
|
1 See
"Non-GAAP Financial Measures".
|
|
|
|
|
Gold sold in the fourth quarter of 2015 of 30,880 ounces was a
7% increase from the third quarter driven by higher grades and
recoveries. The higher grades and resulting recoveries were a
result of mining from the lower elevation of the pit. Full
year gold sold in 2015 was slightly lower as a result of slightly
fewer tonnes processed offset by higher grades and
recoveries.
Cash operating costs in the fourth quarter declined by over 18%
from the third quarter to $625 per
ounce. The reduced cost structure is the result of cost saving
measures implemented including a reduction in personnel, a review
and renegotiation of contracts and lower fuel and cyanide costs.
Cash operating costs for the year in 2015 of $838 per ounce also showed significant
improvement, declining by 14% from the 2014 level of $971 per ounce.
Capital expenditures for the fourth quarter totaled $8.0 million, of which $1.1 million was sustaining capital
expenditures and $6.9 million was
development capital, including $4.8
for Wassa Underground Mine development. For the full year,
capital spending was $34 million of
which $6.5 million was sustaining
capital. Total capital also includes $20.1 million on the development of the Wassa
Underground Mine, $5.4 million for
the improvement of the tailings storage facility and $1.9 million on development drilling at
Wassa.
Production at Wassa in 2016 is expected to be 100,000 - 110,000
ounces of gold at cash operating costs of $800 - $900 per ounce.
Wassa Underground Development
In March 2015, the positive
results of a Feasibility Study on the economic viability of an
underground mine operating in conjunction with the existing open
pit mine were announced and the decision to progress with the
construction of the underground mine was affirmed.
Decline development commenced in July
2015, approximately 1258 metres of development has been
achieved on the Main and Ventilation declines as of February 23, 2016. Decline development
advanced at an average of seven metres per day during the fourth
quarter and is expected to increase in 2016 as efficiencies
improve.
An update to the resource model has been completed which
includes additional drilling undertaken between July 2014 (when the Feasibility Study resource
model was completed) and March 2015.
The mine design and schedule has been updated to reflect the
changes to the resource model and the expansion of the "F shoot"
area. Stope development of the upper mineralization is expected to
commence in the second quarter of 2016 with first ore production
expected in the second half of 2016.
Construction of the surface infrastructure and the transfer from
generator power to grid power was completed in the fourth quarter
of 2015.
Wassa Underground development capital expenditures totaled
$20.1 million during the year and
$22.2 million since late 2014 when
development began.
The Company expects approximately $51
million of capital expenditures in 2016 at Wassa which
includes $34 million on Wassa
Underground development, $11 million
on tailings and plant upgrades and $6
million in sustaining capital.
Production at Wassa Underground is expected to commence sometime
in mid-2016 with pre-commercial production of 20,000 – 25,000
ounces for 2016.
Bogoso / Prestea Operations
|
|
For the three
months ended
|
|
For the years
ended
|
|
|
Dec. 31,
2015
|
|
Sep. 30,
2015
|
|
Dec. 31,
2015
|
|
Dec. 31,
2014
|
BOGOSO / PRESTEA
FINANCIAL RESULTS
|
|
|
|
|
|
|
|
|
|
Revenue
|
$'000
|
22,760
|
|
24,750
|
|
131,998
|
|
186,181
|
|
|
|
|
|
|
|
|
|
|
Mine operating
expenses
|
$'000
|
17,591
|
|
30,963
|
|
128,332
|
|
180,020
|
|
Severance
charges
|
$'000
|
(231)
|
|
—
|
|
12,810
|
|
2,844
|
|
Royalties
|
$'000
|
1,143
|
|
1,294
|
|
6,669
|
|
9,315
|
|
Operating costs to
metals inventory
|
$'000
|
(178)
|
|
(1,899)
|
|
(2,157)
|
|
(5,405)
|
|
Cost of sales
excluding depreciation and amortization
|
$'000
|
18,325
|
|
30,358
|
|
145,654
|
|
187,427
|
|
Depreciation and
amortization
|
$'000
|
2,986
|
|
1,812
|
|
22,817
|
|
11,600
|
|
Mine operating
margin/(loss)
|
$'000
|
1,349
|
|
(7,420)
|
|
(36,473)
|
|
(12,846)
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$'000
|
5,725
|
|
9,283
|
|
23,139
|
|
17,249
|
|
|
|
|
|
|
|
|
|
BOGOSO / PRESTEA
OPERATING RESULTS
|
|
|
|
|
|
|
|
|
|
Ore mined
refractory
|
t
|
—
|
|
60,533
|
|
1,230,333
|
|
2,690,760
|
|
Ore mined
non-refractory
|
t
|
301,397
|
|
179,186
|
|
480,583
|
|
—
|
|
Total ore
mined
|
t
|
301,397
|
|
239,719
|
|
1,710,916
|
|
2,690,760
|
|
Waste
mined
|
t
|
894,081
|
|
605,715
|
|
3,603,153
|
|
12,169,105
|
|
Refractory ore
processed
|
t
|
—
|
|
435,185
|
|
1,520,541
|
|
2,542,273
|
|
Refractory ore
grade
|
g/t
|
—
|
|
1.66
|
|
2.15
|
|
2.30
|
|
Gold recovery –
refractory ore
|
%
|
—
|
|
60.4
|
|
67.5
|
|
70.3
|
|
Non-refractory ore
processed
|
t
|
317,764
|
|
289,346
|
|
1,409,128
|
|
1,382,213
|
|
Non-refractory ore
grade
|
g/t
|
2.36
|
|
1.35
|
|
1.32
|
|
0.96
|
|
Gold recovery -
non-refractory ore
|
%
|
83.1
|
|
68.0
|
|
64.3
|
|
39.2
|
|
Gold sold
refractory
|
oz
|
1,042
|
|
15,648
|
|
76,981
|
|
130,208
|
|
Gold sold
non-refractory
|
oz
|
19,456
|
|
7,402
|
|
36,921
|
|
17,749
|
|
Gold sold
(total)
|
oz
|
20,498
|
|
23,050
|
|
113,902
|
|
147,957
|
|
Cash operating cost
per ounce1
|
$/oz
|
849
|
|
1,261
|
|
1,108
|
|
1,180
|
|
|
1See
"Non-GAAP Financial Measures".
|
Gold sold in the fourth quarter of 2015 was 20,498 ounces, a
slight decline from the third quarter reflecting the suspension of
the refractory operation which occurred during the third
quarter. During the fourth quarter 95% of production was
sourced from the Prestea South Pits oxide ores, which only
commenced production during the third quarter. Production
from this area resulted in higher throughput, higher grades and
higher recoveries from the non-refractory operation compared to the
third quarter. Gold sold for the full year was 113,902 ounces.
Cash operating costs in the fourth quarter declined by 33% from
the third quarter to $849 per ounce.
The reduced cost structure is the result of the suspension of the
refractory operation in the third quarter. Costs for the full
year showed more modest declines to $1,108 per ounce as they include three quarters
of the higher cost refractory production. Costs are
expected to be maintained at the lower levels established in this
quarter as the production going forward being sourced from the
Prestea Open Pits and beginning in 2017, from the Prestea
Underground.
Capital expenditures in the fourth quarter totaled $5.7 million, of which $3.4 million was development capital spending on
the development of the Prestea Underground. Capital spending
for 2015 totaled $23.1 million, of
which $17.1 million were expenditures
related to development at Prestea Underground and $4.5 million were related to Prestea open pit
mines.
Production in 2016, which will be sourced from the Prestea Open
Pit mines, is expected to be 60,000 – 70,000 ounces at cash
operating costs of $840 - $970 per
ounce.
Prestea Underground Development
In December 2015 the positive
results of a Feasibility Study for the Prestea Underground Mine
were indicated a post-tax internal rate of return of 42% and net
present value of $124 million based
on a discount rate of 5% and gold price assumption of $1,150 per ounce. Cash operating costs of
$462 per ounce and all-in sustaining
costs of $603 per ounce were
estimated over the life of mine.
All rehabilitation works are on schedule for completion in the
first quarter of 2016. Mechanical and electrical rehabilitation
work is planned to be completed in the third quarter of 2016 after
which, development will commence. Pre-development of the resource
will take place from the fourth quarter of 2016 to mid-2017.
Stoping is expected to start in mid-2017, ramping up to 500 tonnes
per day by the end of the 2017.
The Company incurred capital expenditures totaling $17.1 million on the Prestea Underground
development in 2015. The Company expects to incur approximately
$36 million of capital expenditures
in 2016 on the project.
The Prestea Underground is expected to begin production in
mid-2017. Life of mine cash operating costs, as per the
Feasibility Study, are expected to be approximately $462 per ounce for average annual production of
approximately 85,000 ounces over 5.5 years.
Outlook
The Company remains focused on transforming into a low cost gold
producer. During 2015, with the suspension of the refractory
operation, the Company's efforts to lower production
costs are being realized. Costs in the fourth quarter
were a five year Company record. With the development of the
underground mines at Wassa and Prestea, the average life of mine
cash operating costs for the Company are expected to decline
further beginning in 2017 when both projects will be in
operation.
For 2016 the Company expects the following:
Production and costs
|
Gold
production
|
|
Cash
operating
costs
|
|
|
|
|
|
(000) ounces
|
|
$ per
ounce
|
Wassa Open
Pit
|
100 - 110
|
|
800 - 900
|
Wassa
Underground
|
20 -
25
|
|
N/A
*
|
Prestea Open Pit
Mines
|
60 -
70
|
|
840 - 970
|
Consolidated
|
180 - 205
|
|
815 - 925
|
|
*
|
Costs incurred at
Wassa Underground will be capitalized until commercial production
is achieved. As a result, these costs are reflected in the
Company's development capital expenditure guidance set out in the
table below and are not included in the Company's cash operating
cost per ounce guidance set out in the table above.
|
Wassa - Production is expected to remain at approximately
the same level as 2015. Grade and strip ratio are expected to
decline slightly in 2016 resulting in slightly lower production
guidance.
Wassa Underground - During the development phase of the
Wassa Underground Mine, the Company expects to produce 20,000 -
25,000 ounces in 2016. As these ounces are expected to be
produced prior to the commercial production phase of the mine, the
revenues from these ounces will be credited against the capital
expenditures incurred.
Prestea Open Pit Mines - Production at Prestea is
expected to be lower in 2016 relative to the prior year as mining
is expected to be exclusively focused on the low-cost
non-refractory ore. Production is expected to come from satellite
pits in the Prestea South property.
Capital expenditures
|
Sustaining
|
Development
|
Total
|
Wassa Open Pit and
Processing Plant
|
6
|
2
|
8
|
Wassa tailings
expansion
|
—
|
9
|
9
|
Wassa
Underground
|
—
|
34
|
34
|
Prestea Open Pit
Mines
|
3
|
—
|
3
|
Prestea
Underground
|
—
|
36
|
36
|
Consolidated
|
9
|
81
|
90
|
Wassa - The Company expects to spend $6 million on sustaining capital expenditures at
the Wassa open pit operations. In addition the Company expects to
spend $34 million of capital on
development activities related to the Wassa Underground Mine,
$9 million on the expansion of the
Wassa tailings facility and $2
million on development activities related to the Wassa Open
Pit and Processing Plant. Revenue earned on underground ounces
produced will be credited against capital expenditures until
commercial production is achieved.
Prestea - The Company expects to spend $3 million on sustaining capital at the Prestea
Open Pit Mines. In addition the Company expects to spend
$36 million on the development of the
Prestea Underground Mine during 2016.
The Company will conduct a conference call and webcast tomorrow,
February 24, 2016, to discuss these
results at 10:00am EST.
The call can be
accessed by telephone or by webcast as follows:
|
|
Participants - Toll
free: +1 888 390 0605
|
|
Participants - Toll:
+1 416 764 8609
|
|
Conference ID (all
numbers): 34902047
|
|
Webcast:
www.gsr.com
|
|
|
A recording of the
conference call will be available until March 2, 2016 by
dialing:
|
|
Toll Free: +1 888 390
0541
|
|
Toll: +1 416 764
8677
|
|
Replay Passcode:
902047#
|
The webcast will also be available after the call at
www.gsr.com
Company Profile:
Golden Star is an established
gold mining company that owns and operates the Wassa and Prestea
mines situated on the prolific Ashanti Gold
Belt in western Ghana,
Africa. Listed on the NYSE
MKT, the TSX and the GSE, Golden
Star is strategically focused on increasing operating
margins and cash flow through the development of two high grade,
low cost underground mines both beneath existing open pit
operations. The Wassa Underground is expected to commence
production in 2016 with the Prestea Underground commencing
production in 2017. Both projects are fully funded and
on track to begin production as expected. Production in 2016 is
expected to be between 180,000 – 205,000 ounces of gold with costs
of $815 - $925 per ounce.
GOLDEN STAR
RESOURCES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Stated in thousands of U.S. dollars except shares and per share
data)
|
|
|
|
For the years
ended
December 31,
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
255,187
|
|
$
|
328,915
|
|
Cost of sales
excluding depreciation and amortization
|
245,494
|
|
304,912
|
|
Depreciation and
amortization
|
37,339
|
|
26,219
|
Mine operating
loss
|
(27,646)
|
|
(2,216)
|
|
|
|
|
Other
expenses/(income)
|
|
|
|
|
Exploration
expense
|
1,307
|
|
556
|
|
General and
administrative
|
14,281
|
|
16,367
|
|
Finance expense,
net
|
10,670
|
|
7,375
|
|
Other
income
|
(8,178)
|
|
(1,104)
|
|
Loss/ (gain) on fair
value of 5% Convertible Debentures
|
(1,712)
|
|
538
|
|
Impairment
charges
|
34,396
|
|
57,747
|
Loss before
tax
|
(78,410)
|
|
(83,695)
|
|
Income tax
recovery
|
—
|
|
(254)
|
Net loss and
comprehensive loss
|
$
|
(78,410)
|
|
$
|
(83,441)
|
Net loss attributable
to non-controlling interest
|
(10,729)
|
|
(10,362)
|
Net loss
attributable to Golden Star shareholders
|
$
|
(67,681)
|
|
$
|
(73,079)
|
|
|
|
|
Net loss per share
attributable to Golden Star shareholders
|
|
|
|
Basic and
diluted
|
$
|
(0.26)
|
|
$
|
(0.28)
|
Weighted average
shares outstanding-basic and diluted (millions)
|
259.7
|
|
259.4
|
GOLDEN STAR
RESOURCES LTD.
CONSOLIDATED BALANCE SHEETS
(Stated in thousands of U.S. dollars)
|
|
|
|
|
|
As of
December
31,
2015
|
|
As of
December
31,
2014
|
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
35,108
|
|
$
|
39,352
|
|
Accounts
receivable
|
5,114
|
|
14,832
|
|
Inventories
|
36,694
|
|
54,279
|
|
Prepaids and
other
|
5,754
|
|
4,767
|
|
Total Current
Assets
|
82,670
|
|
113,230
|
Restricted
cash
|
6,463
|
|
2,041
|
Mining
interests
|
149,849
|
|
142,782
|
|
Total
Assets
|
$
|
238,982
|
|
$
|
258,053
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
110,811
|
|
$
|
123,451
|
|
Current portion of
rehabilitation provisions
|
3,660
|
|
4,562
|
|
Current portion of
long term debt
|
22,442
|
|
17,181
|
|
Current portion of
deferred revenue
|
11,507
|
|
—
|
|
Total Current
Liabilities
|
148,420
|
|
145,194
|
Long term
debt
|
91,899
|
|
85,798
|
Deferred
revenue
|
53,872
|
|
—
|
Rehabilitation
provisions
|
76,025
|
|
81,254
|
|
Total
Liabilities
|
370,216
|
|
312,246
|
|
|
|
|
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
|
695,555
|
|
695,266
|
Contributed surplus
|
32,612
|
|
31,532
|
Deficit
|
(793,304)
|
|
(725,623)
|
|
Total Golden Star
Equity
|
(65,137)
|
|
1,175
|
Non-controlling
interest
|
(66,097)
|
|
(55,368)
|
|
Total
Equity
|
(131,234)
|
|
(54,193)
|
|
Total Liabilities
and Shareholders' Equity
|
$
|
238,982
|
|
$
|
258,053
|
GOLDEN STAR
RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in thousands of U.S. dollars)
|
|
|
|
|
|
For the years
ended
December 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
Net loss
|
|
$
|
(78,410)
|
|
$
|
(83,441)
|
Reconciliation of
net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
37,372
|
|
26,267
|
|
Net realizable value
adjustment on inventory
|
|
1,524
|
|
1,453
|
|
Impairment
charges
|
|
34,396
|
|
57,747
|
|
Share-based
compensation
|
|
2,005
|
|
2,515
|
|
Gain on deferral of other long term
liabilities
|
|
(2,432)
|
|
—
|
|
Accretion of other
long term liabilities
|
|
912
|
|
—
|
|
Accretion of
rehabilitation provisions
|
|
1,761
|
|
1,746
|
|
Amortization of
financing fees
|
|
1,097
|
|
248
|
|
Recognition of
deferred revenue
|
|
(9,621)
|
|
—
|
|
Proceeds from Royal
Gold stream
|
|
75,000
|
|
—
|
|
Gain on reduction of
rehabilitation provisions
|
|
(5,652)
|
|
—
|
|
Reclamation
expenditures
|
|
(2,947)
|
|
(3,554)
|
|
Other
|
|
(1,568)
|
|
1,560
|
|
Changes in working
capital
|
|
6,711
|
|
(2,130)
|
|
|
Net cash provided by
operating activities
|
|
60,148
|
|
2,411
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
Additions to mining
properties
|
|
(758)
|
|
(73)
|
|
Additions to plant
and equipment
|
|
(1,416)
|
|
(499)
|
|
Additions to
construction in progress
|
|
(54,877)
|
|
(33,083)
|
|
Change in accounts
payable and deposits on mine equipment and material
|
|
4,974
|
|
(2,894)
|
|
Increase in
restricted cash
|
|
(4,422)
|
|
(12)
|
|
|
Net cash used in
investing activities
|
|
(56,499)
|
|
(36,561)
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
Principal payments on
debt
|
|
(48,611)
|
|
(12,049)
|
|
Proceeds from debt
agreements
|
|
22,000
|
|
20,000
|
|
Exercise of
options
|
|
18,718
|
|
—
|
|
|
Net cash (used
in)/provided by financing activities
|
|
(7,893)
|
|
7,951
|
Decrease in cash and
cash equivalents
|
|
|
(4,244)
|
|
(26,199)
|
Cash and cash
equivalents, beginning of period
|
|
|
39,352
|
|
65,551
|
Cash and cash
equivalents, end of period
|
|
$
|
35,108
|
|
$
|
39,352
|
GOLDEN STAR
RESOURCES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - Stated in thousands of U.S. dollars except shares and
per share data)
|
|
|
|
|
|
For the three
months
ended December 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
56,420
|
|
$
|
86,586
|
|
Cost of sales
excluding depreciation and amortization
|
|
39,354
|
|
71,410
|
|
Depreciation and
amortization
|
|
7,054
|
|
8,150
|
Mine operating
margin
|
|
10,012
|
|
7,026
|
|
|
|
|
|
Other
expenses/(income)
|
|
|
|
|
|
Exploration
expense
|
|
289
|
|
229
|
|
General and
administrative
|
|
2,521
|
|
2,819
|
|
Finance expense,
net
|
|
323
|
|
1,847
|
|
Other
income
|
|
(5,680)
|
|
(316)
|
|
Gain on fair value of
financial instruments
|
|
(1,658)
|
|
(1,501)
|
|
Impairment
charges
|
|
—
|
|
57,747
|
Net income/(loss)
before tax
|
|
14,217
|
|
(53,799)
|
|
Income tax
recovery
|
|
—
|
|
(254)
|
Net
income/(loss)
|
|
$
|
14,217
|
|
$
|
(53,545)
|
Net income/(loss)
attributable to non-controlling interest
|
|
436
|
|
(5,390)
|
Net income/(loss)
attributable to Golden Star shareholders
|
|
$
|
13,781
|
|
$
|
(48,155)
|
|
|
|
|
|
Net income/(loss)
per share attributable to Golden Star shareholders
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.05
|
|
$
|
(0.19)
|
Weighted average
shares outstanding (millions)
|
|
259.8
|
|
259.4
|
Weighted average
shares outstanding-diluted (millions)
|
|
311.2
|
|
259.4
|
GOLDEN STAR
RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - Stated in thousands of U.S. dollars)
|
|
|
|
|
|
For the three
months
ended December 31,
|
|
|
|
2015
|
2014
|
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
Net
income/(loss)
|
|
$
|
14,217
|
|
$
|
(53,545)
|
Reconciliation of
net income/(loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
7,060
|
|
8,160
|
|
Impairment of
asset
|
|
—
|
|
57,747
|
|
Share-based
compensation
|
|
175
|
|
326
|
|
Accretion of
rehabilitation provisions
|
|
440
|
|
437
|
|
Accretion of gain on
deferral of other long term liabilities
|
|
304
|
|
—
|
|
Amortization of
deferred financing fees
|
|
167
|
|
62
|
|
Recognition of
deferred revenue
|
|
(4,747)
|
|
—
|
|
Proceeds from Royal
Gold stream
|
|
20,000
|
|
—
|
|
Reclamation
expenditures
|
|
(599)
|
|
(408)
|
|
Gain on reduction of
rehabilitation provisions
|
|
(5,652)
|
|
—
|
|
Other
|
|
(1,640)
|
|
(1,097)
|
|
Changes in working
capital
|
|
(17,092)
|
|
(7,366)
|
|
|
Net cash provided by
operating activities
|
|
12,633
|
|
4,316
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
Additions to mining
properties
|
|
(289)
|
|
—
|
|
Additions to plant
and equipment
|
|
(305)
|
|
—
|
|
Additions to
construction in progress
|
|
(13,132)
|
|
(9,219)
|
|
Change in accounts
payable and deposits on mine equipment and material
|
|
2,247
|
|
1,889
|
|
Increase in
restricted cash
|
|
(3)
|
|
(7)
|
|
|
Net cash used in
investing activities
|
|
(11,482)
|
|
(7,337)
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
Principal payments on
debt
|
|
(709)
|
|
(3,657)
|
|
Proceeds from debt
agreements
|
|
7,000
|
|
10,000
|
|
Proceeds from Royal
Gold loan, net
|
|
(7)
|
|
—
|
|
|
Net cash provided by
financing activities
|
|
6,284
|
|
6,343
|
|
|
Increase in cash and
cash equivalents
|
|
7,435
|
|
3,322
|
|
|
Cash and cash
equivalents, beginning of period
|
|
27,673
|
|
36,030
|
|
|
Cash and cash
equivalents, end of period
|
|
$
|
35,108
|
|
$
|
39,352
|
Non-GAAP Financial Measures
In this press release, we use the terms "cash operating cost per
ounce", "all-in sustaining costs per ounce", "cash provided by
operations before changes in working capital" and "adjusted
net income/ (loss) attributable to shareholders". These
should be considered as non-GAAP financial measures as defined in
applicable Canadian and United
States securities laws and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with GAAP.
"Cost of sales excluding depreciation and amortization" as found
in the statements of operations includes all mine-site operating
costs, including the costs of mining, ore processing, maintenance,
work-in-process inventory changes, mine-site overhead as well as
production taxes, royalties, and by-product credits, but excludes
exploration costs, property holding costs, corporate office general
and administrative expenses, foreign currency gains and losses,
gains and losses on asset sales, interest expense, gains and losses
on derivatives, gains and losses on investments and income tax
expense/benefit.
"Cash operating cost per ounce" for a period is equal to "Cost
of sales excluding depreciation and amortization" for the period
less royalties and production taxes, minus the cash component of
metals inventory net realizable value adjustments and severance
charges divided by the number of ounces of gold sold during the
period. We use cash operating cost per ounce as a key
operating indicator. We monitor this measure monthly, comparing
each month's values to third quarters' values to detect trends
that may indicate increases or decreases in operating efficiencies.
We provide this measure to investors to allow them to also monitor
operational efficiencies of the Company's mines. We calculate this
measure for both individual operating units and on a consolidated
basis. Since cash operating costs do not incorporate revenues,
changes in working capital and non-operating cash costs, they are
not necessarily indicative of operating profit or cash flow from
operations as determined under International Financial Reporting
Standards ("IFRS").
"All-in sustaining costs" commences with cash operating costs
and then adds sustaining capital expenditures, corporate general
and administrative costs, mine site exploratory drilling and
greenfield evaluation costs and environmental rehabilitation
costs. 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.
"Cash provided by operations before working capital changes" is
calculated by subtracting the "Changes in working capital" from
"Net cash provided by operating activities" as found in the
statements of cash flows.
In order to indicate to stakeholders the Company's earnings
excluding the non-cash (gain)/loss on the fair value of the
Company's outstanding convertible debentures and non-cash
impairment charges, the Company calculates "adjusted net income/
(loss) attributable to shareholders" to supplement the condensed
consolidated financial statements.
Changes in numerous factors including, but not limited to, our
share price, risk free interest rates, gold prices, mining rates,
milling rates, ore grade, gold recovery, costs of labor,
consumables and mine site general and administrative activities can
cause these measures to increase or decrease. The Company
believes that these measures are similar to the measures of other
gold mining companies, but may not be comparable to similarly
titled measures in every instance.
In the current market environment for gold mining equities, many
investors and analysts are more focused on the ability of gold
mining companies to generate free cash flow from current
operations, and consequently the Company believes these measures
are useful non-IFRS operating metrics ("non-GAAP measures") and
supplement the IFRS disclosures made by the Company. These measures
are not representative of all of Golden
Star's cash expenditures as they do not include income tax
payments or interest costs. There are material limitations
associated with the use of such non-GAAP measures. Since
these measures do not incorporate all non-cash expense and income
items, changes in working capital and non-operating cash costs,
they are not necessarily indicative of operating profit or cash
flow from operations as determined under IFRS.
For additional information regarding the Non-GAAP financial
measures used by the Company, please refer to the heading "Non-GAAP
Financial Measures" in the Company's Management Discussion and
Analysis of Financial Condition and Results of Operations for
the full year ended December 31, available at
www.sedar.com.
Cautionary note regarding forward-looking information
This report contains "forward looking information" within the
meaning of applicable Canadian securities laws and "forward-looking
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995, concerning the business,
operations and financial performance and condition of Golden Star. Generally, forward-looking
information and statements can be identified by the use of
forward-looking terminology such as "plans", "expects", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", "believes" or variations of such words
and phrases (including negative or grammatical variations) or
statements that certain actions, events or results "may", "could",
"would", "might" or "will be taken", "occur" or "be achieved" or
the negative connotation thereof. Forward-looking information
and statements include, but are not limited to, information or
statements with respect to: plans to continue to operate the
non-refractory open pits at Prestea and Wassa, while concurrently
continuing the Wassa Underground and Prestea Underground
development; the timing of stope development and production from
Wassa Underground, and the grade of such production; the risk
profile of the Company and the Company being less operationally
complex; the potential upside of Wassa Underground; Prestea
Underground development being on time and on budget;; gold
production forecast for 2016; 2016 gold production, cash operating
costs and capital expenditures at Wassa and Wassa Underground; 2016
gold production, cash operating costs and capital expenditures at
Prestea and Prestea Underground; the Company's strategy of
transforming its business to being a lower cost non-refractory
producer; the rate of decline development at Wassa Underground in
2016; and matters relating to Ghana energy sources; matters relating to the
feasibility study for Prestea Underground, including estimated
post-tax internal rate of return and net present value of Wassa
underground (including assumed discount rates), and the timing for
first production from Wassa underground; Prestea Underground; the
timing of rehabilitation works, mechanical and electrical
rehabilitation work, pre-development, development and stoping
(including the rate of stoping) at Prestea Underground; and the
impact of Wassa Underground and Prestea Underground production on
the average life of mine cash operating costs and the timing
thereof.
Forward-looking information and statements are made based upon
certain assumptions and other important factors that, if untrue,
could cause the actual results, performances or achievements of
Golden Star to be materially
different from future results, performances or achievements
expressed or implied by such statements. Such statements and
information are based on numerous assumptions regarding present and
future business strategies and the environment in which
Golden Star will operate in the
future, including the price of gold, anticipated costs and ability
to achieve goals. Forward-looking information and statements are
subject to known and unknown risks, uncertainties and other
important factors that may cause the actual results, performance or
achievements of Golden Star to be
materially different from those expressed or implied by such
forward-looking information and statements, including but not
limited to: risks related to international operations, including
economic and political instability in foreign jurisdictions in
which Golden Star operates; risks
related to current global financial conditions; risks related to
joint venture operations; actual results of current exploration
activities; environmental risks; future prices of gold; possible
variations in Mineral Reserves, grade or recovery rates; mine
development and operating risks; accidents, labor disputes and
other risks of the mining industry; delays in obtaining
governmental approvals or financing or in the completion of
development or construction activities and risks related to
indebtedness and the service of such indebtedness. Although
Golden Star has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking information and statements, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
information and statements. Forward-looking information and
statements are made as of the date hereof and accordingly are
subject to change after such date. Forward-looking information and
statements are provided for the purpose of providing information
about management's current expectations and plans and allowing
investors and others to get a better understanding of the Company's
operating environment. Golden Star
does not undertake to update any forward-looking information and
statements that are included in this news release except in
accordance with applicable securities laws.
Technical Information and Quality Control
The technical contents of this press release have been reviewed
and approved by S. Mitchel Wasel, BSc Geology, a "Qualified Person"
pursuant to National Instrument 43-101 ("NI 43-101"). Mr. Wasel is
Vice President Exploration for Golden
Star and an active member of the Australasian Institute of
Mining and Metallurgy.
Additional scientific and technical information relating to the
mineral properties referenced in this news release are contained in
the following current technical reports for those properties
available at www.sedar.com: (i) Wassa - "NI 43-101 Technical Report
on feasibility study of the Wassa open pit mine and underground
project in Ghana" effective date
December 31, 2014; (ii) Prestea
Underground - "NI 43-101 Technical Report on a Feasibility Study of
the Prestea Underground Gold Project in Ghana" effective date November 3, 2015; and (iii) Bogoso - "NI 43-101
Technical Report on Resources and Reserves Golden Star Resources
Ltd., Bogoso Prestea Gold Mine, Ghana" effective date December 31, 2013.
Cautionary note to U.S. investors
This news release has been prepared in accordance with the
requirements of the securities laws in effect in Canada, which differ materially from the
requirements of United States
securities laws applicable to U.S. companies. The terms "mineral
reserve", "proven mineral reserve" and "probable mineral reserve"
are Canadian mining terms as defined in accordance with NI 43-101.
These definitions differ from the definitions of the Securities and
Exchange Commission (the "SEC") set forth in Industry Guide 7 under
the United States Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Under SEC Industry Guide 7 standards,
mineralization may not be classified as a "reserve" unless the
determination has been made that the mineralization could be
economically and legally produced or extracted at the time the
reserve determination is made.
In addition, the terms "mineral resource", "measured mineral
resource", "indicated mineral resource" and "inferred mineral
resource" are defined in and required to be disclosed by NI 43-101;
however, these terms are not defined terms under SEC Industry Guide
7 and are normally not permitted to be used in reports and
registration statements filed with the SEC. Investors are cautioned
not to assume that any part or all of mineral deposits in these
categories will ever be converted into reserves. "Inferred mineral
resources" have a great amount of uncertainty as to their
existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an
inferred mineral resource will ever be upgraded to a higher
category. Investors are cautioned not to assume that all or any
part of an inferred mineral resource exists or is economically or
legally mineable. Disclosure of "contained ounces" in a resource is
permitted disclosure under Canadian regulations; however, the SEC
normally only permits issuers to report mineralization that does
not constitute "reserves" by SEC Industry Guide 7 standards as in
place tonnage and grade without reference to unit measures.
For the above reasons, information contained in this news
release or in the documents referenced herein containing
descriptions of our mineral deposits may not be comparable to
similar information made public by U.S. companies subject to the
reporting and disclosure requirements under the United States federal securities laws and
the rules and regulations thereunder.
SOURCE Golden Star Resources Ltd.