TORONTO, April 13, 2016 /PRNewswire/ - Golden Star
Resources Ltd. (NYSE MKT: GSS; TSX: GSC; GSE: GSR) ("Golden Star"
or the "Company") is pleased to announce that first quarter
production exceeded expectations with approximately 53,000 ounces
of gold produced. Preliminary cash operating costs for the
first quarter are estimated at below $750 per ounce, also lower than expected.
In addition, the Company received $20
million from RGLD Gold AG ("RGLD"), a subsidiary of
Royal Gold, Inc., on April 1, 2016, as per the payment schedule
established in the amended streaming agreement announced on
December 31, 2015.
"As we began demonstrating our ability to deliver reliable
production and stability in costs in the fourth quarter last year,
these first quarter 2016 results continue to enhance confidence in
our ability to deliver on the low-cost producer strategy that was
introduced in 2013," commented Sam
Coetzer, President and CEO of the Company. "The
payment from Royal Gold was also an
important milestone for the Company as it indicates Royal Gold's ongoing confidence in the final
design of our Prestea Underground project which the funds are
earmarked for. With all of the necessary funding committed in
order to develop and place into production our two new underground
projects over the next year and a half, the Company can continue to
focus on its balance sheet and the generation of cash flow that can
be used to further reduce debt."
First Quarter Production and Costs
Production in the first quarter of 2016 was from the open pit
operations with approximately 22,000 ounces of production from
Prestea and approximately 31,000 ounces from Wassa. The open
pit operations at both Wassa and Prestea are expected to be the
primary source of production through 2016 as development work
continues on the respective underground projects. The new
underground projects are scheduled to begin contributing to
production beginning late this year from the Wassa Underground and
in mid-2017 for the Prestea Underground, thereby increasing
annualized production levels by approximately 25% beginning in late
2017.
The preliminary cash operating costs estimated for the first
quarter of 2016 are below $750 per
ounce reflecting a level that is consistent with the new lower cost
structure that has been established by the Company. This
significant change in the cost structure was achieved through the
suspension of the high-cost, high power-consuming refractory
production that was suspended last year, other operational
improvements and cost management measures that have been
implemented. As the Company's entire mineral reserve base and
sources of planned production are comprised solely of
non-refractory ounces, the Company is confident that its lower cost
structure is sustainable going forward as further improvements are
being evaluated.
Streaming Agreement Funds Received
The $20 million payment from RGLD
was paid on April 1, 2016, after the
Company met certain conditions which include the acceptance by RGLD
of the final design of the Prestea Underground mine. This
payment brings the total payments made to date to $95 million of the total $145 million expected before the end of 2016 and
is an important milestone for the Company. The development of
the Prestea Underground project continues and is on track to
commence production in mid-2017.
First Quarter Results Release
The Company will release its first quarter financial results
after the close of market on May 4,
2016 followed by a conference call and webcast at
8:30 a.m. EDT on May 5, 2016.
First Quarter 2016 Conference Call Information
Toll Free (North
America):
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1-888-390-0605
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Toronto Local and
International:
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416-764-8609
|
Webcast:
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http://www.gsr.com/
|
|
|
Conference Call
REPLAY:
|
|
|
|
Toll Free (North
America):
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1-888-390-0541
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Toronto Local and
International:
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416-764-8677
|
Replay
Passcode:
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173120#
|
The conference call replay will be available from 12:00
p.m. EDT on May 5, 2016 until 11:59 p.m.
EDT on May 12, 2016.
Annual & Special Meeting of Shareholders
The annual & special meeting of shareholders will take place
on Thursday May 5, 2016 at
11:30 a.m. EDT at the offices of
Fasken Martineau DuMoulin LLP, Huron / Escarpment Boardrooms, 333
Bay Street, Suite 2400, Bay Adelaide Centre, Toronto, Ontario, Canada.
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 in conjunction with 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.
Non-GAAP Financial Measures
In this news release, we
use the terms "cash operating cost per ounce. This should be
considered as a non-GAAP financial measure as defined in applicable
Canadian and United States
securities laws and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
GAAP. "Cash operating cost per ounce" for a period is equal to the
Company's 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. Golden Star
uses cash operating cost per ounce as a key operating indicator.
Golden Star monitors this measure
monthly, comparing each month's values to prior quarters' values to
detect trends that may indicate increases or decreases in operating
efficiencies. The Company provides this measure to investors to
allow them to also monitor operational efficiencies of the
Company's mines. 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"). 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, 2015, available at
www.sedar.com.
Cautionary note regarding forward-looking information
This news release 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", "budgets",
"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 (or grammatical variations) thereof.
Forward-looking information and statements include, but are not
limited to, information or statements with respect to: the timing
for developing and placing into production the Wassa Underground
and Prestea Underground mines; the Company having all necessary
funding committed in order to develop Wassa Underground and Prestea
Underground; preliminary first quarter 2016 cash operating costs;
sources of production for 2016; the ability of the Company to
reduce its debt and improve its balance sheet; the ability of the
Company to sustain lower cost production; the impact of Wassa
Underground and Prestea Underground on annualized production
levels; and Golden Star transforming
into a low cost producer.
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; 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.
SOURCE Golden Star Resources Ltd.