TORONTO, July 18, 2016 /PRNewswire/ - Golden Star
Resources (NYSE MKT: GSS; TSX: GSC; GSE: GSR) ("Golden Star" or the
"Company") announces its operational results for the second quarter
of 2016.
Highlights:
- Gold production of 42,461 ounces during the second quarter of
2016, in line with expectations
- As stated in first quarter 2016 results, production from the
Wassa Gold Mine ("Wassa") was impacted by a 2.5 week scheduled
plant shutdown
- At the half year, Golden Star
remains on track to achieve its full year guidance for production,
cash operating costs and capital expenditure
- $20 million received from RGLD
Gold AG ("RGLD"), a subsidiary of Royal
Gold, Inc., post quarter-end, as per the payment
schedule
- First stope was blasted successfully at the Wassa Underground
Gold Mine ("Wassa Underground") on July 10,
2016, as previously announced
Second Quarter Production and Costs
Golden Star produced 42,461
ounces of gold during the second quarter of 2016 from its open pit
operations, with production from Wassa of 21,543 ounces of gold and
production from the Prestea Gold Mine ("Prestea") of 20,918
ounces of gold.
Golden Star expected there to be
a decline in second quarter 2016 production compared to the first
quarter due to a scheduled maintenance shutdown at the Wassa
processing plant, in addition to the seasonality traditionally
impacting the second and third quarters of the year. The
planned shutdown lasted for 2.5 weeks and during this time
Golden Star's operational team
rebuilt the ball mill foundation, replaced critical components of
the primary crusher and upgraded the electrical system in the
carbon-in-leach plant. This work was completed successfully
and the operational team has reported an increase in throughput as
a result.
At the half year, Golden Star
remains on track to achieve its 2016 production guidance of
180,000-205,000 ounces of gold with cash operating costs of
$815-$925 per ounce (see "Non-GAAP
Financial Measures" below). The Company also continues to
expect sustaining capital expenditure of $9
million and development capital expenditure of $81 million for total capital spending of
$90 million for the year.
Post-Period Events
Pre-commercial production commenced at Wassa Underground on
July 10, 2016. The successful
blasting of the first stope in the F Shoot delivered the first ore
from the new underground mine to the Wassa processing plant.
This first stope was in the upper part of the F Shoot, which is one
of the more moderate grade areas of the deposit. The higher
grade areas within the B Shoot are scheduled to be accessed in
early 2017. Ore from Wassa Underground will be mined in
conjunction with ore from the Wassa Main pit and blended for
feeding to the processing plant.
Golden Star received $20 million from RGLD on July 1, 2016, pursuant to the payment schedule
established in the amended streaming agreement announced on
December 31, 2015. This payment
brings the payments made to date to $115
million of the total $145
million expected before the end of January 2017.
Payments under the amended streaming agreement are being used to
enable Golden Star to continue its
transformation to becoming a low cost, non-refractory gold
producer.
Sam Coetzer, President and
Chief Executive Officer of Golden
Star, commented:
"At the half year point, we are well-positioned to achieve
our guidance for full year production, cash operating costs and
capital expenditure. Although the second quarter was weaker
than the first quarter, as expected, I am pleased that the upgrades
to the Wassa processing plant were completed on time and on
budget. The plant is now in good shape to process the higher
grade ore coming from Wassa Underground, following the blasting of
the first stope on July 10,
2016. Golden Star is at an
exciting point in its transformation and I look forward to updating
the market on other important milestones, such as the start of the
development of Prestea Underground Mine, during the second half of
the year."
Golden Star will announce its
full Second Quarter 2016 operational and financial results after
market close on July 27, 2016, as
previously announced.
All monetary amounts refer to United States dollars unless otherwise
indicated.
Company Profile
Golden Star is an established
gold mining company that owns and operates the Wassa and Prestea
mines 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 commenced pre-commercial production in mid-2016
and the Prestea Underground is expected to commence production in
mid-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.
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", "guidance",
"becoming", "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: sustaining
capital expenditures and development capital expenditures for 2016;
the Company's strategy of transforming its business to being a high
grade, lower cost producer; the timing for accessing higher grade
ore at Wassa Underground; the ability to mine Wassa Underground in
conjunction with Wassa Main Pit; the
timing for beginning development at Prestea Underground; the timing
of first production at Prestea Underground; and production and cash
operating cost estimates for 2016.
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
production, cash costs, exploration and development activities
compared to guidance or anticipated results; 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;
changes in governmental regulations and requirements; delays in
obtaining governmental approvals or financing or in the completion
of development or construction activities; the risks related to
indebtedness and the service of such indebtedness; and the
availability of financing on acceptable terms or at all. 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 our Annual Information
Form for the year ended December 31,
2015. 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 and that actual results will vary from these estimates,
possibly by material amounts. While we may elect to update
these estimates at any time, we do not undertake to update any
estimate at any particular time or in response to any particular
event. Investors and others should not assume that any
forecasts in this press release represent management's estimate as
of any date other than the date of this press release.
Non-GAAP Financial Measures
In this press release, we use the term "cash operating cost per
ounce". This term should be considered to be 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 "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 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. Golden Star 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").
These non-GAAP financial 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 financial 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.
SOURCE Golden Star Resources Ltd.