TORONTO, Feb. 19, 2015 /CNW/ - Golden Star today reports its financial results
for the quarter and full year ended December
31, 2014 ("the fourth quarter" and "the year"
respectively). All references to currency are to US
dollars.
- Gold sold during in 2014 totalled 260,788 ounces (FY 2013:
330,806 ounces) of which 72,085 ounces were sold in the fourth
quarter (Q3 2014: 61,170 ounces)
- Revenue for the year was $328.9
million (FY 2013: $467.8
million) and $86.6 million for
the fourth quarter (Q3 2014: $77.8
million)
- Mine operating expenses and cost of sales before depreciation
and amortization in 2014 reduced by 12% and 19% respectively from
the prior year
- Cash operating cost per ounce1 totalled $1,090 for 2014 (FY 2013: $1,049) and $919
for the fourth quarter (Q3 2014: $1,052)
- Cash provided by operations before working capital changes for
the year totalled $3.1 million (FY
2013: $30.3 million) and $11.7 million in the fourth quarter (Q3 2014:
$1.4 million)
- Profitability improving with adjusted net loss attributable to
shareholders reduced to $12.2 million
(FY 2013: $21.5 million)
- Consolidated cash balance of $39
million at year end, with access to further $25 million in an agreed facility
- Two development projects progressed to PEA with very favourable
results
- 2015 expected to deliver lower operating costs with reduced
mine operating risk
Sam Coetzer, President and CEO of
Golden Star, commented:
"The last quarter of 2014 marks our fourth consecutive quarter of cost
reductions, which were achieved across all operations and at the
corporate level. Combined with the 18% quarter on quarter
increase in ounces produced, these cost savings resulted in a shift
to profitability for the Company in the quarter.
We anticipate these lower costs to be
achieved again in 2015 and subsequently improved upon as we
progress our two development projects into production. In the
fourth quarter, we placed orders for the bulk of Wassa's
construction equipment and received the necessary permit to start
the construction of the exploration decline later this year. At
Prestea we announced the findings of a PEA that indicates this mine
can be run at remarkably low cash costs for a modest capital
investment.
As such, I believe the Company is entering
2015, well positioned to fulfil on our stated strategy of shifting
to low cost production through the expansion of our non-refractory
business line."
1 See "Non-GAAP Financial Measures".
The Company will conduct a conference call and
webcast today, February 19, 2015, to
discuss these results at 10:00am
EST.
The call can be accessed by telephone or by webcast as
follows:
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Participants - Toll free: +1 888 390 0605
Participants - Toll: +1 416 764 8609
Conference ID (all numbers): 59674439
Webcast: www.gsr.com |
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A recording of the conference call will be available until
February 26, 2015 by dialing:
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Toll Free: +1 888 390 0541
Toll: +1 416 764 8677
Replay Passcode: 674439# |
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The webcast will also be available after the call at
www.gsr.com
Company Profile:
Golden Star Resources (NYSE MKT: GSS; TSX: GSC;
GSE: GSR) ("Golden Star" or the "Company") is an established gold
mining company that holds a 90% interest in the Wassa, Prestea and
Bogoso gold mines in Ghana.
In 2014, Golden Star produced
261,000 ounces of gold and is expected to produce 250,000 - 275,000
ounces in 2015. The Company is pursuing brownfield
development projects at its Wassa and Prestea mines that are
expected to transform these mines into lower cost producers from
2016 onwards. As such, Golden
Star offers investors leveraged exposure to the gold price
in a stable African mining jurisdiction with significant
development upside potential.
Summary of Consolidated Operational and Financial
Results:
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For the three months
ended |
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For the years
ended |
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Dec. 31,
2014 |
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Sep. 30,
2014 |
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Dec. 31,
2014 |
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Dec. 31,
2013 |
Wassa gold sold |
oz |
25,831 |
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22,716 |
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112,831 |
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185,807 |
Bogoso gold sold |
oz |
46,254 |
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38,454 |
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147,957 |
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144,999 |
Total gold sold |
oz |
72,085 |
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61,170 |
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260,788 |
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330,806 |
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Average realized price |
$/oz |
1,201 |
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1,271 |
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1,261 |
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1,414 |
Cash operating cost per ounce1 |
$/oz |
919 |
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1,052 |
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1,090 |
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1,049 |
All-in sustaining cost per ounce1 |
$/oz |
1,059 |
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1,222 |
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1,252 |
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1,326 |
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Gold revenues |
$'000 |
86,586 |
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77,758 |
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328,915 |
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467,796 |
Cost of sales excluding depreciation and
amortization |
$'000 |
71,410 |
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70,774 |
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304,912 |
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377,140 |
Depreciation and amortization |
$'000 |
8,150 |
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6,271 |
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26,219 |
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59,966 |
Mine operating margin/(loss) |
$'000 |
7,026 |
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713 |
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(2,216) |
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30,690 |
General and administrative expense |
$'000 |
2,819 |
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3,722 |
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16,367 |
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21,515 |
(Gain)/loss on fair value of 5% of Convertible
Debentures |
$'000 |
(1,501) |
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(5,743) |
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538 |
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(51,967) |
Impairment charges |
$'000 |
57,747 |
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— |
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57,474 |
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355,624 |
Income tax recovery |
$'000 |
(254) |
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(85) |
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(254) |
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(12,331) |
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Adjusted net income/(loss) attributable to Golden
Star Shareholders1 |
$'000 |
8,825 |
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(1,325) |
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(12,234) |
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(21,493) |
Net income/(loss) attributable to Golden Star
shareholders |
$'000 |
(48,155) |
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2,593 |
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(73,079) |
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(265,892) |
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Cash provided by operations before working capital
changes |
$'000 |
11,682 |
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1,374 |
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3,088 |
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30,328 |
Cash provided by/(used in) operations |
$'000 |
4,316 |
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(909) |
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2,411 |
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59,246 |
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Capital expenditures |
$'000 |
9,219 |
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5,952 |
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33,655 |
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102,867 |
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1 See "Non-GAAP Financial Measures".
Review of Financial Performance
Gold sold in 2014 was 260,788 ounces compared to
330,806 sold in 2013. At Bogoso, gold sold increased from
144,999 ounces in 2013 to 147,957 ounces in 2014, after pushbacks
were completed in May of 2014. Gold sold at Wassa decreased
from 185,807 ounces in 2013 to 112,831 ounces in 2014 as mining in
the high grade Father Brown pit ceased in May 2014. Fourth quarter 2014 gold sold was
72,085 ounces, up 18% from 61,170 ounces sold in the prior
quarter.
Revenue for the full year 2014 was $328.9 million, lower than $467.8 million of revenue in 2013 as a result of
the lower gold sales at lower gold prices. The average realized
gold price for the year decreased from $1,414 per ounce in 2013 to $1,261 per ounce in 2014.
Full year cost of sales before depreciation and
amortization reduced by 19% from 2013. This reduction is
attributable to the elimination of higher cost contract miners,
reduction in labour head count, reduced mine site expenditure from
waste stripping, material savings in reagent costs as well as lower
general and administrative costs.
Mine operating margin decreased from
$30.7 million in 2013 to negative
$2.2 million for 2014, predominantly
as a result of Wassa's reduced operating margin. Mine operating
margin for the fourth quarter increased to $7.0 million from $0.7
million in the prior quarter as grade and production
increased at both mines.
Consolidated cash operating costs per ounce
totalled $1,090 per ounce in 2014, up
from $1,049 in 2013. However, fourth
quarter cash operating costs were $919 per ounce, a 13% reduction from the prior
quarter and the lowest cash operating costs per ounce achieved
since 2012. These lower costs per ounce are primarily as a
result of higher head grade, tonnes processed and recoveries at
both mines.
Corporate general and administrative
expenditures were reduced from $21.5
million in 2013 to $16.4
million in 2014. This was achieved with reductions in expat
workers as well as head count and administrative costs in the
corporate office.
The adjusted net income attributable to
Golden Star shareholders for the
fourth quarter was $8.8 million,
compared to an adjusted net loss of $1.3
million in the prior quarter. The improvement in
profitability at Bogoso is the main contributor to a stronger group
overall performance. In addition to this profitability was
improved across the Company's operations for the full year with
lower operating costs and lower general and administrative
expenses. This is reflected in the reduced adjusted net loss
attributable to shareholders of $12.2
million for 2014 from $21.5
million in the prior year.
Cash provided by operations before changes in
working capital for the fourth quarter was $11.7 million compared to $1.4 million in the prior quarter. With minimal
changes to the working capital over the year, cash provided by
operations was $2.4 million for
2014. This compares to cash provided by operations of
$59.2 million in 2013.
Capital expenditures at Wassa and Bogoso for the
fourth quarter totalled $9.2 million
with capital expenditures for the full year of $33.7 million. This is $16.3 million less than the initial
forecast. The consolidated cash balance was $39 million at December
31, 2014 with $10 million
drawn down on credit facilities in the fourth quarter. A
further $25 million remains available
for drawdown on an existing facility.
Review of Operational Performance
Wassa Operations
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For the three months
ended |
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For the years
ended |
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Dec. 31,
2014 |
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Sep. 30,
2014 |
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Dec. 31,
2014 |
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Dec. 31,
2013 |
WASSA FINANCIAL RESULTS |
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Revenue |
$'000 |
30,979 |
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28,936 |
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142,734 |
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263,072 |
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Mine operating expenses |
$'000 |
26,559 |
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24,672 |
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114,667 |
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145,484 |
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Royalties |
$'000 |
1,550 |
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1,449 |
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7,144 |
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13,171 |
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Operating costs from/(to) metals inventory |
$'000 |
(3,107) |
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157 |
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(4,326) |
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4,411 |
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Cost of sales excluding depreciation and
amortization |
$'000 |
25,002 |
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26,278 |
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117,485 |
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163,066 |
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Depreciation and amortization |
$'000 |
4,439 |
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3,015 |
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14,619 |
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40,883 |
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Mine operating margin/(loss) |
$'000 |
1,538 |
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(357) |
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10,630 |
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59,123 |
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Capital expenditures |
$'000 |
5,941 |
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3,751 |
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16,406 |
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33,570 |
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WASSA OPERATING RESULTS |
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Ore mined |
t |
653,061 |
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630,944 |
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2,656,064 |
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2,053,259 |
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Waste mined |
t |
2,830,078 |
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2,316,733 |
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12,398,568 |
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13,258,797 |
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Ore processed |
t |
651,462 |
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612,611 |
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2,629,029 |
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2,695,284 |
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Grade processed |
g/t |
1.32 |
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1.20 |
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1.41 |
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2.29 |
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Recovery |
% |
93.4 |
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91.9 |
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92.7 |
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94.5 |
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Gold sales |
oz |
25,831 |
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22,716 |
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112,831 |
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185,807 |
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Cash operating cost per ounce1 |
$/oz |
908 |
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1,072 |
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971 |
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805 |
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1 See "Non-GAAP Financial Measures".
Ore tonnes mined in the fourth quarter were in
line with the prior quarter. The strip ratio in the fourth
quarter increased marginally to 4.3:1 (Q3 2014: 3.7:1) in line with
the mine plan. The strip ratio is forecast to increase in the
early part of 2015 but otherwise is expected to be lower for
2015. Mining activities in 2014 are not directly comparable
with 2013, when ore was sourced from both the Wassa and Father
Brown pits. Mining at Father Brown pit ceased in May 2014.
During December
2014, Wassa participated in load shedding activities at the
request of the Ghanaian Ministry of Power. Through careful
planning of maintenance and scheduled downtime at Wassa, the impact
on the mine's processing capacity was mitigated. The Ministry
has requested that further load shedding take place in 2015.
At present two of Ghana's three thermal plants are running at
below capacity and the third is offline. Furthermore the
country's hydroelectric plants are running at well below capacity
due to low water levels in the three main dams. This is
expected to be alleviated once the rainy season starts towards the
middle of the year.
It is expected that two of the three thermal
plants will be running at capacity again by the start of the second
quarter of 2015 when gas supply from offshore sources and
Nigeria are expected to come
online. The third thermal plant is also under construction
and expected to be online in the first half of 2015. The
Company's total production for 2015 may be adversely impacted if
rainfall in the hydro-electric catchment area is below expectations
and the supply of natural gas remains constrained.
The Wassa processing plant performed at rated
capacity over both the fourth quarter and the year.
Grade processed in 2014 declined in line with
the grade mined, with only material from the Wassa Main pit being
processed in the second half of the year. While mining in the
Father Brown pit was profitable in 2013, continued mining beyond
May 2014 would have required an
investment of approximately $26
million in betterment stripping.
Grade mined and processed at Wassa in the fourth
quarter increased from 1.20 g/t Au in the prior quarter to 1.32 g/t
Au. Grade is forecast to increase steadily through 2015 and
average 1.4-1.5 g/t Au for the year.
Gold produced and sold at Wassa totalled 112,831
ounces in 2014, a reduction from the 185,807 ounces sold in
2013. Ounces produced and sold increased in the fourth
quarter to 25,831 from 22,716 in the prior quarter with more tonnes
processed at higher grade.
Mine operating expenses for Wassa totalled
$114.7 million for the full year
2014, $30.8 million lower than those
incurred during 2013. This 21% reduction in expenses is largely due
to the termination of higher cost contract mining and long haul
distances from the Father Brown pit as well as cost savings in
other parts of the operations.
Wassa's cash operating cost per ounce for 2014
increased to $971 from $805 in 2013, due to fewer ounces recovered from
the lower grade ore. Fourth quarter cash operating costs per ounce
reduced to $908 from $1,072 in the third quarter.
Capital expenditures for 2014 totalled
$16.4 million, of which $7.9 million was spent on development
drilling below the Wassa Main pit and $2.9
million was spent in the construction of the new tailings
facility. This reduction in capital expenditure relative to
guidance of $19.0 million was
achieved by deferring expenditure on the Wassa tailings facility
and modifications to the processing plant.
Wassa Underground
It is the Company's intention to develop an
underground mine at Wassa that will operate in conjunction with the
existing open pit mine and as such, a preliminary economic
assessment ("PEA") of this combined operation was completed during
the third quarter of 2014. The PEA indicates a post-tax IRR of 78%
with a NPV for the entire mine of $271
million assuming a gold price of $1,200 per ounce and a 5% discount rate.
The PEA indicates that with the expansion to
underground mining in 2016, cash operating costs per ounce and
all-in sustaining costs per ounce are estimated to reduce to
approximately $680 and $780, respectively, for the life of the Wassa
mine.
As Wassa was successful in securing financing in
September 2014, the construction of
an exploration decline is expected to commence in the second
quarter of 2015. The permits necessary to construct the
decline were obtained in late 2014. A feasibility study to
improve the accuracy of the economics and reduce the associated
risks to this project is currently underway and the results are
expected to be released in the first quarter of 2015. The
Environmental Impact Assessment is also underway and expected to be
submitted in late 2015. First production from test stoping at
Wassa underground is expected in the first half of 2016 and the
mine life is currently estimated at ten years thereafter.
Bogoso Operations
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For the three months
ended |
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For the years
ended |
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Dec. 31,
2014 |
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Sep. 30,
2014 |
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Dec.
31,
2014 |
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Dec. 31,
2013 |
BOGOSO FINANCIAL RESULTS |
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Revenue |
$'000 |
55,607 |
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48,822 |
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186,181 |
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204,724 |
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Mine operating expenses |
$'000 |
44,362 |
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45,035 |
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182,864 |
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193,490 |
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Royalties |
$'000 |
2,782 |
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2,442 |
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9,315 |
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10,243 |
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Operating costs from/(to) metals inventory |
$'000 |
(736) |
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(2,981) |
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(4,752) |
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10,341 |
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Cost of sales excluding depreciation and
amortization |
$'000 |
46,408 |
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44,496 |
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187,427 |
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214,074 |
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Depreciation and amortization |
$'000 |
3,711 |
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3,256 |
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11,600 |
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19,083 |
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Mine operating margin/(loss) |
$'000 |
5,488 |
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1,070 |
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(12,846) |
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(28,433) |
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Capital expenditures |
$'000 |
3,278 |
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2,201 |
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17,249 |
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69,079 |
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BOGOSO OPERATING RESULTS |
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Ore mined refractory |
t |
729,921 |
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775,241 |
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2,690,760 |
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1,755,039 |
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Ore mined non-refractory |
t |
— |
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— |
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— |
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391,289 |
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Total ore mined |
t |
729,921 |
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775,241 |
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2,690,760 |
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2,146,328 |
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Waste mined |
t |
1,694,068 |
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2,142,733 |
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12,169,105 |
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23,409,092 |
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Refractory ore processed |
t |
665,123 |
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559,122 |
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2,542,273 |
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2,352,314 |
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Refractory ore grade |
g/t |
2.73 |
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2.67 |
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2.30 |
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2.24 |
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Gold recovery - refractory ore |
% |
72.2 |
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72.7 |
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70.3 |
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68.7 |
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Non-refractory ore processed |
t |
331,769 |
|
315,349 |
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1,382,213 |
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1,190,954 |
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Non-refractory ore grade |
g/t |
1.02 |
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1.07 |
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0.96 |
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1.39 |
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Gold recovery - non-refractory ore |
% |
39.4 |
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42.4 |
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39.2 |
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48.1 |
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Gold sold refractory |
oz |
41,968 |
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33,610 |
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130,208 |
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119,856 |
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Gold sold non-refractory |
oz |
4,286 |
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4,844 |
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17,749 |
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25,143 |
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Gold sales (total) |
oz |
46,254 |
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38,454 |
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147,957 |
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144,999 |
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Cash operating cost per ounce1 |
$/oz |
926 |
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1,041 |
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1,180 |
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1,361 |
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1 See "Non-GAAP Financial Measures".
In 2014, Bogoso benefitted from the investment
made in the betterment stripping campaign that took place from 2012
through to early 2014. As a result of this, access to ore was
dramatically improved and ore tonnes mined in the year increased
53% from the prior year. The strip ratio in the refractory
pits continued to reduce from 2.8:1 in the third quarter of 2014 to
2.3:1 in the fourth quarter, and was 4.5:1 for the year. The
refractory pits are expected to be mined out by the third quarter
of 2015 after which the refractory plant will be placed on care and
maintenance.
Bogoso was not impacted by load shedding
activities in December 2014.
Power from the Wassa power generating facility was fed back into
the national grid in Ghana in
December. By agreement with Ghanaian Ministry of Energy this
has to date, and should continue to, alleviate any requirement to
reduce power consumption at Bogoso.
Bogoso gold production and sales totalled
147,957 ounces for 2014, up slightly from 144,999 ounces sold in
2013. In the fourth quarter, production improved 20% from the
prior quarter to 46,254 ounces as grade and tonnes processed at
refractory operations increased.
Revenue decreased from $204.7 million in 2013 to $186.2 million in 2014 as realized gold prices
declined by 11%. Revenue in the fourth quarter increased in
line with ounces sold from $48.8
million to $55.6 million.
Retreatment of tailings at Bogoso continued in
the fourth quarter. After delineating the areas of the
tailings storage facility with higher grade and less complex
metallurgy, material was exclusively mined in these benches over
the last two quarters. With less water in the tailings
facility, tonnes mined and treated increased in the fourth quarter
but at slightly lower grade which impacted total production.
In the fourth quarter 2014 Bogoso's mine
operating expenses were $44.4 million
which was in line with the prior quarter. Despite total
tonnes mined decreasing in the fourth quarter, tonnes processed
increased by 14% which contributed to higher expenses.
For the full year, mine operating expenses and
cash operating costs reduced by 5% and 9% respectively from
2013. These savings were achieved in labour cost reductions,
lower waste mining costs, improved maintenance practices and a
reduction in reagent consumption.
Cash operating cost per ounce totalled
$926 for the fourth quarter of 2014,
compared to $1,041 per ounce in the
third quarter of 2014. These are the lowest costs per ounce
achieved at Bogoso in the last four years. For the year,
Bogoso's cash costs were $1,180 per
ounce, a 13% reduction from 2013.
Capital expenditures for 2014 totalled
$17.2 million, which is greatly
reduced from $69.1 million in 2013.
Capital expenditure in 2014 was below the forecast $30 million with reduced expenditure on
maintenance and dewatering at Prestea as well as less investment in
refractory development projects and on the Biox plant at
Bogoso.
Prestea
Prestea is an underground mine which has been in
existence for over 100 years and has produced an estimated 9
million ounces of gold to date. It is currently on care and
maintenance while evaluation and exploration activities are taking
place.
In line with the Company's strategy to pursue
growth from low cost ounces, the decision was taken to review the
optimal mining method for Prestea initially published in
June 2013. In November 2014, a revised PEA for Prestea was
published. This PEA is based on the development of a
non-mechanized mining operation for which the associated capital
expenditure is substantially lower and the IRR superior.
Based on the assumption of a gold price of $1,200 per ounce, the results indicate an IRR of
72%, NPV at a 5% discount rate of $121
million and a payback period of 2.5 years from the start of
development.
In 2015, $12.6
million of capital expenditures is expected to be spent at
Prestea.
Outlook
The Company remains focused on the execution of
its strategy of transforming Golden
Star to a low cost non-refractory gold producer.
Consolidated cash operating costs per ounce finished the year at
their lowest point in over three years, an improvement that is
estimated to continue into 2015.
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 to below $700 per ounce from 2016 onwards. Similarly
all-in sustaining costs are expected to be below $750 per ounce from 2016 onwards. The
Company is in discussions with a number of providers of capital to
secure financing to complete these projects.
GOLDEN STAR RESOURCES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in thousands of U.S. dollars except
shares and per share data)
|
|
|
|
For the years ended
December 31, |
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
328,915 |
|
$ |
467,796 |
|
Cost of sales excluding depreciation and
amortization |
|
304,912 |
|
|
377,140 |
|
Depreciation and amortization |
|
26,219 |
|
|
59,966 |
Mine operating (loss)/
margin |
|
(2,216) |
|
|
30,690 |
|
|
|
|
|
|
Other expenses/(income) |
|
|
|
|
|
|
Exploration expense |
|
556 |
|
|
1,667 |
|
General and administrative |
|
16,367 |
|
|
21,515 |
|
Property holding costs |
|
— |
|
|
7,018 |
|
Finance expense, net |
|
7,375 |
|
|
9,841 |
|
Other income |
|
(1,104) |
|
|
(2,163) |
|
Loss/ (gain) on fair value of 5% Convertible
Debentures |
|
538 |
|
|
(51,967) |
|
Impairment charges |
|
57,747 |
|
|
355,624 |
Loss before tax |
|
(83,695) |
|
|
(310,845) |
|
Income tax recovery |
|
(254) |
|
|
(12,331) |
Net loss |
|
$ |
(83,441) |
|
$ |
(298,514) |
Net loss attributable to
non-controlling interest |
|
(10,362) |
|
|
(32,622) |
Net loss attributable to Golden
Star shareholders |
|
$ |
(73,079) |
|
$ |
(265,892) |
|
|
|
|
|
|
Net loss per share attributable to
Golden Star shareholders |
|
|
|
|
|
Basic and diluted |
|
$ |
(0.28) |
|
$ |
(1.03) |
Weighted average shares
outstanding-basic and diluted (millions) |
|
259.4 |
|
|
259.1 |
|
|
|
|
|
|
GOLDEN STAR RESOURCES LTD.
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE LOSS
(Stated in thousands of U.S. dollars)
|
|
|
|
|
For the years ended
December 31, |
|
|
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE LOSS |
|
|
|
|
|
|
Net loss |
|
|
$ |
(83,441) |
|
|
$ |
(298,514) |
|
|
Unrealized loss on investments, net of taxes |
|
|
— |
|
|
(7,626) |
|
|
Transferred to net loss, net of taxes |
|
|
— |
|
|
1,370 |
|
Comprehensive loss |
|
|
(83,441) |
|
|
(304,770) |
|
Comprehensive loss attributable to
non-controlling interest |
|
|
(10,362) |
|
|
(32,622) |
|
Comprehensive loss
attributable to Golden Star shareholders |
|
|
$ |
(73,079) |
|
|
$ |
(272,148) |
|
|
|
|
|
|
|
|
|
GOLDEN STAR RESOURCES LTD.
CONSOLIDATED BALANCE SHEETS
(Stated in thousands of U.S.
dollars)
|
|
|
As of
December
31, |
|
|
As of
December
31, |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
39,352 |
|
|
$ |
65,551 |
|
|
Accounts receivable |
14,832 |
|
|
8,200 |
|
|
Inventories |
54,279 |
|
|
67,725 |
|
|
Prepaids and other |
4,767 |
|
|
6,852 |
|
|
Total Current Assets |
113,230 |
|
|
148,328 |
|
Restricted cash |
2,041 |
|
|
2,029 |
|
Mining interests |
142,782 |
|
|
165,193 |
|
Exploration and evaluation assets |
— |
|
|
9,747 |
|
Intangible assets |
— |
|
|
446 |
|
|
Total Assets |
$ |
258,053 |
|
|
$ |
325,743 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
123,451 |
|
|
$ |
108,983 |
|
|
Current portion of rehabilitation provisions |
4,562 |
|
|
7,783 |
|
|
Current tax liability |
— |
|
|
9,506 |
|
|
Current portion of long term debt |
17,181 |
|
|
10,855 |
|
|
Total Current Liabilities |
145,194 |
|
|
137,127 |
|
Long term debt |
85,798 |
|
|
83,387 |
|
Rehabilitation provisions |
81,254 |
|
|
78,527 |
|
|
Total Liabilities |
312,246 |
|
|
299,041 |
|
|
|
|
|
|
|
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 |
695,266 |
|
|
694,906 |
|
Contributed surplus |
31,532 |
|
|
29,346 |
|
Deficit |
(725,623) |
|
|
(652,544) |
|
|
Total Golden Star Equity |
1,175 |
|
|
71,708 |
|
Non-controlling interest |
(55,368) |
|
|
(45,006) |
|
|
Total Equity |
(54,193) |
|
|
26,702 |
|
|
Total Liabilities and Shareholders'
Equity |
$ |
258,053 |
|
|
$ |
325,743 |
|
|
|
|
|
|
|
|
|
|
GOLDEN STAR RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in thousands of U.S.
dollars)
|
|
|
|
For the years ended
December 31, |
|
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
OPERATING ACTIVITIES: |
|
|
|
|
|
Net loss |
|
$ |
(83,441) |
|
$ |
(298,514 |
|
Reconciliation of net loss to net
cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
26,267 |
|
60,008 |
|
|
Gain on sale of assets |
|
(117) |
|
(1,271) |
|
|
Write-off of unsuccessful exploration
costs |
|
— |
|
1,333 |
|
|
Impairment charges |
|
57,747 |
|
355,624 |
|
|
Share-based compensation |
|
2,515 |
|
3,013 |
|
|
Deferred income tax recovery |
|
— |
|
(32,936) |
|
|
Loss/ (gain) on fair value of 5%
Convertible Debentures |
|
538 |
|
(51,967) |
|
|
Accretion of rehabilitation
provisions |
|
1,746 |
|
592 |
|
|
Amortization of deferred financing
fees |
|
248 |
|
103 |
|
|
Reclamation expenditures |
|
(3,554) |
|
(5,657) |
|
|
Other |
|
1,139 |
|
— |
|
|
Changes in working capital |
|
(677) |
|
28,918 |
|
|
|
Net cash (used in)/provided by operating
activities |
|
2,441 |
|
59,246 |
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Additions to mining properties |
|
(73) |
|
(62,415) |
|
|
Additions to plant and equipment |
|
(499) |
|
(3,780) |
|
|
Additions to construction in
progress |
|
(32,232) |
|
(36,454) |
|
|
Additions to exploration and
evaluation assets |
|
— |
|
(218) |
|
|
Capitalized interest |
|
(851) |
|
— |
|
|
Change in accounts
payable and deposits on mine equipment and material |
|
(2,894) |
|
(5,695) |
|
|
Proceeds from sale of assets |
|
— |
|
7,200 |
|
|
Other investing activities |
|
(12) |
|
— |
|
|
|
Net cash used in investing activities |
|
(36,561) |
|
(101,362) |
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Principal payments on debt |
|
(12,049) |
|
(7,876) |
|
|
Proceeds from debt agreements |
|
20,000 |
|
36,507 |
|
|
Exercise of options |
|
— |
|
152 |
|
|
|
Net cash provided by financing activities |
|
7,951 |
|
28,783 |
|
Decrease in cash and cash
equivalents |
|
(26,199) |
|
(13,333) |
|
Cash and cash equivalents, beginning
of period |
|
65,551 |
|
78,884 |
|
Cash and cash equivalents, end of
period |
|
$ |
39,352 |
|
$ |
65,551 |
|
|
|
|
|
|
|
|
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, |
|
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
86,586 |
|
|
$ |
96,034 |
|
|
Cost of sales excluding depreciation and
amortization |
|
71,410 |
|
|
88,549 |
|
|
Depreciation and amortization |
|
8,150 |
|
|
9,673 |
|
Mine operating
margin/(loss) |
|
7,026 |
|
|
(2,188) |
|
|
|
|
|
|
|
Other expenses/(income) |
|
|
|
|
|
|
Exploration expense |
|
229 |
|
|
150 |
|
|
General and administrative |
|
2,819 |
|
|
5,098 |
|
|
Finance expense, net |
|
1,847 |
|
|
2,838 |
|
|
Other income |
|
(316) |
|
|
(1,531) |
|
|
Gain on fair value of 5% Convertible
Debentures |
|
(1,501) |
|
|
(1,624) |
|
|
Impairment charges |
|
57,747 |
|
|
159,704 |
|
Loss before tax |
|
(53,799) |
|
|
(166,823) |
|
|
Income tax recovery |
|
(254) |
|
|
(1,518) |
|
Net loss |
|
$ |
(53,545) |
|
|
$ |
(165,305) |
|
Net loss attributable to
non-controlling interest |
|
(5,390) |
|
|
(16,729) |
|
Net loss attributable to Golden
Star shareholders |
|
$ |
(48,155) |
|
|
$ |
(148,576) |
|
|
|
|
|
|
|
Net loss per share
attributable to Golden Star shareholders |
|
|
|
|
|
Basic and diluted |
|
$ |
(0.19) |
|
|
$ |
(0.57) |
|
Weighted average shares outstanding
(millions) |
|
259.4 |
|
|
259.1 |
|
Weighted average shares
outstanding-diluted (millions) |
|
259.4 |
|
|
259.1 |
|
|
|
|
|
|
|
|
GOLDEN STAR RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - Stated in thousands of U.S.
dollars)
|
|
|
|
For the three months ended
December 31, |
|
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
OPERATING ACTIVITIES: |
|
|
|
|
|
Net loss |
|
$ |
(53,545) |
|
$ |
(165,305) |
|
Reconciliation of
net income to net cash provided by/(used in)
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
8,160 |
|
9,675 |
|
|
Gain on sale of assets |
|
(117) |
|
(952) |
|
|
Loss on retirement of asset |
|
(141) |
|
— |
|
|
Write-off of unsuccessful exploration
costs |
|
— |
|
1,333 |
|
|
Impairment of
asset |
|
57,747 |
|
159,704 |
|
|
Share-based compensation |
|
326 |
|
413
|
|
|
Deferred income tax expense |
|
— |
|
150 |
|
|
Gain on fair value of 5% Convertible
Debentures |
|
(1,501) |
|
(1,624) |
|
|
Accretion of rehabilitation
provisions |
|
437 |
|
148 |
|
|
Amortization of deferred financing
fees |
|
62 |
|
62
|
|
|
Reclamation expenditures |
|
(408) |
|
(738) |
|
|
Other |
|
662 |
|
— |
|
|
Changes in working capital |
|
(7,366) |
|
(5,267) |
|
|
|
Net cash provided by/(used in) operating
activities |
|
4,316 |
|
(2,401) |
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Additions to mining properties |
|
- |
|
(10,936) |
|
|
Additions to plant and equipment |
|
- |
|
(1,577) |
|
|
Additions to construction in
progress |
|
(8,368) |
|
(10,000) |
|
|
Capitalized interest |
|
(851) |
|
— |
|
|
Change in accounts payable and
deposits on mine equipment and material |
|
1,889 |
|
4,440 |
|
|
Other investing activities |
|
(7) |
|
(66) |
|
|
|
Net cash used in investing activities |
|
(7,337) |
|
(18,139) |
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Principal payments on debt |
|
(3,657) |
|
(2,235)
|
|
|
Proceeds from debt agreements |
|
10,000 |
|
21,688 |
|
|
|
Net cash provided by financing activities |
|
6,343 |
|
19,453 |
|
|
|
Increase/(decrease) in cash and
cash equivalents |
|
3,322 |
|
(1,087) |
|
|
|
Cash and cash equivalents, beginning of
period |
|
36,030 |
|
66,638 |
|
|
|
Cash and cash equivalents, end of period |
|
$ |
39,352 |
|
$ |
65,551 |
|
|
|
|
|
|
|
|
|
|
|
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 working capital changes" 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 prior 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 three and nine months ended
September 30, 2014 and the Company's
Management Discussion and Analysis of Financial Condition and
Results of Operations for the Year Ended December 31, 2013, 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: expected
improvements to cash operating costs at Wassa and Bogoso for 2015;
anticipated average life of mine cash operating costs after
development of the Wassa and Prestea underground mines for 2016 and
beyond; gold production forecast for 2015; grades, mine operating
expense and gold production at Wassa and Bogoso through 2015; the
Company's strategy of transforming its business to being a lower
cost non-refractory producer; plans and expectations related to
Wassa, including strip ratio expectations in 2015, load shedding
activities in 2015 and matters relating to Ghana energy sources; matters relating to a
feasibility study for Wassa, including estimated post-tax IRR and
NPV of Wassa underground (including assumed discount rates), and
the timing for first production from Wassa underground; plans for
the Bogoso refractory pits to be mined out in 2015; and
expectations for securing funding to develop Prestea and 2015
Prestea expected expenditures.
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.
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 National Instrument 43-101 - Standards of Disclosure for
Mineral Projects ("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. Among
other things, all necessary permits would be required to be in hand
or issuance imminent in order to classify mineralized material as
reserves under the SEC standards. Under SEC Industry Guide 7
standards, a "final" or "bankable" feasibility study is required to
report reserves, the three-year historical average price is used in
any reserve or cash flow analysis to designate reserves and the
primary environmental analysis or report must be filed with the
appropriate governmental authority.
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. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or
pre-feasibility studies, except in rare cases. 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.
Additional information regarding Wassa and
Prestea are available in the Company's National Instrument 43-101
compliant technical reports titled "NI 43-101 Technical Report on a
Preliminary Economic Assessment of the Wassa Open Pit Mine and
Underground Project in Ghana" and
"NI 43-101 Technical Report on Preliminary Economic Assessment
Shrinkage Mining of the West Reef Resource, Prestea Underground
Mine, Ghana", respectively.
SOURCE Golden Star Resources Ltd.