TORONTO, Oct. 28, 2015 /CNW/ - Golden Star today
reports its financial and operational results for the quarter ended
September 30, 2015 ("the third
quarter" or "the period"). All references to currency are in
US dollars.
Golden Star continued to execute its plan to transition to a
higher margin, lower cost producer. During the quarter, four
key elements of this plan were advanced including unit cost
reductions through increased productivity, continued development of
the high grade underground deposits at Wassa and Prestea,
commencement of mining of free milling ore at Prestea surface
operations, and suspension of the refractory plant.
Consolidated Operational Results:
- Gold produced and sold during the third quarter was 51,898
ounces compared to 55,132 ounces in the prior quarter
- Revenue for the third quarter was $56.5
million compared to $65.8
million for the prior quarter
- Cost of sales before depreciation and amortization reduced to
$55.2 million from $78.7 million in the prior quarter
- Consolidated cash operating cost per ounce1 was
$988 for the third quarter compared
to $1,113 in the prior quarter
- Net loss for the third quarter was $6.8
million, or $0.03 per share,
compared to a net loss of $61.5
million, or $0.24 per share,
in the prior quarter
Unit Operational Results:
- Wassa Open Pit produced 28,848 ounces compared with 24,829
ounces in the prior quarter
- Wassa cash operating costs1 decreased to
$770 per ounce from $918 per ounce in the prior quarter
- Refractory operations were suspended at Bogoso during the third
quarter, resulting in production of 15,648 ounces compared with
25,702 ounces in the prior quarter
- Bogoso/Prestea produced 23,050 ounces at $1,261 per ounce cash operating cost compared
with 30,303 ounces at $1,273 per
ounce in the prior quarter
Project Development:
- Wassa Underground decline was advanced by 205 meters at the end
of the third quarter, and it has reached 382 meters to date
- Prestea Open Pits mining commenced in August 2015 and the non-refractory business line
at Bogoso/Prestea produced 7,402 ounces in the third quarter
compared to 4,601 ounces in the prior quarter
- Prestea Underground Mine rehabilitation commenced in September
and production is anticipated to resume in 2017
- The loan and stream financing from Royal Gold, Inc. and its wholly-owned subsidiary
respectively was completed with $20
million received under the term loan and $55 million of the $130
million stream advance received
Cash provided by operations for the third quarter was
$45.3 million which includes the
incremental stream proceeds received from Royal Gold. Consolidated cash balance was
$27.7 million at quarter end.
1 See "Non-GAAP Financial Measures".
Sam Coetzer, President and CEO of
Golden Star, commented:
"I am confident that Golden Star has reached the stage where
we are managing a less complex and more streamlined business. This
was achieved with the suspension of the refractory plant, the
reduction in workforce, the startup of mining from the Prestea Open
Pits, and the progress made at Wassa Underground development.
Having arranged financing with Royal
Gold for $150 million, we are
now in a position to bring our two new low cost projects into
production. These achievements are a reflection of the focus and
dedication of the Golden Star team, the quality of our assets, and
the clarity of our vision."
Golden Star management will conduct a conference call and
webcast on October 29, 2015, at
10:00am EDT to discuss these
results.
The quarterly results 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: 63863007
Webcast: www.gsr.com
A recording of the call will be available until November 5, 2015 by dialing:
Toll free: +1 888 390 0541
Toll: +1 416 764 8677
Replay passcode: 863007 #
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 with two producing mines, Wassa and Bogoso/Prestea, on the
prolific Ashanti Gold Belt in
Ghana. In 2014, Golden Star produced 261,000 ounces of
gold. The Company is financed to develop underground mines
below existing open pit operations which are expected to reduce
unit costs further when in production from 2016 onwards. As such,
the Company offers investors leveraged, un-hedged exposure to the
gold price with low operational risk in a stable African mining
jurisdiction in addition to significant exploration and development
upside potential.
Summary of Consolidated Operational and Financial
Results:
|
|
Three
months
ended
Sept. 30,
|
|
Three
months
ended
Jun. 30,
|
|
|
|
2015
|
|
2015
|
|
SUMMARY OF
CONSOLIDATED FINANCIAL RESULTS
|
|
|
|
|
|
Wassa gold
sold
|
oz
|
28,848
|
|
24,829
|
|
Bogoso gold
sold
|
oz
|
23,050
|
|
30,303
|
|
Total gold
sold
|
oz
|
51,898
|
|
55,132
|
|
|
|
|
|
|
Average realized
price
|
$/oz
|
1,088
|
|
1,193
|
|
Cash operating cost
per ounce - combined1
|
$/oz
|
988
|
|
1,113
|
|
All-in sustaining
cost per ounce1
|
$/oz
|
1,151
|
|
1,302
|
|
|
|
|
|
|
Gold
revenues
|
$'000
|
56,452
|
|
65,796
|
|
Cost of sales
excluding depreciation and amortization
|
$'000
|
55,199
|
|
78,738
|
|
Depreciation and
amortization
|
$'000
|
5,525
|
|
13,175
|
|
Mine operating
loss
|
$'000
|
(4,272)
|
|
(26,117)
|
|
General and
administrative expense
|
$'000
|
3,299
|
|
4,829
|
|
(Gain)/loss on fair
value of 5% Convertible Debentures
|
$'000
|
(4,911)
|
|
1,266
|
Impairment
charges
|
$'000
|
—
|
|
34,396
|
|
|
|
|
|
Adjusted net loss
attributable to shareholders1
|
$'000
|
(10,831)
|
|
(15,979)
|
|
Net loss attributable
to shareholders
|
$'000
|
(6,832)
|
|
(61,503)
|
|
Adjusted loss per
share – basic and diluted
|
$
|
(0.04)
|
|
(0.06)
|
|
|
|
|
|
|
Cash provided
by/(used in) by operations
|
$'000
|
45,341
|
|
(2,664)
|
|
Cash provided
by/(used in) operations before working capital changes
|
$'000
|
38,508
|
|
(8,670)
|
|
Cash provided
by/(used in) by operations per share – basic and diluted
|
$
|
0.17
|
|
(0.01)
|
|
|
|
|
|
|
Capital
expenditures
|
$'000
|
17,789
|
|
12,754
|
|
|
|
|
|
|
|
|
1 See "Non-GAAP Financial Measures".
Review of Financial Performance
Gold produced and sold in the period was 51,898 ounces compared
to 55,132 ounces in the prior quarter. Gold produced and sold at
Wassa increased, due to higher throughput and higher grade, which
partially offset the reduction in ounces produced and sold at
Bogoso/Prestea due to the suspension of refractory operation in the
quarter. The continued decline in gold price and fewer ounces sold
reduced revenue for the third quarter to $56.5 million.
Consolidated cash operating costs per ounce for the quarter
decreased to $988 from $1,113 in the prior quarter. This reduction was
largely achieved through an 11% reduction in cash operating costs
per ounce at Wassa as a result of cost cutting measures implemented
by the Company. All-in sustaining costs per ounce decreased
from $1,302 in the prior quarter to
$1,151 for the third quarter.
Cost of sales before depreciation and amortization decreased
from $78.7 million in the prior
quarter to $55.2 million in the third
quarter. This was mainly a result of lower mining operating
expenses at Wassa and Bogoso/Prestea and a $12.3 million reduction in severance
expense. Mine operating expenses of $54.4 million for the third quarter reduced from
$60.2 million in the prior quarter
due to the suspension of the high costs refractory operation and
the start of the lower cost non-refractory operation at
Bogoso/Prestea. The mine operating loss was reduced to
$4.3 million from $26.1 million in the prior quarter.
The adjusted net loss attributable to Golden Star shareholders
for the third quarter was $10.8
million, and the adjusted loss per share was $0.04.
Cash provided by operations before changes in working capital
for the third quarter was $38.5
million and capital expenditures for the third quarter
totaled $17.8 million. Further
capital expenditure of $21 million is
expected for the remainder of the year on the Wassa and Prestea
mines.
The consolidated cash balance was $27.7
million at September 30,
2015. During the quarter the Company received $75 million from Royal
Gold, consisting of a $20
million term loan payment and $55
million in advanced payments in relation to the stream
financing. Approximately $39 million
of these funds were used to retire the Ecobank I loan early in the
third quarter.
Review of Operational Performance
Wassa Operations
|
|
Three
months
ended
Sept. 30,
|
|
Three
months
ended
Jun. 30,
|
|
|
2015
|
|
2015
|
WASSA FINANCIAL
RESULTS
|
|
|
|
|
|
Revenue
|
$'000
|
31,702
|
|
29,615
|
|
|
|
|
|
|
Mine operating
expenses
|
$'000
|
23,389
|
|
24,412
|
|
Severance
charges
|
$'000
|
1,013
|
|
322
|
|
Royalties
|
$'000
|
1,617
|
|
1,483
|
|
Operating costs to
metals inventory
|
$'000
|
(1,178)
|
|
(1,621)
|
|
Inventory net
realizable value adjustment
|
$'000
|
—
|
|
721
|
|
Cost of sales
excluding depreciation and amortization
|
$'000
|
24,841
|
|
25,317
|
|
Depreciation and
amortization
|
$'000
|
3,713
|
|
2,841
|
|
Mine operating
margin
|
$'000
|
3,148
|
|
1,457
|
|
|
|
|
|
|
Capital
expenditures
|
$'000
|
8,506
|
|
6,979
|
|
|
|
|
|
WASSA OPERATING
RESULTS
|
|
|
|
|
|
Ore mined
|
t
|
728,046
|
|
753,883
|
|
Waste mined
|
t
|
2,658,218
|
|
2,688,452
|
|
Ore
processed
|
t
|
635,332
|
|
609,076
|
|
Grade
processed
|
g/t
|
1.51
|
|
1.36
|
|
Recovery
|
%
|
92.9
|
|
94.1
|
|
Gold sales
|
oz
|
28,848
|
|
24,829
|
|
Cash operating cost
per ounce1
|
$/oz
|
770
|
|
918
|
1 See "Non-GAAP Financial Measures".
Ore tonnes mined in the third quarter remained in line with the
prior quarter. Throughput and grade continued to increase
from the prior quarter resulting in increased gold produced and
sold at Wassa, and an increase in revenue. Stripping remained
in line with the forecast stripping ratio of approximately 4:1 for
2015.
Cash operating costs per ounce continued to decline, down 16%
from the prior quarter to $770 per
ounce as a result of cost cutting measures implemented by the
Company. Mine operating expenses in the third quarter were 4%
lower than the prior quarter.
Capital expenditures for the quarter were $8.5 million, of which $5.8 million was incurred on the development of
the Wassa Underground Mine.
Bogoso/Prestea Operations
The Prestea Mines consist of an underground mine that has been
in existence for over 100 years along with adjacent surface
deposits. The surface deposits are host to approximately 122,000
ounces of non-refractory Mineral Reserves at an average grade of
2.24 g/t Au. The environmental permit required to mine the surface
deposits was issued by the Environmental Protection Agency in
June 2015 after Golden Star undertook
extensive environmental and community impact assessments and local
community consultations. Mining of these surface operations
began early in the third quarter and 20,000 - 25,000 ounces of gold
are expected to be produced in 2015 from the Prestea Open Pits.
The Bogoso refractory operation was suspended during the third
quarter 2015. The processing of non-refractory tailings was
suspended in order to make way for the processing of higher grade
ore from the Prestea Open Pits at the Bogoso non-refractory
plant.
|
|
Three
months
ended Sept.
30,
|
|
Three months
ended Jun. 30,
|
|
|
2015
|
|
2015
|
BOGOSO/PRESTEA
FINANCIAL RESULTS
|
|
|
|
|
|
Revenue
|
$'000
|
24,750
|
|
36,181
|
|
|
|
|
|
|
Mine operating
expenses
|
$'000
|
30,963
|
|
35,835
|
|
Severance
charges
|
$'000
|
—
|
|
13,038
|
|
Royalties
|
$'000
|
1,294
|
|
1,810
|
|
Operating costs
(to)/from metals inventory
|
$'000
|
(1,899)
|
|
2,738
|
|
Cost of sales
excluding depreciation and amortization
|
$'000
|
30,358
|
|
53,421
|
|
Depreciation and
amortization
|
$'000
|
1,812
|
|
10,334
|
|
Mine operating
loss
|
$'000
|
(7,420)
|
|
(27,574)
|
|
|
|
|
|
|
Capital
expenditures
|
$'000
|
9,283
|
|
5,775
|
|
|
|
|
|
BOGOSO/PRESTEA
OPERATING RESULTS
|
|
|
|
|
|
Ore mined
refractory
|
t
|
60,533
|
|
427,808
|
|
Ore mined
non-refractory
|
t
|
179,186
|
|
—
|
|
Total ore
mined
|
t
|
239,719
|
|
427,808
|
|
Waste mined
|
t
|
605,715
|
|
664,036
|
|
Refractory ore
processed
|
t
|
435,185
|
|
513,550
|
|
Refractory ore
grade
|
g/t
|
1.66
|
|
2.06
|
|
Gold recovery –
refractory ore
|
%
|
60.4
|
|
68.1
|
|
Non-refractory ore
processed
|
t
|
289,346
|
|
380,452
|
|
Non-refractory ore
grade
|
g/t
|
1.35
|
|
0.87
|
|
Gold recovery - non-refractory ore
|
%
|
68.0
|
|
43.7
|
|
Gold sold -
refractory
|
oz
|
15,648
|
|
25,702
|
|
Gold sold -
non-refractory
|
oz
|
7,402
|
|
4,601
|
|
Gold sales -
total
|
oz
|
23,050
|
|
30,303
|
|
Cash operating cost per
ounce1
|
$/oz
|
1,261
|
|
1,273
|
1 See "Non-GAAP Financial Measures".
Total ore mined for the quarter was 239,719 tonnes, of which
179,186 tonnes were non-refractory ore from Prestea Open Pits.
Refractory ore mined was reduced dramatically due to the suspension
of refractory operations in the third
quarter.
The grade and recovery of the non-refractory ore increased with
the processing of higher grade ore from Prestea Open Pits. The
refractory ore grade and recoveries declined as the refractory
processing plant was suspended.
Bogoso/Prestea gold production and sales totaled 23,050 ounces
in the third quarter compared to 30,303 ounces in the prior quarter
and combined with the lower realized gold price resulted in a
decline in revenue to $24.8
million.
Third quarter mine operating expenses continued to reduce to
$31.0 million. Cash operating
costs per ounce reduced slightly to $1,261, down from $1,273 in the prior quarter.
Capital expenditures increased to $9.3
million for the quarter. Included in this is
$6.7 million which was spent on
Prestea Underground development and $2.1
million on the development of Prestea Open Pits.
Review of Development Projects
Wassa Underground
Drilling below the Wassa Main pit since late 2011 was successful
in increasing the Wassa Mineral Resource. In March 2015 the 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 and 382 meters of advance was achieved on the Main and
Ventilation declines to date. Currently the declines are
achieving an average advance of seven meters per day. This advance
is expected to increase over the next month as efficiencies and
cycle times 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.
Currently the new resource model is being used to update the mine
design and the production schedule. The Wassa underground orebody
consists of the B Shoot (the main component of the current
resource) and the F Shoot, a parallel zone of mineralization.
Through recent drilling success, the F Shoot area has increased in
the new resource estimate and we expect to access the area in
March 2016 from the decline currently
being developed.
Construction of the surface infrastructure is complete and
transfer from generator power to grid power is expected in the
fourth quarter 2015.
The project to date has incurred capital expenditures totaling
$15.2 million. The Company expects to
incur approximately $6 million on
capital for the remainder of 2015.
Prestea Underground
The Prestea Mines are located 16 km south of the Bogoso
processing plants in the town of Prestea. Prestea Open Pits are now
in operation, while the underground mine is currently in
re-development.
The preliminary economic assessment ("PEA") on the development
of the Prestea underground mine was completed and published on
SEDAR in 2014. The PEA, which is based on development of a
non-mechanized mining operation, indicated a post-tax internal rate
of return (IRR) of 72% and net present value of $121 million at a $1,200 per ounce gold price. Cash operating
costs of $370 per ounce and all-in
sustaining costs of $518 per ounce
were estimated over the life of mine.
Construction capital expenditure for the underground mine was
approved during the third quarter of 2015 and work has commenced on
procurement for long-lead electrical and winder upgrade
components.
The resource model was updated during July 2015 to include additional geotechnical and
metallurgical holes drilled. The Feasibility Study is expected to
be finalized in the fourth quarter of 2015 to include these
additional resources.
Rehabilitation works are ongoing in 17 level and 24 level access
development and in the Central Shaft. 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 whereupon development is expected
commence. Pre-development of the resource is expected 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
2017.
During the nine months ended September
30, 2015, the Company incurred capital expenditures totaling
$13.7 million on Prestea Underground
operations and $2.7 million on the
development of Prestea Open Pits. The Company expects to incur
approximately $12 million of capital
expenditures for the remainder of 2015 at Bogoso/Prestea.
Outlook
The Company continues to advance its strategy of transforming to
a low cost non-refractory producer. Prestea Open Pits are now
in production, providing lower cost, non-refractory ounces, with
grade expected to improve further in future. The refractory
operation is now fully suspended, and the Company's focus is on
first production at Prestea Underground. Wassa continues to
achieve low cost production, and Wassa Underground development is
progressing well. Cash operating costs are expected to continue to
reduce at both operations. With this continued success, the
Company expects to meet full year production guidance of 205,000 to
215,000 ounces at cash operating costs between $955 and $1,050 per ounce.
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Stated in
thousands of U.S. dollars except shares and per share data)
(Unaudited)
|
|
|
For the three
months
|
|
|
ended September
30,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Revenue
|
|
$
|
56,452
|
|
$
|
77,758
|
|
Cost of sales
excluding depreciation and amortization
|
|
55,199
|
|
70,774
|
|
Depreciation and
amortization
|
|
5,525
|
|
6,271
|
Mine operating
(loss)/margin
|
|
(4,272)
|
|
713
|
|
|
|
|
|
Other
expenses/(income)
|
|
|
|
|
|
Exploration
expense
|
|
381
|
|
61
|
|
General and administrative
|
|
3,299
|
|
3,722
|
|
Finance expense,
net
|
|
5,573
|
|
2,215
|
|
Other
expense/(income)
|
|
57
|
|
(622)
|
|
Gain on fair value of
5% Convertible Debentures
|
|
(4,911)
|
|
(5,743)
|
|
Gain on fair value of
warrants
|
|
(145)
|
|
—
|
(Loss)/income
before tax
|
|
$
|
(8,526)
|
|
|
1,080
|
|
Income tax
expense
|
|
|
—
|
|
|
(85)
|
Net
(loss)/income
|
|
$
|
(8,526)
|
|
$
|
1,165
|
Net loss attributable
to non-controlling interest
|
|
(1,694)
|
|
(1,428)
|
Net (loss)/income
attributable to Golden Star shareholders
|
|
$
|
(6,832)
|
|
$
|
2,593
|
|
|
|
|
|
Net (loss)/income
per share attributable to Golden Star shareholders
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.03)
|
|
$
|
0.01
|
Weighted average
shares outstanding-basic (millions)
|
|
259.7
|
|
259.4
|
Weighted average
shares outstanding-diluted (millions)
|
|
259.7
|
|
261.2
|
|
|
|
|
|
|
|
|
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME/(LOSS)
|
(Stated in
thousands of U.S. dollars)
(Unaudited)
|
|
|
|
|
|
|
|
For the three
months
ended September
30,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
OTHER
COMPREHENSIVE INCOME/(LOSS)
|
|
|
|
|
|
Net
(loss)/income
|
|
|
$
|
(8,526)
|
|
|
$
|
1,165
|
Comprehensive
(loss)/income
|
|
|
(8,526)
|
|
|
1,165
|
Comprehensive loss
attributable to non-controlling interest
|
|
|
(1,694)
|
|
|
(1,428)
|
Comprehensive
(loss)/income attributable to Golden Star
shareholders
|
|
|
$
|
(6,832)
|
|
|
$
|
2,593
|
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED BALANCE SHEETS
|
(Stated in
thousands of U.S. dollars)
(Unaudited)
|
|
|
|
|
|
As
of
September
30,
|
|
As
of
December
31,
|
|
|
2015
|
|
2014
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
27,673
|
|
|
$
|
39,352
|
|
Accounts
receivable
|
7,222
|
|
|
14,832
|
|
Inventories
|
30,767
|
|
|
54,279
|
|
Prepaids and
other
|
4,107
|
|
|
4,767
|
|
Total Current
Assets
|
69,769
|
|
|
113,230
|
Restricted
cash
|
6,461
|
|
|
2,041
|
Mining
interests
|
143,984
|
|
|
142,782
|
|
Total
Assets
|
$
|
220,214
|
|
|
$
|
258,053
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
131,491
|
|
|
$
|
123,451
|
|
Current portion of
rehabilitation provisions
|
7,087
|
|
|
4,562
|
|
Current portion of
long term debt
|
6,710
|
|
|
17,181
|
|
Current portion of
deferred revenue
|
12,568
|
|
|
—
|
|
Total Current
Liabilities
|
158,389
|
|
|
145,194
|
Long term
debt
|
92,263
|
|
|
85,798
|
Deferred
revenue
|
37,558
|
|
|
—
|
Rehabilitation
provisions
|
77,702
|
|
|
81,254
|
|
Total
Liabilities
|
365,912
|
|
|
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
|
32,365
|
|
|
31,532
|
Deficit
|
(807,085)
|
|
|
(725,623)
|
|
Total Golden Star
(Deficit)/ Equity
|
(79,165)
|
|
|
1,175
|
Non-controlling
interest
|
(66,533)
|
|
|
(55,368)
|
|
Total
Equity
|
(145,698)
|
|
|
(54,193)
|
|
Total Liabilities
and Shareholders' Equity
|
$
|
220,214
|
|
|
$
|
258,053
|
|
|
|
|
|
|
|
|
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Stated in
thousands of U.S. dollars)
(Unaudited)
|
|
|
|
|
|
For the three
months
ended September
30,
|
|
|
2015
|
2014
|
OPERATING
ACTIVITIES:
|
|
|
|
Net
(loss)/income
|
|
$
|
(8,526)
|
|
$
|
1,165
|
Reconciliation of
net (loss)/income to net cash provided
by/(used in)
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
5,533
|
|
6,278
|
|
Net realizable value
adjustment on inventory
|
|
—
|
|
481
|
|
Loss on retirement of
asset
|
|
80
|
|
71
|
|
Share-based
compensation
|
|
(229)
|
|
321
|
|
Deferred income tax
expense
|
|
—
|
|
(85)
|
|
Gain on fair value of
5% Convertible Debentures
|
|
(4,911)
|
|
(5,743)
|
|
Gain on fair value of
warrants
|
|
(145)
|
|
—
|
|
Accretion of other
long term liabilities
|
|
304
|
|
—
|
|
Accretion of
rehabilitation provisions
|
|
440
|
|
436
|
|
Amortization of
deferred financing fees
|
|
806
|
|
62
|
|
Recognition of
deferred revenue
|
|
(4,874)
|
|
—
|
|
Proceeds from Royal
Gold stream
|
|
55,000
|
|
—
|
|
Reclamation
expenditures
|
|
(275)
|
|
(1,608)
|
|
Other
|
|
20
|
|
477
|
|
Changes in accrued
severance
|
|
(4,715)
|
|
—
|
|
Changes in working
capital
|
|
6,833
|
|
(2,764)
|
|
|
Net cash provided
by/(used in) operating activities
|
|
45,341
|
|
(909)
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Additions to mining
properties
|
|
(373)
|
|
(40)
|
|
Additions to plant and
equipment
|
|
(237)
|
|
—
|
|
Additions to
construction in progress
|
|
(16,498)
|
|
(5,912)
|
|
Capitalized
interest
|
|
(681)
|
|
—
|
|
Change in accounts
payable and deposits on mine equipment and material
|
|
3,542
|
|
2,526
|
|
Increase in restricted
cash
|
|
(4,419)
|
|
—
|
|
|
Net cash used in
investing activities
|
|
(18,666)
|
|
(3,426)
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Principal payments on
debt
|
|
(39,175)
|
|
(3,047)
|
|
Proceeds from Royal
Gold loan, net
|
|
18,725
|
|
—
|
|
|
Net cash used in
financing activities
|
|
(20,450)
|
|
(3,047)
|
|
|
Increase/(decrease) in
cash and cash equivalents
|
|
6,225
|
|
(7,382)
|
|
Cash and cash
equivalents, beginning of period
|
|
21,448
|
|
43,412
|
|
Cash and cash
equivalents, end of period
|
|
$
|
27,673
|
|
$
|
36,030
|
Non-GAAP Financial Measures
In this press release, we use the terms "cash operating cost per
ounce", "adjusted net loss attributable to Golden Star
shareholders" and "all-in sustaining cost per ounce". 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.
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 loss
attributable to Golden Star shareholders" to supplement the
condensed interim 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,
2015 and the Company's Management Discussion and Analysis of
Financial Condition and Results of Operations for the Year Ended
December 31, 2014, 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", "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: the timing for construction at Wassa;
the timing for completion of the Feasibility Study at Prestea; gold
production and cash operating costs forecasts for the remainder of
2015, including production from the Prestea Open Pits; the
Company's transformation to being a lower cost non-refractory
producer and the timing thereof, including the impact of the
underground mines on unit costs; the timing for first production
from Wassa underground and Prestea underground; capital
expenditures at Wassa and Prestea underground for the remainder of
2015; the rate of advance at Wassa underground and the timing for
access to the F Shoot area and the timing of the transfer from
generator power to grid power; the economic analysis of the Prestea
underground mine including IRR, net present value, cash operating
costs and all-in sustaining costs, as well as the life of mine; and
further work required at Prestea underground, including the timing
of rehabilitation work, and stoping (as well as the rate
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
The technical information relating to Golden Star's material
properties disclosed herein is based upon technical reports
prepared and filed pursuant to National Instrument 43-101 -
Standards of Disclosure for Mineral Projects ("NI 43-101") and
other publicly available information regarding the Company,
including the following: (i) "NI 43-101 Technical Report on a
Feasibility Study of the Wassa Open Pit Mine and Underground
Project in Ghana" effective
December 31, 2014; and (ii) "NI
43-101 Technical Report on Preliminary Economic Assessment of
Shrinkage Mining of the West Reef Resource, Prestea Underground
Mine, Ghana" effective
December 18, 2014. The Qualified
Person reviewing and approving the technical contents of this press
release is S. Mitchel Wasel, Golden
Star Resources Vice President of Exploration.
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. 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 and 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.