SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of
October 2015
Commission File Number 001-12284
GOLDEN STAR
RESOURCES LTD.
(Translation
of registrants name into English)
150 King
Street West
Suite 1200
Toronto, Ontario
M5H
1J9, Canada
(Address of
principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F ¨ Form 40-F x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(7): ¨
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes ¨ No x
If Yes is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b):
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Date: October 28,
2015
|
|
|
GOLDEN STAR RESOURCES LTD. |
|
|
By: |
|
/s/ André van Niekerk |
|
|
André van Niekerk Executive Vice
President and Chief Financial Officer |
EXHIBIT INDEX
|
|
Exhibit No. |
Description of Exhibit |
|
|
99.1 |
Press Release dated October 28, 2015 - Golden Star Reports Third Quarter 2015 Results |
|
|
Exhibit 99.1
Golden Star Reports Third Quarter 2015
Results
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.
%CIK: 0000903571
For further information: please visit www.gsr.com or contact:
André van Niekerk, EVP & CFO, +1 416 583 3800, investor@gsr.com
CO: Golden Star Resources Ltd.
CNW 21:01e 28-OCT-15
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