TORONTO, Jan. 11, 2016 /PRNewswire/ - Golden Star today announces 2015 fourth quarter
and full year production results for the Prestea and Wassa mines
and guidance for 2016.
- Achieved 103% of the top end 2015 gold production guidance, as
the Company produced 222,416 ounces of gold in 2015
- Gold production was 108,266 ounces and 114,150 ounces from
Wassa and Bogoso/Prestea, respectively, for the full year 2015
- Fourth quarter gold production of 52,140 ounces with Prestea
South open pit mining yielding a significant contribution to the
quarter
- 31,395 ounces from Wassa and 20,745 ounces from Prestea
- Cash and cash equivalents balance as of December 31, 2015 totaled US$35 million after drawdown of US$20 million of RGLD Gold AG ("Royal Gold")
stream financing and US$7 million on
the Ecobank loan in December
2015
Operations and Projects Update:
Wassa Mine continued operations as normal and processed
approximately 2.5 million tonnes of ore grading 1.46 grams per
tonne with metallurgical recovery of 93% to produce 108,266 ounces
of gold for the year.
Mining of the Prestea South surface oxide pits commenced in
August 2015. Fourth quarter ore
processed totaled 317,764 tonnes grading 2.36 grams per tonne, and
achieved 83% recovery for 20,745 ounces of gold sold. It is
expected that this level of oxide production will continue beyond
the first quarter of 2017. Drilling is expected to continue in the
Prestea South area to further expand the Company's knowledge of
those deposits and potentially increase mineral resources in this
part of the concession.
While the operating costs have not yet been finalized, they are
expected to be significantly lower than achieved in 2014, in
keeping with the cost trend reported in the prior three quarters.
The operating costs for both Prestea and Wassa Mines will be reported in February with
the release of the fourth quarter and full year 2015 results.
The Wassa Underground project has made substantial progress
during 2015, with approximately 885 meters of the twin decline
advance completed to date. Infill drilling early in 2015 was
successful in expanding the F Shoot target. The up plunge
projection of the F Shoot zone was intersected in both declines and
further drilling will be conducted to determine grade and thickness
up plunge from the planned stoping area. Stope development of
the upper mineralization is expected to commence in the second
quarter of 2016 with first ore production expected in the second
half of 2016.
The Feasibility Study on the Prestea Underground project was
completed towards the end of 2015 and confirmed the project
economics are robust in the current gold price environment. Work on
the Prestea Underground project advanced significantly during 2015
with Central Shaft rehabilitation and refurbishment work on 17 and
24 levels progressing as scheduled. All the bearer sets in
Central Shaft were replaced during 2015, a critical step forward to
full hoisting operations. First ore production is expected in early
2017.
Commenting on this operational performance, President and CEO
Sam Coetzer said:
"The hard work and determination of our management and
personnel has enabled Golden Star to
weather the difficult market conditions over the last year and put
the Company firmly on its path of transforming into a lower cost
producer. The operations have performed extremely well in the
second half of the year, particularly in the fourth quarter, with
Golden Star exceeding its production
guidance for 2015. I look forward to reporting our results in
February as we anticipate the cost reduction trend reported in the
first three quarters of the year to continue through the fourth
quarter. The Wassa and Prestea Underground projects have made
excellent progress in 2015, and we are excited about the next 12
months as we continue to execute the transformational strategy for
Golden Star we set out two years
ago."
2016 Full Year Production and Financial Guidance:
The following tables set out Golden
Star's production and cash operating cost guidance, as well
as capital expenditure guidance, for 2016.
|
Production
|
Cash operating
costs
|
|
'000
ounces
|
US$ per
ounce(1)
|
Wassa Open
Pit
|
100 - 110
|
800 - 900
|
Wassa
Underground
|
20 - 25
|
N/A(2)
|
Prestea Open
Pit
|
60 - 70
|
840 - 970
|
Combined
|
180 – 205
|
815 - 925
|
Notes:
(1) See "Non-GAAP Financial Measures".
(2) Costs incurred at Wassa Underground will be capitalized
until commercial production is achieved. As a result, these costs
are reflected in the Company's development capital expenditure
guidance set out in the table below and are not included in the
Company's cash operating cost per ounce guidance set out in the
table above.
|
Wassa
|
Prestea
|
Combined
|
Sustaining capital
expenditure (US$ millions)
|
6
|
3
|
9
|
Development capital
expenditure (US$ millions)
|
45
|
36
|
81
|
Total capital
expenditure (US$ millions)
|
51
|
39
|
90
|
All in sustaining costs for 2016 are expected to be $1,000 – $1,120 per
ounce (see "Non-GAAP Financial Measures").
Golden Star expects to release
its fourth quarter and full year 2015 Financial Results on
February 23, 2016.
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 and Prestea gold
mines in Ghana. As of December 31,
2014 Golden Star had Mineral Reserves of 1.9 million ounces
and 6.6 million ounces in Measured and Indicated Mineral
Resources. The Company is developing two brownfield projects
at Wassa and Prestea mines which are expected to transform
Golden Star into a lower cost
producer. As such, the Company offers investors leveraged
exposure to the gold price in a stable African mining jurisdiction
with significant development upside potential.
For further information regarding Golden
Star's Mineral Reserves and Mineral Resources, see
Golden Star's Annual Information
Form for the year ended December 31,
2014, available on SEDAR 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: the Company's strategy of
transforming its business to being a lower cost producer; Prestea
South production continuing beyond the first quarter of 2017; the
impact of drilling at Prestea South on mineral resources; the
Company's expectations regarding 2015 operating costs relative to
operating costs in 2014 and the prior three quarters of 2015; the
timing of the release of 2015 operating costs for both Prestea and
Wassa Mines; additional drilling at
F Shoot zone and the impact on grade and thickness up plunge from
the planned stoping area; the timing of Wassa Underground stope
development and first production; the timing of Prestea Underground
first production; and production, cash operating cost, capital
expenditure and all in sustaining cost estimates for 2016.
Forward-looking information and statements are made based upon
certain assumptions and other important factors that, if untrue,
could cause the actual results, performances or achievements of
Golden Star to be materially
different from future results, performances or achievements
expressed or implied by such statements. Such statements and
information are based on numerous assumptions regarding present and
future business strategies and the environment in which
Golden Star will operate in the
future, including the price of gold, anticipated costs and ability
to achieve goals. Forward-looking information and statements are
subject to known and unknown risks, uncertainties and other
important factors that may cause the actual results, performance or
achievements of Golden Star to be
materially different from those expressed or implied by such
forward-looking information and statements, including but not
limited to: risks related to international operations, including
economic and political instability in foreign jurisdictions in
which Golden Star operates; risks
related to current global financial conditions; 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. There can be no
assurance that future developments affecting the Company will be
those anticipated by management. Please refer to the
discussion of these and other factors in our Annual Information
Form for 2014. The forecasts contained in this press release
constitute management's current estimates, as of the date of this
press release, with respect to the matters covered thereby.
We expect that these estimates will change as new information is
received and that actual results will vary from these estimates,
possibly by material amounts. While we may elect to update
these estimates at any time, we do not undertake to update any
estimate at any particular time or in response to any particular
event. Investors and others should not assume that any
forecasts in this press release represent management's estimate as
of any date other than the date of this press release.
Non-GAAP Financial Measures
In this press release, we use the terms "cash operating cost per
ounce" 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.
"Cash operating cost per ounce" for a period is equal to "Cost
of sales excluding depreciation and amortization" for the period
less royalties and production taxes, minus the cash component of
metals inventory net realizable value adjustments divided by the
number of ounces of gold sold during the period. Golden Star uses cash operating cost per ounce
as a key operating indicator. Golden
Star monitors this measure monthly, comparing each month's
values to prior quarters' values to detect trends that may indicate
increases or decreases in operating efficiencies. Golden Star provides this measure to investors
to allow them to also monitor operational efficiencies of the
Company's mines. Since cash operating costs do not incorporate
revenues, changes in working capital and non-operating cash costs,
they are not necessarily indicative of operating profit or cash
flow from operations as determined under International Financial
Reporting Standards ("IFRS").
"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.
"All-in sustaining costs per ounce" is that amount divided by the
number of ounces of gold sold during the period. 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.
These non-GAAP financial measures are not representative of all
of Golden Star's cash expenditures
as they do not include income tax payments or interest costs.
There are material limitations associated with the use of such
non-GAAP financial measures. Since these measures do not
incorporate all non-cash expense and income items, changes in
working capital and non-operating cash costs, they are not
necessarily indicative of operating profit or cash flow from
operations as determined under IFRS.
SOURCE Golden Star Resources Ltd.