TORONTO, May 4, 2016 /CNW/ - Golden Star Resources Ltd.
(NYSE MKT: GSS; TSX: GSC; GSE: GSR) ("Golden Star" or the
"Company") today reports its financial and operational results for
the first quarter ended March 31,
2016.
Highlights include:
- 53,217 ounces of gold were produced during the quarter
consistent with fourth quarter 2015 production levels
- Consolidated cash operating costs1 of $721 per ounce, a decline of 32% from the first
quarter of 2015 ("Q1 2015")
- $706/oz. at Wassa, a decline of
37% from Q1 2015
- $742/oz. at Prestea, a decline of
28% from Q1 2015
- All-in sustaining costs1 were $963 per ounce for the quarter, a decline of 22%
from Q1 2015
- Net Earnings of $2.1 million in
Q1 2015 and Adjusted Net Earnings1 of $4.2 million or $0.02 per share
- Cash flow generated before changes in working
capital1 of $10.8 million
or $0.04 per share in the quarter, a
significant improvement over the $1.4
million cash used, or a loss of $0.01 per share, in Q1 2015
- Consolidated cash balance of $14.6
million, prior to the receipt of the $20 million scheduled advance payment as per the
streaming agreement received subsequent to the quarter end on
April 1, 2016
- Wassa Underground development has advanced 1.9 kilometres to
date, an average of 8.6 metres per day in the quarter which is more
than 20% higher than the development rate in Q4 2015 and is
expected to improve further during the year. The project remains on
schedule to deliver first gold production in mid-2016
- Revised study on the Prestea Underground indicates slightly
higher expected average annual production of 90,000 ounces, the
project is on schedule for first gold production in mid-2017
- Subsequent to the quarter end, the Company announced a bought
deal financing that is expected to result in proceeds of
approximately $15 million and is
expected to close on or about May 9,
2016
- On May 4, 2016 the company
entered into an agreement to settle $36.5
million of current liabilities to one significant creditor,
through a payment of $12 million by
June 30, 2016 and a deferral of the
remaining $24.5 million to
January 2018
"The results of the first quarter continue to demonstrate
that the Company is in the final stages of the transition to a
non-refractory, lower cost producer and that the Company has
effectively executed on the strategy as originally stated back in
2013," stated Sam Coetzer,
President and CEO. "With the development of the two new
underground projects well advanced and on-track for the delivery of
first production as expected, we are now turning our focus to the
balance sheet and have already made small improvements with the
repurchase of several of our outstanding convertible debentures
reducing the overall size of the issue. In addition, we just
recently announced a financing, a $15
million equity raise which is expected to close on or about
May 9, 2016. These funds will
enable us to further reduce the level of other components of our
debt. As our new operations ramp-up to full production we will
continue to reduce debt levels through internal cash flow. The
Company remains on track to emerge as a low cost, simple, lean
non-refractory producer with both underground operations in
production in the middle of next year."
Summary of
Consolidated Operational and Financial Results
|
|
|
|
|
|
Three Months
Ended March 31,
|
OPERATING
SUMMARY
|
|
2016
|
|
2015
|
Wassa gold
sold
|
oz
|
30,887
|
|
23,194
|
Bogoso/Prestea gold
sold
|
oz
|
21,782
|
|
40,051
|
Total gold
sold
|
oz
|
52,669
|
|
63,245
|
Total gold
produced
|
oz
|
53,217
|
|
63,245
|
Average realized gold
price
|
$/oz
|
1,159
|
|
1,210
|
|
|
|
|
|
Cash operating cost
per ounce - Wassa1
|
$/oz
|
706
|
|
1,119
|
Cash operating cost
per ounce - Bogoso/Prestea1
|
$/oz
|
742
|
|
1,027
|
Consolidated cash
operating cost per ounce1
|
$/oz
|
721
|
|
1,061
|
Consolidated all-in
sustaining cost per ounce1
|
$/oz
|
963
|
|
1,239
|
|
|
|
|
|
FINANCIAL
SUMMARY
|
|
|
|
|
Gold
revenues
|
$'000
|
61,067
|
|
76,519
|
Cost of sales
excluding depreciation and amortization
|
$'000
|
41,058
|
|
72,203
|
Depreciation and
amortization
|
$'000
|
5,796
|
|
11,585
|
Mine operating
margin/(loss)
|
$'000
|
14,213
|
|
(7,269)
|
General and
administrative expense
|
$'000
|
7,222
|
|
3,632
|
Loss on fair value of
financial instruments
|
$'000
|
2,207
|
|
3,736
|
|
|
|
|
|
Net earnings/(loss)
attributable to Golden Star shareholders
|
$'000
|
2,051
|
|
(13,127)
|
Adjusted net
earnings/(loss) attributable to Golden Star
shareholders1
|
$'000
|
4,157
|
|
(8,955)
|
Earnings/(loss) per
share attributable to Golden Star shareholders -
|
|
|
|
|
basic and
diluted
|
$/share
|
0.01
|
|
(0.05)
|
Adjusted
earnings/(loss) per share attributable to Golden Star
|
|
|
|
|
shareholders - basic
and diluted 1
|
$/share
|
0.02
|
|
(0.03)
|
Cash provided by
operations
|
$'000
|
928
|
|
4,838
|
Cash provided
by/(used in) operations before working capital
|
|
|
|
|
changes1
|
$'000
|
10,767
|
|
(1,421)
|
Cash provided
by/(used in) operations per share - basic and diluted
|
$/share
|
—
|
|
0.02
|
Cash provided by
operations before working capital changes per share
|
|
|
|
|
- basic and
diluted
|
$/share
|
0.04
|
|
(0.01)
|
|
|
|
|
|
Capital
expenditures
|
$'000
|
15,914
|
|
12,782
|
|
|
|
|
|
All references to
currency are US dollars.
|
|
|
|
|
1 See
"Non-GAAP Financial Measures".
|
|
|
|
|
Financial Performance
Revenue for the quarter was $61.1
million from gold sales of 52,669 ounces at an average
realized gold price of $1,159. This represents a decline in revenue
of 20% from Q1 2015 mainly attributed to lower production as a
result of the suspension of the Bogoso refractory operation late
last year and the lower average realized gold price.
Cost of sales excluding depreciation and amortization was
$41.1 million in the quarter a
significant decline from the $72.2
million cost of sales in Q1 2015 as a result of fewer ounces
sold compared to the prior year quarter and lower mine operating
expenses.
Depreciation and amortization declined by close to 50% from Q1
2015 to $5.8 million as a result of
fewer ounces produced and the increase in the Company's mineral
reserves at the Bogoso / Prestea operation. As a result of
lower cost of sales and depreciation and amortization, mine
operating margin increased significantly from the $7.3 million loss in Q1 2015 to $14.2 million.
General and administrative expenses were $7.2 million for the quarter which includes
$4.2 million of non-cash share based
compensation accruals reflecting the improvement in the Company's
share price in the quarter. The Company also recorded
$2.2 million of fair value losses on
financial instruments comprised of a $2.4
million non-cash revaluation of losses on collars, forward
contracts and warrants and a $0.3
million realized loss on sales of gold calls slightly offset
by the non-cash revaluation gain on the Company's 5% Convertible
Debentures.
Net earnings in the quarter were $2.1
million and after certain adjustments, adjusted net earnings
were $4.2 million or $0.02 per share, a significant improvement from
the loss reported in Q1 2015.
Cash flow generated before changes in working capital for the
quarter was $10.8 million or
$0.04 per share and capital
expenditures totaled $15.9
million. The Company continues to expect total capital
expenditures of $90 million for the
full year including $81 million of
development capital and $9 million of
sustaining capital.
The consolidated cash balance was $14.6
million at the end of the first quarter 2016 and does not
reflect the $20 million received on
April 1, 2016, a scheduled
advance payment as per the Company's streaming agreement with
RGLD GOLD AG ("RGLD").
Operational Performance
During the quarter 53,217 ounces of gold were produced at
consolidated cash operating costs of $721 per ounce and all-in sustaining costs of
$963 per ounce. Consolidated
cash operating costs declined by over 30% from Q1 2015 and all-in
sustaining costs declined by 22% reflecting a newly established
cost structure related to the Company's transition to
non-refractory lower cost production that began in the fourth
quarter last year.
Other Corporate Developments
Financing Activities
On April 28, 2016, the Company
announced an agreement with BMO Nesbitt Burns Inc. (the
"Underwriter") under which the Underwriter has agreed to buy on a
bought deal basis 22,750,000 common shares at a price of
$0.66 per share for gross proceeds of
approximately $15 million (the
"Offering"). In addition, the Company has granted the
Underwriter an option, exercisable at the offering price for 30
days following the closing, to purchase up to an
additional 3,412,500 of the common shares under the
Offering.
The net proceeds will be used for debt reduction as well as for
working capital and general corporate purposes and is expected to
close on or about May 9,
2016. For more information, please see the Company's press
release dated April 28,
2016.
Settlement of $36.5 Million
of Current Account Payable
On May 4, 2016, the Company
entered into an agreement with a significant current account
creditor to settle $36.5 million of
current liabilities. Under this agreement, the Company has
agreed to pay $12 million by
June 30, 2016 and defer the remaining
$24.5 million until January 2018 after which, the outstanding balance
will be repaid in equal installments over 24 months with
interest of 7.5% that will accrue and be payable beginning in
January 2017.
Settlement of Convertible Debentures
The Company repurchased $3.6
million principal amount of its 5% Convertible Debentures
subsequent to the quarter ended March 31,
2016 for $1.8 million that
included an interest payment of $0.1
million. As at May 4, 2016, $73.9 million principal amount of the 5%
Convertible Debentures remains outstanding and will mature on
June 1, 2017.
$20 Million Received from
Streaming Agreement with Royal
Gold
On April 1, 2016, the Company
received a scheduled advance payment of $20.0 million pursuant to the streaming agreement
with RGLD.
Forward and Collar Contracts
During the first quarter of 2016, the Company initiated a gold
hedging program to limit its exposure to the fluctuations in the
gold price during the development phase of the Wassa Underground
and Prestea Underground projects. As at May 4, 2016, the
Company has the following outstanding contracts: (i) forward
contracts for 9,000 ounces (or 1,000 ounces per month from April to
December 2016) at a gold price of
$1,188 per ounce, and (ii) collars on
36,000 ounces at gold prices of no less than $1,125 per ounce and up to $1,325 per ounce, (or 4,000 ounces per month from
April to December 2016) for months
ranging from April to December 2016.
During the first quarter of 2016, the Company realized a loss of
$0.3 million on settled
contracts.
Wassa
Operations
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
|
2016
|
|
2015
|
WASSA FINANCIAL
RESULTS
|
|
|
|
|
|
Revenue
|
$'000
|
$
|
35,949
|
|
$
|
28,112
|
|
|
|
|
|
|
Mine operating
expenses
|
$'000
|
24,035
|
|
24,819
|
|
Severance
charges
|
$'000
|
113
|
|
481
|
|
Royalties
|
$'000
|
1,864
|
|
1,406
|
|
Operating costs
(to)/from metals inventory
|
$'000
|
(2,235)
|
|
1,144
|
|
Inventory net
realizable value adjustment
|
$'000
|
—
|
|
803
|
|
Cost of sales
excluding depreciation and amortization
|
$'000
|
23,777
|
|
28,653
|
|
Depreciation and
amortization
|
$'000
|
4,279
|
|
3,900
|
|
Mine operating
margin/(loss)
|
$'000
|
$
|
7,893
|
|
$
|
(4,441)
|
|
|
|
|
|
|
Capital
expenditures
|
$'000
|
8,538
|
|
10,426
|
|
|
|
|
|
WASSA OPERATING
RESULTS
|
|
|
|
|
|
Ore mined
|
t
|
609,519
|
|
560,151
|
|
Waste
mined
|
t
|
2,406,220
|
|
2,361,781
|
|
Ore
processed
|
t
|
640,940
|
|
630,720
|
|
Grade
processed
|
g/t
|
1.64
|
|
1.20
|
|
Recovery
|
%
|
94.1
|
|
92.6
|
|
Gold
produced
|
oz
|
31,273
|
|
23,194
|
|
Gold sold
|
oz
|
30,887
|
|
23,194
|
|
|
|
|
|
|
Cash operating cost
per ounce1
|
$/oz
|
706
|
|
1,119
|
|
|
|
|
|
1 See
"Non-GAAP Financial Measures".
|
Gold production was 31,273 ounces for the first quarter of 2016,
a 35% increase from the 23,194 ounces sold during the same period
in 2015 as ore mined and processed, ore grade and recoveries were
higher in Q1 2016. During the second quarter, the Wassa plant will
undergo a scheduled two week maintenance shut down that is expected
to slightly impact production and cash operating costs in the
quarter. This activity is part of the annual plan and
anticipated as part of the annual guidance provided.
Cash operating cost per ounce for Q1 2016 totaled $706, a reduction of 37% from $1,119 in the same period of 2015. The lower
cash operating cost per ounce was due to a decline in mining cost
per tonne as a result of higher equipment utilization achieved.
Total capital expenditures for the first quarter of 2016 were
$8.5 million. Of that,
sustaining capital expenditures were $0.8
million in the quarter as compared to $2.2 million in the same period in 2015 and
development capital expenditures were $7.7
million in Q1 2016 compared to $8.2
million in Q1 2015. Development capital expenditures in the
first quarter of 2016 included $6.2
million of expenditures relating to the development of the
Wassa Underground Mine and $1.5
million for the improvement of the tailings storage
facility.
Bogoso/Prestea
Operations
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2016
|
|
2015
|
BOGOSO/PRESTEA
FINANCIAL RESULTS
|
|
|
|
|
|
Revenue
|
$'000
|
$
|
25,118
|
|
$
|
48,407
|
|
|
|
|
|
|
Mine operating
expenses
|
$'000
|
17,412
|
|
43,943
|
|
Severance
charges
|
$'000
|
(184)
|
|
3
|
|
Royalties
|
$'000
|
1,296
|
|
2,422
|
|
Operating costs to
metals inventory
|
$'000
|
(1,243)
|
|
(2,818)
|
|
Cost of sales
excluding depreciation and
|
|
|
|
|
|
amortization
|
$'000
|
17,281
|
|
43,550
|
|
Depreciation and
amortization
|
$'000
|
1,517
|
|
7,685
|
|
Mine operating
margin/(loss)
|
$'000
|
$
|
6,320
|
|
$
|
(2,828)
|
|
|
|
|
|
|
|
Capital
expenditures
|
$'000
|
7,376
|
|
2,356
|
|
|
|
|
|
BOGOSO/PRESTEA
OPERATING RESULTS
|
|
|
|
|
|
Ore mined
refractory
|
t
|
—
|
|
741,992
|
|
Ore mined
non-refractory
|
t
|
383,177
|
|
—
|
|
Total ore
mined
|
t
|
383,177
|
|
741,992
|
|
Waste
mined
|
t
|
1,145,325
|
|
1,439,321
|
|
Refractory ore
processed
|
t
|
—
|
|
571,806
|
|
Refractory ore
grade
|
g/t
|
—
|
|
2.59
|
|
Gold recovery -
refractory ore
|
%
|
—
|
|
70.6
|
|
Non-refractory ore
processed
|
t
|
362,302
|
|
421,566
|
|
Non-refractory ore
grade
|
g/t
|
2.21
|
|
0.92
|
|
Gold recovery -
non-refractory ore
|
%
|
84.4
|
|
41.9
|
|
Gold produced -
refractory
|
oz
|
—
|
|
34,589
|
|
Gold produced -
non-refractory
|
oz
|
21,944
|
|
5,462
|
|
Gold produced -
total
|
oz
|
21,944
|
|
40,051
|
|
Gold sold -
refractory
|
oz
|
—
|
|
34,589
|
|
Gold sold -
non-refractory
|
oz
|
21,782
|
|
5,462
|
|
Gold sold -
total
|
oz
|
21,782
|
|
40,051
|
|
|
|
|
|
|
Cash operating cost
per ounce 1
|
$/oz
|
742
|
|
1,027
|
|
|
|
|
|
1 See
"Non-GAAP Financial Measures".
|
Non-refractory gold production was 21,944 ounces for Q1 2016,
compared to 5,462 ounces for the same period in 2015 due to the
commencement of mining and processing of the Prestea oxide ore in
Q3 2015. Non-refractory production in Q1 2015 was processed from
low grade tailings. Refractory gold production, which was suspended
at the end of the third quarter of 2015, was 34,589 ounces of gold
during Q1 2015.
Cash operating cost per ounce of $742 for the first quarter of 2016 was the lowest
since 2010, compared to $1,027 for
the same period in 2015. This 28% decrease in cash operating costs
per ounce is due to the change in cost profile at Prestea. Mining
and processing costs in the first quarter of 2016 were attributable
to the lower cost non-refractory operation whereas 86% of gold sold
in the same period in 2015 was attributable to the higher cost,
higher power consuming refractory operation.
Total capital expenditures for Q1 2016 were $7.4 million compared to $2.4 million during the same period in 2015. Of
this, sustaining capital expenditures in the quarter were
$1.2 million compared to $0.4 million in Q1 2015 and development capital
expenditures were $6.2 million in the
quarter compared to $2.0 million in
the same period in 2015. Development capital expenditures in the
first quarter of 2016 were all attributable to the Prestea
Underground Mine
Development Projects Update
Wassa Underground Development
In March 2015 the results of a
Feasibility Study ("FS") on the economic viability of an
underground mine operating in conjunction with the existing open
pit mine at Wassa were announced and the decision to progress with
the construction of the underground mine was affirmed.
Decline development commenced in July
2015. To date, approximately 1.9 kilometers of development
has been completed on the main, ventilation and F-Shoot access
declines. Development in the first quarter was advanced 796 metres,
an average of 8.6 metres per day for the quarter, compared to an
average of 7 metres per day during the Q4 2015. The rate of
development is expected to increase further in 2016 as efficiencies
improve and more development faces become available.
The first development ore is expected from the F-Shoot area in
the second quarter of 2016 and initial production expected in
mid-2016.
Prestea Underground Development
The FS results for the Prestea Underground Mine were reported in
December 2015 and indicated a
post-tax internal rate of return of 42% and net present value of
$124 million based on a discount rate
of 5% and gold price assumption of $1,150 per ounce. Cash operating costs of
$462 per ounce and all-in sustaining
costs of $603 per ounce were
estimated over the mine life of 5.5 years at an average annual
production rate of 80,000 ounces.
In January 2016 an internal study
was commenced to investigate changing the proposed FS mining method
from conventional shrinkage mining to mechanized shrinkage mining.
The study was completed in March 2016
and indicated an increase in value with a post-tax internal rate of
return of 54% and net present value of $134
million based on a discount rate of 5% and gold price
assumption of $1,150 per ounce. Cash
operating costs of $468 per ounce and
all-in sustaining costs of $615 per
ounce were estimated over the mine life of 4.5 years at an average
annual production rate of 90,000 ounces.
Based on these improved economic parameters and on expectations
for improved safety and efficiency using mechanized shrinkage
mining, this method will be used for the extraction of the Prestea
West Reef orebody. The change in mining method does not constitute
a material change in the economics or capital presented in the FS
and the change in mining method has not resulted in any change to
the mineral reserves or mineral resources.
Rehabilitation works are ongoing on 24 level to improve the
track for high-speed haulage and to install new electrical and
water supply services. Mechanical and electrical rehabilitation
work is planned to be completed in the fourth quarter of 2016 and
development blasting is expected to commence in the fourth quarter
of 2016. Pre-development of the resource is expected to take place
from the fourth quarter of 2016 to mid-2017. Stoping is expected to
start in the mid-2017, with expectation to ramp up to full
production by the end of 2017.
Outlook
The Company continues to expect full year production of 180,000
- 205,000 ounces including 20,000 – 25,000 ounces of pre-commercial
production from the Wassa Underground and cash operating costs of
between $815 and $915 per ounce. As
part of this guidance, the Company is expecting a slight decline in
second quarter production compared to the first quarter due to a
scheduled maintenance shutdown of two weeks at the Wassa mill in
addition to the seasonality traditionally impacting Q2 and Q3. The
Company also continues to expect sustaining capital expenditures of
$9 million and development capital
expenditures of $81 million for total
capital spending of $90 million for
the year.
First Quarter 2016 Conference Call Information
The Company will conduct a conference call and webcast
May 5, 2016 to discuss these results
at 8:30 a.m. EDT.
Toll Free (North
America):
|
1-888-390-0605
|
Toronto Local and
International:
|
416-764-8609
|
Webcast:
|
http://www.gsr.com/
|
|
|
Conference Call
REPLAY:
|
|
|
|
Toll Free (North
America):
|
1-888-390-0541
|
Toronto Local and
International:
|
416-764-8677
|
Replay
Passcode:
|
173120#
|
The conference call replay will be available from 12:00 p.m. EDT on May 5,
2016 until 11:59 p.m. EDT on
May 12, 2016.
Annual & Special Meeting of Shareholders
The annual & special meeting of shareholders will take place
on Thursday May 5, 2016 at
11:30 a.m. EDT at the offices of
Fasken Martineau DuMoulin LLP, Huron / Escarpment Boardrooms, 333
Bay Street, Suite 2400, Bay Adelaide Centre, Toronto, Ontario, Canada.
Company Profile
Golden Star is an established
gold mining company that owns and operates the Wassa and Prestea
mines situated on the prolific Ashanti Gold
Belt in western Ghana,
Africa. Listed on the NYSE MKT,
the TSX, and the GSE, Golden Star is
strategically focused on increasing operating margins and cash flow
through the development of two high grade, low cost underground
mines both in conjunction with existing open pit operations. The
Wassa Underground is expected to commence production in mid-2016
with the Prestea Underground commencing production in mid-2017.
Both projects are fully funded and on track to begin production as
expected. Production in 2016 is expected to be between 180,000 –
205,000 ounces of gold with costs of $815 -
$925 per ounce.
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF OPERATIONS AND
|
COMPREHENSIVE
EARNINGS/(LOSS)
|
(Stated in
thousands of U.S. dollars except shares and per share data)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
Revenue
|
|
$
|
61,067
|
|
$
|
76,519
|
|
Cost of sales
excluding depreciation and amortization
|
|
41,058
|
|
72,203
|
|
Depreciation and
amortization
|
|
5,796
|
|
11,585
|
Mine operating
margin/(loss)
|
|
14,213
|
|
(7,269)
|
|
|
|
|
|
Other
expenses/(income)
|
|
|
|
|
|
Exploration
expense
|
|
442
|
|
312
|
|
General and
administrative
|
|
7,222
|
|
3,632
|
|
Finance expense,
net
|
|
2,106
|
|
2,670
|
|
Other
income
|
|
(78)
|
|
(2,506)
|
|
Loss on fair value of
financial instruments, net
|
|
2,207
|
|
3,736
|
Net
earnings/(loss) and comprehensive earning/(loss)
|
|
$
|
2,314
|
|
$
|
(15,113)
|
Net earnings/(loss)
attributable to non-controlling interest
|
|
263
|
|
(1,986)
|
Net
earnings/(loss) attributable to Golden Star
shareholders
|
|
$
|
2,051
|
|
$
|
(13,127)
|
|
|
|
|
|
Net
earnings/(loss) per share attributable to Golden Star
shareholders
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.01
|
|
$
|
(0.05)
|
Weighted average
shares outstanding-basic (millions)
|
|
259.9
|
|
259.5
|
Weighted average
shares outstanding-diluted (millions)
|
|
264.9
|
|
259.5
|
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED BALANCE SHEETS
|
(Stated in
thousands of U.S. dollars)
|
(Unaudited)
|
|
|
|
|
|
As of
March 31,
2016
|
|
As of
December 31,
2015
|
|
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
14,561
|
|
$
|
35,108
|
|
Accounts
receivable
|
4,466
|
|
5,114
|
|
Inventories
|
39,867
|
|
36,694
|
|
Prepaids and
other
|
6,835
|
|
5,754
|
|
|
Total current
assets
|
65,729
|
|
82,670
|
Restricted
cash
|
6,463
|
|
6,463
|
Mining
interests
|
160,441
|
|
149,849
|
|
|
Total
assets
|
$
|
232,633
|
|
$
|
238,982
|
|
|
|
|
Liabilities
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
102,509
|
|
$
|
110,811
|
|
Derivative
liabilities
|
2,792
|
|
407
|
|
Current portion of
rehabilitation provisions
|
3,868
|
|
3,660
|
|
Current portion of
long term debt
|
23,824
|
|
22,035
|
|
Current portion of
deferred revenue
|
12,993
|
|
11,507
|
|
|
Total current
liabilities
|
145,986
|
|
148,420
|
Long term
debt
|
90,894
|
|
91,899
|
Deferred
revenue
|
49,611
|
|
53,872
|
Rehabilitation
provisions
|
74,627
|
|
76,025
|
|
|
Total
liabilities
|
361,118
|
|
370,216
|
|
|
|
|
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
|
|
695,555
|
Contributed
surplus
|
33,047
|
|
32,612
|
Deficit
|
(791,253)
|
|
(793,304)
|
|
Total Golden Star
Deficit
|
(62,651)
|
|
(65,137)
|
Non-controlling
interest
|
(65,834)
|
|
(66,097)
|
|
Total
Deficit
|
(128,485)
|
|
(131,234)
|
|
Total Liabilities
and Shareholders' Equity
|
$
|
232,633
|
|
$
|
238,982
|
GOLDEN STAR
RESOURCES LTD.
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Stated in
thousands of U.S. dollars)
|
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
2016
|
|
2015
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
Net
earnings/(loss)
|
$
|
2,314
|
|
$
|
(15,113)
|
Reconciliation of
net earnings/(loss) to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
5,801
|
|
11,594
|
|
Net realizable value
adjustment on inventory
|
—
|
|
803
|
|
Share-based
compensation
|
4,344
|
|
529
|
|
Loss on fair value of
warrants
|
1,131
|
|
—
|
|
Gain on deferral of
other long term liabilities
|
—
|
|
(2,432)
|
|
Recognition of
deferred revenue
|
(2,775)
|
|
—
|
|
Unrealized loss on
non-hedge derivative contracts
|
1,254
|
|
—
|
|
Reclamation
expenditures
|
(1,532)
|
|
(1,066)
|
|
Other
|
230
|
|
4,264
|
|
Changes in working
capital
|
(9,839)
|
|
6,259
|
|
|
Net cash provided by
operating activities
|
928
|
|
4,838
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Additions to mining
properties
|
(264)
|
|
(19)
|
|
Additions to
construction in progress
|
(15,650)
|
|
(12,763)
|
|
Change in accounts
payable and deposits on mine equipment and
material
|
(6,290)
|
|
(2,878)
|
|
|
Net cash used in
investing activities
|
(22,204)
|
|
(15,660)
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Principal payments on
debt
|
(2,271)
|
|
(4,348)
|
|
Proceeds from debt
agreements
|
3,000
|
|
—
|
|
|
Net cash provided
by/(used in) financing activities
|
729
|
|
(4,348)
|
Decrease in cash and
cash equivalents
|
(20,547)
|
|
(15,170)
|
Cash and cash
equivalents, beginning of period
|
35,108
|
|
39,352
|
Cash and cash
equivalents, end of period
|
$
|
14,561
|
|
$
|
24,182
|
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 changes in working capital", "cash flow generated
before changes in working capital" and "adjusted net earnings/
(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, 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 third
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" and
"cash flow generated before changes in working capital" are
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 earnings/
(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
full year ended December 31, 2015 and
in the Company's Management Discussion and Analysis for the three
months ended March 31, 2016, both of
which are available at www.sedar.com.
Cautionary note regarding forward-looking information
This press 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 in this press release
include, but are not limited to, information or statements with
respect to: production and cash operating costs for 2016; the
timing for transforming, and the Company's ability to transform,
into a lower cost producer; sustaining, development and total
capital expenditures for 2016; the results of the Prestea
Underground mine feasibility study, including the post-tax internal
rate of return, net present value (including assumed discount rates
and gold price) and cash operating costs per ounce and all-in
sustaining costs per ounce; the change to mechanized shrinkage
mining at Prestea Underground mine and the impact on and duration
of production, post-tax internal rate of return, net present value
and cash operating costs per ounce and all-in sustaining costs per
ounce; future work to be completed at Prestea Underground Mine; the
safety and efficiency of mechanized shrinkage mining at Prestea
Underground mine; the timing for mechanical and electrical
rehabilitation work, as well as pre-development and development
work and stoping, at Prestea Underground mine; the timing of and
amount of production from each of Wassa Underground mine and
Prestea Underground Mine; future work to be completed at Wassa
Underground Mine, including the rate of decline advances during the
remainder of 2016; scheduled maintenance at Wassa during the second
quarter of 2016 and the impact on production and cash operating
costs during the second quarter of 2016; capital expenditures for
the development of Wassa Underground and Prestea Underground mines;
the Company's ability to reduce the level of its debt, including
through internal cash flow as the Company's new underground
operations ramp-up to full production; and the ability of the
Company to repay the 5% Convertible Debentures when due or to
restructure them or make alternate arrangements.
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 and Quality Control
The technical contents of this press release have been reviewed
and approved by S. Mitchel Wasel, BSc Geology, a "Qualified Person"
pursuant to National Instrument 43-101 ("NI 43-101"). Mr. Wasel is
Vice President Exploration for Golden
Star and an active member of the Australasian Institute of
Mining and Metallurgy.
Additional scientific and technical information relating to the
mineral properties referenced in this news release are contained in
the following current technical reports for those properties
available at www.sedar.com: (i) Wassa - "NI 43-101 Technical Report
on feasibility study of the Wassa open pit mine and underground
project in Ghana" effective date
December 31, 2014; (ii) Prestea
Underground - "NI 43-101 Technical Report on a Feasibility Study of
the Prestea Underground Gold Project in Ghana" effective date November 3, 2015; and (iii) Bogoso - "NI 43-101
Technical Report on Resources and Reserves Golden Star Resources
Ltd., Bogoso Prestea Gold Mine, Ghana" effective date December 31, 2013.
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.
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. 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.
SOURCE Golden Star Resources Ltd.