Golden Star ends 2016 with 194,054 ounces of gold production

March 7, 2017
Source: Norvan Acquah - Hayford/
Golden Star ends 2016 with 194,054 ounces of gold production

Golden Star Resources has posted its strongest quarterly performance in the fourth quarter producing some 53,403 ounces which added to the total gold production of 194,054 ounces’ full year which ended December 31, 2016.

According to the company, 2016 full year consolidated guidance achieved on all metrics of gold production, cash operating cost per ounce1, All-In Sustaining Cost ("AISC") per ounce1 and capital expenditures

Below are full highlights of the mining firm which has two sites in Ghana located in Wassa and Prestea undergrounds,

  • Cash operating cost per ounce1 of $872 in 2016, an 11% decrease compared to 2015, and $880 per ounce in the fourth quarter of 2016, reflecting Golden Star's on-going transition into a low cost, non-refractory producer
  • AlSC per ounce1 of $1,093 in 2016 and $1,197 in the fourth quarter of 2016
  • Capital expenditures of $84.4 million in 2016, with 84% representing development capital primarily for the advancement of the Wassa Underground Gold Mine ("Wassa Underground") and the Prestea Underground Gold Mine ("Prestea Underground") ?Post-period end, commercial production was achieved at Wassa Underground on January 1, 2017.
  • West Reef ore body intersected on 24 Level for the first time by Golden Star's mining operations at Prestea Underground and first Alimak mining equipment moved underground - commercial production on schedule for mid-2017
  • Mine operating margin1 of $27.5 million in 2016, compared to a mine operating loss1 of $27.6 million in 2015 due to the closure of the high cost, refractory operations in the third quarter of 2015
  • Cash generated by operations before changes in working capital1 of $75.5 million ($0.26 per share) in 2016, a 41% increase compared to 2015
  • Consolidated cash balance of $21.8 million, prior to the receipt of the $10 million scheduled advance payment under the streaming transaction on January 3, 2017 from RGLD Gold AG ("RGLD"), a subsidiary of Royal Gold, Inc.
  • In addition, the Company received net proceeds of C$32.7 million ($24.8 million) from the bought deal public offering, which completed on February 7, 2017
  • Full year 2017 guidance represents an anticipated strengthening of gold production and profitability due to a 31-44% expected increase in ounces produced and an expected reduction in the cash operating cost per ounce1

Speaking during the release the 2016 final results of the company, Sam Coetzer, President and Chief Executive Officer of Golden Star stated that: "In 2016 Golden Star both progressed the development of our two transformational underground projects and achieved our full year guidance on all metrics. In 2017 we will seek to consolidate on these achievements as we look to both expand our production and reduce our costs further. 2017 will also be another exciting year from a development perspective, as we look to bring our high grade Prestea Underground and our high grade Mampon deposit into production. Today, Golden Star is a very different company from the one it was a year ago, with a substantially reduced risk profile and various sources of ore feeding our plants from two open pit mines and an underground mine. I look forward to continuing our transformation into a high grade, low cost producer during the year ahead."

During the second half of 2016 Golden Star conducted an in-fill drilling programme to further delineate the first planned transverse stooping areas of the B Shoot zone.

In December 2016, Golden Star reported the first nine holes of this programme and the results of the remaining 15 holes have now been received.

They continue to confirm the wide zones of high grade gold mineralisation in this area. This programme has also defined the contacts and geometry of the high-grade zones so that detailed mining plans and schedules can be assembled in advance of mining.

In addition, the drilling targeted gaps in the existing planned stopes to determine whether continuity between areas of higher grade mineralisation exists.

The results of the most Northern holes from this programme indicated that the ore body is open to the North and, therefore, Golden Star will be evaluating the viability of adding additional stopes to the mine plan in this area.

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 Ghana, West 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 its two high grade, low cost underground mines both in conjunction with existing open pit operations.

The Wassa Underground Gold Mine commenced commercial production in January 2017 and the Prestea Underground Gold Mine is expected to achieve commercial production in mid-2017.

Gold production in 2017 is expected to be 255,000-280,000 ounces with cash operating costs of $780-860 per ounce.