EX-99.1 2 dex991.htm PRESS RELEASE OF GOLDEN STAR RESOURCES LTD. Press release of Golden Star Resources Ltd.

Exhibit 99.1

 

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TSX: GSC; NYSE Amex: GSS    NEWS RELEASE    WWW.GSR.COM

GOLDEN STAR REPORTS RECORD QUARTERLY GOLD SALES OF 96,971 OUNCES

Denver, Colorado, May 6, 2009: Golden Star Resources Ltd. (NYSE Amex: GSS; TSX: GSC; GSE: GSR) today announced its unaudited first quarter 2009 results which include record quarterly gold sales. All currency in this news release is expressed in U.S. dollars, unless otherwise noted. The Company will host a live webcast and conference call to discuss its quarterly results on Thursday, May 7, 2009 at 11:00 a.m. ET. To access the webcast and conference call, go to the home page of the Company’s website, www.gsr.com.

Tom Mair, President and CEO, said, “Wassa turned in an excellent quarter producing over 56,000 ounces at a cash cost of less than $400 per ounce. This demonstrates the results of a full quarter of HBB high grade ore deliveries to the Wassa plant. At Bogoso we continue to see progress but power quality issues remain. We are on track to meet our 2009 guidance of 400,000 ounces at an average cash cost of $550 per ounce.”

FIRST QUARTER 2009 RESULTS AND HIGHLIGHTS

 

   

Record quarterly gold sales of 96,971 ounces for the first quarter of 2009, a 13% increase over fourth quarter 2008 and a 69% increase over the first quarter of 2008;

 

   

Gold revenues for the quarter of $87.6 million representing an increase of 26% over fourth quarter 2008 revenues of $69.6 million and an increase of 65% over first quarter of 2008;

 

   

Net loss of $1.1 million or $0.005 per share compared to a loss of $86.8 million for the fourth quarter of 2008;

 

   

Operating cash flow of $11.1 million for the first quarter of 2009, or $0.047 per share;

 

   

Operating cash flow before working capital charges of $19.8 million for the first quarter of 2009, or $0.084 per share;

 

   

Quarter-end cash balance of $28.1 million; and

 

   

Realized gold price for the first quarter averaged $904 per ounce compared to $808 in the fourth quarter of 2008, an increase of 12%;

 

 

Golden Star Resources Ltd.    News Release 09-02 Page 1 of 8


FINANCIAL SUMMARY

 

SUMMARY OF CONSOLIDATED

FINANCIAL RESULTS

   First Quarter
2009
    First Quarter
2008
 

Bogoso/Prestea gold sold (oz)

   40,546     31,414  

Wassa gold sold (oz)

   56,425     26,013  

Total gold sold (oz)

   96,971     57,427  

Average realized price ($/oz)

   904     926  

Cash operating cost—combined ($/oz)

   571     621  

Gold revenues ($000’s)

   87,645     53,183  

Cash flow provided/(used) by operations ($000’s)

   11,093     (5,038 )

Net loss ($000’s)

   (1,146 )   (3,692 )

Net loss per share—basic ($)

   (0.005 )   (0.016 )

BOGOSO/PRESTEA

Bogoso increased its gold sold to 40,546 ounces, a small increase over the prior quarter, as higher ore grades and recoveries were offset by lower mill throughputs due. During the quarter, approximately two weeks of production was lost due to electrical issues including an electrical fire in the liquid resistance starter and continuing poor quality power from the VRA. The Genser power plant should be commissioned in the second quarter and this should improve the power situation. Sulfide plant recoveries continue to improve from 59.0% in the first quarter of 2008 to 71.5% in the first quarter of 2009.

 

OPERATING RESULTS    First Quarter
2009
   Fourth Quarter
2008
   First Quarter
2008

Mining

        

Ore mined (000s t)—Refractory

   654    558    853

Ore mined (000s t)—Non refractory

   —      4    25
              

Total ore mined (t)

   654    562    878

Waste mined (t)

   3,352    4,154    5,493

Bogoso Sulfide Plant Results

        

Refractory ore processed (t)

   627    703    828

Refractory grade—(g/t)

   3.00    2.78    2.67

Recovery—Refractory (%)

   71.5    71.1    59.0

Cash operating cost ($/oz)

   813    799    764

Gold sold (oz)

   40,546    40,192    31,414

WASSA

Wassa sold 56,425 ounces of gold during the first quarter of 2009 compared to 45,952 ounces in the fourth quarter of last year. The cash operating cost at Wassa decreased from $496 per ounce last quarter to $397 per ounce this quarter, a decrease of 20%. A total of 282,096 tonnes grading 4.62 grams per tonne was trucked from Benso to Wassa during the first quarter. Additionally, the haul road extension that will connect the high grade Hwini-Butre properties to the Benso-Wassa road is nearing completion and we expect higher grade Hwini-Butre ore to be delivered to Wassa during the second half of this year.

 

 

Golden Star Resources Ltd.    News Release 09-02 Page 2 of 8


OPERATING RESULTS    First Quarter
2009
   Fourth Quarter
2008
   First Quarter
2008

Ore mined (t)

   660    592    1,018

Waste mined (t)

   3,566    2,687    1,257

Ore processed (t)

   747    683    927

Grade processed (g/t)

   2.28    2.19    1.14

Recovery (%)

   95.6    94.7    93.1

Cash operating cost ($/oz)

   397    496    447

Gold sold (oz)

   56,425    45,952    26,013

EXPLORATION

The focus of our exploration activities will be centered on resource definition drilling in close proximity to our operating mines using our own drill rigs and crews. Development drilling at Wassa has confirmed the continuity of higher grade ore pods at the SAK pits.

In Suriname, Newmont continued to fund all exploration activities at the Saramacca property during the first quarter. We anticipate that Newmont will meet its $6.0 million target spending in the second quarter of 2009 and will then vest into a 51% interest in Saramacca. Exploration at Saramacca was focused on further evaluation of the near surface oxide and laterite gold targets during the quarter. Exploration will continue during the year.

We created a new exploration entity for our activities in Brazil during the first quarter of the year and subsequently transferred our Brazilian projects into that entity. We will continue to review properties and grow our property portfolio in Brazil.

CASH AND CASH FLOW

Our cash, cash equivalents and short term investments totaled $28.1 million at the end of March 2009. Cash flow from operations totaled $11.1 million during the quarter. Our mining operations generated $19.8 million in cash before adjustments to working capital in the quarter. All future sustaining capital requirements for 2009 are expected to be funded from operating cash flows.

Liquidity Outlook

We anticipate that all of our cash needs in 2009 will be met by the $28.1 million cash on hand, cash generated from operations, the recently announced revolving line of credit and equipment financing facilities already in place.

LOOKING AHEAD

Our objectives for the remainder of 2009 include the following:

 

   

Optimization of the Bogoso sulfide processing plant to further improve throughput and recovery rates and reduce costs;

 

   

Complete construction of the Hwini-Butre haul road for ore delivery to Wassa during the second half of 2009;

 

   

Finalize permitting of the Prestea South properties; and

 

   

Continue exploration at Bogoso/Prestea, Wassa and the HBB properties.

 

 

Golden Star Resources Ltd.    News Release 09-02 Page 3 of 8


We reiterate our previously stated guidance for 2009 as follows:

 

     2009

Guidance

   Gold Production    Cash Operating Cost

Bogoso/Prestea

   200,000    $ 650

Wassa

   200,000    $ 450
           

Total

   400,000    $ 550
           

 

 

Golden Star Resources Ltd.    News Release 09-02 Page 4 of 8


FINANCIAL STATEMENTS    The following information is derived from the Company’s consolidated financial statements contained in our Form 10-Q, which we filed with the SEC today and is available on our website.

 

ASSETS    As of
March 31,
2009
    As of
December 31,
2008
 

CURRENT ASSETS

    

Cash and cash equivalents

   $ 28,108     $ 33,558  

Accounts receivable

     9,571       4,306  

Inventories

     48,070       49,134  

Deposits

     4,351       3,875  

Prepaids and other

     4,128       1,100  
                

Total Current Assets

     94,228       91,973  

RESTRICTED CASH

     4,175       4,249  

AVAILABLE-FOR-SALE INVESTMENTS

     94       29  

DEFERRED EXPLORATION AND DEVELOPMENT COSTS

     13,076       13,713  

PROPERTY, PLANT AND EQUIPMENT

     263,096       271,528  

MINING PROPERTIES

     307,171       312,029  

OTHER ASSETS

     776       778  
                

Total Assets

   $ 682,616     $ 694,299  
                

LIABILITIES

    

CURRENT LIABILITIES

    

Accounts payable

   $ 33,230     $ 43,355  

Accrued liabilities

     36,484       30,879  

Fair value of derivatives

     —         1,690  

Asset retirement obligations

     1,699       1,620  

Current debt

     9,561       12,778  
                

Total Current Liabilities

     80,974       90,322  

LONG TERM DEBT

     113,273       112,649  

ASSET RETIREMENT OBLIGATIONS

     30,253       30,036  

FUTURE TAX LIABILITY

     30,377       33,125  
                

Total Liabilities

     254,877       266,132  

MINORITY INTEREST

     —         —    

COMMITMENTS AND CONTINGENCIES

     —         —    

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. Shares issued and outstanding: 236,045,311 at March 31, 2009, and 235,945,311 at December 31, 2008

     615,545       615,463  

CONTRIBUTED SURPLUS

     15,806       15,197  

EQUITY COMPONENT OF CONVERTIBLE DEBENTURES

     34,542       34,542  

ACCUMULATED OTHER COMPREHENSIVE INCOME

     (61 )     (88 )

DEFICIT

     (238,093 )     (236,947 )
                

Total Shareholders’ Equity

     427,739       428,167  
                

Total Liabilities and Shareholders’ Equity

   $ 682,616     $ 694,299  
                

 

 

Golden Star Resources Ltd.    News Release 09-02 Page 5 of 8


     Three months ended
March 31,
 
     2009     2008  

REVENUE

    

Gold revenues

   $ 87,645     $ 53,183  

Cost of sales (Note 17)

     (84,517 )     (48,902 )
                

Mine operating margin

     3,128       4,281  

OTHER EXPENSES, (GAINS) AND LOSSES

    

Exploration expense

     110       389  

General and administrative expense

     3,414       4,339  

Abandonment and impairment

     290       —    

Derivative mark-to-market (gain)/loss (Note 11)

     (312 )     442  

Property holding costs

     1,342       —    

Foreign exchange gain

     (1,671 )     (362 )

Interest expense

     3,710       3,693  

Interest and other income

     (40 )     (380 )

Loss on sale of assets

     179       —    
                

Loss before minority interest

     (3,894 )     (3,840 )

Minority interest

     —         148  
                

Net loss before income tax

     (3,894 )     (3,692 )

Income tax benefit (Note 14)

     2,748       —    
                

Net loss

   $ (1,146 )   $ (3,692 )
                

OTHER COMPREHENSIVE LOSS

    

Other comprehensive income—unrealized gain on investments

     27       2,574  
                

Comprehensive loss

   $ (1,119 )   $ (1,118 )
                

Deficit, beginning of period

     (236,947 )     (114,973 )
                

Deficit, end of period

     (238,093 )     (118,887 )
                

Net loss per common share—basic and diluted (Note 19)

   $ (0.005 )   $ (0.016 )

Weighted average shares outstanding (millions)

     236.0       234.8  
                

 

 

Golden Star Resources Ltd.    News Release 09-02 Page 6 of 8


     Three months ended
March 31,
 
     2009     2008  

OPERATING ACTIVITIES:

    

Net loss

   $ (1,146 )   $ (3,692 )

Reconciliation of net loss to net cash used in operating activities:

    

Depreciation, depletion and amortization

     24,321       10,750  

Amortization of loan acquisition cost

     166       165  

Abandonment and impairment

     290       —    

Loss on sale of assets

     179       —    

Stock compensation

     610       689  

Income tax benefit

     (2,748 )     —    

Reclamation expenditures

     (241 )     (63 )

Fair value of derivatives

     (3,800 )     164  

Accretion of convertible debt

     1,615       1,507  

Accretion of asset retirement obligations

     538       217  

Minority interests

     —         (148 )
                
     19,784       9,589  

Changes in assets and liabilities:

    

Accounts receivable

     (5,248 )     4,350  

Inventories

     1,510       (15,485 )

Prepaids and other

     (933 )     (213 )

Deposits

     (951 )     (2,434 )

Accounts payable and accrued liabilities

     (3,031 )     (845 )

Other

     (38 )     —    
                

Net cash provided by / (used in) operating activities

     11,093       (5,038 )

INVESTING ACTIVITIES:

    

Expenditures on deferred exploration and development

     (402 )     (1,952 )

Expenditures on mining properties

     (10,040 )     (7,715 )

Expenditures on property, plant and equipment

     (868 )     (2,253 )

Cash used to secure letters of credit

     74       (3,660 )

Proceeds from the sale of assets

     1       —    

Change in payable on capital expenditures

     (1,490 )     (2,032 )

Change in deposits on mine equipment and material

     474       —    
                

Net cash used in investing activities

     (12,251 )     (17,612 )

FINANCING ACTIVITIES:

    

Issuance of share capital, net of issue costs

     81       6,248  

Principal payments on debt

     (4,409 )     (4,343 )

Proceeds from equipment financing facility

     35       —    

Other

     1       (332 )
                

Net cash (used in)/provided by financing activities

     (4,292 )     1,573  
                

Decrease in cash and cash equivalents

     (5,450 )     (21,077 )

Cash and cash equivalents, beginning of period

     33,558       75,754  
                

Cash and cash equivalents end of period

   $ 28,108     $ 54,677  
                

COMPANY PROFILE

Golden Star holds a 90% equity interest in Golden Star (Bogoso/Prestea) Limited and Golden Star (Wassa) Limited, which respectively own the Bogoso/Prestea and Wassa open-pit gold mines through subsidiaries in Ghana. In addition, Golden Star has an 81% interest in the currently inactive Prestea Underground mine in Ghana, as well as gold exploration interests elsewhere in Ghana, in other parts of West Africa and in the Guiana Shield of South America. Golden Star has approximately 236 million shares outstanding.

 

 

Golden Star Resources Ltd.    News Release 09-02 Page 7 of 8


Statements Regarding Forward-Looking Information:    Some statements contained in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Investors are cautioned that forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause actual results to differ materially. Such statements include comments regarding the improvement of our cost structure, including lower electrical power, fuel and input costs; the completion of the haul road from Hwini-Butre to Benso and the commencement of mining at the Hwini-Butre property; the impact of the HBB properties on Wassa gold sales; permitting and the mining at Prestea South and the impact on Bogoso gold sales; planned exploration activities and drilling, including exploration at Bogoso/Prestea, Wassa, and the HBB properties; the ability to fund sustaining capital requirements; optimization of throughput and recovery rates at the Bogoso sulfide processing plant; our 2009 production and cash operating cost estimates, capital expenditure estimates, sources of and adequacy of cash to meet capital and other needs in 2009; and the ability to convert mineral resources into mineral reserves. Factors that could cause actual results to differ materially include timing of and unexpected events at the Bogoso/Prestea oxide and sulfide processing plant; variations in ore grade, tonnes mined, crushed or milled; variations in relative amounts of refractory, non-refractory and transition ores; delay or failure to receive board or government approvals and permits; the availability and cost of electrical power, timing and availability of external financing on acceptable terms; technical, permitting, mining or processing issues, changes in U.S. and Canadian securities markets, and fluctuations in gold price and costs and general economic conditions. 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 Form 10-K for 2008. 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 news release, we use the terms “cash operating cost per ounce.” Cash operating cost per ounce is equal to total cash costs less production royalties and production taxes, 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 period’s values to detect trends that may indicate increases or decreases in operating efficiencies. This measure is also compared against budget to alert management to trends that may cause actual results to deviate from planned operational results. We provide this measure to our investors to allow them to also monitor operational efficiencies of our mines. We calculate this measure for both individual operating units and on a consolidated basis. Cash operating cost per ounce should be considered as Non-GAAP Financial Measures as defined in SEC Regulation S-K Item 10 and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. There are material limitations associated with the use of such non-GAAP measures. Since this measure does not incorporate revenues, changes in working capital and non-operating cash costs, it is not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Changes in numerous factors including, but not limited to, mining rates, milling rates, gold grade, gold recovery, and the costs of labor, consumables and mine site general and administrative activities can cause these measures to increase or decrease. We believe that these measures are the same or similar to the measures of other gold mining companies, but may not be comparable to similarly titled measures in every instance.

For further information, please contact:

GOLDEN STAR RESOURCES LTD.            +1-800-553-8436

Bruce Higson-Smith, Vice President Corporate Development

Anne Hite, Investor Relations Manager

 

 

Golden Star Resources Ltd.    News Release 09-02 Page 8 of 8