To provide extra support and to ensure that the Company has a sufficient cash balance available, Golden Star will consider financing alternatives. Although the Company estimates that it has sufficient cash in hand for the remainder of 2013, it is prudent for the Company to make such an arrangement. The Company will update the market in the third quarter on the availability of development capital and the timing of pit development.
As announced on May 8, 2013 the Company suspended the Bogoso/Prestea non-refractory operations due to insufficient supply of ore from the Pampe pit. This suspension is expected to result in a reduction of approximately 35,000 oz of gold production in 2013. The gold production lost from Pampe during the first half of 2013 has been recovered from accelerated mining at the Father Brown pit. The Company's revised 2013 gold production estimate is now expected to be in the range of 290,000 - 310,000 oz of gold.
Cash operating costs are expected to remain in the same range, as previously indicated, from $1,050 to $1,150/oz for the balance of 2013. As indicated above, the Company has reduced total operating expenses for the remainder of 2013, however cash operating costs remain in the same range, due to reduced expected production.
The Company expects to provide an update to the market on completed Wassa and Mampon drilling in the third quarter of 2013.
On June 18, 2013, the Company will conduct a conference call at 10:00 a.m. Eastern Time. Please call in at least five minutes prior to the conference call start time to ensure prompt access to the conference. The call can be accessed by telephone as follows:
Participants (North America): (877) 407-8289
Participants (Outside U.S. and Canada): (201) 689-8341
A recording of the conference call will be available until July 9, 2013 by dialing:
North America: (877) 660-6853
International (Outside U.S. and Canada): (201) 612-7415
Conference ID number: 416721
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/HBB open-pit gold mines in Ghana. In addition, Golden Star has a 90% interest in the Prestea Underground mine in Ghana. Golden Star also holds gold exploration interests elsewhere in Ghana, in other parts of West Africa and in Brazil in South America. Golden Star has approximately 259 million shares outstanding.
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 applicable Canadian 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: our plans to reduce operating costs; the viability of operations; the ability of cash flow from operations and cash to cover sustaining capital requirements for 2013 and 2014; 2013 gold production and cash operating cost forecasts; the duration of production from Chujah and Bogoso North and their impact on the Company's cash flow profile and funding of the Mampon, Dumasi and Prestea South development projects; the timing for updating Wassa resource models; the reduction in strip ratios at Bogoso, the timing thereof and sources of funds for and the timing of pushbacks, as well as changes in operating costs at Bogoso and the production profile at Bogoso; expected savings of operating costs; and the expected impact of the re-optimization of pit shells, including on strip ratios and operating costs. Factors that could cause actual results to differ materially include timing of and unexpected events at the Bogoso/Prestea oxide and sulfide processing plants; 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 input 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 2012. 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 for a period is equal to "Cost of sales" for the period less mining related depreciation, depletion and amortization costs, royalties, production taxes, accretion of asset retirement obligation costs, costs that meet the definition of a stripping activity asset under International Financial Reporting Standards ("IFRS") and operations-related foreign currency gains and losses for the period, 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 applicable Canadian securities laws 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 revenue, 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.
Executive Vice President and Chief Financial Officer
The Capital Lab, Inc.
The Capital Lab, Inc.
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