Category: Uncategorized
- Published: 29 November -0001
News Release: 2002 Earnings Of $4.9 Million
Golden Star Resources Ltd. ('Golden Star'or the 'Company') is pleased to announce earnings of $4.9 million for 2002. This is the first full profitable year for Golden Star and compares with a loss of $20.6 million in 2001. Highlights
* Net income totals $4.9 million, or 7 cents per share, for 2002
* Cashflow from operations totals $5.8 million, or 8 cents per share, for 2002
* Production of 124,400 ounces of gold in 2002 at cash operating costs of $193 per ounce1
* Mineral Reserves at Bogoso/Prestea increase by 21% to 2.2 million ounces2
* Realized gold price for 2002 of $311 per ounce
* Acquired a 90% interest in Wassa
* Acquired a joint venture interest in the Prestea Underground
* Listed on the American Stock Exchange Full Year 2002 Results Golden Star had net income of $4.9 million ($0.07 per share) for 2002 on revenue of $38.8 million, compared to a loss of $20.6 million (a loss of $(0.49) per share) on revenue of $24.7 million in 2001. Earnings improved on higher gold prices and better gold recoveries as we commenced the mining of the Prestea surface ores. Also, we had no property impairment write-offs in 2002, whereas we had written off $15.0 million in 2001. Gold production for 2002 totaled 124,400 ounces at a cash operating cost of $193 per ounce. In 2001, we produced 87,936 ounces at a cash operating cost of $263 per ounce. We received an average of $311 per of gold sold ounce in 2002, up from $271 per ounce received in 2001.
Full details of our financial statements can be found in our Form 10-K for the year ended December 31, 2002, which we expect to have available on our web site (http://www.gsr.com) from March 31, 2003.
During 2002, Golden Star was profitable for each quarter. In addition, we increased our Mineral Reserves, we completed the acquisition of the Wassa property, we entered into a joint venture on the Prestea underground
mine, we re-listed on the American Stock Exchange, our shares were listed on the Berlin Stock Exchange and we successfully raised equity to finance our continuing progress toward the objective of becoming a mid-tier gold producer.
Liquidity
Cash flow from operations generated $5.8 million during 2002, compared with $2.4 million generated during 2001. In addition, the Company raised $29.1 million (net of issue costs) from the sale of equity during 2002. At December 31, 2002 we had cash and short-term investments of $20.0 million, compared with cash and short-term investments of $0.5 million at December 31, 2001. In addition, in February 2003 we completed an equity financing for net proceeds of approximately $31.5 million.
Outlook for 2003
We expect to produce 140,000 ounces of gold from Bogoso/Prestea in 2003 at an average cash operating cost of $185 per ounce. By mid-2003 we expect to complete the Wassa feasibility study and then, if the feasibility study is positive, to re-develop the project as a CIL operation with production expected to commence in early 2004 at an estimated rate of approximately 100,000 ounces in 2004 at an average cash operating cost of $185 per ounce.
Geologic and engineering studies are underway at the Prestea underground mine and will continue through 2003 while the mine remains on care and maintenance. We are stepping up our exploration activities and expenditures on our current properties, primarily in Ghana, and continue to consider potential acquisition targets. Our objective is to grow our business to become a mid-tier gold producer over the next few years, through organic growth and through acquisition.
Mineral Reserves2
We continued to increase our Proven and Probable Mineral Reserves during 2002, with the year-end reserves showing a 21% increase over the reserves at the end of 2001. Proven and Probable Mineral Reserves at Bogoso/Prestea as of December 31, 2002 were 23.1 million tonnes at an average grade of 2.98 g/t, for approximately 2.2 million contained ounces. This compares with Mineral Reserves at Bogoso/Prestea of 19.1 million tonnes at an average grade of 2.97 g/t, or approximately 1.8 million contained ounces at December 31, 2001.
Bogoso/Prestea
Gold production at from the Bogoso/Prestea mine during 2002 totaled 124,400 ounces, compared to 87,936 ounces in 2001. This 41% increase in gold production for 2002 compared to 2001, is attributable to the higher gold recoveries achieved from processing Prestea ore and an increase in processing rate.
2002 2001
Gold produced, ounces 124,400 87,936
Cash operating cost, $/oz 193 263
Ore milled, Mt 2.27 2.10
Ore Grade milled, g/t 2.31 2.69
Recovery, % 74 50
We are currently working on a feasibility study on the viability of the redevelopment of the Wassa project as a conventional milling and CIL operation. We expect to complete the feasibility study by mid-2003 and, with a positive result, construction of the CIL mill facility could commence immediately. The capital cost through to start-up is estimated to be approximately $14 million, and gold production could begin by early 2004.
Prestea Underground
In March 2002, one of our 90%-owned subsidiaries entered into a joint venture agreement on the Prestea underground mine, under which we have the right to manage the exploration, re-development and operation of the mine. Prestea had operated as an underground mine for some 130 years and had produced in the region of nine million ounces of gold. During 2002, we commenced an assessment of the Prestea underground mine and, through our expenditures and cash contributions to the joint venture, our subsidiary increased its interest from the initial 45% to 54% at December 31, 2002. The mine remains on care and maintenance and, once all the historical information has been assimilated into digital form to give us a better understanding of the geology and mineralization, we expect to commence underground exploration in the second half of 2003. We have not yet estimated any reserves or resources at the Prestea underground mine.
Golden Star
Golden Star holds a 90% equity interest in the Bogoso/Prestea open-pit gold mine in Ghana, a 54% managing equity interest in the currently inactive Prestea underground mine in Ghana, and a 90% equity interest in the Wassa gold project, also in Ghana. In addition, the Company has other gold exploration interests in Ghana and elsewhere in West Africa and in the Guiana Shield in South America. Golden Star has approximately 107 million common shares outstanding and is listed on the Toronto Stock Exchange under the symbol 'GSC', on The American Stock Exchange under the symbol 'GSS'and on the Berlin Stock Exchange under the symbol 'GS5'. Additional information on the Company can be found on our website (http://www.gsr.com).
Statements in this press release, other than statements of historical information, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. The forward-looking statements involve risks and uncertainties including those relating to exploration, the establishment and estimates of mineral reserves and non-reserve mineral resources, the recovery of any mineral reserves, future gold production and production costs, future exploration and development expenditures, estimated construction and development costs and production commencement dates, future permitting dates for additional sources of ore, and achievement of our growth objectives. There can be no assurance that future developments affecting the Company will be those anticipated by management. Please refer to the discussions of these and other risk factors in our recent Securities and Exchange Commission filings. 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.
1 Cash operating costs are intended to provide investors with information about the cash generating capacity of the Company. Management uses this measure for the same purpose and for monitoring the performance of its gold mining operations. This information differs from earnings determined in accordance with GAAP and should not be considered in isolation or a substitute for measures of performance determined in accordance with GAAP.
2 Calculated in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities. The Mineral Reserves are considered equivalent to reserves as defined in Industry Guide 7 (under the Securities Exchange Act of 1934). The Qualified Person for the estimation of the Mineral Reserves was Dave Alexander, Project Planning Manager, Ghana. A full description of the assumptions, parameters and methods used to determine the Mineral Reserves is contained in our Form 10-K for the year ended December 31, 2002.
CONTACT: TEL: +1 800 553 8436 GOLDEN STAR RESOURCES LTD.
TEL: +1 303 894 4613 Peter Bradford, President and CEO
TEL: +1 303 894 4631 Allan Marter, Chief Financial Officer
WEBSITE This email address is being protected from spambots. You need JavaScript enabled to view it.
