Golden Star Resources has said its 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 miner said the project remains on schedule to deliver first gold production in mid-2016.
Meanwhile, Golden Star has also said revised study on its Prestea Underground mine indicates slightly higher expected average annual production of 90,000 ounces, with the project being on schedule for first gold production in mid-2017.
Listed on the New York Stock Exchange (NYSE:GSS), Toronto Stock Exchange (TSX:GSC) and on the Ghana Stock Exchange (GSE: GSR), the established gold mining company that owns and operates the Wassa and Prestea mines situated on the prolific Ashanti Gold Belt in western Ghana, Africa, 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.
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.
Below are the highlights of the miner’s first-quarter results published on Wednesday May 4:
• 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”)
o $706/oz. at Wassa, a decline of 37% from Q1 2015
o $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,” Mr Coetzer said.