Golden Star Resources Ltd.

Golden Star Resources Ltd.

June 03, 2005 13:15 ET

Golden Star Completes Wassa Mine's Powerline; Reduces Wassa's Cost Structure by up to $80 Per Ounce

DENVER--(CCNMatthews - Jun 3, 2005) -

Golden Star Resources Ltd. (AMEX: GSS)(TSX: GSC) today announced that it has completed the construction and commissioning of the 50-kilometer, 161-kilovolt powerline to connect its Wassa Mine in Ghana to the national power grid. The Wassa processing plant began commissioning in late 2004 utilizing used diesel generators, including those it acquired from the previous operators.

The national power grid is operated by the Volta River Authority, who, in terms of an agreement with Golden Star, will also own and operate the new powerline to Wassa. Use of grid power in lieu of diesel-generated electricity is expected to reduce cash operating costs by up to $80 per ounce from June.

In addition to the reduction in power-related operating costs, the connection to the national power grid should enable more stable processing plant operations and allow the processing throughput performance to be fully tested and optimized. Whilst we have been successful in operating the Wassa processing plant over the last few months in certain areas at rates in excess of design, we have been constrained to an overall processing rate of about 90% of design by the diesel-fired powerhouse, whose capacity is limited as a result of the intensive maintenance requirements associated with the used generators. The diesel generating equipment will now be used solely for standby purposes, and the mine management team can now focus all its attention on realizing the full potential of the operation.

Peter Bradford, President and CEO commented: "We decided in December 2004 to internally manage the construction of the powerline following early termination of the Wassa Mine construction contract. Our people and sub-contractors are proud to have completed the powerline construction in just over five months -- a significant achievement relative to the 6-8 months quoted by other specialist contractors. We congratulate them on their efforts and thank the Volta River Authority for their cooperation and assistance during the construction and commissioning of the powerline."

Company Profile

Golden Star holds a 90% equity interest in the Bogoso/Prestea and Wassa open-pit gold mines in Ghana. In addition, the Company has an 81% interest in the currently inactive Prestea Underground mine in Ghana, as well as gold exploration interests elsewhere in West Africa and in the Guiana Shield of South America. Golden Star has approximately 142.4 million common 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. 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 anticipated improvements to the cost structure and operations at Wassa, production estimates and costs. Factors that could cause actual results to differ materially include timing of and unexpected events during operations; variations in ore grade, tonnes crushed or milled; variations in relative amounts of refractory, non-refractory and transition ores; and fluctuations in costs. 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 2004. 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, the term "cash operating cost" is used on a per ounce of gold basis. Cash operating cost per ounce is equivalent to total cash cost per ounce, less production royalties and taxes. .Total cash cost per ounce is equivalent to mining operations expenses for the period divided by the number of ounces of gold shipped during the period. We have included cash operating cost information to provide purchasers with information about the cost structure of our mining operations. This information differs from measures of performance determined in accordance with GAAP in Canada and in the United States and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. These measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP and may not be comparable to similarly titled measures of other companies.

Contact Information

  • Golden Star Resources Ltd., Denver
    Peter Bradford, 303-894-4613
    President and CEO
    Allan Marter, 303-894-4631
    Chief Financial Officer
    Golden Star Resources Ltd.