Golden Star Resources Ltd.

Golden Star Resources Ltd.

November 16, 2005 11:27 ET

Golden Star Confirms Recommencement of Mining at the Prestea Plant-North Pit; Updates Wassa Mine's Costs

DENVER--(CCNMatthews - Nov 16, 2005) -

Golden Star Resources Ltd. (TSX: GSC)(AMEX: GSS) confirmed today that it recommenced mining operations at its Plant-North pit on November 3, as was announced during its third quarter conference call held that same day. The Plant-North pit is currently the primary source of ore for its Bogoso gold processing plant at the Company's Bogoso/Prestea Mine in Ghana.

During the approximately four-week suspension of mining at the Plant-North pit, the Bogoso processing facility continued full production, fed from stockpiled ore and from ore mined at the newly re-opened Ablifa pit. Subsequently, mining and production were delayed for a day due to a labor dispute that was quickly resolved. The labor dispute was not supported by the union and a letter of apology for the action has since been delivered to the Company by the union. Construction work on the Bogoso sulfide expansion project continued throughout the mining suspension.

The suspension was required by the Ghana Environmental Protection Agency pending the completion of the balance of the mitigation measures identified in the Environmental Impact Statement relating to mining the new Phase 3 at the Plant-North pit.

Wassa Costs Show Improvement in October

Mining and processing at the Wassa gold mine, 35 kilometers east of Bogoso/Prestea, went uninterrupted during the mining suspension at Plant-North. Cash operating costs showed a downward trend in October, improving by 20% to $367 per ounce, compared to an average of $465 per ounce in the third quarter. Gold production for the month was approximately 8,000 ounces, about the same as the average monthly production during the third quarter. While October was an improvement, further improvements in both production and costs are expected over each of the next three quarters. The life-of-mine projections for Wassa indicate an average production of about 12,000 ounces per month at a cash operating cost of $250 per ounce, which reflects higher average grades from the deeper material. In 2006, production is expected to average approximately 10,000 ounces per month at an average cost of $300 per ounce, while in 2007, production and average cash operating costs are expected to match the life of mine projections.

About Golden Star

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. Production is expected to increase to over 500,000 ounces in 2007, compared to expected production of approximately 200,000 ounces in 2005. Golden Star has approximately 143 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 the establishment and estimates of mineral reserves and non-reserve mineral resources, the recovery of any mineral reserves, planned operations, anticipated financing, expansion plans for Bogoso/Prestea, construction cost estimates, construction completion dates, equipment requirements and acquisitions, production, production commencement dates, cash operating costs, grade, processing capacity, recoveries, anticipated hedging activities, results of feasibility and technical studies, development, costs, expenditures, and exploration activities and expenditures. Factors that could cause actual results to differ materially include timing of and unexpected events during construction, expansion and start-up; 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; timing and availability of external financing on acceptable terms; technical, permitting, mining or processing issues, and fluctuations in gold price and 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. 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. Cash operating cost per ounce is equivalent to total cash cost per ounce, less production royalties and taxes. 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.
    Allan Marter, 800-553-8436
    Senior Vice President and Chief Financial Officer
    303-830-9094 (FAX)