SOURCE: Golden Star Resources

Golden Star Resources

September 01, 2011 08:00 ET

Golden Star Resources Announces Pampe Pit Re-Opening and Commencement of Mining Operations Targeting 191,000 Ounces of Proven and Probable Gold Reserves

Exploratory Drilling Program Underway Along Strike Extension of Pampe Mineralized Trend; Bogoso Oxide Processing Plant Being Upgraded in Preparation for New Oxide Ore Sources

DENVER, CO--(Marketwire - Sep 1, 2011) - Golden Star Resources Ltd. (NYSE Amex: GSS) (TSX: GSC) (GSE: GSR) ("Golden Star" or the "Company") today announced it has re-commenced mining of the free milling Pampe Deposit located 26 kilometers west of the Company's Bogoso processing plant in Ghana, West Africa. The Company also announced that an exploratory drilling program is underway focused on increasing Pampe's Proven and Probable Reserves of 191,000 ounces of gold.

The Pampe non-refractory deposit is on the southern end of the Akropong Trend, which is a subsidiary fault structure of the prolific Ashanti Trend. The Akropong Trend also hosts the multi-million ounce Edikan gold project operated by Perseus Mining.

The Pampe Deposit, an existing pit that was mined by Golden Star from 2007 to 2008, has all required regulatory permits and all necessary mining infrastructure in place. The Proven and Probable Reserves at Pampe are 1.7 million tonnes grading 3.5 grams per tonne (g/t) and totaling 191,000 ounces of gold. Initial mining will concentrate on a pit waste cut back to access ore below the existing pit floor. Once the waste cut back has been completed, mine production is expected to generate up to 75,000 tonnes of ore per month beginning in January 2012. The Company expects mined grade of ore to average 3.5 g/t Au with metallurgical recovery of approximately 80%.

The Bogoso Oxide Processing Plant, which has production capacity of 1.5 million tonnes per year, is currently being upgraded and enhanced to accommodate new sources of oxide ore, with plant re-commissioning expected in January 2012. Production from the Pampe pit, in combination with retreatment of Bogoso/Prestea mine tailings, is expected to increase the Bogoso/Prestea mine's overall production by approximately 80,000 to 90,000 ounces of gold in 2012 with an estimated cash operating cost of $650/ounce. Over the long term, Pampe and the Company's Prestea South and Mampon pits, both of which are in permitting phase, have more than 10 million tonnes of oxide ore that are expected to keep the plant operating at capacity for seven years.

The new exploration drilling along the strike extension of the Pampe mineralized trend involves one multipurpose rig and will target the northern strike and the down dip extensions of the gold mineralized zone, which has not been thoroughly tested in past exploration programs.

Tom Mair, President and Chief Executive Officer, said, "The Pampe pit will supply non-refractory ore to the Bogoso Oxide Processing Plant, increasing overall gold production and lowering overall cash operating costs at the Bogoso/Prestea Mine. We are also excited about our current drilling program aimed at finding more non-refractory ore at Pampe as the ore body is open in all directions. We continue to strengthen operations throughout the organization and are intensely focused on increasing production, lowering costs and returning value to our shareholders."


Golden Star Resources holds the largest land package in one of the world's largest and most prolific gold producing provinces. The Company 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, West Africa. In addition, Golden Star has an 81% interest in the currently inactive Prestea Underground mine in Ghana, as well as 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.

The Mineral Reserve and Mineral Resource estimates have been estimated by our technical personnel in accordance with definitions and guidelines set out in the Definition Standards for Mineral Resources and Mineral Reserves published by the Canadian Institute of Mining, Metallurgy, and Petroleum and as required by Canada's National Instrument 43-101. The 2010 Mineral Reserves were prepared under the supervision of Mr. Karl Smith, former Vice President Technical Services for the Company. Mr. Smith is a "Qualified Person" as defined by Canada's Nation Instrument 43-101. The technical contents of this press release have been reviewed by S. Mitchel Wasel, BSc Geology, a Qualified Person pursuant to Canada's National Instrument 43-101. Mr. Wasel is Vice President Exploration for Golden Star and an active member of the Australasian Institute of Mining and Metallurgy.

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 other applicable securities laws. Investors are cautioned that forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause actual facts to differ materially. Such statements include comments regarding planned mining activities at the Pampe Deposit; anticipated increases in gold production; estimated cash operating costs of gold produced from the Pampe pit and retreatment of Bogoso/Prestea mine tailings; anticipated duration of production from the Pampe, Prestea South and Mampon pits; planned exploration and focus on increasing the Pampe proven and probable reserves; and anticipated average mined grades and metallurgical recovery from Pampe ore. Factors that could cause actual results to differ materially include timing of and unexpected events at the Pampe pit and Bogoso Oxide Processing Plant; variations in ore grade, ore type, tonnes mined, crushed or milled and gold recoveries; delay or failure to receive board or government approvals and permits; the cost of mining, consumables, reagents and power; the results of exploration at Pampe; technical, permitting, mining or processing issues; fluctuations in gold price, operating 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 2010. 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. While we may elect to update these estimates at any time, we do not undertake 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 is equal to total cash costs less production royalties and production taxes, 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 other applicable 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 revenues, 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.

Contact Information

  • For further information, please contact:

    Bruce Higson-Smith
    Vice President Corporate Development

    Jay Pfeiffer or Geoff High
    Pfeiffer High Investor Relations, Inc.