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BOGOSO/PRESTEA GOLD MINE (90% interest)

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Bogoso/PresteaGolden Star owns the Bogoso/Prestea mine that consists of mining and exploration concessions along the Ashanti Trend. In total the Bogoso/Prestea property covers a strike length of approximately 85 km.

The remaining 10% interest in the Bogoso/Prestea property is a carried interest owned by the Government of Ghana, with dividends payable after capital costs have been recovered.

Location

Bogoso/Prestea is located in southwest Ghana approximately 300 kilometers west of the capital, Accra, and is accessible by sealed road.

Geology of the Bogoso/Prestea Mine

Bogoso/Prestea lies within the Eburnean Tectonic Province (1,800-2,166 Ma) in the West African Precambrian Shield. The paleo-proterozoic rocks that comprise most of the West African craton and host the major gold mineralization in Ghana are subdivided into metasedimentary and volcanic rocks of the Tarkwaian and Birimian sequences.

The Birimian is composed largely of phyllites, schists, greywackes, volcanoclastics, and metavolcanic rocks (including lavas, pyroclastics, and some finer-grained metasedimentary rocks). Unconformably overlying the Birimian are the continental clastics of the Tarkwaian sequence. These clastics were derived from the weathering of Birimian rocks and granitic intrusions found within the Birimian.

The area is dominated by a major northeast-southwest trending structural fault zone referred to as the Ashanti Trend, which hosts the Prestea, Bogoso, Obuasi and Konongo gold deposits, among others. Parallel to the Ashanti Trend is the Akropong trend, which hosts the multi-million ounce Edikan gold deposit. The Akropong Trend is about 15 km west of the Ashanti Trend in the Bogoso region, and gradually converges with it, coalescing at Obuasi and forming the basis for the world class Obuasi deposit, owned and operated by AngloGold Ashanti Ltd.

Gold operations in the Tarkwaian sequence include the Teberebie, Abosso, Tarkwa and Iduapriem mines.

In the Bogoso area, the faulted contact zone is known as the “Main Crush Zone” and passes through the central part of the Bogoso Mine for its entire 18.5-kilometer concession length. The Main Crush Zone lies within a structural corridor that varies in width from 1,000 to 2,500 meters. Some 90% of the gold mined to date at the Bogoso Mine has come from the Main Crush Zone with the larger deposits being located at bends and junctions along this major fault. Additional faults and splays in the structural corridor may also be prospective for gold. The oxide ores tend to have fine-grained free gold that has been liberated during the weathering of pre-existing sulfides. Oxidation extends from surface down to the approximate elevation of the water table averaging 40 m below surface and ranging between 10 m and 60 m below surface. Below this, a transition zone of up to 20 meters of partially oxidized material directly overlies fresh sulfide mineralization.

The Prestea concession covers a 22 km stretch of the Ashanti Trend located immediately south of the Bogoso concession. Within the concession, the “Main Crush Zone” is comprised of an anastomosing network of thrust faults with three dominant structures trending northeasterly (40-60°). The three structures are often referred to in the old nomenclature as the Prestea Main, East and West reef zones. Sulfide gold mineralization is also associated with the hangingwall and footwall of these discrete quartz vein (reef) zones. In the Northern portion of the lease the deposits tend to be similar to the Bogoso lease deposits, whilst in the south they are more discrete vein systems. Further towards the south, in the vicinity of the Bondaye-Tuapim shafts, the structures split into two distinct zones running approximately parallel. Tuapim mineralization trends roughly along the same direction as the entire belt (32 degrees) gradually turning to an approximate N-S orientation running parallel to the Tarkwaian - Birimian contact. The second zone of mineralization, the Bondaye Zone in the vicinity of the Bondaye main shaft, swings N-S paralleling this lithological boundary.

Historical Mining Operations at Bogoso/Prestea

In total over 13 million ounces have been mined to date from the Bogoso and Prestea properties.

Mining has been conducted at Prestea since 1873, primarily as an underground operation, with more than nine million ounces of gold recorded by the Ghana Chamber of Mines as having being produced during its more than 135-year history. From 1873 to 1965, the current Prestea concession comprised a number of different licenses operated by independent mining companies, which, in 1965, were amalgamated by the post-independence government. Production declined due to lack of sustained investment, and the mine operated at a loss. In 1985, the Government of Ghana secured a World Bank loan to rehabilitate the mines, but after three years of continued losses, the decision was taken to privatize the mines.

In 1994, JCI Limited won the privatization bid for participation in the Prestea mining operation. JCI made improvements to the productivities and efficiencies of the underground operation and carried out exploration programs and feasibility studies on the near surface resources amenable to open pit mining. However, owing to the declining gold price and continued financial losses, JCI closed down the Prestea underground mine in September 1998 and commenced a process to sell their rights in the project. The closure of the underground mine was opposed by the Prestea workforce who consequently formed Prestea Gold Resources (“PGR”"), which was granted a permit by the Government of Ghana to run the mine in December 1998.

In June 2001, the Government of Ghana granted two separate leases for the Prestea concession. One lease, over the surface rights down to a depth of 200m below general ground elevation (an elevation of approximately 150m below sea level) was granted to Golden Star Bogoso/Prestea Limited (“GSBPL”), and the second, for the underground mine below this level, was granted to PGR. In March 2002, GSBPL reached an agreement with PGR to form a joint venture, to be managed by GSBPL for the assessment and future operations of the Prestea underground mine.

Gold was first commercially mined at Bogoso in the early 20th century. In 1935, high-grade oxide ore was mined from a series of open pits and from limited underground operation on the concession. Until its closure in 1955, this operation produced over 900,000 ounces of gold at an average recovered grade of 3.73 g/t.

Billiton International Metals BV took control of the Bogoso concession in the late 1980’s, and completed the construction of mining and processing facilities in 1991. The plant was designed to process oxide ores by using conventional CIL technology at a design capacity of 1.36 million tonnes per year and to process sulfide ores by using flotation, fluid bed roasting and CIL technology at a design capacity of 0.9 million tonnes per year. Billiton encountered serious operational and mechanical difficulties with the fluid bed roaster and closed the flotation circuit and roaster in early 1994.

Following closure of the roaster, Billiton, by then owned by Gencor, focused the Bogoso operations on oxide ore until it sold its interest in the mine to the mine’s project lenders, who subsequently sold the majority interest in the mine to Golden Star in 1999.

Mineral Reserves

 

Dec 31, 2013 Proven
Mineral Reserve

Dec 31, 2013 Probable
Mineral Reserve

Dec 31, 2013 Proven and Probable Mineral Reserve

tonnes
(000)

grade
g/t Au

ounces
(000)

tonnes
(000)

grade
g/t Au

ounces
(000)

tonnes
(000)

grade
g/t Au

Ounces
(000)

Bogoso 

2,930

2.65

250

1,731

2.59

144

4,662

2.63

394

Dumasi

3,116

2.39

239

5,826

2.36

443

8,941

2.37

682

Mampon

-

-  

-  

1,133

5.24

191

1,133

5.24

191

Prestea South  

969

2.74

85

2,170

2.52

176

3,139

2.59

261

Prestea Underground

-  

-  

-  

1,434

9.61

443

1,434

9.61

443

Stockpiles

106

1.79

6

-  

-  

-  

106

1.79

6

Total

7,122

3

581

12,294

4

1,397

19,415

3

1,977

Notes to the Mineral Reserve Statement:

  1. The stated Mineral Reserve for Bogoso includes the currently operational pits of Bogoso North and Chujah.
  2. The stated Mineral Reserves have been prepared in accordance with the requirements of NI43-101 - Standards of Disclosure for Mineral Projects and are classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum’s “CIM Definition Standards - For Mineral Resources and Mineral Reserves”.  Mineral Reserve estimates reflect the Company’s reasonable expectation that all necessary permits and approvals will be obtained and maintained.  Mining dilution and mining recovery vary by deposit and have been applied in estimating the Mineral Reserves.
  3. The 2013 Mineral Reserves were prepared under the supervision of Dr. Martin Raffield, Senior Vice President Technical Services for the Company.  Dr. Raffield is a “Qualified Person” as defined by Canada’s NI 43-101.
  4. The Mineral Reserves at December 31, 2013 were estimated using a gold price assumption of $1,300 per ounce. 
  5. The slope angles of all pit designs are based on geo-technical criteria as established by external consultants.  The size and shape of the pit designs are guided by consideration of the results from a pit optimization program.  The parameters for the pit optimization program are based on a gold price of $1,300 per ounce, and historical and projected operating costs at Bogoso and Wassa.  Metallurgical recoveries are based on historical performance or estimated from test work and typically range from 60% to 95% for non-refractory ores and from 70% to 85% for refractory ores. A government royalty of 5% is included in the Mineral Reserves.
  6. Numbers may not add due to rounding.

 

 

Dec 31, 2013
Measured Mineral Resources

Dec 31, 2013
Indicated Mineral Resources

Dec 31, 2013
Measured and Indicated  Mineral Resources

tonnes
(000)

grade
g/t Au

ounces
(000)

tonnes
(000)

grade
g/t Au

ounces
(000)

tonnes
(000)

grade
g/t Au

ounces
(000)

Bogoso

2,697

2.94

255

1,856

2.95

176

4,553

2.94

431

Dumasi

3,255

2.56

268

9,868

2.41

764

13,123

2.45

1,032

Mampon

-   

-  

-  

1,553

4.79

239

1,553

4.79

239

Prestea South

986

2.87

91

3,318

2.62

279

4,304

2.67

370

Prestea Underground

-  

-  

-  

1,356

14.50

632

1,356

14.50

632

Bogoso Other

-  

-  

-  

3,835

2.64

325

3,835

2.64

325

Total

6,938

2.75

614

21,786

3.45

2,415

28,724

3.28

3,029



 

Dec 31, 2013 Inferred Mineral Resources

tonnes
(000)

grade
g/t Au

ounces
(000)

Bogoso

288

2.08

19

Dumasi

-  

-  

-  

Mampon

221

1.79

13

Prestea South

581

6.00

112

Prestea Underground

3,289

8.02

848

Bogoso Other

892

2.37

68

Total

5,024

6.46

1,044



Notes to the Measured and Indicated Mineral Resource and the Inferred Mineral Resources:

  1. The Mineral Resources were estimated in accordance with the requirements of NI 43-101.
  2. The Mineral Resources for Wassa Other include Benso and Chichiwilli.
  3. The Mineral Resources for Bogoso Other include Buesichem and Ablifa.
  4. The Wassa Underground Mineral Resource has been estimated below the $1,400 per ounce of gold pit shell using an economic gold grade cut-off of 2.6 g/t Au, which the Company believes would be the lower cut-off for underground.
  5. The Father Brown Underground Mineral Resource has been estimated below the $1,400 per ounce of gold pit shell using an economic gold grade cut-off of 2.9 g/t Au, which the Company believes would be the lower cut-off for underground.
  6. Prestea Underground Mineral Resource has been estimated below the $1,400 pit shell of Prestea South down to 3800m elevation using a gold cut-off at 4.74 g/t Au
  7. Mineral Resources were estimated using optimized pit shells at a gold price of $1,400 per ounce. Other than gold price, the same optimized pit shell parameters and modifying factors used to determine the Mineral Reserves were used to determine the Mineral Resources.
  8. The Qualified Person reviewing and validating the estimation of the Mineral Resources is S. Mitchel Wasel, Golden Star Resources Vice President of Exploration.
  9. Numbers may not add due to rounding.

Processing Operations

Bogoso/Prestea ores consist of both non-refractory and refractory material. The non-refractory ore is processed in the 1.5 million tonnes per year Bogoso Oxide Processing Plant utilizing a conventional carbon-in-leach (“CIL”) process. The refractory ore is processed in the 2.7 million tonnes per year Bogoso Sulfide Processing Plant which utilizes a sulfide concentrate flotation circuit, bio-xidation (“BIOX®”) and CIL.

Bogoso/Prestea Regional Development Strategy

Since the acquisition of Bogoso in 1999, Golden Star has adopted a forward-looking approach to investment in the area, and during the extended downturn in the gold industry, we were able to acquire significant landholdings along this southern portion of the Ashanti Trend. Having consolidated the district-scale land position, our next step was to expand our mining and processing capacity to optimize the rate of gold production to match the size of the resource.

Given that the majority of the current reserves and resources are refractory, we built a 2.7 million tonne per annum processing facility which incorporates a Gold Fields' proprietary BIOX® bio-oxidation circuit to breakdown the sulfide mineralization. The plant was put into commercial production on July 1, 2007. The expansion project, including the construction of the sulfide processing plant and the expansion of the mining fleet, cost approximately $125 mi.

BUESICHEM SOUTH

Golden Star announced a new discovery at the Prestea concession, just south of the Buesichem pit on March 4, 2010.

Buesichem South Discovery

Buesichem Significant Intersections

- click to enlarge - - click to enlarge - - click to enlarge -

Buesichem intersections drilling 10-10-2010

PRESTEA UNDERGROUND

From the 1870s to 2002, Prestea Underground operations produced approximately 9 million ounces of gold, the second highest production of any mine in Ghana. The underground workings are extensive, reaching depths of approximately 1,400 meters and extending along a strike length of approximately 9 kilometers.

Re-commissioned in the second quarter of 2013, Prestea Underground mine is located 16 kilometers south of the Bogoso mine and adjacent to the town of Prestea. The property consists of two currently operational surface access shafts; one near the town of Prestea (Central Shaft) and a second approximately 4 kilometers to the southwest at Bondaye. Access to the mine site is via a paved road from Tarkwa.

The life of mine plan considers the mining of ore from the underground mine using a Mechanised Cut and Fill method at an average ore production rate of 250 ktpa containing 70,000 ounces of gold. Golden Star is planning to process the West Reef Project ("WRP") ore in the Bogoso Processing plant, close to the Chujah open pit operation. The WRP underground ore will be trucked from a storage facility at the new hoisting shaft.

Prestea Underground (90% interest)

Mineral Reserves

The following table summarizes Prestea Underground mine WRP's estimated Proven and Probable Reserves:

West Reef Reserves Tonnes Gold Grade Oz
(M) (g/t) (000/s)
Proven - - -
Probable 1.434 9.61 443

The Probable Mineral Reserves reported as of May 1, 2013, have been estimated based on: cut-off grades determined at a gold price of $1,500/oz; suitable mining recovery factors and operating costs; and detailed mine designs which account for varying waste dilution as a result of changes in mineralization dip and width. For further details, please refer to the report entitled, "NI 43-101 Technical Report for the Prestea West Reef Feasibility Study”.

Mineral Resources

The following table summarizes Prestea Underground mine WRP's estimated Indicated Mineral Resources and Inferred Mineral Resources:

West Reef Resources Tonnes Gold Grade Oz
(M) (g/t) (000/s)
Indicated 0.862 18.27 507
Inferred 0.508 11.62 190

The Indicated and Inferred Mineral Resources reported as of May 1, 2013, have been estimated at an economic cut-off grade of 3.08 g/t based on a gold price of $1,750 per ounce.

Prestea Underground Location Map


Isometric view of Prestea Underground Mine showing historic infrastructure and location of the West Reef mineralization (view from south-west)


View from the east (footwall) of the West Reef Block Model showing the distribution of Au grade and the drill hole traces


West Reef mine design