DENVER, CO, Mar 21, 2012 (MARKETWIRE via COMTEX) --Golden Star Resources Ltd. (NYSE Amex: GSS) (TSX: GSC) (GSE: GSR)
("Golden Star" or the "Company") is pleased to announce the
completion of a Company authored Preliminary Economic Assessment
("PEA") of the West Reef orebody of the Prestea Underground Mine. The
Company plans to file a PEA document that is compliant with National
Instrument 43-101 within 45 days. The Board of Directors has approved
the PEA and has directed management to proceed to a full feasibility
study. All references herein to "$" are United States dollars.
Highlights:
-- West Reef has an Indicated Resource of 874,000 tonnes grading 18.07
grams per tonne (g/t) for 508,000 ounces of gold (Au) and the orebody
is open along strike and down dip
-- The PEA contemplates a 1,200 tonnes per day operation from mechanized
mining to produce 90,000 ounces of gold per year at full operation
-- Ore will be processed at the Bogoso oxide processing plant
-- Life-of-mine cash operating costs (before royalty and taxes) are
estimated at $650 to $700 per ounce
-- Capital cost, including a decline and hoisting shaft, are estimated at
approximately $115 million
-- Net present value at $1,500/oz Au and 5% discount rate is $134 million
(pre-tax)
-- Internal rate of return of 17%
Tom Mair, President and Chief Executive Officer, commented, "We are
excited to announce the completion of the PEA and our commitment to
completing the West Reef feasibility study later this year. We are
also investigating the possibility of obtaining all necessary permits
for a re-start of underground mining operations at Prestea by the end
of 2012. This production would be sourced from existing
infrastructure in the upper levels of the mine. It is gratifying that
our hard work and perseverance is being rewarded with a project that
will not only provide a new source of gold production for Golden Star
but is anticipated to lower our overall cash operating costs. In
addition, a viable underground operation will enable us to continue
to explore the Prestea Underground complex thoroughly -- not only in
previously unexplored areas between surface and 1,400 meters but also
depth extensions of the orebodies below all historic workings."
History:
In March 2002 Golden Star, through its local subsidiary, Bogoso Gold
Limited (now Golden Star Bogoso/Prestea Limited ("GSBPL")), formed a
joint venture with the government of Ghana and Prestea Gold Resources
Limited, the former owner of the Prestea Underground Mine. The
purpose of the joint venture was to evaluate and, if warranted,
restart and operate the Prestea Underground Mine. The mine has
produced over nine million ounces of gold since the late 19th century
from workings which extend more than 10 kilometers along strike and
up to 1,400 meters below surface.
Upon acquisition, Golden Star recognized that the exploration
potential of the Prestea Underground complex was substantial and that
the Company had a considerable amount of work ahead to make the
workings safe for a series of drilling programs. Golden Star has
financed the care and maintenance of the mine which included
extensive dewatering of the workings, rehabilitation of the Central
and Bondaye Shafts and the winders, refurbishment of main access ways
from the Central Shaft to the West Reef orebody and other areas, and
replacement of pumps, compressors and ventilation equipment. The
Company also obtained extensive geologic and operational data from
the Prestea Mine Offices, digitized all the relevant data and
outlined a number of drill targets. From 2003 to 2006, Golden Star
carried out a number of drilling programs from underground, testing
the down-dip extensions of the West Reef and Main Reef orebodies. The
drilling was successful and outlined a significant extension to the
known West Reef orebody below 17 Level (600 meters below surface).
Prior drilling by Golden Star of the Prestea Underground has resulted
in an Indicated Resources total of 666,000 ounces of gold, of which
the West Reef orebody accounts for 508,000 ounces. Inferred Resources
total an additional 1.23 million ounces, of which 270,000 ounces are
situated within the West Reef area. To date, Golden Star has invested
approximately $64 million in the Prestea Underground Mine.
PEA Operating Parameters:
The PEA targets a modern, mechanized mine development plan which
would deliver ore to the Bogoso Oxide Processing Plant at a rate of
1,200 tonnes per day at an average diluted mined grade of
approximately 8 g/t Au, producing approximately 90,000 ounces of gold
per year at full production. Commencing in 2013, the Company expects
to begin the development of a decline from surface to, eventually, 30
Level (1,200 meters below surface), with simultaneous decline
development from 24 Level (900 meters below surface). The decline
would enable the efficient and safe passage of people, materials and
equipment into the West Reef area. In addition, an ore hoisting shaft
would be raise bored from West Reef to surface.
The orebody is steeply dipping (60 to 70 degrees) and is 1.5 meters
to 1.7 meters wide. The PEA contemplates 1 meter of dilution on
either side of the ore and 20 meter spaced sub-levels. Stoping would
use a modified AVOCA mining method, where a central raise (slot) is
developed in a panel of ore, production holes are blasted into the
void and the ore is mucked on the lower level. The stopes progress in
both directions from the central raise and waste backfill is
introduced at the center to follow the blast faces. The two halves of
the ore panel are progressively blasted, mucked and backfilled until
the whole panel is extracted for that level. The process is then
repeated, using the backfilled stope as the floor for the next cut.
Economic analysis from the PEA of the West Reef mining area suggests
a capital cost of approximately $115 million for completion of the
refurbishment of the Central Shaft and existing haulage drives to the
West Reef area, upgrading of pumps, compressors and ventilation,
development of the decline and raise-bored shaft to 30 Level and
initial stope development. The PEA has delineated a mining area
within the West Reef orebody containing 375,000 ounces of Indicated
Resources and 85,000 ounces of Inferred Resources. The Company
expects that with further drilling around the periphery of the West
Reef orebody the Inferred Resource ounces will be upgraded to the
Indicated Resource category and the mine development plans can be
expanded. The ore is known to be non-refractory with a significant
portion of the gold ( > 60%) expected to be recovered from the
gravity circuit at the Bogoso Oxide Processing Plant for total gold
production of approximately 437,000 ounces over the life of the
project. This could be higher depending on the success of future
drilling programs along strike and down dip of the known West Reef
orebody. The PEA estimates life-of-mine cash operating costs in the
range of $650 to $700 per ounce of gold, not including the 5% royalty
paid to the government of Ghana. At a gold price of $1,500 per ounce,
the PEA suggests a pre-tax net present value for the project
(discounted at 5%) of $134 million and an internal rate of return of
17%.
Prestea Underground Resources:
Cautionary Note to US Investors Concerning Estimates of "Indicated
Mineral Resources" and "Inferred Mineral Resources"
This section uses the terms "Indicated Mineral Resources" and
"Inferred Mineral Resources." The Company advises US investors that
while these terms are recognized and required by National Instrument
43-101, the US Securities and Exchange Commission ("SEC") does not
recognize them. US Investors are cautioned not to assume that any
part or all of the mineral deposits in these categories will ever be
converted into a higher category or into mineral reserves. Inferred
Mineral Resources have a great amount of uncertainty as to their
existence, and great uncertainty as to their economic and legal
feasibility. In accordance with Canadian rules, estimates of Inferred
Mineral Resources cannot form the basis of feasibility or other
economic studies, and US investors are cautioned not to assume that
any part or all of the Inferred Mineral Resource exists, or is
economically or legally mineable. Also, disclosure of contained
ounces is permitted under Canadian regulations; however the SEC
generally requires mineral resource information to be reported as
in-place tonnage and grade.
The Indicated and Inferred Mineral Resources reported below have been
estimated in compliance with definitions set out in Canada's National
Instrument 43-101.
The Indicated and Inferred Mineral Resources have been estimated at
an economic cut-off grade based on a gold price of $1,500 per ounce
for December 31, 2011, and on economic parameters deemed realistic.
The following table summarizes Prestea Underground Mine's estimated
Indicated and Inferred Mineral Resources as of December 31, 2011:
--------------------------------------------------------------------
Prestea Underground Tonnes Gold Grade Ounces
Resources (M) (g/t) (000's)
--------------------------------------------------------------------
Indicated 1.641 12.63 666
Inferred 5.243 7.28 1,227
--------------------------------------------------------------------
Of these resources, the West Reef orebody has estimated Indicated and
Inferred Mineral Resources as of December 31, 2011:
--------------------------------------------------------------------
West Reef Tonnes Gold Grade Ounces
Resources (M) (g/t) (000's)
--------------------------------------------------------------------
Indicated 0.874 18.07 508
Inferred 0.829 10.14 270
--------------------------------------------------------------------
Notes to the Indicated and Inferred Mineral Resources:
(1) The Prestea Underground resource was estimated using a $1,500 per
ounce gold price and an economic gold cut-off of 2.3 g/t.
(2) The
Qualified Person reviewing and validating the estimation of the
Mineral Resources is S. Mitchel Wasel, Golden Star Resources Vice
President of Exploration.
The technical contents of this press release have been reviewed and
approved by Dr. Martin Raffield, P. Eng., a Qualified Person pursuant
to National Instrument 43-101. Dr. Raffield is Senior Vice President
Technical Services for Golden Star.
COMPANY PROFILE
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. Additional information is available
at www.gsr.com.
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.
Such statements include plans and timing for a definitive feasibility
study, and plans and timing for development of and commencement of
operations at the Prestea Underground Mine; significance of drilling
results and the impact on mine development plans; estimates and
expectations for ore types and indicated and inferred resources;
estimates concerning cash operating costs, gold prices, recovery
rates, ounces of gold produced, net present values (including assumed
discount rates), the internal rate of return, levels of investment
and capital cost necessary to bring the Prestea Underground Mine into
development phase; the impact of operations at the Prestea
Underground Mine on overall cash operating costs and on exploration
at the Prestea Underground complex; mining methods at the Prestea
Underground Mine; and plans to file a detailed and National
Instrument 43-101 compliant Preliminary Economic Assessment within 45
days. Investors are cautioned that forward-looking statements are
inherently uncertain and involve risks and uncertainties that could
cause actual facts to differ materially, including timing of and
unexpected events at the Prestea Underground Mine; variations in ore
grade; delay or failure to receive government approvals and permits;
the availability and cost of electrical power and key inputs; timing
and availability of external financing on acceptable terms;
technical, permitting, mining or processing issues; fluctuations in
gold price and 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 2011. 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 to update any estimate at
any particular time or in response to any particular event.
For further information, please contact:
GOLDEN STAR RESOURCES LTD.
Bruce Higson-Smith
Senior Vice President Finance and Corporate Development
1-800-553-8436
INVESTOR RELATIONS
Jay Pfeiffer
Pfeiffer High Investor Relations, Inc.
303-393-7044
SOURCE: Golden Star Resources