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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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From: John McCarthy8/30/2006 2:34:13 AM
   of 78416
 
Golden Star Advises of Power Shortages in Ghana and Potential Short-Term Impact on Operations
DENVER, August 29 /CNW/ - Golden Star Resources Ltd. (AMEX:GSS) (TSX:GSC)
today advised that the wholesale power utility in Ghana, namely the Volta
River Authority, has advised of potential power shortages in Ghana and the
need for bulk users (which would include Golden Star) to curtail their power
consumption by as much as 25 to 50%.
The Volta River Authority relies on power from the Volta Hydroelectric
Power Station, Aboadze Thermal Power Station and imports from Cote d'Ivoire.
Currently the Aboadze Thermal Power Station is operating at less than full
capacity due to retrofitting, to operate on gas when the West African gas
pipeline comes online in late 2006. In addition, the Volta River Authority has
stated that the Volta Reservoir is at low levels resulting in decreased
efficiency of the turbines. Historically, the Volta Reservoir is replenished
by rainfall on an annual basis and, assuming that rain will replenish the
Volta Reservoir this year, this should result in an increase in water levels
in the reservoir in the September to October period resulting in increased
power generation efficiency.
Golden Star has the capacity to generate a portion of its power
requirements using diesel fired power generators and expects that it could
maintain current operations by using this generating capacity to make up a 25
to 50% curtailment in consumption from the grid power. The cost of diesel
generated power, at current diesel prices, is about five times the cost of
grid power, which would result in a combined increase in monthly power costs
for Bogoso/Prestea and Wassa of about $0.7 to $1.4 million.
The Company, along with other mining companies in Ghana, expects to meet
with Government and the Volta River Authority in the coming week to better
understand the situation and to discuss the implications of the power shortage
on the start up of the Bogoso Sulfide Expansion Project, but expects to do so
this week following which additional information will be provided.
The statement from the Volta River Authority can be found on the
Company's website at www.gsr.com.

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