Winzer,
I don't know if you've seen this PR from GSR, but there is a section in it that is relevant to BGI and may certainly lead to the next 'deal' in Ghana. I've put the relevant section in bold.
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Golden Star Reports on Interim Fourth Quarter Results At Its Bogoso Gold Mine in Ghana
DENVER, Jan. 20 /CNW/ -- Golden Star Resources Ltd.
(Amex: GSR; Toronto: GSC) (Golden Star) announced today the first results from
the Bogoso Gold Mine in Ghana since its acquisition on September 30, 1999.
Bogoso Gold Limited, owner and operator of the Bogoso Gold Mine, was acquired
from a consortium of banks led by the International Finance Corporation.
Golden Star owns a 70% interest in Bogoso Gold Limited, with Anvil Mining NL
of Australia and the Government of Ghana owning 20% and 10%, respectively.
Peter Bradford, President and CEO of Golden Star commented that, "The
fourth quarter of 1999 was the Company's first as operator of a gold mine and
therefore constituted a significant turnaround for the Company. On the basis
of Bogoso's performance during the fourth quarter, we expect that for the
first time in its history, Golden Star will achieve positive quarterly
earnings."
Fourth Quarter Performance Better Than Planned
Performance at the Bogoso Gold Mine during the fourth quarter of 1999 was
better than planned with production of 36,074 ounces of gold at a cash cost of
US$152.61 per ounce and a total cash cost (inclusive of royalties) of
US$161.30 per ounce. Not only were the production levels and costs achieved
during the quarter slightly better than budget but they also represented
substantial improvements over the third quarter of 1999. Production
highlights are presented in the following table:
Parameter Units Fourth Third
Quarter 1999 Quarter 1999
Mining
Total Mined (Ore and Waste) Tonnes 2,011,617 2,375,500
Ore mined Tonnes 852,372 581,310
Grade G/t 2.53 2.23
Processing
Ore Processed Tonnes 577,457 524,131
Head Grade G/t 2.47 2.20
Recovery % 78.7 76.3
Gold Produced Ounces 36,074 28,318
Realized Gold Price US$/oz 294.95 261.12
Operating Costs
Cash Cost per
tonne milled US$/tonne 9.53 11.79
Cash Cost per ounce
of gold US$/oz 152.61 218.25
Total Cash Cost per
ounce of gold US$/oz 161.30 225.67
Note:
a) All operating performance and cost information is final but unaudited.
b) All operating cost information has been calculated in accordance with
the uniform format for reporting producing costs endorsed by the Gold
Institute.
c) Total cash cost per ounce includes a 3% royalty to the Ghana
Government.
Mining performance during the quarter was ahead of budget and benefited
from lower overall strip ratios and higher grades in the new areas being mined
at Boppo 2 and Boppo 3 in the north of the Bogoso concession. Milling
performance also showed considerable improvement with the highest tonnage ever
recorded for a three-month period since the mine was first brought into
production in 1991 being achieved.
Process gold recovery was lower than historical levels due to the combined
effects of the higher throughput rates and the refractory nature of the deeper
material being mined from the bottoms of the Chujah and Big Hill West pits.
This situation is currently being rectified by the addition of a new leach
tank that is due to be commissioned during the second quarter of 2000. The
new leach tank is expected to reverse the 1-2% recovery loss currently being
experienced as a result of the higher processing rates.
When the Company first announced in May 1999 its intent to acquire the
Bogoso Gold Mine, cash production costs at the mine were US$208 per ounce and
production was at an annualized rate of approximately 110,000 ounces. A key
objective of Golden Star in connection with the acquisition was to make a
substantial impact on the cash cost of production. Under the new management,
this objective has already been met with cash costs for the quarter of below
US$160 per ounce and production at an annualized rate in excess of 130,000
ounces per year.
The major cost reductions at Bogoso have come from a downsizing of the
workforce, a re-negotiation on prices for materials and services contracts and
a renewed emphasis on cost control. These initiatives should continue to have
a positive impact on the Bogoso operation through 2000. Operating costs per
ounce have also been improved as a result of the higher than expected
production during the quarter. Also contributing to performance has been the
improvement in morale as a result of the ownership change from a consortium of
banks to an emerging mining company possessing the vision and the will to
build on the existing strategic asset at Bogoso.
2000 Performance Forecast
Gold production levels are expected to be marginally lower and cash costs
marginally higher during 2000, compared with the 1999 fourth quarter results.
This is primarily because the recovered grades of the material to be mined are
expected to be lower than those during this last quarter.
The production of gold, the cash cost and capital expenditure forecasts
for 2000 are as follows:
Period Production Cash Costs Capital
(Ounces) (US$/ounce Expenditure
produced) (US$million)
First Quarter, 2000 30,000 193 2.6
Second Quarter, 2000 32,000 183 0.8
Third Quarter, 2000 30,000 180 0.6
Fourth Quarter, 2000 22,000 183 0.2
Year 2000 114,000 184 4.2
The majority of the planned capital expenditure has been targeted for
exploration to discover new sources of oxide ore (US$0.6 million) and the
completion of the sulfide project feasibility study (US$2.0 million) that will
involve substantial drilling.
Sulfide Project
In 1999, Golden Star completed an internal pre-feasibility study to
determine the viability of developing a sulfide operation at Bogoso to mine
and to process sulfide mineralized material delineated by Billiton in the late
1980's.
The work completed for the pre-feasibility study included a US$100,000
review of certain refractory ore processing techniques that may be applicable
at Bogoso. The review, which was completed by Minproc Engineers from Perth,
Australia in May 1999, considered the suitability and determined the expected
capital and operating costs structures of the various processing options.
In addition to the Minproc review, Golden Star completed a total review of
the sulfide deposit, developed new ore body and block models, and derived
optimized pit shells for varying gold prices. At a US$325 gold price, the
sulfide mineralized material was estimated by Golden Star to be 7.1 million
tonnes grading 3.36 grams per tonne gold. This estimate of mineralized
material would classify as Indicated Resources under the Australian JORC Code
and Canadian National Instrument 43-101. The estimate of mineralized material
along with the capital and operating costs derived from the Minproc study were
used as the basis for an economic evaluation of the Sulfide Project.
The Golden Star internal pre-feasibility study indicated that the
mineralized material could form the basis for a robust sulfide project and as
a result US$2.4 million dollars have been committed to complete a bankable
feasibility study of which US$0.4 million were spent in 1999. The study
assumes that the existing 2.0 Mtpa oxide processing circuit will be converted
to a 1.4 Mtpa sulfide processing circuit by the upgrade of the existing
flotation circuit and the addition of a bio-oxidation circuit. The study is
scheduled for completion during the third quarter of 2000. Included in this
study is US$1.3 million of drilling (a) to test for lateral and depth
extensions of the sulfide mineralized material, (b) to validate previous
drilling results, and (c) to increase the proportion of the mineralized
material meeting the requirements for Measured Resources as defined in the
above mentioned international reporting standards.
Regional Oxide Potential
Golden Star is actively targeting oxide mineralization located outside the
Bogoso concessions in order to extend the oxide processing life at Bogoso and
thereby ensure a smooth transition into the development of the sulfide
mineralized material. Opportunities have been identified along the Ashanti
Trend, to the north at Birim Goldfields Inc's Dunkwa property and to the south
at Prestea. Opportunities have also been identified approximately 10-15 km to
the west of Bogoso in a mineralized trend which parallels the Ashanti Trend,
and which is referred to as the Akropong Trend.
In November 1999, Golden Star concluded an option agreement on the Riyadh
concession located on the Akropong Trend and is in negotiation with a number
of other parties regarding additional neighboring properties in this area
within trucking distance of the Bogoso plant. The area has had very minor
past production and, although it is substantially under-explored when compared
with the Ashanti Trend, it does have a number of encouraging high grade,
narrow drill intersections which justify further geological evaluation and
drilling.
Summary
In summary, the management of Golden Star is pleased with the fact that
the transition after the acquisition of Bogoso has been a success. The
Company is now poised to attack the second phase of its strategy by (i)
completing a feasibility study for the sulfide material located on the Bogoso
property and (ii) acquiring low cost oxide material in the vicinity of Bogoso.
The strategy aims at extending by several years the mine life of Bogoso and
ensuring a steady source of cash flow for the Company in the near future.
This should provide Management with a strong basis from which to build
shareholder value through the continuing development and expansion of Bogoso
and the advancement of the Company's assets in the Guiana Shield.
Golden Star
Golden Star is a gold producer with a 70% equity interest in the Bogoso
gold mine in Ghana and a 30% equity interest in the Omai mine in Guyana. The
Company also has a solid portfolio of gold and diamond exploration and
development properties in South America and Africa. The Company continues to
evaluate, with joint venture partner Cambior Inc., options for the Gross
Rosebel gold project in Suriname, potentially a low cost mining development
with estimated total costs, including capital, of under US$200/ounce. Golden
Star currently has approximately 37 million shares outstanding. The Company's
shares are listed on the Toronto Stock Exchange (under the symbol "GSC") and
the American Stock Exchange (under the symbol "GSR").
For further information, please contact: GOLDEN STAR RESOURCES LTD.
Call Toll Free from the USA and Canada on, 800-553-8436, or Allan Marter,
Chief Financial Officer, 303-894-4631, or Louis Peloquin, General Counsel,
303-894-4622.
Special Note on Mineralized Material:
Mineralized material does not represent reserves because, even though
enough drilling and trenching indicate a sufficient amount and grade to
warrant further exploration or development expenditures, this material does
not qualify under the U.S. Securities and Exchange Commission standards as
being commercially mineable until further drilling, metallurgical work and
other economic and technical feasibility factors based upon such work are
resolved.
The company only reports mineralized material if the potential exists for
reclassification to reserves following additional drilling and/or final
technical, economic and legal factors have been determined for the project.
Special Note Regarding Forward Looking Statements:
This press release contains "forward looking statements" within the
meaning of the U.S. securities laws. Forward looking statements include
statements concerning plans, objectives, goals, strategies, future events,
capital expenditure, exploration efforts, financial needs, and other
information that is not historical information. The Company's forward-looking
statements are based on the Company's current expectations and various
assumptions as of the date such statements are made. The Company cannot give
assurance that such statements will prove to be correct.
Factors that could cause the Company's actual results to differ materially
from these statements include changes in gold price, imprecision of reserve
estimates, unanticipated grade recovery, mining risks, results of current and
future exploration activities, results of pending and future feasibility
studies, political, economic, and operational risks of foreign operations,
capitalization and commercial viability, the failure of plant, equipment or
processes to operate in accordance with specification or expectations,
accidents, labor disputes, environmental costs and risks, and general domestic
and international economic and political conditions. Please refer to a
discussion of these and other factors in Golden Star's 10-K, 10-Q and other
Securities and Exchange Commission filings.
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For further information: Allan Marter, Chief Financial Officer,
303-894-4631, or Louis Peloquin, General Counsel, 303-894-4622, both of
Golden Star Resources Ltd., or Golden Star Resources Ltd., 800-553-8436
newswire.ca |
