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July 07, 2015 10:50 PM ET

Metals and Mining

Company Overview of Golden Star Resources, Ltd.

Company Overview

Golden Star Resources Ltd. operates as a gold mining and exploration company. The company owns and operates the Wassa open-pit gold mine, the Wassa underground development project, and a carbon-in-leach processing plant located approximately 35 kilometers from the town of Bogoso in Ghana; and Bogoso gold mining and processing operation located near the town of Bogoso in Ghana. It also has a 90% interest in the Prestea Underground mine in Ghana; and holds interests in various gold exploration projects in Ghana and other parts of West Africa, and in South America, as well as holds and manages exploration properties in Brazil. Golden Star Resources Ltd. was founded in 1984 and is headquartered ...

Sun Life Financial Tower

Suite 1200

150 King Street West

Toronto, ON M5H 1J9

Canada

Founded in 1984

Phone:

416-583-3800

Key Executives for Golden Star Resources, Ltd.

Chief Executive Officer, President and Non-Independent Director
Age: 54
Total Annual Compensation: $500.0K
Chief Financial Officer and Executive Vice President
Age: 38
Total Annual Compensation: $251.6K
Chief Operating Officer, Executive Vice President and Non-Independent Director
Age: 57
Total Annual Compensation: $400.0K
Senior Vice President of Operations, Project Development and Technical Services
Age: 46
Total Annual Compensation: $280.0K
Vice President of Exploration
Age: 50
Total Annual Compensation: $220.0K
Compensation as of Fiscal Year 2014.

Golden Star Resources, Ltd. Key Developments

Golden Star Resources Secures Permits to Develop Open Pit Operations at its Prestea Mine

Golden Star Resources confirmed that it has secured the necessary permits to develop open pit operations at its Prestea Mine. The surface deposits to the south of the Prestea underground mine are host to 122,000 ounces of non-refractory Mineral Reserves at an average grade of 2.24 g/t Au. These surface operations are expected to be in production by the end of 2015, a year earlier than production from Prestea was initially anticipated. Combined with the redevelopment of underground operations, Prestea has the potential to deliver in excess of five years of low cost production. The environmental permit was issued by the Ghanaian Environmental Protection Agency after Golden Star undertook extensive impact assessment studies and local community consultations. Prestea South has not been mined to date and an investment in the haul road will be required to bring the project into production. The existing contractor's fleet at Bogoso will be used to haul this oxide ore 16 kilometers to the Bogoso non-refractory plant where processing will take place.

Golden Star Resources, Ltd. Announces Securing of $150 Million Financing from Royal Gold, Inc. and RGLD Gold AG

Golden Star Resources, Ltd. announced the securing of a $150 million financing with Royal Gold Inc. (RGI) and its wholly-owned subsidiary RGLD Gold AG. The $150 million financing consists of a $130 million stream transaction with RGLD and a further $20 million term loan from RGI. RGLD has agreed to pay Golden Star a $130 million advance payment in exchange for a gold stream on Golden Star's Bogoso, Prestea and Wassa mines. The proceeds from the stream will allow Golden Star to develop the Wassa and Prestea underground mines. Under the purchase and sale agreement Golden Star will receive an initial $55 million payment when certain customary conditions precedent have been met and the remaining $75 million will be paid as spending on the Wassa and Prestea underground mines progresses in line with an agreed payment schedule. It is anticipated that Golden Star will receive the full $130 million advance payment by September 2016. In exchange for the advance, Golden Star agrees to sell to RGLD: an initial gold stream of 8.5% of production from Bogoso, Prestea and Wassa to RGLD at a cash purchase price of 20% of spot price until 185,000 ounces have been delivered. Thereafter a reduced gold stream of 5% of production at a cash purchase price of 20% of spot gold until a further 22,500 ounces have been delivered. Thereafter a tail gold stream of 3% of production at a cash purchase price of 30% of spot gold. After the 207,500 ounces of gold have been delivered in full, Golden Star will have the option to repurchase 50% of the tail stream thereby reducing the tail stream to 1.5% of production. If RGLD elects not to sell 50% of the tail stream back to Golden Star it will be required to increase the tail stream by 50% for the same price that Golden Star offered. RGLD's advance payment will be secured against the Wassa, Bogoso and Prestea assets. RGLD will subordinate its security in support of up to $25 million in financing from the existing undrawn Ecobank II $25 million facility that will remain in place. RGI has agreed to provide Golden Star with a $20 million secured term loan for a four year period at an interest rate linked to the gold price. The interest rate is calculated as the product of the average spot gold price over the quarter and 62.50% divided by 10,000, and shall not exceed 11.5%. At a gold price of $1,200 this equates to an interest rate of 7.5% and compares favorably to the interest rate of 9.5% due on Golden Star's drawn with Ecobank I loan. The loan will be used to retire outstanding indebtedness under the $50 million existing Ecobank facility, of which $38 million is currently outstanding. The remaining $18 million of this facility will be repaid with a portion of the upfront proceeds from the stream arrangement. Interest payments on the loan will be made quarterly in arrears and the remaining capital portion of the loan is due on the fourth anniversary of the effective date of the transaction, subject to an agreed quarterly 25-50% excess cash flow sweep from the third quarter of 2017 onwards. There are no early prepayment penalties. RGI's secured loan will be secured against the Wassa, Bogoso and Prestea assets. RGI will subordinate its security in support of up to $25 million in financing from the existing undrawn Ecobank II $25 million facility that will remain in place. Funding under the loan is contingent upon the satisfaction of certain customary conditions precedent, including the registration and filing of Royal Gold's security interests in the collateral for the loan.

Golden Star Resources, Ltd. Reports Consolidated and Unaudited Earnings and Production Results for the First Quarter Ended March 31, 2015; Provides Production and Capital Expenditure Guidance for the Year 2015

Golden Star Resources, Ltd. reported consolidated and unaudited earnings and production results for the first quarter ended March 31, 2015. For the quarter, the company reported revenue of $76.5 million compared to $86.6 million for the prior quarter. Capital expenditures were $12.8 million. Adjusted net loss attributable to the company was $9.0 million. Net loss attributable to shareholders was $13,127,000 or $0.05 basic and diluted loss per share against $48,155,000 or $0.19 basic and diluted loss per share for the same quarter a year ago. Cash flow provided by operations was $4,838,000 against $4,316,000 for the same quarter a year ago. For the quarter, the company produced gold was 63,245 ounces compared to 72,085 ounces in the prior quarter with fewer tonnes at lower grade processed. For the year 2015, the company expects total capital expenditure of $72 million. For the year 2015, the company announced that in 2014, it produced 261,000 ounces of gold and is expected to produce 250,000 - 275,000 ounces in 2015.

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