Golden Star Unveils 2014 View, Shares Down - Analyst Blog


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Golden Star Resources Ltd. ( GSS ) has unveiled its production numbers for fourth-quarter and full-year 2013 and guidance for 2014. The company also named Daniel Owiredu as its Chief Operating Officer.

The Toronto-based company produced and sold 330,805 ounces of gold in 2013, at par with its revised guidance for the year as well as ounces sold in 2012. It expects to produce 295,000 to 320,000 ounces of gold in 2014, lower than what achieved last year. Golden Star's shares fell nearly 10% in the trading session following the news release.

Golden Star produced and sold 75,429 ounces of gold in fourth-quarter 2013 with Wassa and Bogoso mines contributing 44,337 ounces and 31,093 ounces, respectively.

For 2013, gold sales at Wassa were 185,807 ounces and at Bogoso were 144,999 ounces. Cash operating costs per ounce are expected to be at the bottom end of the company's guidance range of $1,050 to $1,150.

For 2014, cash operating costs per ounce are expected to be $950 to $1,000. Moreover, Golden Star anticipates sustaining capital expenditure of $21 million and development capital expenditure of $29 million for 2014.

Golden Star expects production from Wassa and Bogoso to be 130,000 to 140,000 ounces and 165,000 to 180,000 ounces, respectively, in 2014. It sees production to fluctuate between quarters this year as pushbacks are completed in Bogoso (expected to be mostly complete in the first quarter) and increasingly higher grade ore is accessed with depth at the Wassa Main pit.

The pushbacks at Bogoso will enable improved access to ore and higher levels of production from the mine, resulting in an anticipated reduction in cash costs. Golden Star expects output from Wassa to be higher in the second and fourth quarter than for the first and third.

Golden Star has healthy liquidity and financial flexibility. At the end of 2013, the company had cash and cash equivalents of about $66 million, after the drawdown of $20 million of cash from the Ecobank loan and income tax payment of $10.4 million to the Government of Ghana in the fourth quarter.

Golden Star, which currently holds a Zacks Rank #3 (Hold), expects to report its full-year 2013 results on Feb 20.

Other companies in the mining industry worth considering include Tahoe Resources Inc. ( TAHO ), Timmins Gold Corp. ( TGD ) and Denison Mines Corp. ( DNN ). While Tahoe Resources holds a Zacks Rank #1 (Strong Buy), both Timmins Gold and Denison Mines retain a Zacks Rank #2 (Buy).

DENISON MINES (DNN): Free Stock Analysis Report

GOLDEN STAR RES (GSS): Free Stock Analysis Report

TAHOE RESOURCES (TAHO): Free Stock Analysis Report

TIMMINS GOLD (TGD): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
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