On Nov 27, Zacks Investment Research upgraded
Golden Star Resources Ltd.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Golden Star delivered better-than-expected third-quarter 2013
results on Nov 4. The company posted earnings of a penny per
share which beat the Zacks Consensus Estimate of a loss of 4
cents and was a turnaround from a loss of 8 cents per share
posted a year ago. Revenues fell year over year but managed to
beat the Zacks Consensus Estimate. Gold production increased
during the quarter driven by improved results at Bogoso.
Golden Star remains committed to lowering its costs, and its
cost-cutting initiatives are expected to provide savings of $45
million over the balance of 2013. By the third quarter, the
company reached half of this target, and expects to have
continued cost savings in the fourth quarter.
Golden Star has a significant pipeline of projects. Collectively,
these assets can provide meaningful ore sources to both the
refractory and non-refractory plants at Bogoso. At Prestea South,
the company gets strong support from the Prestea community to
develop its pits.
Golden Star has access to an undrawn term loan of $40 million
from Ecobank, and another $20 million is available on its
equipment lease facility. Combined, the company has good
liquidity and financial flexibility. At the end of the third
quarter, the company's cash and cash equivalents were about $67
Since the company's third-quarter earnings release, the Zacks
Consensus Estimate of a loss for 2013 has narrowed 45% to 11
cents per share. For 2014, the Zacks Consensus Estimate of a loss
has gone down 67% to 2 cents per share.
Other Stocks to Consider
Other companies in the gold mining industry that are also
worth considering include
Agnico Eagle Mines Limited
AngloGold Ashanti Ltd.
). All these stocks carry a Zacks Rank #2 (Buy).
AGNICO EAGLE (AEM): Free Stock Analysis
ANGLOGOLD LTD (AU): Free Stock Analysis
B2GOLD CORP (BTG): Get Free Report
GOLDEN STAR RES (GSS): Free Stock Analysis
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