Golden Star Resources, Ltd.
) reported earnings per share of 3 cents, in line with the
year-ago quarter results as well as the Zacks Consensus
Golden Star saw a 26% year-over-year increase in its net
income to $9.1 million in the quarter. Included in net income is
a gain of $9.2 million on the sale of Golden Star's Saramacca
exploration asset, which more than offset the $2.5 million in
higher general and administrative costs, mainly due to charges
associated with the head office shift to Toronto.
Revenues jumped 26% year over year to $149.7 million on the
back of higher gold sales and improvement in average realized
price of gold. Gold sales came in at 85,544 ounces in the
quarter, 24% higher than last year. Average realized gold price
increased 6% year over year to $1,710 per ounce in the quarter.
Golden Star's cash operating costs inched up 1% year over year to
$1105 per ounce.
In fiscal 2012, revenue improved 17% to $550.5 million from
$471.0 million in 2011, helped by an increase in gold sales and
higher gold prices. Gold sales were higher due to the restart of
ore processing at Bogoso's non-refractory processing plant in
early 2012, which contributed an incremental 38,113 ounces to
2012's total gold sales. For the year, Golden Star incurred a
loss per share of 4 cents compared with loss per share of 1 cent
Golden Star's cash flow from operations was $94.3 million in
2012, a significant improvement from $23.6 million generated last
year. Cash and cash equivalents were $78.9 million as of Dec 31,
2012, down from $103.6 million as of Dec 31, 2011. Long-term debt
increased to $110.5 million as of Dec 31, 2012, up from $10.7
million as of Dec 31, 2011.
Golden Star expects total gold production in the range of
320,000-350,000 ounces in 2013. The Bogoso/Prestea mine is
expected to produce 170,000-190,000 ounces of gold, while
Wassa/HBB is expected to produce 150,000-160,000 ounces of gold.
Cash operating costs is expected in the range of 1,050-1,150 per
Golden Star's capital budget for 2013 is estimated at $141
million including both sustaining ($60 million) and development
capital ($81 million). Development capital projects have been
defined as the Dumasi development, the Mampon and Prestea South
development, Prestea Underground, HBB development, additional
tailings capital, and the Wassa drilling program. Sustaining
capital requirements are anticipated to be covered by existing
cash balances and expected operating cash flows while development
capital is expected to be funded with operating cash flows along
with additional external financing as required.
Among other operational objectives set for 2013, Golden Star
plans to complete the Prestea Underground feasibility study and
initiate Phase 1 operations at the Prestea Underground mine. It
plans to continue drilling at Wassa to follow up on the 2012
drilling results and an update of 2012 reserves and start
construction of the new tailings storage facility at Wassa.
Furthermore, it remains committed to achieve further reductions
in operating costs throughout the organization.
Golden Star engages in the acquisition, exploration,
development, and operation of gold properties. It owns and
operates the Bogoso/Prestea gold mining and processing operations
along the southwest-trending Ashanti gold district in western
Ghana; and the Wassa open-pit gold mine and carbon-in-leach
processing plant located to the east of Bogoso/Prestea in
southwest Ghana. Golden Star competes with
AngloGold Ashanti Ltd.
Golden Star currently carries a Zacks Rank #3 (Hold) rating.
Among the other stocks in the same industry,
Sandstorm Gold Ltd.
Seabridge Gold, Inc.
) hold a Zacks Rank #2 (Buy) and are favorable options for
ANGLOGOLD LTD (AU): Free Stock Analysis
GOLDEN STAR RES (GSS): Free Stock Analysis
SEABRIDGE GOLD (SA): Free Stock Analysis
SANDSTORM GOLD (SAND): Get Free Report
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