Golden Star Resources, Ltd
) second-quarter 2013 adjusted loss (barring one-time items) of 8
cents a share was wider than the Zacks Consensus Estimate of a
loss of 4 cents. It also compared unfavorably to a penny per
share earned in the year-ago quarter.
On a reported basis, Golden Star logged a net loss of $128.8
million (or 50 cents per share) in the second quarter as against
the year-ago quarter's net earnings of $0.03 million (break-even
on per share basis). The loss resulted from $169.6 million (or 65
cents per share) of after tax non-cash impairment charges,
arising from lower gold pricing, to write down the carrying value
of Bogoso/Prestea and Wassa/HBB mines.
Revenues slipped 12% year over year to $120.7 million from $136.3
million generated in the prior-year quarter largely due to a
decrease in the average realized gold price. The company also
faced a challenging market condition. However, sales beat the
Zacks Consensus Estimate of $117 million. Average realized gold
price decreased 11% year over year to $1,418 per ounce in the
Gold sales came in at 85,090 ounces in the quarter compared with
85,183 ounces sold in the prior-year quarter. Golden Star's
consolidated cash operating costs increased 11% year over year to
$1,078 per ounce.
Golden Star currently holds a 90% equity stake in Golden Star
(Bogoso/Prestea) Limited and Golden Star (Wassa) Limited, which
respectively own the Bogoso/Prestea and Wassa/HBB open-pit gold
mines in Ghana. In addition, Golden Star has a 90% interest in
the currently inactive Prestea Underground mine in Ghana.
At the Wassa/HBB non-refractory plant, Golden Star produced and
sold 50,774 ounces of gold in the second quarter, up 23.6% from
the year-ago quarter driven by higher ore grade processed. Gold
revenues increased $6.4 million year over year to $72.1 million
in the second quarter.
At the Bogoso/Prestea refractory plant, Golden Star produced and
sold 29,856 ounces of gold in the second quarter compared with
34,051 ounces sold in the second quarter of last year. At the
Bogoso/Prestea non-refractory plant, Golden Star produced and
sold 4,460 ounces of gold in the second quarter compared with
10,064 ounces sold in the second quarter in prior year.
Gold revenues decreased $22 million year over year to $48.6
million in the second quarter due to lower realized gold prices
and the suspension of the Pampe open-pit mining operation in
Golden Star's cash and cash equivalents were $52.7 million as of
Jun 30, 2013, down 50.2% from $105.7 million as of Jun 30, 2012.
Long-term debt decreased 62.3% to $56.5 million as of Jun 30,
2013, from $150 million as of Jun 30, 2012.
Golden Star's cash flow from operations was $29.5 million in 2012
in the reported quarter, which improved 22.4% from $24.1 million
generated last year.
Golden Star, which operates in the gold-mining industry along
Barrick Gold Corporation
Kinross Gold Corporation
), envisions continued lower costs and increased margins at the
The company has taken steps to safeguard its financial position
by being conservative with its cash position, deferring capital
spending, and instituting cost-reduction measures specifically at
Bogoso/Prestea. Moving forward, Golden Star believes these
measures will strengthen its balance sheet and increase its
Golden Star is on track to meet its projected gold production and
sales volumes targets for 2013. For 2013, Golden Star expects its
gold production to be within 290,000 ounces to 310,000 ounces,
roughly 10% lower than its earlier guidance. Cash operating costs
are anticipated to be in the range of $1,050 to $1,150 per
Golden Star currently retains a Zacks Rank #3 (Hold).
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