Golden Star Resources, Ltd (GSS)

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Call Start: 13:15

Call End: 13:31

Golden Star Resources Ltd. (GSS)

Denver Gold Forum

September 25, 2013 01:15 pm ET

Executives

Sam Coetzer - President and Chief Executive Officer

Analysts

Presentation

Unidentified Company Representative

From (Inaudible) to a couple of producers, gold producers now, first is Golden Star, producing from. This is in Prestea and Wassa mines in Ghana, around about 3,000 ounces a year.

To present, we have President and CEO, Sam Coetzer.

Sam Coetzer

Thank you. You might walked really [fast], because I want to use every second to tell you about the transformation that we are seeing in Golden Star.

Good morning, ladies and gentlemen. Thank you for joining me here today and what I would like to do just before I start the presentation is to remind you of our overall strategy and that is to transform Golden Start to a low gold cost producer. Also going forward, we want to increase the resilience of this company.

What I do know and I continue to be excited by the resilience of the company and I am encouraged extremely a lot by its future potential. What I want to do today is, highlight to you how we are tracking against the strategy.

Just take note of our disclaimer. Golden Star has two operating mines, Bogoso and Wassa in the established mining jurisdiction of Ghana. The combined processing capacity of the mines is 7 million tonnes per annum.

In 2012, we produced 337,000 or 336,000 ounces. In 2013, we are forecasting to produce between 290,000 and 330,000 ounces and today I am happy to announce that we are turning to the top side of that guidance number.

Looking to the future, we are well capitalized with $100 million in available funds, which provides us with a financial flexibility to continue project development.

As the gold price has declined over the last, since April, we have also seen us squeezing real margins. Management responded by getting $45 million as well as adjusting our capital streaming going forward. We re-optimized our pits and we are now fully funded for the remainder of 2013.

As most of you know, I joined the company as a Chief Operating Officer about 18 months ago and what I realize, what was very clear to me at that point in time, is that we had some major operational issues that we needed to tackle and that our planning ability in this company needed to be adjusted.

I would like to report back on how we progressed on these issues over that time period. We are more than halfway through our investment in betterment stripping at Bogoso, which will have a positive impact starting next year and reduce Bogoso's cost going forward.

We have commenced reprocessing of their tailings of the TSF1 at Bogoso with very good early results, and I will be talking about this a bit later. Early in the fourth quarter, we will be updating our resource results at Wassa, with an additional 84,000 meters of drilling that was not included in our previous statements. We are excited about how that is shaping up.

Finally, we have secured a $50 million term loan facility in country that allows us the flexibility to further projects at Wassa. When I next present to you, I would refer back to the slide we report on the transformation of this company.

Investments in infrastructure over the last few years, even before I joined, have resulted in Golden Star having significant processing capacity of 7 million tonnes per annum across three plants within a 40-kilimeter radius. That to me was the inherent opportunity that this company has. These plants enable to process any type of ore on Ashanti Trend. We recently restarted the Bogoso oxide plant with the capacity of 14.5 million tonnes.

Our current mine plan focus on various supply sources to full the plants going forward. The key element of our immediate strategy is to consistently operate at capacity in our existing processing plants which could collectively have as I said previously 7 million per annum.

Over the last 18 months, we have invested in both, in our plants as well as our ore resources to allow us to fully achieve this. This graph is what I do believe is where we are going to be continuing to add value to Golden Star.

If you see the tracking of this graph and it's very telling over the period from 2011 to 2013, we have closed the gap of supplying throughput to three plants, and not only was that important to close that gap, but the component of the non-refractory ore to refractory ore is how we will skew our cost to a lower cost producer.

You would note that just recently in the last quarter, we are now tracking at full capacity. This will be the first lean quarter that we have going forward at full capacity for Bogoso. That to me is very telling.

Looking at this map Wassa operation, you could see there are multiple ore sources all the way down the Wassa trend. In the first half of this year, we produced 97,000 ounces at $770 per ounce, well below our cash cost guidance.

For 2013, which was $900 to $1,000 per ounce, this is mainly due as a result of the good performance that we had from your Father Brown pit, but what it demonstrates is the flexibility that we have to source ore from multiple sources at a time, so the challenges for us was to invest in the plant, make sure that we are good plants and we did that.

Read the rest of this transcript for free on seekingalpha.com