Golden Star Resources (GSS) announced financial and operating results for the first quarter of 2009, as well as objectives for the remainder of 2009. The company reported a net loss of $1.1 million, or $0.005 per share, and operating cash flow of $11.1 million, or $0.047 per share. This compares to a net loss of $86.8 million and cash flow used by operations of $5.0 million for the second quarter of 2008. Earnings contained foreign exchange losses, a non-cash item. As of March 31, 2009, the company had cash and cash equivalents of $28.1 million and debt of $122.7 million. GSS anticipates that all of its cash needs in 2009 will be met by its $28.1 million cash balance, cash generated from operations, its recently announced revolving line of credit, and equipment financing facilities already in place.
For the quarter GSS sold a record 96,971 gold ounces, a 13% increase over second quarter 2008, at a realized price of $904 per gold ounce. The company reiterated its previously stated 2009 guidance, which includes a production forecast of 400,000 gold ounces at cash costs of $550 per gold ounce. At its Bogoso/Prestea property, GSS was able to increase the gold grade processed to 3.0 g/t and to continue increasing recovery rates. The company also emphasized the effectiveness of its cost containment programs and that its main focus company-wide is on cost reductions.
Management, under the leadership of CEO Tom Mair, is making progress at its Bogoso BIOX plant and is continuing to work on getting cash costs down at this operation, chiefly though better gold recoveries. The company’s Wassa mine continues to operate efficiently. GSS trades at one of the cheapest cash flow per share valuations in the industry. If the company is able to continue to bring down its cost structure, then this valuation gap will shrink and the shares have the opportunity to appreciate.
GSS also created a new exploration entity for its activities in Brazil during the quarter and plans to continue to review properties and grow its property portfolio in Brazil. For the remainder of the year GSS plans to optimize the Bogoso sulfide processing plant, complete construction of the Hwini-Butre haul road for ore delivery to Wassa during the second half of 2009, finalize permitting of its Prestea South properties, and continue exploration at Bogoso/Prestea, Wassa, and HBB properties.
Golden Star Resources is an international gold mining and exploration company, with operations in Ghana, West Africa and South America. GSS owns controlling interests in several gold properties in southwest Ghana, including the Bogoso/Prestea and Wassa mines. Shares of GSS closed up 1% to $1.46, while the gold price closed up $14.07 to $911.22 per ounce.
