Q P R E S T E A P E A R E S U L T S

Transcription

1 Q P R E S T E A P E A R E S U L T S

2 DISCLAIMER AND OTHER MATTERS SAFE HARBOR: Some statements contained in this presentation are forwardlooking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Investors are cautioned that forwardlooking statements are inherently uncertain and involve risks and uncertainties that could cause actual results to differ materially. Such statements include comments regarding: PEA operating metrics, including estimated gold production, tonnes processed, grade and gold recoveries; estimated pretax and posttax internal rate of return and net present value of Prestea mine (including assumed discount rates) and sensitivities to gold price; the timing for first production from Prestea mine; the life of mine at Prestea and the ability to extend the life of mine; cash operating costs per ounce; allin sustaining costs per ounce; the availability and quantum of funding to advance the development of Prestea mine; mining methods and estimated recovery at Prestea mine; capital costs, including preproduction capital costs, for Prestea mine; potential modifications to the Bogoso processing plant; required investments in mine infrastructure; production and operating metrics; the timing for ramping up production at Prestea mine; group life of mine cash costs; estimates of indicated mineral resources, including tonnage, grade and contained ounces of gold; and future work to be completed at Prestea mine. Factors that could cause actual results to differ materially include timing of and unexpected events at the Bogoso processing plant; variations in ore grade, tonnes mined, crushed or milled; variations in relative amounts of refractory, nonrefractory and transition ores; delay or failure to receive board or government approvals and permits; the availability and cost of electrical power; timing and availability of external financing on acceptable terms; technical, permitting, mining or processing issues, including difficulties in establishing the infrastructure for Prestea mine; changes in U.S. and Canadian securities markets; and fluctuations in gold price and input costs and general economic conditions. There can be no assurance that future developments affecting the Company will be those anticipated by management. Please refer to the discussion of these and other factors in our Annual Information Form for The forecasts contained in this presentation constitute management s current estimates, as of the date of this presentation, with respect to the matters covered thereby. We expect that these estimates will change as new information is received and that actual results will vary from these estimates, possibly by material amounts. While we may elect to update these estimates at any time, we do not undertake to update any estimate at any particular time or in response to any particular event. Investors and others should not assume that any forecasts in this presentation represent management s estimate as of any date other than the date of this presentation. NONGAAP FINANCIAL MEASURES: In this presentation, we use the terms "cash operating cost per ounce and allin sustaining cost per ounce. These terms should be considered as NonGAAP Financial Measures as defined in applicable Canadian and United States securities laws and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Cash operating cost per ounce for a period is equal to the cost of sales excluding depreciation and amortization for the period less royalties and production taxes, minus the cash component of metals inventory net realizable value adjustments divided by the number of ounces of gold sold during the period. Allin sustaining costs per ounce commences with cash operating costs and then adds sustaining capital expenditures, corporate general and administrative costs, mine site exploratory drilling and greenfield evaluation costs and environmental rehabilitation costs. This measure seeks to represent the total costs of producing gold from operations These measures are not representative of all cash expenditures as they do not include income tax payments or interest costs. These measures are not necessarily indicative of operating profit or cash flow from operations as would be determined under International Financial Reporting Standards. Changes in numerous factors including, but not limited to, mining rates, milling rates, gold grade, gold recovery, and the costs of labor, consumables and mine site general and administrative activities can cause these measures to increase or decrease. We believe that these measures are the same or similar to the measures of other gold mining companies, but may not be comparable to similarly titled measures in every instance. INFORMATION: The information contained in this presentation has been obtained by Golden Star from its own records and from other sources deemed reliable, however no representation or warranty is made as to its accuracy or completeness. The technical information relating to Golden Star s material properties disclosed herein is based upon technical reports prepared and filed pursuant to National Instrument Standards for Disclosure of Mineral Properties ( NI ) and other publicly available information regarding the Company, including the following: (i) NI Technical Report on Mineral Resources and Mineral Reserves Golden Star Resources Ltd, Wassa Gold Mine, Ghana Effective Date December 31, 2012, prepared by SRK Consulting (UK) Limited and prepared under the supervision of Martin P. Raffield and S. Mitchel Wasel; (ii) Golden Star s press release dated February 10, 2014; (iii) Golden Star s Annual Report for 2013; and (iv) Golden Star s press release dated September 15, Additional information is included in Golden Star s Annual Information Form for the year ended December 31, 2013 which is filed on SEDAR. Mineral Reserves were prepared under the supervision of Dr. Martin Raffield, Senior Vice President Technical Services for the Company. Dr. Raffield is a "Qualified Person" as defined by Canada's National Instrument The Qualified Person reviewing and validating the estimation of the Mineral Resources is S. Mitchel Wasel, Golden Star Resources Vice President of Exploration. CURRENCY: All monetary amounts refer to United States dollars unless otherwise indicated. 2

3 MANAGEMENT PARTICIPANTS Sam Coetzer President and Chief Executive Officer Martin Raffield Senior Vice President, Technical Services

4 EXECUTING ON STRATEGY Golden Star is transforming to a lower cost producer Higher cost Bogoso refractory operation to close late 2015 Wassa underground development reduces Wassa s costs per oz dramatically Tailings retreatment has delivered lower cost oz Development of Prestea mine is next logical development PEA indicates Prestea can deliver ~70k oz/ year for 4.5 years at average cost of $370 per oz for $40 million investment Expenditure of ~$80 million on Wassa and Prestea unlocks significant value for shareholders Realization of corporate strategy to favour margin over production Group Life of Mine CoC expected to reduce below $700/ oz from See note on slide 2 regarding NonGAAP Financial Measures LOM is from 2016 onwards and assumes Wassa construction proceeds as per technical report and Prestea construction commences early 2015

5 PRESTEA IS ENDOWED WITH SOLID INFRASTRUCTURE Located on Ashanti trend in town of Prestea, Western Ghana More than 16 surface and six underground shafts Two surface and two underground shafts operational today Central and Bondaye shafts 15 kms from Bogoso processing plant along dedicated haul road Existing, permitted and constructed processing plants at Bogoso Labour with underground experience in local community Utilities including grid electricity available 5

6 PRESTEA HAS A LONG HISTORY OF PRODUCTION Prestea in operation as underground mine since 19th century 9 million oz of production from the larger mineralized zone, Main Reef Acquired in 2002, placed on care and maintenance Refurbishment and dewatering ongoing Exploration development and drilling Identified and defined the West Reef mineralized zone 2013 Feasibility Study demonstrated positive economics for mechanised mining on the West Reef 6

7 PRESTEA GEOLOGY AND RESOURCES Prestea mineralized trend has strike length of over 9 km Primary structure is Main Reef north south trending, steeply dipping, narrow, mineralized quartz vein Multiple secondary vein structures are developed to the east and west of the Main Reef PEA is focused on the West Reef, high grade mineralized zone Indicated Resource of g/t for 502k oz Inferred Resource of g/t for 185k oz Nonrefractory material Expected recovery of 90% with high gravity gold recovery Strike length 800 m, dip 7085º west, m wide 570m to 950 m depth (17 to 24 Level) 7

8 PRESTEA MINING METHOD West Reef last mined in 2000 above 17 level in the PEA target area These stopes used shrinkage mining and are accessible today Feasibility Study published in mid2013 for mechanized cut and fill mining method and a new access shaft system for the West Reef PEA supersedes the Feasibility Study Shrinkage mining method Low operating and capital cost Higher NPV and enhanced IRR in a lower gold price environment 8

9 PRESTEA WEST REEF LOCATION PEA target 9

10 PRESTEA MINING METHOD Proposed shrinkage method, historically used at Prestea Access from current Central Shaft on 17 and 24 level Incline/decline system to develop sublevels spaced at 40 meters vertical Vent and orepass raises Haulage on 24 level Low risk brownfield project in established and tested mining area 10

11 PRESTEA DEVELOPMENT AND COSTS 90,000 84,100 80, ,000 60,000 79, ,000 81, Costs per tonne ,900 40,000 30,000 26,800 20,000 10,000 3 Production 4 5 Coc 6 Aisc Year 1 focused on infrastructure upgrades Development commences in year 2 50% production rate achieved mid year 2 Full production rate of ~500 tpd achieved in year 3 649k tonnes at 17.2 g/t for 359k oz contained Includes 17% mining dilution 11 $133 Process/hauling $29 G&A $28 Total 64 2 Mining $190

12 PRESTEA CAPITAL COSTS Capital Expenditure Development capex 4 5 Sustaining capex Infrastructure rehab $30 M Refurb & development $24 M Sustaining capital $22 M Development & stoping $7 M Mining equipment $6 M Owner costs $2 M Closure $2 M Total Preproduction capex estimated at $40 million all in year 1 Infrastructure includes hoist and shaft upgrades, electrical, ventilation, dewatering and process plant modifications Refurbishment and development overheads include power, labor and maintenance during the construction period Capital supports underground mining beyond the West Reef PEA target 12 $94 M

13 PRESTEA UNDERGROUND ECONOMICS At Au $1,200, posttax IRR of 72% At Au $1,200, posttax NPV5% of $121 million LOM cash operating costs of $370/oz LOM allin sustaining costs of $518/oz Gold Price NPV5% IRR $ 1, % $ 1, % $ 1, % $ 1, % $ 1, % The PEA demonstrates robust economics for Prestea At Au $1,160, IRR is 68% and post tax NPV 5% is $112 million High grade nature of the deposit, combined with the low capex requirements, makes the project viable at low gold prices 13

14 WAY FORWARD Development period of months Disciplined approach to funding, options being evaluated at subsidiary and corporate level Critical permits and licenses in place, updated Environmental permit application ongoing Enthusiastic local community and Government support for mine Prestea represents the third low cost ore source to be identified and developed in the last 18 months Golden Star will continue to assess and develop its existing assets to lower our group cost profile and improve shareholder returns 14

15 CATALYSTS FOR VALUE CREATION Establish Wassa Main pit Operational cost savings achieved Q Complete push back at Bogoso Wassa Feasibility complete Updated Mineral Resource estimate for Wassa Q Q PEA on underground mining at Wassa complete Revised PEA for Prestea Wassa decline construction begins * Development of projects dependent on positive study results and adequate access to finance 15 First Prestea development production commences from Wassa Underground First production Prestea

16 Investment Case 3.9M oz. in Mineral Reserves on the largest land package on the Ashanti Gold belt Established gold mining company with 15 years of production history in Ghana Low operational risk in a stable African mining jurisdiction Successfully reduced overall operating costs over last two years Significant exploration & development upside development Brownfield development projects to deliver low cost ounces through 2026 Offers investors leveraged, unhedged exposure to the gold price

17 PROVEN AND PROBABLE RESERVES Dec 31, 2013 Proven Mineral Reserve Dec 31, 2013 Probable Mineral Reserve Dec 31, 2013 Proven and Probable Mineral Reserve tonnes grade g/t Au ounces tonnes grade g/t Au ounces tonnes grade g/t Au ounces Wassa Main 33, ,863 33, ,863 Father Brown Stockpiles Subtotal Wassa , ,960 34, ,970 Bogoso 2, , , Dumasi 3, , , Mampon 1, , Prestea South , , Prestea Underground 1, , Stockpiles Subtotal Bogoso 7, , ,397 19, ,977 Total 7, , ,357 54, ,947 * Please refer to the relevant disclosure on Mineral Reserve and Mineral Resource Estimates contained in our Annual Report for the year ended December 31,

18 MEASURED AND INDICATED MINERAL RESOURCES 1 Dec 31, 2013 Measured Mineral Resources Dec 31, 2013 Indicated Mineral Resources Dec 31, 2013 Measured and Indicated Mineral Resources tonnes grade g/t Au ounces tonnes grade g/t Au ounces tonnes grade g/t Au ounces Wassa Main2 25, ,160 25, ,160 Wassa Underground2 10, ,389 10, ,389 Father Brown Father Brown Underground 1, , Wassa Other 2, , Subtotal Wassa 39, ,007 39, ,007 Bogoso 2, , , Dumasi 3, , , ,032 Mampon 1, , Prestea South , , Prestea Underground 1, , Bogoso Other 3, , Subtotal Bogoso 6, , ,415 28, ,029 Total 6, , ,422 68, ,036 Please refer to the relevant disclosure on Mineral Reserve and Mineral Resource Estimates contained in the Company s Annual Report for the year ended December 31, All Mineral Resources for Wassa Main and Wassa Underground are as at September 15, Please refer to the to the relevant disclosure on Mineral Resource Estimates contained in Company s announcement of the same date. 18

19 INFERRED MINERAL RESOURCES 1 Dec 31, 2013 Inferred Mineral Resources tonnes grade g/t Au ounces Wassa Main Wassa Underground2 8, ,122 Father Brown Father Brown Underground Wassa Other Subtotal Wassa 10, ,324 Bogoso Dumasi Mampon Prestea South Prestea Underground 3, Bogoso Other Subtotal Bogoso 5, ,060 Total 15, ,384 Please refer to the relevant disclosure on Mineral Reserve and Mineral Resource Estimates contained in the Company s Annual Report for the year ended December 31, All Mineral Resources for Wassa Main and Wassa Underground are as at September 15, Please refer to the to the relevant disclosure on Mineral Resource Estimates contained in Company s announcement of the same date. 19