Golden Star Resources in $19.2 million operation in first quarter

Accra, May 10, GNA - Golden Star Resources, one of the emerging mining concerns in Ghana, has announced a net income of 5.2 million dollars on its gold sales revenue of 19.3 million dollars for the first quarter of 2004.

The income, which represents a return of 0.39 cents per share marks the ninth consecutive quarter of profitable operations. Presenting the highlights of the Company's operations, an official of Golden Star Resources told the Ghana News Agency that the sale of 47,202 ounces at an average of 408 dollars per ounce yielded 19.9 million dollars.

He said the cash operating cost was 181 dollars per ounce up 11 per cent from the same quarter of 2003. Total cash cost averaged 193 dollars per ounce, down from 201 dollars per ounce during the same period in 2003.

The Bogoso Plant processed an average of 5,653 tonnes of ore per day, down from 6,185 tonnes per day in the same period of 2003.

Processing rates reduced due to optimum recoveries from higher grade feed material. Optimisation of the processing plant and a slower processing rate pushed the gold recovery rate up to 81 per cent compared to the 74 per cent achieved a year earlier.

All of the feed to the Bogoso plant during the first quarter was oxide ore from the Plant-North Pit on the Prestea property.

"As previously forecast, we expect gold production from Bogoso/Prestea to be in the range of approximately 135,000 ounces to 155,000 ounces in 2004 at a projected cash operating cost of between 200 dollars and 220 dollars per ounce.

The improved earnings and production were primarily due to a combination of increased gold output at the Company's Bogoso/Prestea Gold Mine; richer ore and improved recovery at Bogoso/Prestea coupled with higher gold prices on the international market.

The realized gold price averaged 408 dollars per ounce for the first three months, which was a 15 per cent improvement from the 354 dollars per ounce in the first quarter of 2003.

The Official said: "Golden Star Resources is making good progress on development projects," but added that the Wassa Start up had been deferred to the third quarter of 2004.

The Board had given its approval for the addition of a second processing plant on the Prestea concession.

This year's first quarterly earnings compare favourably to the net income of 4.0 million dollars or 0.041 cents per share during the same period in 2003.

Giving the financial breakdowns, the Official said at March 31, 2004 the Company held cash and cash equivalents of 86.0 million dollars, down by 4.0 million dollars from the December 31, 2003 level.

Improvements in gold prices and gold production combined to provide 6.0 million dollars of operating cash flow during the first quarter, a 14 per cent increase over the 5.3 million dollars generated in the same period of 2003.

A total of 11.4 million dollars was spent on capital projects in the first quarter, including 4.6 million dollars on development and construction of the Wassa Project.

This compares to capital spending of 7.3 million dollars in the first quarter of 2003. Financing activities raised a net 0.4 million dollars in the quarter, mostly related to exercise of options.