RCKS talk

Monday, July 18, 2016 Derek Macpherson

GSC Releases Solid Q2 Operating Results


Download Report

Golden Star Resources Ltd. (TSX:GSC, NYSEMKT:GSS, GSE:GSR) reported Q2 2016 production of 42,472 oz Au which brings YTD production to 95,678 oz Au, 53% of the lower-end of full-year 2016 guidance (180,000 to 205,000 oz Au). In our view, Golden Star remains on-track to meet this year’s guidance, despite a 2.5 week shutdown in Q2. As well, the company continues to make steady progress in its transition to becoming a higher-grade, lower-cost underground miner, with the first stope blasted at Wassa underground. The company’s YTD outperformance is supported by the ongoing transition; however, continued operating success, particularly with respect to costs, is likely needed to maintain this trend.


First stope at Wassa blasted, advancing towards becoming a higher-grade, lower-cost underground miner. The first stope blasted was in the upper region of the F shoot which is a moderate grade area of the underground deposit. Higher grade ore will be accessed from the B shoot in early 2017. All underground ore is planned to be blended with open-pit material to feed the Wassa processing plant. As well, the company expects initial development ore from the Prestea underground to be processed in H2 of this year.

Outperforming peers because of higher leverage, continued execution needed to maintain the trend. Golden Star is up 479% this year outperforming the GDXJ, which is up 152%. As well, Golden Star trades at 1.81x NAV and 7.4x 2017E EBITDA versus peers at 1.81x and 6.4x, respectively. To continue outperforming peers, Golden Star likely to needs to continue executing operationally, particularly on costs, and deliver on its planned transition to becoming a higher-grade, lower-cost miner.
 
Company description: Golden Star Resources Ltd. (TSX:GSC, NYSE MKT:GSS, GSE:GSR) is a gold mining company operating in the prolific Ashanti Gold Belt in western Ghana. The Company has 100% interests in two producing mineral properties the Wassa and Prestea mines which both have existing open pit operations and are planned to be developed into low cost, high grade underground mines.


Disclaimer
Red Cloud Klondike Strike Inc. is registered as an Exempt Market Dealer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland & Labrador, and the Yukon. Part of Red Cloud Klondike Strike Inc.'s business is to connect mining companies with suitable investors that qualify under available regulatory exemptions (the " Red Cloud KS Business"). Red Cloud Klondike Strike Inc., its affiliates and associates, and their respective officers, directors, representatives, researchers and members of their families (collectively, " Red Cloud KS") may hold positions in the companies mentioned in this publication and may buy or sell, or buy and sell their securities or securities of the same class on the market or otherwise. Additionally, Red Cloud KS may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services.
Red Cloud KS has prepared this publication for general information purposes only, NOT as part of the Red Cloud KS Business. This document should not be considered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided by Red Cloud KS for the purposes of this publication has been derived from sources believed to be accurate, but cannot be guaranteed. Opinions or analysis contained in this publication may be subject to change and Red Cloud KS does not undertake to advise the reader of such changes. This publication does NOT take into account the particular investment objectives, financial situations, or needs of individual recipients and other issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons. Recipients should rely on their own investigations and take their own professional advice before investment. Red Cloud KS will not treat recipients of this publication as customers or clients by virtue of having viewed this report.
Company Specific Disclosure Details


1) 
A member of Red Cloud KS team has visited/viewed material operations of the issuer.
2) In the last 12 months, Red Cloud KS has been retained under a service or advisory agreement by the subject issuer.
3) In the last 12 months, Red Cloud KS has received compensation for investment banking services.
4) Red Cloud KS or a member of the Red Cloud KS team or household, has a long position in the shares and/or the options of the subject issuer.
5) Red Cloud KS or a member of the Red Cloud KS team or household, has a short position in the shares and/or the options of the subject issuer.
6) Red Cloud KS or a member of the Red Cloud KS team own more than 1% of any class of common equity of the subject issuer.
7) A member of Red Cloud KS team or a member’s household serves as a Director or Officer or Advisory Board Member of the subject issuer.


 

SUBSCRIBE TO HEAR FROM US

Gain access to exclusive mining industry research reports as well as additional mining industry information, promotional materials, press releases and news.

RCKS Talk Daily Analysis
RCKS News
LATEST POST
CATEGORIES
RELATED TAGS
ARCHIVES

 

RISK WARNING:

Red Cloud Klondike Strike Inc. is registered as an Exempt Market Dealer (EMD) in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland & Labrador, and Yukon.

 

By accessing this website you agree to be bound by our Terms of Use and Privacy Policy.

 

Red Cloud Klondike Strike Inc. connects mining companies with suitable investors that qualify under available regulatory exemptions. For example, in Canada, according to National Instrument 45-106, Prospectus and Registration Exemptions. Similar laws and regulations apply in other jurisdictions. Companies presented on this website are considered to be highly speculative and, as such, are suitable only for purchasers who can tolerate the highest level of risk including the loss of their entire investment.

© Copyright 2017 Red Cloud Klondike Strike Inc. All rights reserved.