Golden Star 1Q Output Rises But Earnings Decline
Golden Star Resources Ltd. (NYSE MKT: GSS; TSX: GSC; GSE: GSR) reports a rise in first-quarter gold output but a decline in earnings. Net income was $0.2 million, or zero cents per share, compared to $2.1 million, or a penny, in the first quarter of 2016. The decline was due primarily to a mining operating loss at Wassa, which was partially offset by a higher mine operating margin at the Prestea Open Pits and a fair value gain on financial instruments. The loss at Wassa was due to lower production from the Wassa Main Pit as a result of mining in a lower-grade ore zone, higher mining costs associated with underground mining and production from Wassa Underground affected by mining in the lower grade F Shoot, Golden Star says. After special items, adjusted net earnings were $3.4 million, compared to $8.5 million in the same period in 2016. Golden Star says the January-March period marked its strongest quarterly production since cessation of the refractory operation in the third quarter of 2015. The company lists a 9% year-on-year increase in gold production to 57,795 ounces, with all-in sustaining costs of $977. Golden Star says costs are expected to decrease further as Wassa Underground continues to ramp up and the high-grade Prestea Underground Gold Mine begins production. “Although our costs are lower than those we achieved in the full-year 2016, we are committed to driving them down further still through the delivery of high-margin ounces from our two underground mines,” says Sam Coetzer, president and chief executive officer. “Our focus is now on bringing Prestea Underground into production, optimizing the relationship between the open pit and underground operations at Wassa and on gaining a better understanding of the upside potential of our assets through our exploration program. We are on track to achieve our 2017 guidance on all announced metrics and I look forward to updating the market on exploration results as we begin to look towards future growth."