Golden Star Reports on Coronavirus Management Controls
TORONTO, March 16, 2020 /PRNewswire/ - Golden Star Resources Ltd. (NYSE American: GSS; TSX: GSC; GSE: GSR) ("Golden Star" or the "Company") reports on the procedures and controls that are being implemented to protect its employees and ensure business continuity with respect to the potential risks posed by the COVID-19 (Coronavirus) outbreak.
The outbreak of the Coronavirus has now resulted in cases being reported in the Company's three operating countries. There have been a number of reported cases of infection in the United Kingdom and Canada where the Company operates corporate offices, and the first cases have now been reported in Ghana where Golden Star operates two gold mines, Wassa and Prestea.
None of our employees have been diagnosed with Coronavirus. Further to the statement in our 2019 results press release (dated February 22, 2020), the business has not suffered a material impact on the mining operations, logistics, supply chain, sales or its financial position.
In order to mitigate the potential risks to our operations and people, the Company activated our response protocols earlier this year, as a result the business has been proactively implementing procedures that include:
- Development of a specific disease management plan;
- Situation monitoring with our health consultants and other recognised resources;
- Circulation of education and awareness materials;
- Screening of all individuals that have travelled to countries that have experienced the Coronavirus outbreak;
- Business continuity planning; and
- Establishment of Emergency and Crisis Management teams to coordinate the implementation of management plans.
In recognition of the risks to our people and operations, the Company has commenced the implementation of the following controls:
- Restriction on international travel to limit risk of exposure;
- Implementation of hygiene and sanitation controls;
- Implementation of virtual office protocols in the corporate offices;
- Implementation of site access temperature screening at the mining operations;
- Self-isolation for individuals that display symptoms; and
- Controls to require citizens that have returned to Ghana following international travel to undergo a 14-day home isolation prior to being approved for site access.
Golden Star's priority is to minimise the potential risks to its employees and mitigate the possibility of disruption at the mining operations. In this respect, the stability of the supply chain poses a risk to business continuity and we have been managing our exposure closely. Supplies critical to the operations have been identified and suppliers have been asked to provide an update on their ability to continue to supply Golden Star's requirements. Critical supplies were risk assessed based on responses received and the origin of the products. Mitigating controls for items with a higher risk profile include temporarily increasing safety stock levels and identifying alternative sources of supply. We continue to monitor the situation as the pandemic evolves and remain in regular contact with our key suppliers.
Golden Star is an established gold mining company that owns and operates the Wassa and Prestea underground mines in Ghana, West Africa. Listed on the NYSE American, the Toronto Stock Exchange and the Ghanaian Stock Exchange, Golden Star is focused on delivering strong margins and free cash flow from its two underground mines. Gold production guidance for 2020 is 195,000-210,000 ounces at a cash operating cost per ounce1 of $790-$850. Since winning the PDAC 2018 Environmental and Social Responsibility Award, Golden Star has remained committed to leaving a positive and sustainable legacy in its areas of operation.
Statements Regarding Forward-Looking Information
Some statements contained in this news release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and "forward looking information" within the meaning of Canadian securities laws include but are not limited to, statements and information regarding: gold production of 195-210koz and a cash operating cost of $790-$850 per ounce in 2020. Generally, forward-looking information and statements can be identified by the use of forward-looking terminology such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes" or variations of such words and phrases (including negative or grammatical variations) or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative connotation thereof. Investors are cautioned that forward-looking statements and information are inherently uncertain and involve risks, assumptions and uncertainties that could cause actual facts to differ materially. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which Golden Star will operate in the future, including the price of gold, anticipated costs and ability to achieve goals. Forward-looking information and statements are subject to known and unknown risks, uncertainties and other important factors that may cause the actual results, performance or achievements of Golden Star to be materially different from those expressed or implied by such forward-looking information and statements, including but not limited to: risks related to international operations, including economic and political instability in foreign jurisdictions in which Golden Star operates; risks related to current global financial conditions; risks related to joint venture operations; actual results of current exploration activities; environmental risks; future prices of gold; possible variations in Mineral Reserves, grade or recovery rates; mine development and operating risks; accidents, labor disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities and risks related to indebtedness and the service of such indebtedness. Although Golden Star has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information and statements, there may be other factors that cause results not to be as anticipated, estimated or intended. 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 Management's Discussion and Analysis of financial conditions and results of operations for the year ended December 31, 2019 and in our annual information form for the year ended December 31, 2018 as filed on SEDAR at www.sedar.com. The forecasts contained in this press release constitute management's current estimates, as of the date of this press release, with respect to the matters covered thereby. We expect that these estimates will change as new information is received. While we may elect to update these estimates at any time, we do not undertake any estimate at any particular time or in response to any particular event.
Non-GAAP Financial Measures
In this news release, we use the terms "cash operating cost", "cash operating cost per ounce".
"Cash operating cost" for a period is equal to "cost of sales excluding depreciation and amortization" for the period less royalties, the cash component of metals inventory net realizable value adjustments, materials and supplies write-off and severance charges and "cash operating cost per ounce" is that amount divided by the number of ounces of gold sold (excluding pre-commercial production ounces sold) during the period.
"Cost of sales excluding depreciation and amortization" includes all mine-site operating costs, including the costs of mining, ore processing, maintenance, work-in-process inventory changes, mine-site overhead as well as production taxes, royalties, severance charges and by-product credits, but excludes exploration costs, property holding costs, corporate office general and administrative expenses, foreign currency gains and losses, gains and losses on asset sales, interest expense, gains and losses on derivatives, gains and losses on investments and income tax expense/benefit.
We use "cash operating cost per ounce" as a key operating metric. We monitor this measure monthly, comparing each month's values to prior periods' values to detect trends that may indicate increases or decreases in operating efficiencies. We provide this measure to investors to allow them to also monitor operational efficiencies of the Company's mines. We calculate this measure for both individual operating units and on a consolidated basis. Since cash operating costs do not incorporate revenues, changes in working capital or non-operating cash costs, they are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Changes in numerous factors including, but not limited to, mining rates, milling rates, ore grade, gold recovery, 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 similar to the measures of other gold mining companies but may not be comparable to similarly titled measures in every instance.
For additional information regarding the Non-GAAP financial measures used by the Company, please refer to the heading "Non-GAAP Financial Measures" in the Company's Management Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2019, which are available at www.sedar.com
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SOURCE Golden Star Resources Ltd.