TORONTO, Aug. 17, 2016 /PRNewswire/ - Golden Star
Resources Ltd. (NYSE MKT: GSS; TSX: GSC; GSE: GSR) ("Golden Star"
or the "Company") is pleased to announce that it has repaid in full
its loan with Ecobank Ghana Limited ("Ecobank").
The loan was a $25 million medium
term facility ("Ecobank II") and since the facility became
available to the Company in September
2014, the Company had previously repaid $3 million. The proceeds were used for the
advancement of the Wassa Gold Mine ("Wassa"), including progressing
a feasibility study for the Wassa Underground Gold Mine ("Wassa
Underground"). The first stope was blasted at Wassa
Underground on July 10, 2016,
representing the start of pre-commercial production at the
mine.
The remaining $22 million of the
loan, as well as all accrued interest thereon, has now been repaid
in full using the proceeds from the financing transaction that
closed on August 3, 2016. The
repayment of Ecobank II is expected to result in a saving of
approximately $600,000 in interest
charges during the remainder of 2016. It also is expected to
have a significant positive impact on Golden Star's cash flows, as the Company was due
to use its operating cash flows to pay $8.4
million to Ecobank by the end of 2017: $2.8 million in the second half of 2016 and
$5.6 million in 2017.
Sam Coetzer, President and
Chief Executive Officer of Golden
Star, commented:
"The repayment of the Ecobank loan is an important step in
strengthening our balance sheet. By repaying the remainder of
the loan now, we have reduced our interest charges in 2016 and
strengthened materially our cash flow over the next 18
months. The funds allowed us to progress our Wassa
Underground mine, and this asset forms an important part of our
strategy to become a high grade, low cost, non-refractory gold
producer. I look forward to updating the market on
Golden Star's transformation further
over the coming months."
Further Information on Settlement of Loan
The repayment of Ecobank II follows the previously announced
offerings of equity and senior convertible notes by the Company,
which closed on August 3, 2016.
The net cash proceeds of the equity offering were approximately
$32.4 million and the net cash
proceeds of the private placement of convertible senior notes were
approximately $21.2 million.
The remainder of the funds from the offerings were used to
repurchase additional 5.0% convertible senior unsecured debentures
due June 1, 2017 in privately
negotiated transactions and for other corporate purposes. After the
above mentioned transactions, the remaining balance of the 5.0%
convertible senior unsecured debentures is $13.6 million.
All monetary amounts refer to United States dollars unless otherwise
indicated.
Company Profile
Golden Star is an established
gold mining company that owns and operates the Wassa and Prestea
mines situated on the prolific Ashanti Gold
Belt in western Ghana,
Africa. Listed on the NYSE MKT,
the TSX, and the GSE, Golden Star is
strategically focused on increasing operating margins and cash flow
through the development of two high grade, low cost underground
mines both in conjunction with existing open pit operations. The
Wassa Underground commenced pre-commercial production in mid-2016
and the Prestea Underground is expected to commence production in
mid-2017. Both projects are fully funded and on track to begin
production as expected. Production in 2016 is expected to be
between 180,000–205,000 ounces of gold with costs of US$815-US$925 per ounce.
Cautionary note regarding forward-looking information
This press release contains "forward looking information" within
the meaning of applicable Canadian securities laws and
"forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995, concerning
the business, operations and financial performance and condition of
Golden Star. 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. Forward-looking information
and statements in this press release include, but are not limited
to, information or statements with respect to: the savings in
interest and impact on cash flows resulting from the Ecobank II
repayment; and the Company's ability to transform, into a high
grade, low cost producer. Forward-looking information and
statements are made based upon certain assumptions and other
important factors that, if untrue, could cause the actual results,
performances or achievements of Golden
Star to be materially different from future results,
performances or achievements expressed or implied by such
statements. 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; 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.
SOURCE Golden Star Resources Ltd.