DENVER, CO--(Marketwire - March 21, 2012) - Golden Star Resources Ltd. (NYSE Amex: GSS) (TSX: GSC) (GSE: GSR) ("Golden Star" or the "Company") is pleased to announce the completion of a Company authored Preliminary Economic Assessment ("PEA") of the West Reef orebody of the Prestea Underground Mine. The Company plans to file a PEA document that is compliant with National Instrument 43-101 within 45 days. The Board of Directors has approved the PEA and has directed management to proceed to a full feasibility study. All references herein to "$" are United States dollars.
- West Reef has an Indicated Resource of 874,000 tonnes grading 18.07 grams per tonne (g/t) for 508,000 ounces of gold (Au) and the orebody is open along strike and down dip
- The PEA contemplates a 1,200 tonnes per day operation from mechanized mining to produce 90,000 ounces of gold per year at full operation
- Ore will be processed at the Bogoso oxide processing plant
- Life-of-mine cash operating costs (before royalty and taxes) are estimated at $650 to $700 per ounce
- Capital cost, including a decline and hoisting shaft, are estimated at approximately $115 million
- Net present value at $1,500/oz Au and 5% discount rate is $134 million (pre-tax)
- Internal rate of return of 17%
Tom Mair, President and Chief Executive Officer, commented, "We are excited to announce the completion of the PEA and our commitment to completing the West Reef feasibility study later this year. We are also investigating the possibility of obtaining all necessary permits for a re-start of underground mining operations at Prestea by the end of 2012. This production would be sourced from existing infrastructure in the upper levels of the mine. It is gratifying that our hard work and perseverance is being rewarded with a project that will not only provide a new source of gold production for Golden Star but is anticipated to lower our overall cash operating costs. In addition, a viable underground operation will enable us to continue to explore the Prestea Underground complex thoroughly -- not only in previously unexplored areas between surface and 1,400 meters but also depth extensions of the orebodies below all historic workings."
In March 2002 Golden Star, through its local subsidiary, Bogoso Gold Limited (now Golden Star Bogoso/Prestea Limited ("GSBPL")), formed a joint venture with the government of Ghana and Prestea Gold Resources Limited, the former owner of the Prestea Underground Mine. The purpose of the joint venture was to evaluate and, if warranted, restart and operate the Prestea Underground Mine. The mine has produced over nine million ounces of gold since the late 19th century from workings which extend more than 10 kilometers along strike and up to 1,400 meters below surface.
Upon acquisition, Golden Star recognized that the exploration potential of the Prestea Underground complex was substantial and that the Company had a considerable amount of work ahead to make the workings safe for a series of drilling programs. Golden Star has financed the care and maintenance of the mine which included extensive dewatering of the workings, rehabilitation of the Central and Bondaye Shafts and the winders, refurbishment of main access ways from the Central Shaft to the West Reef orebody and other areas, and replacement of pumps, compressors and ventilation equipment. The Company also obtained extensive geologic and operational data from the Prestea Mine Offices, digitized all the relevant data and outlined a number of drill targets. From 2003 to 2006, Golden Star carried out a number of drilling programs from underground, testing the down-dip extensions of the West Reef and Main Reef orebodies. The drilling was successful and outlined a significant extension to the known West Reef orebody below 17 Level (600 meters below surface). Prior drilling by Golden Star of the Prestea Underground has resulted in an Indicated Resources total of 666,000 ounces of gold, of which the West Reef orebody accounts for 508,000 ounces. Inferred Resources total an additional 1.23 million ounces, of which 270,000 ounces are situated within the West Reef area.