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Business News of Tuesday, 16 November 2004

Source: LiquidAfrica via COMTEX

Golden Star Resources Announces a Net Loss of Revenues in Ghana

Nov 16, 2004 (LiquidAfrica via COMTEX) -- Golden Star Resources Ltd. today announced a third quarter net loss of $4.3 million ($(0.03) per share), based on revenues of $13.4 million and gold production of 30,755 ounces from its Bogoso/Prestea Mine in Ghana.

Slower production rates and higher costs associated with the mining and processing of transition ore at Bogoso/Prestea exacerbated by high rainfall and a protracted commissioning phase for Wassa combined with recognizing previously capitalized corporate development expenses related to the IAMGold tender offer were the primary reasons for the loss.

THIRD QUARTER HIGHLIGHTS -- Net loss of $4.3 million or $(0.03) per share; Total revenues of $13.4 million and a realized gold price of $401 per ounce; Operating cashflow of $0.7 million;

Gold sales of 30,755 ounces at a cash operating cost of $319 per ounce; Excessive rains exacerbated lower ore mining rates during a period of scheduled high waste stripping causing a greater dependence on more refractory stockpiled transition ore, resulting in lower gold recovery rates and gold production;

The Wassa project advanced to the testing and commissioning phase; and $3.9 million in previously capitalized corporate development costs related to the IAMGold tender offer was expensed in the quarter.

YEAR-TO-DATE HIGHLIGHTS

Net income of $2.1 million or $0.015 per share; -- Total revenues of $49.8 million and a realized gold price of $403 per ounce; -- Operating cashflow of $12.4 million; and Gold sales of 116,763 ounces at a cash operating cost of $237 per ounce. Peter Bradford, Golden Star's President and CEO, said: "We are disappointed with these results, which are indicative of a difficult quarter.

Unusually high rainfall directly impacted our ability to mine Prestea transitional ore from the Plant-North pit. That meant that we processed a greater proportion of more refractory stockpiled Bogoso transitional ore to keep the mill in operation.

We did, however, achieve better recoveries than in the past from this Bogoso transitional ore, benefiting from the flotation circuit that we commissioned in the second quarter."

"The delay in achieving commercial production at Wassa has also impacted our results," continued Mr. Bradford, "although we expect to achieve this milestone in the fourth quarter. We terminated our takeover bid for IAMGold in the quarter and had to write-off all the costs associated this.

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