GSS News Golden Star Updates Mineral Reserves and Mineral Resources at December 31, 2006
DENVER--(BUSINESS WIRE)--Golden Star Resources Ltd. (AMEX: GSS) (TSX: GSC) today announced its Proven and Probable Mineral Reserves, referred to as Mineral Reserves, and its Mineral Resources as at December 31, 2006.
Mineral Reserves in 2006 increased by 380,000 ounces, or 9% before mining depletion. Mineral Reserves, after mining depletion, increased by 100,000 ounces, or 2%, during 2006 to 55.2 million tonnes grading 2.34 grams per tonne (g/t) for contained gold of 4.15 million ounces at year end. The increase was a result of an increased gold price assumption and a focused drill program around our operating mines to convert and better define our Mineral Resources (as defined below). These gains were offset by increasing cost factors, design changes and a review of the Wassa resource model.
Peter Bradford, President and CEO, said: “Although year-on-year Mineral Reserves increased marginally in 2006, there is a significant increase in Mineral Reserves at Bogoso/Prestea and a reduction in Mineral Reserves at Wassa. This reduction at Wassa follows a previously disclosed review of the resource model and the adoption of a new model which we expect to improve our mine planning and gold production forecasts. In addition we have reviewed and updated engineering assumptions and costs and incorporated these into our models. Optimized pit shells using the same parameters as the Mineral Reserves but including Inferred Mineral Resources in the optimization have an additional 3.9 million tonnes at 1.16 g/t of Inferred Mineral Resources and an additional 1.5 million tonnes at 0.83 g/t of Indicated Mineral Resources reporting to them. We expect to drill this Inferred Mineral Resource in 2007 with the aim of bringing it into the Indicated Mineral Resource category.”
“The Mineral Reserves,” continued Mr. Bradford, “do not include any contribution from the Hwini-Butre and Benso project or the Prestea Underground. We are currently finalizing a feasibility study for the mining and haulage of high grade ore at Hwini-Butre and Benso for processing at our Wassa processing plant. This feasibility study is expected to be completed by, and presented to our Board for a decision to mine, in the second quarter.”
Measured and Indicated Mineral Resources increased to 41.0 million tonnes grading 2.40 g/t of gold while Inferred Mineral Resources decreased to 28.7 million tonnes grading 3.05 g/t of gold.
The Mineral Reserve and Mineral Resource estimates have been estimated by our technical personnel in accordance with definitions and guidelines set out in the Definition Standards for Mineral Resources and Mineral Reserves published by the Canadian Institute of Mining, Metallurgy, and Petroleum and as required by Canada’s National Instrument 43-101.
There are numerous uncertainties inherent in estimating proven and probable mineral reserves and measured, indicated and inferred mineral resources, including many factors beyond our control. The estimation of reserves and resources is a subjective process, and the accuracy of any reserve or resource estimate is a function of the quality of available data and of engineering and geological interpretation and individual judgment. Results from drilling, testing and production, as well as material changes in metal prices subsequent to the date of an estimate, may justify revision of such estimates.
We expect to complete and file our Form 10-K, which will include additional information on Mineral Reserves and Non-Reserve Mineral Resources, on or about March 13, 2006.
MINERAL RESERVES
Proven and Probable Mineral Reserves as at December 31, 2006
Property
Proven
Probable
Total
Tonnes (millions)
Gold Grade (g/t)
Con- tained Ounces
(millions)
Tonnes (millions)
Gold Grade (g/t)
Con- tained Ounces
(millions)
Tonnes (millions)
Gold Grade (g/t)
Con- tained Ounces
(millions)
Bogoso/ Prestea
Non-refrac- tory
0.9
2.30
0.07
6.9
2.59
0.57
7.8
2.56
0.64
Refrac- tory
14.5
2.95
1.38
19.3
2.65
1.64
33.8
2.78
3.02
Total
15.5
2.91
1.45
26.2
2.64
2.22
41.6
2.74
3.67
Wassa
Non-refrac- tory
0.5
1.08
0.02
13.0
1.11
0.46
13.6
1.11
0.48
Total
0.5
1.08
0.02
13.0
1.11
0.46
13.6
1.11
0.48
Totals
Non-refrac- tory
1.5
1.85
0.09
19.9
1.62
1.04
21.4
1.64
1.13
Refrac- tory
14.5
2.95
1.38
19.3
2.65
1.64
33.8
2.78
3.02
Total 2006
16.0
2.85
1.47
39.2
2.13
2.68
55.2
2.34
4.15
Total 2005
14.9
3.11
1.48
41.9
1.90
2.57
56.8
2.22
4.05
Notes to the 2006 Mineral Reserve Statement:
(1) The stated Mineral Reserve for Bogoso/Prestea incorporates Pampe and Mampon.
(2) The stated Mineral Reserves have been prepared in accordance with Canada’s National Instrument 43-101 Standards of Disclosure for Mineral Projects. Mineral Reserves are equivalent to Proven and Probable Reserves as defined by the United States Securities and Exchange Commission Industry Guide 7.
(3) The Mineral Reserves have been prepared under the supervision of Mr. Peter Bourke, P.Eng., Vice President Technical Services for the Company. Mr. Bourke is a “Qualified Person” as defined by Canada’s National Instrument 43-101.
(4) The Mineral Reserves were estimated using a gold price of $480 per ounce, which is approximately equal to the three year average price, and are based on a mine plan derived from an optimized pit shell.
(5) The terms “non-refractory” and “refractory” refer to the metallurgical characteristics of the ore. We plan to process the refractory ore in our BIOX® bio-oxidation plant that is currently being constructed at Bogoso and to process the non-refractory ore using our more traditional gravity, flotation and/or cyanidation techniques.
(6) Optimized pit parameters are based on historical and projected operating costs at Bogoso/Prestea and Wassa and estimated costs for processing refractory ores in the under construction BIOX®plant. Metallurgical recoveries are based on historical performance or estimated from testwork and typically range between 80 to 92% for non-refractory ores and estimated from 70 to 90% for refractory ores. Pit designs are based on geotechnical criteria established by external consultants. Mining dilution and mining recovery varies by deposit and has been applied in estimating the Mineral Reserves. A royalty of 3% is allowed.
(7) Mineral Reserves are expressed on a 100% basis. Golden Star’s share of the Mineral Reserves is subject to the Government of Ghana’s 10% carried interest which entitles them to a 10% dividend once our capital costs have been recovered.
(8) Numbers may not add due to rounding.
Reconciliation of Mineral Reserves
The following table sets out the primary factors that impacted our Mineral Reserves during 2006.
Reconciliation
Tonnes (millions)
Contained Ounces (millions)
Tonnes (% of Opening)
Ounces (% of Opening)
Opening Mineral Reserves
56.8
4.05
100
100
Gold Price Increase(1)
28.6
1.37
50
34
Exploration Changes(2)
(2.1)
(0.04)
(4)
(1)
Mining Depletion(3)
(4.9)
(0.28)
(9)
(7)
Engineering(4)
(23.2)
(0.95)
(41)
(23)
Closing Mineral Reserves
55.2
4.15
97
102
Notes to the reconciliation of Mineral Reserves:
(1) Gold Price Increase represents changes resulting from an increase in gold price used in the Mineral Reserve estimates from $400 per ounce in 2005 to $480 per ounce in 2006.
(2) Exploration Changes include changes due to geological modeling, data interpretation and resource block modeling methodology as well as due to exploration discovery of new mineralization.
(3) Mining Depletion represents 2005 Mineral Reserve mined and processed in 2006 before considering recovery losses and therefore does not correspond with 2006 actual gold production.
(4) Engineering includes changes as a result of engineering facts such as changes in operating costs, mining dilution and recovery assumptions, metallurgical recoveries, pit slope angles and other mine design considerations.
NON-RESERVE MINERAL RESOURCES
Cautionary Note to US Investors concerning estimates of Measured and Indicated Mineral Resources
This section uses the terms “measured mineral resources” and “indicated mineral resources.” We advise US investors that while those terms are recognized and required by Canadian regulations, the US Securities and Exchange Commission does not recognize them. US investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into mineral reserves.
Cautionary Note to US Investors concerning estimates of Inferred Mineral Resources
This section uses the term “inferred mineral resources.” We advise US investors that while this term is recognized and required by Canadian regulations, the US Securities and Exchange Commission does not recognize it. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. In accordance with Canadian rules, estimates of inferred mineral resources cannot form the basis of feasibility or other economic studies. US investors are cautioned not to assume that part or all of the inferred mineral resource exists, or is economically or legally mineable.
The following table sets out the Mineral Resources, which either (i) fall within a Whittle 4-D optimized shell at a gold price of $560 per ounce using the same modifying factors and assumptions as used for the estimation of the Mineral Reserves, or (ii) report to an underground resource model after applying a cut-off grade commensurate with underground mining. In 2005, as reported in our press release of February 1, 2006, we used a $480 per ounce optimized pit shell to report our constrained Mineral Resources.
Measured and Indicated Mineral Resources and
Inferred Mineral Resources as at December 31, 2006
