Canadian Mining Journal

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Golden Star to lower costs at Wassa gold mine

Cash-strapped Golden Star Resources (TSX: GSC; NYSE-MKT: GSS) has reported a feasibility study that shows adding an underground mine to its producing Wassa open pit gold mine in Ghana could bring down costs.


Cash-strapped Golden Star Resources (TSX: GSC; NYSE-MKT: GSS) has reported a feasibility study that shows adding an underground mine to its producing Wassa open pit gold mine in Ghana could bring down costs.

Production from the underground mine could start in early 2016 and continue with the open pit mine into 2024. The combined operation should churn out 163,000 oz a year, at average life of mine cash operating costs of US$780 per oz. Not only will the underground mine boost output, it will also greatly improve costs. Last year, the Wassa open pit sold less than 113,000 oz at operating costs of US$971 per oz.

The study pegs start-up costs for the underground operation at US$39 million and total capital for the combined mine at US$189 million, including sustaining costs. Given the low initial costs, the underground has a strong return on investment. Using a gold price of US$1,200 per oz and a 5% discount rate, the post-tax net present value is US$176 million, with an 83% post-tax internal rate of return. Payback should occur in little over 3 years.

Read the complete article at NorthernMiner.com/news/golden-star


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