Modern Mining: Featured News

In January this year Golden Star Resources (GSR), which operates the Wassa and Prestea mines in Ghana and is listed on the NYSE American and TSX, became a primarily underground-focused gold producer following the cessation of production from the Wassa Main Pit. The Prestea Open Pits are also expected to complete production during the third quarter of 2018. GSR says that its strategy going forward will be to focus on high margin, underground ore with the objective of strengthening its financial position and creating a robust platform to deliver shareholder value.

Gold production from the Wassa complex increased by 13 % in the first quarter of 2018 to 35 506 ounces compared to the first quarter of 2017, with 83 % of its production attributable to Wassa Underground, which delivered stronger than anticipated production as a result of higher grades and higher tonnages. Consequently, the Wassa complex delivered its lowest cash operating cost per ounce in over two years of US$683/oz, says GSR in its report for Q1 2018.

                                            Underground at Prestea.

The grade of the underground ore during the quarter increased by 84 % to 4,54 g/t Au compared to the first quarter of 2017 and by 12 % compared to the fourth quarter of 2017. Mining rates at Wassa Underground also continued to exceed expectations, at approximately 2 400 tonnes per day (tpd) on average in the first quarter. This represents a 40 % increase compared to the first quarter of 2017 and a 26 % increase compared to the fourth quarter of 2017. During March 2018, the mining rate exceeded 2 600 tpd.

The targeted average mining rate for Wassa Underground in FY 2018 is 2 700-3 000 tpd. GSR says the mining team is well-positioned to continue to increase the tonnage profile in 2018 and beyond, with the mining sequence working well and an increasing number of stopes prepared and developed.

Located approximately 35 km north-east of the town of Tarkwa within the southern portion of the Ashanti greenstone belt, Wassa was acquired by GSR in 2002 with open-pit mining starting in 2005 and the underground in 2016.

In April, GSR released an updated inferred mineral resource estimate for Wassa Underground. This delivered a 147 % increase in inferred resources to 5,2 Moz in the B Shoot South and F Shoot South areas. The grade of the inferred mineral resources also increased by 9 % to 3,6 g/t compared to 3,3 g/t in the December 2017 estimate.

Commercial production was achieved at Prestea Underground on February 1, 2018 and the mine produced 7 481 ounces of gold in the first quarter of 2018 compared to nil in the first quarter of 2017. Challenges experienced with the blasting of the first stope at Prestea Underground (which were reported by GSR in January this year) continued during the reporting period. As a result, the blasted ore from the first stope contained higher than anticipated levels of dilution and the grade processed from Prestea Underground was 8,22 g/t Au, compared to the average mineral reserve grade of 12,35 g/t Au.

GSR says the mining team has learnt important lessons from the first stope and further changes have been made to drill design patterns, blasting practice, raise layouts and stope ventilation in order to address these dilution issues.

Since mid-April 2018, when GSR began drawing down ore from the second stope at Prestea Underground, the mine’s production rate has increased significantly (averaging 613 tpd in late April) and management expects the results of the second quarter of 2018 to reflect these improvements.

Prestea is located south-west of Wassa near the town of Prestea. Probably the most famous mine in Ghana after Obuasi, it started production over a century ago and has reputedly produced 9 million ounces of gold over its life. It was acquired by GSR in 1999 but placed on care and maintenance in 2002 while evaluation and exploration activities continued. Open-pit mining started in 2015. The five-year mine life of Prestea Underground is expected to be extended through exploration.

GSR’s consolidated cash operating cost per ounce was US$909 in the first quarter of 2018, a 14 % increase compared to the first quarter of 2017. This was due primarily to the increase in mine operating expenses associated with Prestea Underground declaring commercial production on February 1, 2018 and the decrease in ounces sold in the first quarter of 2018 at the Prestea complex compared to the first quarter of 2017.

The AISC per ounce in the first quarter of 2018 was US$S1 171, an increase of 20 % compared to the first quarter of 2017, as a result of an increase in capitalised development costs at Wassa Underground. Sustaining capital incurred at Wassa Underground in the first quarter of 2017 was very low as mining operations had not yet accessed the B Shoot zone.

GSR’s production guidance for 2018 is for Wassa and Prestea to produce a total of between 230 000 and 255 000 oz at an AISC of between US$850 and US$950 per ounce.

“With both underground mines now in commercial production, Golden Star has differentiated itself from its peers,” says Sam Coetzer, President and CEO of GSR. “We are one of the few primarily underground producers in the West African gold sector and, as a result, we benefit from a significantly lower risk profile. Wassa Underground is continuing to ramp up robustly, delivering stronger grades and productivity than expected. Prestea Underground is now finding its stride and we look forward to improved results in the second quarter of 2018.”

Photos courtesy of Golden Star Resources

Contact Modern Mining

Title: Editor
Name: Arthur Tassell
Email: mining@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

Title: Advertising Manager
Name: Bennie Venter
Email: benniev@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

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