Golden Star Resources Ltd Reports Operating Results (10-Q)
Golden Star Resources Ltd. (usa) has a market cap of $305.5 million; its shares were traded at around $1.34 with and P/S ratio of 0.7.
Highlight of Business Operations:Results for the three months ended June 30, 2012, include net income attributable to Golden Star shareholders of $2.5 million or $0.010 per share, compared with a net loss of $5.0 million or $(0.020) per share in the same period of 2011. A $12.2 million increase in mine operating margin as compared to the second quarter of 2011 was the major factor responsible for the earnings improvement. Higher gold sales and higher gold prices as compared to a year earlier were the major factors contributing to the improvement in mine operating margin. Mining operations costs were higher than in the same period of 2011, but the increase in revenues more than offset the cost increases.
Results for the six months ended June 30, 2012 include net income attributable to Golden Star shareholders of $11.6 million or $0.045 per share, compared with net income of $0.9 million or $0.003 per share in the same period of 2011. Gold sales totaled 162,908 ounces in the first six months of 2012, up from 156,448 ounces sold in the first six months of 2011 and our average realized gold price rose to $1,641 per ounce, up 13% from $1,447 per ounce in the first six months of 2011.
Bogoso/Prestea's revenues totaled $140.2 million in the first six months of 2012, up $46.1 million from $94.1 million in the first six months of 2011. The increase in revenues was related to a 20,704 ounce increase in the number of ounces sold in the first half of 2012 and to higher gold prices as compared to the same period in 2011. The major factor contributing to the 20,704 increase in ounces sold, as compared to the first half of 2011, was the start-up of the Bogoso non-refractory plant in the first quarter of 2012 and its sales of 17,003 ounces in the first half of 2012. Bogoso's realized gold price averaged $1,642 per ounce in the first half of 2012, up from $1,455 per ounce a year earlier. Bogoso's refractory plant processed less tonnes of ore than in the first half of 2011, but higher feed grade and improved recovery rates more than offset the drop in tonnes processed yielding 68,354 ounces, up 5.7% from 64,653 ounces in the first half of 2011.
First half 2012 gold sales were lower than a year earlier mostly due to lower ore grades and a marginal drop on tonnes processed. The drop in tonnes processed, as compared to the first half of 2011, was due to a change in ore blends that included higher amounts of harder rock and a seven day power outage in the local Ghana power grid in the first quarter of 2012. The grade drop reflects closure of the Benso mine in the first quarter of 2012 and replacement of the Benso ore feed by lower grade Wassa pit ores. Cash operating costs came down to $70.9 million in the first half of 2012 from $71.5 million in the first half of 2011. While total mining operations spending in the first six months of 2012 was $2.4 million higher than in the same period of 2011, Wassa added $4.9 million of mining costs to ore stockpile inventories in the first half of 2012, resulting in a net decrease in first half cash operating costs. Even with the reduction in cash operating costs, the drop in ounces sold during the first half of 2012 resulted in an increase in first half 2012 cash operating costs per ounce to $914 as compared to $779 per ounce in the first half of 2011.
Gold revenues less the mining operations cost components of cost of goods sold (non-GAAP measure) totaled $67.6 million during the first half of 2012, up from $55.2 million in the same period of 2011. Portions of the $67.6 million of cash generated in the first half of 2012 were used to cover various non-operating cash costs and changes in working capital, bringing cash from operations to $35.5 million for the six months, as compared to a use of $7.3 million of cash from operations in the first six months of 2011. The major non-operating uses of cash during the first half of 2012 included approximately $8.2 million of cash for corporate general and administrative items, $4.4 million for reclamation projects, $5.0 million for interest payments, $18.6 million for working capital needs and $6.3 million for non-mine-site exploration and property holding costs.
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