Golden Star Resources Ltd. (NYSE MKT: GSS; TSX: GSC; GSE: GSR) (“Golden Star” or the “Company”) is happy to declare its exploration strategy for 2017.
“During 2016 our focus was on delivering our two underground development projects, but I am happy that we are now in a position to turn part of our focus back to exploration. I believe strongly that our assets present an exploration upside opportunity, with both Wassa Underground and Prestea Underground having the potential to expand production on an annual basis and extend their mine lives beyond the current seven and five years respectively. I am anxious that we have enlarged the size of our exploration program for 2017 to crystallize these opportunities and to drive our assets further along the value curve. If the results of the first phase of the drilling program are positive, we expect to allocate further funds for phase two of the exploration program later in 2017 and I look forward to releasing the drilling results during the course of the year.”
2017 Exploration Strategy and Budget
The 2017 exploration strategy has three key objectives, which focus on increasing the lives of Golden Star’s operations in the short, medium and long term. Phase one of the program comprises about 48,000m of drilling and further drilling may be conducted if the results of the first phase are positive.
In its 2017 guidance for capital expenditures Golden Star stated that $2.4 million would be allocated to exploration. However following the bought deal public offering that was accomplished by the Company in February 2017, the Company decided to increase its exploration budget for the first phase of 2017 drilling by 171% to $6.5 million, consistent with the use of proceeds provisions.
Golden Star believes that there is potential to expand significantly Prestea Underground’s current Mineral Reserves of 490,000 ounces of gold (1.09 million tonnes at 13.93 grams per tonne). Based on these Mineral Reserves, the mine is anticipated to generate production of 90,000 per annum during a 5.5 year mine life. Formerly it was possible only to drill a small portion of the West Reef because of lack of underground development and services. However, now that the rehabilitation of Prestea Underground is almost complete, Golden Star’s exploration team have begind drilling from underground.
Golden Star believes that if additional Mineral Resources can be delineated at Prestea Underground, it offers the strongest potential for increasing near-term production because of the under-utilized shaft and processing plant. If additional ore is delineated, the Company anticipates that Prestea Underground’s production rate could be raised substantially without the need to incur noteworthycapital expenditures for infrastructure upgrades.
Phase one of the 2017 exploration program will have three key targets at Prestea Underground. Firstly, the program will focus on the extension and definition of the West Reef, with the objective of assessing the opportunity to increase the supply of high grade, underground ore to the processing plant in the near term. This drilling begind from underground in the first quarter of 2017.
Secondly, the program will focus on the initial testing of the Main Reef between 17 and 21 Levels; an area which has not been drilled before by the Company. The objective of this drilling is to evaluate the potential to include ore from the Main Reef into the mine plan in the medium term and this drilling is predictable to begin in the third quarter of 2017.
Thirdly, the program will target the South Gap and Tuampim areas. The South Gap is a two kilometre portion of the Ashanti Gold Belt, located on the extreme southern end of the nine kilometre area of historical Prestea Underground workings, between the Bondaye and Tuapim shafts. The drilling will be conducted from surface and it will test the Main Reef with the intention of confirming the results of formerly drilled intersections that have demonstrated encouraging grades and widths of gold mineralization. If the results are positive, the material from the South Gap could extend Prestea Underground’s life of mine.