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« Gold: to fall with base metals? | Main | Silverado’s Green Fuel »
Thursday
Jul202006

Golden Star Mining

GSSlogo1

Golden Star is a medium sized gold mining company with major properties in Ghana, West Africa. Its gold production is un-hedged and therefore appeals to us, as the stock price should move in line with gold prices. Last year Golden Star showed their worth by producing 200,968 ounces of gold at an average cash operating cost of $365 per ounce, creating a new record for the company.

Production this year should hit 300,000 ounces followed by 500,000 ounces next year, at a reduced average cash cost of $335/oz when the Bogoso-Prestea expansion project is completed.
Later on this year the Bogoso-Prestea expansion should be completed which incorporates a sulphide/bio-oxidation circuit. This investment is costing about $125 million, however production will increase to around 370,000 ounces per year.

A commitment by Golden Star to spend approximately $16.5 million on exploration clearly demonstrates their aggressive attitude to locating new sources for future mining projects.
The Company has proved that it is well funded, which is part of our investment criteria, without funding then there just isn’t an opportunity to expand. Their management team has West African experience and is familiar with local customs and practises.






The Market Capitalisation is $618 million and the share price $2.98 having had a recent high of $3.80 and reserves stand 4.05 million ounces. Trading volume has been low recently which may be a negative and delay progress slightly. However, after the recent market sell off a number of other gold mining stocks are displaying the same characteristics, so we view this as only a minor hindrance.

The chart shows this gold mining stock is recovering and may go through some consolidation before moving higher. But as gold continues its resurgence then so will Golden Star.

GSSchart1

The stock is traded on the Toronto Stock exchange under the symbol GSC and on the Amex under the symbol of GSS.

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