• Mon. Nov 23rd, 2020

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Average trade momentum: Golden Star Resources Ltd. (NYSE: GSS)

On 23 March 2020, Golden Star Resources Ltd. (NYSE: GSS) spotted trading -50.50% off 52-week high price. On the other end, the stock has been noted 32.97% away from the low price over the last 52-weeks. The stock changed 11.82% to recent value of $2.46. The stock transacted 858626 shares during most recent day however it has an average volume of 521.55K shares. The company has 113.54M of outstanding shares and 113.54M shares were floated in the market.

Golden Star Resources Ltd. (GSS) reports its financial and operational results for the fourth quarter ended December 31, 2019 and the Full Year (“FY”) 2019 results.

HIGHLIGHTS

Q4 2019 production totaled 52.7koz, 8% higher than Q4 2018 and 7% higher than Q3 2019 production. In Q4 2019 the $1,227 /oz All-In Sustaining Cost (“AISC”) was in line with the $1,233 /oz achieved in Q3 2019.

FY 2019 production totaled 203.8koz, in line with the upper end of the 190-205koz revised production guidance range. The $1,159 /oz AISC is also in line with the $1,100 -1,200/oz revised guidance for FY 2019.

FY 2019 cash flow from operations totaled $22.8m, importantly higher than the $7.6m of cash used in operations in 2018.

The FY 2019 capex of $73.4m was 19% above the $61.7m guidance. This is Because of the acceleration of underground development and exploration spend. The underground development improves the operational flexibility across the mines and the additional exploration expenditure at Wassa focused on infill drilling and some expansionary step-out drilling of the southern extension of the Wassa orebody.

Cash position of $53.4m at December 31, 2019 and total debt of $106.8m for net debt of $53.4m.

Following a review of the operation, the value of Prestea is being impaired by $56.8m based on a conservative valuation approach given recent performance and the execution risk in delivering the revised mine plan. The residual asset value is balanced by liabilities and working capital resulting in a zero net asset value.

Andrew Wray , Chief Executive Officer of Golden Star , commented:
“The fourth quarter operational performance was in line with our expectations with Wassa continuing to deliver strong mining rates and a raise in underground grades, while ongoing improvements in the Prestea underground performance were offset by the planned reduction in open pit contribution. As a result, we delivered on the upper end of the revised production range and the mid-point of the AISC guidance for 2019. The effort of our management and mine site teams in 2019, alongside the important capital investment, has started to deliver improved operational performance and improved geological understanding at both of our mines. In 2020 we plan to continue to invest in our asset base with the completion of the paste plant project at Wassa which is predictable to provide more flexibility in the mine plan, a new mining method and mining area at Prestea, and acceleration of the development and maintenance spend across both sites.

These initiatives are predictable to deliver improved production rates and margins as we progress through the year. They will also help us to further define the long-term growth at Wassa. We remain excited by the potential to continue to increase the mining rates at Wassa, with the aim of improving the scale and margins at the operation. At Prestea, the investment is aimed at improving the sustainability and flexibility of the operation with the introduction of a second mining level in order to enable it to return to positive cash generation once fully ramped up through 2020. This is predictable to also improve the options accessible for us to realize value from the asset having carried out the operational review, redesigned the mine plan and invested in the equipment for Long Hole Open Stoping (LHOS).

Its earnings per share (EPS) expected to touch remained -187.80% for this year while earning per share for the next 5-years is expected to reach at 10.00%. GSS has a gross margin of 18.80% and an operating margin of -19.10% while its profit margin remained -25.50% for the last 12 months. According to the most recent quarter its current ratio was 0.9 that represents company’s ability to meet its current financial obligations. The price moved ahead of -6.71% from the mean of 20 days, -14.42% from mean of 50 days SMA and performed -24.54% from mean of 200 days price. Company’s performance for the week was 13.36%, -14.58% for month and YTD performance remained -35.43%.

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