Gold Star posts loss as operating costs soar

Golden Star Resources Ltd has blamed rising operating costs at its Wassa and Bogoso mines in Ghana for losses posted in the third-quarter.

In the three months to the end of September 2007, the company’s operating costs increased 68% on the previous quarter, as a result of an unusually wet rainy season and flooding.

Consequently, gold from its Ghana mines was produced at $687 oz as against a price received of $681 oz.

The company recorded a third-quarter net loss of US$12.7 million, compared to a net income of US$1.5 million for the third quarter of 2006.

For the nine months to the end of September the net loss stood at US$18.6 million compared to a net income of US$33.9 million during the same period in 2006.

Other factors to be taken into account include lower than expected gold sales from Gold Star’s sulfide processing plant and the costs of developing a new sulphide processing plant at Bogoso.

The rainy season in Ghana did not significantly affect gold production but the company’s exploration projects in Niger and Sierra Leone were set back.

Gold Star actually achieved a 21.2% increase in gold sales, to 70,143 oz, during the third quarter of 2007, as compared with the same period of 2006.

The company currently holds a 90% equity interest in the Bogoso/Prestea and Wassa open-pit gold mines in Ghana.

It has a number of other property interests in Ghana and gold exploration interests elsewhere in West Africa and in the Guiana Shield of South America.