Macro Tsimmis

intelligently hedged investment

Golden Star Resources (GSS) update #12

Posted by intelledgement on Sun, 28 Jun 09

Our patience with our underperforming gold mining spec play, Golden Star Resources (GSS) is palpably closer to paying off in the wake of Friday’s announcement by management that “the long awaited Ghana grid power cost reduction is being implemented.” Electricity rates will be lowered from 14.5 cents per kWh to approximately 8 cents and this rate will be retroactive to 1 Jan 09. This is an interim rate which will be in effect until a final power rate formula is implemented.

“Based on the new power rate, Golden Star’s reported overall cash cost of production for the first quarter of 2009 would have been reduced approximately $56 per ounce to $515 per ounce. Assuming this rate will not change during the year, we expect an overall reduction in cash operating costs of $60 per ounce and $20 per ounce for Bogoso and Wassa, respectively, resulting in an expected $40 per ounce company-wide reduction in 2009 cash operating costs,” according to the press release (click on this link and then select “Golden Star Reports Significantly Lower Power Costs in Ghana”).

Previous GSS-related posts:

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