P R E S T E A
0 5 . 1 5
D E V E L O P M E N T
P R O J E C T
DISCLAIMER AND OTHER MATTERS
SAFE HARBOR: Some statements contained in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995 and applicable Canadian securities laws. Investors are cautioned that forward-looking statements are inherently uncertain and involve risks and uncertainties that
could cause actual results to differ materially. Such statements include comments regarding: timing and cash operating costs over the life of mine; the Company being
fully financed for development at a reduced cost of capital; the rise in total costs, and improved efficiencies that reduce unit and per ounce costs; Wassa grade forecasts
over the remainder 2015; Bogoso refractory costs reducing over the next three quarters; the easing of load shedding and the reduction in Wassa diesel power costs; the
impact of a decreased strip ratio and maintenance on Bogoso costs for the remainder of 2015; the improvement in the Company’s cost profile once the underground
mines are in production; the benefits of the stream and loan transaction; Golden Star transforming to a non-refractory miner with a declining cash cost profile; the
timing for the development of and production from the underground mines and the payback period; and plans for deeper drilling at Wassa. Factors that could cause
actual results to differ materially include timing of and unexpected events at the Bogoso oxide and sulfide processing plants and/or at the Wassa processing plant;
variations in ore grade, tonnes mined, crushed or milled; variations in relative amounts of refractory, non-refractory and transition ores; delay or failure to receive board
or government approvals and permits; construction delays; the availability and cost of electrical power; timing and availability of external financing on acceptable terms;
technical, permitting, mining or processing issues, including difficulties in establishing the infrastructure for Wassa Underground; changes in U.S. and Canadian securities
markets; and fluctuations in gold price and input costs and general economic conditions. There can be no assurance that future developments affecting the Company will
be those anticipated by management. Please refer to the discussion of these and other factors in our Annual Information Form for the year ended December 31, 2013.
Additional factors, if applicable, will be included in our Annual Information Form for the year ended December 31, 2014, which will be filed on SEDAR at www.sedar.com.
The forecasts contained in this presentation constitute management's current estimates, as of the date of this presentation, with respect to the matters covered thereby.
We expect that these estimates will change as new information is received and that actual results will vary from these estimates, possibly by material amounts. While we
may elect to update these estimates at any time, we do not undertake to update any estimate at any particular time or in response to any particular event. Investors and
others should not assume that any forecasts in this presentation represent management's estimate as of any date other than the date of this presentation.
NON-GAAP FINANCIAL MEASURES: In this presentation, we use the terms "cash operating cost per ounce" or “CoC per ounce” and "all-in sustaining cost per ounce“
or “AISC per ounce”. These terms should be considered as Non-GAAP Financial Measures as defined in applicable Canadian and United States securities laws and should
not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. "Cash operating cost per ounce" for a period is equal to
the cost of sales excluding depreciation and amortization for the period less royalties and production taxes, minus the cash component of metals inventory net realizable
value adjustments and severance charges divided by the number of ounces of gold sold during the period. "All-in sustaining costs per ounce" commences with cash
operating costs and then adds sustaining capital expenditures, corporate general and administrative costs, mine site exploratory drilling and greenfield evaluation costs
and environmental rehabilitation costs. This measure seeks to represent the total costs of producing gold from operations. These measures are not representative of all
cash expenditures as they do not include income tax payments or interest costs. These measures are not necessarily indicative of operating profit or cash flow from
operations as would be determined under International Financial Reporting Standards. Changes in numerous factors including, but not limited to, mining rates, milling
rates, gold grade, gold recovery, and the costs of labor, consumables and mine site general and administrative activities can cause these measures to increase or
decrease. We believe that these measures are the same or similar to the measures of other gold mining companies, but may not be comparable to similarly titled
measures in every instance. In order to indicate to stakeholders the company's earnings excluding the non-cash (gain)/loss on the fair value of debentures, non-cash
impairment charges and severance charges, the Company calculates adjusted net loss attributable to Golden Star shareholders" and "adjusted net loss per share
attributable to Golden Star shareholders" to supplement the condensed interim consolidated financial statements.
INFORMATION: The information contained in this presentation has been obtained by Golden Star from its own records and from other sources deemed reliable,
however no representation or warranty is made as to its accuracy or completeness. The technical information relating to Golden Star's material properties disclosed
herein is based upon technical reports prepared and filed pursuant to National Instrument 43-101 Standards for Disclosure of Mineral Properties ("NI 43-101") and other
publicly available information regarding the Company, including the following: (i) “NI 43-101 Technical Report on a Preliminary Economic Assessment of the Wassa Open
Pit Mine and Underground Project in Ghana” effective October 30, 2014 prepared by SRK Consulting (UK) Limited; (ii) “NI 43-101 Technical Report on Resources and
Reserves, Golden Star Resources Ltd., Bogoso Prestea Gold Mine, Ghana” effective December 31, 2013 prepared by SRK Consulting (UK) Limited, and (iii) “NI 43-101
Technical Report on Preliminary Economic Assessment of Shrinkage Mining of the West Reef Resource, Prestea Underground Mine, Ghana”. Additional information is
included in Golden Star's Annual Information Form for the year ended December 31, 2013 which is filed on SEDAR. Mineral Reserves were prepared under the
supervision of Dr. Martin Raffield, Senior Vice President Technical Services for the Company. Dr. Raffield is a "Qualified Person" as defined by Canada's National
Instrument 43-101. The Qualified Person reviewing and validating the estimation of the Mineral Resources is S. Mitchel Wasel, Golden Star Resources Vice President of
Exploration.
CURRENCY: All monetary amounts refer to United States dollars unless otherwise indicated.
2
May 2015 - Prestea Development
PRESTEA BACKGROUND AND HISTORY
— In operation as underground mine
since 19th century with 9M oz of
gold produced
— Acquired by Golden Star in 2002
— Two surface and two internal shafts
operational – Central and Bondaye
are being used for dewatering,
Central undergoing refurbishment
— Undeveloped oxide surface deposits
2 km to south of underground mine
— Dedicated haul road 15 kms to
Bogoso processing plants
— Underground drilling between 2003
& 2013 identified and defined the
West Reef mineralized zone
— 2013 FS on West Reef demonstrated
positive economics for mechanised
mining
3
May 2015 - Prestea Development
CURRENT STATUS
— 17 g/t underground orebody with excellent potential for high grade
extensions outside the known resource
— Easily accessible surface deposits with Mineral Reserve of 122,000 oz
at 2.6 g/t in final stages of permitting
— Community with a strong desire to support development of mines
— Extensive underground infrastructure of operating shafts and levels
— Employed workforce ready to begin rehabilitation operations and
training for shrinkage mining
— Established processing and tailings location within 15 km
— Exploration potential along 9 km of strike length and to a depth of
1.4 km on three mineralized vein systems
— PEA on development of non-mechanised mine on the West Reef
mineralised zone completed in November 2014
— Fully funded for development with Royal Gold stream transaction
4
May 2015 - Prestea Development
PRESTEA GEOLOGY AND INFRASTRUCTURE
Main Reef Foot Wall
(MR FW)
West
Reef
(WR)
Bondaye
proposed
Oxide pits
South
Gap UG
Tuapim UG
decline
— Prestea mineralized trend has a strike length of over 9 km
— Primary structure is the Main Reef, a north south trending, steeply dipping,
narrow, mineralized quartz vein
— Multiple secondary vein structures are developed to the east and west of the
Main Reef
5
May 2015 - Prestea Development
PRESTEA WEST REEF
PEA
target
— PEA on development of West Reef, high grade mineralized zone of
non-refractory material
— M&I Resource 1.3M tonnes @ 14.8 g/t for 630k oz; Inferred Resource
3.3M tonnes @ 8.0 g/t for 858k oz
— Expected recovery of 90% with high gravity gold recovery
— Strike length 800m, dip 70-85º west, 0.5-4.0 m wide
— 570 m to 950 m depth (17 to 24 Level)
6
May 2015 - Prestea Development
PRESTEA UNDERGROUND PEA RESULTS
INVESTMENT
MINING
PROCESSING
RETURN
Shrinkage mining of West Reef
on existing levels 17 and 24
COC PER OZ
$370
Modifications to be made to
front end of existing
Bogoso processing plant
AISC PER OZ
$518
IRR
72%
SUPPORT
INFRASTRUCTURE
CAPEX
FIRST GOLD
15km haul road
improvements required
Initial capex $40M
to get into production
First gold expected
late 2016
NPV5%
PAY BACK PERIOD
$121M
2.5 years
*Assumption of a gold price of $1,200 per ounce used in these calculations. For further critical assumptions used in these assessments, please refer to the reports titled “NI 43-101 Technical
Report on Preliminary Economic Assessment of Shrinkage Mining of the West Reef Resource, Prestea Underground Mine, Ghana” which is filed on SEDAR.
7
May 2015 - Prestea Development
ATTRACTIVE COST POSITION, LOW INITIAL CAPITAL
Remaining Development Capex (US$ mm)
$500
Bubble size represents
LOM avg. annual Au production
(100 koz shown)
Yaoure
$400
Fekola
$300
Natougou
Bombore
$200
Kalana
Yaramoko
$100
Bouly
Obotan (Phase 1)
Sissingue
Enchi
Karma
Prestea UG
Banfora
Wassa UG
Prestea UG + Wassa UG
-$400
$500
$600
$700
LOM Average Annual Cash Costs (US$/oz Au)
1.
8
For ease of comparison, all Golden Star average annual cash costs are reflected above inclusive of royalties
May 2015 - Prestea Development
$800
$900
PRESTEA UNDERGROUND PEA CAPITAL ESTIMATES
LOM Capital Expenditure
Infrastructure rehabilitation
9
$30M
Refurbishment & Development overheads
$24M
Sustaining capital
$22M
Development and initial stopping
$7M
Mining equipment
$6M
Owner costs
$2M
Closure
$2M
Total capital expenditure
$94M
May 2015 - Prestea Development
PRESTEA UNDERGROUND INFRASTRUCTURE UPGRADE REQUIRED
— Shafts – Central and Bondaye shaft steelwork rehab
— Hoists – Central both hoists full control system upgrades
— Electrical – All transformers, switchgear and cabling, surface and
underground
— Pumping – new pumps and electrical components
— Compressed air – new compressors and piping
— 17 and 24 level – new rail and ground support
— Ventilation – new surface and UG fans, vent raises in West Reef
area
— Plant – upgrade Bogoso CIL to include a high-grade, low tonnage
circuit
10
May 2015 - Prestea Development
PRESTEA DEVELOPMENT SCHEDULE
— Year 1 – infrastructure upgrades
— Development commences in Year 2
— 50% production rate achieved mid-Year 2
— Full production rate of ~500 tpd achieved in Year 3
— Total project life of 5½ years
— 649,000 tonnes at 17.2 g/t for 359,000 oz contained
— Includes 17% mining dilution
$40
$30
$20
$10
$34.6
$3.0
$7.7
$17.4
$0
2015
2016
2017
Development Capital
11
May 2015 - Prestea Development
$5.8
$5.8
$1.9
$1.3
$1.6
$2.1
2018
2019
2020
2021
$12.2
Sustaining Capital
PRESTEA UNDERGROUND MINING
— Proposed shrinkage method
— Access from current Central
Shaft on 17 and 24 level
— Incline/decline system to
develop sublevels spaced at 40m
vertical
— Vent and orepass raises
— Haulage on 24L
12
May 2015 - Prestea Development
PRESTEA UNDERGROUND MINING
13
May 2015 - Prestea Development
PRESTEA UNDERGROUND PROCESSING
14
May 2015 - Prestea Development
PRESTEA UNDERGROUND PRODUCTION
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
$600
$480
91,286
$398
60,118
$340
$446
75,293
$500
$412
73,095
$400
$319
$300
$200
19,090
4,479
$100
$-
2016
2017
2018
2019
Oz produced
2020
2021
CoC per oz.
In steady state production 2017 – 2019:
Average Run of Mine (tpd)
470
Average mill feed grade (g/t Au)
17.2
Average gold recoveries
90%
Average annual gold production (oz)
15
May 2015 - Prestea Development
82,000
PRESTEA UNDERGROUND DEVELOPMENT SCHEDULE 2015
— Detailed engineering and estimation work for Feasibility Study progressed,
results expected July 2015
— Q1 2015 capex of $2.4M on rehabilitation of main underground mining levels
— Development plans being accelerated – capex for 2015 revised up to
$29M
16
May 2015 - Prestea Development
PRESTEA SOUTH OFFERS NEAR TERM PRODUCTION
— 122k oz of surface oxide deposit with average grade of 2.6 g/t
— Historically mined by artisanal miners
— Environmental permit outstanding, EIS submitted in Q4 2014 and
permit by end Q2 2015
— Preparatory work expected to take 6 months
— Haul road rehabilitated and 1.5km road tarring in mitigation
— Rail bridge refurbishment
— Site establishment
— Mining ongoing for 18 months with processing at Bogoso CIL
plant
— Potential upside in transition material that is non-refractory
17
May 2015 - Prestea Development
TIMELINE TO DELIVERY
July 2015
Q2’15
Feasibility
study
completed
18
May 2015 - Prestea Development
Q3’15
First
production
from
underground
stopes
Underground
Shaft
rehabilitation
completed
Environmental
permit for
Prestea South
received
Q3’15
Preparation
of Prestea
South
commences
Q4’15
Q4’16
First
production
from surface
pits
WEST REEF RESOURCE DEVELOPMENT
— Drilling expected to expand
known Mineral Resource by
conversion as well as
extending up and down
plunge
12L
17L
24L
19
May 2015 - Prestea Development
— Exploration strategy to
expand Mineral Resource to
enable more production
headings to increase daily
tonnage
MAIN REEF RESOURCE DEVELOPMENT
— Limited drilling on Main Reef
between 17 & 24 levels in
same vicinity as West Reef
stopes
— Intention is to drill target from
West Reef to determine if
economic mineralization is
present
17L
24L
20
May 2015 - Prestea Development
— Assuming high grade targets
along Main Reef delineated,
they can be mined from new
development for West Reef
mining