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Revenue of Golden Star Resources drops

BY: Arku Jasmine

Revenues of Golden Star Resources (GSR) declined to US$253.6 million in the first half of this year compared to the US$267.33 million recorded the same period last year.

The drop, attributable to the falling prices of gold on the international market, caused the company to make a loss of US$120.82 million in the first six-month period.

Its net income was US$12.9 million in the first half of last year but declined to the current figure due to the corresponding drop in gross revenues.

This was revealed in the company’s half year financial statement released last week.

GSR, which mines gold at Bogoso, Prestea and Wassa, all in the Western Region, said in the statement that its total gold output within the period, however, rose to US$162,908 ounce from the US$166,451 ounce realised in the same period last year.

The slight increment in GRS’s gold output could, however, not shield its operations from the impact of the falling gold prices.

Tracing the prices of gold in recent times, the company said while gold prices generally trended upward from a low of US$252 per ounce in 2001 to a high of US$1,895 per ounce in September 2011, spot prices fell from US$1,694 per ounce at the beginning of 2013 to US$1,192 per ounce near the end of the second quarter of 2013.

Spot prices as at August 9, 2013, were US$1,309 per ounce, the company said, noting that  these developments caused its earnings to fall.

“We realised an average of US$1,418 per ounce for our gold shipments during the second quarter of 2013 compared with US$1,600 per ounce for our gold shipments during the second quarter of 2012,” it noted.

The results further showed that the company held US$52.7 million in cash and cash equivalents as of June 30, 2013, down from the US$78.9 million reported in December 31, 2012.

“Operations generated US$41.5 million of cash during the six months ended june 30, 2013, and cash flow used for investing and financing activities aggregated US$64.2 million and US$3.5 million respectively during the period,” it said.

And should gold prices remain at their current levels, GSR said its mineral reserves and resources could be “significantly lower” when re-assessed at the end of 2013 than previously reported in the 2012 annual filing.

By Maxwell Adombila Akalaare/Graphic Business/Ghana