Golden Star Resources has undergone significant changes over the last two years to maximise its golden opportunities.

Incorporated in May 1992, Golden Star Resources Ltd (GSR) is a well-established mid-tier Canadian gold mining company operating the Wassa mine on the prolific Ashanti Gold Belt in Ghana. With one of the largest land packages of any company operating in the country and a history of nearly two decades of gold production, the company is well positioned for prospective growth.

Andrew Wray, the company’s President and CEO, who joined the board of the company two years ago and was appointed to his role as CEO in 2019, explains that the last few years have been a period of profound business change. In 2018, La Mancha, a gold exploration and production company with assets in various parts of the world, acquired a 30% stake in the business with the idea of developing the potential of Wassa and then broadening the business beyond. Since then, the La Mancha stake has grown to 35%.

He says: “Wassa is a significant resource of about 10 million ounces, which is quite unusual. We are a small to medium size business but, given the size of the resource, we have the potential to turn into a very large producer. This is what makes us different from other companies of our size.”

He affirmed that La Mancha became involved with a clear vision to profoundly change the business. “We put a new corporate team in place, set up an office in London, which – being in the same time zone and a lot closer to the asset – eased communication and significantly improved the management of the asset. That was a strategic shift in the business.”

Another was a financial restructuring. For the previous decades, GSR was floating just above water, focused on surviving, without a solid foundation. With the help of the capital injection that La Mancha brought, as well as the operational focus and management, the company managed to consolidate its financial position and set a clear path forward.

“Last year was very important for us. It was the first year of the new team in the business and of implementing major changes. The result was soon visible in the strong performance of the mine, achieved in the middle of the pandemic. We have set up clear targets and have a high-quality team in place to drive the business forward,” Andrew Wray affirms, pointing out that the focus is not just on making the most of the current asset but also on stepping up investment in exploration.

Beyond the mine

While developing the business, consideration for the local environment is strong. Ghana is a stable jurisdiction with a century-long history of mining and good existing infrastructure – aspects that present a clear advantage: 99% of GSR’s workforce are Ghanaians and 50% of those come from the host communities.

“The strong Ghanaian team has proved to be a great benefit during the pandemic with restricted international travel, when we had no expats on site. We are also very focused on local supply chains, i.e. services and consumables supplied from local communities. This not only mitigates risks to the supply chains and logistics, but also hugely benefits the local communities. During the pandemic, having local procurement was another advantage, as the business was less exposed to supply chain disruptions,” admits Mr Wray.

Supporting and helping to develop local communities has been a continuing effort that started way back. Through the development foundations, Golden Star works in partnership with local people, establishing a long-term commitment to the betterment of the community and local economic development.

“The focus is on turning our efforts into sustainable results rather than just making donations,” says Andrew Wray. To this end several initiatives have been established, including the award-winning oil palm project as an alternative livelihood project for artisanal miners and other community members.

“Sustainability is core to our strategy. We want to develop a sustainable and diversified business focusing on environmental rehabilitation and creating a sustainable industry beyond the lifespan of the mine,” he emphasises. As the winner of the Prospectors & Developers Association of Canada 2018 Environmental and Social Responsibility Award, Golden Star remains committed to leaving a positive and sustainable legacy in its areas of operation.

Clear path forward

Speaking about the plans for the coming months, Andrew Wray says that the vision is clear: “We are already an established producer, with a view to expanding the production base over the next five years to achieve a potential of 250,000 – 300,000 ounces which, in African terms, will make it a pretty big operation. This demonstrates our longer-term thinking on developing infrastructure around the mine as well.”

He further affirms that what was a transformational year for Golden Star, the operational performance of Wassa stood out with the delivery of the improved production guidance range, despite the numerous challenges that have arisen as a result of the pandemic. The mine continued to operate throughout the pandemic and investments in longer-term infrastructure were increased, with a paste fill plant and electrical upgrades commissioned in Q4 2020.

Investment is set to continue in 2021 in significantly ramping up drilling to better understand the ore body as a precursor to increasing production, as well as in stepping up exploration activities with a view to accelerating the systematic testing of the numerous in-mine, near-mine and regional exploration targets.

“2021 will be a critical year. We have established a clear path forward, including balance sheet restructuring and loan repayment. There will also be an increased focus on acquisition opportunities. Following the restructuring, we are an attractive business and growth is a clear part of our strategy. Consolidation is one of the themes expected to emerge in the gold sector over the next year or two and we want to be an active participant in that process,” concludes Andrew Wray.