Golden Star Resources Ltd. Earnings Call Nuggets: Gold Price Determination and Reserves Outlook

Golden Star Resources, Ltd. (AMEX:GSS) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.

Gold Price Determination

Rahul Paul – Canaccord Genuity: With respect to the impairment charges, what gold price and discount rate did you use to test the carrying value of Bogoso and Wassa?

Sam Coetzer – President and CEO: Yeah, I think we (hadn’t done) a rate cut, but Jeff may be you can reiterate those (notes) as well.

Jeff Swinoga – EVP and CFO: Sure. Yeah, we used a consensus of analysts to get our gold price determination and it was approximately around $1,400. The discount rate we used for Wassa and Bogoso was 8% and 9%.

Rahul Paul – Canaccord Genuity: Did you assume revised reserves based on your re-optimized pits at both operations?

Jeff Swinoga – EVP and CFO: Yeah, what we did was we used the best available information we had at the time and that included using the re-optimized pits. But, of course, there is no information coming in all the time, of course, like drilling over at Wassa that hasn’t been included. And I am not sure, Sam, if you want to?

Sam Coetzer – President and CEO: Yeah, I don’t think it should be rating on what the reserves it’s going to be. We took when the gold price dropped, Rahul, we had different pit shells to immediately react to the market as we saw it. And those pit shells we used for the testing. That does not include the recent drilling that we’ve seen at Wassa. We’re going to have to update those reserves going forward and also the reduction that we now see that we can attain from the cost structures both at Wassa and Bogoso. That will be going into our calculation when we determine reserves going forward. Moving into the IFRS, we had to take that information that we released and see if this is how we’re going to react to the gold price and basically those are the pit shells that we’ve used in the calculation. The trigger point document we have now is reviewing in more detail what we believe we can achieve through the different sources we have and also the cost reductions that we’ve seen from both sites moving forward. So, we will be redoing our results with the latest information that we see and also assessing what the floor is that we see in the market and how we will adjust Wassa going forward…

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