On Thursday, Golden Star Resources, Ltd. (AMEX:GSS) reported its first quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Revolving Line of Credit
Cosmos Chiu – CIBC World Markets: I had a few questions here. I am just wondering, do you still have your revolving line of credit, that’s $31.5 million available to you? I am just noticing that in the past you would talk about it in your press release, but I didn’t seem to see that – I didn’t see the discussion?
Tom Mair – President and CEO: No, it expired. As we had nothing drawn on it, it expired on April 1.
Cosmos Chiu – CIBC World Markets: Are you looking to renegotiate another line of credit or do you think you need it or…?
Tom Mair – President and CEO: Yeah, we’re in discussions with Standard Chartered.
Cosmos Chiu – CIBC World Markets: If I can move on to a question on CapEx, I guess your previous guidance was for about $80 million in CapEx to be spent in 2012. You spent about $25 million in Q1 and you are looking to spend maybe another $70 million for the rest of 2012. Just wondering if I can get a little bit more color on the implied increase in the CapEx budget. I guess Sam kind of mentioned some of the things that you’re working on at Wassa in terms of preparing for the wet season, but I am just wondering if that’s all?
Tom Mair – President and CEO: Yeah, there’s been two major changes since our last update, Cosmos. The first is an increase in capital spending at the Prestea Underground of about $5 million and, of course, that’s based on the positive results we’ve had from the Preliminary Economic Assessment and what we see going forward. So, we do have some increased spending there. The second one is at the construction of a new tailings empowerment for Wassa, and that’s an increase of approximately $10 million for the year, and part of that increased capital cost and part of that is pulling – we’re making better progress than we had expected on the village resettlement required there; so we’ve picked up the rate of spending.
Betterment Waste Stripping Cost
Trevor Turnbull – Scotia Capital: I am trying to remember, I know you’ve discussed in the past a little bit about how you treat the betterment waste stripping cost. It seems that kind of made the difference between kind of the consensus estimates of a few cents EPS and kind of what you came in at. It’s not something that gets put into the cash cost but it does need to be expensed. Can you just remind us exactly how you treat that and if that’s something we should look for as an ongoing situation going forward?
Tom Mair – President and CEO: I’ll answer the second part first, Trevor, and then I’ll turn it over to Roger and he can explain the accounting. Q1 we did have some betterment stripping at Pampe and that’s pre-strip I should say and that’s probably the end of it at Pampe for this year. Roger, do you want to?
Roger Palmer – CFO: Yes. Trevor, we – under U.S. GAAP, we cannot capitalize betterment stripping; that’s an IFRS concept. But since so many of our competitors report on IFRS, when we calculate our cash operating costs per ounce, we do deduct that as if it was capitalized for calculating that cost.
Trevor Turnbull – Scotia Capital: So, to be in line with your peers, you don’t throw that into the cash cost calculation, is that right?
Tom Mair – President and CEO: Yes, it’s a credit to the cash cost calculation when we have betterment stripping?
Trevor Turnbull – Scotia Capital: Right. Okay. And…
Tom Mair – President and CEO: Not recorded in our accounting records, it’s recorded only in our calculation of cash costs per ounce.
Trevor Turnbull – Scotia Capital: And then just a slightly different question on the G&A, your G&A seems to be in line kind of with where it was about a year ago, but a bit higher than it was towards the end of last year. Is that a place that you might be able to find some savings or is G&A pretty much expected to be at these levels going forward?
Tom Mair – President and CEO: We have reduced the cash component of G&A, Trevor. And what you see in Q1 is the annual option grants and equity related compensation grants, which of course is a non-cash item.
Trevor Turnbull – Scotia Capital: Then, sorry one last question. I heard you’re talking about the Prestea Underground and we’ve seen the results of the study, but I might have missed it what’s the next step before you can make final decisions on moving ahead with capitalization or has that decision been made, I think I missed what you said?
Tom Mair – President and CEO: To be able to capitalize, well, there is a few things there. We are intending to spend about $5 million in plant and equipments there this year, which will be capitalizes, but the ongoing carrying maintenance costs and labor costs will not be capitalized until we have a reserve and we will not have a reserve until we complete a feasibility study, which we expect to do by the end of 2012.
Trevor Turnbull – Scotia Capital: So then the feasibility study would be at the point where the Company or the Board could pull the trigger and make a decision to go forward with the production decision once you have that in-hand?
Tom Mair – President and CEO: That’s correct, yes, that would be the next milestone is the feasibility study will – there is a concept in the PEA, but the feasibility study will also look at a lot of trade-offs, that’s sort of thing. So the development decision would not be made until we have – for the West Reef development will not be made until we have the full feasibility study in-hand.