GOLDEN Star has extended its hedging programme adding 12,600 ounces to its existing forward sales plan in order to protect revenue for its Ghana mine, Prestea.
The company now has gold price protection in place for 45,933 oz at an average floor price of $1,427/oz and an average ceiling price of $1,816/oz. The initial period of the hedge was from August 2019 for a year, but it has now been extended to the end of 2020.
In terms of the hedge extension, Golden Star was entered into zero cost collars on an additional 12,600 oz with a floor price of $1,500/oz and a ceiling of $1,992/oz. The additional positions will mature at a rate of 4,200 oz per month from October to December 2020, it said.
“Extension of the gold price protection program to the end of 2020 has secured an attractive floor and ceiling price for the period,” said Andrew Wray, CEO of Golden Star. “These hedges cover the estimated production for Prestea to the end of 2020, a period during which we expect to continue to execute on our plans to improve the operational performance of the asset,” he said.
Earlier this month, Golden Star impaired the value of Prestea some $56.8m following a restructuring of the operation which is aimed at returning it to positive cash generation.
The write-down resulted in a net loss of $78m for Golden Star’s 2019 financial year, deepening the $24.1m loss the firm recorded in the previous year. The company has some $53.4m in cash and after taking into account total debt of $106.3m, net debt of $53.4m.
