GOLDEN Star has downgraded its 2021 gold production forecast from its Wassa mine in Ghana by 13% following a delay in the commissioning of new milling equipment.
The company also said mining development at Wassa had been slower than anticipated owing to Covid-19 infections affecting crew availability.
“We believe that the impact of these challenges will be contained to 2021 and are continuing to assess options from both a production and a cost perspective to mitigate them further,” said Andrew Wray, CEO of Golden Star.
Production was now estimated to be between 145,000 and 155,000 ounces at Wassa compared to previous guidance of 165,000 to 175,000 oz. All-in sustaining cost guidance (AISC) would increase to $1,150 to $1,250/oz as a result of the lower production. AISC previously was put at $1,000 to $1,075/oz.
Commenting on staffing levels, Wray said there had been a capacity increase of over 30% over the past two years so the disruptions currently as a result of Covid-19 “would not be a long-term issue”.
Golden Star said in May that it had extended its hedging adding another 84,375 ounces of gold to its programme in order to support the conversion of a fixed loan to a three-year revolving credit facility (RCF).
All in all, the company will have a total of 160,938 oz sold forward, with 10,938 oz maturing on June 30. The remainder of the hedge matures at a rate of 12,500 oz a quarter from September 30 to the end-June in 2024.
The hedging program now covers 25% to 30% of the company’s forecast production during the current term of the RCF. All hedges have a floor of $1,600 per oz and an average ceiling of $2,171/oz in 2021 and $2,179/oz in 2022 and a flat ceiling of $2,115/oz in 2023 and 2024, said Golden Star.
