Golden Star Resources (GSR), which has offices in Toronto and Accra, has announced the results of its Feasibility Study (FS) on the development of an underground mining operation (Wassa Underground) at its currently operating Wassa open-pit mine in Ghana. The FS estimates the Wassa mine (underground and open pit) will produce an average of 163 000 ounces of gold per annum over its production life with average cash operating costs of US$780 per ounce.
The FS indicates an IRR of 83 % for the Wassa mine at a US$1 200 per ounce gold price and an NPV, assuming a 5 % discount rate, of US$176 million. Pre-production incremental capital expenditure for Wassa Underground is estimated at US$39 million with first production from the underground project expected early 2016 and estimated to continue into 2024.
The main pit at the Wassa gold mine in Ghana (photo: Golden Star Resources).
"We are excited to announce this positive Feasibility Study on the combined existing Wassa open-pit operation and the Wassa Underground extension," comments Sam Coetzer, President and CEO of Golden Star. "The strong rate of return on investment suggested by the study validates the Preliminary Economic Assessment of Wassa Underground we published in 2014 and is a confirmation of the decisions made for the expenditures on drilling and the studies of the last few years.
"The Wassa Underground project has been underway since December 2014 when we purchased certain underground mining equipment and received the exploration decline permit. The Wassa Underground deposit remains open down plunge and has great potential to grow and the company plans to extend development. The Wassa mine will help transform Golden Star into a lower cost gold producer going forward."
The mine is in the Western Region of Ghana. It has a carbon-in-leach processing plant with a rated capacity of 2,7 Mt/a. Golden Star has been mining the Wassa open pits since commissioning the plant in 2005. Mining is currently at the Wassa open pit, which is within 500 m of the plant