New power line benefits Golden Star’s Wassa

Denver-based Golden Star Resources (GSC-T) expects to trim operating costs at its Wassa gold mine in Ghana by up to US$80 per oz. now that the operation has been hooked up to the national power grid.

At the end of 2004, Golden Star decided to manage power-line construction itself after firing the mine’s construction contractor for excessive delays. Golden Star built the 50-km, 161-kV power line in five months.

Commissioning of Wassa’s processing plant began in late 2004, with power supplied by diesel generators. While the used generators managed to keep parts of the plant running at rates exceeding design capacity, overall processing rates rang in at 90%. Golden Star attributes the shortfall to the intensive maintenance required by the used generators.

The national power grid is operated by the Volta River Authority, which will own and operate the new power line.

Golden Star plans to retain the existing diesel generators for standby purposes.

Situated near the company’s Bogoso-Prestea operation, the Wassa mine ramped up to around 9,300 tonnes per day, or around 93% of design capacity, by the end of March 2005; the mine was officially placed in commercial production at the beginning of April.

During the balance of the year, Golden Star will process heap-leach material left on the pads by the previous owner. The depleted ore pad will eventually be used as a tailings dam site. Looking ahead, open-pit mining will proceed with a mixture of surplus equipment from Bogoso-Prestea and leased equipment until a new, larger-capacity fleet arrives in the second and third quarters.

This year, plant feed will consist of 30-50% heap-leach material and 50-70% open-pit ore. Recoveries from the blended material are expected to average 87-90%.

Golden Star expects Wassa to produce 100,000-120,000 oz. gold at an average cash operating cost of US$280-300 per oz. in 2005. At full steam, in 2006, production is projected to be 140,000 oz. per year at US$200 apiece.

Golden Star holds a 90% equity interest in the Wassa and Bogoso-Prestea open-pit gold mines; it also holds 81% of the currently inactive Prestea underground mine.