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TRANSCRIPT
CREATING A LEADING AFRICAN GOLD PRODUCER
Q2 2020 Results Conference Call | July 2020
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SAFE HARBOUR: Some statements contained in this presentation are forward-looking statements orforward-looking information (collectively, “forward-looking statements”) within the meaning of theUnited States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws,respectively. Investors are cautioned that forward-looking statements are inherently uncertain andinvolve risks and uncertainties that could cause actual results to differ materially. Such statementsinclude comments regarding: gold production, cash operating costs, AISC and capital expenditureestimates and guidance for 2020 on a consolidated and per mine basis, the Company's achievement ofexpected range of consolidated gold production for 2020; the accuracy of the Company's updatedmineral reserve and resource models; the expected allocation of the Company's capital expenditures;the ability to expand the Company and its production profile through the exploration and developmentof its existing mines and through strategic value accretive acquisitions; the intended expansion ofproduction and reduction of costs at both mines; the ability of the Company to optimize its Presteamining operations; the anticipated improvement in development productivity as a result of theoptimization of the Prestea operations; the ability to achieve cash break-even at Prestea in 2020; thepotential impact of the COVID-19 pandemic on the Company's operations and the ability to mitigatesuch impact; the ability to expand the mineral reserves of the Company through further drilling; theability of the Company to improve the geographical diversification of its portfolio; expected grade andmining rates for 2020; the ability to increase capacity at Wassa; completion and commissioning of thepaste fill plant project and timing thereof; timing to complete the paste fill plant project; improvedrecovery expected to result from the paste fill plant project; installation of the electrical substation andupgrade of the underground electrical infrastructure, and the timing thereof; the resumption ofexploration activities and the timing thereof; the development of the southern extensions of the Wassaresource and the timing thereof; the ability to satisfy the conditions to complete the transaction for thesale of Bogoso-Prestea, including ministerial approval in Ghana, the restructuring of the streamingagreement with Royal Gold and the Macquarie credit facility; the completion of the sale of Bogoso-Prestea and the timing thereof; Future Global Resources’ ability to deliver the Bogoso Sulfide Project;the receipt by Golden Star of the deferred payments and the timing thereof; and the receipt by GoldenStar of the contingent payment and the potential amount thereof. Forward-looking statements aresubject to known and unknown risks, uncertainties and other important factors that may cause theactual results, performance or achievements of Golden Star to be materially different from thoseexpressed or implied by such forward-looking information. There can be no assurance that futuredevelopments affecting the Company will be those anticipated by management. Please refer to thediscussion of these and other factors in Management's Discussion and Analysis of financial conditionsand results of operations for the year ended December 31, 2019, the three months ended June 30,2020 and in our annual information form for the year ended December 31, 2019 as filed on SEDAR atwww.sedar.com. The forecasts contained in this presentation constitute management's currentestimates, as of the date of this presentation, with respect to the matters covered therein. We expectthat these estimates will change as new information is received and that actual results will vary fromthese estimates, possibly by material amounts. While we may elect to update these estimates at anytime, we do not undertake to update any estimate at any particular time or in response to anyparticular event. Investors and others should not assume that any forecasts in this presentationrepresent management's estimate as of any date other than the date of this presentation.
In this presentation, we use the terms "cash operating cost per ounce", "All-In Sustaining Cost perounce" and "AISC per ounce". These terms should be considered as Non-GAAP Financial Measures asdefined in applicable Canadian and United States securities laws and should not be considered inisolation or as a substitute for measures of performance prepared in accordance with InternationalFinancial Reporting Standards ("IFRS"). "Cash operating cost per ounce" for a period is equal to thecost of sales excluding depreciation and amortization for the period less royalties, the cash componentof metals inventory net realizable value adjustments and severance charges divided by the number of
ounces of gold sold (excluding pre-commercial production ounces) during the period. ,"All-In SustainingCosts per ounce" commences with cash operating costs and then adds sustaining capital expenditures,corporate general and administrative costs, mine site exploratory drilling and greenfield evaluationcosts and environmental rehabilitation costs, divided by the number of ounces of gold sold (excludingpre-commercial production ounces) during the period. This measure seeks to represent the total costsof producing gold from operations. These measures are not representative of all cash expenditures asthey do not include income tax payments or interest costs. Changes in numerous factors including, butnot limited to, mining rates, milling rates, gold grade, gold recovery, and the costs of labor,consumables and mine site general and administrative activities can cause these measures to increaseor decrease. We believe that these measures are the same or similar to the measures of other goldmining companies but may not be comparable to similarly totaled measures in every instance. Pleasesee our "Management's Discussion and Analysis of Financial Condition and Results of Operations for theyear ended December 31, 2019" for a reconciliation of these Non-GAAP measures to the nearest IFRSmeasure.
INFORMATION: The information contained in this presentation has been obtained by Golden Star fromits own records and from other sources deemed reliable, however no representation or warranty ismade as to its accuracy or completeness. The mineral reserve and mineral resource estimates havebeen compiled by the Company's technical personnel in accordance with definitions and guidelines setout in the Definition Standards for Mineral Resources and Mineral Reserves adopted by the CanadianInstitute of Mining, Metallurgy, and Petroleum and as required by Canada's National Instrument 43-101– Standards of Disclosure for Mineral Projects ("NI 43-101"). . All mineral resources are reportedinclusive of mineral reserves. Mineral resources which are not mineral reserves do not havedemonstrated economic viability. Mineral reserve estimates reflect the Company's reasonableexpectation that all necessary permits and approvals will be obtained and maintained. Mining dilutionand mining recovery vary by deposit and have been applied in estimating the mineral reserves.Additional scientific and technical information relating to the mineral properties referenced in this newsrelease are contained in the following current technical reports for those properties available atwww.sedar.com: (i) Wassa - "NI 43-101 Technical Report on Resources and Reserves, Golden StarResources, Wassa Gold Mine, Ghana" effective December 31, 2018; (ii) Bogoso/Prestea - "NI 43-101Technical Report on Resources and Reserves, Golden Star Resources, Bogoso/Prestea Gold Mine,Ghana" effective date December 31, 2017.
CAUTIONARY NOTE TO US INVESTORS: This presentation uses the terms "measured mineralresources“, "indicated mineral resources“ and "inferred mineral resources.” The Company advises USinvestors that while these terms are recognized and required by NI 43-101, the US Securities andExchange Commission ("SEC") does not recognize them. Also, although disclosure of contained ouncesis permitted under Canadian regulations, the SEC generally requires mineral resource information to bereported as in-place tonnage and grade. US Investors are cautioned not to assume that any part or allof the mineral deposits in the measured and indicated categories will ever be converted into mineralreserves. US investors should also note that "Inferred mineral resources" have a great amount ofuncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. Itcannot be assumed that all or any part of inferred mineral resources will ever be upgraded to a highercategory. In accordance with Canadian rules, estimates of inferred mineral resources cannot form thebasis of feasibility or other economic studies. US investors are cautioned not to assume that any part orall of the inferred mineral resource exists or is economically or legally mineable.
CURRENCY: All monetary amounts refer to United States dollars unless otherwise indicated.
DISCLAIMER
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PARTICIPATING MANAGEMENT
Andrew Wray
Chief Executive Officer
Paul Thomson
Chief Financial Officer
Graham Crew
Chief Operating Officer
Peter Spora
Head of Growth & Exploration
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Long TermGrowth
Plant capacity7,800tpd
Wassa & Prestea | Two operating gold mines in Ghana
Short TermGrowth
Targeting 5,000tpd mining rate
Transformative 2020
Target cash break-even by the end of
2020
Creating shared value
99% Ghana workforce is Ghanaian
54% from host communitiesLocal procurement to leverage
impact
GOLDEN STAR - Overview
Wassa
Preste
aS
usta
inab
ilit
y
Exploration
Exploring the wider potential of the Wassa
complex
Creating vibrant economies
Industry leading agri-businessPoverty alleviation
Focussed on women & youthSustainable post-mining land-
uses
Optimization
Improving mining rates and reducing dilution in
alimak mining
Investment
Developing 17 LevelIntroducing long hole
open stoping
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Adj. EBITDA1
Q2 2020 $33.7mQ1 2020 $17.2m
Operating Cash Flow2
Q2 2020 $27.1mQ1 2020 $13.4m
Cash opex/oz1
Q2 2020 $827/ozQ1 2020 $860/oz
AISC/oz1
Q2 2020 $1,186/ozQ1 2020 $1,201/oz
Production
Q2 2020 50.6kozQ1 2020 50.0koz
Gold Sold
Q2 2020 52.7kozQ1 2020 45.6koz
Q2 2020 – Performance Summary & Key Events
1. See note on slide 2 regarding Non-GAAP Financial Measures.2. Operating cash flow before working capital changes
Q2 2020 Key Events
COVID-19
▪ Continue to proactively managing the risks associated with the pandemic
▪ Prestea – the number of suspected cases and resulting isolation of contacts
created personnel shortages in the underground operation
▪ Wassa – relatively low number of cases to date, the operating impact was
limited during Q2 2020
Wassa
▪ Underground mining rates exceeded 4,400 tonnes per day through Q2 2020
▪ Underground grades rose to 3.5g/t, 18% higher than Q1 2020
▪ Production supplemented by processing of low grade stockpiles
Prestea
▪ Mining to be introduced on 17 Level with new long hole open stoping mining
methodology. Through personnel shortages these activities were prioritized to
maintain target of delivering the first stoping ore in Q4 2020
▪ Q2 2020 marked by reliance on a limited number of stopes on 24 Level,
dilution and ore losses in these stopes had a significant impact on production
Sustainability
▪ All injury frequency rate (AIFR) of 6.61 and total recordable injury frequency
rate (TRIFR) of 1.30 during Q2 2020 delivered improvement on Q1 2020 and
the 2019 full year results
Cash
Q2 2020 $45.1mQ1 2020 $41.9m
Net Debt
Q2 2020 $57.5mQ1 2020 $65.4m
Production And Sales
Unit Costs
Financial Performance
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Definitive Agreement for the sale of Bogoso-Prestea to Future Global Resources (“FGR”)
BOGOSO-PRESTEA SALE AGREEMENT– consideration of up to $95M
Transaction highlights:
▪ Signing of definitive agreement for the purchase by FGR of Golden Star’s 90% interest in Bogoso-Prestea (on cash free, debt free and working capital free basis)
▪ Purchase price of $55m payable partly at closing and in staged payments
▪ Staged payments allow FGR to focus investment capacity on Bogoso-Prestea while providing Golden Star with exposure to its long-term growth potential
▪ Purchase price includes a separate contingent component of up to $40 million conditional upon FGR proceeding with the Bogoso sulfide project
▪ The sale strengthens Golden Star’s balance sheet and allows the Company to accelerate the growth and development of the large resource base at Wassa
▪ FGR was established in 2020 to leverage the operating credentials of its board, executive team and shareholders on the African continent
Definitive Agreement
Signed onJuly 26,
2020
Conditions PrecedentInclude:• Ministerial approval in
Ghana• Royal Gold stream
restructuring• Lender consent
Transaction Completion
Expected to occur by September 30,
2020
Transaction timeline
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$55m consideration for cash proceeds of c.$30m
BOGOSO-PRESTEA SALE AGREEMENT– consideration of up to $95M
≤$1,400/oz
$20m
$30m payable on completion
Calculated on a cash, debt and working capital free basis
Cash proceeds of $5mFGR to assume c.$25m of negative working
capital
$10m cash
Payable July 31, 2021
$20-40m – Bogoso sulfide contingent consideration payable in two tranches
Tranche one
50% of $20-40m consideration payable on “Decision to Proceed” 1 or extraction of 5% of sulfide resource
Tranche two
Balance of contingent consideration payable on first anniversary of
achieving commercial production or declaration of extraction of 5% of
sulfide resource
>$1,400 - $1,700/oz
$30m
>$1,700/oz
$40m
Average spot price for 90 days preceding sulfides “Decision to Proceed”1 defines the value of contingent payment
$15m cash
Payable July 31, 2023
1. “Decision to Proceed”, The trigger point for the contingent payment is either (i) FGR’s formal decision to proceed with the Bogoso Sulfide Project, or (ii) the extraction of an aggregate of 5% of the sulfide resources as stated by Golden Star at the end of 2019, being 1.76 million ounces of measured and indicated resources and 0.07 million ounces of inferred resource
Sulfides Contingent Consideration
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OUTLOOK – Tightening Production and Cost Guidance Range
1. See note on slide 2 regarding Non-GAAP Financial Measures.
Performance Versus GuidanceQuarter EndedYear to
DateGuidance
June 2020
March 2020
H1 2020 Updated Original
Production and cost highlights
Production – Wassa koz 44.8 40.3 85.1 165-170 155-165
Production – Prestea koz 5.9 9.6 15.5 30-35 40-45
Total gold produced koz 50.6 50.0 100.6 195-205 195-210
Cash operating cost – Wassa1 $/oz 633 632 632 620-660 620-660
Cash operating cost – Prestea1 $/oz 2,292 1,778 1,986 1,800-2,000 1,400-1,550
Cash operating cost – Consolidated1 $/oz 827 860 842 810-850 790-850
All-in sustaining cost – Wassa1 $/oz 960 941 952 930-990 930-990
All-in sustaining cost – Prestea1 $/oz 2,890 2,248 2,508 2,200-2,600 1,650-1,850
All-in sustaining cost – Consolidated1 $/oz 1,186 1,201 1,193 1,100-1,180 1,080-1,180
Capital Expenditure
Sustaining capital – Wassa $m 6.5 3.6 10.1 23-25 23-25
Sustaining capital - Prestea $m 1.9 2.3 4.2 6.5-7.5 6.5-7.5
Sustaining capital - Corporate $m 0.1 0.3 0.4 - -
Sustaining capital – Consolidated $m 8.5 6.2 14.7 29.5-32.5 29.5-32.5
Development capital – Wassa $m 5.2 5.8 11.0 19-21 19-21
Development capital – Prestea $m 0.3 0.4 0.7 2.5-3 2.5-3
Development capital – Exploration $m 0.1 0.2 0.3 3.5 3.5
Development capital – Consolidated $m 5.6 6.4 12.0 25-27.5 25-27.5
Total capital - Consolidated $m 14.1 12.6 26.7 55-60 55-60
Production
Wassa H1 2020 performance annualizes above the mine level guidance range due to:
• Higher than budgeted mining rates of 4,420tpd in Q2 2020
• Improved underground grades in Q2 2020
• The processing of low grade stockpiles
Prestea H1 2020 performance is tracking below the annualized run rate required to deliver the mine level guidance for 2020 due to:
• Dilution and ore losses
• Low ore availability
• Impact of COVID-19 contact tracing and isolation protocols.
Costs
H1 2020 AISC performance slightly exceeded the top of the guidance range due to:
• Higher than budgeted Prestea AISC
• Increase in royalties due to higher realized gold price ($10/oz)
• Processing of low grade stockpiles at Wassa ($15/oz AISC impact for Wassa and $10/oz impact on a consolidated basis)
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CORPORATE RESPONSIBILITY & HEALTH AND SAFETY
LEADING PRACTICESafety & Environment▪ Implementing Health and Safety strategy and 3-year plan▪ YTD improvement in All Injury Frequency Rate over 2019▪ 100% compliance with air, noise, vibration and water
requirements▪ No reportable environmental incidents or significant spills
PROJECTS & INITIATIVES
Malaria ▪ Malaria case rates in line with targets▪ Lowest level in history of the program and an order of magnitude better than background
rates
RECOGNITION▪ Featured in the UN Global Compact Canada Sustainable
Development Goals Leading Practice Guide for SDG 1, 3 & 8 ▪ Five successive Ghana Mining Industry Awards for leading social
initiatives
Tailings Rehabilitation – Oil Palm plantation▪ Rehabilitation of historical tailings facilities with commercial oil palm plantation▪ Creates a sustainable alternative livelihood that currently supports over 700 families
Local procurement ▪ Supporting local supply chains by sourcing services and supplies
World Gold Council Member▪ Golden Star aligns its approach to the World Gold Council’s 10 Responsible Gold
Mining Principles
DIVERSITY & LOCAL REPRESENTATION▪ 99% Ghanaian workforce, +50% from the host communities▪ Increasing female representation in the workforce to +20% over the
next five years
RECENT NEWS
Commitment to responsible gold mining principles ▪ Commitment to adopt the World
Gold Council’s Responsible Gold Mining Principles
Focus on Diversity▪ Summer internship
positions advertised with Women in Mining
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COVID-19 – Proactive Management Controls
Corporate office, Planning and Preparedness
▪ Epidemic and Pandemic Management Plans updated to reflect COVID-19 evolution and knowledge▪ Daily situation monitoring with support from International SOS▪ Corporate team continues to primarily work from home▪ Ghana borders remain closed with restrictions eased for mining expatriate workforce
Business continuity
Gold sales▪ Final shipment of Q1 2020 was delayed, since then gold export and sales have continued without
interruption using alternative export arrangements made due to reduced commercial flights▪ The inventory build relating to the alteration of sales logistics is expected to be fully unwound
following the resumption of commercial flights.
Supply chain▪ Medical supply chains remain intact and additional stock obtained▪ Supply chains for key consumables (cyanide, lime, grinding media, fuel and lubricants) remain
intact▪ Alternative suppliers have been identified for essential supply chains
Proactive Controls and Procedure
Wassa & Prestea Mine Sites
▪ Extensive education of workforce and host communities▪ Enhanced screening protocols implemented at operations▪ Implemented in-house COVID-19 testing capacity▪ Enhanced hygiene and sanitation protocols implemented▪ Medical preparedness activities▪ Contribution to Ghana Government’s COVID-19 response▪ Support to host community prevention and preparation▪ Private donor fund-raising to support community efforts▪ Supporting local SMEs to produce FDA approved face masks
COVID-19 Status at the Operations
COVID-19 cases identified in our workforce
▪ A small number of confirmed cases in our workforce▪ Some disruption at Prestea during the quarter given the number
of workers affected by contact tracing▪ Most cases asymptomatic or display mild symptoms
Enhanced screening protocols support effective protection of personnel and operations
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WASSA FLAGSHIP ASSET
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▪ Processing plant capacity 7,800tpd - only ~50-60% utilised▪ Additional underground mining infrastructure would be
required to maximise utilisation of the plant▪ The southern extensions could be accessed via a decline or
a shaft▪ The on-mine exploration program could defer the need for
major infrastructure (subject to success)
▪ Decline capacity 5,000tpd▪ Implies 20-25% of additional production capacity once fully
utilised▪ Production should therefore rise accordingly▪ The incremental production expected to have a positive
impact on unit costs▪ Mining fleet required to to be expanded over time. 60
tonne trucks, additional loaders & jumbo
▪ Mining rates expected to exceed 4,000tpd in 2020▪ 2020 production guidance of 155-165koz revised to 165-
170koz▪ Paste fill plant currently being constructed - due to be
commissioned in Q4 2020
WASSA – Available Infrastructure Capacity Creates Growth Opportunity
Current Operations – A Strong Foundation
Growth Phase One - Utilisation of decline capacity
Growth Phase Two - Utilisation of plant capacity
500 m
N S
Blocks > 1.8 g/t
2019 YE Reserve
Mined Inferred Resource
Extensions
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Project Timeline▪ Paste plant construction started in H2 2019▪ Project at 84% completion at June 30, 2020▪ Commissioning expected in Q4 2020
Budget▪ Capital cost: $23m ($13.5m in 2020)▪ Operating cost: $5-7 per tonne
Investment rationale▪ Increase recovery of ore as a primary and secondary stope will be mined, we currently
mine larger primary stopes, leaving support pillars▪ Can return to certain mining areas to recover historical pillars▪ Access more ore per development metre▪ Supports increased mining rates
WASSA PROJECTS UPDATE – Investing In The Longer-term Potential
Paste Fill Plant
Project Timeline▪ The civils work for the installation of the
electrical substation has been completed.Commissioning is expected to be completed inconjunction with the completion of the paste fillproject.
Investment rationale▪ Electrical infrastructure upgrade to support the
mine plan for the next five years▪ Work to upgrade the underground electrical
infrastructure is progressing alongside thesubstation project
Electrical Upgrade
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WASSA PRODUCTION SCORECARD – Performance Tracking
Mining Rate (ore tpd) – Above 4,000tpd for four quarters
2,620
3,410 3,360
3,6303,470
4,420
4,090
4,3204,420
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
5.0
3.7 3.8
4.3
3.5
2.8
3.8
2.9
3.5
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
96.1 95.8 95.4 95.6 95.9 95.4 95.4 95.0 95.1
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Grade (g/t) – Underground grades increased in Q2 2020
Recovery (%) – Stable while processing stockpiles Production (koz) – Robust performance driven by ore volumes
38.5 38.1 37.6
42.9
37.4
34.6
41.3
40.3
44.8
38.2 38.337.2
43.0
37.7
33.9
41.9
36.5
46.5
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Gold produced (koz) Gold sold (koz)
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WASSA COST SCORECARD – Performance Tracking
UG Mining Costs ($/t ore mined) – Benefiting from higher
volumes
39
32 32
34
39
32
34
32 31
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
22
19
21
24
26
21
23
20
17
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
610 613 614552
655
732
615 632 633
994
805
933
760
941
1,061
959 941 960
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Cash Operating Cost (US$/oz) AISC (US$/oz)
4.4 4.0 3.9
3.7 3.8 4.0
4.3 4.2
4.7
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Processing Costs ($/t) – Benefiting from higher ore volumes
Site G&A Cost ($m) – Stable despite labour cost inflation and
Q2 2020 adversely impacted by higher gold transportation costs
Cash Opex & AISC1 ($/oz) – Stable cost performance enabling
margin increase in current gold price environment
1. See note on slide 2 regarding Non-GAAP Financial Measures.
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PRESTEAOPERATIONAL CHANGE UNDERWAY
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PRESTEA – Optimising Alimak And Introducing Long Hole Open Stoping
17L
24L
21L
17 to 21L Decline
vent raise to 17L
24L Fwd vent loop
N
24L-21L ore pass
24L north SLOS Long alimaks
Short alimaks
S19 S22
N1
S13
N2N3
S16
17L LHOS
Prestea Underground - Planned mining areas to Q4 2021 Q2 2020 progress update
24 Level – Existing Alimak operation
▪ Mining from S15 and S16 in Q2 2020▪ Volumes constrained by ore availability
and personnel shortages related toCOVID-19
▪ The first optimised stopes (S20 andN1/N2) are currently being developed andexpected to transition into production laterin 2020
17 Level – Introducing long hole openstoping
▪ Ore drives being developed▪ Ventilation and maintenance workshop are
nearing completion▪ There has been COVID-19 related delays
to certain drilling and mining equipmentwhich may result in a delay to stopingactivities
▪ The first stope is planned to come onlinein Q4 2020
Improvement initiatives – 2020 plan
Reduced mining execution risk
Reduced dilution
Increase flexibility and ore volumes
Faster Alimak stope cycle time
Targeted benefits of operational change
In Green, stopes to be mined in 2020In Blue/purple, stopes to be mined in 2021
24 Level – Operating changes
▪ Reduce Alimak stope height▪ Use of a narrower Alimak platform
to target reduced dilution
17 Level – New mining level
▪ Establish long hole stope mining methodology on a new operating level
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PRESTEA PRODUCTION SCORECARD – Performance Tracking
Mining Rate (ore tpd) – UG mining rates constrained by ore
availability
501 731 351
497
1,740
1,940 1,222 1,146
754
345
376
322
430
408
457
374 354
380
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Mining rate OP (Ore tpd) Mining rate UG (Ore tpd)
2.3
1.1 1.0 1.3 1.6 1.6 1.5 1.5 1.4
13.6
10.4
8.6
6.3
4.15.0
6.96.1
4.7
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
OP Grade (g/t) UG Grade (g/t)
88.0
84.084.9
87.4
83.2
86.986.0 86.0
85.4
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Grade (g/t) – Underground grade below reserve grade due to
dilution
Recovery (%) – Consistent with recent performanceProduction (koz) – Ore volumes and dilution control key to
increasing production
22.7
19.0
11.3
10.411.1
14.8
11.3
9.6
5.9
22.3
19.4
11.210.5 11.0
14.7
11.5
9.1
6.2
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Gold produced (koz) Gold sold (koz)
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PRESTEA COST SCORECARD – Performance Tracking
UG Mining Costs ($/t ore mined) – Anticipated to reduce as
ore volumes increase
282
232
284
204 206
164
211
241 226
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
22 23
34 36
30 28
44
36
55
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
1,149 1,110
1,8671,463
1,677
1,249
1,6161,778
2,292
1,293
1,367
2,164
1,865
2,1431,630
2,202 2,248
2,890
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Cash Operating Cost (US$/oz) AISC (US$/oz)
3.5
3.0
3.5
2.9 3.0
2.9
3.2 3.1
2.9
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Processing Costs ($/t) – Q2 2020 impacted by cessation of
open pits operations in May
Site G&A Cost ($m) – Q2 2020 trending below recent averageCash Opex & AISC1 ($/oz) – Cost performance adversely
impacted by lower production volumes
1. See note on slide 2 regarding Non-GAAP Financial Measures.
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FINANCIAL RESULTS
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Q2 2020 CONSOLIDATED FINANCIAL RESULTS
▪ Adjusted EBITDA increased by 283% on Q2 19 and 96% on Q1 20primarily due to the impact of higher revenues in combination withreduced operating costs as reflected in higher operating marginsand furthermore lower share based costs and exploration expenses
▪ Adjusted income/(loss) per share turned positive in Q2 2020driven by primarily increased gold revenues and lower operatingcosts, in part offset by the higher tax expense at Wassa
▪ Gold revenues benefited from higher realized prices (28% on Q2 19 and10% on Q1 20) and higher gold sales (8% on Q2 19 and 16% on Q1 20)
▪ Gold sales exceeded production by 2.1koz due to the roll over impact ofprior quarter production only sold in Q2 due to the shipment schedulingchange following COVID-19 restrictions - as at Q2 2020 finished goldinventory totalled 2.9koz
▪ AISC was 2% lower than Q2 2019 and 1% lower than Q1 2020 primarilydue to volumes gains at Wassa and energy savings which were in part offsetby higher royalties, cost impact of LG stockpile processing at Wassa, lowerPrestea volumes and higher gold transport costs
1. Year on Year (“YoY”), Quarter on Quarter (“QoQ”)2. See note on slide 2 regarding Non-GAAP Financial Measures.
Q2 2020 Q2 2019 YoY1 % change Q1 2020 QoQ1 % change
Total gold produced koz 50.6 48.4 5% 50.0 1%
Total gold sold koz 52.7 48.7 8% 45.6 16%
All-in Sustaining Costs per Ounce Sold $/oz 1,186 1,212 (2%) 1,201 (1%)
Average realized gold price $/oz 1,626 1,270 28% 1,477 10%
Gold revenues $m 85.6 61.9 38% 67.4 27%
EBITDA2 $m 33.4 4.7 611% 18.5 81%
Loss/(gain) on fair value of financial instruments $m 1.8 (0.4) (4.1)
Other (income)/expense $m (1.4) 4.5 2.7
Impairment charges $m - - -
Adj. EBITDA2 $m 33.7 8.8 283% 17.2 96%
Adj. income/(loss) per share 2 $/share 0.09 (0.05) (0.01)
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NET CASH FLOW BRIDGE – Cash Movement And Financial Position
Total cash inflow $3.2m in Q2 2020
▪ Increase driven by higher realized gold prices andadditional ounces sold at Wassa, resulting in recordcash operating margins
▪ Operating cashflow (before working capitalmovements) of $27.1m
▪ Total capital expenditure of $14.6m
Working capital outflow of $6.9m and $2.7m inflow in capex payables
▪ $1.4m decrease in inventory largely driven by afinished gold sales in excess of production
▪ AP outflow of $4.6m cash adjusted has normalizedthe balance sheet position
▪ Total Prepaids and Other outflow of $2.1m relatingto D&O insurance
▪ Income tax payment of $2m for Wassa
Corporate and other costs
▪ A reduction in non-recurring charges and corporatecapital spend resulted in a $1.1m reduction incorporate costs on Q1 2020
Q2 2020 Q1 2020 Q2 2019
Cash position at end of period $m 45.1 41.9 66.2
Macquarie credit facility $m 52.8 57.7 -
August 2021 Convertible Debentures $m 48.3 47.6 45.8
Finance leases $m 1.5 2.0 1.4
Ecobank facilities $m - - 32.9
Vendor agreements $m - - 17.1
Gross debt $m 102.6 107.3 97.2
Net Debt $m 57.5 65.4 31.0
Cash and net debt
▪ Cash increased by $3.2m during Q2
▪ Adjusted cash and net debt position for unsoldfinished gold on hand of $48.9m and $53.7mrespectively
▪ Macquarie principal repayment of $5m in June 2020with the next $5.0m due in September
▪ Hedging - realized loss of $0.1m on the call optionfor June 2020 gold sales of 4,167 ounces whichwere sold at $1,775/oz, $25/oz over the hedgedprice of $1,750/oz
1. See note on slide 2 regarding Non-GAAP Financial Measures.
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EXPLORATION & GEOLOGY
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EXPLORATION – Redefining The Exploration Strategy
EXPLORATION STRATEGY
▪ Wassa mineralisation now extendsover 2.5km along strike & 1.5kmdepth and still open
▪ Wassa focus now on infill drilling ofInferred resource from underground
▪ Regional programs to focus on targetsalong the existing haul road to thesouth
▪ Identifying attractive land packagesfor acquisition
EXPLORATION GUIDANCE
$6.2m
Exploration budget
$3.5m capitalised & $2.7m expensed
Exploration Objectives – 2020
Mineral Reserve and Resource update – Completed Q1 2020
Drill Wassa in-mine targets – Re-commence Q3 2020
Regional targeting exercises – Commenced Q2 2020
Regional field programmes including drilling – Commence Q3 2020
Exploration Focus – Shifting To Near Term Impact
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EXPLORATION – Improving Understanding Of The Southern Extensions
Improving geological understanding
▪ Targeting further improvements of the geologicalconfidence and understanding of the southern extension atWassa
▪ Ongoing investment to increase drill density todetermine optimal stope sequencing
▪ Target 12 months of definition drilling ahead of 2021mining
500 m
N S
Blocks > 1.8 g/t
2019 YE Reserve
Mined Inferred Resource
Extensions
7Moz Inferred Resource – Infill Drilling
On Mine Exploration – Prioritizing Drill Targets
Testing for mineralization around current miningareas
▪ Two holes drilled into footwall during Q1 2020▪ Intersected projections of the mineralized structures with
significant alteration▪ Generally showed anomalous gold values, insufficient value
to be economically viable▪ Will assess whether further drilling is warranted later this
year▪ H2 2020 drilling to test up-dip extensions to B-Shoot near
to existing underground infrastructure
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EXPLORATION – Significant near-mine potential within 5km of Wassa
Numerous multi-kilometre scale gold-soil anomalies
▪ Targeting discovery of new gold deposits within 5-10km of the largeWassa gold resource
▪ The “Wassa Corridor” (Wassa-242, Anomaly 1 & Anomaly 4prospects) is a series of almost continuous gold-in-soil anomaliesextending for ~9km and containing the very large Wassa resource
▪ The “SAK Corridor” (SAK1-3, Anomaly 2 & Anomaly 3 prospects) is asecond parallel gold-in-soil geochemical trend occurring to the westof the Wassa Corridor and extending over 8km
▪ Limited drill testing has occurred across gold-in-soil anomaliesoutside of the Wassa-242 and SAK1-3 prospect areas and has beenlimited almost exclusively to <50 metres vertical depth
▪ Despite the limited drilling, RAB drilling results on a number oftargets have identified bedrock gold zones requiring additionaldrilling
▪ Drilling programs are being designed to test undrilled surface goldanomalies as well as follow-up positive results from historic shallowRAB/RC drilling
Wassa Near-Mine Targets – Delineate new discoveries
Wassa-242SAK 1-3
Anomaly 1
Anomaly 2
Anomaly 3
Anomaly 4
Interpreted gold soil
anomaly
2.5km
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85 km long haul roadWassa to Father Brown
WASSA REGIONAL EXPLORATION – Targets Along Existing Haul Road
Wassa plantCapacity: 7,800 tpd
Current utilization: ~4,000 tpd
ChichiwelliIndicated Resources: 52 koz (850 kt at 1.9 g/t)
BensoIndicated Resources: 112 koz (1.2 Mt at 2.9g/t)
Under pit intercept 15.5 m at 6.2 g/t
Father BrownIndicated Resources: 238 koz (982 kt at 7.5 g/t)
Abada & ApotunsoHigh grade quartz vein & shear
Intercepts include 8m at 5.48g/t
Manso North (Angu)3-5km long gold anomaly (>100ppb)
Historical testing – Auger drilling
Regional prospectivity+30 gold targets identified
Testing for new regional discoveries
▪ Regional exploration across Chichiwelli, Benso,HBB and Abura project areas has identifiedmore than 30 targets for field follow-up
▪ Wassa operation is linked to Father Brown byan 85km long, well-maintained haul road thatwas used to truck ore from several open pitsmined in the past
▪ The company is developing a strategy tosystematically delineate and test the bestregional targets to potentially identify eithersatellite ore feed to Wassa or a possible stand-alone satellite operation based around anothergold camp
▪ Six targets have been selected for infill augerdrilling and first pass Aircore or reversecirculation drilling in H2 2020
Existing infrastructure
Ta
rg
ets
Regional Targets across 90km Strike Length
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SUMMARY – Q2 2020 Highlights, 2020 Guidance and Catalysts
1. See note on slide 2 regarding Non-GAAP Financial Measures.
Q2 2020
Highlights
H2 2020
Catalysts
▪ Wassa | Underground mining rates have exceeded 4,000tpd for four consecutive quarters. The underground grade stabilized near reserve grade in Q2 2020 (18% higher than achieved in Q1 2020)
▪ Cash generation | The cash position increased in Q2 2020, after a $5m principal repayment of the Macquarie term loan and a reduction in the accounts payable balance. Adjusted cash and net debt position for unsold finished gold on hand of $48.9m and $53.7m respectively
▪ Financial performance | EBITDA and operating cash flow were approximately double Q1 2020 performance
▪ Bogoso-Prestea definitive sale agreement | Sale of Bogoso-Prestea expected to close on September 30, 2020
▪ Investing in infrastructure | Paste fill plant and electrical upgrades due to be commissioned in H2 2020
▪ Wassa exploration & growth | Exploration activities to resume in August 2020. Plan to announce longer term strategy of the development of the southern extensions of Wassa resource by year end
WASSA PRESTEA
GROUP GUIDANCE - 2020
165-170koz Production Guidance
$620-660/ozCash cost
$930-990/ozAISC1
$42-46mCapex Guidance
30-35koz Production Guidance
$1,800-2,000/ozCash cost
$2,200-2,600/ozAISC1
$9-10.5mCapex Guidance
195-205koz Production Guidance
$810-850/ozCash cost
$1,100-1,180/ozAISC Guidance1
$55-60mCapex Guidance
2020 Guidance
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THANK YOU – Q&A
Michael StonerInvestor Relations & Business Development
+44 020 8167 [email protected]
NYSE American: GSS | TSX: GSC
CONTACT US
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Appendix
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Mineral Reserves & Resources – Wassa Resource Continues To Grow
Mineral Reserve Estimate – December 31, 2019Mineral Reserve & Resource update
Proven Mineral ReserveProbable Mineral
ReserveTotal Mineral Reserve
Mt g/t koz Mt g/t koz Mt g/t koz
Wassa Open Pit - - - 9.9 1.57 500 9.9 1.57 500
Wassa Underground 1.7 4.11 228 5.7 3.61 661 7.4 3.72 889
Stockpiles 1.1 0.62 21 - - - 1.1 0.62 21
Subtotal Wassa 2.8 2.78 249 15.6 2.31 1,160 18.4 2.38 1,410
Prestea Open Pit - - - - - - - - -
Prestea Underground - - - 0.9 11.0 302 0.9 11.0 302
Subtotal Prestea - - - 0.9 11.0 302 0.9 11.0 302
GSR Total 2.8 2.78 249 16.5 2.76 1,463 19.3 2.76 1,712
Mineral Resource Estimate – December 31, 2019
Measured & Indicated Resource Inferred Resource
Mt g/t koz Mt g/t koz
Wassa Open Pit 29.2 1.29 1,206 0.6 1.31 26
Wassa Underground 16.2 3.89 2,027 58.8 3.75 7,097
Father Brown AdoikromUnderground
0.9 8.67 254 1.9 6.07 367
Wassa Other 2.5 2.32 187 0.4 2.11 29
Subtotal Wassa 48.8 2.34 3,675 61.7 3.79 7,518
Bogoso / Prestea (Refractory) 19.8 2.76 1,760 0.8 2.69 71
Mampon 0.1 1.61 5 0.02 1.66 1
Prestea South 1.7 2.08 114 0.07 1.87 4
Prestea Underground 1.1 17.15 626 1.6 9.54 486
Bogoso / Prestea (Other) 2.2 1.68 118 0.7 1.47 32
Subtotal Bogoso / Prestea 24.9 3.27 2,624 3.2 5.8 594
GSR Total 73.7 2.66 6,299 64.9 3.89 8,113
Wassa Underground Proven Reserve
228koz | 87% growth
Reflects improved geological understanding of 2020 & 2021 mining areas
Total Reserves
1.7Moz
Wassa UndergroundMeasured & Indicated Resource
2Moz | 18% growth
Infil l drill ing improved geological confidence in ore body
Wassa UndergroundInferred Resource
7Moz | 19% growth
Southern extensions of ore body continued to deliver additional Inferred Resource
Total Measured and
Indicated Resources
6.3Moz
Total Inferred Resources
8.1Moz