Q3 2021 Press ReleasePDF (522 KB)

Golden Star Resources Reports Results for the Three and Nine Months Ended September 30, 2021

Toronto, ON - November 1, 2021 - Golden Star Resources Ltd. (NYSE American: GSS; TSX: GSC; GSE: GSR) ("Golden Star" or the "Company") reports its financial and operational results for the three and nine months ended September 30, 2021. All references herein to "$" are to United States dollars.

Q3 2021 HIGHLIGHTS:

• Q3 2021 production totaled 38.7 thousand ounces ("koz") from Wassa, at an All-In Sustaining Cost ("AISC") of $1,299 per ounce ("/oz"). For the nine months to September 30, 2021, production totaled 116.8koz at an AISC of $1,193/oz. The Company is on track to deliver on the upper end of the revised production guidance of 145- 155koz for 2021.
• The Wassa underground grade averaged 3.2 grams per tonne ("g/t") in Q3 2021, 5% higher than the reserve grade and Q2 2021 performance.
• Paste fill test work continued during the quarter with the completion of the filling of a second test stope. Test results for the 28 day curing period show improved strength compared to the first test stope and these meet the design criteria. Full restart of the filling operations is subject to strength results after the 56 days curing period, which is due in Q4 2021.
• Q3 2021 saw continued investment in infill drilling and development at Wassa and expansion of the tailings storage facility. During the quarter, capital expenditure at Wassa totaled $13.3m.
• The repayment of the $51.5m convertible debenture was completed in August 2021. This deleveraging event further strengthened the balance sheet and delivers a lower cost of capital. Concurrent with the repayment and settlement of the convertible debenture, the company drew down the remaining $29.2m of available liquidity on the Macquarie Revolving Credit Facility ("RCF").
• As a result of the repayment of the convertible debentures, the cash position reduced by $22.3m in Q3 2021 to $50.5m at September 30, 2021, with net debt of $32.0m in line with the prior quarter.
• In-mineexploration drilling during the quarter delivered positive results, indicating further extension of B- Shoot mineralization up-dip of the current and planned reserve mining areas.

Table 1 - Q3 2021 Performance Summary (Continuing Operations unless otherwise stated)

								Q3	Q3	%	9 Months	9 Months	%
								2021	2020	change	2021	2020	change
	Production - Wassa		Koz	38.7	41.6	(7)%	116.8	126.7	(8)%
	Production - Prestea (discontinued operation)		Koz	-	6.8	(100)%	-	22.3	(100)%
	Total gold produced				Koz		38.7	48.4	(20)%	116.8	149.0	(22)%
	Gold sold - Wassa		Koz	38.4	40.9	(6)%	115.0	124.0	(7)%
	Gold sold - Prestea (discontinued operation)		Koz	-	6.7	(100)%	-	22.0	(100)%
	Total gold sold		Koz	38.4	47.7	(19)%	115.0	145.9	(21)%
	Average realized gold price (incl. Deferred Revenue)		$/oz	1,676	1,813	(8)%	1,684	1,643	3%
	Cash operating cost per ounce - Wassa1
		$/oz	868	664	31%	779	643	21%
	Cash operating cost per ounce - Prestea1		$/oz	-	2,141	(100)%	-	2,033	(100)%
	Cash operating cost per ounce - Consolidated1		$/oz	868	872	-%	779	852	(9)%
	All-in sustaining cost per ounce - Wassa1		$/oz	1,299	1,023	27%	1,193	979	22%
	All-in sustaining cost per ounce - Prestea1		$/oz	-	2,491	(100)%	-	2,477	(100)%
	All-in sustaining cost per ounce - Consolidated1			$/oz		1,299	1,230	6%	1,193	1,205	(1)%
	Gold revenues		$m	64.3	74.2	(13)%	193.7	203.7	5%
	Adj. EBITDA1		$m	21.2	37.5	(44)%	74.4	95.2	(22)%
	Adj. income/share attributable to shareholders - basic1	$/share	-	0.17	(100)%	0.09	0.29	(69)%
	Cash provided by operations before working capital		$m	18.1	30.5	(41)%	64.6	82.6	(22)%
	Changes in working capital and taxes paid		$m	(0.9)	(4.4)	80%	(24.2)	(18.0)	(34)%
	Net cash used in investing activities		$m	(16.3)	(11.7)	(39)%	(39.5)	(33.7)	(17)%
	Net cash provided by financing activities		$m	(23.2)	(1.0)	(2220)%	(11.3)	(6.5)	(74)%
	Free cash flow1		$m	1.0	14.4	(93)%	1.0	30.9	(97)%
	Cash			$m	50.5	48.3	5%	50.5	48.3	5%
	Net Debt		$m	31.9	48.7	(34)%	31.9	48.7	(34)%

Notes: 1. See "Non-GAAP Financial Measures".

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Andrew Wray, Chief Executive Officer of Golden Star, commented:

"The cash settlement of the $51.5m convertible debentures in August 2021 was a key milestone for the Company as it represented the final step in a two-year process to restructure the balance sheet which was aimed at removing short dated facilities and reducing the cost of capital. We now have a clean balance sheet with the $90m Macquarie Revolving Credit Facility as our only debt product and a cash position of $50.5m for a conservative overall level of net debt.

Following revision of our 2021 guidance in June, the Wassa operating team responded well to the planned reduction in the availability of underground ore both through accessing new stoping areas, thanks to further improvement in development rates, as well as through the increased processing of low-grade stockpiles. While the latter acts to increase the AISC, it utilizes latent processing plant capacity to generate cash.

Our key operational focus remains the completion of the commissioning of the paste fill plant by the end of the year. Recent paste strength test work has yielded improved results and the second test stope was completed during October. Test results after 28 days curing show improved strength compared to the first test stope and meet the design criteria. While the full restart of the filling operations is subject to strength results after 56 days' curing, we continue to expect to be in a position to deliver production from secondary stopes as planned in 2022.

I am very pleased to welcome Ben Pullinger to the senior team as Executive Vice President Discovery from November 1, 2021. He will lead our continued investment in exploration, a key discipline in the delivery of our growth strategy. Last week, we were pleased to report positive progress being made on the drilling programs as part of the exploration and infill drilling initiatives. The team has moved quickly to follow up on the recent up-dip and down-dip drilling success with further drilling to test the continuity of a new up-dip zone. Drilling in Q3 2021 was aimed at further testing of this target with the ambition of delineating a resource in the 2021 year-end resource update."

Q3 2021 RESULTS WEBCAST AND CONFERENCE CALL

The Company will conduct a Q3 2021 results conference call and webcast on Tuesday November 2, 2021 at 10.00 am ET.

Toll Free (North America): [phone]

Toronto Local and International: [phone]

Toll Free (UK): 0800 652 2435

Conference ID: 53013185

Webcast:https://produceredition.webcasts.com/starthere.jsp?ei=1503699&tp_key=cfac6ce624

Following the conference call, a recording will be available on the Company's website at: www.gsr.com.

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KEY EVENTS - Q3 2021

Wassa Operational Performance and Infrastructure Investment

• The mining rate averaged 3,690tpd in Q3 2021, representing a 26% decrease on the 4,957tpd achieved in Q3 2020 and 7% lower than the mining rate of 3,963tpd achieved in Q2 2021 due to the planned reduction in available stopes caused by the resequencing of the mine plan. This is in line with guidance for the period.
• Underground mined grade averaged 3.2g/t, 5% above the underground reserve grade of 3.1g/t and 5% higher than the grade achieved in Q2 2021.
• Processing of low-grade stockpiles continued during Q3 2021, given the continued strength of the gold price. This initiative, which utilizes latent capacity in the process plant without compromising gold recovery rates, contributes additional cash flow, albeit at a slightly higher AISC than achieved by the underground mine. This initiative contributed 4.5koz of production during Q3 2021, while adding around $50/oz to the overall AISC.
• Investment in infrastructure continued throughout Q3 2021 to provide additional mining flexibility with the objective of increasing mining rates. Capital expenditure at Wassa totaled $13.3m during Q3 2021.
• The operational improvements and recruitment of jumbo operators implemented during Q2 2021 delivered an increase in development rates in June. Over Q3 2021 lateral development totaled 2,295 metres, equating to 25 metres per day, which exceeds the H1 2021 development rate by 4%.

Paste Fill Commissioning Update

• The Paste fill plant commissioning process started in Q1 2021, after the completion of the plant construction in Q4 2020. As previously announced the commissioning was delayed by quality assurance test results in April 2021 showing lower than expected fill strengths in the test stope.
• As a result, filling operations were suspended and the test work program was extended. The Company is working in collaboration with consultants Minefill Services (Australia) and the University of Mines and Technology (Ghana). Test results received in Q3 2021 from the Wassa site laboratory and Minefill Services were consistent and showed strengths meeting the design criteria, consistent with the feasibility study results and higher than those achieved in the trial samples from the test stope.
• Filling of a second test stope commenced in September 2021 and was completed during October 2021. The stope was filled with paste that had a 10% cement blend for maximum fill strength. Test results after 28 days' curing show improved strength compared to the first test stope, which meet the design criteria. The full restart of the filling operations is subject to satisfactory strength results for the 56 days' curing period, which is due later in Q4 2021 and will enable production from secondary stopes as planned in 2022.
• Off-sitemix design optimization and test work continues in Q4 2021, with alternative binder products showing excellent strength results in laboratory tests and demonstrating the potential to optimize the mix design for future stopes.

COVID-19 PANDEMIC

• Ghana experienced a slight increase in COVID-19 cases in Q3 2021. A total of 7,323 positive cases had been confirmed in the Western Region, where the Wassa mine is located, of which 183 were active cases as at September 27, 2021, eight times that of the previous quarter. During Q3 2021, Wassa experienced 39 suspected COVID-19 cases with 30 confirmed cases.
• Supply chains for the shipment of dore to the refinery and for the key consumables, including cyanide, lime, grinding media, fuel and lubricants, have remained intact throughout the pandemic. All supply chains are being continually monitored and alternative suppliers have been identified for essential supply chains.

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Safety and Health

• The all-injury frequency rate ("AIFR") of the continuing operations as at September 30, 2021 was 3.12 and the total recordable injury frequency rate ("TRIFR") was 0.78, based on a 12-month rolling average per million hours worked. This compares to the continuing operations AIFR of 3.55 and TRIFR of 0.71 as at September 30, 2020. These numbers reflect the two incidents reported in the second quarter of 2021 ("Q2 2021"). Both injured persons have recovered and have returned to full work duties. The operations team continues to focus on leading indicator programs to improve health, safety and environmental performance.

Cash Repayment of Convertible Debentures

• On August 15, 2021, the principal balance of $51.5 million and outstanding interest on the 7% Convertible Debentures were fully repaid and settled in cash. Concurrent with the cash repayment of the 7% Convertible Debentures, the Company met the conditions precedent for draw-down of the Macquarie
  Revolving Credit Facility ("RCF"). With these conditions met, the Company drew down on the remaining $29.2 million of available liquidity and as of the September 30, 2021, the $90 million Macquarie RCF is fully drawn.

At The Market Equity Program

• On October 28, 2020, the Company entered into an At The Market ("ATM") program with BMO Capital Markets Corp. ("BMO") relating to Golden Star common shares. In accordance with the terms of the Sales Agreement, the Company may distribute shares of common stock having a maximum aggregate sales price of up to $50 million from time to time through BMO as agent for the distribution of shares or as principal. The proceeds from the Sales Agreement will be used for discretionary growth capital at Wassa, exploration, general corporate purposes and working capital.
• A total of 4,220,213 shares of common stock had been sold under the Sales Agreement up to June 30, 2021, generating net proceeds of $13.8m. There were no sales under the Sales Agreement during Q3 2021.
• The Company does not anticipate any further sale of the Company's common stock from the Sales Agreement, which expires in November 2021.

Sale of Bogoso-Prestea

Deferred Consideration

• On September 30, 2020, the Company completed the sale of its 90% interest in Prestea to Future Global Resources Limited ("FGR") pursuant to a share purchase agreement for the sale by Golden Star's wholly owned subsidiary, Caystar Holdings ("Caystar"), and the purchase by FGR of all the issued and outstanding share capital of Bogoso Holdings ("Bogoso"), the holder of 90% of the shares of Golden Star (Bogoso/Prestea) Limited (the "SPA"), for a consideration price (the "Total Consideration Price") comprising a deferred consideration of $34.3 million (the "Deferred Consideration"), which, prior to the amendments to the SPA as described below, was payable by FGR to Golden Star in the following tranches:
  o $5 million in cash to be paid on the earlier of: (i) the date at which FGR puts in place a new reclamation bond with the Environmental Protection Agency of Ghana ("EPA") in relation to Prestea, and (ii) March 30, 2021;
  o $10 million in cash and the net working capital adjusted balancing payment (as described in the SPA) which amounts to approximately $4.3 million to be paid on July 31, 2021; and
  o $15 million in cash to be paid on July 31, 2023.

SPA Amendments

• On March 28, 2021, the Company and Caystar entered into an amendment agreement to the SPA with FGR and Blue International Holdings ("BIH"), the parent company of FGR, to reprofile the staged payments that

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form the Deferred Consideration (the "Staged Payments") such that both the $5 million originally due on March 30, 2021 and the $10 million originally due on July 31, 2021 became payable on May 31, 2021.

• On May 31, 2021, the Company, Caystar, FGR and BIH entered into a second amendment agreement to the SPA to further reprofile the Staged Payments to allow time for FGR to complete ongoing financing transactions and the environmental bonding process for Prestea. Pursuant to this second amendment to the SPA, the Deferred Consideration was due as follows:
  o the $15 million payment that was due on May 31, 2021 became payable by no later than July 16, 2021; and
  o an amount of approximately $4.6 million (comprised of the working capital balancing payment of approximately $4.3 million and fees of approximately $0.3 million for services provided by Caystar to FGR pursuant to a transition agreement dated September 30, 2020) became payable by no later than July 31, 2021.
• As of July 31, 2021, no Deferred Consideration had been received by Golden Star from FGR. Following discussions between the parties to the SPA, on September 30, 2021 the Company, Caystar Holdings, FGR and BIH agreed to reconfigure the terms for the sale and purchase of Prestea by, inter alia, substituting a net smelter return ("NSR") royalty for the Deferred Consideration as per the following commercial terms: o from October 1, 2020, NSR royalty payments in respect of gold produced from the Prestea underground mine will be paid at a rate of 1% of the net smelter returns once production exceeds
  100,000 ounces of gold, and up to a total of 300,000 ounces of gold;
  o once production from the Prestea underground mine exceeds 300,000 ounces of gold, the royalty rate will increase to 2%, until cumulative royalty payments total $35 million, at which point the obligation to make royalty payments will automatically terminate; and
  o these payments apply to production from the areas containing the underground resources and reserves declared at the Prestea underground mine at the time it was acquired by FGR.
• This reconfiguration of the terms for the sale and purchase of Prestea follows the mining and drilling activities undertaken over the past 11 months and is aimed at better aligning any payments due to the Company with the anticipated performance of the asset. The Company, Caystar, FGR and BIH also agreed to mutually release each other from all existing and future claims relating to the sale and purchase of Prestea.
• The SPA contemplated that, in addition to the Deferred Consideration, a contingent payment of up to $40 million (the "Contingent Payment") may become payable by FGR to Golden Star conditional upon the occurrence of milestones in respect of the development of the Bogoso Sulphide Project (as defined in the SPA). Concurrent with the restructuring of the Deferred Consideration into an NSR royalty, the Contingent Payment was also restructured. To support the viability of the B/P Refractory Mineral Resources (as defined in the SPA), Golden Star has agreed to adjust the payments associated with that project, which have become payable in three tranches (previously, two), as follows:
  o 33.3% at the time when 5% of the B/P Refractory Mineral Resources have been extracted;
  o 33.3% at the time of the first anniversary of the declaration that 5% of the B/P Refractory Mineral Resources have been extracted; and
  o the remaining unpaid amount of the Contingent Payment will fall due once a cumulative 500,000 ounces of gold have been produced from the Bogoso Sulphide Project.

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