Golden Star Resources has reported the results of a new preliminary economic assessment (PEA) for development of a new underground gold mining operation on its Prestea property in southwest Ghana. The PEA replaces a June 2013 feasibility study and adopts a nonmechanized shrinkage stoping mining method in place of the feasibility study's mechanized cut and fill. The PEA also assumes use of existing shaft infrastructure, rather than sinking of a new shaft as was proposed in the 2013 feasibility study.

The PEA indicates mining of the West Reef zone at Prestea can deliver about 70,000 oz/y of gold for 4.5 years for an initial investment of $40 million. Average all-in costs of production are estimated at $659/oz. Development time is estimated at one year.

The West Reef zone has indicated resources of 800,000 mt grading 18.5 g/mt gold for 502,000 contained oz and inferred resources of 500,000 mt grading 12.1 g/mt for 185,000 contained oz. The PEA assumes mining of 649,000 mt at an average grade of 17.2 g/mt for 359,000 oz of contained gold.

The feasibility study estimated mining of 1.4 million mt at a diluted mined grade of 9.6 g/mt gold for 443,000 oz. The initial feasibility study capital outlay was estimated at $91 million with a development timeline of approximately three years.

Prestea is located 16 km along a dedicated haul road from Golden Star's existing Bogoso processing plant, which will be available to process Prestea ore after completion of mining at the Bogoso North and Chujah pits in late 2015.

The Prestea mine has been worked for more than 100 years from extensive underground workings and has produced an estimated 9 million oz of gold to date. Golden Star acquired the mine in 2002 and placed it on care and maintenance while evaluation and exploration activities continued.

Underground drilling of approximately 47,000 m in 248 holes defined the new resource in the West Reef. This steeply dipping, high-grade, narrow vein deposit lies at a depth of 600 m to 950 m below surface, approximately 2 km to south of the existing Prestea Central Shaft. The Central Shaft will be used for personnel access, materials trans-port, dewatering and hoisting. The main haul-age level will be established on the existing 24 level at the base of the targeted mining area to move ore and waste rock to the shaft.

Metallurgical test work indicates that the Prestea West Reef material is non-refractory, with greater than 90% metallurgical recovery using carbon-in-leach processing. The proportion of gravity-recoverable gold is high at approximately 80%.

Labor with underground mining experience is plentiful in the Prestea area, and Golden Star's care and maintenance crew already employs 160 experienced staff and employees.

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