GOLDEN STAR RESOURCES LTD., 10-Q filed on 11/9/2011
Quarterly Report
Document And Entity Information
9 Months Ended
Sep. 30, 2011
Oct. 5, 2011
Entity Information [Line Items]
 
 
Entity Registrant Name
GOLDEN STAR RESOURCES LTD 
 
Entity Central Index Key
0000903571 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2011 
 
Document Fiscal Year Focus
2011 
 
Document Fiscal Period Focus
Q3 
 
Amendment Flag
FALSE 
 
Entity Common Stock, Shares Outstanding
 
258,609,486 
Consolidated Balance Sheets (USD $)
In Thousands
Sep. 30, 2011
Dec. 31, 2010
ASSETS
 
 
Cash and cash equivalents (Note 4)
$ 114,294 
$ 178,018 
Accounts receivable (Note 4)
16,384 
11,885 
Inventories (Note 6)
64,625 
65,204 
Deposits
8,368 
5,865 
Prepaids and other
2,097 
1,522 
Total Current Assets
205,768 
262,494 
RESTRICTED CASH
2,405 
1,205 
PROPERTY, PLANT AND EQUIPMENT (Note 8)
241,292 
228,367 
INTANGIBLE ASSETS
5,793 
7,373 
MINING PROPERTIES (Note 9)
254,172 
250,620 
OTHER ASSETS (Note 7)
2,362 
3,167 
Total Assets
711,792 
753,226 
LIABILITIES
 
 
Accounts payable (Note 4)
23,139 
34,522 
Accrued liabilities (Note 4)
51,857 
53,935 
Derivatives (Notes 4 and 5)
6,813 
Asset retirement obligations (Note 10)
11,445 
23,485 
Current tax liability (Note 12)
714 
1,128 
Current debt (Notes 11)
7,327 
10,014 
Total Current Liabilities
101,295 
123,084 
LONG TERM DEBT (Notes 4 and 11)
133,259 
155,878 
ASSET RETIREMENT OBLIGATIONS (Note 10)
22,311 
21,467 
DEFERRED TAX LIABILITY (Note 12)
24,932 
15,678 
Total Liabilities
281,797 
316,107 
COMMITMENTS AND CONTINGENCIES (Note 13)
SHAREHOLDERS' EQUITY
 
 
First preferred shares, without par value, unlimited shares authorized. No shares issued and outstanding
Common shares, without par value, unlimited shares authorized. Shares issued and outstanding: 258,624,486 at September 30, 2011; 258,511,236 at December 31, 2010 (Note 14)
693,784 
693,487 
CONTRIBUTED SURPLUS
19,258 
16,560 
ACCUMULATED OTHER COMPREHENSIVE INCOME
1,679 
1,959 
DEFICIT
(283,352)
(274,036)
Total Golden Star Equity
431,369 
437,970 
NONCONTROLLING INTEREST
(1,374)
(851)
Total Equity
429,995 
437,119 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 711,792 
$ 753,226 
Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2011
Dec. 31, 2010
Consolidated Balance Sheets
 
 
First preferred shares, no par value
 
 
First preferred shares, shares issued
First preferred shares, shares outstanding
Common shares, no par value
 
 
Common shares, shares issued
258,624,486 
258,511,236 
Common shares, shares outstanding
258,624,486 
258,511,236 
Consolidated Statements Of Operations And Comprehensive Income/(Loss) (USD $)
In Thousands, except Share data in Millions, unless otherwise specified
3 Months Ended
Sep. 30,
9 Months Ended
Sep. 30,
2011
2010
2011
2010
REVENUE
 
 
 
 
Gold revenues
$ 125,880 
$ 103,651 
$ 352,193 
$ 327,222 
Cost of sales (Note 15)
106,385 
97,952 
316,661 
291,444 
Mine operating margin
19,495 
5,699 
35,532 
35,778 
Exploration expense
1,824 
1,625 
3,972 
4,174 
General and administrative expense
5,996 
3,859 
20,350 
12,973 
Derivative mark-to-market (gain)/loss (Note 5)
13,245 
(19,280)
(4,368)
4,473 
Property holding costs
1,778 
1,557 
6,141 
3,855 
Foreign exchange loss
666 
313 
1,385 
884 
Interest expense
2,193 
2,395 
6,663 
6,879 
Interest and other income
(61)
(48)
(163)
(343)
(Gain)/loss on sale of investments
(338)
(336)
(1,650)
Net income/(loss) before income tax
(5,808)
15,275 
1,888 
4,533 
Income tax (expense)/benefit
(3,621)
43 
(11,727)
(2,737)
Net income/(loss)
(9,429)
15,318 
(9,839)
1,796 
Net income/(loss) attributable to noncontrolling interest
767 
(626)
(523)
721 
Net income/(loss) attributable to Golden Star shareholders
(10,196)
15,944 
(9,316)
1,075 
Net income/(loss) per share attributable to Golden Star shareholders
 
 
 
 
Basic (Note 17)
$ (0.039)
$ 0.062 
$ (0.036)
$ 0.004 
Diluted (Note 17)
$ (0.039)
$ 0.061 
$ (0.036)
$ 0.004 
Weighted average shares outstanding (millions)
258 
258 
Weighted average shares outstanding-diluted (millions)
OTHER COMPREHENSIVE INCOME/(LOSS)
 
 
 
 
Net income/(loss)
(9,429)
15,318 
(9,839)
1,796 
Unrealized gains on investments (Note 7)
59 
311 
(280)
651 
Comprehensive income/(loss)
(9,488)
15,007 
(9,559)
1,145 
Comprehensive income/(loss) attributable to Golden Star shareholders
(10,255)
(311)
(9,036)
424 
Comprehensive (income)/loss attributable to noncontrolling interest
767 
(626)
(523)
721 
Comprehensive loss
(9,488)
15,007 
(9,559)
1,145 
Deficit, beginning of period
(273,156)
(277,675)
(274,036)
(262,806)
Deficit, end of period
$ (283,352)
$ (261,731)
$ (283,352)
$ (261,731)
Consolidated Statements Of Cash Flows (USD $)
In Thousands
3 Months Ended
Sep. 30,
9 Months Ended
Sep. 30,
2011
2010
2011
2010
OPERATING ACTIVITIES:
 
 
 
 
Net income/(loss)
$ (9,429)
$ 15,318 
$ (9,839)
$ 1,796 
Reconciliation of net loss to net cash provided by operating activities:
 
 
 
 
Depreciation, depletion and amortization
15,621 
22,558 
52,113 
75,391 
Amortization of loan acquisition cost
321 
1,088 
993 
893 
Gain/Loss on sale of assets
(338)
(336)
(1,649)
Non cash employee compensation
564 
449 
2,784 
2,368 
Future income tax expense
2,908 
(215)
9,255 
961 
Fair value of derivatives
1,700 
(312)
6,879 
(631)
Fair value (gains)/losses on convertible debt
2,084 
(18,965)
(22,208)
4,038 
Accretion of asset retirement obligations
2,184 
601 
5,300 
1,802 
Reclamation expenditures
(8,416)
(1,934)
(20,244)
(5,534)
Reconciliation, Total
7,199 
18,592 
24,697 
79,435 
Changes in non-cash working capital:
 
 
 
 
Accounts receivable
(1,886)
9,214 
(4,690)
(3,215)
Inventories
1,177 
(3,016)
756 
(7,208)
Deposits
147 
(1,495)
(553)
(1,775)
Accounts payable and accrued liabilities
4,265 
6,388 
(14,534)
10,991 
Other
565 
(59)
(1,524)
259 
Net cash provided by/(used in) operating activities
11,467 
29,624 
4,152 
78,487 
INVESTING ACTIVITIES:
 
 
 
 
Expenditures on mining properties
(12,211)
(15,253)
(30,242)
(24,434)
Expenditures on property, plant and equipment
(13,678)
(9,966)
(33,541)
(27,255)
Cash securing letters of credit (used)/refunded
(1,200)
2,598 
(1,200)
2,598 
Change in accounts payable and deposits on mine equipment and material
2,499 
(5,186)
(685)
(2,593)
Other
681 
(752)
681 
1,468 
Net cash used in investing activities
(23,909)
(28,559)
(64,987)
(50,216)
FINANCING ACTIVITIES:
 
 
 
 
Principal payments on debt
(2,622)
(8,814)
(7,960)
(25,224)
Proceeds from debt agreements and equipment financing
1,391 
11,168 
4,861 
25,674 
Other
52 
(646)
210 
1,196 
Net cash provided by/(used in) financing activities
(1,179)
1,708 
(2,889)
1,646 
Increase/(decrease) in cash and cash equivalents
(13,621)
2,773 
(63,724)
29,917 
Cash and cash equivalents, beginning of period
127,915 
181,232 
178,018 
154,088 
Cash and cash equivalents end of period
$ 114,294 
$ 184,005 
$ 114,294 
$ 184,005 
Nature Of Operations
Nature Of Operations
NATURE OF OPERATIONS
Through our 90% owned subsidiary Golden Star (Bogoso/Prestea) Ltd (“GSBPL”) we own and operate the Bogoso/Prestea gold mining and processing operation (“Bogoso/Prestea”) located near the town of Bogoso, Ghana. Through our 90% owned subsidiary Golden Star (Wassa) Ltd (“GSWL”) we also own and operate the Wassa gold mine (“Wassa”), located approximately 35 kilometers east of Bogoso/Prestea. Wassa mines ore from pits near the Wassa plant and also processes ore mined at our Hwini-Butre and Benso (“HBB”) mines located south of Wassa. We hold interests in several gold exploration projects in Ghana and elsewhere in West Africa including Burkina Faso, Niger and Côte d'Ivoire, and in South America we hold and manage exploration properties in Brazil.
Basis Of Presentation
Nature of Operations [Text Block]
BASIS OF PRESENTATION
Golden Star Resources Ltd (“Golden Star” or “Company”) is a Canadian federally-incorporated, international gold mining and exploration company headquartered in the United States (“U.S.”). Prior to 2011, Golden Star had reported to security regulators in Canada, Ghana and the U.S. using Canadian GAAP financial statements with a footnote reconciliation to U.S. GAAP. However, a change in SEC position in late 2009 required Canadian companies such as Golden Star, which do not qualify as foreign private issuers, to file their financial statements in the U.S. using U.S. GAAP after December 31, 2010. We therefore adopted U.S. GAAP as of January 1, 2011 for all of our subsequent U.S., Ghanaian and Canadian filings. All comparative financial information presented in this Form 10-Q is thus reported in accordance with U.S. GAAP.
Since the U.S. GAAP financial statements contained in this Form 10-Q differ in certain respects from financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), Note 21 has been added to this Form 10-Q which presents our Consolidated Balance Sheets, Statements of Operations and Statements of Cash Flow as if we had adopted IFRS. This is done to facilitate comparison of our financial results to those of other mining companies that report in IFRS.
These unaudited interim financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the interim periods presented.
The results reported in these interim financial statements are not necessarily indicative of the results that may be reported for the entire year. Accordingly, these interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2010, including note 27, “Generally Accepted Accounting Principles in the United States”, filed on Form 10-K.
Recent Accounting Pronouncements
Recent Accounting Pronouncements
RECENT ACCOUNTING PRONOUNCEMENTS
RECENTLY ADOPTED STANDARDS
In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2010-06, “Improving Disclosures about Fair Value Measurements,” which amends Subtopic 820-10 of the FASB Accounting Standards Codification to require new disclosures for fair value measurements and provides clarification for existing disclosure requirements. More specifically, this update required (a) an entity to disclose separately the amounts of significant transfers in and out of Levels 1 and 2 fair value measurements and to describe the reasons for the transfers; and (b) information about purchases, sales, issuances and settlements to be presented separately (i.e. present the activity on a gross basis rather than net) in the reconciliation for fair value measurements using significant unobservable inputs (Level 3 inputs). This update clarified existing disclosure requirements for the level of disaggregation used for classes of assets and liabilities measured at fair value and requires disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements using Level 2 and Level 3 inputs. We adopted this new guidance in the first quarter of 2010 and it did not materially expand our consolidated financial statement footnote disclosures.
In April 2010, the FASB issued Accounting Standards Update No. 2101-12 which amends topic 718 “Compensation-Stock Compensation”. The amendment addresses the classification of an employee share-based payment awards with an exercise price denominated in the currency of a market in which the underlying equity security trades, stating that a share-based award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity trades shall not be considered to contain a market, performance, or service condition. Therefore, such an award is not to be classified as a liability if it otherwise qualifies as equity. This new provision is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2010. While our stock option plan denominates option strike prices in Canadian dollars, a substantial portion of our common shares trade in Canada and thus this new guidance did not affect our consolidated financial position, cash flows, nor results of operations in 2011.
RECENTLY ISSUED STANDARDS
Presentation of Comprehensive Income: In June 2011, the FASB issued Accounting Standards Update No. 2011-05, Comprehensive Income (Topic 220)-Presentation of Comprehensive Income (ASU 2011-05), to require an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of equity. ASU 2011-05 is effective for us in our first quarter of fiscal 2013 and should be applied retrospectively. We are currently evaluating the impact of our pending adoption of ASU 2011-04 on our consolidated financial statements.
Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements: In May 2011, the FASB issued Accounting Standards Update No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (Topic 820)-Fair Value Measurement (ASU 2011-04), to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. ASU 2011-04 is effective for us in our fourth quarter of fiscal 2012 and should be applied prospectively. We are currently evaluating the impact of our pending adoption of ASU 2011-04 on our consolidated financial statements.
Disclosure Requirements Related to Fair Value Measurements: In January 2010, the FASB issued Accounting Standards Update No. 2010-06, Improving Disclosures about Fair Value Measurements (Topic 820)-Fair Value Measurements and Disclosures (ASU 2010-06), to add additional disclosures about the different classes of assets and liabilities measured at fair value, the valuation techniques and inputs used, and the activity in Level 3 fair value measurements. Certain provisions of this update will be effective for us in fiscal 2012 and we do not believe these provisions will have a material impact on our consolidated financial statements.

Financial Instruments
Financial Instruments
FINANCIAL INSTRUMENTS
FINANCIAL ASSETS
The carrying amounts and fair values of our financial assets are as follows:

 
 
 
 
As of September 30, 2011
 
As of December 31, 2010
 
 
 
 
Estimated
 
Carrying
 
Estimated
 
Carrying
Assets
 
Category
 
Fair Value
 
Value
 
Fair Value
 
Value
Cash and cash equivalents (1)
 
Loans and receivables
 
$
114,294

 
$
114,294

 
$
178,018

 
$
178,018

Restricted cash (1)
 
Loans and receivables
 
2,405

 
2,405

 
1,205

 
1,205

Accounts receivable (1)
 
Loans and receivables
 
16,384

 
16,384

 
11,885

 
11,885

Derivative instrument - Riverstone Warrants (1)
 
Held-for-trading
 
308

 
308

 
375

 
375

Available for sale investments (3)
 
Available-for-sale
 
1,117

 
1,117

 
928

 
928

Total financial assets
 
 
 
$
134,508

 
$
134,508

 
$
192,411

 
$
192,411



FINANCIAL LIABILITIES
The carrying amounts and fair values of financial liabilities are as follows:

 
 
 
 
As of September 30, 2011
 
As of December 31, 2010
 
 
 
 
Estimated
 
Carrying
 
Estimated
 
Carrying
Liabilities
 
Category
 
Fair Value
 
Value
 
Fair Value
 
Value
Accounts payable and accrued liabilities (1)
 
Other financial liabilities
 
$
74,996

 
$
74,996

 
$
88,457

 
$
88,457

Derivative instrument-Structured Gold Options
 
Held-for-trading
 
6,813

 
6,813

 

 

Convertible debentures (2)
 
Other financial liabilities
 
126,818

 
125,146

 
147,779

 
147,353

Revolving credit facility (2)
 
Other financial liabilities
 

 

 

 

Equipment financing loans (2)
 
Other financial liabilities
 
15,041

 
14,557

 
16,113

 
15,714

Total financial liabilities
 
Total Financial Liabilities
 
$
223,668

 
$
221,512

 
$
252,349

 
$
251,524


_____________________
(1)
Carrying amount is a reasonable approximation of fair value.
(2)
The fair values of the debt portion of the convertible senior unsecured debentures, the equipment financing loans, and the revolving credit facility are determined by discounting the stream of future payments of interest and principal at the estimated prevailing market rates of comparable debt instruments. The carrying values of these liabilities are shown net of any capitalized loan fees. The fair value of the equity component of the convertible debentures is estimated by a Black Scholes option pricing model.
(3)
The fair value represents quoted market prices in an active market.
The following tables illustrate the classification of the Company's financial instruments within the fair value hierarchy as at September 30, 2011. The three levels of the fair value hierarchy are:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
Level 3 - Inputs that are not based on observable market data.

 
Financial assets measured at fair value as at
September 30, 2011
 
Level 1    
 
Level 2    
 
Level 3    
 
Total    
Available for sale investments
$
1,117

 
$

 
$

 
$
1,117

Warrants

 
308

 

 
308

 
$
1,117

 
$
308

 
$

 
$
1,425


 
Financial liabilities measured at fair value as at
September 30, 2011
 
Level 1
 
Level 2
 
Level 3
 
Total
Convertible debentures
$

 
$

 
$
126,818

 
$
126,818

Gold price derivatives

 
6,813

 

 
6,813

 
$

 
$
6,813

 
$
126,818

 
$
133,631


 
Financial assets measured at fair value as at
December 31, 2010
 
Level 1
 
Level 2
 
Level 3
 
Total
Available for sale investments
$
928

 
$

 
$

 
$
928

Warrants

 
375

 

 
375

 
$
928

 
$
375

 
$

 
$
1,303


 
Financial liabilities measured at fair value as at
December 31, 2010
 
Level 1
 
Level 2
 
Level 3
 
Total
Convertible debentures
$

 
$

 
$
147,779

 
$
147,779

 
$

 
$

 
$
147,779

 
$
147,779


The convertible senior unsecured debentures are recorded at fair value. These debentures are valued based on discounted cash flows for the debt portion and based on a Black-Scholes model for the equity portion. Inputs used to determine these values were; discount rate 8.97%, risk free interest rate of 0.91%, volatility of 98.5%, and a remaining life of 1.2 years. Note 11 - Debt has a more detailed discussion of the debentures.


Fair value measurements using Level 3 inputs:

 
Convertible debentures
Balance at December 31, 2010
$
147,779

Gain included in net income
(20,961
)
Balance at September 30, 2011
$
126,818


Derivative Gains And Losses
Derivative Gains And Losses
DERIVATIVE GAINS AND LOSSES
The derivative mark-to-market (gains)/losses recorded in the Statement of Operations are comprised of the following amounts:
 
 
For the three months ended
September 30
 
For the nine months ended
September 30
 
2011
 
2010
 
2011
 
2010
Riverstone Resources, Inc. - warrants
$
25

 
$
(311
)
 
$
67

 
$
(630
)
Gold price derivatives
11,136

 

 
17,773

 
1,066

Convertible debenture
2,084

 
(18,969
)
 
(22,208
)
 
4,037

Derivative (gain)/loss
$
13,245

 
$
(19,280
)
 
$
(4,368
)
 
$
4,473


 
For the three months ended
September 30
 
For the nine months ended
September 30
 
2011
 
2010
 
2011
 
2010
Realized (gain)/loss
$
9,461

 
$

 
$
10,960

 
$
1,066

Unrealized (gain)/loss
3,784

 
(19,280
)
 
(15,328
)
 
3,407

Derivative (gain)/loss
$
13,245

 
$
(19,280
)
 
$
(4,368
)
 
$
4,473

RIVERSTONE RESOURCES INC. - WARRANTS
In the first quarter of 2008, we received 2 million warrants from Riverstone Resources Inc. (“Riverstone”) as partial payment for the right to earn an ownership interest in our exploration projects in Burkina Faso. These warrants are exercisable through January 2012 at Cdn$0.45.
GOLD PRICE DERIVATIVES
In January 2011, we entered into a series of put and call contracts covering 76,800 ounces of future gold production between February and December 2011. The contracts are spread evenly in each week over this period and are structured as cashless collars with a floor of $1,200 per ounce and a cap of $1,457 per ounce. In early February 2011, we entered into a second set of put and call contracts covering 75,200 ounces of future gold production between February and December 2011. The contracts are spread evenly in each week during this period and are structured as cashless collars with a floor of $1,200 per ounce and a cap of $1,503 per ounce. As of September 30, 2011, each tranche had 20,800 ounces outstanding.
CONVERTIBLE DEBENTURES
The convertible senior unsecured debentures are recorded at fair value for U.S. GAAP purposes. These debentures are valued based on discounted cash flows for the debt portion and based on a Black-Scholes model for the equity portion. Inputs used to determine these values were: discount rate of 8.97%, risk free interest rate of 0.91%, volatility of 98.5%, and a remaining life of 1.2 years. Note 11 - Debt has a more detailed discussion of the debentures.

Inventories
Inventories
INVENTORIES
 
As of
 
As of
 
September 30
 
December 31
 
2011
 
2010
Stockpiled ore
$
9,007

 
$
2,551

In-process
6,709

 
13,839

Materials and supplies
48,909

 
48,814

Finished goods

 

Total
$
64,625

 
$
65,204

There were approximately 28,000 and 20,000 recoverable ounces of gold in the ore stockpile inventories shown above at September 30, 2011 and December 31, 2010, respectively. Stockpile inventories are short-term surge piles expected to be processed within the next 12 months.


Available For Sale Investments
Available For Sale Investments
AVAILABLE FOR SALE INVESTMENTS
The following table presents changes in available for sale investments in the first nine months of 2011 and the full year 2010:
 
As of September 30, 2011
 
As of December 31, 2010
 
Riverstone
 
Riverstone
 
Fair Value
 
Shares
 
Fair Value
 
Shares
Balance at beginning of period
$
928

 
1,300,000

 
$
181

 
700,000

Acquisitions
469

 
700,000

 
128

 
600,000

OCI - unrealized gain/(loss)
(280
)
 

 
619

 

Balance at end of period
$
1,117

 
2,000,000

 
$
928

 
1,300,000

Property, Plant And Equipment
Property, Plant And Equipment
PROPERTY, PLANT AND EQUIPMENT

 
As of September 30, 2011
 
As of December 31, 2010
 
Property,
Plant and
Equipment
at Cost
 
Accumulated
Depreciation
 
Property,
Plant and
Equipment
Net Book
Value
 
Property,
Plant and
Equipment
at Cost
 
Accumulated
Depreciation
 
Property,
Plant and
Equipment
Net Book
Value
Bogoso/Prestea
$
166,216

 
$
(108,654
)
 
$
57,562

 
$
157,010

 
$
(107,132
)
 
$
49,878

Bogoso sulfide plant
186,671

 
(56,673
)
 
129,998

 
184,641

 
(50,988
)
 
133,653

Wassa/HBB
105,313

 
(52,457
)
 
52,856

 
89,875

 
(45,607
)
 
44,268

Corporate & other
1,727

 
(851
)
 
876

 
1,343

 
(775
)
 
568

Total
$
459,927

 
$
(218,635
)
 
$
241,292

 
$
432,869

 
$
(204,502
)
 
$
228,367


There was no interest capitalized in new additions to property, plant and equipment in the periods shown above.

Mining Properties
Mining Properties
MINING PROPERTIES
 
 
As of September 30, 2011
 
As of December 31, 2010
 
Mining
Properties
 
Accumulated
Amortization
 
Mining
Properties,
Net Book
 
Mining
Properties
 
Accumulated Amortization
 
Mining
Properties,
Net Book
Bogoso/Prestea
$
110,800

 
$
(59,228
)
 
$
51,572

 
$
99,435

 
$
(56,488
)
 
$
42,947

Bogoso sulfide
60,217

 
(41,585
)
 
18,632

 
56,541

 
(37,101
)
 
19,440

Mampon
15,995

 

 
15,995

 
15,995

 

 
15,995

Wassa/HBB
321,818

 
(171,854
)
 
149,964

 
303,379

 
(147,558
)
 
155,821

Other
20,339

 
(2,330
)
 
18,009

 
18,747

 
(2,330
)
 
16,417

Total
$
529,169

 
$
(274,997
)
 
$
254,172

 
$
494,097

 
$
(243,477
)
 
$
250,620


There was no interest capitalized in new additions to mining properties in the periods shown above.

Asset Retirement Obligations
Asset Retirement Obligations
ASSET RETIREMENT OBLIGATIONS
At the end of each period, Asset Retirement Obligations (“ARO”) are equal to the present value of all estimated future costs required to remediate any environmental disturbances that exist as of the end of the period, using discount rates applicable at the time of initial recognition of each component of the liability. Included in this liability are the costs of closure, reclamation, demolition and stabilization of the mines, processing plants, infrastructure, tailings storage facilities, waste dumps and ongoing post-closure environmental monitoring and maintenance costs. While the majority of these costs will be incurred near the end of the mines' lives, it is expected that certain on-going reclamation costs will be incurred prior to mine closure. These costs are recorded against the asset retirement obligation liability as incurred. At September 30, 2011 and December 31, 2010, the total undiscounted amount of the estimated future cash needs was estimated to be $67.8 million and $84.3 million, respectively. Discount rates used to value the ARO range between 8% and 10%. The schedule of payments required to settle the September 30, 2011, ARO liability extends through 2029.

The changes in the carrying amount of the ARO during the nine months ended September 30, 2011 and 2010 are as follows:

 
For the nine months ended
September 30
 
2011
 
2010
Beginning balance
$
44,952

 
$
31,969

Accretion expense
5,300

 
1,802

Additions and change in estimates
3,748

 
16,352

Cost of reclamation work performed
(20,244
)
 
(5,534
)
Balance at September 30
$
33,756

 
$
44,589


 
 
 
Current portion
$
11,445

 
$
17,140

Long term portion
$
22,311

 
$
27,449


Debt
Debt
DEBT
 
As of
 
As of
 
September 30
2011
 
December 31
2010
Current debt:

 

Equipment financing credit facility
$
6,444

 
$
7,189

Capital lease
883

 
2,825

Revolving credit facility

 

Total current debt
$
7,327

 
$
10,014

Long term debt:
 
 
 
Equipment financing credit facility
$
8,113

 
$
8,525

Convertible debentures
125,146

 
147,353

Total long term debt
$
133,259

 
$
155,878


EQUIPMENT FINANCING CREDIT FACILITY
GSBPL and GSWL maintain a $40 million equipment financing facility with Caterpillar Financial Services Corporation, with Golden Star as the guarantor of all amounts borrowed. The facility provides credit for new and used mining equipment. Amounts drawn under this facility are repayable over five years for new equipment and over two years for used equipment. The interest rate for each draw-down is fixed at the date of the draw-down using the Federal Reserve Bank 2-year or 5-year swap rate or London Interbank Offered Rate (“LIBOR”) plus 2.38%. At September 30, 2011, approximately $25.4 million was available to draw down. The average interest rate on the outstanding loans was approximately 7.0% at September 30, 2011. Each outstanding equipment loan is secured by the title of the specific equipment purchased with the loan until the loan has been repaid in full.
CAPITAL LEASE
In February 2010, GSBPL accepted delivery of a nominal 20 megawatt power plant. Upon acceptance, a $4.9 million liability was recognized which, at the time, was equal to the present value of future lease payments. The life of the lease is two years from the plant's February 2010 in-service date. We are required to pay the owner/operator a minimum of $0.3 million per month on the lease, of which $0.23 million will be allocated to principal and interest on the recognized liability and the remainder of the monthly payments will be charged as operating costs.
CONVERTIBLE DEBENTURES
Interest on the $125 million aggregate principal amount of 4.0% convertible senior unsecured debentures due November 30, 2012, (the “Debentures”) is payable semi-annually in arrears on May 31 and November 30 of each year. The Debentures are, subject to certain limitations, convertible into common shares at a conversion rate of 200 shares per $1,000 principal amount of the Debentures (equal to a conversion price of $5.00 per share) subject to adjustment under certain circumstances. The Debentures are not redeemable at our option. On maturity, we may, at our option, satisfy our repayment obligation by paying the principal amount of the Debentures in cash or, subject to certain limitations, by issuing that number of our common shares obtained by dividing the principal amount of the Debentures outstanding by 95% of the weighted average trading price of our common shares on the NYSE Amex stock exchange for the 20 consecutive trading days ending five trading days preceding the maturity date (the “Market Price”).
Upon the occurrence of certain change in control transactions, the holders of the Debentures may require us to purchase the Debentures for cash at a price equal to 101% of the principal amount plus accrued and unpaid interest. If 10% or more of the fair market value of any such change in control consideration consists of cash, the holders may convert their Debentures and receive a number of additional common shares, determined as set forth in the indenture.
The Debentures are direct senior unsecured indebtedness of Golden Star Resources Ltd., ranking equally and ratably with all our other senior unsecured indebtedness, and senior to all our subordinated indebtedness. None of our subsidiaries has guaranteed the Debentures, and the Debentures do not limit the amount of debt that we or our subsidiaries may incur.
See Note 4 - Financial Liabilities and Note 5 - Derivative Gains and Losses for additional information on the fair value of these convertible debentures.
REVOLVING CREDIT FACILITY
We have a revolving credit facility agreement (the “Facility Agreement”) with Standard Chartered Bank which extends through September 30, 2012. The Facility currently provides us with $40.5 million of borrowing capacity and bears interest at the higher of LIBOR or the applicable lenders' cost of funds rate (which is capped at 1.25% per annum above LIBOR), plus a margin of 5% per annum. As of September 30, 2011, the outstanding balance was nil. The amount available under the Facility will be reduced, as scheduled in the agreement, by $9.0 million on December 31, 2011. Covenants require that we meet certain financial ratios at the end of each quarter, including that in excess of 90% of our assets are retained within a group of subsidiaries whose common shares are pledged as collateral for amounts drawn under the revolving credit facility. We were in compliance with all covenants at September 30, 2011 and December 31, 2010.
Income Taxes
Income Taxes
INCOME TAXES
The provision for income taxes includes the following components: 
 
For the three months ended
September 30
 
For the nine months ended
September 30
 
2011
 
2010
 
2011
 
2010
Current expense
 
 
 
 
 
 
 
Canada
$

 
$

 
$

 
$

Foreign
(788
)
 
(170
)
 
(2,472
)
 
(1,158
)
Future expense


 


 


 


Canada

 

 

 

Foreign
(2,833
)
 
213

 
(9,255
)
 
(1,579
)
Total expense
$
(3,621
)
 
$
43

 
$
(11,727
)
 
$
(2,737
)
The future tax expense is related to the change in the temporary difference between book and tax basis at GSWL.
The current tax expense is related to a temporary tax levy on certain Ghanaian industries, including mining, brewing, banking, communications and insurance. The levy is set at 5% of “profits before tax” as disclosed on the statements of operations. The effective period of this levy has been extended through the end of 2011.
Commitments And Contingencies
Commitments And Contingencies
COMMITMENTS AND CONTINGENCIES
Our commitments and contingencies include the following items:
ENVIRONMENTAL BONDING IN GHANA
In July 2011, we increased a letter of credit for Wassa's environmental bonding from $2.85 million to $7.8 million. This brought the total bonded amount, including $0.15 million of cash, from $3.0 million to $7.95 million. We have also bonded $9.0 million to cover rehabilitation and closure obligations at Bogoso/Prestea. These bonding requirements have been met by an $8.1 million letter of credit from a commercial bank and a $0.9 million cash deposit held by the EPA. The cash deposits are recorded as Restricted Cash on our Consolidated Balance Sheets.
In 2008, Bogoso/Prestea resubmitted an updated draft of the Environmental Management Plan (“EMP”) to the EPA that included an updated estimate of the reclamation and closure costs prepared by a third party consultant. A consultant was commissioned to prepare the reclamation and closure cost estimate and the final EMP was submitted to the EPA in February 2009. Bogoso/Prestea has completed all the legal requirements and is waiting for the environmental certificate. In the mean time and in compliance with the legal time line for the previous EMP, Bogoso/Prestea is preparing a new EMP for submission to the EPA in the fourth quarter of 2011.
In March 2011, we provided $12 million of reclamation bonding to the Ghana Environmental Protection Agency (“EPA”) to cover backfilling of the Plant North pit at Prestea, which we mined from 2003 to 2006. The bonding requirements were met by a $1.2 million cash deposit and a $10.8 million letter of credit from a commercial bank. Provisions of the bond allow the bonded amount to be reduced as cash is spent on the progress of the backfill project. The bonded amount was reduced by $2.7 million in June and then a further $4.7 million in August, reflecting the effort and success achieved in backfilling the Plant North Pit.
ROYALTIES
Dunkwa Properties
As part of the acquisition of the Dunkwa properties in 2003, we agreed to pay the seller a net smelter return royalty on future gold production from the Mansiso and Asikuma properties. As per the acquisition agreement, there will be no royalty due on the first 200,000 ounces produced from Mampon which is located on the Asikuma property. The amount of the royalty is based on a sliding scale which ranges from 2% of net smelter return at gold prices at or below $300 per ounce and progressively increases to 3.5% for gold prices in excess of $400 per ounce.
Government of Ghana
The Ghana Government receives a royalty equal to 5% of mineral revenues, effective as of March 31, 2011.
Benso
Benso pays a $1.00 per ounce gold production royalty to former owners.
Hwini-Butre
As part of the agreement for the purchase of the Hwini-Butre properties, Golden Star agreed to pay B.D. Goldfields Ltd, Hwini-Butre’s former owner, an additional $1.0 million in cash if at least one million ounces of gold are produced and recovered in the first five years of production from the area covered by the Hwini-Butre prospecting license. Gold production was initiated at Hwini-Butre in May 2009. It is not possible at this time to know if future exploration work will increase Hwini-Butre’s reserves sufficiently to yield production of one million ounces prior to May 2014.
EXPLORATION AGREEMENTS
Obuom
In October 2007, we entered into an agreement with AMI Resources Inc. (“AMI”), which gives AMI the right to earn our 54% ownership position in the Obuom property in Ghana. Should AMI eventually obtain full rights to our position on the property and develop a gold mining operation at Obuom, we would receive from AMI a 2% net smelter return royalty on 54% of the property’s gold production.
Goulagou and Rounga
In October 2007, we entered into an option agreement with Riverstone Resources Inc. (“Riverstone”) whereby Riverstone has the right to acquire our 90% interest in the Goulagou and Rounga properties in Burkina Faso. To exercise the option, Riverstone is required to spend Cdn$4 million on exploration programs on the Goulagou and Rounga properties over a four-year period ended in February 2012, and may then purchase our interest for $18.6 million in cash or Riverstone common shares. We were entitled to receive up to two million shares of Riverstone over the term of the option, all of which were received as of March 31, 2011. In addition we received a one-time distribution of two million Riverstone common share purchase warrants during 2008. The Riverstone purchase warrants have an exercise price of Cdn$0.45.
LEGAL PROCEEDINGS
On July 19, 2011 B.D. Goldfields, Ltd. (“plaintiff”), a Ghanaian registered company, filed suit in the Superior Court of Judicature, the High Court of Justice, Commercial Division, in Accra, Ghana, against Golden Star Resources Ltd. and our subsidiary St. Jude Resources (Ghana) Ltd. The plaintiff is challenging the validity of the concession contracts and settlements related to our acquisition of the Hwini-Butre gold property in Ghana in 2006. More specifically the plaintiff is taking the position that the original sales agreement covered only a small section of the Hwini-Butre concession and is now seeking $24 million plus a royalty for the remaining portion of the concession. The plaintiff is also seeking an interim court injunction which would halt mining on the concession until all legal issues are resolved.
In 2008, the plaintiff filed two similar suits in the United States, challenging our ownership of the Hwini-Butre concession and these claims were dismissed by the courts.
Based on the earlier dismissed claims and comprehensive court- approved settlements that were reached among the plaintiff and our wholly- owned subsidiary St Jude Resources Ltd. and other related parties before the Ghanaian Court of Appeal in February 2006 with respect to title to the Hwini-Butre gold property, management has assessed the likelihood that any amount would be settled on this claim is remote. During the third quarter of 2011 we prepared a defense to this claim and filed it with the Ghana court on October 5, 2011. We are now awaiting the court's consideration of this case.
Share Capital
Share Capital
SHARE CAPITAL
Changes in share capital during the nine months ended September 30, 2011 are as follows: 
 
Shares
 
Amount
Balance at December 31, 2010
258,511,236

 
$
693,487

Common shares issued:

 

Option exercises
113,250

 
297

Balance at September 30, 2011
258,624,486

 
$
693,784


We held no treasury shares as of December 31, 2010 and September 30, 2011.
Cost Of Sales
Cost Of Sales
COST OF SALES
 
For the three months ended
September 30
 
For the nine months ended
September 30
 
2011
 
2010
 
2011
 
2010
Mining operations costs
$
87,387

 
$
77,329

 
$
258,487

 
$
216,655

Operations costs from/(to) metal inventory
1,310

 
(2,548
)
 
851

 
(2,314
)
Mining related depreciation and amortization
15,504

 
22,570

 
52,023

 
75,301

Accretion of asset retirement obligations
2,184

 
601

 
5,300

 
1,802

Total cost of sales
$
106,385

 
$
97,952

 
$
316,661

 
$
291,444

Stock Based Compensation
Stock Based Compensation
STOCK BASED COMPENSATION
Non-cash employee compensation expense recognized in general and administrative expense in the statements of operations with respect to the Plan are as follows:
 
For the three months ended
September 30
 
For the nine months ended
September 30
 
2011
 
2010
 
2011
 
2010
Total stock compensation expense
$
564

 
$
449

 
$
2,784

 
$
2,368


STOCK OPTIONS
We have one stock option plan, the Third Amended and Restated 1997 Stock Option Plan (the “Plan”) approved by shareholders in May 2010, under which options are granted at the discretion of the Board of Directors. Options granted are non-assignable and are exercisable for a period of ten years or such other period as stipulated in a stock option agreement between Golden Star and the optionee. Under the Plan, we may grant options to employees, consultants and directors of the Company or its subsidiaries for up to 25,000,000 shares, of which 9,143,846 are available for grant as of September 30, 2011, and the exercise price of each option is not less than the closing price of our shares on the Toronto Stock Exchange on the day prior to the date of grant. Options typically vest over periods ranging from immediately to three years from the date of grant. Vesting periods are determined at the discretion of the Board of Directors.
We granted 1,988,000 and 1,308,500 options during the first nine months of 2011 and 2010, respectively. We do not receive a tax deduction for the issuance of options. As a result we do not recognize any income tax benefit related to the stock compensation expense.
The fair value of our option grants are estimated at the grant dates using the Black-Scholes option-pricing model. Fair values of options granted in the first nine months of 2011 and 2010 were based on the assumptions noted in the following table:
 
For the nine months ended
September 30
 
2011
 
2010
Expected volatility
66.33 to 69.79%
 
67.95 to 77.37%
Risk-free interest rate
1.58 to 2.26%
 
2.34 to 2.58%
Expected lives
5.63 to 8.47 years
 
6.0 to 8.6 years
Dividend yield
0%
 
0%
Expected volatilities are based on the mean reversion tendency of the volatility of Golden Star's shares. Golden Star uses historical data to estimate share option exercise and employee departure behavior and this data is used in determining input data for the Black-Scholes model. Groups of employees that have dissimilar historical behavior are considered separately for valuation purposes. The expected term of the options granted represents the period of time that the options granted are expected to be outstanding; the range given above results from certain groups of employees exhibiting different post-vesting behaviors. The risk-free rate for periods within the contractual term of the option is based on the Canadian Chartered Bank administered interest rates in effect at the time of the grant.

A summary of option activity under the Plan during the nine months ended September 30, 2011:
 
Options
(‘000)
 
Weighted–
Average
Exercise
price
(Cdn$)
 
Weighted–
Average
Remaining
Contractual
Term (Years)
 
Aggregate
intrinsic  value
Cdn($000)
Outstanding as of December 31, 2010
6,724

 
3.35

 
7.0

 
9,001

Granted
1,988

 
2.80

 
10.0

 

Exercised
(113
)
 
1.84

 
4.0

 

Forfeited, canceled and expired
(127
)
 
3.65

 
6.0

 

Outstanding as of September 30, 2011
8,472

 
3.24

 
7.0

 
474




 


 


 


Exercisable as of September 30, 2011
6,047

 
3.32

 
6.0

 
393

Stock Bonus Plan
In December 1992, we established an Employees' Stock Bonus Plan (the “Bonus Plan”). The activity and status of the Bonus Plan is unchanged from what was disclosed in our December 31, 2010 annual report on Form 10-K.
Deferred Share Units
On March 9, 2011 the Board adopted a Deferred Share Unit Plan (“DSU plan”) which was subsequently approved by shareholders at the May 2011 annual meeting. The DSU Plan creates Deferred Share Units (“DSUs”), each representing the right to receive one share of Golden Star common stock upon redemption. DSUs may be redeemed only upon termination of the holder's services to the Company, and may be subject to vesting provisions. DSU awards are granted at the sole discretion of the Company's compensation committee. The DSU Plan allows directors, at their option, to receive all or any portion of their retainer by accepting DSUs in lieu of cash.
The compensation committee may also award DSUs to executive officers and/or directors in lieu of cash as a component of their long term performance compensation, the amount of such awards being in proportion to the officer's or director's achievement of pre-determined performance goals. As with DSU awards for directors' retainers, DSUs received as performance compensation are redeemable only upon termination of the holder's services to the Company. The Company may, at its option, provide cash in lieu of common shares upon a holder's redemption, the cash value being established by the share price on the DSU original award date, less all applicable tax withholding.

In the third quarter of 2011, the Company granted 8,483 units to directors of the company in lieu of fees earned and accrued in the second quarter of 2011. These units were immediately vested. The Company recognized compensation expense related to DSUs of $21,461. As of September 30, 2011, there was nil unrecognized compensation expense related to DSUs granted under the Company's DSU plan. There were 8,483 DSUs outstanding at September 30, 2011.
Earnings Per Common Share
Earnings Per Common Share
EARNINGS PER COMMON SHARE
The following table provides reconciliation between basic and diluted earnings per common share:
 
For the three months ended
September 30
 
For the nine months ended
September 30
 
2011
 
2010
 
2011
 
2010
Net income/(loss) attributable to Golden Star shareholders
$
(10,196
)
 
$
15,944

 
$
(9,316
)
 
$
1,075




 


 


 


Weighted average number of shares (millions)
258.6

 
258.2

 
258.6

 
257.8

Dilutive securities:

 

 

 

Options

 
2.0

 

 
1.8

Convertible debentures

 

 

 

Weighted average number of diluted shares (millions)
258.6

 
260.2

 
258.6

 
259.6



 

 

 

Net income/(loss) per share attributable to Golden Star shareholders:
 
 
 
 
 
 
 
Basic
(0.039
)
 
0.062

 
(0.036
)
 
0.004

Diluted
(0.039
)
 
0.061

 
(0.036
)
 
0.004

Operations By Segment And Geographic Area
Operations By Segment And Geographic Area
OPERATIONS BY SEGMENT AND GEOGRAPHIC AREA
 
 
Africa
 
 
 
 
 
 
As of and for the three months ended September 30
 
Bogoso/
Prestea
 
Wassa/
HBB
 
Other
 
South
America
 
Corporate
 
Total
2011
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
$
68,693

 
$
57,187

 
$

 
$

 
$

 
$
125,880

Net income/(loss) attributable to Golden Star
 
2,881

 
8,174

 
(1,039
)
 
(92
)
 
(20,120
)
 
(10,196
)
Income tax expense
 

 
(3,621
)
 

 

 

 
(3,621
)
Capital expenditure
 
9,027

 
11,638

 
146

 

 

 
20,811

Total assets
 
371,787

 
253,685

 
2,532

 
228

 
83,560

 
711,792

2010
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
$
54,003

 
$
49,648

 
$

 
$

 
$

 
$
103,651

Net income/(loss) attributable to Golden Star
 
833

 
1,793

 
(1,169
)
 
(75
)
 
14,562

 
15,944

Income tax benefit
 

 
43

 

 

 

 
43

Capital expenditure
 
13,115

 
12,076

 
29

 

 

 
25,220

Total assets
 
357,487

 
231,953

 
3,095

 
(251
)
 
167,443

 
759,727

 
 
Africa
 
 
 
 
 
 
As of and for the nine months ended September 30
 
Bogoso/
Prestea
 
Wassa/
HBB
 
Other
 
South
America
 
Corporate
 
Total
2011
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
$
162,790

 
$
189,403

 
$

 
$

 
$

 
$
352,193

Net income/(loss) attributable to Golden Star
 
(12,889
)
 
27,189

 
(2,419
)
 
(356
)
 
(20,841
)
 
(9,316
)
Income tax expense
 

 
(11,727
)
 

 

 

 
(11,727
)
Capital expenditure
 
29,877

 
28,407

 
421

 

 

 
58,705

Total assets
 
371,787

 
253,685

 
2,532

 
228

 
83,560

 
711,792

2010
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
$
168,212

 
$
159,010

 
$

 
$

 
$

 
$
327,222

Net income/(loss) attributable to Golden Star
 
16,596

 
8,045

 
(2,446
)
 
59

 
(21,179
)
 
1,075

Income tax expense
 

 
(2,737
)
 

 

 

 
(2,737
)
Capital expenditure
 
29,806

 
20,176

 
1,613

 

 
95

 
51,690

Total assets
 
357,487

 
231,953

 
3,095

 
(251
)
 
167,443

 
759,727

Related Parties
Related Parties
RELATED PARTIES
During the first nine months of 2011, we obtained legal services from a firm to which one of our board members is of counsel. The cost of services incurred from this firm during the first nine months of 2011 and 2010 was $0.3 million and $0.8 million, respectively. Our board member did not personally provide any legal services to the Company during these periods nor did he benefit directly or indirectly from payments for the services performed by the firm.
Supplemental Cash Flow Information
Supplemental Cash Flow Information
SUPPLEMENTAL CASH FLOW INFORMATION
In the first nine months of 2011, $2.5 million was paid for income taxes. Cash paid for income taxes during the first nine months of 2010 was $1.0 million. Cash paid for interest was $3.4 million in the first nine months of 2011 and $3.8 million in the first nine months of 2010.
In February 2010, the company recognized a non-cash $4.9 million liability and an offsetting $4.9 million asset related to delivery of a 10 megawatt power plant upon successful commissioning at Bogoso.
International Financial Reporting Standards
International Financial Reporting Standards
INTERNATIONAL FINANCIAL REPORTING STANDARDS
Our consolidated financial statements have been prepared in accordance with U.S. GAAP which differ from financial statements prepared in accordance with IFRS. The effect of applying IFRS to our financial statements is shown below:
CONSOLIDATED BALANCE SHEETS UNDER IFRS
 
US GAAP
 

 

 
IFRS
 
IFRS
 
As of
September 30
2011
 
Note
 
Adjustments
 
As of
September 30
2011
 
As of
December 31
2010
ASSETS

 

 

 

 

CURRENT ASSETS

 

 

 

 

Cash and cash equivalents
$
114,294

 

 

 
$
114,294

 
$
178,018

Accounts receivable
16,384

 

 

 
16,384

 
11,885

Inventories
64,625

 
1

 
$
(21
)
 
64,604

 
65,204

Deposits
8,368

 

 

 
8,368

 
5,865

Prepaids and other
2,097

 

 

 
2,097

 
1,523

Total Current Assets
205,768

 

 

 
205,747

 
262,495

RESTRICTED CASH
2,405

 

 

 
2,405

 
1,205

PROPERTY, PLANT AND EQUIPMENT
241,292

 

 

 
241,292

 
227,367

INTANGIBLE ASSETS
5,793

 

 

 
5,793

 
7,373

MINING PROPERTIES
254,172

 
2, 3

 
35,838

 
290,010

 
293,102

DEFERRED EXPLORATION

 
4

 
16,287

 
16,287

 
14,487

OTHER ASSETS
2,362

 

 

 
2,362

 
3,168

Total Assets
$
711,792

 

 

 
$
763,896

 
$
809,197

LIABILITIES

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Accounts payable
$
23,139

 

 

 
$
23,139

 
$
34,522

Accrued liabilities
51,857

 

 

 
51,857

 
53,935

Fair value of derivatives
6,813

 

 

 
6,813

 

Asset retirement obligations
11,445

 

 

 
11,445

 
23,485

Current tax liability
714

 

 

 
714

 
1,128

Current debt
7,327

 

 

 
7,327

 
10,014

Total Current Liabilities
101,295

 

 

 
101,295

 
123,084

LONG TERM DEBT
133,259

 
6

 
(10,590
)
 
122,669

 
117,290

ASSET RETIREMENT OBLIGATIONS
22,311

 
3

 
14,700

 
37,011

 
42,826

CAPITAL LEASES

 

 

 

 

NET DEFERRED TAX LIABILITY
24,932

 
5

 
5,208

 
30,140

 
21,094

Total Liabilities
$
281,797

 

 

 
$
291,115

 
$
304,294

COMMITMENTS AND CONTINGENCIES

 

 

 

 

SHAREHOLDERS’ EQUITY

 

 

 

 

SHARE CAPITAL

 

 

 

 

First preferred shares, without par value, unlimited shares authorized.

 

 

 

 

No shares issued and outstanding

 

 

 

 

Common shares, without par value, unlimited shares authorized. Shares issued and outstanding: 258,624,486 at September 30, 2011; 258,511,236 at December 31, 2010
693,784

 

 

 
693,784

 
693,487

CONTRIBUTED SURPLUS
19,258

 
7

 
1,125

 
20,383

 
17,433

EQUITY COMPONENT OF CONVERTIBLE NOTES

 
6

 
34,542

 
34,542

 
34,542

ACCUMULATED OTHER COMPREHENSIVE INCOME
1,679

 

 

 
1,679

 
1,959

DEFICIT
(283,352
)
 

 
4,475

 
(278,877
)
 
(243,930
)
TOTAL GOLDEN STAR EQUITY
431,369

 

 

 
471,511

 
503,491

NONCONTROLLING INTEREST
(1,374
)
 
8

 
$
2,644

 
1,270

 
1,412

TOTAL EQUITY
$
429,995

 

 

 
$
472,781

 
$
504,903

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
711,792

 

 

 
$
763,896

 
$
809,197

UNDER IFRS
 
US GAAP
 

 

 
IFRS
 
IFRS
 
For the three months ended
 

 

 
For the three months ended
 
For the three months ended
 
 

 

 
 
 
September 30 2011
 
Note
 
Adjustments
 
September 30 2011
 
September 30 2010
 
 
 
 
 
REVENUE

 

 

 

 

Gold revenues
$
125,880

 

 

 
$
125,880

 
$
103,651

Cost of sales
106,385

 
 1,2,3
 
$
886

 
107,271

 
90,824

  Mine operating margin
19,495

 

 

 
18,609

 
12,827



 

 

 

 

Exploration expense
1,824

 
4
 
(735
)
 
1,089

 
637

General and administrative expense
5,996

 
7
 
106

 
6,102

 
3,943

Abandonment and impairment

 
4
 

 

 
3

Derivative mark-to-market gains
13,245

 
6
 
(2,085
)
 
11,160

 
(311
)
Property holding costs
1,778

 

 

 
1,778

 
1,557

Foreign exchange loss
666

 

 

 
666

 
313

Interest expense
2,193

 
6
 
1,906

 
4,099

 
4,341

Interest and other income
(61
)
 

 

 
(61
)
 
(48
)
Gain on sale of assets
(338
)
 

 

 
(338
)
 

Income/(loss) before income tax
(5,808
)
 

 

 
(5,886
)
 
2,392

Income tax expense
(3,621
)
 
5
 
683

 
(2,938
)
 
(487
)
Net income/(loss)
$
(9,429
)
 

 

 
$
(8,824
)
 
$
1,905

Net income attributable to noncontrolling interest
767

 
8
 
(203
)
 
564

 
61

Net income/(loss) attributable to Golden Star shareholders
(10,196
)
 

 

 
(9,388
)
 
1,844



 

 

 

 

Net income/(loss) attributable to Golden Star shareholders per share:

 

 

 

 

Basic
$
(0.039
)
 

 

 
$
(0.036
)
 
$
0.007

Diluted
$
(0.039
)
 

 

 
$
(0.036
)
 
$
0.007

Weighted average shares outstanding (millions)
258.6

 

 

 
258.6

 
258.2

Weighted average number of diluted shares (millions)
258.6

 

 

 
258.6

 
260.2



 

 

 

 

OTHER COMPREHENSIVE INCOME/(LOSS)

 

 

 

 

Net income/(loss)
$
(9,429
)
 

 

 
$
(8,824
)<