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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 14, 1998
GOLDEN STAR RESOURCES LTD.
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(Exact name of registrant as specified in its charter)
CANADA 000-21708 980101955
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(State or other jurisdiction (Commission File IRS Employer
of incorporation) Number) Identification No.)
1660 Lincoln St., Suite 3000, Denver, Colorado 80264
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(Address of principal executive offices ) (zip code)
(303)-830-9000
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(Registrant's telephone number, including area code )
Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
Golden Star Resources Ltd. (the "Recipient") and its approximately 71% owned
public French subsidiary, Guyanor Ressources S.A., have completed an internal
review of the mineralized inventory estimates for the Paul Isnard project in
French Guiana, which were made public in February. The review identified
inappropriate parameters used in the mineralized inventory calculations which
led to an over estimation of open pit mineralized inventories and, to a much
lesser degree geologic inventories. A new estimate has been prepared using more
appropriate parameters and is currently being independently reviewed by SRK
Consulting ("SRK"), an international consulting firm specializing in engineering
and applied science. A copy of the Registrant's press release regarding the
restated mineralized inventory is attached hereto as an exhibit and incorporated
by reference. The August 14, 1998 announcement describes the principal
differences between the August and February estimates.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GOLDEN STAR RESOURCES LTD.
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Registrant
Date August 14, 1998 /s/ Gordon J. Bell
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Gordon J. Bell, Vice President
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description of Exhibit
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99.1 Registrant's press release, dated August 14, 1998 entitled "Restatement
of Mineralized Inventories at the Paul Isnard Project in French Guiana."
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EXHIBIT 99.1
JOINT PRESS RELEASE
GOLDEN STAR RESOURCES LTD.
GUYANOR RESSOURCES S.A.
Restatement of Mineralized Inventories at the Paul Isnard Project in French
Guiana Denver, Colorado and Cayenne, French Guiana - August 14, 1998
Golden Star Resources Ltd. (Golden Star) and its approximately 71% owned public
French subsidiary, Guyanor Ressources S.A. (Guyanor), have completed an internal
review of the mineralized inventory estimates for the Paul Isnard project in
French Guiana, which were made public in February. The review has identified
inappropriate parameters used in the mineralized inventory estimations which led
to an over estimation of open pit mineralized inventories and to a much lesser
degree geologic inventories. A new estimate has been prepared using more
appropriate parameters and is currently being independently reviewed by SRK
Consulting (SRK), an international consulting firm specializing in engineering
and applied science. The following table compares the results of the new
estimates with the February estimates.
TABLE 1. PAUL ISNARD PROJECT, FRENCH GUINEA - MONTAGNE D'OR MINERALIZED
INVERNTORIES, COMPARISON OF FEBRUARY AND AUGUST 1998 ESTIMATES
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WHITTLE PIT MINERALIZED INVENTORIES GEOLOGIC MINERALIZED INVENTORIES
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Millions Grade Strip Millions Grade
Estimate tonnes g Au/t Ratio Estimate tonnes g Au/t
- -------- -------- ------ ----- -------- --------- ------
Feb-98 16.3 2.5 6:1 May-98 28.6 2.0
Aug-98 4.6 2.6 6:1 Aug-98 34.7 1.4
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ESTIMATE ASSUMPTIONS
Gold Pit Slope Mining Mining Cost Milling
Estimate Price degrees Dilution /t Milled Cost /t
- -------- ----- ---------- -------- ----------- --------
Feb-98 $350 48 0% $ 10.50 $ 11.50
Aug-98 $350 55 10% $ 7.70 $ 9.30
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Principal Differences between the August and February Estimates
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In general, the revised, August 1998 estimate represents a more conservative
view of the Montagne d'Or deposit taking into consideration the overall
confidence in the geologic model and grade estimations given the wide spaced
drilling on the project. Following are the principal differences between the
August and February estimates.
. In the February model, the influence of assay values were extrapolated over
distances up to 400 meters in order to fill out the block model, given the
wide spaced drilling at Montagne d' Or (nominally 200 meter centers over a
strike of approximately 3 kilometers). The new estimate makes use of a
modified approach, which more reasonably restricts the influence of higher
grade assay values in the deposit and as a result reduces the volume of
higher grade material, especially material lower in the deposit, that led to
deeper pits and consequentially greater mineable tonnages in the February
estimate.
<PAGE>
JOINT PRESS RELEASE - GOLDEN STAR AND GUYANOR ANNOUNCE RESTATEMENT OF
MINERALIZED INVENTORIES AT THE PAUL ISNARD PROJECT IN FRENCH GUIANA
AUGUST 14, 1998
PAGE TWO
. The revised August estimate uses a more conservative estimate of waste rock
in determining total waste and the resulting strip ratio. A higher waste rock
density factor of 2.65 was used in the August estimate while a lower density
factor of 2.4 was used in the February estimate, which resulted in an
underestimation of total waste tonnage in the February estimate.
. With respect to the geologic mineralized inventory estimates, the primary
difference between the August and February estimate is grade related, with
average model grades of 1.4 g Au/t and 2.0 g Au/t respectively. Again the
difference is accounted for by restricting the influence of higher grade
values horizontally, or along the strike of the deposit. The August estimate
reflects the wide spaced drilling at Montagne d'Or and the need for
additional infill drilling to be able to more accurately model the grade
distribution within the deposit. Only more drilling will allow greater
confidence in grade continuity.
. The February estimate was prepared by Golden Star's technical staff. The
August open pit and geologic mineralized inventory estimates for Paul Isnard
have been prepared with the involvement of Guyanor's senior technical staff
and are currently being independently reviewed by SRK.
Fundamentally, the August estimates more appropriately reflect the wide spacing
of drill hole information over a 3 kilometer strike length and, based on the
limited current information, represents a more realistic view of the Montagne
d'Or deposit. At the same time and despite the restatement, the potential of
the Montagne d'Or deposit remains under explored. Three core drilling campaigns
have defined a mineralized system over a minimum strike length of 3 kilometers
and to a minimum depth of 200 meters. The geology of the deposit is becoming
better understood and the drilling completed to date has provided strong
evidence of geologic continuity in the system. As recently reported, ongoing
geophysical surveys and core drilling have only made the geologic model more
robust by identifying sulfide targets that have been intersected in drill core
and are consistent with the geologic model. The geologic understanding of
Montagne d'Or provides a solid foundation for infill drilling over the known
strike of the deposit as well as continued exploration along strike of Montagne
d'Or and elsewhere in the large Paul Isnard project area.
Effects of the Paul Isnard Restatement on Golden Star and Guyanor
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The restatement of the Paul Isnard open pit and geologic mineralized inventories
impact both Golden Star and Guyanor's attributable mineralized inventories. The
impact of the Paul Isnard restatement on Golden Star's total attributable
reserves and open pit inventories is a reduction of 8.2 million tonnes, from
51.9 million tonnes grading 1.9 g Au/t in May to 43.7 million tonnes grading 1.8
g Au/t. For Guyanor, the Paul Isnard restatement results in a reduction in
attributable open pit mineralized inventory tonnage of 11.7 million tonnes, from
26.1 million tonnes grading 2.4 g Au/t to 14.6 million tonnes grading 2.3 g
Au/t. Geologic inventories for both companies remain little changed with
increased tonnages offset by decreased average grades.
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JOINT PRESS RELEASE - GOLDEN STAR AND GUYANOR ANNOUNCE RESTATEMENT OF
MINERALIZED INVENTORIES AT THE PAUL ISNARD PROJECT IN FRENCH GUIANA
AUGUST 14, 1998
PAGE THREE
In considering the total gold reserves and mineralized inventories attributable
to Golden Star and Guyanor in the Americas it should be noted that reserve and
mineralized inventory estimates for Gross Rosebel, Andorinhas, Yaou and Dorlin
have all been prepared in conjunction with our various joint venture partners
and reviewed by outside consultants. The estimates for the Michel zone at St-
Elie will be reviewed internally over the course of the next 30 days, followed
by an independent review by outside consultants.
Corrective Actions to be Taken
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As a result of the restatement of the mineralized inventories at Paul Isnard, a
full review of the Company's technical management structure, policies and
procedures for mineralized inventory and reserve estimation is underway.
Appropriate action will be taken following completion of the review, which is
scheduled to be completed in the next 30 days. In the mean time, Golden Star's
recently appointed Manager of Mining Geology will have direct access to Golden
Star's senior management and will be responsible for reviewing and approving all
future estimates of mineralized inventories and reserves prior to independent
review by outside experts.
David Fennell, President of Golden Star and Guyanor, commented, "Golden Star
and Guyanor have for some time been considered among the most competent and
professional exploration organizations in the business. The problems found in
our February estimates for Paul Isnard show that we have had a kink in our
armor. The weak link is not to be found in Guyanor's technical staff or our
exploration and understanding of the geology of Montagne d'Or. The weak link
was in the block modeling exercise conducted in February. We recently appointed
a Manager of Mining Geology to strengthen our geologic modeling and reserve and
resource estimation capabilities. It was the implementation of this policy
that led to the recognition that our previous estimation parameters for Paul
Isnard were not appropriate given the wide spaced drilling information over the
deposit. We have taken immediate, proactive measures to revise the February
estimate. We are also undertaking a full internal review of our policies,
procedures and management structure with respect to geologic modeling and
resource estimation. Our current estimate only reflects what we now know of
Montagne d'Or. We are more confident than ever that further exploration will
prove our continued enthusiasm for the project warranted, given the quality of
our people in French Guiana, the geologic setting at Paul Isnard and the
positive results of our ongoing geophysical and core drilling programs."
The Paul Isnard project, which includes the Paul Isnard and Eau Blanche areas,
covers approximately 250 square kilometers. Of this area, approximately 150
square kilometers are held by SOTRAPMAG, a wholly owned subsidiary of Guyanor,
in the form of mining concessions, which give SOTRAPMAG the right to mine on the
concessions. The remaining 100 square kilometers are held in the form of French
"B" type exploration permits which give SOTRAPMAG the right to explore and can,
if a commercially exploitable deposit is demonstrated, be converted to
exploitation permits. SOTRAPMAG currently holds an approximate 87% interest in
the Paul Isnard projects, with the remainder held by LaSource Developpement
S.A.S. (LaSource) under a pre-existing joint venture agreement.
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JOINT PRESS RELEASE - GOLDEN STAR ANDGUYANOR ANNOUNCE RESTATEMENT OF MINERALIZED
INVENTORIES AT THE PAUL ISNARD PROJECT IN FRENCH GUIANA
AUGUST 14, 1998
PAGE FOUR
Golden Star is a gold and diamond exploration company which holds a 30% equity
interest in the Omai gold mine in Guyana, one of the largest gold mines in South
America. Golden Star also holds significant gold and diamond exploration
interests in South America and Africa. Golden Star currently has approximately
30.3 million shares outstanding, approximately US$11 million in cash and no
debt. The Company is listed on the Toronto Stock Exchange (under the symbol
"GSC") and the American Stock Exchange (under the symbol "GSR").
Guyanor is a French exploration company in which Golden Star Resources Ltd. is
the majority shareholder. Guyanor operates exclusively in the French Department
of Guyane (French Guiana) and is focused on the identification, exploration and
development of significant mineral deposits, principally gold and diamonds.
Guyanor currently holds interests in the St-Elie, Yaou, Dorlin, and Paul Isnard
gold properties as well as the Dachine diamond property. Guyanor is listed on
the Toronto Stock Exchange under the symbol GRL.B and on Le Nouveau Marche of
the Paris Bourse under the symbol, GUYN.
The above forward-looking statements involve risks and uncertainties including
those relating to exploration, the establishment of reserves, potential mine
development and the recovery of any reserves. Please refer to a discussion of
these and other factors in Golden Star's 10-K, 10-Q and other Securities and
Exchange Commission filings. The Whittle Pit mineralized inventories mentioned
above do not qualify as reserves and have not been reported as such. They were
prepared only to give an idea of the portion of the geological inventories that
could be exploited economically utilizing open pit mining methods through the
application of certain economical and technical parameters in a mathematical
algorithm. This estimation of resource will not qualify as a reserve until a
more comprehensive evaluation based upon unit cost, grade, recoveries and other
material factors is concluded. Consequently, there can be no assurance that the
mineralized inventories within the Whittle Pits mentioned above will ever become
ore reserves.
For further information, please contact:
GOLDEN STAR RESOURCES LIMITED
David A. Fennell RICHARD A. WINTERS
President & CEO Vice President Corporate Development
(303) 830-9000 or (800) 553-8436
GUYANOR RESSOURCES S.A.
Jean-Francois Sauvage
Managing Director
Cayenne, French Guiana
011-594-29-5440
