Golden Star Resources Ltd.

Paolo Lostritto - National Bank Financial, Inc., Research Division Cosmos Chiu - CIBC World Markets Inc., Research Division Andrew Breichmanas - BMO Capital Markets Canada Trevor Turnbull - Scotiabank Global Banking and Markets, Research Division Anita Soni - Crédit Suisse AG, Research Division William Richard Nasgovitz - Heartland Advisors, Inc.

Thank you. Good morning, everyone, and thank you for joining us on the call today.

Just before I begin, I wanted to highlight Dan, our Executive VP of Operations, will be taking this call from Accra in Ghana. Great, thanks.

Firstly, I would like to take this opportunity to thank the Golden Star team for delivering on our goal to reduce costs and stabilize our operations. With the achievement of both of these, we now have clear sight of where production will come from over the next 2 years.

At Bogoso, we will continue to process ore from Bogoso North and Chujah pits until the fourth quarter of 2015. This production will be supplemented by recoveries from the tailings retreatment program.

At Wassa, mining will continue from the Wassa Main and Father Brown pits where push back will secure continued access to ore. In addition, we have a strong pipeline of development projects ahead, and we continue to evaluate based on capital efficiency and rate of return.

We have an effective and highly committed team that has accomplished a tremendous amount of work in this year of transition. I thank my team listening today for their efforts.

Before we begin to discuss our quarterly results, I want to remind you of what we set out to do in June. Our focus was and remains on cost reduction, mine optimization and appropriate capital reallocation.

We have a can-do attitude. On June 17, we announced our action plan to deliver on critical components in this new gold price environment.

As a reminder, here is what we set out to do: Cost cutting initiatives were expected to provide savings of $45 million. To date, we have achieved half of these, and we expect to see continued cost savings in the next quarter.

Mine sequencing and cash flow generation models were updated, with new pit shell assumptions of $1,100 per ounce gold price at Wassa and $1,200 an ounce at Dumasi and Mampon. This is now complete.

Development capital commitments, excluding betterment stripping, were reduced from $81 million to $37 million and sustaining capital was reduced by $24 million to $36 million. On the same basis, we have spent $57 million year-to-date.

This spending is in line with the revised $73 million of capital expenditure expected for the fiscal year. Jeff will speak in more detail on our spending this quarter.

We are now operating at a much higher level of efficiency as a result of these changes, meaning we are focused on cost reduction, capital conservation, as we are nearing the end of our investment in the Bogoso North and the Chujah push backs. We are well positioned for increased operating cash flow in 2014.

I believe that Golden Star is better prepared for downside movements in gold price as a result of our action plan and extremely well leveraged for any upside change. I will start by reviewing the progress we made this quarter in our financial results.

Revenue over the period was $118 million. This reflects the lower realized gold price, which was down 6.3% quarter-on-quarter to $1,329 per ounce.

On a consolidated basis, cash operating costs per ounce declined $118 to $960 an ounce, compared to $1,078 an ounce during the last quarter. This result is directly attributable to our focus on lowering cost production and marks the third consecutive quarter of reduced mine operating expenses.

Cash generated by operations before working capital changes totaled $12.8 million. This is significantly better than last quarter results of just over $300,000.

Our consolidated cash position at the end was about $67 million, with a further $40 million available in existing financing agreements, and Jeff will talk more to this shortly. Our net income attributable to shareholders amounted to $3.5 million or an earnings of $0.01 per share.

In the quarter, gold sold increased 5% to nearly 89,000 ounces. This is our highest production quarter since the second quarter of 2010, as we had strong performance at both our Wassa and Bogoso mines.

Year-to-date gold sold was just over 255,000 ounces on the 30th of September, and you will have seen that we've announced today an upward revision of our 2013 production guidance to 325,000 to 330,000 ounces. This increase is largely due to our tailings facility, providing an incremental and stable source of production at a greater rate than expected, and to improve productivity at Bogoso, which Dan will provide some detail on.

Pleasingly, our 3 processing plants are operating at near-capacity, which is a credit to our on-site teams’ improved maintenance protocols as well as effective capital investment made in these plants over the last 2 years. Although we don't yet have a quantified mineral reserve for the tailings, we estimate that tailings retreatment is expected to supply production for at least another 5 years at the current rate.

To update you on the Bogoso North and Chujah push backs, we are progressing well, and as a result of improved access to ore, we are seeing a stronger than anticipated production coming from Bogoso. We expect to complete these push backs in the second quarter of next year.

As you know, a successful public hearing was held at Prestea South in the third quarter. The project can now advance to the next phase of its environmental permitting.

Dan will provide an update on this and our other development projects. I will now turn the call over to Jeff, to discuss our financial performance.

Jeff?

Thank you, Sam. Good morning to all of our analysts and investors on the call.

I will be reviewing major items contributing to our financial performance, and changes to our financial condition for the third quarter of 2013. Driven mainly by the improved results at Bogoso, gold sales for the third quarter increased approximately 4,000 ounces to 88,925 ounces.

However, with the 6% reduction quarter-on-quarter in realized gold prices, revenue decreased marginally to $118 million from $121 million in the second quarter. As Sam indicated, the average realized gold price achieved was $1,329 per ounce.

Wassa's revenues were down 17% quarter-over-quarter to $59 million compared to $73 million in the second quarter of 2013. Despite the increase in tonnes processed at Wassa, revenue was negatively impacted by the decline in the grade processed and by lower realized gold prices.

Gold production at Wassa decreased to 44,830 ounces for the quarter as a result of lower grade ore being mined from the Father Brown pit, which was partially offset by the higher grade ore mined at the Wassa pit. Bogoso performed well during this quarter, with revenues of $59 million.

This is approximately $10 million higher than the previous quarter. The increase in throughput and the startup of full production from the tailings reclaim facility contributed very positively to Bogoso's production and revenue results.

Accordingly, total gold sales at Bogoso were 44,095 ounces, an increase of 28% from the previous quarter. Now turning to Slide 9.

In June, we announced that we were going to implement $45 million of cost savings over the remainder of this year. Results of our massive efforts to reduce our total operating costs over time and shift our production to higher-margin operations are being realized.

To date, we've achieved about half of these savings and are on track to achieve the other half in the fourth quarter, mostly from continued operating expense savings at Bogoso. These savings referred to in our press release were obtained through the following: At Bogoso, we reduced operating expenses by obtaining supplier discounts and reducing the water treatment costs at both plants.

With the purchase of 2 new excavators, we obtained an overall reduction in maintenance and fuel costs. We also reallocated equipment and improved efficiencies, as a result, we are becoming less reliant on contractors and reduced the number of overall contractors as well.

Lastly, we renegotiated our supplier contracts which resulted in price improvements. At both Bogoso and Wassa, operating results were realized through transport and delivery efficiencies, stock holding cost reductions, and improved purchasing procedures.

Although total cash operating costs at Wassa declined slightly quarter-over-quarter, cash operating cost per ounce increased 9% to $805 per ounce. This was on account of a 12% reduction in grade and additional tonnes processed at the Wassa plant.

For Bogoso, we are very pleased to see our cash operating costs per ounce for the third quarter decline 29% to $1,118 per ounce from $1,584 per ounce in the second quarter. This cost reduction is mainly due to: An increase in average grade of ore processed in the refractory plant of 2.62 grams per tonne in comparison to the average grade processed in the second quarter at refractory plant of 2.15 grams per tonne; the inclusion of low-cost ore from the tailings facility at the non-refractory plant, the positive results from this program are exceeding our initial expectations as Sam mentioned, and we are pleased with its contribution to the full-year results; and lastly, general cost savings were achieved across the operation as I mentioned before.

All-in sustaining costs on a consolidated basis declined 12% to $1,213 per ounce for the third quarter of 2013 when compared to $1,378 per ounce realized last quarter. We are also targeting to maintain these cost savings going forward.

Golden Star's net income attributable to shareholders was approximately $3.5 million or $0.01 per share this quarter versus a net loss of $129 million for Q2. Now adjusted for the non-cash mark-to-market loss on the convertible debentures, net income would have been $4.7 million or $0.02 per share.

This significant improvement from Q2 was largely a result of the non-cash impairment charges of $170 million net of tax that was incurred in the second quarter. Also, I want to mention third quarter depreciation and amortization decreased to $9.8 million from $24 million in the second quarter, as our book value of our mining assets decreased with this impairment charge.

Now turning to cash flows. Before working capital changes, operations provided $13 million of operating cash flow during the third quarter, up from $300,000 provided in the second quarter of this year.

This increase was mainly a reflection of lower mining operating expense. Now, I'd like to take -- walk you through our capital spending.

Year-to-date major capital expenditures at Bogoso include: $7 million on the Dumasi resettlement project; $3 million for the development expenditures at Mampon and Prestea South; $4 million on Prestea underground; $1.5 million on completing the construction of a water treatment plant; $11.4 million for mining equipment; $4 million was spent on plant upgrades; and $23.6 million on capitalized betterment stripping. While major capital spending items at Wassa were $10.5 million on development drilling, mostly on the Wassa main pit; $2.2 million on Father Brown development costs; $3 million on the tailings storage facility; and $2.6 million on plant upgrades.

Overall, the company's total capital expenditure for 2013 is expected to be approximately $73 million with another $29 million related to betterment stripping, which we've previously expensed under U.S. GAAP.

And to date, we remain on track to meet our CapEx. As of September 30, 2013, our cash and cash equivalents balance was approximately $67 million.

In addition, we have access to an undrawn term loan from Ecobank for another $40 million, and we also have another $20 million available on our equipment lease facility. Combined, the company has good liquidity and financial flexibility.

This concludes my remarks. And now, I'd like to pass the call on to Dan.

Thank you, Sam and Jeff, and good day, everyone, from Accra. I'm pleased to discuss today the progress on our Wassa and Bogoso operations and our development plans.

Let's start with Wassa. Over the quarter, 540,000 tonnes of ore was mined, a 25% increase from last quarter.

Ore processed was 675,000 tonnes, marginally up from the last quarter. The reason for this differential is that during the second quarter, we actively reduced our stockpile.

Wassa continued to perform well and has demonstrated a stable production profile with lower costs. The grade decline we saw this quarter to 2.24 grams per tonne is as expected, and due to the ongoing balancing of mining operations between the Wassa Main and Father Brown pit.

In the third quarter, we saw lower plant grades coming from the Father Brown pit and higher grade from the Wassa Main pit. As you are aware, we revised our pit shells in the middle of the year to optimize production at $1,100 gold price.

The result was an increasing grade processed at the Wassa Main pit. But the grade processed at the Father Brown pit declined in the quarter closer to its overall reserve grade.

Our push back for the Father Brown will commence in the fourth quarter and will extend the life of this pit. At Bogoso, let me begin by focusing on cash operating costs per ounce, which reduced dramatically underscoring our efforts to reduce operating expenses.

Overall, cash costs reduced 29% to $1,118 per ounce. Quarter 3 was our first quarter of running the tailings retreatment project on a full-time basis, and this added to the strong quarter for Golden Star.

And at the end of third quarter, throughput was exceeding targets. The initial target was 4,000 tonnes per day and toward the end of the quarter, we achieved 5,000 tonnes per day.

The incremental cost of these ounces is low and the project therefore contributed to the lower overall costs per ounce for Bogoso. We expect this project to continue to deliver production at this rate for at least the next 5 years.

As Sam said earlier, we do not have a quantified mineral reserve for the tailings. However, we do have an accurate assessment of the volume of tailings as well as past tailings deposition on which we are basing our 5-year expectations.

Investment in the push backs at Bogoso North and Chujah pits continues to improve access to ore. The stripping ratio and consequently mining operating expenses are expected to reduce over the life of mine and I expect the push backs to be completed during the second quarter of 2014.

Future pipeline, by the end of September, we had drilled 140 holes for approximately 48,000 meters under the Wassa Main pit. Drill results are indicating that the deposit is open at depth and to the south of the pit.

We've incorporated our all drill results in updating our mineral resource estimation and expect to announce these shortly. Although studies in this regard, have not yet started, initial indications are that a high-grade zone below the pit is amenable to underground mining.

As you know, Golden Star has a significant pipeline of projects. Collectively, these assets can provide meaningful ore sources to both the refractory and non-refractory plants at Bogoso.

At Prestea South, as Sam mentioned, we successfully concluded a public hearings with the Prestea community, and we have strong support to develop these pits. We are now awaiting comments from the EPA, which will allow us to conclude the environmental permitting process.

In the interim, we are undertaking metallurgical test work and evaluating optimal processing methods. At Dumasi, which hosts the largest deposit of all our development projects, predevelopment work and capital spending is focused on site preparation for the community resettlement.

EIS work continued in the third quarter and is expected to continue into 2014. At Mampon, which is a high grade deposit about 35 kilometers north of Bogoso, access road design work is ongoing.

The EIS is currently undergoing internal review, and we plan to submit this to the EPA by the end of the first quarter of 2014. The capital budget for 2014 will review the timing and development spending for these development projects, which are all subject to environmental permits.

We expect to provide capital budget guidance early in 2014. I'll now turn the call back to Sam for concluding remarks.

Thank you, Dan and Jeff. On the back of a strong quarter, I'm very pleased to say that we now expect 2013 annual production to be higher than what we said to you a few quarters back in the range of 325,000 to 330,000 ounces.

Although we expect to achieve further reductions in operating costs throughout the company over the rest of the year, our current cost guidance remains relevant. We will shortly commence the push backs of the Father Brown pit and we will continue with the successful tailings retreatment project.

Lastly, we are planning to start in-fill drilling on the high-grade zone below the Wassa Main pit. Over the next 2 years, production will continue to be sourced from the Father Brown pit, Wassa Main, Bogoso North, and Chujah pits.

As discussed, this will be supplemented by ounces from the tailings retreatment project. We expect production for the next 18 months to stabilize at an average production rate achieved in 2013 to date.

And of course, to secure future production, we will continue the permitting processes at Dumasi, Mampon, and Prestea South. In conclusion, this has been a great quarter, in which we have made solid progress towards sustainably increasing production and continuing to reducing our costs.

Looking ahead, results may vary with planned changes in grade processed, but I believe the long-term trend on the key performance metrics is and will remain positive. With the enhanced resilience of our existing operations and the improving prospectivity of our development projects, I am optimistic about the fourth quarter of this year and 2014.

I will now turn the call over to the operator for questions that you might have. Thank you.

First question with regards to the DD&A, is the $9 million that you reported -- $9.8 million that you reported in the quarter, is that kind of more sustainable going forward? I recognize that you've written down some of the assets, and so, therefore, it's -- you're working off a lower base.

So, is that exclusive of any other adjustments so the $9.8 million is more of a go-forward number?

Hey, Paul, it's Jeff here. Yes, the -- good question.

It's -- depreciation, of course, is evaluated at the time and over our ore reserves. So, as we look to redo our ore reserves at year end, we're going to relook at what our depreciation will be going forward.

So it really depends on what the new reserves will look like, the mine lives, and so forth, and then we'll depreciate over that basis. So, I really can't give you any sort of perspective on what depreciation will be going forward, although, I mean, it's something that we're very appreciative of the fact that we do have a lower depreciation expense this quarter.

It will change after we update our new reserves.

Got it. Follow-up question, with regards to the strip ratios coming down at Bogoso next year, can we get, maybe, some guidance in terms of what that's going to look like over the next 4 quarters?

Yes, Paul I'll take that. As you know, we went on a high -- I think it was in the second quarter was our highest strip, we were around about 16, went down to about 10, 9 in the third quarter.

We'll see a slight up, in the fourth quarter to that, basically flat but slightly up, and then down about from 6 down to 2 in the first and second quarter. And from -- basically from the second quarter, we will be in a much lower strip, which is what we did our viability test on for those 2 pits moving forward.

And then from that point onwards, it will be in a very low strip environment for -- until the end of 2015.

And last question, I've got with regards to -- I know you're still going through budgets and looking out at different options that you have. Have you provided guidance in terms of 2014 CapEx yet or are you still working on that?

We will be giving that guidance early in the next year. We're looking at that.

Obviously, it's a very dynamic mine plan. You can see how the last quarter panned out.

Excited what we see from the tailings reclaim. It gives us a new way of looking at that.

We're looking at our trigger document. We're looking at how to utilize capital efficiency.

What we now have a clear line of sight is our EBITDAR for the next 2 years, and then what we will look at is which of those projects makes good sense for us to develop, to dovetail into our projects moving towards the end. So we will be giving that guidance early in the next year to you all.

What does the per quarter push back cost look like going over the next 3 quarters?

Hi, Doug, it's Jeff here. So in terms of looking at our fourth quarter, we're estimating about a $5.5 million spend on CapEx for our betterment stripping in Q4.

Going forward after that, it's probably in the neighborhood of $10 million, roughly for next year. But again, as Sam mentioned, we'll come up with our new CapEx guidance early in the year, but it's roughly the magnitude.

Yes, it should start reducing from the first quarter, and re -- mainly I would say about $10 million to complete that.

Okay. All right.

And then with regard to how the convert is carried on the books, I know that there was an accounting change that you made here last quarter, where should we think of that convert being held on the books if it were in U.S. GAAP?

Doug, there's not really a change between U.S. GAAP recognition and IFRS.

Both are mark-to-marketed or noncash unrealized gains and losses that go through our income statement. So I can appreciate how it is a bit confusing when you do have an appreciation of your convertible, showing up as a loss and things like that.

So it's -- but if you like, we can talk off-line more about the accounting for that.

Okay, fair enough. And when I look at your cash flow statement for the quarter, you've got positive $15 million from proceeds from debt agreements.

Is that just taking down the -- taking some cash out of the -- a new debt? Is that what that is?

Yes, Doug. In fact, we actually drew down about $10 million from our Ecobank term loan facility in Q3.

And what we also did was actually we leased some of the equipment -- most of the equipment that we purchased in Q3. So that's the net proceeds coming from debt and lease agreements.

Okay. And just a couple of more quick ones, were there any cash flow events, big events after quarter end?

No.

No.

All right. And the final one.

Do you currently have any reserves booked from the tailings, or can we expect to see some forward -- going forward?

Doug, I'm going to try to explain this to everybody. We have a clear understanding of the volume, and how many tailings we have there.

And we have all the results over the year of where the tailings grade went into this tailings -- the tailings dams we have. We are now -- Martin Raffield and the team is now looking at a way, how do we go into a tailings dam.

The moment you try to draw it, it just caves in on you, and you can't get a reserve out of it. But we're going to find ways, probably in the next quarter to come out and in the next 2 quarters coming out and trying to put a resource or reserve around this and find ways to how do we assess this going forward.

But what we know is we have sufficient tonnes ahead of ourselves. What we saw in the third quarter, we started very slow and towards the end of the quarter, we were running at a much higher rate than in the first month of the quarter.

So we are looking at how do we enhance this project going forward. But at this stage, we can comfortably guide that we know we have at least 5 years of -- I don't know, I can't even call it resource going forward, but our volume at a certain grade that we expect.

But we will be doing more works, so that we can guide for the purposes of your models what we expect to see from that impairment [ph].

It's always nice to see improving results. I've got a few questions here, Sam and Jeff.

Maybe first off, if I can focus on the non-refractory mill at Bogoso, I don't think I saw it in the press release, but could you break out the unit costs for production per tonne for us in terms of what it costs?

In any case, what -- we have 2 sources. We have the pure tailings, which is about 3 or 4 people standing with a monitor and just blowing and unpumping the tailings through the plant.

And if we run that operation -- when we run that operation, we're looking at about $8 to $10 a tonne, when we do that lower grade. During times that you do push backs, and you get ounces from either Chujah and Bogoso which we did get the start of this particular quarter, we get a higher grade ounces then we -- what we do is we bow those the ounces through -- we can vein it through for a period of 2 weeks or 3 weeks.

That particular cost is sitting somewhere between $10 and $14 a tonne. So, look, what we try to do is optimize how we bulk [ph] that.

But generally looking over the tailings and the large impairment for the last quarter, we would be looking at somewhere between $8 and $10 a tonne. Going forward, we are obviously try to see if we can improve that whole project as we just started, and we're learning a lot from that.

And I think we can still improve on that going forward.

Yes. And remind me again, Sam, how does that compare to the cost for the sulfites, the BIOX?

In terms of processing costs?

Yes.

I think the processing cost is somewhere between about $35 a tonne in that range, plus or minus $35. Now we're starting to see better results in that only because we've invested as you remember last year in the BIOX section, in our power supply.

And also we are looking at the new gearboxes that we've installed, the maintenance cost is starting to come down. But at this stage, until we come out next year, looking at how that whole business line is going to perform, we are looking at about $35 a tonne in that range.

Okay. And then, maybe, on throughput at the anaut [ph] refractory mill, I saw that you pretty much put through above 434,000 tonnes in terms of throughput in the quarter.

But what I recall, Sam, I thought the nameplate capacity was 1.5 million tonnes per annum. So as you had mentioned earlier during the presentation, you're exceeding sort of that nameplate capacity right now.

Do you think you can continue? Is that just a function of putting in more tailings reprocessing?

Is that why you're able to kind of achieve that higher throughput?

Yes, it's a function of a few things. Firstly, it is -- we went in with a target of about 4,000 tonnes per day.

And towards the end of the quarter, we started exceeding that. And as you rightly say, it was harder off if you crush and grind.

The capacity is in the range of about 1.5 million tonnes. Now with what we see how understanding the chemistry, looking at the CIL component, et cetera, and we're getting a much better appreciation of how hard we can push this.

So we're looking going forward with very minor adjustments and operating practices looking if we can exceed that 5,000 tonnes that we end the quarter at going forward. And that I would like hopefully be able to update in this quarter of what we can do to even increase that throughput.

Okay. And then maybe moving onto a different topic here.

And thanks, Jeff, for giving us the details in terms of the CapEx that was spent in the quarter. Could you remind us again what's kind of being categorized into development CapEx?

I believe it was about $11 million in Q3.

Sure, in terms of -- you want me to separate between sustaining and development or just go over the Q3, capital numbers?

Yes, if you can put it into the 2 different buckets, if you give me one, I can back out the other one.

Okay, well maybe what I could do is if you look at -- not to refer you back to the MD&A, but if you look at the -- we break it out, we look at all-in sustaining costs, and we -- I'll just give you the page reference here. It's a quite good disclosure to look at.

Yes, on Page 20, can you see that, what we have is, for the quarter we've got about $12 million of sustaining capital. And we've got about $12 million of development capital.

One thing to note in our development capital, that's where we put our betterment stripping. So we've got $5.3 million of betterment stripping in our development capital.

And the reason we do that is because it's such a significant capital investment at our Chujah pit that it makes sense to put it in that development category for the additional mine life and access to ore that we're going to get. If it was rather smaller, not as material as that, we would certainly look to put that into our sustaining capital.

So if you want to look at other items, in sustaining capital, we've got plant upgrades of about $2.2 million at Bogoso. We've also got a small amount of plant upgrades for Wassa.

The Prestea Underground is in our Bogoso, about $3.5 million. We have the purchase of equipment, the 2 graders, 4 drills, 2 'dozers that we've leased.

That approximates just over $7 million. And if you look at -- Wassa was -- only had about $4 million overall for the quarter, and most of that was -- about 1/2 of that was development, 1/2 of that was sustaining.

And Jeff, I guess, on the back of that, I'm just wondering, in terms of sustaining CapEx, are there any plans to ever get down to $11 million or $12 million a quarter in terms of sustaining CapEx, or would it always be -- given that there's quite a few things going on as well at Golden Star in terms of Prestea South and Prestea Underground, is that $12 million number -- is that ever -- are you ever going to see that number, or is it always going to be higher?

Yes, and Cosmos, maybe just to amplify, the sustaining capital for this quarter was about $12 million. So we've certainly hopefully met that goal that you're talking about.

And so going forward, I mean, as I'm sure Sam will mention, that we really look closely at our capital allocation program, our trigger point document, how we look at things. It's not just on developments.

It's also on sustaining too. As you can see, as we -- as Sam just mentioned with the improvement in the plants and how we're kind of reaching our capacity limits, the reason for that now is because of all the good capital investment we've made over the last couple of years to improve our plants, and we are continuing to make those improvements and hopefully will achieve recoveries that reflect that investment in those plants.

So I don't know, Sam, if you want to...?

Yes, I can tell you what our goal and our vision is where we want to take the company at my direction. I firmly believe in just over the years that I've been in the industry, is we want to give you about 8% to 10% of your higher -- direct operating cost.

And that's the goal that we set ourselves for sustaining capital moving forward. So we've done a lot over the last 18 months.

We had to get our plants -- get the bottleneck of our plants out of the way, get our supply sources, invest into equipment moving forward. And we are now starting to stabilize in terms of sustaining capital.

And as I said, my goal to take the company to, is somewhere between 8% and 10% of direct operating cost.

All right, I guess, Sam, I'm just wondering if total CapEx can ever be $12 million, or is it always total CapEx, including sustaining would always be sort of higher?

Well you know, Cosmos, it's a great question. Hopefully I can interrupt Sam for once, but then as we look at the magnitude of capital being invested in a company, and I know we are focusing on our company, but it has returned.

This is the focus and this is the benefit of having all the processes in place for the trigger point document because an investment is made to have a return. And I know we can't control the gold price.

We are running our models all the time. We are very good at planning, so when we make an investment, we do expect on a risk-adjusted basis to achieve that return.

So I know I can appreciate how you kind of view all in sustaining capital and all in costs as very important into looking at what CapEx is going to be going forward, as we look to transform this company, necessary capital investments are made into the benefit of the shareholders and the benefit of the company going forward to generate additional cash flow, additional margins. So I can -- I certainly appreciate your comment and I know Sam, if you want to jump in.

We have one focus and part of the focus is to make this a not complex company. We're looking now, really we're getting to the point where we see for the next 2 years, throughputs at Bogoso and throughputs at Wassa.

And a tailings replate. That we consolidate in terms of our operating cash flow, our EBITDA, very clearly and how do we maximize that component.

So looking forward, in terms of that is the approach we're going to take is constantly keeping it in a not too complex environment. I mean if you don't have it as complex, you can easily predict a lower sustaining capital moving forward.

And that is the goal that we want to achieve is not try to do everything but try to schedule it in such a way that it doesn't burden the CapEx spend going forward. However, I want to -- we will come out early next year to give you the guidance of what we want to do in terms of our CapEx spend for 2014.

Not to belabor the plan on sustaining capital, but I have another question on sustaining capital. Originally for the year, the budget was $60 million, and that's been reduced to $36 million.

I guess, the question is of that reduction, has any of that been deferred into next year, or, I mean, what's the level to think about going forward?

Yes, Andrew -- I and it's maybe going back to Cosmos question's too. I didn't mean to suggest anything other than, but we all like to see lower capital in the company, but we do look at this very closely.

So we look at our savings in sustaining capital for 2013, a lot of it has been just been the refocus, to do things smarter. There has been some -- there has been some deferral, but we're also looking at that and determining what can be even further deferred or if not eliminated.

So whenever you defer capital, of course, you increase your return on capital, for -- that you've already employed. So we're really looking at a lot of those metrics.

And if we can keep deferring capital and the plants are running as Sam mentioned very well, we've done a lot of good investments in the past, we're looking at where we need to spend our dollars. We're being very myopic about it, and I think it's -- everyone can appreciate that we're doing a very good job so far in terms of what we need to spend money on and where it's being spent.

So anyway, Sam, I'm not sure if you want to add.

No, Andrew, we haven't -- deferral maybe on the older plant, we're looking at -- but we have a different view of what we are looking at. Now, you see the drilling where we'll be coming out with the drilling update below Wassa, and our mine plans are considering different approaches.

We're looking holistically at the company. We are looking at timing differently than what we would have done previously, with the starting up of the tailings weekly [ph] .

We have different windows to review. My technical services team are constantly reviewing ways to spread our projects that we currently have.

I think we have a very binary approach, maybe 12 months back. We now have options in terms of looking at how we would be moving our spend if you want to call it that going forward.

So this is the quarter where we're really looking at the company from a different perspective in terms of our mine planning. I don't know, I have Dr.

Martin Raffield here to comment on any deferrals. But we haven't really gotten to the point of any deferrals.

Not in the terms of the mine planning?

No really Sam, as you said we're looking at all of our projects. We are looking in the amount of cash flow.

We are doing -- making a lot of focus at the moment on looking at our short term, medium-term cash flows and making our decisions based on that. These things that we're seeing at Wassa at the moment are really encouraging for us.

And over the next quarter and over the next year, we'll be working very hard on the Wassa side to see where we can best spend our money.

Andrew, I know it's probably not what you wanted to hear, but we're getting new information we're looking at it, but we haven't differed anything that would injure the company at this point in time.

Okay. And, I guess, another question.

The phrase trigger points has been mentioned a number of times. I wonder if you could just elaborate on that and maybe provide some detail about what kind of returns you're expecting from some of your projects before you...

The trigger document that we've come up that Martin and the team has worked with, looks at 2 things. It looks at near term cash flow and long-term value to the company.

And based on what we see in terms of our balance sheet moving forward at any particular time, what our feeling is on the momentum that we see in the gold price. We have plans really to go in that direction.

So we have a rate of return target that I just don't want to highlight until I've gone through that, but it is a balance at this point in time, of our near term cash flow. We want to be able to continue to go forward with the cash that we have, and we think we can see a way through that and then deliver on a future pipeline that will make sense under the current environment.

But we will be ready. As I've said earlier, this company is greatly releveraged for any upside from this point on where we're sitting today.

So we will be ready to pull the trigger should we feel that, that rate of return based on the gold price moving forward. And also what our efficiencies are at that point in time and lastly the risk associated of losing the reserves.

So the trigger document and it's -- is fairly -- it's not binary. It looks at various different alternatives that we want to start up at the point that it meets our forward-looking premise of what we can deliver.

With respect to the grades at Wassa, it was -- shooting in the dark a little bit kind of trying to determine the split between the Wassa pit and the higher grade stuff you've had from Father Brown, can you give us any sense of kind of how that split works out?

Yes, Father Brown, when -- as you know is a high-grade pit. It has 2 areas of it.

It has a Phase 1 and a Phase 2 component. And as we go deeper into the pit, we see higher grades.

And for this year, as they are planned we were in the Phase 1 side of the pit. And we've just started moving and bringing the other side of the pit, which would be the lower grade.

But as it goes deeper down, the grades increase, and then we will have the floor of the Father Brown back into the normality, and out of which we backed the higher grades at the bottom of the floor. So it's a question of our mine plan rather than grades falling off and it fits -- and the reason why it fits Trevor, because you got to look at it this way; the Wassa Main pit that we've done with the near drilling and what we see in the output levels, it's a much lower cost and lower haulage cost to be driving a big pit that is close to the plant.

So we feel comfortable now that we have Wassa around about the $800 an ounce, that we have the new pit shell at $1,100 an ounce, that it will be with a lower cost and with its new grade that we will update everybody very soon. But the balance between how much we mine from Father Brown and how much we mine from the Wassa Main in terms of its totality, we can stabilize that moving forward.

So it might appear that there will be a reduction in grade, but what you're going to see is that the cost per tonne on the 2 should reduce accordingly. So we have a clear understanding now in this company of how to manage our pits.

And this is also part of the trigger document. But don't be too nervous about just seeing a grade drop.

You've got to look at the cost per tonne impact from being a bigger pit sitting much closer to the plant. To give you a bit of a feeling, we do about 2,500 tonnes a day from Father Brown into the plant and about 5,500 tonnes a day from the Wassa Main pit.

So looking at that, we might at times increase the Wassa Main at a lower-cost, while we do the Phase 1 of the Father Brown, which is at a slightly lower grade than what we saw before. Martin, is there anything else on how I explained it?

No, I think you got it exactly right, Sam. The sort of grades that we are getting out of the Wassa Main at the moment are in the region of 1.2 to 1.3, and the grades we're getting out of Father Brown historically have been up in the 5-gram plus range.

We're seeing a lower grade portion of Father Brown at the moment as we back up to the top of the pit, but we are doing a push back and we expect to get down in about 6 months or so down back into the high grades in Father Brown. So as Sam said, it's really a function of where we're mining and where the planning is and how we get those grades up to make our cash flow [ph] work.

Is that all, Trevor?

Yes, so until you're down into that kind of lower, back down to the floor of Father Brown, does that mean you expect a few more tonnes -- kind of, your biased towards the Wassa tonnage?

Yes, but we also -- we're planning on mining more tonnes of the lower grade Father Brown material. So we're aiming to keep the grade up to the sort of levels we've seen by mining more lower grade tonnes from Father Brown to get the ounces out of there.

Okay, so actually I had it just backwards. Right, so to keep a more stable head grade at the mill, you would put more of the Father Brown tonnes forward because those tonnes are a bit lower grade at the Phase 1 stage.

Yes, and also it's high-high grades tonnes as they were, we'll put more of them through.

Okay, and you didn't break down, I don't think, in your guidance, where exactly the higher guidance came from, is it, but the sense is most of that's from Wassa, not as much of that is Bogoso?

I knew you were going to go there. Right, 2 things about this quarter.

The first one is the last possible day of the quarter sits on a Monday and it's the 31st of December. And if you take it back, you can't pour and ship on the weekend before that, and you have to pour really on the Thursday evening.

So we're probably going to be a pour short, #1 trigger, although we might reduce it we'll be a pour short. Secondly, we're looking really comfortably to continue to produce at the levels that we're seeing.

But I've always thought that the fourth quarter will be again a softer quarter, only in relationship to, there were one more high strip scenario that we get from Bogo. And it's really a function of the grade supply from the Chujah into the plant.

So, although we had fantastic productivity in the third quarter, I remain just saying that it will be a bit softer based on the way the pour sits, #1. And #2, seeing if we can maintain that very good productivity that we've seen in the third quarter in the push backs.

And as you go down in the push backs, the pits get a little bit -- get a smaller and the congestion is a bit higher at the bottom of the pit. So based on that, that's why I've given the guidance where it is currently.

Okay, just a quick question on the stripping. I think you said a bit earlier in the call that you spoke about the stripping in Bogoso getting down about down to 2.

Yes.

But I seem to recall there was a presentation where you kind of showed stripping on a quarter-by-quarter basis, one of your presentations a while back. And I thought it was going to be a fair bit higher than that.

Is that -- are these new stripping numbers? Have you been able to refine that since maybe the last time you updated Bogoso?

No, we showed a general trend down I think the previous one. We, to be -- you're right.

It's going to be somewhere between 2 and 4 in the strip depending on the quarter. It's always quarter-related, and it's not exactly uniform.

The ore body opens up and closes, but it will be much lower than what we've seen in 2013. It will be the high end will be on the 4 [ph] side.

Okay, and then last question, we've had a lot of questions about the tails and all that, but with respect to the grade of the tails, you were doing really well up over the 2 gram mark in the first half of the year, it's a bit lower now. Can you give us you give us any visibility on how that looks into next year or even into Q4?

You're talking about the tailings grade or the...

Yes sorry the grade of the tails you've been processing, not going into detail.

No, no. Beginning of the year, we had the Pampe pit supply the oxide plant.

And then, if you recall we had the slip of the Pampe and we then immediately looked for starting up the Tailings, which is a project we completed in 2012 and we're ready to run should we have any issues. So, which was at a much higher mining cost and -- a higher mining cost and a higher processing cost.

Now, we have the tailings, which runs by itself and the tailings is in the 0.94 to 1 gram a tonne but at a much lower cost and a much bigger throughput. So you're relating early in the year, a pit that supplied which came to an end, and now we are looking at the tailings, much more efficient low cost tailings number going forward.

So I think the first quarter our average grade was about 2.75, which was for Pampe, and then it went down to 2.08, and then in the third quarter, we're running the tailings at about 0.96 to 1 gram a tonne, Trevor. So it's 2 different operations, but this one has now solidified itself, and we keep on seeing better results from the tailings.

And is the Q3 recovery that's a pretty typical recovery to work with?

Well, yes, we knew [ph] into it. We predicted 0.4.

We did, I think comfortably I think it was 0.42. The number 0.425 is the recovery.

And we still -- the team is excited. We're learning a lot of ways how to manage this and the chemical that you put in and takeout and retention times.

So we've had one quarter of exciting results. And the last month basically of the third quarter, we produced as much as we did in the first 2 months of the first quarter.

So it was -- we started -- we are continue to starting to learn how this process is going to enhance Bogoso going forward.

Just a couple of questions with regards to your stockpile levels. Could you just give me a break out of the Wassa stockpile currently in the BP [ph] stockpile both in tonnage and grade?

Anita, we normally don't give out that much detail on the stockpile. I know Sam probably mentioned...

I don't have the numbers with me now either, but we managed our stockpile, 50 at Bogoso. Last year we knew we were going to have a tough year in 2013, so we mined an excess of about 630,000 tonnes in 2012 and in the second quarter, we mined a split about 235,000 tonnes.

So we had it about 3, 400,000 tonnes from stockpile. In the second quarter, we mined 535,000, so we added 100,000 tonnes odd from stockpile.

So we knew this was going to happen, so we managed that. But I just don't have the Wassa stockpile, but in terms of how we deal with the Wassa, we have a blend between the Father Brown and the Wassa Main pit.

And until about the second quarter, we had viscosity issues in the pit so -- in the plant. Now, that has been rectified by having changed some of the impairments and some of the things that the team has done, so we are much less reliant on having the stockpile going forward as we can put in the ore that we mine directly.

I just don't have the stockpile numbers right in front of me, so I don't know. Does anybody have?...

Yes, we haven't disclosed them, but we do have stockpiles available as you see, and we have been drawing down our stockpiles as we did to sort of fill our plants. We do have additional stockpiles is available at Wassa, the breakdown grades in times we don't normally give that out until about year end.

So we will have to look -- we will have to get back to that.

Sure, I would appreciate you getting back to me. And secondly, you did say that you've got another 5 levels -- 5 years at the current rate on the tailings.

What would you call the current rate in terms of ounces produced?

We're looking at -- currently, we're taking about 5,000 tonnes a day at about a 92% availability in the plant. It's a very straightforward process.

You know just you have a monitor, and you pump it across, and so we -- we're doing more work on that, Anita see if we -- this business line can be really, really important for us, especially next year for the next few years. So with this quarter, with the results we've seen, the team is now looking at whether we can do anything to make this look even better.

But given our third quarter, I guided at 4,000 tonnes. We're now sitting at 5,000 tonnes.

So it keeps on going in the right direction for us.

And so you got by my calculation, then somewhere around 9 million tonnes on the...

Yes, 92%.

About 9 million tonnes?

Yes, it's 9 million sounds a bit high.

Sorry Anita, we didn't hear you very...

Did you say 9 million?

Yes, I was going 5 times, 5 years hence during 365 days.

Oh, times 5 years, sorry. We all thought you said per annum.

Yes, I mean 9 million tonnes is what we are -- we know we have more volume but that's what we are giving now.

All right, and then just could you just clarify for me how long you think the Father Brown pit is going to give you elevated grades to the Wassa mill?

The current mine plan is to go to met 15 on the current Father Brown pit plant mine plan.

And if you're doing percentage blends from now until mid-2015 for that, what would you say the blend would be between the Wassa...

It's not a blend I'd say [ph], we're 85 kilometers away, and we have a certain rate from the pit size and roughly we do between 2,000, 2,500 tonnes a day from there. So if I -- it's just a function of what the pit can particularly deliver in the breadth of 2,000, 2,500 tonnes per day is what I'm working on the mine plan.

And then Wassa gives the remaining amount.

Yes, Wassa, we're looking at -- obviously, we will update on the new resource hopefully very shortly. We're looking at it from all angles.

And that will be the other pit. So very easy to model, very straightforward operations, and that's where we want to get to.

It's nice to see the trend in costs, and cash flow and all those good things. But it seems as if Golden Star is suffering from a Rodney Dangerfield value -- your perception valuation; no respect -- you get no respect.

Certainly in bear markets, high-cost producers such as Golden perhaps are out-of-favor. But it seems to me, certainly I would enjoy your -- I would appreciate your comments but on this -- it seems that the market is worried about preserving shareholder value.

Is there another dilution, another dilutive convertible bond coming or Lord knows what? Could you just comment on -- just your -- the firm's, the board's view of preserving and building shareholder value?

And perhaps anything else which you think is behind this low evaluation. The Street just -- $0.50 targets, the stock is trading if you annualize the cash flow, less than 2x annualized cash flow seems absurd.

I'd appreciate your comments on both.

Yes, well I think you're right. And one thing for the team, it's a combination of credibility of line of sight of the next 2 to 3 to 4 years.

It's a question, do you survive this? And I think it's above all, will the company be around to see the future upside?

And we are working very hard and I think on the credibility side, the team has shown that we are looking at the business is totally different. We are coming out with the results that fall in line with achieving a future trend.

And then that we can deliver going forward. And I'm like you, extremely optimistic where we can go, and we haven't been able to give the market that comfort.

And we -- what we do on a daily basis is delivering the results to show the credibility there. Jeff, do you want to...

Bill, great question. If you look at the -- what we've done so far, we raised the $50 million term loan financing with Ecobank, very flexible piece of debt.

A little bit of higher cost but, of course, with no financial covenants, no corporate guarantee, early repayment, no early repayment telling [ph], sorry. And so it's something that actually kind of fits our planning going forward, make sure that we have that flexibility.

As we go forward and we look at our capital spend and based on this trigger point doc, which I think we've discussed probably enough today, but the ability for us to match that investment threshold with the amount of financing that makes sense, that best matches it, if you know what I'm saying. Is it appropriate financing, is it more debt, is it -- our preference of courses conduct to have any external financing.

So as we march forward, we have to weight that type of consideration and those type of trade-offs, and we don't want to have an extremely high leverage company in the sense of having additional debt. However, we have few -- if it means lower-costs and greater margins and greater capacity to repay that debt to benefit of shareholders, we will certainly -- that would certainly be our preference.

So that's the way we look at things. So as we formulate our plans for next year and later part [ph], those financing plans are lack of financing plans will hopefully best match the plan we put forward.

Well, we look forward to seeing it.

Thanks Bill, it is -- and we chip every quarter, we do the things we have transparent -- clear on what we achieve, and we're getting some good things happening to this company and hopefully in the next week, we can show you some more of that.

Operator, thank you for running this. Thanks to everybody and good questions and the good compliments as well that came our way.

Thanks a lot and goodbye.