Golden Star Resources Ltd.

Thank you, very much, and good morning, good afternoon, everyone. Welcome to Golden Star's Q4 and Full Year 2020 results call.

If I can draw your attention, we'll move to Slide 2 on the presentation, you just got a disclaimer there, which I'll point out. Then moving on to Slide 3, you can see team on today: myself, Graham, our COO; Paul Thomson, CFO; and Mitch Wasel, VP Exploration.

Mitch is in Ghana. And I think there's a pretty big storm there at the moment.

So bear with us if there's a bit of background noise, but hopefully, the line will hold up. If you can, move on to Slide 4, please.

You can see there that really if we look at 2020, I think like any business anywhere, a busy year, in the case of Golden Star, we planned it to be a busy year. And then, clearly, we had the additional challenges of dealing with the pandemic.

For us, really 2020 was about repositioning the business and putting ourselves in a position where we can extract maximum value from what is a very exciting asset in Wassa. That meant that we sold Bogoso-Prestea Limited at the end of Q3.

And we also address several elements of our balance sheet to set us up to be able to invest more heavily in Wassa. As Paul will take us through, that introduces a bit of complexity into the financial reporting in terms of continuing and discontinued operations.

So bear with us through that and the explanations and 2021 will then be a much cleaner year from reporting purposes. And as I said, now, we focus on Wassa and a lot of milestones there that will set out.

We've got the PEA work that we pretty much completed now. And we're going to be reporting on that on Monday in more detail.

And, that will set out how we see the longer-term at Wassa and the potential of a large ore body, a large resource, Wassa growing mine production already. So that'll be part of the technical report we'll relay, we will release on Monday, with an update on our reserve resources and show what the reserve back plan looks like.

And then, beyond that, what the extensions at Wassa can contribute through the PEA. We move on to Slide 5 and the presentation there.

You can see left hand side of the page you've got the key metrics in Q4, which really demonstrates that continued progress at Wassa. And Graham will take us through some of those operating metrics a little bit more, and pull the financial metrics.

I think it is important to remember that that was achieved in the COVID environment that we've been operating in. We've negotiated that pretty well, I think.

Some impacts on the business, but we've minimized that. And as we saw at Wassa, a step back up in the grade in the fourth quarter and some positive drilling results both up and down that Mitch will talk a little bit about in the exploration section.

And I think it is also important there, as we note that safety performance at Wassa improved during the year. And compared to last year, the metrics showed the focus on safety translating through and that's something that will continue.

Can we go to Slide 6, please? There you can see what we achieved in Q4 and the full year versus the guidance.

So good delivery of guidance there, worth pointing out the AISC at Wassa was slightly above, about 1%, 1.5% above the range, which was a function of royalties with a higher gold price, clearly higher than we budgeted for at the start of the year. We did process the lower grade stockpiles, given that gave us good cash generation.

Obviously, with that grade there higher cost ounces, but still cash generative ounces. And we reallocated the G&A entirely to Wassa with the disposal of Prestea.

So, without those, would have probably been pretty firmly in the middle of the range. And Q4 saw an acceleration of CapEx, a bit of a catch-up with 1 or 2 items that got behind during the year that were in the initial budget.

And we've managed to catch those up. And one or two things we brought forward as well to take advantage of the fact that we're able to execute on those during the quarter.

So that's a pretty broad compliance there with what we'd set out. And in fact, we increased that production guidance, as you recall, during the year at Wassa, so a pleasing performance all-in.

Moving on to Slide 7, the outlook in 2021, our focus I think really comes back to what I was saying, it's setting Wassa up, that continued growth. And really, that means putting the development in, continuing to increase the development meters as we've done over the course of 2020.

So we're giving ourselves access to the material and flexibility to mine and also a lot of infill drilling there. We want to improve the confidence of what we see already as well as our knowledge base of what we're going to be mining, so a big step-up in both of those.

And also in exploration, both out and around Wassa as well as more regionally, where we see significant opportunity and multiple targets that continue to potentially add resource for Wassa itself, and more broadly, target new standalone opportunities for us as a business. So there's plenty there that keeps us busy in the context of solid operating performance.

From Wassa, you'll see pretty similar metrics in 2021 to 2020. And that will help in terms of cash generation for that step-up in investment.

And we'll start to operate the paste plant, as we go through, Graham will provide a bit more detail on that. It'll add a little bit to the cost, but gives us better mining flexibility.

So with that, I'll hand over to Graham, who'll take us through Wassa in a bit more detail. Graham?

Thanks, Andrew. We move over to Slide 9.

Just a bit of a recap of the scale of Wassa, with the long section there, you can see the current mining area as shown on that long section. And as Andrew mentioned, on Monday, we'll be coming out with the updated resource and reserve estimates.

But important to note, the decline capacity at 5,000 tonnes a day, we've done some more work on that. We've sort of shown that over 2020, that that's achievable.

And then, obviously, we've got the plant capacity is the kind of next milestone that we're looking for at Wassa. And Mitch will talk about some of the exploration activities that we're able to focus on through 2021.

So moving over to the next slide, just characterize it the quarter at Wassa as a solid quarter. As Andrew mentioned, safety and sustainability, performance continues to be strong and a focus area for the team, especially in amongst COVID-19.

So some good management controls there at Wassa that are keeping the business running well for us. Importantly, 6 quarters in a row of 4,000-tonnes-plus per day.

Back off a little bit in Q4 compared to Q3 as we had some a little bit more high-grade coming through the plant. And you can see that how that reflects in the grade, recovery still nice and stable at Wassa as we've seen over time.

Moving over to the next slide, just in terms of unit costs, seeing some of those slightly lower volumes reflected in the unit costs. Site G&A was starting to pick up a little bit extra G&A with the sale of Bogoso-Prestea.

And as Andrew said, the site all-in sustaining costs pretty well in line with our expectations when you normalize for some of the low-grade material and the additional royalty costs. Moving on to the next slide across to Slide 12, probably the key highlights for me for the quarter at Wassa is really some of the infrastructure.

We've talked about in previous quarters, but really getting that to the sharp end, we completed construction of the paste plant, we're a little bit delay in commissioning, just with travel restrictions, et cetera. But we did get November, December, we did get the commissioning engineers from [Grez and CEC Filters, so the 2 key] [ph] commissioning groups on site that commissioning has progressed well.

And we, in fact, this week, we're filling the first test start, so a little bit behind our original schedule, but about really a high quality facility that that's been built 100% in country with a lot less external support than we'd originally envisaged. And probably just highlighting some of the sustainability benefits of reusing the tailings material for backfill, we'll start to see more of that benefit of reducing the TSF volume and footprint, and obviously, the reduction in greenhouse gas emissions as compared to other backfill methods.

And just a reminder there that the capital costs, we've managed to bring that in under budget. And you would have seen earlier that we're looking at $3 to $4 per tonne this year.

And that's really because of the ramp up over the long-term that's sort of $5 to $7 range per tonne that it's adding to the unit cost, but obviously much better ore recovery from the ore body. Similarly, with the power supply, the new GENSER power station commissioned early in Q1.

So that's now up and running. And we're already starting to see the benefits of more stable power supply.

The electrical upgrade I think we talked about in previous quarters, so that's really enabling us to focus on the next 5 years, 6 years of development with good stable power supply. And also the dewatering infrastructure is also up and running as well.

So, lots of good work completed to a really high standard, and managed by the team on site, so probably the most pleasing thing about 2020 for us at Wassa. And with that, I'll hand over to Paul to talk a little bit about the financial results.

Thank you, Graham. Yeah, 2020 was a transformational year, as Andrew just said.

So this is reflected in the financial statements. So just as a quick recap in terms of the key events, so we had the disposal of Prestea that's no classified as a discontinued operation.

Wassa's obviously continuing operation. Secondly, we had the refinancing of the Macquarie Credit Facility.

And then the third major thing that happened from financial perspective was moving the corporate office to London. So all of these things were done against the backdrop of a volatile macroeconomic environment and also the challenges of COVID-19, I think, overall, a good year and a good quarter for the business.

If we turn our attention to revenue, turn on Slide 16, 2020 with a good year of production, which benefited from the strength of the gold price. The average realized gold price in Q4 was $1,579 and $1,626 for the year.

The Wassa non-cash adjustment in respect to the Royal Gold Stream and the deferred revenue component thereof, which takes into account the estimated number of ounces expected to be delivered as part of the Stream agreement. So that's over the life of mine.

So with the number of ounces increasing, this resulted in a reduction to the revenue of just under $8 million and a reduction to the finance cost of $1.5 million as per the reported numbers, but it is key to just point out that these adjustments are non-cash in nature. Moving to the EBITDA, the major impact has obviously been the removal of press there from the results.

To the strong EBITDA from the continuing operations, Wassa of $28.5 million demonstrates Wassa's ability to generate cash. So the sale of the business at Prestea on the September 30 resulted in the following so is the discontinued operations piece, so main operating loss of $14 million to loss from sale of $36.6 million.

And the costs or losses incurred during Q4 and related to Prestea was amounted to $1.7 million to those recognized in Q4. So those are the final costs associated with the overall disposal, which hadn't been reflected in the Q3 results.

Moving to the adjusted EBITDA, there was $2.5 million of cost realized in relation to the settlement of hedge positions, so that those were hedge positions in relation to Q2 and Q3 2020. Then there's obviously the impact of the deferred revenue component that is spoken about.

So earnings per share, it's a material step up, full year 2020 EPS of $0.35 per share demonstrates underlying earnings capability of Wassa and also the increase in the realized gold price. The EPS for the discontinued operations on the other hand reflects the losses in Prestea and that's the $0.47 number that can be seen in the FY 2020 column.

Next slide, please. So Slide 17 in terms of the balance sheet, that's really has changed significantly when we compare the year end 2019 to year end 2020, so these transformational event can enabled us to happen.

So firstly, Macquarie loan facility was restructured and beginning of Q4 2020. So ensure the revised principal repayment profile, those payments have been rescheduled, dished out and we've increased the principal, resulting in additional liquidity of $35 million in the business.

The big thing that the finance team is focusing on this year is a convertible debenture, which is due to be redeemed on August 15, 2021. So that's really in front of mine for us as a business.

So we ended the year with a healthy cash balance of $61 million, meaning that the net debt position was $45 million. So what's the underlying performance of Wassa, the business has the ability to generate strong cash flows, particularly in a higher gold price environment, to what - it's useful, just to point out that there's additional liquidity factors for 2021, which include the following.

So those $10 million additional principal from the Macquarie facility available is the receipt of the deferred consideration from FGR, and there is the ATM which was put in place during 2020. But it's key to stress that this hasn't been used today.

In terms of protecting our downside, we have zero cost protection collars in place. And these relate to the years 2021 and 2022.

So each year has 43,750 ounces and floor of $1,600 then ceilings in 2021 of $2,176 and $2,188 in 2022. So in my view, this is a good range of pricing which preserves significant upside as the gold price, whilst under rest of side giving cost protection a sensible level, particularly in respect of Wassa's ongoing development.

We turn to the next slide, Slide 18. This is where you can see how the balance sheet has really changed in terms of the sale of Prestea.

So you can see that we have moved from negative net assets to positive net assets. So the sale of Prestea has resulted in the removal of quite a large negative working capital position, as well as the removal of the $51 million rehabilitation liability.

So from Q4 onwards, I'd say that the businesses return to have a normal level of working capital. What does this mean from a cash flow perspective, if we turn to Slide 19.

So as a consequence of COVID in Q1, the combination of the ongoing Prestea business and the cash losses that is incurring, managed that to Prestea cash and be really disciplined around costs and look for other opportunities to generate cash. So this is flat today, their capital spend profile, which was skewed a little bit more towards H2 2020, in particular, Q4, where there was an increase in exploration, and the capital costs are accelerated during that time, including the GSS.

The second thing which was done was certain planned expenditures were deferred into H2 2020, so there was some G&A cost and maintenance cost. And then, we had some working capital management procedures, which we were able to do in order to carefully manage the cash balance.

So Q4 the underlying earnings for the continuing business, similar to Q3 were higher ounces, as Graham's just explained, which is partly offset by slightly lower realized price. So the key points to note on this cash bridge - cash flow forecast - cash flow bridge, sorry, for 2020 are as follows.

So Wassa generated $60 million. One point to note is on the tax.

Tax paid in 2020 was $25.8 million as shown in the chart on Slide 19. So the tax is paid quarterly, and it's paid in the following quarter, there normally 3 or 4 days after the quarter.

And so as such the tax related to Q4 2020 was actually paid in early January 2021. So if we had normalized that amount, and included it in the cash flow forecast, cash flow what - I'm sorry, for 2020, the cash tax paid [will be $37 million] [ph].

Facility and that's included in the financing activities, and the cash consumed by via Prestea in 2020, was about $1 million. So the cash outflow in Q4 2020 included a number of catch-up CapEx items as I mentioned before, which was $15 million.

So in summary, 2020 with a very significant and important year for Golden Star, the balance sheet has been completely repositioned to help and facilitate the growth in Wassa. If I could hand over to the expert in geology phase and Mitch will take you through these.

Thanks, Paul. We're going to skip over the first slide here, we'll go to Slide 21.

Slide 21 is sort of an overview of the current holdings that we have now along the eastern side of the Ashanti Belt, you can take a look there, she roughly have about 352 square kilometers and 90 kilometer strike length along what I like to call the eastern side of the Ashanti Belt, which is relatively unexplored. This year, our exploration guidance for the budget is going to be $15 million.

So we're back into the drilling phase again, prior to what we've done from the previous years, and where we end up drilling, we end up finding significant ounces. So I'm glad to be back into the saddle again, as they say and going forward with the drilling.

The programs we're looking at for 2021 that budget of $15 million is roughly split into roughly $7 million being spent to the Wassa and $7 million are more regional targets from there - $7 million or $8 million from there. We're going to be testing most of the targets around Wassa and I will hone in on this a little bit better on the next few slides, I'm just giving a brief overview here on this one.

So what we're looking for milestones in 2021 is the mineral reserve and resource that's been updated. And as Andrew mentioned, we will be releasing that on the March 1, which is Monday.

We're going to be doing some in-mine targets testing in and around the current resource and reserve at Wassa, and I'll show you some slides on that. And some of the earlier results that we picked up and some of the drilling again in Q4 more regional testing and the targets we've got down towards the south as well.

And I'll show you some more detail on that one, plus when I'm quite excited about is we're going to be drilling some holes underneath, some of the Benso pits of [Sabrisa east and Sabrisa west] [ph], which we drilled in the past just to optimize open pits and do have a high-grade core and some of these pits that I think have some roots in them that have never been tested before. So we're looking forward to doing that drilling.

And as you notice in the bottom left-hand corner, there's a joint venture that we have down there on their Abura concession, which has a good geological context, we'll be doing some initial testing on that as well. So we'll flip over to the next slide, which is Slide 22.

We're looking at the Wassa deposit, one on the right-hand side of the plan view, on the left-hand side is the isometric view looking towards the east. And what you can see there and the greater than 1.5 grams show what we're looking at.

And you'll see the 2 targets that we've got there, the up-dip extensions to the known mineralization on the down-dip extension. So these are targets that we're testing in sort of the near mine vicinity.

So we're not looking at the very deep at this point in time. We're trying to define additional resources and reserves in the area where we have immediate infrastructure.

So if we do - if we are successful, and I'll show you some of the results we do have on there with our successful on that that we can easily get in there, drill us off and be adding to the current resource based on that one. So what I'll do is I'm going to roughly show you there's 2 sections there, we'll be looking at one that's up 375, which is an up-dip extension that one at 19-600.

So if you look at this slide, you can refer to the [ore ends on the top, you see] [ph] roughly where we are within ore body. So the first one we're looking at is on Section 19-375, and that's an up-dip extension.

We drilled 2 holes here. The first of hole was drilling into more of an intrusive body that we intersected there with lots of alteration but not any significant intercepts on there.

The hole of interest that we're looking at there as well 3, which is about 125 meters up-dip of the no mineralization that we've got defined already within the resource and the intersecting the significant result there. As you can see, this is an estimated true width that we're looking at there of about 21 meters and about 6.9 grams per tonne.

So again, these are holes that will require follow up, because our spacing that we're looking at between those holes is greater than 100 meters at this point in time. So that that we consider successful up-dip hole.

And the next one I'm going to show you is on 19-600 north, which is sort of the guts of the ore body as you move up towards to north. And this was a deeper hole drilled down-dip to test mineralization below the extensive ore resource, which you can see in this slide are the red outline now are same in the previous slide.

And what we found in this was we've intersected not only the main zone, which intersected about 18 meters at 3.6 grams per tonne. But we've also seen a continuation of a hanging wall zone, and also the extension of wall zone at depth with the 2 intersections with the hanging walls on being about 4.2 meters at 4.7 grams per tonne.

And then the footwall zone is 7.5 or 3.3. Subsequently, since we've drilled this hole, we have commenced the drilling of the daughter hole and give us roughly 100 meter spacing.

So we're again testing this mineralization further down-dip trying to get some volume built out of it. And that's really the whole phase of the drilling at Wassa that we're doing up-dip and down-dip, it's very coarse at this point.

So we're doing 200 meter space fences, we're testing roughly 100 meters, up and down dip on those fences. And approximately 10,000 meters will be drilled in 2021.

So this encompasses the results from 2020, which is about 4,000 meters. So it's successful so far, and we'll probably have to be doing some follow-up on that later on in 2021.

Okay, so I'm going to go through the next slide, which sort of summarizes the work that we're going to be doing on Wassa, which is Slide 25. So we have the exploration focus is sort of 2-fold here, we're looking at, as I shown previously, the up and down dip extensions of mineralization.

But as you can see, just on that slide is kind of busy. But it shows the geochemistry overlaying with the geology overlaying with the geophysics.

And the little 2.5 kilometer that you see on the right-hand side there on the image itself shows the extents of the underground workings right now. So it shows you how much we've actually tested so far, the strike length on the 1 zone, there's 2 parallel zones or so there's lots of additional targets that we'll be doing follow-up drilling on this year.

And that's going to be involving roughly 8 targets and we'll test all of those. We will have 27,000 meters of RC and DD, and about 9,000 meters of Aircore drilling that will be following up with at Wassa.

So we're pretty excited about that. And what this is going to do is give us information in order to really guide exploration going forward in 2022, and subsequent years from there.

So - and then the main objection here is, the main objective here is to define some material within 10 kilometers of the plant, because, as Andrew rightly pointed out, and Graham pointed out, we have that excess capacity at the mill, which is roughly about 7,400 tonnes per day. And we're currently going to be putting about 5,000 tonnes per day through that, so with the underground feed.

Okay, I'll progress over to Slide number 26. 26 sort of shows us more the regional prospects that we're looking at.

So this is the Benso and the Chichiwelli and HBB concessions down towards the south of Wassa, which is approximately Chichiwelli would be 30 kilometers, Benso 50 and Father Brown at extreme south will be 85 kilometers. And those of you that are familiar with Golden Star's mining history, we have a haul road that goes from the Wassa mill all the way down to Father Brown 85 kilometers down through there.

So we have access right through the center of this zone from there. So, yeah, it's exciting here.

We're testing roughly 11 out of 30 targets that we've defined. And they're each one of those stars that you're seeing over top of the geochemistry there as representative of a target.

And we'll be testing 11 of those targets this year. And the whole idea with that is to bring these targets' level of confidence up into a drilling phase.

So we've got in there an exploration sort of target pyramid. And we're trying to advance these targets up through the pyramid in there.

And those programs involve about 50,000 meters of Aircore. We've got some IP surveys that we're doing.

And we've got roughly some follow-up drilling on about 14,000 meter of deeper RC and diamond drilling from there. Okay, that summarizes the exploration.

And I'll pass it back over to Andrew to give us a wrap up.

Many thanks, Mitch. And it's great to see that step-up in activity and exploration, a lot going on.

And look forward to updating everybody as we go through the year. So, just moving on to Slide 27, just to finalize the presentation.

A lot has been accomplished in 2020. But really, that's laying the foundations now for what we do next and for future development, particularly of Wassa, but also of some of those targets Mitch was referring to.

I think we showed the resilience and discipline in 2020 through that delivery during the pandemic. And I think the important thing there is, there will be critical elements as we look to deliver on the longer-term plans.

Critically, we've also made major strides on the balance sheet in 2020, which has been an area that's needed to be addressed for some time. And I think, as we go through this year with the settlement of the convertible debenture in August 2021, then really, we set ourselves up on a much more stable footing.

And as we go through the year, there's going to be a number of catalysts in the business. And really that starts with the PEA we're putting out Monday next week.

So with that, I'll hand it back to Carmen and we will take any questions that anybody has.

Thanks for taking my call. Hi, Andrew and team.

Maybe I'll just start off with a question about your underground mining fleet. I think your fleet consists of 40K tonne trucks.

Do you guys have intention to replace these with larger trucks? And if so, how much would that increase the capacity of a single declined and what would be the timing, presumably the years?

Yeah, Don, I'll let Graham give you the detail on that. Graham?

Yeah, that's correct, Don. So the plan is to, as low as 40 tonne fleet start coming to the end of their life.

We'll start introducing 60 tonne fleet that will start this year. And that new fleet will sort of roll in over a couple of years this year with the - with kind of ramping up the paste fill and that will enable us to ramp-up the production rate sort of over 2021.

Our key focus this year is really to push the capital development and get the decline down a little bit further ahead of ourselves, get some more levels in and that will, as much as the trucking fleet, that will enable a bit of an increase in production. But that the 60 tonne fleet itself is not the only key to increasing that production rate beyond 5,000 tonnes per day.

Right, okay, because 40 to 60, I mean, that's a 50% increase. But it wouldn't be a commensurate increase from 5,000 up to closer to the 6,000 or 7,000, would it?

Just by the - no?

No, the key will be availability of stopes and keeping a stock of available stopes at any given time. That gives you blending capability from a grade perspective, gives you plan flexibility from a tonnage perspective.

And having those things available and then, obviously, the fleet will add a little bit, but the decline then becomes a constraining piece, because you have to handle all the various bits of traffic, and drills and jumbos and things rolling up and down the decline as well. So something, Andrew touched on the PEA, something we can point to some of those key parts of the longer-term plan that sort of - that show that roadmap.

Okay, yeah, we're looking forward to the PEA. And just shifting to exploration, Mitch had talked about some of the regional targets.

If you do you have success regionally, would that mean that you could potentially continue with just a single decline at Wassa? We're looking for the PEA and maybe with regional success as a pass, you might not implement some of the plans in the PEA, which might include different methods to increase mine rate.

I think I'll give you my view on that. I don't think that regional success displaces the expansion of the underground at Wassa, given there's a compelling argument for that.

I think what it potentially could open up to is an expansion of processing capacity. I mean, that's certainly more the way I've looked at it, if we're in the position where, let's say, I guess, what you'd call a quality problem to have that we've got near-mine exploration success.

Ideally, that comes sooner rather than later. So we're able to fill the plant sooner rather than later.

But if we've got sufficient material on a longer-term basis, then I think you look very carefully, then does that justify an expansion of the plan, and then, you know, bigger overall production volume coming out of the asset. I don't know, Graham, if there's anything you want to say at this point in that?

No, that's exactly the answer that I would have given. The opportunity is to really optimize Wassa.

And then if there's more material with the exploration, then, yeah, that that creates opportunity to expand the plant. So, yeah, completely agree.

Okay, thanks for that. And maybe just - well, my last question was actually could you expand the mill above 7 the nameplate.

It was mentioned at 7,400. I know maybe this is preliminary, but how high could you take it and what would be the cost potentially?

I'll pass that on to Graham. We've done some very high-level thinking about that.

But, Graham, I don't know if there's anything else you want to say at this point.

No, except to say that the plant, we haven't done any detailed work on that, Don. I mean, really, the focus has been on how do we unlock the capacity that we do have.

But we've had a quick look at things. There is plenty of crushing capacity.

So you might need to add some milling capacity or you might change to a semi-autogenous grinding method or something. But you've got a very good footprint.

You've got really good infrastructure. The paste fill means that, nearly all of Wassa generated tailings will be going back underground.

So you've got tailings capacity longer-term. So I think it would be - you wouldn't be talking masses of capital to do an expansion.

But preliminary as you say.

Yeah. Okay.

Well, thanks so much for that. Good luck.

That's all for me.

Thanks, Don.

Thanks, God.

Thank you very much. And we'll be back Monday, where we'll be, I'd obviously take you through a lot more detail on the PEA.

So I'm sure there'll be a lot more to talk about at that point in time. But as ever, give us a call if there's anything else you want to go through in the meantime.

Thank you very much.

Thank you, everyone.