Golden Star Reports Fourth Quarter and Full Year 2012 Results and Announces 2013 Capital Plan

TORONTO -- (Marketwire) -- 03/04/13 -- Golden Star Resources Ltd. (NYSE MKT: GSS) (TSX: GSC) (GHANA: GSR)

  • 2012 net cash provided by operations was $94.3 million, up $70.6 million year-over-year
  • 2012 revenue of $550.5 million, up 17% year-over-year; fourth quarter revenue of $149.7 million, up 26% year-over-year
  • Fourth quarter net income of $9.1 million, up 26% from the fourth quarter of 2011; 2012 net loss of $9.5 million
  • Achieved production and cost guidance for 2012; sold 331,278 ounces of gold in 2012 at cash operating costs of $1,033 per ounce
  • Produced 336,348 ounces of gold in 2012, a 12% increase over 301,120 ounces produced in 2011
  • $78.9 million held in cash and cash equivalents as of December 31, 2012
  • Strengthened balance sheet by reducing debt by $47.5 million
  • Significantly increased Proven and Probable Mineral Reserves at Wassa by 85% to 1.47 million ounces of contained gold, relative to December 31, 2011
  • In early 2013 received mining and environmental permits for Prestea Underground

Golden Star Resources Ltd. (NYSE MKT: GSS) (TSX: GSC) (GHANA: GSR) ("Golden Star" or the "Company") today reported its financial results for the fourth quarter and full year ended December 31, 2012. All references to currency are to US dollars.

Sam Coetzer, President and CEO of Golden Star, commented: "The Company ended 2012 on a positive note, generating net income of $9.1 million in the fourth quarter. For the year, revenue increased to $550.5 million and cash flow provided by operations increased to $94.3 million, up 17% and 300% year-over-year, respectively. We also confirm that the Company delivered on production and cost guidance for this year."

"Looking back, the Company had a transformational 2012, in which we restarted the relatively low cost Bogoso non-refractory plant, and we made several significant changes to our management team and Board of Directors, in addition to commencing the move of our headquarters to Toronto. We expect to unlock significant value for our shareholders over the next three to four years through further lowering of our production costs by continuing to shift the majority of our production to non-refractory ores at Wassa and developing our high grade Prestea Underground mine. The combination of our current operations of Bogoso and Wassa with the Prestea Underground project and the discovery of significant additional reserves at Wassa, we are in a strong position to grow as a mid-tier gold producer."

Conference Call and Webcast

The Company will be holding a conference call and webcast at 8:00 am (ET) on March 5, 2013, for analysts and investors. Dial-in information for the call is as follows:

Participant (Toll-Free): 877-407-8289
Participant (International): 201-689-8341
The webcast can be accessed at www.gsr.com

A recording of the conference call will be available until March 26, 2013. To access the encore recording of the call, please dial:

Replay (Toll-Free): 877-660-6853
Replay (International): 201-612-7415
Conference ID: 409927

Summary of Consolidated Financial Results:

----------------------------------------------------------------------------
                                     Three months ended      Year ended
                                         December 31,       December 31,
----------------------------------------------------------------------------
                                        2012      2011     2012      2011
----------------------------------------------------------------------------
Bogoso/Prestea gold sold (oz)           47,178    35,475  172,379   140,504
----------------------------------------------------------------------------
Wassa/HBB gold sold (oz)                40,366    35,336  158,899   160,616
----------------------------------------------------------------------------
Total gold sold (oz)                    87,544    70,811  331,278   301,120
----------------------------------------------------------------------------
Average realized gold price ($/oz)       1,710     1,678    1,662     1,564
----------------------------------------------------------------------------
Cash operating cost - combined
 ($/oz)                                  1,105     1,089    1,033     1,062
----------------------------------------------------------------------------
Gold revenue ($000s)                   149,710   118,814  550,540   471,007
----------------------------------------------------------------------------
Cash flow provided by operations
 ($000s)                                35,630    19,491   94,290    23,643
----------------------------------------------------------------------------
Cash flow provided by operations per
 share ($)                                0.14      0.08     0.36      0.09
----------------------------------------------------------------------------
Net income (loss) attributable to
 GSR ($000s)                             9,121     7,241   (9,490)   (2,075)
----------------------------------------------------------------------------
Net income (loss) per share basic
 ($)                                      0.04      0.03    (0.04)    (0.01)
----------------------------------------------------------------------------

Fourth Quarter 2012 Financial Highlights

  • Revenue improvement: For the fourth quarter, the Company recorded revenue of $149.7 million and net income attributable to Golden Star of $9.1 million, or $0.04 per share, compared to 2011 fourth quarter revenue of $118.8 million and net income attributable to Golden Star of $7.2 million, or $0.03 per share. Included in 2012 fourth quarter net income is a gain of $9.2 million on the sale of the Company's Saramacca exploration asset, which more than offset the $2.5 million in higher general and administrative costs (primarily higher due to charges related to the head office move).

  • Operating cash flow improvement: Operating cash flow, after changes in working capital, provided $35.6 million, up from $19.5 million in 2011.

Full Year 2012 Financial Highlights

  • Revenue improvement: For the 2012 full year the Company recorded revenue of $550.5 million compared to 2011 revenue of $471.0 million. The revenue improvement was the result of more ounces sold at higher gold prices than in the previous year. The higher gold sales were due to the re-start of ore processing at Bogoso's non-refractory processing plant in early 2012, which contributed an incremental 38,113 ounces to 2012's total gold sales.

  • Strong realized gold prices: The gold price realized by the Company averaged $1,662 per ounce during 2012, up 6% from $1,564 per ounce in 2011.

  • Improvement in operating cash flow: After changes in working capital, operations provided $94.3 million of operating cash flow, up from $23.6 million in 2011. The increase was related primarily to increases in revenue from more ounces of gold sold at higher gold prices. Lower reclamation spending also contributed to the improvement in 2012 operating cash flow.

  • Reduced total debt position: The Company redeemed $125 million of its 4% convertible debentures due November 30, 2012, using cash and the issuance of $77.5 million of new 5% convertible debentures due June 1, 2017, for a net debt reduction of $47.5 million during the year.

  • Cash operating costs: Consolidated 2012 cash operating costs totaled $342.3 million, up 7% from $319.8 million in 2011. The increase in costs was primarily due to the start-up of Bogoso's non-refractory plant early in 2012, which produced an additional 38,113 ounces.

Fourth Quarter 2012 Operational Highlights

The following tables set forth the operational highlights at Bogoso/Prestea and Wassa/HBB for the fourth quarter of 2012.

Bogoso/Prestea

Bogoso/Prestea Fourth Quarter Operating Results

---------------------------------------------------------------------------
                                                    Three Months Ended
                                                        December 31,
                                                ---------------------------
                                                     2012          2011
---------------------------------------------------------------------------
Mining
---------------------------------------------------------------------------
  Refractory ore mined (000s t)                           548           711
---------------------------------------------------------------------------
  Non-refractory ore mined (000s t)                       247            16
---------------------------------------------------------------------------
  Total ore mined (000s t)                                795           727
---------------------------------------------------------------------------
  Waste mined (000s t)                                  7,190         8,876
---------------------------------------------------------------------------
Bogoso/Prestea Refractory Plant Results
---------------------------------------------------------------------------
  Refractory ore processed (000s t)                       596           493
---------------------------------------------------------------------------
  Refractory grade (g/t)                                 2.52          2.95
---------------------------------------------------------------------------
  Refractory recovery (%)                                70.5          77.7
---------------------------------------------------------------------------
  Refractory gold sold (oz)                            35,600        35,475
---------------------------------------------------------------------------
Bogoso/Prestea Non-refractory Plant Results
---------------------------------------------------------------------------
  Non-refractory ore processed (000s t)                   268             -
---------------------------------------------------------------------------
  Non-refractory grade (g/t Au)                          2.21             -
---------------------------------------------------------------------------
  Non-refractory recovery (%)                            58.3             -
---------------------------------------------------------------------------
  Non-refractory gold sold (oz)                        11,578             -
---------------------------------------------------------------------------
Bogoso/Prestea Consolidated Results
---------------------------------------------------------------------------
  Cash operating cost ($/oz)                            1,246         1,166
---------------------------------------------------------------------------
  Gold sold (oz)                                       47,178        35,475
---------------------------------------------------------------------------


Wassa/HBB

Wassa/HBB Fourth Quarter Operating Results

---------------------------------------------------------------------------
                                                    Three Months Ended
                                                        December 31,
                                                ---------------------------
                                                     2012          2011
---------------------------------------------------------------------------
Wassa/HBB Non-refractory Results
---------------------------------------------------------------------------
  Ore mined (000s t)                                      525           639
---------------------------------------------------------------------------
  Waste mined (000s t)                                  3,627         3,820
---------------------------------------------------------------------------
  Ore processed (000s t)                                  583           589
---------------------------------------------------------------------------
  Grade (g/t)                                            2.30          2.04
---------------------------------------------------------------------------
  Recovery (%)                                           94.9          94.1
---------------------------------------------------------------------------
  Cash operating cost ($/oz)                              941         1,012
---------------------------------------------------------------------------
  Gold sold (oz)                                       40,366        35,336
---------------------------------------------------------------------------


Full Year 2012 Operational Highlights

Bogoso/Prestea

  • The Bogoso/Prestea refractory plant processed 2.5 million tonnes in 2012, which yielded 134,266 ounces of gold. Metallurgical recovery at the refractory processing plant was 71.2% in 2012, an improvement from 69.8% in 2011.

  • The Bogoso/Prestea non-refractory plant processed 0.9 million tonnes of ore in 2012, which yielded 38,113 ounces of gold as compared to zero production in 2011. Ore processing was restarted at the Bogoso/Prestea non-refractory plant in the first quarter of 2012 following completion of the plant renovation project in late 2011.

  • Bogoso/Prestea's revenue totaled $286.6 million during 2012, up $64.1 million from $222.5 million in 2011. The increase in revenue was generated by the 38,113 ounces of gold produced from the non-refractory plant during 2012. In addition Bogoso/Prestea's realized gold price averaged $1,663 per ounce of gold in 2012, 5% higher than the realized $1,584 per ounce in 2011.

  • In May 2012, the Company completed a preliminary economic assessment ("PEA") of the West Reef area of the Prestea Underground mine located near the Bogoso/Prestea mining operation in Ghana. Based on the results of the PEA, the Company is now preparing a feasibility study to better define the economic potential of this underground property which is expected to be completed during the second quarter of 2013.

Bogoso/Prestea Annual Operating Results

----------------------------------------------------------------------------
                                                   Year Ended December 31,
                                                 ---------------------------
                                                      2012          2011
----------------------------------------------------------------------------
Mining
----------------------------------------------------------------------------
  Refractory ore mined (000s t)                          2,516         2,672
----------------------------------------------------------------------------
  Non-refractory ore mined (000s t)                        805            42
----------------------------------------------------------------------------
  Total ore mined (000s t)                               3,321         2,714
----------------------------------------------------------------------------
  Waste mined (000s t)                                  24,937        25,243
----------------------------------------------------------------------------
Bogoso/Prestea Refractory Plant Results
----------------------------------------------------------------------------
  Refractory ore processed (000s t)                      2,464         2,397
----------------------------------------------------------------------------
  Refractory grade (g/t)                                  2.42          2.57
----------------------------------------------------------------------------
  Refractory recovery (%)                                 71.2          69.8
----------------------------------------------------------------------------
  Refractory gold sold (oz)                            134,266       140,504
----------------------------------------------------------------------------
Bogoso/Prestea Non-refractory Plant Results
----------------------------------------------------------------------------
  Non-refractory ore processed (000s t)                    873             -
----------------------------------------------------------------------------
  Non-refractory grade (g/t Au)                           2.37             -
----------------------------------------------------------------------------
  Non-refractory recovery (%)                             59.9             -
----------------------------------------------------------------------------
  Non-refractory gold sold (oz)                         38,113             -
----------------------------------------------------------------------------
Bogoso/Prestea Consolidated Results
----------------------------------------------------------------------------
  Cash operating cost ($/oz)                             1,160         1,284
----------------------------------------------------------------------------
  Gold sold (oz)                                       172,379       140,504
----------------------------------------------------------------------------


Wassa/HBB

  • Wassa sold 158,899 ounces of gold during 2012, compared with 160,616 ounces sold in 2011. Gold revenue totaled $263.9 million in 2012, up from $248.5 million in 2011. Wassa realized an average gold price of $1,661 per ounce during 2012, up 7% from $1,547 per ounce in 2011.

  • Proven and Probable Mineral Reserves at Wassa increased by 85% to 1.47 million ounces of contained gold, relative to December 31, 2011.

  • Metallurgical recoveries at the Wassa plant were 94.6% for 2012, showing a slight improvement from 2011.

Wassa/HBB Annual Operating Results

----------------------------------------------------------------------------
                                                   Year Ended December 31,
                                                 ---------------------------
                                                      2012          2011
----------------------------------------------------------------------------
Wassa/HBB Non-refractory Results
----------------------------------------------------------------------------
  Ore mined (000s t)                                     2,583         2,541
----------------------------------------------------------------------------
  Waste mined (000s t)                                  15,933        15,354
----------------------------------------------------------------------------
  Ore processed (000s t)                                 2,507         2,579
----------------------------------------------------------------------------
  Grade (g/t)                                             2.09          2.04
----------------------------------------------------------------------------
  Recovery (%)                                            94.6          94.3
----------------------------------------------------------------------------
  Cash operating cost ($/oz)                               896           868
----------------------------------------------------------------------------
  Gold sold (oz)                                       158,899       160,616
----------------------------------------------------------------------------


2013 Guidance

Golden Star is forecasting its 2013 production to remain in-line with 2012 production. The Company expects total gold production to be in the range of 320,000 - 350,000 ounces. Production at Bogoso/Prestea is expected to be within the range of 170,000 - 190,000 ounces of gold, while Wassa/HBB is expected to produce between 150,000 - 160,000 ounces of gold. Cash operating costs are expected to average approximately $1,050 - $1,150 per ounce of gold produced.

----------------------------------------------------------------------------
                                Bogoso/Prestea    Wassa/HBB      Combined
----------------------------------------------------------------------------
                                   170,000 -      150,000 -      320,000 -
2013E Production Forecast         190,000 oz     160,000 oz     350,000 oz
----------------------------------------------------------------------------
                                   $1,150 -     $900 - $1,000    $1,050 -
2013E Cash Operating Costs        $1,250 / oz       / oz        $1,150 / oz
----------------------------------------------------------------------------


2013 Operational Objectives

  • Complete the Prestea Underground feasibility study in the second quarter of 2013;
  • Initiate Phase 1 operations at the Prestea Underground mine;
  • Continue drilling at Wassa to follow up on the 2012 drilling results and an update of 2012 reserves;
  • Commence construction of the new tailings storage facility at Wassa;
  • Permitting of Dumasi pit, approval of the Dumasi resettlement action plan and commencement of construction of the Dumasi resettlement town site;
  • Permitting and planning of the Mampon pit;
  • Permitting and planning of the Prestea South pits; and
  • Achieve further reductions in operating costs throughout the organization.

2013 Capital Plan

The Company's capital budget for 2013 is estimated at approximately $141 million including both sustaining and development capital. Expected sustaining capital requirements are approximately $60 million, and development capital projects comprise approximately $81 million. Development capital projects have been defined as the Dumasi development, the Mampon and Prestea South development, Prestea Underground, HBB development, additional tailings capital, and the Wassa drilling program. Sustaining capital requirements are anticipated to be covered by the Company's existing cash balances and expected operating cash flows in 2013. The Company's development capital is expected to be funded with operating cash flows along with additional external financing as required.

The following chart highlights the Company's expected capital expenditures by operation as well as by refractory and non-refractory ore.

2013 Expected Capital Expenditures (in $ Millions)

---------------------------------------------------------
                                       Refractory
                              ---------------------------
                                Sustaining   Development
---------------------------------------------------------
Bogoso/Prestea
---------------------------------------------------------
Dumasi                                                 10
---------------------------------------------------------
Plant Upgrades                           10
---------------------------------------------------------
Equipment                                10
---------------------------------------------------------
Water Treatment                           5
---------------------------------------------------------
Other                                     6
---------------------------------------------------------
Subtotal                                 31            10
---------------------------------------------------------
---------------------------------------------------------
                                     Non-Refractory
                              ---------------------------
                                Sustaining   Development
---------------------------------------------------------
Bogoso/Prestea
---------------------------------------------------------
Dumasi                                                  5
---------------------------------------------------------
Mampon & Prestea                                       15
---------------------------------------------------------
Plant Upgrade                             2
---------------------------------------------------------
Prestea UG                                             26
---------------------------------------------------------
Other                                     3
---------------------------------------------------------
Subtotal                                  5            46
---------------------------------------------------------

---------------------------------------------------------
                                Sustaining    Development
---------------------------------------------------------
Wassa
---------------------------------------------------------
Tailings Storage Facility                10             5
---------------------------------------------------------
Wassa Drilling                                         13
---------------------------------------------------------
HBB Development                                         7
---------------------------------------------------------
Plant Upgrades                            9
---------------------------------------------------------
Other                                     5
---------------------------------------------------------
Subtotal                                 24            25
---------------------------------------------------------
Total                                    60            81
---------------------------------------------------------

Company Profile

Golden Star holds a 90% equity interest in Golden Star (Bogoso/Prestea) Limited and Golden Star (Wassa) Limited, which respectively own the Bogoso/Prestea and Wassa/HBB open-pit gold mines in Ghana. In addition, Golden Star has an 81% interest in the currently inactive Prestea Underground mine in Ghana. Golden Star also holds gold exploration interests elsewhere in Ghana, in other parts of West Africa and in Brazil in South America. Golden Star has approximately 259 million shares outstanding.

Statements Regarding Forward-Looking Information:

Statements Regarding Forward-Looking Information: Some statements contained in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Investors are cautioned that forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause actual results to differ materially. Such statements include comments regarding expected reductions in operating costs and increases in margins and production from non-refractory ore; the timing of the Prestea Underground feasibility study; planned exploration activities; anticipated capital (including both sustaining and development capital) expenditures in 2013; the Company's 2013 production and cash operating cost estimates; the Company's 2013 operational objectives; and sources of and adequacy of cash to meet capital and other needs. Factors that could cause actual results to differ materially include timing of and unexpected events at the Bogoso/Prestea oxide and sulfide processing plants; variations in ore grade, tonnes mined, crushed or milled; variations in relative amounts of refractory, non-refractory and transition ores; delay or failure to receive board or government approvals and permits; the availability and cost of electrical power; timing and availability of external financing on acceptable terms; technical, permitting, mining or processing issues; changes in U.S. and Canadian securities markets; and fluctuations in gold price and input costs and general economic conditions. There can be no assurance that future developments affecting the Company will be those anticipated by management. Please refer to the discussion of these and other factors in our Form 10-K for 2012. The forecasts contained in this press release constitute management's current estimates, as of the date of this press release, with respect to the matters covered thereby. We expect that these estimates will change as new information is received and that actual results will vary from these estimates, possibly by material amounts. While we may elect to update these estimates at any time, we do not undertake to update any estimate at any particular time or in response to any particular event. Investors and others should not assume that any forecasts in this press release represent management's estimate as of any date other than the date of this press release.

Non-GAAP Financial Measures: In this news release, we use the terms "cash operating cost per ounce." Cash operating cost per ounce is equal to total cash costs less production royalties and production taxes, divided by the number of ounces of gold sold during the period. We use cash operating cost per ounce as a key operating indicator. We monitor this measure monthly, comparing each month's values to prior period's values to detect trends that may indicate increases or decreases in operating efficiencies. This measure is also compared against budget to alert management to trends that may cause actual results to deviate from planned operational results. We provide this measure to our investors to allow them to also monitor operational efficiencies of our mines. We calculate this measure for both individual operating units and on a consolidated basis. Cash operating cost per ounce should be considered as Non-GAAP Financial Measures as defined in SEC Regulation S-K Item 10 and other applicable securities laws and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. There are material limitations associated with the use of such non-GAAP measures. Since this measure does not incorporate revenues, changes in working capital and non-operating cash costs, it is not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Changes in numerous factors including, but not limited to, mining rates, milling rates, gold grade, gold recovery, and the costs of labor, consumables and mine site general and administrative activities can cause these measures to increase or decrease. We believe that these measures are the same or similar to the measures of other gold mining companies, but may not be comparable to similarly titled measures in every instance.

For additional information regarding the Company's mineral reserves and resources, please refer to the Company's February 5, 2013 press release entitled "Golden Star Announces Mineral Reserves and Resources Estimates as at December 31, 2012".



                   Consolidated Statements of Operations
  (Stated in thousands of US dollars except shares issued and outstanding)

                            For the quarters ended     For the years ended
                                 December 31,             December 31,
                           ------------------------  ----------------------
                               2012         2011        2012        2011
                           -----------  -----------  ----------  ----------
                           (unaudited)  (unaudited)
REVENUE
Gold sales                 $   149,710  $   118,814  $  550,540  $  471,007

Cost of sales                  142,704      103,492     497,618     420,153
                           -----------  -----------  ----------  ----------
  Mine operating margin          7,006       15,322      52,922      50,854

OTHER EXPENSES, (GAINS)
 AND LOSSES
Exploration expense                831        1,165       3,505       5,137
General and administrative
 expense                         7,583        5,028      23,674      25,378
Property holding costs           4,835        2,533       9,862       8,674
Foreign exchange loss              284        1,364       2,446       2,749
Derivative mark-to-market
 loss                                -        1,436         162      19,276
(Gain)/loss on fair value
 of convertible debentures      (4,107)      (3,946)     27,985     (26,154)
Loss on extinguishment of
 debt                                -            -         568           -
Interest expense                 1,600        2,228      10,163       8,891
Interest and other income         (110)         (66)       (467)       (229)
(Gain)/loss on sale of
 assets                         (9,175)      (1,014)    (31,577)     (1,350)
                           -----------  -----------  ----------  ----------
Income before tax                5,265        6,594       6,601       8,482
Income tax
 expense/(benefit)              (2,648)        (743)     16,816      10,984
                           -----------  -----------  ----------  ----------
Net income/(loss)                7,913        7,337     (10,215)     (2,502)
Net loss/(income)
 attributable to non-
 controlling interest            1,208          (96)        725         427
                           -----------  -----------  ----------  ----------
Net income/(loss)
 attributable to Golden
 Star shareholders         $     9,121  $     7,241  $   (9,490) $   (2,075)
                           ===========  ===========  ==========  ==========

Net Income/(loss) per
 share attributable to
 Golden Star shareholders
  Basic                    $      0.04  $      0.03  $    (0.04) $    (0.01)
  Diluted                  $      0.03  $      0.03  $    (0.04) $    (0.01)
  Weighted average shares
   outstanding (millions)        259.0        258.6       258.9       258.6
  Weighted average shares
   outstanding-diluted
   (millions)                    312.5        258.6       258.9       258.6

OTHER COMPREHENSIVE
 INCOME/(LOSS)
    Net Income/(loss)      $     7,913  $     7,337  $  (10,215) $   (2,502)
Unrealized loss/(gain) on
 available-for-sale
 investments                    (2,423)        (299)     (2,694)         19
                           -----------  -----------  ----------  ----------
Comprehensive
 income/(loss)             $     5,490  $     7,038  $  (12,909) $   (2,483)
                           ===========  ===========  ==========  ==========
Comprehensive
 loss/(income)
 attributable to non-
 controlling interest            1,208          (96)        725         427
Comprehensive
 income/(loss)
 attributable to Golden
 Star                            6,698        6,942     (12,184)     (2,056)




                   Consolidated Statements of Cash Flows
                    (Stated in thousands of US dollars)

                            For the quarters ended    For the years ended
                                 December 31,             December 31,
                           ------------------------  ----------------------
                               2012         2011        2012        2011
                           -----------  -----------  ----------  ----------
                           (unaudited)  (unaudited)
OPERATING ACTIVITIES:
Net income/(loss)          $     7,913  $     7,337  $  (10,215) $   (2,502)
Reconciliation of net
 income/(loss) to net cash
 provided by operating
 activities:
Depreciation, depletion
 and amortization               30,267       19,353      98,926      71,466
Amortization of loan
 acquisition costs                   -          570         895       1,563
Loss on extinguishment of
 debt                                -            -         568           -
Gain on sale of assets          (9,177)      (1,014)    (31,577)     (1,350)
Non-cash employee
 compensation                    1,374          601       6,111       3,385
Deferred income tax
 expense                        (2,648)        (940)     16,816       8,315
Derivatives mark-to-market
 loss                                -       (7,056)        162        (177)
Fair value loss/(gain) on
 convertible debt               (4,107)      (3,946)     27,985     (26,154)
Accretion of asset
 retirement obligations            705       (1,455)      2,816       3,845
Reclamation expenditures          (814)      (6,651)     (6,203)    (26,895)
Changes in working capital      12,117       12,692     (11,994)     (7,853)
                           -----------  -----------  ----------  ----------
Net cash provided by
 operating activities      $    35,630  $    19,491  $   94,290  $   23,643

INVESTING ACTIVITIES:
Expenditures on mining
 properties                    (16,982)     (19,785)    (43,382)    (50,027)
Expenditures on property,
 plant and equipment           (13,847)     (17,812)    (45,113)    (51,353)
Change in accounts payable
 and deposits on mine
 equipment and materials         5,663        2,592       4,559       1,907
Proceeds from sale of
 investments                     8,318            -      15,616           -
Other                                -        2,435        (734)      1,916
                           -----------  -----------  ----------  ----------
Net cash used in investing
 activities                $   (16,848) $   (32,570) $  (69,054) $  (97,557)

FINANCING ACTIVITIES:
Principal payments on debt     (46,330)      (2,437)    (58,806)    (10,397)
Proceeds from debt
 agreements and equipment
 financing                           -        5,014       8,510       9,875
Issuance of share capital,
 net of issuance costs             110          282         300         282
Other                                -         (430)          -        (220)
                           -----------  -----------  ----------  ----------
Net cash (used
 in)/provided by financing
 activities                    (46,220)       2,429     (49,996)       (460)

Decrease in cash and cash
 equivalents                   (27,438)     (10,650)    (24,760)    (74,374)
Cash and cash equivalents,
 beginning of period           106,322      114,294     103,644     178,018
                           -----------  -----------  ----------  ----------
Cash and cash equivalents,
 end of period             $    78,884  $   103,644  $   78,884  $  103,644
                           ===========  ===========  ==========  ==========



                        Consolidated Balance Sheets
  (Stated in thousands of US dollars except shares issued and outstanding)

                                                     As of December 31,
                                                 --------------------------
                                                     2012          2011
                                                 ------------  ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents                        $     78,884  $    103,644
Accounts receivable                                    11,896        10,077
Inventories                                            90,212        74,297
Deferred tax assets                                       235             -
Deposits                                                8,600         6,474
Available for sale investments                         15,034         1,416
Prepaids and other                                      2,666         2,048
                                                 ------------  ------------
Total Current Assets                                  207,527       197,956
Restricted Cash                                         2,028         1,273
Property, Plant and Equipment                         260,986       252,131
Mining Properties                                     252,176       270,157
Intangible Assets                                       3,159         5,266
Other Assets                                                -           895
                                                 ------------  ------------
Total Assets                                     $    725,876  $    727,678
                                                 ============  ============
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities         $    101,760  $     92,088
Asset retirement obligations                            9,943         8,996
Current tax liability                                  12,393           197
Current debt                                            6,968       128,459
                                                 ------------  ------------
Total Current Liabilities                             131,064       229,740
Long Term Debt                                        110,507        10,759
Asset Retirement Obligations                           24,170        24,884
Deferred Tax Liability                                 28,650        23,993
                                                 ------------  ------------
Total Liabilities                                     294,391       289,376
Commitments and Contingencies                               -             -
SHAREHOLDERS' EQUITY
Share Capital                                         694,652       693,899
Contributed Surplus                                    25,154        19,815
Accumulated Other Comprehensive (Deficit)/Income         (716)        1,978
DEFICIT                                              (285,602)     (276,112)
                                                 ------------  ------------
Total Golden Star Equity                              433,488       439,580
Non-controlling Interest                               (2,003)       (1,278)
                                                 ------------  ------------
Total Equity                                          431,485       438,302
                                                 ------------  ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $    725,876  $    727,678
                                                 ============  ============

For Further Information, Please Contact:

GOLDEN STAR RESOURCES LTD.
Bruce Higson-Smith
Senior Vice President Corporate Strategy
1-800-553-8436

INVESTOR RELATIONS
Belinda Labatte
The Capital Lab, Inc.
647-427-0208

Jay Pfeiffer
Pfeiffer High Investor Relations, Inc.
303-393-7044