Golden Star Resources reboots oxide plant, gains 70,000 ounces production

Originally the Bogoso/Prestea oxide plant in Ghana operated from 1990 to 2008, until it was sidelined due to a lack of an adequate oxide ore supply required to keep the plant afloat. After three years of being put on care and maintenance, Golden Star Resources (TSX:GSC) (AMEX:GSS) announced the re-commissioning of the oxide plant at Bogoso/Prestea, a move that’s expected to generate up to 70,000 ounces of gold in 2012. The anticipated production would bring Golden Star’s total production from 301k ounces in 2011 up to 350k-370k ounces in 2012.

Renovations required on the facility came to the tune of approximately $3 million, with much of the oxide plant being refurbished from the crusher to the carbon treatment and gold room circuits. The first gold pour from the refurbished oxide mill is expected in February 2012.

The lacking supply of non-refractory ore has been essentially replenished with a steady supply coming from further drilling at the Pampe deposit, located 26km west of the Bogoso/Prestea plant. Mining at Pampe recommenced in August of 2011, resulting in a stockpile of non-refractory and transition ore totals over 129,000 tonnes grading approximately 2.2 grams per tonne.

While the supply of non-refractory and transition ore helps feed the mill, one issue still in question is that of a power supply. During recent months, the power supplied by the Ghana government utility has been less than reliable. So far, there have been power interruptions, which are expected to continue throughout the year. And despite adjustments that have been made to allow for such interruptions, there’s no guarantee that these won’t persist throughout the year. Bogoso management will be taking over operation of standby power facilities in mid-February to mitigate the impact of power interruptions.

For both the Bogoso and Golden Star’s other mining operation at Wassa, each mine is on target for production through January. Combined production for the first quarter is expected to reach 79,000 ounces, as the full impact of the oxide mill won’t reflect on production until the second quarter.