Golden Star Resources Annual Report 2003

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FY2003 Annual Report · Golden Star Resources

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G O L D E N S T A R R E S O U R C E S L T D .

2 0 0 3 A N N U A L R E P O R T

G o l d

G r o w t h

G h a n a

Corporate Profile

Golden Star Resources Ltd. is a fast-growing gold producer with its foundation in
Ghana, one of the most stable and mining-friendly countries in Africa.

Our 2003 production of 174,300 ounces should double to more than 350,000 ounces
in 2005 and the rate is expected to grow even more as additions are made to the
3.6 million ounces of reserves and to our other substantial resources.

Our strategy of acquiring property on Ghana’s proliﬁ c Ashanti Gold Belt during the
recent low-gold-price environment is delivering its reward of production growth.
We are now shifting emphasis and aggressively exploring our signiﬁ cant land holdings.

We have not hedged our production and our shares are fully leveraged to the gold price.
Golden Star’s highly liquid stock trades on the American and Toronto stock exchanges
under the symbols GSS and GSC, respectively.

Table of Contents

Highlights

Shareholders Letter

Reserves and Resources

Bogoso/Prestea Mine

Wassa Mine

Exploration

Corporate Responsibility

Board of Directors

Form 10-K

Management’s Discussion and Analysis

Consolidated Financial Statements

IBC

Corporate Information

About the Cover

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On the cover is a high-grade sample of gold ore from the Bogoso/Prestea property on the

proliﬁ c Ashanti Gold Belt in Ghana. Our property has historic production in excess of 11 million

ounces and offers considerable potential along strike and at depth. In addition, the sulﬁ de ore

potential was ignored by previous owners due to lack of appropriate processing facilities, which

we are now building.

Forward-Looking Statements are made in this report to give the reader an indication of our business prospects, plans and objec-

tives. Although we believe these statements are reasonable at the time, actual results, performance or achievements could differ

materially from those stated. The risks involved in making these statements are given on page 2 of our Form 10-K, contained herein.

Non-GAAP Financial Measures are used in this report, in particular “total cash cost” and “cash operating cost” on a per ounce of

gold basis. This information differs from measures of performance in accordance with Canadian and US Generally Accepted Account-

ing Principles and readers should examine the cautionary and explanatory statement on page 2 of our Form 10-K, contained herein.

HIGH LIG HTS

• Signiﬁcantly increased production, reserves, earnings and cash ﬂow

• Share price reﬂected these achievements and exposure to gold price increases

• Wassa Mine prepared for production in 2004

• On track to double production rate to more than 350,000 ounces in 2005

• Increased holdings to a 100-kilometer strike length on the Ashanti Gold Belt

• Added exploration properties in Ghana and elsewhere in West Africa

• Raised $113 million of new equity to ﬁnance development and growth

All currency is stated in US dollars throughout this report, except as noted.

Results

Production (thousands oz)1

Ghana reserves (thousands oz)1

Cash operating cost ($/oz)

Total cash cost ($/oz)

Gold price realized

Net earnings ($ millions)

Earnings per share ($)

Cash ﬂow from operations ($ millions)

Capital expenditures ($ millions)

Cash at year end ($ millions)

Debt at year end ($ millions)

Shares outstanding at year end (millions)

2003

174.3

3,555

166

184

364

22.0

0.20

29.1

70.2

90.0

0.8

133

2002

124.4

2,211

193

215

311

4.9

0.07

4.9

16.1

20.0

5.3

+/- %

-14

349

183

494

360

- 85

A History of Growth

Production Growth 1
(thousands oz)

Reserves and Resources 1,2
(millions oz at year end)

Share and Gold
Price Changes

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1. Before minority interests

2. U.S. investors should read the cautionary statements relating to Resources on pages 12 and 13 of our Form 10-K, contained herein.

P e t e r B r a d f o r d

President and Chief Executive Ofﬁcer

DE A R FELLOW
SH A R EHOLDER S

Since our decision in 1999 to move away from our sole focus on exploration, Golden Star has success-

fully evolved into an emerging mid-tier gold company. As we grow, we will be at the forefront of the

gold industry over the next few years, during what promises to be a very exciting period.

Focus, Focus, Focus

Our focus continues to be: building a portfolio of gold assets in Ghana, West Africa, a mining friendly

country that has many centuries of gold production; fueling growth and proﬁtability with these assets;

and developing a management team second to none in the gold mining sector to manage our growth.

This focus has been highly successful as evidenced by our strong performance in 2003 and our planned

strong growth through 2005 and beyond.

Let me highlight our achievements during 2003:

• Record gold production of 174,300 ounces

• Record earnings of $22 million

• Commenced construction at Wassa

• Expanded reserves by 61% to 3.6 million ounces

• Expanded property position and exploration commitment

• Planned for the expansion of Bogoso/Prestea in 2004 and 2005

• Raised the capital required for expansion activities

• Kept debt at negligible levels and avoided hedging commitments

• Expanded the management team to support growth

Construction of our new mine, Wassa, will be nearing completion as we mail this report to you, and

planning for the expansion of the nearby Bogoso/Prestea mine is in its ﬁnal stage, with the construction

decision to be made soon. The Bogoso/Prestea expansion is expected to increase our total production

rate to more than 350,000 ounces a year in 2005, at an estimated capital cost of $70 million. We

describe these projects later in this report.

2004 Objectives

• Commence production at Wassa

Increase total production to

•
185,000-210,000 ounces

• Commence Bogoso/Prestea
expansion activities

• Prepare to increase production
rate to 350,000 ounces in 2005

• Expand gold reserves and resources
in Ghana after mining depletion

• Delineate the ﬁ rst gold reserves
at Prestea Underground

• Expand non-mine exploration
commitment to identify organic
growth opportunities

A young woman carries locally grown oranges near the athletic ﬁ eld we
are building for the communities around our Bogoso/Prestea Mine. In
the background is the currently inactive Prestea Underground Mine’s
central shaft, one of the many old mines on the proliﬁ c Ashanti Gold
Belt. We control over 100 kilometers of highly prospective property on
the Belt.

Investing at the Low Point of the Cycle

We are optimistic about both the gold price and the gold potential

of Ghana. Our focus on property acquisitions in Ghana at the low

point of the gold cycle (when others were exiting this highly

endowed gold region) has been very successful. Ghana returned

to prominence in 2003 with major investments announced by North American and South African senior

gold producers.

We have further expanded our land position and exploration commitment in Ghana, in the belief that the

country is under explored and that only the low hanging fruit has been picked. Recent activity by the

senior producers is a solid indication that our strategy has paid off – we are ahead of the crowd.

Our knowledge of Ghana’s geology – speciﬁ cally the factors that control gold mineralization – has grown

as we have examined different properties. This familiarity gives us a competitive edge, allowing us to

better target the potential new gold deposits hidden below surface.

Recognizing that there are limitations to our ability to grow in Ghana, we laid the foundations for our

expansion elsewhere during the year, with two exploration joint ventures in West Africa and a renewed

commitment to our properties in the Guiana Shield in South America.

We like the joint venture approach to exploration. It minimizes acquisition costs while maximizing

expenditures in the ground. More importantly for Golden Star, it allows us to invest in new areas on a

collaborative basis with partners who are already established, thereby leveraging from their geological

knowledge while minimizing our learning curve and cost of entry.

(Left to right)

Allan Marter
Senior Vice President & CFO

Roger Palmer
Controller

Richard Gray
Senior Vice President & COO

Bruce Higson-Smith
Vice President, Corporate Development

Doug Jones
Vice President, Exploration

Peter Bradford
President & CEO

Neil Stevenson
Acting General Manager, Bogoso/Prestea

Joe Mobilia
Treasurer

Andrew Goode
Vice President & General Manager,
Wassa

Golden Star continues to add to its
management team in Denver and
Ghana. We have the proven technical
and ﬁ nancial skills and the depth of
management to develop our growth.

Explor ation – Our New Emphasis for Growth

We expect that exploration will play a pivotal role in our future growth by ﬁ nding production ounces at a

relatively low cost on our own highly prospective land. Therefore our exploration commitment in 2004

has been signiﬁ cantly expanded to $21 million, up from $6.9 million in 2003.

A major portion of our exploration commitment is in the area around the Bogoso/Prestea and Wassa

mines, where potential for more gold mineralization has already been identiﬁ ed. However, we have

budgeted $6 million for early stage and grassroots exploration programs elsewhere in Ghana, as well as

West Africa and South America.

In parallel with our growth prospects from exploration, we continue to assess acquisition opportunities.

We recognize that in the current buoyant market acquisitions are likely to be expensive. However, they

can create value in other ways such as greater market recognition, share liquidity, increased credibility

and reduced asset risk.

We are committed to responsible growth. In this report we highlight the areas where we are being

environmentally proactive, seeking to create other types of work, and supporting the communities

where we operate.

The Years Ahead

In 2004 we will continue to grow, beneﬁ ting from our new

Wassa Mine’s production. Total production, before minority

interests, is expected to be in the range of 185,000 to 210,000

ounces at average cash operating costs between $200 and

$225 per ounce.

When Wassa and Bogoso/Prestea reach their full production

levels in 2005, we expect an annualized gold production rate in

excess of 350,000 ounces, a 100% increase over 2003’s level.

Growth beyond that depends on our well-honed exploration

and deal-making skills, which yielded their ﬁ rst results in our

2003 performance.

A Change in Emphasis

Since Golden Star became a gold
producer in 1999, we have acquired a
portfolio of exploration properties in
Ghana on the proliﬁ c gold belt that
hosts the historic Ashanti Mine. The
properties contain gold mineralization
and many have been previously mined.

Our emphasis is changing from
acquiring properties to exploring them,
with $21 million being allocated to
exploration in 2004 (we spent $6.9
million in 2003).

Another change is that we are broadening
our horizons beyond Ghana. Attractive
though the country is, there are also
opportunities elsewhere.

Our recent achievements have come from the team effort and hard work by all the people at Golden Star –

from the dedication of our employees to the leadership and foresight of our management team and

board of directors. Other stakeholders have also played key roles in our success including the

Government of Ghana, the communities where we do business and our professional advisors.

This was an excellent year as we carved a larger niche for ourselves in the gold mining sector. We are

realizing the beneﬁ ts of our commitment to property acquisitions, mine expansion and exploration

programs, creating the platform for great years in 2004 and beyond.

On behalf of everyone at Golden Star, I thank you, our shareholders, for your continued support.

Peter Bradford

President and Chief Executive Ofﬁ cer

March 25, 2004

R ESERV ES
A ND R ESOU RCES

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The Mineral Reserves at our properties in Ghana increased by

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61% in 2003 to 3.55 million ounces of contained gold. This sig-

niﬁcant increase was a result of continued exploration and tech-

nical studies at Bogoso/Prestea, the acquisition of the

Mampon deposit north of our Bogoso/Prestea operation, and

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the completion of exploration and feasibility studies at Wassa.
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Miner al Reserves
(not including Mineral Resources below)

Proven and Probable Mineral Reserves as at December 31, 2003:

Sensitivity to Gold
Price Changes 1

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Estimated percentage increase

in Reserve and Resource ounces

at different gold prices

Proven

Probable

Total

Property

Tonnes
(thousands)

Gold
Grade
(g/t)

Contained
Ounces
(thousands)

Tonnes
(thousands)

Gold
Grade
(g/t)

Contained
Ounces
(thousands)

Tonnes
(thousands)

Gold
Grade
(g/t)

Contained
Ounces
(thousands)

Bogoso/Prestea

8,254

3.31

Wassa

Total, year end 2003

Total, year end 2002

–

8,254

14,170

–

3.31

3.26

878

–

878

1,485

19,048

16,207

35,255

8,902

3.29

1.28

2.36

2.54

2,011

665

2,676

726

27,302

16,207

43,509

23,072

3.29

1.28

2.54

2.98

2,890

665

3,555

2,211

Our Mineral Reserves were determined using a gold price of $325 per ounce and were estimated in accordance with the deﬁnitions
and requirements of Canada’s National Instrument 43-101. The Qualiﬁed Person for the estimation of our Mineral Reserves is our
employee, David Alexander. Additional information on the estimation of our Mineral Reserves is provided on pages 4 and 10 of our
Form 10-K for the year ended December 31, 2003, contained herein.

Mineral Reserves are subject to the Government of Ghana’s right to a 10% dividend once our capital costs have been recovered.

Miner al Resources 1
(in addition to the Mineral Reserves above)

Measured, Indicated and Inferred Mineral Resources as at December 31, 2003:

Measured

Indicated

Measured & Indicated

Inferred

Property

Tonnes
(thousands)

Gold
Grade
(g/t)

Tonnes
(thousands)

Gold
Grade
(g/t)

Tonnes
(thousands)

Gold
Grade
(g/t)

Tonnes
(thousands)

Gold
Grade
(g/t)

Bogoso/Prestea

11,253

2.45

16,024

Prestea Underground

Wassa

Ghana Total,
year end 2003

Ghana Total,
year end 2002

–

11,253

5,861

–

2.45

3.64

–

9,363

25,387

31,870

2.53

–

0.96

1.93

1.91

27,277

–

9,363

36,640

37,731

2.50

–

0.96

2.11

2.18

29,690

1,606

30,768

62,064

52,803

2.43

8.58

1.27

2.00

1.95

Our Mineral Resources were determined using a gold price of $375 per ounce and were estimated in accordance with the deﬁnitions
and requirements of Canada’s National Instrument 43-101. The Qualiﬁed Person for the estimation of our Mineral Resources is our
employee, S. Mitchel Wasel. Additional information on the estimation of our Mineral Resources is provided on pages 4 and 12 of
our Form 10-K for the year ended December 31, 2003, contained herein.

Mineral Resources are subject to the Government of Ghana’s right to a 10% dividend once all capital has been repaid, and to minority
interests in the Prestea Underground in which Golden Star currently has a 59% beneﬁcial interest.

1. U.S. investors should read the cautionary statements relating to Mineral Resources and Inferred Mineral Resources on pages 12
and 13 of our Form 10-K for the year ended December 31, 2003, contained herein.

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We control a strike length of over 100 kilometers on the Ashanti
Gold Belt and have properties in other prospective areas of

Ghana. Over the centuries, mines on the Belt have produced

over 50 million ounces of gold.

Jacobus Kankam, Mike Morawa and Johnny Appiah-Kubi,

geologists in Ghana, discuss exploration targets on
the property. With its long mining history, Ghana has a

well-educated professional workforce.

Open pit mining of gold oxide ore is in progress, with
revegetated benches in the background. Only 8 of the
34 historically mined oxide pits have been explored

and the deeper sulﬁde potential is signiﬁcant.

The Honorable Yaw Barimah, Ghana’s Minister of

Employment, opens the new district labor ofﬁce in the

town of Prestea. Golden Star ﬁnanced construction of

the ofﬁce, which coordinates all employment in the region.

BOG OSO/ PR EST E A

Our only operating gold mine during 2003 was Bogoso/Prestea, which is located on the proliﬁc Ashanti

Gold Belt in Ghana. This mine consists of a series of open pits feeding the processing facility at Bogoso.

Bogoso/Prestea delivered excellent results in 2003, with record production levels due to higher-grade

oxide ores at Prestea. Our exploration resulted in further increases in reserves and resources, and these

gave us the conﬁdence to plan for the next stage of the property’s evolution – a major expansion.

The Government of Ghana has a 10% carried interest in the Bogoso/Prestea and Wassa properties and

will be entitled to a 10% dividend once our capital costs have been recovered.

Bogoso/Prestea Properties

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During the year we increased open pit
reserves at Bogoso/Prestea by 31% to
2.9 million ounces, and other resources
by 9%. Our large reserve and resource
base is driving our expansion plans.

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Mine Properties

Exploration Properties

Increased Production and Reserves, Record Earnings in 2003

Operations in 2003 surpassed our targets and produced a record 174,315 ounces of gold at a cash

operating cost of $166 per ounce, primarily due to the mining of higher grade ores than anticipated in

the oxide zone of the major open pit. Mining with our owner-operated ﬂeet continued smoothly, with a

total mined tonnage of 8.8 million tonnes.

The Bogoso mill performed well, processing 2.1 million tonnes at a grade of 3.3 g/t gold at our target re-

covery rate of 81%. The gravity circuit installed in 2001 proved especially valuable in treating high-grade

ore. This circuit was upgraded in 2003. We also upgraded our ﬂotation circuit in readiness for processing

mixed oxide/sulﬁde and sulﬁde ores in 2004 and beyond.

Production to Increase by 2005

Exploration during the year resulted in a 31% increase to Bogoso/Prestea reserves, net of mining

depletion, to 2.9 million ounces of contained gold and a 9% increase to our other gold resources. This

large base is driving our expansion plans which consist of three elements: the construction of a second

processing plant; the conversion of the Bogoso processing plant by the addition of a bio-oxidation circuit

to process refractory sulﬁde material; and the expansion of our mining ﬂeet to match the greater

production rate. Being able to process refractory sulﬁde ore opens up signiﬁcant opportunities to

increase reserves and future production levels.

We expect the construction of the second processing plant to be completed by early 2005. The majority

of the equipment for this phase was acquired second-hand in Ghana at considerable cost savings.

The addition of a bio-oxidation circuit to the Bogoso plant is planned to commence in late 2004 and be

completed in late 2005.

The expansion program is expected to increase our overall gold production rate at Bogoso/Prestea to

about 250,000 ounces a year by 2005, reducing average haulage costs, providing general economies of

scale, and allowing more efﬁcient mining by simultaneously processing the full range of ore types.

Prestea Underground: Substantial Potential Identified

The compilation of a digital database for the dormant Prestea Underground Mine was substantially

completed in 2003. The scope of this exercise is huge, combining the manual data from over 100 years of

mining by multiple operators on several adjoining concessions. Collectively these operations produced in

excess of nine million ounces of gold in the years up to 2001. The consolidated mine extends over a strike

length of ten kilometers and down to a depth of 1,400 meters, and is open along strike and at depth.

Historic Prestea Underground Mine
Longitudinal Diagram

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Historical mining concentrated on three separate quartz reefs and our database evaluation has highlighted

the potential for this mineralization on strike, at depth and in gaps between mined areas. Sulﬁde gold

mineralization occurring between and adjacent to these reefs, which was left undeveloped due to mining

and processing constraints of the previous owners, represents further untapped potential.

Exploration drilling is underway in the inactive

Prestea Underground Mine. We have a majority
interest in the mine, which previously produced

in excess of nine million ounces. It has many

Justice Amekudi is plotting maps of Prestea Underground. For the

unexplored areas with known mineralization and

ﬁrst time, a digital database has been compiled from the many
manual sources of information covering different operators in

is open along strike and at depth. We are assessing
its potential as a ﬁrst step to bringing the mine

separate parts of the mine. With three-dimensional mapping, we

back into production.

are able to discover areas of potential that were previously hidden.

Drill-chip samples from the Wassa property show the

multi-colored rock types. Our Ghanaian land holdings
include in excess of 100 kilometers along the highly

prospective Ashanti Gold Belt, where the Obuasi Mine

has produced more than 25 million ounces over the

The school complex in the town of Bogoso, which we upgraded in

last century. Obuasi currently produces over 500,000
ounces a year.

2000, provides education for students from kindergarten through

senior grade. Since independence from Britain in 1957, Ghana

has continued a strong emphasis on education. The literacy rate

is a high 75% in this mainly agricultural country.

We are now drilling relatively shallow (400-550 meters deep) underground targets, focusing on the

quartz reef potential beneath our proposed pits at Prestea. Underground drill stations will also be

developed at a depth of 1,100 meters in preparation for a 2004/5 drill program targeting extensions of a

higher-grade reef beneath the old workings.

Extensive Surface Miner alization to Be Explored

Surface exploration during 2003 successfully delineated mineralization south of the Prestea town.

In 2004, a 20,000-meter drill program is planned on this mineralization, which continues in two parallel

zones for seven kilometers south to our concession boundary .

On the Bogoso concession, 34 individual oxide pits have been

Why Ghana?

mined (mainly by others) along the main Ashanti structure and drill

testing for sulﬁde mineralization has been carried out on only eight

of them. During 2004 we plan to drill approximately 45,000 meters

beneath the untested pits for open pit sulﬁde potential, which we

can process once the bio-oxidation circuit is completed in 2005.

In 2004 we will also drill targets on the Akropong Trend. This is

a mineralized corridor parallel to and approximately 20 kilometers

west of the Ashanti Gold Belt, where we hold rights covering an

area of approximately 700 square kilometers. Extensive early stage

exploration in 2003 identiﬁed a 1.2-kilometer zone of mineralization

and a six-kilometer gold-soil anomaly.

In 2003 we acquired the Dunkwa properties covering an area of 125

square kilometers north of and contiguous with the Bogoso mining

• Stable and mining friendly

• Gold generates over 50% of

foreign exchange

• Centuries of gold mining history,
major deposits

• Under explored, strong gold
potential

• Major mining companies now

investing

• Management’s experience in

the country

• Strong economy based on gold
and agriculture

• English-speaking democracy

lease, which include a strike length of 45 kilometers on the Ashanti

• Well-established mining law

Gold Belt. Work by previous operators has deﬁned a reserve and

• Educated population, 75%

mining is expected to commence in 2005. Our exploration activi-

literacy rate

ties during 2003 included inﬁll soil geochemistry and preparation for

• Hardworking, trained workforce

drilling known gold occurrences and new targets in 2004.

2004 – a Tr ansition Year

In 2004 the majority of what we will mine and process at Bogoso/Prestea will be mixed oxide/sulﬁde

and sulﬁde ores, which are more difﬁcult to process than the oxide ores processed in 2003. As a result,

there will be a decrease in mill throughput and recovery, yielding in the range of 135,000 to 155,000

ounces at a cash operating cost of approximately $200 to $220 per ounce. Costs are forecast to be

higher because of the lower gold production rate and higher mining and processing costs associated

with the deepening of the pits and the harder nature of the ore. The production shortfall should be more

than offset by production from the new Wassa Mine.

The benefits of the expansion program will begin in 2005, when we expect the annualized gold

production rate from Bogoso/Prestea to increase to approximately 250,000 ounces at a cash operating

cost of about $200 an ounce.

WA SS A

The Wassa open pit gold project, acquired in 2002, is located about 35 kilometers east of Bogoso/Prestea

on the southeastern ﬂank of the Ashanti Gold Belt. During 2003 we completed a feasibility study and

commenced construction of a conventional processing plant, which is to begin producing gold in 2004.

The feasibility study was based on processing 3.5 million tonnes per annum, to produce an average

of 140,000 ounces of gold when at full production. Current contained gold reserves are estimated at

665,000 ounces, grading 1.3 g/t; however, resources and other opportunities exist to increase mine life.

The capital cost was estimated at $40 million, which includes a provision to acquire a mining ﬂeet later

in 2004. Construction began in July 2003 and is on track for completion in 2004.

Wassa Properties

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Because of the potential in the Wassa
area, we are expanding our land hold-
ings and will be carrying out extensive
exploration reconnaissance in 2004.

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Mine Properties

Exploration Properties

Production to Start Early 2004

Production for 2004 is expected to be in the range of 50,000 to 55,000 ounces of gold at a cash operating

cost of approximately $200 to $240 per ounce. Production for the ﬁrst 12 months of operation will come

from reprocessing heap-leach material left by the previous owner. This will be followed in 2005 by ore

from open pit mining, at which time the annual production is estimated to increase to 140,000 ounces

a year at a cash operating cost of about $200 an ounce.

New Deposit with Important Potential

Particularly exciting is the discovery of a new deposit, located about two kilometers southwest of the

Wassa processing plant. This deposit has the potential to signiﬁcantly add to our reserve base in 2004

and at a higher grade than the current reserves at Wassa. In addition, there are a number of gold-soil

anomalies within a mineralized corridor that will be tested in 2004.

Based on our knowledge of the geology on the Wassa property and the fact that the area is

under explored, we are both expanding our land position and carrying out detailed airborne geophysical

surveys to help guide future exploration.

Mills are being erected at Wassa. This new mine will come into

production in 2004, adding an estimated 50,000 to 55,000 ounces

to production in that year. Beginning in 2005 the annual produc-

tion rate should increase to an estimated 140,000 ounces per

year, at an average cash operating cost of $200 an ounce, helping

to double our production rate to 350,000 ounces.

Refurbishing is being carried out on the mill shell for

the Wassa processing facility which is under

construction. Key equipment for the facility, such as

the mills, was acquired second-hand, helping to lower

capital costs. Most processing equipment has a long

life providing it is well maintained.

GROW T H FROM E X PLOR AT ION

Following our property acquisition period from 1999 through 2003, our emphasis is now changing to

incorporate a signiﬁcant exploration program in order to fuel organic growth from these properties. In

2004, we will be spending up to $21 million on exploring our land holdings, $15 million on our mine sites

and adjacent properties (described on pages 9 to 14) and $6 million elsewhere. Some of our properties

have the potential to host big deposits, which could propel us through the ranks of mid-tier producers.

If we are successful, this exploration-focused growth will be low cost relative to acquiring known gold

reserves. Exploration, however, takes time and these efforts may take several years to be rewarded.

2004 Explor ation Budget
($ millions)

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Geogr aphical Diversity

Ghana is a great country to ﬁnd and produce gold, but there are other

places in West Africa, South America and around the world with equal-

ly good prospects. Using our exploration and deal-making talents, we

are spreading our wings and we will be more inclined to joint venture if

the other party brings local geological and business knowledge to the

partnership.

West Africa

Obuom, Ghana (ownership 52%) During 2001 we acquired an interest

in Obuom because of its location on the Ashanti Gold Belt and its early

1900s mining history. Exploration was limited until the 1990s, when a

major South African company deﬁned a number of promising gold-soil

anomalies directly over what is believed to be a structural contact zone.

Subject to permit timing, we expect to commence reconnaissance

exploration in 2004.

Of the $21 million exploration bud-
get for 2004, $15 million is earmarked
for our properties around the Bogoso/
Prestea and Wassa mines. The remain-
ing $6 million is for generative and
early stage exploration elsewhere in
West Africa and in the Guiana Shield
of South America.

Kibi, Ghana (ownership 100%) An application has been ﬁled for a large

reconnaissance license covering land between two gold belts in southern

Ghana. Traditionally, the area has been regarded as having no gold poten-

tial. Our new interpretation suggests there may be mineralization in the

area. It is anticipated the licenses will be granted during 2004, which will

allow regional sampling to commence.

Mininko, Mali (earning up to 82.5%) In 2003 we entered into an earn-in exploration joint venture on this

property in southern Mali. The property covers prospective rock types, which host the multi-million ounce

Morila and Syama deposits in the same region. Extensive workings dating back several hundred years

were discovered during the 1980s. Subsequent exploration by others has deﬁned three zones of gold

mineralization but drilling was too shallow to test for deeper Morila-style mineralization. During 2003 we

completed a soil sampling program that conﬁrmed previous anomalies and discovered several others. A

follow-up drilling and trenching program is planned for early 2004.

Exploration drilling is taking place near the

Wassa Mine. We have committed $15 million

to exploration on our extensive holdings

around our mine sites, where signiﬁcant gold

mineralization has been identiﬁed.

Mano River, Sierra Leone (earning up to 85%) We entered into an earn-in joint venture on several

properties where numerous gold occurrences have been identiﬁed. Aid-funded prospecting programs

with limited drilling produced encouraging results at several locations, some of which were signiﬁcant

alluvial gold producers in the 1930s to 1950s. Subsequent exploration was interrupted by a civil war,

which broke out in the mid 1990s and has now been peacefully resolved. For 2004 we have planned an

intensive exploration program on several prospects to follow up our earlier encouraging work.

South America

Saramacca, Suriname (ownership 100%) This project is in north central Suriname, about 100 kilometers

southwest of Paramaribo. It is on the same structural trend as the 1.9 million-ounce Gross Rosebel

deposit. We have carried out several phases of district-scale drainage and gold-soil sampling and have

identiﬁed a ﬁve kilometer-long gold-soil anomaly. Follow-up work is planned for 2004.

Bon Espoir, French Guiana (ownership 73%) In 2003 we acquired an indirect interest in Bon Espoir,

located 200 kilometers west of Cayenne. This largely unexplored property covers a length of about 40

kilometers of a gold-mineralized shear zone. A soil sampling program is planned for 2004.

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Sierra Leone and Mali offer similar potential to

host gold deposits as Ghana. We will be more
inclined to joint venture where we do not have the

geological or business knowledge of the area.

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COR POR AT E R ESPONSIBIL IT Y

Reclamation of Mined-Out Areas

During 2003 we maintained our position as a leader in Ghanaian mine reclamation with our continued

focus on these activities. At Bogoso/Prestea we made a record 140,000 plantings to reclaim a land area

of nearly 60 hectares, bringing the mine-life reclamation effort to 900,000 plantings over 450 hectares.

Of particular value during the year was the successful reclamation of a mined rock pile adjacent to the

Bogoso to Prestea road and to some local communities. This rock pile had been an issue due to the

difﬁ culty of erosion control before our acquisition of Bogoso in 1999.

Overall, monitoring programs in all areas of the Bogoso/Prestea operations detected no unforeseen

impact on the environment and local communities due to our mining activities.

An Integr al Part of the Community

Consultations with local communities, along with the observance of traditional customs, have produced

an atmosphere in which we are able to harmoniously achieve our operational goals. In addition

to providing employment opportunities, we have made considerable investments of time and funds to

further improve the neighborhoods around us. Community development projects undertaken during the

year included: the construction of new public toilet facilities in some of the nearby areas; the development

of market facilities for the Prestea environs; the construction of a new post ofﬁ ce and employment

ofﬁ ce in the town of Prestea; the construction of new roads; and the repair of existing roads in the Bogoso,

Prestea and Wassa areas.

Helping Establish Alternative Livelihoods

We are also proud of our ongoing Alternative Livelihood Programs, with one becoming an item

of national interest. The Sericulture Project (rearing silk worms to produce silk for cloth manufactur-

ing), which was visited by the Minister for Mines and the Minister for Manpower and Development, is of

Our Core Principles

Golden Star is committed to best industry

practices and applying the principles of sustain-

able development wherever we operate:

Responsible Care

Sustain a corporate culture of responsible care

for the environment and the safety of people and

provide adequate time and resources to educate

and train employees.

Community Partnership

Actively engage all communities in our

areas of operation to ensure open communica-

tions are maintained, so we can develop and

operate for the beneﬁ t of everyone.

Risk Management

Minimize the impact of our activities on

people and the environment and continually

improve our performance by evaluating our risks

and applying best industry practices.

Rehabilitation

Apply progressive rehabilitation consistent

with the requirements of the environment and

our communities.

In acquiring our properties in Ghana, we inherited abandoned
mining operations which we have undertaken to reclaim. Above
we demonstrate the sequence of some of our reclamation,
from the start of planting a site (left), to a thriving mulberry farm
(center), to the silk worm that feeds on mulberry leaves. Helping
create a silk-cloth industry will provide sustainable non-mining jobs
in the communities where we operate.

The open pit being reclaimed (left) is also being developed into a
prototype ﬁ sh farm as an alternative livelihood project. Others can
replicate this ﬁ sh farm by converting similar abandoned pits.

particular interest as it ties in with a national initiative. We also

continued the palm-oil production project with the construction

of an oil processing facility.

In addition, we expanded the planting of citrus trees for the

community and developed a ﬁ sh farm in one of the reclaimed

pits at Bogoso. Extensive discussions were held with the

Performance Targets

Department of Cooperatives to help them educate the nearby

communities on the beneﬁ ts of forming cooperative groups

Integrate environmental, safety and

community performance targets into our

everyday planning and operational

to generate economies of scale in agricultural programs.

decisions.

Agriculture and mining are Ghana’s two biggest industries.

Our plans for 2004 include the development of a small-loan

program, in conjunction with local banks, to assist new busi-

ness ventures such as the farming of native animal species.

Accountability

Report performance internally, to

government agencies, to the communities

and to our shareholders.

Safety a Priority

We achieved a Lost Time Injury Frequency rate for the year of 0.45 and 0.15 injuries per million man

hours worked for Bogoso/Prestea and Wassa respectively, comparing favorably with our target of 0.90.

Our results are better than the U.S. surface mining operations statistic for 2002.

BOA RD OF DIRECTORS

(Left to right)

Ian MacGregor
Toronto, Ontario
Chairman of the Board

Peter J. Bradford
Littleton, Colorado

David K. Fagin
Denver, Colorado

Robert R. Stone
Vancouver, British Columbia
Immediate past Chairman

James E. Askew
Denver, Colorado

Lars-Eric Johansson (not pictured)
Oakville, Ontario

Golden Star’s Board brings a wealth of mining and related experience to providing direction to the

Company. With the exception of Peter Bradford, President and CEO, all are independent directors.

Jim Askew is an engineer with many years of experience managing and being a director of mining companies.
He was formerly CEO of Golden Star, and also Golden Shamrock, an Australian mining company with properties in

West Africa.

Peter Bradford has been President and CEO of Golden Star since late 1999 and has 20 years of operating and
development experience, 13 being in Ghana. Prior to Golden Star, he was with Ashanti Goldﬁ elds and Golden

Shamrock where he was responsible for developing the Iduapriem mine and later for business development.

David Fagin has served as Chairman and CEO of the Company, is on a number of boards in the resource industry
and has many years of management experience in mining. He was formerly President of Homestake Mining and

Rosario Resources and provides his insights into management and operating matters.

Lars-Eric Johansson recently joined the Board following his retirement as CFO of Noranda, a major Canadian base

metals company. He brings to the Company an in-depth understanding of international mining, and the development

and ﬁ nance of large mining projects.

Ian McGregor recently became Chairman of the Board after serving as a director for the past four years. He is
Of Counsel with one of Canada’s largest law ﬁ rms, Fasken Martineau DuMoulin, and provides us with his wide-ranging

knowledge of mining ﬁ nance, joint ventures, and mergers and acquisitions.

Bob Stone is immediate past Chairman of the Board and has been a director since 1997. He brings with him a strong

ﬁ nancial background following his position as CFO of Cominco, a major Canadian base metals producer. Bob was

instrumental in guiding the Company through its transition from an exploration company into a producing company

in 1999. He is retiring from the Board effective May 2004.

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year ended December 31, 2003
Commission file number 1-12284

G O L D E N S TA R R E S O U R C E S LT D.
(Exact Name of Registrant as Specified in Its Charter)

Canada
(State or other Jurisdiction of
Incorporation or Organization)

10901 West Toller Drive, Suite 300
Littleton, Colorado
(Address of Principal Executive Office)

98-0101955
(I.R.S. Employer
Identification No.)

80127-6312
(Zip Code)

Registrant’s telephone number, including area code (303) 830-9000

Securities registered or to be registered pursuant to Section 12 (b) of the Act:

Title of Each Class
Common Shares

Name of each exchange on which registered
American Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Warrants Issued July 2002
Warrants Issued February 2003

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form l0-K.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes X No

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the
Registrant was approximately $700.4 million as of January 29, 2004, based on the closing price of the
shares on the American Stock Exchange of $5.31 per share.

Number of Common Shares outstanding as at January 29, 2004: 133,140,528.

D O C U M E N T S I N C O R P O R AT E D BY R E F E R E N C E

Portions of our Definitive Proxy Statement to be filed with the Securities and Exchange Commission
pursuant to Regulation 14A in connection with the 2004 Annual Meeting of Shareholders are incorpo-
rated by reference to Part III of this Report on Form 10-K.

R E P O RT I N G C U R R E N C Y, F I N A N C I A L A N D O T H E R I N F O R M AT I O N

All amounts in this Report are expressed in US dollars, unless otherwise indicated. Canadian currency is denoted as
“Cdn$” and the Euro is denoted as “¤”.

Financial information is presented in accordance with accounting principles generally accepted in Canada (“Cdn GAAP”).
Differences between accounting principles generally accepted in the US (“US GAAP”) and those applied in Canada, as
applicable to Golden Star Resources Ltd., are explained in Note 22 to the Consolidated Financial Statements.

Information in Part I and II of this report includes data expressed in various measurement units and contains numer-
ous technical terms used in the gold mining industry. To assist readers in understanding this information, a conver-
sion table and glossary are provided below.

References to “Golden Star”, “we”, “our”, and “us” mean Golden Star Resources Ltd., its predecessors and consoli-
dated subsidiaries, or any one or more of them, as the context requires.

N O N - G A A P F I N A N C I A L M E A S U R E S

In this Form 10-K, the terms “total cash cost” and “cash operating cost” are used on a per ounce of gold basis. Total
cash cost per ounce is equivalent to mining operations expense for the period as found on the Consolidated
Statements of Operations, divided by the number of ounces of gold sold during the period. Cash operating cost per
ounce is equivalent to mining operations expense for the period less production royalties, divided by the number of
ounces of gold sold during the period. We have included total cash cost and cash operating cost information to provide
investors with information about the cost structure of our mining operations. We use this information for the same pur-
pose and for monitoring the performance of our operations. This information differs from measures of performance
determined in accordance with GAAP in Canada and the US and should not be considered in isolation or as a substi-
tute for measures of performance prepared in accordance with GAAP. These measures are not necessarily indicative of
operating profit or cash flow from operations as determined under GAAP and might not be comparable to similarly titled
measures of other companies. See Item 7, Management’s Discussion and Analysis of Financial Condition and Results
of Operations for a reconciliation of these non-GAAP measures to our Statement of Operations.

S TAT E M E N T S R E G A R D I N G F O R WA R D - L O O K I N G I N F O R M AT I O N

This Form 10-K contains forward-looking statements, within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, with respect to our financial condi-
tion, results of operations, business prospects, plans, objectives, goals, strategies, future events, capital expenditure,
and exploration and development efforts. Words such as “anticipates”, “expects”, “intends”, “plans”, “forecasts”, “proj-
ects”, “budgets”, “believes”, “seeks”, “estimates”, “could”, “might”, “should”, and similar expressions identify forward-
looking statements. Although we believe that our plans, intentions and expectations reflected in these forward-look-
ing statements are reasonable, we cannot be certain that these plans, intentions or expectations will be achieved.
Actual results, performance or achievements could differ materially from those contemplated, expressed or implied
by the forward-looking statements contained or incorporated by reference in this Form 10-K. These statements
include comments regarding: the establishment and estimates of mineral reserves and mineral resources, produc-
tion, production commencement dates, productions costs, cash operating costs per ounce, total cash costs per
ounce, grade, processing capacity, potential mine life, feasibility studies, development costs, capital and operating
expenditures, exploration, the closing of certain transactions including acquisitions and offerings, our expansion plans
for Bogoso/Prestea, including relocation of a recently acquired carbon-in-leach (“CIL”) processing plant to Prestea, and
the development and start-up of Wassa.

The following, in addition to the factors described in “Risk Factors” in this Form 10-K, are among the factors that
could cause actual results to differ materially from the forward-looking statements:

• unexpected changes in business and economic conditions;
• significant increases or decreases in gold prices;
• changes in interest rates and currency exchange rates;
• timing and amount of production;
• unanticipated grade changes;
• unanticipated recovery rates or production problems;
• changes in mining, processing and overhead costs;
• changes in metallurgy and processing technology;

• access and availability of materials, equipment, supplies, labor and supervision,

power and water;

• determination of mineral reserves and mineral resources;
• availability of drill rigs;
• changes in project parameters;
• costs and timing of development of new mineral reserves;
• results of current and future exploration activities;
• results of pending and future feasibility studies;
• joint venture relationships;
• political or economic instability, either globally or in the countries in which

we operate;

• local and community impacts and issues;
• timing of receipt of government approvals;
• accidents and labor disputes;
• environmental costs and risks;
• competitive factors, including competition for property acquisitions; and
• availability of capital at reasonable rates or at all.

These factors are not intended to represent a complete list of the general or specific factors that could affect us. We
might note additional factors elsewhere in this Form 10-K, and in any documents incorporated by reference into this
Form 10-K. We undertake no obligation to update forward-looking statements.

C O N V E R S I O N F A C T O R S A N D A B B R E V I AT I O N S

For ease of reference, the following conversion factors are provided:

1 acre
1 foot
1 gram per tonne

= 0.4047 hectare
= 0.3048 meter
= 0.0292 ounce
per short ton
1 short ton (2000 pounds) = 0.9072 tonne
1 tonne

= 1,000 kg or

1 mile
1 troy ounce
1 square mile

= 1.6093 kilometers
= 31.1035 grams
= 2.59 square
kilometers

1 square kilometer = 100 hectares
= 2.2 pounds or
1 kilogram

2,204.6 pounds

32.151 troy ounces

The following abbreviations of measurements could be used herein:

Au = gold
g
= gram
g/t = grams of gold per tonne
ha = hectare
km = kilometer
km2 = square kilometers
kg = kilogram
m = meter

= square meter
= cubic meter
= milligram

m2
m3
mg
mg/m3 = milligrams per cubic meter
t
oz
ppb
Ma

= tonne
= troy ounce
= parts per billion
= million year

Note: All units in this report are stated in metric measurements unless otherwise noted.

G L O S S A R Y O F T E R M S

Note: The definitions of proven and probable mineral reserves and the definitions for measured, indicated and
inferred mineral resources set forth below are those used in Canada as required in accordance with National
Instrument 43-101. The definitions of proven and probable mineral reserves are consistent with those prescribed for
use in the US by the Securities and Exchange Commission and set forth in SEC Industry Guide 7.

mineral reserve

proven mineral
reserve

probable mineral
reserve

mineral resource
(also referred to
as non-reserves)

measured mineral
resource

indicated mineral
resource

inferred mineral
resource

qualified person

The term “mineral reserve” refers to the economically mineable part of a measured or indi-
cated mineral resource demonstrated by at least a preliminary feasibility study. This study
must include adequate information on mining, processing, metallurgical, economic, and
other relevant factors that demonstrate, at the time of reporting, that economic extraction
can be justified. A mineral reserve includes diluting materials and allowances for losses that
might occur when the material is mined.

The term “proven mineral reserve” refers to the economically mineable part of a measured
mineral resource demonstrated by at least a preliminary feasibility study. This study must
include adequate information on mining, processing, metallurgical, economic, and other rel-
evant factors that demonstrate, at the time of reporting, that economic extraction is justified.

The term “probable mineral reserve” refers to the economically mineable part of an indicated,
and in some circumstances a measured mineral resource demonstrated by at least a prelim-
inary feasibility study. This study must include adquate information on mining, processing,
metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting,
that economic extraction can be justified.

The term “mineral resource” refers to a concentration or occurrence of natural natural,
solid, inorganic or fossilized organic material in or on the Earth’s crust in such form and
quantity and of such a grade or quality that it has reasonable prospects for economic extraction.
The location, quantity, grade, geological characteristics and continuity of a mineral resource
are known, estimated or interpreted from specific geological evidence and knowledge.

The term “measured mineral resource” refers to that part of a mineral resource for which
quantity, grade or quality, densities, shape, physical characteristics are so well established
that they can be estimated with confidence sufficient to allow the appropriate application of
technical and economic parameters, to support production planning and evaluation of the
economic viability of the deposit. The estimate is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to
confirm both geological and grade continuity.

The term “indicated mineral resource” refers to that part of a mineral resource for which quantity,
grade or quality, densities, shape and physical characteristics, can be estimated with a level of
confidence sufficient to allow the appropriate application of technical and economic parameters,
to support mine planning and evaluation of the economic viability of the deposit. The estimate is
based on detailed and reliable exploration and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and drill holes that are
spaced closely enough for geological and grade continuity to be reasonably assumed.

The term “inferred mineral resource” refers to that part of a mineral resource for which quantity
and grade or quality can be estimated on the basis of geological evidence and limited sampling
and reasonably assumed, but not verified, geological and grade continuity. The estimate is
based on limited information and sampling gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes.

The term “qualified person” refers to an individual who is an engineer or geoscientist with at least
five years of experience in mineral exploration, mine development, production activities and proj-
ect assessment, or any combination thereof, including experience relevant to the subject matter
of the project or report and is a member in good standing of a self-regulating organization.

We use the following definitions of the stages of the exploration and development process. There can be no assur-
ance that the terminology used by us is consistent with the terminology used by other companies in the mining
industry or by industry analysts.

exploration stage

feasibility stage

development stage

mining

An exploration stage prospect typically involves testing one or more targets within an area
which have been determined to have merit, first with a combination of geological, geochem-
ical and geophysical analysis, and then, once better defined targets have been established,
by testing at depth, typically by trenching and drilling, and generating the information neces-
sary to develop a three dimensional geologic model of the mineralized zone, which could be
used to demonstrate mineralized materials and/or mineral reserves.

During the feasibility stage, exploration continues to further increase confidence in mineraliza-
tion while attempting to further expand the mineralization. During this stage, management
develops in detail the necessary engineering and costing for mining, processing, power and
infrastructure, as well as the designs for the plant and equipment required to construct and oper-
ate a modern mining operation. It is at the end of this stage that mineralization could be catego-
rized as proven and/or probable mineral reserves if a positive mining decision is justified. The fea-
sibility stage normally incorporates several phases of work, which involve increasing levels of
detail including (i) scoping study, (ii) pre-feasibility study, and (iii) bankable feasibility study.

After the feasibility stage, a company could decide to bring the property into production. The
process of bringing a mine from the feasibility stage to the production stage is the development
stage. It is during this stage that costs are capitalized for US financial reporting purposes.
Construction activities carried out during the development stage include shaft sinking, crosscut-
ting, drifting and raising, stripping, processing plant construction, leach pad construction, tailings
impoundment and infrastructure construction (roads, power, water, ports, etc.).

Mining is the process of extraction and beneficiation of mineral reserves to produce a mar-
ketable metal or mineral product. Exploration continues during the mining process and, in
many cases, mineral reserves are expanded during the life of the mine operations as the
exploration potential of the deposit is realized.

alteration any change in the mineral composition of a
rock brought about by physical or chemical means

bio-oxidation or BIOX a processing method that uses
bacteria to oxidize refractory sulfide ore to make it ame-
nable to normal oxide ore processing techniques such as
carbon-in-leach

Birimian a thick and extensive sequence of Proterozoic
age metamorphosed sediments and volcanics first iden-
tified in the Birim region of southern Ghana

cash operating cost per ounce is equal to total cash
cost per ounce less royalties and production taxes divided
by ounces sold during the period. This definition is consis-
tent with the Gold Institute’s definition

CIL or carbon-in-leach an ore processing method involv-
ing the use of cyanide where activated carbon which has
been added to the leach tanks is used to absorb gold con-
taining solutions

craton a stable relatively immobile area of the earth’s crust

cyanidation the process of introducing cyanide to ore to
recover gold

dip the angle that a structural surface, a bedding or fault
plane, makes with the horizontal, measured perpendicular
to the strike of the structure

disseminated where minerals occur as scattered particles
in the rock

doré unrefined gold bullion bars containing various impuri-
ties such as silver, copper and mercury, which will be further
refined to near pure gold.

fault a surface or zone of rock fracture along which there
has been displacement

fold a curve or bend of a planar structure such as rock
strata, bedding planes, foliation, or cleavage

formation a distinct layer of sedimentary rock of similar
composition

geochemistry the study of the distribution and amounts
of the chemical elements in minerals, ores, rocks, solids,
water, and the atmosphere

geophysicist one who studies the earth; in particular the
physics of the solid earth, the atmosphere and the earth’s
magnetosphere

geotechnical the study of ground stability

greenstone a sequence of usually metamorphosed vol-
canic-sedimentary rock assemblages

heap leach a mineral processing method involving the
crushing and stacking of an ore on an impermeable liner
upon which solutions would be sprayed that dissolve met-
als i.e. gold/copper etc.; the solutions containing the metals
are then collected and treated to recover the metals

web site, www.sedar.com, contains public security fil-
ings for Canadian public companies.

shear a form of strain resulting from stresses that cause
or tend to cause contiguous parts of a body of rock to
slide relatively to each other in a direction parallel to their
plane of contact

shield a large area of exposed basement rocks often sur-
rounded by younger rocks, e.g. Guyana Shield

hydrothermal the products of the actions of heated water,
such as a mineral deposit precipitated from a hot solution

stratigraphic, stratigraphically geology that deals with
the origin and succession of strata

mapped or geological mapping the recording of geo-
logic information such as the distribution and nature of
rock units and the occurrence of structural features, min-
eral deposits, and fossil localities

metasediment a sedimentary rock which shows evidence
of having been subjected to metamorphism

metavolcanic a volcanic rock which shows evidence of
having been subjected to metamorphism

mineral
a naturally formed chemical element or com-
pound having a definite chemical composition and, usually,
a characteristic crystal form

mineralization a natural occurrence in rocks or soil of
one or more metal yielding minerals

non-refractory ore containing gold that can be satisfac-
torily recovered by basic gravity concentration or simple
cyanidation

outcrop that part of a geologic formation or structure that
appears at the surface of the earth

oxide when used in reference to gold mining ores sig-
nifies an ore where natural processes have oxidized any
sulfide minerals.

Proterozoic the more recent time division of the Precam-
brian; rocks aged between 250 and 550 million years old

puts a financial instrument that provides the right, but
not the obligation, to sell a specified number of ounces
of gold at a specified price.

quartz crystalline silica; silicon dioxide

refractory ore containing gold that cannot be satisfac-
torily recovered by basic gravity concentration or simple
cyanidation

SEDAR the term SEDAR refers to the System for
Electronic Document Analysis Retrieval. The SEDAR

strike the direction or trend that a structural surface, e.g. a
bedding or fault plane, takes as it intersects the horizontal

strip to remove overburden in order to expose ore

sulfide a mineral including sulfur (S) and Iron (Fe) as well
as other elements

syncline a concave downward fold, the core of which
contains the stratigraphically younger rocks

Tarkwaian a scattered group of mainly shallow water
sedimentary rocks of Proterozoic age named after the
town of Tarkwa in southern Ghana where they were
found to be gold bearing

total cash cost per ounce is equal to mining operation
expenses as reported in the statement of operations,
divided by the ounces sold during the period. Includes the
costs of mining and processing, waste stripping, mine
site general and administrative costs, third party smelting
and refining costs, and by-product credits. [This definition
is consistent with the Gold Institute’s definition.]

transition ore is an ore zone lying between the oxide
ore and the sulfide ore

vein a thin, sheet like crosscutting body of hydrothermal
mineralization, principally quartz

volcanics those originally molten rocks, generally fine
grained, that have reached or nearly reached the Earth’s
surface before solidifying

volcano-sedimentary rocks composed of materials of
both volcanic and sedimentary origin

wall rock the rock adjacent to a vein

P A R T I

ITEM 1. DESCRIPTION OF BUSINESS

O V E R V I E W O F G O L D E N S TA R

Golden Star Resources Ltd. was established under the Canada Business Corporations Act on May 15, 1992 as a
result of the amalgamation of South American Goldfields Inc., a corporation incorporated under the federal laws of
Canada, and Golden Star Resources Ltd., a corporation originally incorporated under the provisions of the Alberta
Business Corporations Act on March 7, 1984 as Southern Star Resources Ltd. We are a Canadian international gold
mining and exploration company producing gold in Ghana, West Africa. Our principal office is located at 10901 West
Toller Drive, Suite 300, Littleton, Colorado 80127, and the registered and records office is located at 19th Floor, 885
West Georgia Street, Vancouver, British Columbia, Canada V6C 3H4. Our fiscal year ends on December 31.

Through our subsidiaries and joint ventures we own a controlling interest in four significant gold properties in
Southern Ghana: the Bogoso property (“Bogoso”), the Prestea property (“Prestea”), the Wassa property (“Wassa”)
and the Prestea Underground property (“Prestea Underground”). Bogoso and Prestea are adjoining properties, oper-
ating as a single operation and referred to as “Bogoso/Prestea”. Bogoso/Prestea and the Prestea Underground are
owned by our 90% owned subsidiary Bogoso Gold Limited (“BGL”). In 2003 Bogoso/Prestea sold 174,315 ounces
of gold for an average gold price and cash operating cost of approximately $364 and $166 per ounce, respectively.
Bogoso/Prestea has produced all of our gold since initiating production in late 1999.

We hold a 90% equity interest in Wexford Goldfields Limited (“WGL”), which owns the Wassa gold property, located
some 35 kilometers east of Bogoso/Prestea. Wassa is currently in development, and we expect gold production to
commence in early 2004.

The Prestea Underground is located on the Prestea property and consists of a currently inactive underground gold mine
and associated support facilities. As of December 31, 2003 BGL owned an approximately 66% operating interest in
this mine and we are currently seeking to determine if the underground mine can be reactivated on a profitable basis.

We also hold interests in gold exploration properties in Ghana, Sierra Leone, Mali, Suriname, and French Guiana. The
French Guiana properties are mainly held through our 73%-owned subsidiary, Guyanor Ressources S.A. (“Guyanor”).
We hold a royalty right on the Gross Rosebel gold mine in Suriname and expect to begin receiving cash royalties
from this property during 2004.

Most of our senior corporate management reside in Littleton, Colorado where we maintain our corporate headquar-
ters. In addition to the Bogoso/Prestea and Wassa employees, we have a small administrative office and staff in
Accra, the capital of Ghana, and a small staff in French Guiana where most of our South American exploration prop-
erties are located. Our accounting records are kept in compliance with Canadian GAAP and all of our operations,
except for the French Guiana office, transact business in US dollars and keep financial records in US dollars.

Gold Sales and Production

Ghana has been a significant gold producing country for the last 100 years with Ashanti Goldfields Company
Limited’s Obuasi mine and the underground mine at Prestea historically being the two major producers. Several
other areas in Ghana have also produced significant amounts of gold. The gold industry in Ghana is currently expe-
riencing resurgence in exploration, development spending and gold production. Several large international gold min-
ing companies have announced in the past year plans to spend several hundred million dollars on exploration and
expansion projects in Ghana. Gold production in Ghana exceeded 2 million ounces in each year from 1998 through
2002, reaching approximately 2.2 million ounces in 2002. Gold production in Ghana is projected to rise in the future
as the planned developments and expansions reach the production stage.

All of our gold is sent to a South African gold refinery in the form of doré bars which average approximately 91%
gold with the remaining portion being primarily silver which we account for as a by-product. Our gold is sold to a
European bank and revenue is recognized when title is transferred to the customer at the Accra International Airport
in Ghana. The sales price is based on the London P.M. fix on the day of delivery.

Gold Price History

The price of gold is volatile and is affected by numerous factors beyond our control such as the sale or purchase of gold
by various central banks and financial institutions, inflation or deflation, fluctuation in the value of the US dollar and for-
eign currencies, global and regional demand, and the political and economic conditions of major gold-producing coun-
tries throughout the world.

The following table presents the high, low and average afternoon fixing prices for gold per ounce on the London
Bullion Market over the past ten years:

Year

1994

1995

1996

1997

1998

1999

2000

2001
2002

2003

To January 29, 2004

Data Source: www.kitco.com

High

$ 396

396

415

362

313

326

313

293
349

416

425

Low

$ 370

372

367

283

273

253

264

256
278

320

406

Average

Golden Star

$ 384

$ N/A

384

388

331

294

279

271
310

363

415

N/A

293

280

271
311

364

418

The following diagram depicts the organizational structure of Golden Star and our significant subsidiaries:

GOLDEN STAR
RESOURCES
LTD.
(C ANADA)

GUYANOR
RESOURCES S.A.
(FR A NC E)
Approximately
[73%]

WASFORD
HOLDINGS
(C AYMA N
ISLA NDS)
[100%]

SOCIETE DES
MINES DE YAOU &
DORLIN S.A.S.
(FR A NC E)
[50%] / [50%]

SOTRAPMAG
S.A .R .L.
(FR A NC E)
[100%]

WEXFORD
GOLDFIELDS
LIMITED
(GHA NA)
[90%]

GSR
EXPLORATION
LIMITED
( GH ANA)
[100%]

CAYSTAR
HOLDINGS
( CAYMAN
I SLANDS)
[100%]

BOGOSO
HO LDI NG S
( CAYMAN
I SLANDS)
[100%]

BOGOSO
GOLD
LIMITED
( GH ANA)
[90%]

PRESTEA
UNDERGROUND
JOINT VENTURE
( GH ANA)
Approximately [66%]

B U S I N E S S S T R AT E G Y A N D D E V E L O P M E N T

Our business and development strategy since 1999 has been to focus primarily on the acquisition of producing and
development stage gold properties in Ghana and on the exploration, development and operation of these properties.
Given our significant mineral resource position, we are currently carrying out technical studies to expand our produc-
tion at Bogoso/Prestea. At our Wassa property, we commenced development in mid-2003, and now expect to com-
mence production in early 2004 by processing material from the existing heap leach pads left by the former owner.
We plan to commence ore production from the Wassa open pit mine in early 2005. If the above mentioned expan-
sion and development plans are approved and permitted (as expected), our annualized production should exceed
350,000 ounces of gold. However, there can be no assurance that development and start-up can be completed as
anticipated or that our production goals will be achieved.

Our objective is to grow our business to become a mid-tier gold producer (which we understand to be a producer with
annual production of approximately 500,000 ounces) over the next few years. Due to higher gold prices and our
improved financial condition, we believe we are well placed to pursue the acquisition of producing, development and
advanced stage exploration gold properties and companies, primarily in Ghana and elsewhere in Africa. We are actively
investigating potential acquisition and merger candidates, some of which have indicated to potential acquirers or their
advisors that they or certain of their properties might be available for acquisition. However, we presently have no agree-
ment or understanding with respect to any potential transaction. We have increased exploration activities and expendi-
tures on our current exploration properties, primarily in Ghana.

O U R A S S E T S

Bogoso/Prestea — As mentioned above, we own and operate the Bogoso/Prestea gold mine in Ghana, West Africa.
Ore is currently mined from an open-pit surface operation at Prestea and trucked approximately 15 kilometers from
the Prestea mine site to the nominal 6,000 tonne-per-day Bogoso processing plant where the ore is processed. The
Bogoso processing plant utilizes CIL technology along with gravity and flotation processes to separate gold from the
ore. CIL technology is well known and is widely used for treating gold ores. In addition to the mine and processing
plant facility, our assets include a fleet of mining equipment, numerous ancillary facilities including warehouses,
maintenance shops, roadways and administrative offices. We also own several housing complexes at Bogoso which
include a medical center, cafeteria, store, recreation facility and golf course.

Under normal operating conditions and current processing capacity, Bogoso/Prestea would produce approximately
130,000 to 140,000 ounces per year; however in 2003 we sold 174,315 ounces due primarily to higher than average
ore grades and improved recoveries. Historical and forecast production from Bogoso/Prestea are shown on the Gold
Production and Cash Costs table below.

Wassa — Once Wassa’s development and construction are completed in 2004, it will be very similar to Bogoso/Prestea
including an open-pit surface mine, a CIL processing plant, mining equipment and a town site with associated facilities.

Prestea Underground — The Prestea Underground is located directly beneath the Prestea property. It is a large
underground gold mine that operated for over 100 years producing a total of approximately nine million ounces of
gold prior to its closure in early 2002. We have entered into a joint venture with the previous owner and are now
performing engineering, geological and economic analysis of the mine to determine if it can be reopened on a prof-
itable basis. The mine includes two useable shafts and several kilometers of underground workings on numerous
levels extending as deep as 1,400 meters below the surface.

Other Assets — We hold or have an interest in numerous exploration properties in Ghana, Sierra Leone, Mali, and
South America. Most of the exploration properties in Ghana are within trucking distance of Bogoso/Prestea or
Wassa. The Mampon property, located approximately 35 kilometers north of the Bogoso processing plant, has min-
eral reserves of approximately 0.2 million ounces which are expected to be trucked to the Bogoso processing plant
after 2005. We have a staff of geologists in Ghana that are actively investigating the mineral resource potential of
the various exploration properties, and we anticipate that such exploration effort will increase in 2004.

G O L D P R O D U C T I O N A N D C A S H C O S T S

The following table represents historical gold production and projected production for 2004.

PRODUCTION & CASH COST PER OUNCE

2001

BOGOSO/PRESTEA(1)
Ounces (thousands)

Cash Operating Cost ($/oz)

Total Cash Cost ($/oz)
WASSA(2)
Ounces (thousands)

Cash Operating Cost ($/oz)

Total Cash Cost ($/oz)
Total Ounces(3) (thousands)
Consolidated Cash Operating Cost ($/oz)

Consolidated Total Cash Cost ($/oz)

87.9

263

271

—

87.9

263

271

2002

124.4

193

215

—

124.4

193

215

2003

174.3

166

184

—

174.3

166

184

2004
Projected

135-155

200-220

210-230

50-55

200-240

210-250

185-210

200-225

210-235

Notes to Production & Cash Cost Per Ounce Table
(1) The 2004 projection for Bogoso/Prestea excludes any impact from the planned installation of the Bondaye processing
plant at Prestea, which subject to approvals and permitting, is expected to be completed by early 2005.

(2) Wassa is expected to begin production by reprocessing materials, left on heap leach pads by a former owner, in early
2004, subject to the timely receipt of the necessary operating permits and the commissioning of the CIL processing plant
which are progressing on schedule.

(3) Gold production is shown on a 100% basis, which represents our current beneficial interest in gold production and rev-
enues. Once all capital has been repaid, the Government of Ghana would receive 10% of the dividends from the sub-
sidiaries owning the Bogoso/Prestea and Wassa mines.

M I N E R A L R E S E R V E S

Our proven and probable mineral reserves are estimated in conformance with definitions set out in Canada’s
National Instrument 43-101. We have filed on SEDAR (www.sedar.com) Technical Reports on our mineral reserves
for Bogoso/Prestea and Wassa as required in Canada’s National Instrument 43-101. We intend to file Technical
Reports on our mineral reserves for Bogoso/Prestea and Wassa as of December 31, 2003 during the first quarter of
2004. See our “Glossary of Terms”. The proven and probable mineral reserves are those ore tonnages contained
within engineered pits, using current and predicted mining and processing methods, and related operating costs and
performance parameters. We believe that the definitions of proven and probable mineral reserves are consistent
with the definition of proven and probable mineral reserves prescribed for use in the US by the US Securities and
Exchange Commission and set forth in SEC Industry Guide 7.

The estimation of the mineral reserves is based on information compiled and/or validated by Mr. Dave Alexander, our
Projects Planning Manager. Mr. Alexander is a qualified mining engineer with 20 years of experience, a member of the
Institute of Materials, Minerals and Mining, and a Chartered Engineer under the auspices of the Engineering Council
of the United Kingdom. Mr. Alexander is considered a qualified person under Canada’s National Instrument 43-101.

The proven and probable mineral reserves as of December 31, 2003 have been estimated at an economic cut-off grade
based on a gold price of $325 per ounce. This compares to $300 per ounce used for the estimate of our mineral
reserves at December 31, 2002.

The following table summarizes total and our share of estimated proven and probable mineral reserves as of
December 31, 2003 and December 31, 2002:

PROVEN AND PROBABLE
MINERAL RESERVES

Property
Mineral Reserve
Category

Bogoso/Prestea(3)
Proven

Probable

Sub-total

Attributable Share
Wassa(4)
Probable

Attributable Share

Total

Attributable Share

As of December 31, 2003

As of December 31, 2002

Tonnes(1)
(thousands)

Gold
Grade
(g/t)

Contained(2)
Ounces
(thousands)

Tonnes(1)
(thousands)

Gold
Grade
(g/t)

Contained(2)
Ounces
(thousands)

8,254

19,048

27,302

24,572

16,207

14,586

43,509

39,158

3.31

3.29

1.28

2.54

878

2,011

2,890

2,601

665

599

3,555

3,200

14,170

8,902

23,072

20,765

—

23,072

20,765

3.26

2.54

2.98

—

2.98

1,485

726

2,211

1,990

—

2,211

1,990

Notes to Proven and Probable Mineral Reserves Table

(1) Tonnes of mineral reserves are net of a 5% dilution allowance for mining, to account for losses resulting from planned
mining methods, and a 98% ore recovery factor.

(2) Calculation of contained ounces includes adjustments due to rounding.

(3) Approximately 68% of the 2003 Bogoso/Prestea mineral reserves are refractory ore. We are currently planning to add a bio-
oxidation circuit to the Bogoso processing plant to process the refractory mineral reserves. The estimated recovery rates uti-
lized in our mineral reserve calculations in 2003 ranged from 65% to 85% for oxides and other non-refractory ores, and from
78% to 85% for refractory ore. The estimated cut-off grades utilized in mineral reserve calculations in 2003 ranged from 0.7 g/t
to 1.8 g/t for oxide ore and other non-refractory ores and from 1.5 g/t to 2.3 g/t for refractory ore. Included in the December 31,
2003 proven mineral reserve category is 0.8 million tonnes of ores at an average grade of 2.4 g/t in stockpiles which are locat-
ed at Bogoso. Also included in the December 31, 2003 probable mineral reserve category are the Mampon property mineral
reserves of 0.9 million tonnes of ore at an average grade of approximately 5.6 g/t containing approximately 162,000 ounces of
gold. These mineral reserves were purchased as part of the Dunkwa properties acquisition in June 2003.

(4) All of the Wassa mineral reserves are non-refractory and should be treatable in the Wassa CIL processing plant now
under construction. The estimated recoveries utilized in mineral reserve calculations in 2003 ranged from 92% to 93%. The
estimated cut-off grades utilized in mineral reserve calculations in 2003 range from 0.5 g/t to 0.6 g/t. The mineral reserves
include 4.2 million tonnes of material grading 0.7 g/t remaining on the leach pads established by the previous operator of
the Wassa mine. No mineral reserves were declared for Wassa in 2002.

Reconciliation of Proven and Probable Mineral Reserves

(In thousands of ounces of total contained gold)

PROPERTY

Bogoso/Prestea

Wassa

Total

December 31, 2002

2003 Depletion(1)

Increase(2)

December 31, 2003

2,211

—

2,211

(221)

—

(221)

900

665

1,565

2,890

665

3,555

Notes to Reconciliation of Proven and Probable Mineral Reserves Table

(1) Depletion represents contained ounces of mineral reserves processed during 2003 before considering recovery losses
and therefore does not equal 2003 gold production.

(2) Increases and decreases in mineral reserves can result from the discovery of new mineralization, conversion of mineral
resources to mineral reserves, changes in price assumptions, unit costs and recoveries or any combination of these factors.
The increases in mineral reserves during 2004 were due primarily to the exploration successes at Bogoso/Prestea, the acqui-
sition of the Dunkwa properties which included the mineral reserves at the Mampon property, and the successful completion
of the feasibility study at Wassa.

N O N - R E S E R V E S — M E A S U R E D A N D I N D I C AT E D M I N E R A L R E S O U R C E S

Measured and Indicated Mineral Resources

Cautionary Note to US Investors concerning estimates of Measured and Indicated Mineral Resources
This section uses the terms “measured mineral resources” and “indicated mineral resources”. We
advise US investors that while those terms are recognized and required by Canadian regulations, the US
Securities and Exchange Commission does not recognize them. US investors are cautioned not to
assume that any part or all of the mineral deposits in these categories will ever be converted into
mineral reserves.

Our measured and indicated mineral resources, which are reported in this Form 10-K, do not include that part of
the mineral resources converted to proven and probable mineral reserves, and have been estimated in conformance
with definitions set out in Canada’s National Instrument 43-101. We have filed on SEDAR (www.sedar.com) Technical
Reports on our mineral reserves and mineral resources (mineral resources stated in the Technical Reports include
mineral reserves) for Bogoso/Prestea and Wassa as required in Canada’s National Instrument 43-101. We intend to
file Technical Reports for Bogoso/Prestea and Wassa as of December 31, 2003 during the first quarter of 2004. See
our “Glossary of Terms”.

The measured and indicated mineral resources for our properties have been estimated at an economic cut-off grade
based on a gold price of $375 per ounce for December 31, 2003 and economic constraints that we believe are real-
istic. For December 31, 2002 the economic cut-off grade was based on a gold price per ounce of $325, except at
Yaou and Dorlin where we used a gold price of $300 per ounce.

The following table summarizes the total and our share of estimated non-reserves — measured and indicated min-
eral resources as of December 31, 2003 and December 31, 2002:

NON-RESERVES — MEASURED AND
INDICATED MINERAL RESOURCES(1)
Property
Mineral Resource Category

Bogoso/Prestea(2)
Measured

Indicated

Sub-total
Wassa(3)
Indicated
Dorlin(4)
Indicated

Attributable Share

Measured

Indicated
Total

As of December 31, 2003

As of December 31, 2002

Tonnes
(thousands)

Gold Grade
(g/t)

Tonnes
(thousands)

Gold Grade
(g/t)

11,253

16,024

27,277

9,363

3,607

10,128

25,968
36,096

2.45

2.53

2.50

0.96

1.56

2.45

1.90
2.06

5,861

14,101

19,962

17,770

3.64

2.69

2.97

1.29

Yaou & Dorlin(4)

13,800

5,275

45,131
50,406

2.10

3.64

2.05
2.22

Notes to Non-Reserves — Measured and Indicated Mineral Resources Table

(1) See Glossary Of Terms for definitions of non-reserves — mineral resources, measured mineral resources and indicated
mineral resources.

The estimation of the Bogoso/Prestea, Dunkwa and Wassa measured and indicated mineral resources are based on infor-
mation compiled and/or validated by Mr. S. Mitchell Wasel, our Exploration Manager. Mr. Wasel is a qualified geologist who
has 16 years of experience in gold and base metal exploration and is a member of the Australasian Institute of Mining and
Metallurgy. Mr. Wasel is considered a qualified person under Canadian National Instrument 43-101.

The primary qualified person responsible for the estimation of the indicated mineral resource for the Dorlin property is Mr. Colin
Jones, who is a professional geologist with 22 years of experience. Mr. Jones is a Partner and Manager (Audits) of RSG Global
Pty Ltd and a member of the Australasian Institute of Mining and Metallurgy. Mr. Jones is considered a qualified person under
Canadian National Instrument 43-101. The amount of the mineral resource at the Dorlin property that might have been removed
by illegal mining is not known but could be material.

(2) Approximately 81% of the 2003 Bogoso/Prestea measured and indicated mineral resources are refractory. The estimated
cut-off grades utilized in mineral resource calculations in 2003 ranged from 0.7 g/t to 1.8 g/t for non-refractory material and

from 0.9 g/t to 2.1 g/t for refractory material. Also included in the December 31, 2003 indicated mineral resource category are
mineral resources of 0.4 million tonnes of ore at an average grade of approximately 2.79 g/t, which were purchased as part of
the Dunkwa properties acquisition in June 2003.

(3) All of the 2003 Wassa measured and indicated mineral resources are non-refractory. The estimated cut-off grades utilized
in mineral resource calculations in 2003 ranged from 0.5 g/t to 0.6 g/t.

(4) Dorlin is located in French Guiana, South America, and Golden Star owns approximately an 86.5% beneficial interest
of Dorlin. The estimated cut-off grades utilized in mineral resource calculations in 2003 was 0.5 g/t. The property is unde-
veloped and has been on a care and maintenance basis in recent years. In 2002 Yaou and Dorlin were reported together.

N O N - R E S E R V E S — I N F E R R E D M I N E R A L R E S O U R C E S

Inferred Mineral Resources

Cautionary Note to US Investors concerning estimates of Inferred Mineral Resources
This section uses the term “inferred mineral resources”. We advise US investors that while this term
is recognized and required by Canadian regulations, the US Securities and Exchange Commission does
not recognize it. “Inferred mineral resources” have a great amount of uncertainty as to their existence,
and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part
of an inferred mineral resources will ever be upgraded to a higher category. Under Canadian rules esti-
mates of inferred mineral resources could not form the basis of feasibility or other economic studies.
US investors are cautioned not to assume that part or all of the inferred mineral resource exists,
or is economically or legally mineable.

Our inferred mineral resources, which are reported in this Form 10-K, do not include that part of the mineral
resources converted to proven and probable mineral reserves or measured and indicated mineral resources, and
have been estimated in conformance with definitions set out in Canada’s National Instrument 43-101. We have filed
on SEDAR (www.sedar.com) Technical Reports on our mineral reserves and mineral resources (mineral resources
stated in the Technical Reports include mineral reserves) for Bogoso/Prestea and Wassa as required in Canada’s
National Instrument 43-101. We intend to file Technical Reports for Bogoso/Prestea and Wassa as of December 31,
2003 during the first quarter of 2004. See our “Glossary of Terms”.

The inferred mineral resources for our properties have been estimated at economic cut-off grades based on gold
prices of $375 and $325 per ounce as of December 31, 2003 and December 31, 2002, respectively, and economic
constraints that we believe are realistic.

The following table summarizes the total and our share of estimated non-reserves — inferred mineral resources as
of December 31, 2003 and December 31, 2002:

NON-RESERVES — INFERRED
MINERAL RESOURCES(1)
Property
Mineral Resource Category

As of December 31, 2003

As of December 31, 2002

Tonnes
(thousands)

Gold Grade
(g/t)

Tonnes
(thousands)

Gold Grade
(g/t)

Bogoso/Prestea(2)
Inferred
Wassa(3)
Inferred
Prestea Underground(4)
Inferred
Yaou(5)
Inferred
Dorlin(6)
Inferred
Paul Isnard(7)
Inferred

Attributable Share

Inferred

29,690

30,768

1,606

12,074

3,375

8,215

75,218

2.43

1.27

8.58

2.63

1.43

1.78

2.06

23,960

28,843

—

2.91

1.15

—

47,523

1.95

Notes to Non-Reserves — Inferred Mineral Resources Table

(1) See Glossary of Terms for definitions of non-reserves — mineral resources and inferred mineral resources.

The estimation of the Bogoso/Prestea, Wassa, and Prestea Underground inferred mineral resources are based on information
compiled and/or validated by Mr. S. Mitchell Wasel, Exploration Manager. Mr. Wasel is a qualified geologist who has 16 years
of experience in gold and base metal exploration and is a member of the Australasian Institute of Mining and Metallurgy.

The primary qualified person responsible for the estimation of the inferred mineral resource for the Yaou, Dorlin and Paul Isnard
property is Mr. Colin Jones, who is a professional geologist with 22 years of experience. Mr. Jones is a Partner and Manager
(Audits) of RSG Global Pty Ltd and a member of the Australasian Institute of Mining and Metallurgy. The amount of the min-
eral resource at the Dorlin property that might have been removed by illegal mining is not known but could be material.

(2) Approximately 84% of the 2003 Bogoso/Prestea inferred mineral resources are refractory. The estimated cut-off grades
utilized in inferred mineral resource calculations in 2003 ranged from 0.7 g/t to 1.8 g/t for non-refractory material and from
0.9 g/t to 2.1 g/t for refractory material. Also included in the December 31, 2003 inferred mineral resource category are the
Dunkwa properties mineral resources of 2.4 million tonnes of ore at an average grade of approximately 2.69 g/t, which were
purchased as part of the Dunkwa properties acquisition in June 2003.

(3) All of the Wassa inferred mineral resources are non-refractory. The estimated cut-off grades utilized in mineral resource
calculations in 2003 ranged from 0.5 g/t to 0.6 g/t.

(4) All of the Prestea Underground inferred mineral resources are refractory. Golden Star owns approximately a 59% bene-
ficial interest in the property. The estimated cut-off grade utilized in mineral resource calculations in 2003 was 4.2 g/t.

(5) Yaou is located in French Guiana, South America, and Golden Star owns approximately an 86.5% beneficial interest in
the property. The estimated cut-off grade utilized in mineral resource calculations in 2003 was 0.5 g/t. The property is unde-
veloped and has been on a care and maintenance basis in recent years.

(6) Dorlin is located in French Guiana, South America, and Golden Star owns approximately an 86.5% beneficial interest
in the property. The estimated cut-off grade utilized in mineral resource calculations in 2003 was 0.5 g/t. The property is
undeveloped and has been on a care and maintenance basis in recent years.

(7) Paul Isnard is located in French Guiana, South America, and Golden Star owns approximately a 73% beneficial interest
in the property. The estimated cut-off grades utilized in mineral resource calculations in 2003 was 0.4 g/t. The property is
undeveloped and has been on a care and maintenance basis in recent years.

E X P L O R AT I O N

We spent approximately $8.5 million in exploration activities during 2003 including $2.2 million at Wassa establishing
mineral reserves in the existing pits and in areas outside the pits, $3.1 million at the Prestea Underground, including
underground care and maintenance costs, $2.3 million on exploration projects outside the Wassa and Bogoso/Prestea
areas and $0.9 million developing new mineral reserves in the Plant North area. Exploration spending during 2003 was
less than expected due to a shortage of drill rigs in Ghana. Recent increases in exploration activity in Ghana by us and
our competitors have adversely impacted drill rig availability and as a result some of our planned work was delayed,
including drilling at the Prestea Underground which was delayed several months.

Most of our exploration efforts in 2003 were focused on Ghana, with Prestea Underground, Prestea, Wassa and the
Akropong Trend properties receiving the most attention. Late in 2003 we began to explore the newly acquired Dunkwa
properties north of Bogoso. During 2004 we plan to spend approximately $21 million on gold exploration.
Approximately $6 million will be used to evaluate surface projects in and around Bogoso/Prestea including the
Akropong Trend and Dunkwa properties. Approximately $6.6 million is planned for the continued exploration efforts at
the Prestea Underground project, $2.5 million is scheduled for the Wassa area, $2.4 million is expected to be spent
on the properties in Sierra Leone and Mali, both in West Africa, $1.7 million is expected to be used to identify and
evaluate projects in South America, including some of Guyanor’s holdings, and $1.6 million is planned for our project
generation program.

We entered, subject to definitive documentation and government approval, into a joint venture agreement in late
2003 to invest up to $6 million over the next four years in the Mano River project in Sierra Leone via an earn-in agree-
ment with a junior exploration company which now holds a group of gold exploration properties in Sierra Leone. The
initial $6 million, if fully funded (we can terminate the joint venture agreement after spending $1.0 million), would
yield a 51% interest in the joint venture. Further provisions of the joint venture agreement provide the opportunity
to acquire up to 85% of the joint venture by continued long term funding. Spending was nil in 2003.

In late 2003 we entered into a second joint venture agreement, subject to definitive documentation and government
approval, agreeing to fund exploration work on the Mininko gold property in Mali. Funding of $2.6 million would earn
a 51% interest in the joint venture. We can terminate the joint venture agreement after spending $0.4 million, of which
$0.1 million was spent in 2003. The joint venture agreement provides that we can earn up to an 82.5% interest by
continued funding of exploration and development.

We also provided $0.9 million of funding during 2003 to a junior exploration company working in South America. The
Guyanor properties were maintained on a care and maintenance basis during 2003, but we expect to initiate new explo-
ration efforts there in 2004 focusing on further evaluation of our existing properties and recently acquired properties.

We do not believe it to be cost effective at this point to add exploration staff or to establish additional exploration
offices. As such, we expect to utilize funding of joint ventures for much of our exploration activities outside the
Bogoso/Prestea area where our current exploration staff resides.

E M P L O Y E E R E L AT I O N S

As of December 31, 2003 Golden Star, including our majority owned subsidiaries and joint ventures, had approxi-
mately 1,000 employees and contract employees, a 9% decrease from the approximately 1,100 people employed
at the end of 2002. The total includes ten employees and four part-time or contract employees at our principal office
in Littleton, Colorado.

C U S T O M E R S

All of our gold is sold to a single European bank in accordance with a long-term contract whereby cash payment for
gold sold is received in our account two to three working days after each shipment with title passing at the point of
shipment at the Accra International Airport. The global gold market is competitive with numerous banks and refineries
willing to buy gold on short notice, therefore we believe that the loss of our current customer would not materially delay
or disrupt revenues.

C O M P E T I T I O N

We compete with major mining companies and other natural mineral resource companies in the acquisition, explo-
ration, financing and development of new prospects. Many of these companies are larger and better capitalized than
we are. There is significant competition for the limited number of gold acquisition and exploration opportunities. Our
competitive position depends upon our ability to successfully and economically explore, acquire and develop new
and existing mineral prospects. Factors that allow producers to remain competitive in the market over the long term
include the quality and size of their orebodies, costs of operation, and the acquisition and retention of qualified
employees. We also compete with other mining companies for skilled mining engineers, mine and processing plant
operators and mechanics, geologists, geophysicists and other technical personnel. This could result in higher
turnover and greater labor costs.

AVA I L A B L E I N F O R M AT I O N

We make available, free of charge, on or through our Internet website our annual report on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electroni-
cally file such material with, or furnish it to, the SEC. Our Internet address is www.gsr.com. Our Internet website
and the information contained therein or connected thereto are not intended to be incorporated into this Annual
Report on Form 10-K.

R I S K F A C T O R S

You should consider carefully the following discussion of risks, in addition to the other information contained in, or incor-
porated by reference into, this report.

Financial Risks

Our business is substantially dependent on gold prices.

The price of our common shares, our financial results and our exploration, development and mining activities have pre-
viously been, and would in the future be, significantly adversely affected by fluctuations in the price of gold. The price of
gold is volatile and is affected by numerous factors beyond our control such as the sale or purchase of gold by various
central banks and financial institutions, inflation or deflation, fluctuation in the value of the US dollar and foreign curren-
cies, global and regional demand, and the political and economic conditions of major gold-producing countries through-
out the world. If gold prices were to decline significantly or for an extended period of time, we might be unable to con-
tinue our operations, develop our properties or fulfill our obligations under our agreements with our partners or under
our permits and licenses. As a result, we could lose our interest in, or be forced to sell, some of our properties.

Furthermore, mineral reserve calculations and life-of-mine plans using significantly lower gold prices could result in
reduced estimates of mineral reserves and non-reserve mineral resources and in material write-downs of our invest-
ment in mining properties and increased amortization, reclamation and closure charges.

We have recorded substantial losses in the past.

While we had earnings of $22.0 million and $ 4.9 million in 2003 and 2002, respectively, we reported net losses of
$20.6 million in 2001, $14.9 million in 2000, and $24.4 million in 1999. Numerous factors, including declining gold
prices, lower than expected ore grades or higher than expected operating costs, and impairment write-offs of mine
property and/or exploration property costs, could cause us to become unprofitable in the future. Any future operat-
ing losses could make financing our operations and our business strategy, or raising additional capital, difficult or
impossible and could materially and adversely affect our operating results and financial condition.

Our obligations could strain our financial position and impede our business strategy.

We have total debts and liabilities as of December 31, 2003 of $16.6 million, including $0.8 million payable to finan-
cial institutions, $8.0 million of current trade payables and accrued current liabilities and $7.7 million in environmental
rehabilitation liabilities. We expect that our indebtedness and other liabilities will increase as a result of our corporate
development activities. This indebtedness could have important consequences, including the following:

• increasing our vulnerability to general adverse economic and industry conditions;
• limiting our ability to obtain additional financing to fund future working capital, capital expenditures,

operating and exploration costs and other general corporate requirements;

• requiring us to dedicate a significant portion of our cash flow from operations to make debt service
payments, which would reduce our ability to fund working capital, capital expenditures, operating
and exploration costs and other general corporate requirements;

• limiting our flexibility in planning for, or reacting to, changes in our business and the industry; and
• placing us at a disadvantage when compared to our competitors that have less debt relative to their

market capitalization.

Our estimates of mineral reserves and non-reserves could be inaccurate.

There are numerous uncertainties inherent in estimating proven and probable mineral reserves and measured, indicated
and inferred mineral resources, including many factors beyond our control. The estimation of mineral reserves and non-
reserves is a subjective process, and the accuracy of any such estimates are a function of the quantity and quality of avail-
able data and of the assumptions made and judgments used in engineering and geological interpretation, which could
prove to be unreliable. There can be no assurance that these estimates will be accurate, that mineral reserves and non-
reserves figures will be accurate, or that mineral reserves or non-reserves could be mined or processed profitably.

Fluctuation in gold prices, results of drilling, metallurgical testing and production and the evaluation of mine plans
subsequent to the date of any estimate could require revision of the estimate. The volume and grade of mineral
reserves mined and processed and recovery rates might not be the same as currently anticipated. Any material
reductions in estimates of our mineral reserves and non-reserves, or of our ability to extract these mineral reserves
and non-reserves, could have a material adverse effect on our results of operations and financial condition.

We currently have only one source of operational cash flows.

While we have recently received significant infusions of cash from sales of equity, our only internal source of funds is oper-
ational cash flows from Bogoso/Prestea. We expect to commence production at Wassa in early 2004, although there can
be no assurance that our Wassa production goals will be achieved. The anticipated continuing exploration and development
of our properties will require significant expenditures over the next several years. We expect that these expenditures will
exceed free cash flows generated by Bogoso/Prestea during that period, and therefore we expect to use our excess cash
and in the future to require additional outside capital. Lower gold prices during the five years prior to 2002 adversely affect-
ed our ability to obtain financing, and recurring lower gold prices could have similar effects in the future. We cannot assure
you that in the future we will be able to obtain adequate financing on acceptable terms. If we are unable to obtain addi-
tional financing, we might need to delay or indefinitely postpone further exploration and development of our properties,
and as a result, we could lose our interest in, or could be forced to sell, some of our properties.

Implementation of a hedging program might be unsuccessful and incur losses.

We continue to review whether or not, in light of the potential for gold prices to fall, it would be appropriate to establish a
hedging program. To date, we have not decided to implement a hedging program, although we have purchased and expect
to continue to purchase puts from time to time, which give us the right to sell gold in the future at a fixed price. The imple-
mentation of a hedging program might not, however, protect adequately against declines in the price of gold.

In addition, although a hedging program could protect us from a decline in the price of gold, it might also prevent us
from benefiting fully from price increases. For example, as part of a hedging program, we could be obligated to sell
gold at a price lower than the then-current market price. Finally, if unsuccessful, the costs of any hedging program
could further deplete our financial resources.

We are subject to fluctuations in currency exchange rates, which could materially adversely affect our financial position.

Our revenues are in US dollars, and we maintain most of our working capital in US dollars or US dollar-denominated
securities. We convert funds to foreign currencies as payment obligations become due. A significant portion of the
operating costs at Bogoso/Prestea is based on the Ghanaian currency, the Cedi. We are required to convert into Cedis
only 20% of the foreign exchange proceeds that we receive from selling gold, but the Government of Ghana could
require us to convert a higher percentage of such sales proceeds into Cedis in the future. In addition, we currently have
future obligations that are payable in Euros, and receivables collectible in Euros. We obtain construction and other serv-
ices and materials and supplies from providers in South Africa and other countries, and the costs of those services
could increase due to changes in the value of the South African Rand or other currencies. Accordingly, we are subject
to fluctuations in the rates of currency exchange between the US dollar and these currencies, and such fluctuations
could materially affect our financial position and results of operations. Consequently, construction, development and
other costs might be higher than we anticipate. We currently do not hedge against currency exchange risks, although
we might do so from time to time in the future. There can be no assurance that implementation of a currency hedging
program would adequately protect us from the effects of fluctuation in currency exchange rates.

There could be no opportunity to evaluate the merits or risks of any future acquisition undertaken by us.

As a key element of our growth strategy, we have stepped up the active pursuit of acquisitions of producing, develop-
ment and advanced stage exploration properties and companies. We are actively investigating potential acquisition and
merger candidates. Risks related to acquiring and operating acquired properties and companies could have a material
adverse effect on our results of operations and financial condition. In addition, to acquire properties and companies, we
would use our available cash, incur debt, issue our common shares or other securities, or a combination of any one or
more of these. This could limit our flexibility to raise capital, to operate, explore and develop our properties and to make
additional acquisitions, and could further dilute and decrease the trading price of our common shares. Acquisition trans-
actions in our business are often initiated and completed over a particularly short period of time. There could be no
opportunity for our shareholders to evaluate the merits or risks of any future acquisition undertaken by us except as
required by applicable laws and regulations.

Risks inherent in acquisitions that we might undertake could adversely affect our growth and financial condition.

We are actively pursuing the acquisition of producing, development and advanced stage exploration properties and
companies, and have recently completed the acquisition of exploration and development properties in Ghana. From
time to time, we might acquire securities of or other interests in companies with which we could enter into acqui-
sitions or other transactions. Acquisition transactions involve inherent risks, including:

• accurately assessing the value, strengths, weaknesses, contingent and other liabilities and potential

profitability of acquisition candidates;

• ability to achieve identified and anticipated operating and financial synergies;
• unanticipated costs;
• diversion of management attention from existing business;
• potential loss of our key employees or the key employees of any business we acquire;
• unanticipated changes in business, industry or general economic conditions that affect the assumptions

underlying the acquisition; and

• decline in the value of acquired properties, companies or securities.

Any one or more of these factors or other risks could cause us not to realize the benefits anticipated to result from
the acquisition of properties or companies, and could have a material adverse effect on our ability to grow and on
our financial condition.

We are subject to litigation risks.

All industries, including the mining industry, are subject to legal claims, with and without merit. We are involved in var-
ious routine legal proceedings, which include labor matters such as unfair termination claims, supplier matters and
property issues incidental to our business. We believe it is unlikely that the final outcome of these legal proceedings
will have a material adverse effect on our financial position or results of operation. However, defense and settlement
costs can be substantial, even with respect to claims that have no merit. Due to the inherent uncertainty of the liti-
gation process, there can be no assurance that the resolution of any particular legal proceeding will not have a mate-
rial effect on our financial position or results of operations.

Operational Risks

The technology, capital costs and cost of production of refractory mineral reserves and non-reserves at Bogoso/Prestea
remain subject to a number of uncertainties, including funding uncertainties.

Based upon the completion of our Bogoso sulfide project feasibility study in 2001 and its subsequent review by a qual-
ified person under Canada’s National Instrument 43-101, the refractory material at Bogoso/Prestea has been included
in our proven and probable mineral reserves. While the sulfide project feasibility study indicated that refractory miner-
al reserves can be profitably mined and processed at gold prices at or above $275 per ounce, the capital cost to upgrade
the Bogoso processing plant with a bio-oxidation or BIOX circuit to process refractory ore, together with related min-
ing equipment, and facilities, is significant. The capital cost of the sulfide project together with our other
Bogoso/Prestea expansion plans including capitalized exploration, mine development, and expanding the mining fleet
is expected to be approximately $70 million expected to be spent in 2004 and 2005. We cannot assure you that we
will have access to capital, whether from internal or external sources, in the required amounts or on acceptable terms.
While the processing technology envisioned in the feasibility study has been successfully utilized at other mines, we
cannot assure you, in spite of our testing, engineering and analysis that the technology will perform successfully at
commercial production levels on the Bogoso/Prestea refractory sulfide ores. Therefore, we cannot assure you that our
production estimates can be achieved.

Completion of development of Wassa and the projected expansion of Bogoso/Prestea is subject to a number of
uncertainties.

We have completed a feasibility study regarding the development of and commencement of production at Wassa in
Ghana using conventional CIL processing techniques and have commenced development of the Wassa mine. We can-
not assure you that production will commence when we currently anticipate. We have not yet completed technical
studies for the projected $70 million expansion of Bogoso/Prestea. The management of mine development projects
and start-up of new operations are complex. We do not have a history of managing simultaneously two significant
development projects and an ongoing operation. We cannot assure you that these development projects will be com-
pleted at the cost and on the schedule predicted, or that gold grades and recoveries, production rates or costs antic-
ipated will be achieved. Any development of Wassa and the expansion of Bogoso/Prestea are subject to all of the risks
described in this Form 10-K, including “Risk Factors — Operational Risks — The development and operation of our
mining projects involve numerous uncertainties.”

Declining gold prices could reduce our estimates of mineral reserves and non-reserves and could result in delays in
development until we can make new estimates and determine new potential economic development options under
the lower gold price assumptions.

In addition to adversely affecting our mineral reserve estimates and our financial condition, declining gold prices could
impact operations by requiring a reassessment of the feasibility of all or a portion of a particular project. A reassess-
ment might be the result of a management decision or could be required under financing arrangements related to the
project. Even if the project is ultimately determined to be economically viable, the need to conduct a reassessment
could cause substantial delays or might interrupt operations until the reassessment can be completed.

We are subject to a number of operational hazards that can delay production or result in liability to us.

Our activities are subject to a number of risks and hazards including:

• environmental hazards;
• discharge of pollutants or hazardous chemicals;
• industrial accidents;
• labor disputes;
• supply and shipping problems and delays;
• unusual or unexpected geological or operating conditions;
• slope failures;
• cave-ins of underground workings;
• failure of pit walls or dams;
• fire;
• changes in the regulatory environment; and
• natural phenomena such as inclement weather conditions, floods and earthquakes.

These or other occurrences could result in damage to, or destruction of, mineral properties or production facilities,
personal injury or death, environmental damage, delays in mining, delayed production, monetary losses and possible
legal liability. We could incur liabilities as a result of pollution and other casualties. Satisfying such liabilities could be
very costly and could have a material adverse effect on our financial position and results of operations.

Our mining operations are subject to numerous environmental laws, regulations and permitting requirements that
can delay production and adversely affect operating and development costs.

We cannot assure you that compliance with existing regulations governing the discharge of materials into the environ-
ment, or otherwise relating to environmental protection, in the jurisdictions where we have projects will not have a
material adverse effect on our exploration activities, results of operations or competitive position. New or expanded
regulations, if adopted, could affect the exploration or development of our projects or otherwise have a material adverse
effect on our operations.

A significant portion of our recently acquired Dunkwa property and portions of our Wassa development property as
well as some of our exploration properties in Ghana are located within forest reserve areas. Although Dunkwa and
Wassa have been identified by the Government of Ghana as eligible for mining permits subject to normal procedures
and a site inspection, there can be no assurance that permits for projects in forest reserve areas will be issued in a
timely fashion, or at all, or that such permits will not contain special requirements with which it is burdensome or
expensive to comply.

Our planned development of Wassa, relocation of the processing plant to Bondaye near Prestea, conversion of the
existing Bogoso/Prestea processing plant to process refractory sulfides and other activities will require mining and
other permits from the Government of Ghana. There can be no assurance that these permits will be issued on a
timely basis or at all, or that permits issued will not be subject to requirements or conditions with which it is bur-
densome or expensive to comply. This could adversely affect our projected production commencement dates, pro-
duction amounts and costs.

As a result of the foregoing risks, project expenditures, production quantities and rates and cash operating costs, among
other things, could be materially and adversely affected and could differ materially from anticipated expenditures, produc-
tion quantities and rates, and costs. In addition, estimated production dates could be delayed materially. Any such events
could materially and adversely affect our business, financial condition, results of operations and cash flows.

The development and operation of our mining projects involve numerous uncertainties.

Mine development projects, including our ongoing development at Wassa and anticipated expansion at Bogoso/Prestea, typ-
ically require a number of years and significant expenditures during the development phase before production is possible.

Development projects are subject to the completion of successful feasibility studies and environmental assessments,
issuance of necessary governmental permits and receipt of adequate financing. The economic feasibility of develop-
ment projects is based on many factors such as:

• estimation of mineral reserves and mineral resources;
• anticipated metallurgical recovery rates;
• environmental considerations and permitting;
• future gold prices; and
• anticipated capital and operating costs of such projects.

Our mine development projects could have limited relevant operating history upon which to base estimates of future
operating costs and capital requirements. Estimates of proven and probable mineral reserves and operating costs
determined in feasibility studies are based on geologic and engineering analyses and might not prove to be accurate.

Any of the following events, among others, could affect the profitability or economic feasibility of a project:

• unanticipated changes in grade and tonnage of ore to be mined and processed;
• unanticipated adverse geotechnical conditions;
• incorrect data on which engineering assumptions are made;
• costs of constructing and operating a mine in a specific environment;
• availability and cost of processing and refining facilities;
• availability of economic sources of power;
• adequacy of water supply;
• adequate access to the site including competing land uses (such as agriculture and illegal mining);
• unanticipated transportation costs;
• government regulations (including regulations relating to prices, royalties, duties, taxes, permitting,
restrictions on production, quotas on exportation of minerals, as well as the costs of protection of
the environment and agricultural lands);

• fluctuations in gold prices; and
• accidents, labor actions and force majeure events.

Adverse effects on the operations or further development of a project could also adversely affect our business, financial
condition, results of operations and cash flow. Because of these uncertainties, and others identified in “Risk Factors”,
there can be no assurance that our production estimates at Bogoso/Prestea and Wassa can or will be achieved.

We need to continually obtain additional mineral reserves for gold production.

Because mines have limited lives based on proven and probable mineral reserves, we must continually replace and
expand our mineral reserves as our mines produce gold. At current average production rates, we estimate that
Bogoso/Prestea has over ten years of mine life, but our estimates might not be correct and the mine life would be short-
ened if we expand production. Our ability to maintain or increase our annual production of gold will be dependent in sig-
nificant part on our ability to bring new mines into production and to expand or extend the life of existing mines.

Gold exploration is highly speculative, involves substantial expenditures, and is frequently non-productive.

Gold exploration, including the exploration of the Prestea Underground, involves a high degree of risk and exploration
projects are frequently unsuccessful. Few prospects that are explored end up being ultimately developed into produc-
ing mines. To the extent that we continue to be involved in gold exploration, the long-term success of our operations
will be related to the cost and success of our exploration programs. We cannot assure you that our gold exploration
efforts will be successful. The success of gold exploration is determined in part on the following factors:

• the identification of potential gold mineralization based on superficial analysis;
• the quality of our management and our geological and technical expertise; and
• the capital available for exploration and development.

Substantial expenditures are required to determine if a project has economically mineable mineralization. It could take
several years to establish proven and probable mineral reserves and to develop and construct mining and processing
facilities. As a result of these uncertainties, we cannot assure you that current and future exploration programs will result
in the discovery of mineral reserves, the expansion of our existing mineral reserves and the development of mines.

We face competition from other mining companies in connection with the acquisition of properties.

We face strong competition from other mining companies in connection with the acquisition of properties producing,
or capable of producing, precious metals. Many of these companies have greater financial resources, operational
experience and technical capabilities. As a result of this competition, we might be unable to maintain or acquire attrac-
tive mining properties on terms we consider acceptable or at all. Consequently, our revenues, operations and finan-
cial condition could be materially adversely affected.

Title to our mineral properties could be challenged.

Our policy is to seek to confirm the validity of our rights to title to, or contract rights with respect to, each mineral
property in which we have a material interest. However, we cannot guarantee that title to our properties will not be
challenged. Title insurance generally is not available, and our ability to ensure that we have obtained secure claim to
individual mineral properties or mining concessions could be severely constrained. We might not have conducted
surveys of all of the properties in which we hold direct or indirect interests and, therefore, their precise area and
location could be in doubt. Accordingly, our mineral properties could be subject to prior unregistered agreements,
transfers or claims, and title could be affected by, among other things, undetected defects. In addition, we might be
unable to operate our properties as permitted or to enforce our rights with respect to our properties.

We depend on the services of key executives.

We are dependent on the services of key executives including our President and Chief Executive Officer and a small
number of highly skilled and experienced executives and personnel. Due to the relatively small size of our company,
the loss of these persons or our inability to attract and retain additional highly skilled employees could adversely affect
the exploration and development of our properties, which could have a material adverse effect on our business and
future operations.

The period of weak gold prices prior to 2002 resulted in the depletion in the number of trained and experienced pro-
fessionals and managers in our industry. Higher gold prices have resulted in an increased demand for these people,
and it could therefore be more difficult to attract or retain such experienced professionals and managers without sig-
nificantly increasing the cost to Golden Star.

Our insurance coverage could be insufficient.

Our business is subject to a number of risks and hazards generally, including:

• adverse environmental conditions;
• industrial accidents;
• labor disputes;
• unusual or unexpected geological conditions;
• ground or slope failures;
• cave-ins;
• changes in the regulatory environment; and
• natural phenomena such as inclement weather conditions, floods and earthquakes.

Such occurrences could result in:

• damage to mineral properties or production facilities;
• personal injury or death;
• environmental damage to our properties or the properties of others;
• delays in mining;
• monetary losses; and
• possible legal liability.

Although we maintain insurance in amounts that we believe to be reasonable, our insurance might not cover all the
potential risks associated with our business. We might also be unable to maintain insurance to cover these risks at
economically feasible premiums. Insurance coverage might not continue to be available or might not be adequate
to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as

a result of exploration and production is not generally available to us or to other companies in the mining industry
on acceptable terms. We might also become subject to liability for pollution or other hazards which we cannot insure
against or which we might elect not to insure against because of premium costs or other reasons. Losses from
these events might cause us to incur significant costs that could have a material adverse effect upon our financial
performance and results of operations.

Governmental and Regulatory Risks

As a holding company, limitations on the ability of our operating subsidiaries to make distributions to us could
adversely affect the funding of our operations.

We are a holding company that conducts operations through foreign (principally African) subsidiaries and joint ventures,
and substantially all of our assets consist of equity in these entities. Accordingly, any limitation on the transfer of cash
or other assets between the parent corporation and these entities, or among these entities, could restrict our ability to
fund our operations efficiently. Any such limitations, or the perception that such limitations might exist now or in the
future, could have an adverse impact on our valuation and stock price.

We are subject to changes in the regulatory environment where we operate.

Our mining operations and exploration activities are subject to extensive regulation governing various matters, including:

• licensing
• production
• taxes
• water disposal
• toxic substances
• mine safety

• development and permitting
• exports
• imports
• labor standards
• occupational health and safety
• environmental protections

Compliance with these regulations increases the costs of the following:

• planning
• designing
• drilling
• operating

• developing
• constructing
• closure and reclamation

We believe that we are in substantial compliance with current laws and regulations in Ghana and elsewhere. However,
these laws and regulations are subject to frequent change and reinterpretation. Due to the substantial increase in mining
development during 2003 in Ghana, the Government of Ghana has been reviewing the adequacy of reclamation bonds
and guarantees throughout the country and in some cases has requested higher levels of bonding than previously had
been required. There can be no assurance that our bonds would not increase. Amendments to current laws and regula-
tions governing operations and activities of mining companies or more stringent implementation or interpretation of these
laws and regulations could have a material adverse impact on us, cause a reduction in levels of production and delay or
prevent the development or expansion of our properties in Ghana.

Government regulations limit the proceeds from gold sales that could be withdrawn from Ghana. Changes in regu-
lations that increase these restrictions could have a material adverse impact on us, as Bogoso/Prestea is currently
our only source of internally generated operating cash flows.

The Government of Ghana has the right to participate in the ownership and control of certain subsidiaries.

The Government of Ghana currently has a 10% carried interest in our subsidiaries that own our Bogoso/Prestea
mine, Wassa development property and Prestea Underground property. The Government of Ghana also has: (a) the
right to acquire up to an additional 20% equity interest in each of these subsidiaries for a price to be determined by
agreement or arbitration; (b) the right to acquire a special share or golden share in such subsidiaries at any time for
no consideration or such consideration as the Government of Ghana and such subsidiaries might agree; and (c) a
pre-emptive right to purchase all gold and other minerals produced by such subsidiaries. We cannot assure you that
the Government of Ghana would not seek to exercise one or more of these rights, which could reduce our equity
interest. A reduction in our equity interest could reduce our income or cash flows from Bogoso/Prestea and/or
reduce our anticipated income or cash flows from Wassa, reducing amounts available to us for reinvestment and
adversely affecting our ability to take certain actions.

We are subject to risks relating to exploration, development and operations in foreign countries.

Certain laws, regulations and statutory provisions in certain countries in which we have mineral rights could, as they
are currently written, have a material negative impact on our ability to develop or operate a commercial mine. For
countries where we have exploration or development stage projects, we intend to negotiate mineral agreements
with the governments of these countries and seek variances or otherwise be exempted from the provisions of these
laws, regulations and/or statutory provisions. We cannot assure you, however, that we will be successful in obtain-
ing mineral agreements or variances or exemptions on commercially acceptable terms.

Our assets and operations are affected by various political and economic uncertainties, including:

• the risks of war, civil unrest, coups or other violent or unexpected changes in government;
• political instability and violence;
• expropriation and nationalization;
• renegotiation or nullification of existing concessions, licenses, permits, and contracts;
• illegal mining;
• changes in taxation policies;
• restrictions on foreign exchange and repatriation; and
• changing political conditions, currency controls, and governmental regulations that favor or require
the awarding of contracts to local contractors or require foreign contractors to employ citizens of,
or purchase supplies from, a particular jurisdiction.

Illegal mining occurs on our properties, is difficult to control, can disrupt our business and can expose us to liability.

Artisanal miners illegally work on our properties from time to time, despite the fact that we have hired security per-
sonnel to protect our properties. The presence of illegal miners could lead to project delays and disputes regarding
the development or operation of commercial gold deposits. The work performed by the illegal miners could cause
environmental damage or other damage to our properties, or personal injury or death for which we could potentially
be held responsible. Extensive illegal mining could result in surface depletion of mineral deposits, potentially making
the future mining of such deposits uneconomic.

Our activities are subject to complex laws, regulations and accounting standards that can adversely affect operating
and development costs, the timing of operations, the ability to operate and financial results.

Our business, mining operations and exploration and development activities are subject to extensive Canadian, US,
Ghanaian and other foreign, federal, state, provincial, territorial and local laws and regulations governing exploration,
development, production, exports, taxes, labor standards, waste disposal, protection of the environment, reclama-
tion, historic and cultural resource preservation, mine safety and occupational health, toxic substances, reporting
and other matters, as well as accounting standards. Compliance with these laws, regulations and standards or the
imposition of new such requirements could adversely affect operating and development costs, the timing of opera-
tions, the ability to operate and financial results.

Market Risks

The market price of our common shares could experience volatility and could decline significantly.

Our common shares are listed on the American Stock Exchange and the Toronto Stock Exchange. Securities of small-
cap companies have experienced substantial volatility in the past, often based on factors unrelated to the financial
performance or prospects of the companies involved. These factors include macroeconomic developments in North
America and globally and market perceptions of the attractiveness of particular industries. Our share price is also
likely to be significantly affected by short-term changes in gold prices or in our financial condition or results of oper-
ations as reflected in our quarterly earnings reports. Other factors unrelated to our performance that could have an
effect on the price of our common shares include the following:

• the extent of analytical coverage available to investors concerning our business could be limited if

investment banks with research capabilities do not continue to follow our securities;

• the trading volume and general market interest in our securities could affect an investor’s ability to

trade significant numbers of common shares;

• the relatively small size of the public float will limit the ability of some institutions to invest in our

securities; and

• a substantial decline in our stock price that persists for a significant period of time could cause our
securities to be delisted from the American Stock Exchange and the Toronto Stock Exchange, further
reducing market liquidity.

As a result of any of these factors, the market price of our common shares at any given point in time might not accu-
rately reflect our long-term value. Securities class action litigation often has been brought against companies following
periods of volatility in the market price of their securities. We could in the future be the target of similar litigation.
Securities litigation could result in substantial costs and damages and divert management’s attention and resources.

You could have difficulty or be unable to enforce certain civil liabilities on us, certain of our directors and our experts.

We are a Canadian corporation. Substantially all of our assets are located outside of Canada and the US, and our
head office is located in the US. Additionally, a number of our directors and the experts named in this Form 10-K are
residents of Canada. Although we have appointed Koffman Kalef, Suite 1900, 885 West Georgia Street, Vancouver,
British Columbia and Field LLP, 1900, 350 — 7th Avenue S.W., Calgary, Alberta as our agents for service of process
in the Provinces of British Columbia and Alberta respectively, it might not be possible for investors to collect judg-
ments obtained in Canadian courts predicated on the civil liability provisions of securities legislation. It could also be
difficult for you to effect service of process in connection with any action brought in the US upon such directors and
experts. Execution by US courts of any judgment obtained against us or any of the directors, executive officers or
experts named in this Form 10-K in US courts would be limited to the assets of Golden Star Resources Ltd. or the
assets of such persons or corporations, as the case might be, in the US. The enforceability in Canada of US judg-
ments or liabilities in original actions in Canadian courts predicated solely upon the civil liability provisions of the fed-
eral securities laws of the US is doubtful.

There may be certain tax risks associated with investments in our company.

Potential investors that are US taxpayers should consider that we could be considered to be a “passive foreign invest-
ment company” (“PFIC”) for federal income tax purposes. Although we believe that we currently are not a PFIC and
do not expect to become a PFIC in the near future, the tests for determining PFIC status are dependent upon a num-
ber of factors, some of which are beyond our control, and we can not assure you that we would not become a PFIC
in the future. If we were deemed to be a PFIC, then a US taxpayer who disposes or is deemed to dispose of our
shares at a gain, or who received a so-called “excess distribution” on the shares, generally would be required to treat
such gain or excess distribution as ordinary income and pay an interest charge on a portion of the gain or distribution
unless the taxpayer makes a timely qualified electing fund election (a “QEF” election). A US taxpayer who makes a
QEF election generally must report on a current basis his or her share of any of our ordinary earnings and net capital
gain for any taxable year in which we are a PFIC, whether or not we distribute those earnings. Special estate tax rules
could be applicable to our shares if we are classified as a PFIC for income tax purposes.

We do not anticipate paying dividends in the foreseeable future.

We anticipate that we will retain all future earnings and other cash resources for the future operation and development
of our business. We do not intend to declare or pay any cash dividends in the foreseeable future. Payment of any future
dividends will be at the discretion of our board of directors after taking into account many factors, including our oper-
ating results, financial condition, and current and anticipated cash needs.

Future sales of our common shares by our existing shareholders could decrease the trading price of the common shares.

Sales of a large number of our common shares in the public markets, or the potential for such sales, could decrease
the trading price of our common shares and could impair our ability to raise capital through future sales of our common
shares. We completed sales of units, comprised of common shares and warrants, in January, July and December 2002
and February 2003 and sales of common shares in August, October, and December 2003, all but the December 2003
offering at prices significantly less than the current market price of our common shares. Accordingly, a significant num-
ber of our shareholders have an investment profit in our securities that they could seek to liquidate. Substantially all of
our common shares not held by affiliates can be resold without material restriction in the US and Canada.

The existence of outstanding rights to purchase common shares could impair our ability to raise capital.

As of December 31, 2003 approximately 22.6 million common shares are issuable on exercise of warrants, options
or other rights to purchase common shares at prices ranging from Cdn$1.02 to Cdn$9.07. During the life of the war-
rants, options and other rights, the holders are given an opportunity to profit from a rise in the market price of our
common shares with a resulting dilution in the interest of the other shareholders. Our ability to obtain additional
financing during the period such rights are outstanding could be adversely affected, and the existence of the rights
could have an adverse effect on the price of our common shares. The holders of the warrants, options and other
rights can be expected to exercise them at a time when we would, in all likelihood, be able to obtain any needed
capital by new offering of securities on terms more favorable than those provided by the outstanding rights.

ITEM 2. DESCRIPTION OF PROPERTIES

M A P O F A F R I C A N O P E R AT I O N S A N D P R O P E RT I E S

The map below shows the locations of Bogoso, Prestea, Wassa and the Prestea Underground in Ghana, and various
exploration properties. These properties are described in further detail below.

P R O P E RT Y S TAT U S TA B L E

The chart below summarizes information regarding certain of our properties, which are described in further detail
afterwards:

Expiration
Date

8/21/17
8/16/18

Property
Size

95 km2

2003
Status

Active

Comments

Mining stage

7/6/31

129 km2

Active

Mining stage

9/16/22

7/6/31

102 km2
another 172
km2 applied for
129 km2
Lies directly
below Prestea
125 km2

Active

Development stage

Active

Exploration stage

Active

Exploration stage

Various

Type of
Interest

Government granted
mining leases held by a
90% owned subsidiary

Government granted
mining lease held by a
90% owned subsidiary

Government granted
mining lease, 59%(1)
beneficial interest

Property

Bogoso
(Ghana)

Prestea
(Ghana)

Wassa
(Ghana)

Prestea
Underground
(Ghana)

Dunkwa
Properties
(Ghana)

Akropong
Trend (Ghana)

Obuom
(Ghana)

Option agreements

Various

697 km2

Active

Exploration stage

52% interest in
joint venture

Other Africa

Various

Saramacca
Properties
(Suriname)

Bon Espoir
(French
Guiana)
Dorlin(2)
(French
Guiana)

Yaou(2)
(French
Guiana)

Paul Isnard
(French

Guiana)

Government granted
right of exploration
and option agreements

PER (Permit Exclusif
de Recherches),
73% ownership

PER (Permit Exclusif
de Recherches), 86.5%
including direct and
indirect ownership

8 Concessions.
73% ownership

PER (Permit Exclusif
de Recherches), 73%
ownership

Awaiting
renewal

Various

Renewals
Pending

44 km2
another 101
km2 applied for
Approximately
750 km2
871 km2

Inactive

Exploration stage

Active

Exploration stage

Active

Exploration stage

10/31/06

466 km2

Active

Exploration stage

1/31/06

84 km2

Inactive

Exploration stage

1/31/06

52 km2

Inactive

Exploration stage

12/31/18

150 km2

Inactive

Exploration stage

283 km2

Inactive

Exploration stage

12/1/02
Awaiting
renewal

(1) The Prestea Underground Joint Venture, which owns Prestea Underground, is owned approximately 66% by BGL, our
90% owned subsidiary.

(2) We own a 50% interest in Yaou and Dorlin and our 73% owned subsidiary, Guyanor owns a 50% interest.

M I N I N G I N G H A N A

Ghanaian Ownership and Special Rights

Ghana is situated on the West Coast of Africa, approximately 600 kilometers north of the equator on the Gulf of
Guinea. Accra, the capital city of Ghana, is located on the Prime Meridian. After a period as a British colony, Ghana
achieved independence in 1957 and it is now a republic with a democratically elected government. Ghana has a pop-
ulation of approximately 20 million people. English is the official and commercial language. The total land area of the
country is approximately 238,000 square kilometers and the topography is relatively flat. Ghana has a tropical climate
with two rainy seasons and two dry seasons, each year.

Rights to explore and develop a mine are administered through the Minerals Commission, a governmental organization
designed to promote and control the development of Ghana’s mineral wealth. A company or individual can apply to the
Minerals Commission for a renewable exploration concession granting exclusive rights to explore for a particular min-
eral in a selected area for a period of two years. When exploration has successfully delineated a mineable mineral
reserve, an application is made to the Minerals Commission for conversion to a mining lease, granting a company the
right to produce a specific product from the concession area for a period of normally 20 to 30 years. Production must
begin within two years of the date of granting a mining lease.

The Government of Ghana has a 10% carried interest in BGL and WGL, and is entitled to acquire up to an additional
20% interest in each of BGL and WGL. The carried interest entitles the Government of Ghana to a pro-rata share of
future dividends (none have been declared to date), if any, from BGL and WGL once all capital is repaid, and the
Government of Ghana has no obligation to contribute development or operating expenses. BGL and WGL owe $61.1
million and $50.3 million, respectively, to Golden Star as of December 31, 2003 for past advances and debts and such
amounts would be repaid to us before payment of any dividends. If the Government of Ghana wishes to exercise its
right to acquire an additional 20%, it must first give reasonable notice, and pay a mutually agreed price. If there is no
agreement, the purchase price would be the fair market value of such interest at such time as determined by arbitra-
tion conducted by the International Centre for the Settlement of Investment Disputes. The Government of Ghana
could also acquire further interests in BGL and/or WGL on terms mutually acceptable to the Government and BGL or
WGL. To date the Government has indicated no intent to obtain additional ownership in any of our properties.

The Government of Ghana is entitled to acquire a special or golden share in BGL or WGL or any mining company at
any time for no consideration or such consideration as the Government of Ghana and BGL or WGL might agree. The
special share would constitute a separate class of shares with such rights as the Government of Ghana and BGL or
WGL might agree. In the absence of such agreement, the special share would have the following rights:

• the special share would carry no voting rights, but the holder would be entitled to receive notice of
and attend and speak at any general meeting of the members or any separate meeting of the holders
of any class of shares;

• the special share could only be issued to, held by, or transferred to the Government or a person acting

on behalf of the Government;

• the written consent of the holder of the special share would be required for all amendments to the
organizational documents of the company, the voluntary winding-up or liquidation of the company or
the disposal of any mining lease or the whole or any material part of the assets of the company; and
• the holder of the special share would be entitled to the payment of a nominal sum of 1,000
Ghanaian Cedis in a winding-up or liquidation of the company in priority to any payment to other
members and could require the company to redeem the special share at any time for a nominal sum
of 1,000 Cedis.

BGL and WGL have not issued nor to date been requested to issue any such special share to the Government of Ghana.

The Government of Ghana has a pre-emptive right to purchase all gold and other minerals produced by BGL and
WGL. The purchase price would be such price as the Government of Ghana and BGL and WGL might agree on, or
the price established by any gold hedging arrangement between BGL or WGL and any third party approved by the
Government, or the publicly quoted market price prevailing for the minerals or products as delivered at the mine or
plant where the right of preemption was exercised. The Government of Ghana has agreed to take no preemptive
action pursuant to its right to purchase such gold or other minerals so long as BGL and WGL sell gold in accordance
with certain procedures for selling gold approved by the Bank of Ghana.

Ghanaian Royalty Requirements

Under the laws of Ghana, a holder of a mining lease is required to pay quarterly a royalty of not less than 3% per
annum and not more than 12% per annum of the total revenues earned from the lease area. The Government of
Ghana determines the royalty percentage each year based on the ratio that the operating margin bears to the value
of gold produced from a mining lease in that year. Based on the Mineral Royalty Regulation of 1987, the royalty is
3% when the operating ratio is 30% or less, the royalty increases 0.225% for each 1% increase in operating ratio
until the royalty reaches a maximum of 12% at an operating ratio of 70%. In 2003, 2002 and 2001 the royalty rate
for BGL was 3% of revenues, and the amounts paid were $1.9 million, $1.2 million and $0.7 million, respectively. The
royalty payments from Golden Star have not exceeded 3% per annum in any year.

Ghanaian Environmental Regulations

BGL and WGL are in substantial compliance with the environmental requirements imposed by Ghanaian laws and guide-
lines and applicable guidelines and standards published by the World Bank. BGL completed significant work during 1999
to identify the outstanding reclamation liabilities for Bogoso/Prestea and to prepare a rehabilitation work plan. Significant
work has been performed during 2001, 2002 and 2003 to advance this plan and to reduce the outstanding reclamation
liability. Expenditures for ongoing rehabilitation work, including the capping of sulfide material, backfilling of worked out
pits, and the contouring and re-vegetation of waste dumps, were approximately $0.8 million, $0.5 million, and $0.2 mil-
lion for 2003, 2002, and 2001, respectively. As at December 31, 2003 BGL had $3.3 million of restricted cash set aside
for environmental reclamation of the Bogoso Mine.

A reclamation liability of $2.3 million was recognized upon the acquisition of the Wassa property in September 2002,
this amount representing the discounted estimated cost of reclamation as of the date of the acquisition.

Community Development Programs

In mid-2001 we initiated an “Alternative Livelihood and Sustainable Development Program” in the Bogoso/Prestea
area. In 2004 we plan to expand the program to Wassa. The goals of the Program are to assist the communities in
the vicinity of our mining operations to create alternative employment opportunities, promote growth of sustainable
economic development and to reduce the community’s dependence on mining.

Given the importance of agriculture in the local economy, much of our efforts have been focused on agricultural oppor-
tunities. A demonstration farm has been established at one of the backfilled pits at Prestea where we now have a fish
farm, a mulberry plantation and a silk production and processing facility. We plan to add demonstration plots of citrus
crops and ginger in 2004. Studied have shown that Chinese silk production has fallen in recent years, providing an
opportunity for new supply centers, and the climate of western Ghana appears to be well suited to sericulture.

The farm facility is used for training and assistance to the 150 local farmers who have signed up to participate in the
Program. In addition, the farm is providing participants with seed stock and fish and silk worms for use on their own farms.

Working with local Ghanaian government agencies, we have encouraged formation of agricultural cooperatives, the
first of which has recently obtained a plot of ground in the Prestea area to initiate a silk operation. We have also made
contact with various non-governmental developmental groups in hopes of facilitating availability of micro-project
financing for the Bogoso/Prestea communities.

During 2004 we are planning to provide two new oil-palm/palm kernel processing facilities in the local area to more
efficiently process the palm oil production already existing in the area.

In addition to the alternative livelihood projects, we are involved in the ongoing funding of several community assis-
tance projects. We have provided funding and assistance for school improvements and equipment, libraries, a day
care center, community centers, potable water systems, sports facilities and toilet facilities.

O P E R AT I N G P R O P E RT I E S

The Bogoso/Prestea Operation

Overview of the Bogoso/Prestea Operation

Bogoso/Prestea consists of a gold mining/processing operation located along the Ashanti Trend in western Ghana,
approximately 35 kilometers northwest of the town of Tarkwa from which it can be reached by paved roads. The mining
areas at Prestea are linked to the Bogoso processing plant by paved and gravel haul-roads located on our properties.
Equipment and facilities at Bogoso/Prestea include several open pit mines, a nominal 6,000 tonne per day CIL gold pro-
cessing plant and a fleet of haul trucks, loaders and mining support equipment. In addition, there are numerous ancillary
support facilities such as power and water supply equipment, haul roads, housing for management and technical staff,
a medical clinic, tailings storage facility, waste dumps, warehouse, maintenance shops, offices and administrative facili-
ties. The Bogoso/Prestea properties cover 224 square kilometers and mining rights are granted through several mining
leases, which expire in or after August 2017.

Commercial mining at Bogoso dates back to the early years of the 20th century. During its 20-year period of opera-
tions from 1935 to 1955, production totaled over 900,000 ounces of gold at an average recovered grade of 3.73 g/t.
Underground mining has been conducted at Prestea for more than 130 years. From 1873 to 1965, the current

Prestea property was comprised of a number of different licenses operated by independent mining companies,
which, in 1965, were amalgamated by the Government of Ghana into Prestea Goldfields Limited, under the aegis of
the State Gold Mining Corporation.

BGL started surface mining operations on the Prestea concession in September 2001, with the first ore being processed
at the Bogoso processing plant in October 2001. Total gold production from the Prestea area since recorded mining com-
menced in the 1870s is reported by the Ghana Chamber of Mines to be in excess of nine million ounces, making it the
second largest historical gold producing area in Ghana, after the Obuasi mine.

The Bogoso property was acquired for a total cost of $18.9 million in a series of transactions beginning in 1999 with
the final contingent payments being made in February 2003. In 2001, we acquired a 90% interest in the adjoining
Prestea property for total consideration of approximately $8.0 million from Barnato Exploration Limited (“Barnex”)
and Prestea Gold Resources Limited. Barnex retained a royalty interest in Prestea, which varied, according to a gold
price formula, from a minimum of $6.00 per ounce at gold prices less than $260 per ounce to a maximum of $16.80
per ounce at gold prices at or above $340 per ounce. We bought back all of Barnex royalty rights for approximately
$12.0 million in common shares in November 2003.

Bogoso/Prestea Expansion Project

The known mineral reserves at Bogoso/Prestea can be grouped into three general categories based on the metal-
lurgy of the ore. They are referred to as: (a) oxide ore which is non-refractory and has been successfully processed
in the existing Bogoso CIL and gravity circuits; (b) non-refractory transition and sulfide ores which we expect to suc-
cessfully process at the Bogoso processing plant following the reactivation of the processing plant’s flotation circuit
in early 2004; and (c) refractory transition and sulfide ores which would require some form of oxidation process prior
to gold recovery. The oxide ores are found at surface, down to the general level of the water table, while sulfide ores
are located at depth. Between these two distinct ore types lies the transition ore, of varying thickness, a zone of
partially oxidized ore. Our Bogoso/Prestea reserves at the end of 2003 are comprised of approximately 13% oxide
ore, 15% transition ores, and 72% sulfide ores on a gold content basis.

The existing Bogoso processing plant is configured to process primarily oxide ores. In recent years additions to the
processing plant’s equipment made it possible to treat certain transition ores but not all of the transition ores known
to exist at Bogoso/Prestea. Gold recovery from oxide ores is typically around 80% to 85% but when processing tran-
sition ores the recovery rate drops substantially below this. In 2001 when processing large tonnages of transition
ores from the old Bogoso pits, the gold recovery rate dropped below 50%.

To facilitate efficient processing of the sulfide and transition ores and to expand the productive capacity of Bogoso/
Prestea, we plan to make major modification to the existing Bogoso processing plant during 2004 and 2005 and at
the same time add a second processing plant on the Prestea property, which will be designed to process oxide ores
and other non-refractory ores.

In July 2003 we purchased a used 4,500 tonne per day conventional CIL processing plant, associated stores inventory,
and a six-megawatt powerhouse from an inactive mine site in Ghana. This facility was dismantled in the third and fourth
quarters of the year and will be moved to Prestea in early 2004. During 2004 we plan to reassemble this processing plant
at a site approximately 5 kilometers south of the town of Prestea. With the appropriate modifications it should be able
to process oxide ores and some of the transition ores found at Bogoso/Prestea. This new processing plant is now
referred to as the Bondaye processing plant. We expect the Bondaye processing plant to be operational in the fourth
quarter of 2004 if the required approvals and permits are obtained as expected.

Also during 2004 and into mid 2005, we plan to modify the existing Bogoso processing plant, via the addition of a
bio-oxidation (“BIOX”) circuit, to process sulfide ore. The modifications would be done in a manner that will allow
the Bogoso processing plant to continue processing oxide and transition ores during 2004 until the BIOX modifica-
tions are completed. We expect the Bogoso processing plant upgrades to be competed in 2005 and at that point
begin to process only refractory transition and sulfide ores. Once the Bondaye processing plant construction and the
Bogoso processing plant upgrades are completed, we anticipate being able to process all of the known ore types
existing at Bogoso/Prestea and in the surrounding area.

We currently estimate the cost to move, reassemble and modify the Bondaye processing plant, to add the BIOX
upgrade to the existing Bogoso processing plant, and to expand the mining fleet at Bogoso/Prestea as required to
feed the expanded processing plant complex, to total about $70 million, not including the $4.3 million initial purchase
cost of the Bondaye processing plant.

The BIOX process is designed to treat refractory gold ores prior to cyanidization by utilizing naturally occurring bac-
teria capable of oxidizing gold-bearing sulfide concentrates under controlled conditions. Prior to the BIOX process,
the ore will be crushed and ground utilizing existing equipment at the Bogoso processing plant. A combination of
flotation and gravity circuits, including circuits already at the Bogoso processing plant, will then separate a sulfide
concentrate from the ore slurry with the gold locked in the matrix of the sulfide minerals. The bacteria used in the
BIOX process oxidize the sulfide minerals in the concentrate thereby liberating the gold particles which are then
recovered by cyanidation. The bacteria used in the BIOX process are non-pathogenic and pose no health risks.

The BIOX process has been successfully employed since the mid 1980s with five operations now using the process
worldwide including Ashanti Goldfields Company Limited’s Obuasi gold mine located 100 kilometers north of
Bogoso. The Obuasi mine is currently treating approximately 1,000 tonnes of sulfide concentrates per day with gold
recoveries averaging 92%. Two new BIOX processing plants are currently in construction, one in Australia and one
in Kazakhstan. While all plants constructed to date have reached design capacity in less than three months after
start-up, there is no assurance that we will achieve similar results.

BIOX bench and pilot scale tests on Bogoso sulfide ores have consistently yielded gold recoveries in excess of 86%.
This compares to 55% achievable by direct cyanide treatment. The cost of BIOX treatment is estimated to be approx-
imately $10.40 per tonne of ore processed. This is higher than the current operating costs for oxide ores at Bogoso,
but is expected to be cost effective when compared to other options for treating refractory sulfide ores.

The Bogoso/Prestea expansion plans outlined above are subject to the completion of technical studies now underway,
subsequent board approval, obtaining all requisite environmental permits and successful resolution of potential technical
difficulties that could be encountered during the construction and start-up of the new facilities.

Geology at Bogoso/Prestea

The Bogoso/Prestea property lies within the Eburnean Tectonic Province in the West African Precambrian Shield.
Prestea covers a 22 kilometers stretch of the Ashanti Trend located immediately south of Bogoso. The area is dom-
inated by a major northeast-southwest trending structural fault zone referred to as the Ashanti Trend, which hosts
the Prestea, Bogoso, Obuasi and Konongo gold deposits, among others. Parallel to the Ashanti Trend is the Akropong
Trend, which hosts the Ayanfuri deposit. The Akropong Trend is about 15 kilometers west of the Ashanti Trend in the
Bogoso region, and gradually converges with it, converging at Obuasi and forming the basis for the world class
Obuasi deposit, owned and operated by Ashanti Goldfields Company Limited.

Operation Results for Bogoso/Prestea

Bogoso/Prestea Operating Results

Ore Milled (t)

Rate (t/day)

Grade milled (g/t)

Recovery %
Total gold production (oz)(1)
Cash operating cost ($/oz)

Total cash cost ($/oz)

2003

2,093,600

5,736

3.29

81.2

174,315

166

184

2002

2,271,747

6,223

2.31

74.4

124,400

193

215

2001

2,098,165

5,748

2.69

49.6

87,936

263

271

(1) Gold production is shown on a 100% basis, which represents our current beneficial interest in gold production and rev-
enues. Once all capital has been repaid, the Government of Ghana would receive 10% of the dividends from the sub-
sidiaries owning the Bogoso/Prestea and Wassa mines.

Mineral Reserves and Mineral Resources at Bogoso/Prestea

Bogoso/Prestea has proven and probable mineral reserves of 26.4 million tonnes with a grade of 3.25 g/t containing
approximately 2.7 million ounces of gold before a reduction for the 10% minority interest. Total measured and indicated
mineral resources total 26.8 million tonnes with a grade of 2.50 g/t before a reduction for the 10% minority interest. The
current proven and probable mineral reserves should support mining operations for approximately ten years, although
we expect the mine life to be extended as we continue to evaluate mineral resources through ongoing exploration
efforts. See the Proven and Probable Mineral Reserves table and the Non-Reserves — Measured and Indicated Mineral
Resource table in Item 1 of this 10-K.

Exploration Activities at Bogoso/Prestea

Exploration activities at Prestea during 2003 successfully delineated additional mineral resources and mineralization
at the southern end of the Prestea property. Following up on gold in soil anomalies defined in 2002, four meter deep
auger drilling was conducted during the first half of 2003. The four meter auger program helped to define the traces
of gold in the soil and confirmed the existence of mineralized structures below one meter. Areas where deep auger
drilling confirmed subsurface gold mineralization was tested further with drilling. Drilling programs have involved two
drill rigs, one stepping out on 100 meter spacing and the second drill rig infilling on 50 meter spacing. The drilling
program thus far has tested two sub-parallel zones along a combined strike length of seven kilometers. During 2003
we spent $1.6 million on exploration and completed approximately 42,000 meters of drilling. During 2004 we plan
to spend approximately $4.3 million on approximately 118,000 meters of drilling at Bogoso/Prestea.

D E V E L O P M E N T S TA G E P R O J E C T

The Wassa Development Project

Overview of the Wassa Project

In September 2002 we acquired a 90% interest in the Wassa gold property located 35 kilometers east of our
Bogoso/Prestea gold operations in Ghana and immediately began a drilling program and engineering studies
designed to evaluate the economic viability of the property as a conventional 10,000 tonnes per day CIL gold oper-
ation. Based on initial drill results and engineering data, a feasibility study was begun shortly after acquisition and
was completed in July 2003. In July 2003 we announced that the project would proceed and that construction of
the CIL processing plant would commence immediately. The feasibility study was prepared by our staff supported
by a team of independent consultants led by Metallurgical Design and Management (Pty) Ltd. (“MDM”) of South
Africa. In July 2003 we also awarded a fixed-price contract to MDM to construct the new CIL plant and associated
processing facilities.

Wassa is owned by WGL, one of our 90% owned Ghanaian subsidiaries. As with Bogoso/Prestea, the Government
of Ghana holds a 10% carried interest and is not required to contribute any development capital. Any future divi-
dends (none have been declared to date) would be split 90% and 10% between us and the Government of Ghana,
respectively. Dividend payments are not anticipated until WGL has repaid all capital.

The first phase of the Wassa development is now nearing completion. As of December 31, 2003 development costs
totaled $27.4 million including the feasibility study cost, equipment and construction cost. In October 2003 we paid
an additional $11.5 million to buy out all the debt and royalty obligations due the sellers. Phase two development,
which is expected to cost $17.3 million, would consist of the purchase of a mining fleet and the commencement of
mining and is scheduled to occur early in 2005.

Wassa is scheduled to commence production operations in early 2004 by processing material from the heap leach
pads left by the previous owners. Prior to Golden Star’s acquisition, Wassa was operated as an open pit, heap leach
operation. Early reprocessing of this material will make the leach pad area available for tailings containment.
Construction of the processing plant and CIL circuit is well underway, and the construction of the tailings dam is
scheduled for early 2004. The existing powerhouse at Wassa is being supplemented to allow Wassa to generate
100% of its own power requirements in the early stages of the project’s life until a connection to the local power
grid is completed during 2004.

Total production from Wassa is expected to be in the range of 50,000 to 55,000 ounces of gold during 2004 at a
cash operating cost of approximately $200 to $240 per ounce. Open pit mining is scheduled to commence early in
2005 when processing of the heap leach material is nearing exhaustion. When operating at the planned capacity of
3.5 million tonnes of ore per year on new ore mined from the open pit, gold production is expected to average
140,000 ounces per year, at an average cash operating cost of approximately $200 per ounce.

Wassa was initially developed in the late 1990’s by a consortium of European mining companies and consisted of an open pit
mine and a conventional heap leach operation. While operating as a heap leach property, Wassa produced approximately
90,000 ounces of gold per annum for a period of just over two years beginning in 1999 and ending in mid-2001.

Geology at Wassa

Wassa lies within the Eburnean Tectonic Province in the West African Precambrian Shield. The proterozoic rocks that
comprise most of the West African craton and host the major gold mineralization in Ghana are subdivided into
metasedimentary and volcanic rocks of the Birimian, and Tarkwaian sequences.

Wassa is hosted within the same Birimian volcano-sedimentary greenstone package as Bogoso/Prestea. Wassa is situ-
ated on the southeastern limb of the Tarkwa Syncline while Bogoso and Prestea occur along the northwestern limb. The
northwestern belt hosts the Obuasi, Prestea, and Bogoso gold mines but the southeastern limb also is characterized by
gold mines and mineral occurrences. Tarkwaian hosted deposits along the south eastern limb include Goldfield’s Tarkwa
and Abosso mines, while Birimian hosted gold occurrences include St. Jude’s Hwini-Butre property and Wassa.

Mineral Reserves and Mineral Resources at Wassa

Wassa has a probable mineral reserve of 16.2 million tonnes with a grade of 1.28 g/t containing approximately 0.7
million ounces of gold before the reduction for the 10% minority interest. Total measured and indicated mineral
resources consist of 9.4 million tonnes with a grade of approximately 0.96 g/t before a reduction for the 10% minor-
ity interest. The current mineral reserves should support mining operations for approximately five years at planned
mining rates. See the Proven and Probable Mineral Reserves table and the Non-Reserves — Measured and
Indicated Mineral Resource table in Item 1 of this 10-K.

Exploration Activities at Wassa

Exploration at Wassa during 2003 concentrated on upgrading the mineral resources contained within and around the
current engineered pits as well as delineation of mineral resources at a new discovery site approximately 2 kilometers
from the Wassa processing plant, called South Akyempim. A total of approximately 21,000 meters of drilling was com-
pleted during 2003. Soil and stream sampling of the Adasse prospecting license, located just north of Wassa, was also
completed in 2003. Initial results from Adasse were marginal, but results would be evaluated further to see if any addi-
tional follow-up work is warranted. Two of the three reconnaissance permits applied for in 2003 are awaiting final
approval from the Government of Ghana and work is expected to commence during the first half of 2004.

Drilling of the first of several gold exploration targets on the Wassa property in Ghana has resulted in the discovery
of a new higher-grade zone intersected with 15 drill holes to date. The new mineralized zone, located approximately
2 kilometers southwest of the Wassa processing plant has an average drill width and gold assay of approximately
seven meters at 3.1 grams per tonne at depths between the surface and 165 meters below the surface. Additional
drilling is planned for 2004 to follow up on this initial drilling campaign. The new zone, which is called South Akyempim,
was identified in the drilling of the first of six geochemical targets which exist in two parallel trends running in a south-
westerly direction over a strike length of approximately six kilometers, south of the known reserves at Wassa.

E X P L O R AT I O N S TA G E P R O P E RT I E S I N G H A N A

Prestea Underground

Overview

Prestea Underground is located directly beneath our Prestea property and consists of currently inactive underground
workings and support facilities. A program to recondition the two main shafts and their associated hoists for explo-
ration purposes was undertaken during 2002 and 2003. Support facilities include an administrative office, mainte-
nance shops, a warehouse and electrical substations. The former 70 year-old processing plant was dismantled by
BGL in 2002 to gain access to the surface mineral reserves now being mined by BGL. Access to the mine site is via
a paved road maintained by the Government of Ghana. A rail line connects the town of Prestea to Tarkwa, a major
mining supply center approximately 25 kilometers to the east, but there is currently no service on the line. Any
potential future production from the Prestea Underground could be trucked to the Bogoso processing plant or
planned Bondaye processing plant for processing.

In March 2002 BGL entered into an agreement with Prestea Gold Resources Limited, the former operator of the
underground mine, and the Government of Ghana to form a joint venture with BGL as operator and manager, with
initial interests of 45%, 45%, and 10%, respectively, to evaluate the Prestea Underground. BGL initially contributed
approximately $2.4 million to the joint venture for their initial 45% interest, but since that time BGL has funded all
of the refurbishment and geological evaluation expenditures and has increased its interest to approximately 66% at
the end of 2003, compared to 54% at the end of 2002.

The Prestea Underground has produced approximately nine million ounces of gold during the last 130 years, the second
highest production of any mine in Ghana. The underground workings are extensive, reaching depths of approximately
1,400 meters and extending along a strike length of approximately ten kilometers. Underground workings can currently
be accessed via two shafts, one near the town of Prestea and a second approximately four kilometers to the southwest.
Underground operations ceased in early 2002, following an extended period of low gold prices.

The Prestea Underground is contained within a mining lease which covers the same area as the surface mining lease
granted to BGL in 2001. The surface mining lease extends to a depth of 200 meters below the elevation of the Prestea
central shaft collar, while the underground mining lease is restricted to material deeper than 200 meters. The consoli-
dation of the underground mine with the activities of BGL is therefore viewed as a natural progression to the orderly
and economic development of the area.

Geology of Prestea Underground

The Prestea deposits are found along the Ashanti Trend which extends over 220 kilometers and which accounts for
80% to 90% of the total quartz lode-hosted gold extracted in Ghana. Other mines located along the same shear are
our Bogoso pits, and the Obuasi and Konongo mines owned by others.

Two types of gold hosts have historically been recognized at Prestea: fault-related hydrothermal quartz veins; and
disseminated sulfide-hosted gold mineralization associated with metavolcanic pods; the first type of ore was the
focus of intense mining during Prestea’s past production. We intend to evaluate both types of mineralization.

Mineral Resources at Prestea Underground

Total inferred mineral resources consist of 1.6 million tonnes with a grade of 8.58 g/t before a reduction for the 41%
minority interest. See the Non-Reserves – Inferred Mineral Resource table in Item 1 of this Form 10-K.

Exploration Activities at Prestea Underground

Since the creation of the Prestea Underground joint venture, BGL, as the joint venture manager, has been collating
over 100 years worth of data and 15,000 meters of the underground workings have been mapped and digitized and
entered into our mine and mineral reserve models. Inferred mineral resources at the Prestea Underground of 1.6
million tonnes grading 8.56 g/t at have been conservatively categorized as inferred until validation sampling and vol-
umetrics have been confirmed.

While awaiting preparation of access to the less developed and less explored lower levels of the Prestea under-
ground workings, we initiated in mid-2003 a series of drill holes at shallower levels where access had already been
established. A total of 28 holes were drilled averaging 97 meters in length. These holes were in areas that had
received extensive mining and development in the past. While some significant intersections were encountered, no
major new mineralized zones were discovered. By the end of 2003 we had obtained access to new areas deeper in
the mine where we expect to concentrate our efforts in 2004.

Spending at the Prestea Underground project totaled $3.7 million during 2003, including facility maintenance, engi-
neering, drilling, geologic activities and equipment purchases. Support crews continue to maintain the underground
and surface facilities in good working order and assist our underground drilling teams.

The Prestea Underground exploration programs for 2004 will involve drilling from underground and surface sites.
Drilling of targets below the extent of the existing mining will be conducted from a series of hanging wall cross cuts
on the lower levels of the mine. The underground drilling will test the down dip extension of the high-grade ore zones
which were previously exploited.

Akropong Trend Properties

Overview of the Akropong Trend Properties

We have entered into numerous option agreements of properties along the Akropong Trend since the acquisition of
BGL in September 1999. All of the mineral properties are located on the Akropong Trend and within approximately 25
kilometers from the BGL plant. In addition to the option agreements, BGL has been granted two prospecting licenses
to the south and east of the Akropong Trend and has one application for a prospecting license on the western side of
the Trend. The total surface area of the mineral properties covered in the option agreements and applications is approx-
imately 700 square kilometers. The objective of this work is to identify additional mineral reserve opportunities in the
immediate vicinity of Bogoso/Prestea that could, in the future, provide additional sources of processing plant feed for
the Bogoso or planned Bondaye processing plants. All these projects are at an early stage of exploration and to date
they do not have, and ultimately might not have, proven and probable mineral reserves.

Exploration Activities at Akropong Trend Properties

We spent approximately $1.0 million on Akropong projects during 2003 compared to $0.1 million in 2002. Exploration
work for 2003 involved soil geochemistry surveys, mechanized trenching, and drilling to delineate the source of the
alluvial gold defined by the stream sampling program initiated in 2002. Pending positive results from the soil geo-
chemistry, these anomalies will be drilled in 2004.

Dunkwa Properties

Overview of the Dunkwa Properties

In 2003 we purchased two prospecting licenses, Asikuma and Mansiso, along the Ashanti Trend from Birim Goldfields
Inc., which we refer to as the Dunkwa properties. These properties cover 45 kilometers of strike along the Ashanti Trend
directly north of and contiguous with the current Bogoso Mining Lease. The addition of the Asikuma and Mansiso
prospecting licenses, which cover 56 and 69 square kilometers, respectively, increases our property holdings along the
trend to over 100 kilometers in length. In 2003 we also acquired from Ashanti Goldfields Company Limited the rights
to the Mampon prospect located on the Asikuma license.

Past and present prospects located on the Dunkwa concessions have been explored during the 1930s to the present
day. Several prospects were discovered in the early 1930s and consist of discontinuous gold-bearing quartz veins up
to 4m wide with limited known mineralization in the wall rocks. The Mampon prospect was discovered in 1988 using
regional geochemical methods and consists of narrow quartz veins with strong pyrite and arsenopyrite mineralization
in the wall rocks ranging up to 15% total sulfides. These prospects are also associated with shearing and/or graphitic
faults, similar to those seen at Bogoso. There are five known gold prospects on the Dunkwa concession. All of these
occur in the same approximate stratigraphic position within Lower Birimian sediments from 1 to 1.5 kilometers west
of the contact with the Birimian metavolcanics.

Exploration Activities at the Dunkwa Properties

During 2003 exploration activities included infill soil geochemistry and establishing drill access. Exploration for 2004 is
expected to involve drilling over the known occurrences as well as follow up drilling of any new targets generated. The
Mampon mineral reserves, located within the Dunkwa prospecting licenses, add approximately 0.9 million tonnes of
probable mineral reserves grading 5.61 g/t of gold containing approximately 0.2 million ounces of gold. At December
31, 2003 the indicated mineral resource on the Dunkwa properties was 0.4 million tonnes grading 2.79 g/t of gold. In
addition, there are approximately 2.4 million tonnes of inferred mineral resource at an average grade of 2.69 g/t of gold.
Further mineral resource definition drilling during 2004 is expected to cost $0.7 million.

Obuom Property

In 2003 we reapplied for a prospecting license on the Obuom concession and anticipate that it will be approved in
2004. Exploration work scheduled for Obuom will involve early stage exploration to confirm previous soil geochem-
ical work done by previous owners.

Other Active Properties in Africa

In late 2003 we added 500 and 250 square kilometers of exploration properties in Sierra Leone and Mali, respectively.
The related joint venture agreements, which are subject to definitive documentation and government approvals, allow
Golden Star to earn in up to 85% and 82.5%, respectively, by sole funding the development of any projects. Firm com-
mitments during the first twelve months of the agreements require us to spend $1.0 million and $0.4 million on the
Sierra Leone and Mali properties, respectively. Any further spending will be dependent upon the results of the work
done during the commitment period.

In addition to the ongoing exploration on the mining leases and existing prospecting and reconnaissance permits, we
are actively targeting prospective areas for potential land acquisitions. Target generation will require the acquisition and
interpretation of geophysical datasets, compilation of data collected by previous explorers, interpretation of high-reso-
lution satellite images and field investigation. Highly prospective areas will be selected from our compilation and inter-
pretation, and we will actively pursue the land position either through joint ventures or staking of available ground.

T H E S O U T H A M E R I C A N P R O P E RT I E S

Overview of the South American Properties

We hold one exploration property in Suriname known as the Saramacca property. Our other properties in South
America are located in French Guiana and held through Guyanor, our 73% owned subsidiary. French Guiana is part
of French national territory and has been an overseas “Département” of France since 1946. Under the French
Constitution, the same laws govern French Guiana as metropolitan France, subject to modifications (including those
affecting tax and mining laws and regulations) that could be adopted to reflect the historical, cultural, geographical
and economic characteristics of French Guiana and provide for regional administration.

At December 31, 2003 Guyanor owned mineral rights (either directly or through its subsidiaries) for the Yaou, Dorlin,
Paul Isnard, and Bon Espoir properties. The Bon Espoir property was acquired in December 2003 and is discussed
in more detail below. During 2003 Guyanor spent approximately $0.2 million on care and maintenance of its explo-
ration properties compared to $0.3 million during 2002.

Acquisition of the Bon Espoir Property

In December 2003 Guyanor acquired the Bon Espoir property from Gold Fields Exploration B. V. for a purchase price
of $0.3 million payable in stock and warrants. Bon Espoir is located north of the Paul Isnard properties in western
French Guiana. The purchase price of approximately $0.3 million will be payable by the issuance of 1.5 million com-
mon shares and 1.5 million warrants of Guyanor subject to various shareholder and governmental approvals. The terms
of the 1.5 million warrants, which comprise three classes, have exercise prices ranging from ¤0.21 per share to ¤0.34
per share, and have expiration dates of one to three years. Additional provisions include a sliding scale royalty rang-
ing from 0.5% to 2.0% of the net smelter returns and a back-in-right to acquire a 65% participating interest in a future
gold project on the Bon Espoir property.

The Guiana Shield Transaction

In May 2002 we sold our interests in the Gross Rosebel, Headleys and Thunder Mountain properties in Suriname,
and our interest in Omai Gold Mines Limited (“OGML”) in Guyana, to Cambior Inc. We received $5.0 million cash in
2002 and a $1.0 million deferred payment in 2003 from the sale of the Gross Rosebel property. We expect to receive
two additional deferred payments of $1.0 million each in 2004 and 2005. In addition, Cambior agreed to pay us a roy-
alty equal to 10% of the excess of the average quarterly market price above a gold price hurdle on the first 7 million
ounces of gold production from Gross Rosebel. For soft and transitional rock the gold price hurdle is $300 per ounce
and for hard rock the gold price hurdle is $350 per ounce. For the Headleys and Thunder Mountain properties, we
are entitled to receive a deferred consideration of $0.5 million each, when and if Cambior commences commercial
mining from these properties. As payment for our 30% equity interest and preferred shares in OGML, we received
a release and waiver from OGML, Cambior and the Guyana Government in respect of all liabilities, of any nature,
related to the Omai gold mine. In the transaction Golden Star also acquired Cambior’s 50% interests in the Yaou and
Dorlin exploration properties in French Guiana.

Cambior has stated that Gross Rosebel’s commercial gold production is scheduled to begin in early 2004 and total
approximately 245,000 ounces of gold during 2004. Cambior is projecting 220,000 ounces of gold per year average pro-
duction over the mine’s projected nine year mine life. Based on Cambior’s announced gold production schedule, we
expect royalty payments from Gross Rosebel of approximately $2 million in 2004, assuming current gold prices.

Saramacca Property

Two successive soil auger sampling programs were completed in late 2002 and early 2003 to evaluate the 15 to 18 kilo-
meter long by 3 to 5 kilometer wide series of stream sediment gold anomalies. A total of approximately $0.2 million of
direct field related costs were spent in each of the 2002 and 2003 field programs. Field work has included establish-
ment of an 18 kilometer long by 4 to 7 kilometer wide auger grid, with 154 kilometers of cut lines. Grid line spacing
was 600 to 800 meters with one-meter auger samples taken on 100 meter line spacings.

For 2004, approximately $0.2 million of exploration spending will be focused on a deep augering and mechanized
trenching campaign. Positive results would likely be followed up in late 2004 or 2005 with drilling to establish potential
subsurface grades, as well as defining limits of the system. The Saramacca property is held directly by Golden Star.

Bon Espoir Property

The area is covered by the Bon Espoir Exclusive Exploration Permit, dated October 24, 2001 and valid until October 31,
2006. This permit covers an area of 466 square kilometers. Financial commitments for the first five-year period of valid-
ity ending October 31, 2006, are ¤3.2 million, of which ¤0.9 million has already been spent in detailed exploration work
on the Wayamaga prospect which lies within the Bon Espoir property (soil geochemistry, drilling). Planned work in 2004
consists of regional soil geochemistry to test the totality of the 40 kilometer long prospective contact.

The Yaou and Dorlin Properties

The Yaou exploration permit covers an area of 52 square kilometers located some 210 kilometers southwest of
Cayenne, French Guiana. The Dorlin exploration permit covers an area of 84 square kilometers located some 180
kilometers southwest of Cayenne and 60 kilometers east of Maripasoula. In 2003 the Yaou and Dorlin properties
remained on care and maintenance and expenditures totaled less than $0.1 million. There is no significant work
planned at Yaou or Dorlin in 2004.

Paul Isnard Property

The Paul Isnard property is located in the western part of French Guiana, approximately 180 kilometers west of
Cayenne. The concessions held will expire on December 31, 2018 but can be renewed for an additional 25 years.
The Paul-Isnard exploration permit covers an area of 283 square kilometers, and we are waiting for the granting of
its first renewal for a reduced surface area. The total area under or awaiting permit is 433 square kilometers. Paul
Isnard remained on care and maintenance during 2003 and total costs incurred were less than $0.1 million. There is
no significant work planned at Paul Isnard in 2004.

ITEM 3. LEGAL PROCEEDINGS

We have been named as one of 14 defendants in a class action lawsuit filed in the High Court of the Supreme Court
of Judicature of Guyana on May 19, 2003 related to the August 1995 accidental release of cyanide-bearing waste into
a stream near the Omai gold mine, in which we then owned a 30% equity interest. Other defendants include Cambior
Inc., which co-owned and operated the mine in 1995 and to which we subsequently sold the mine in 2002. The plain-
tiffs claim to represent residents near the stream and its tributaries. The plaintiffs claim various environmental and
other damages and have asked for substantial damages, in excess of $1.0 billion, from all defendants, jointly and sev-
erally, among other remedies. During the third quarter of 2003 Cambior filed a motion to dismiss the lawsuit. We have
not been served with process in this litigation. While we believe this claim is without merit, we cannot reasonably
predict the outcome of this litigation. In connection with the sale of our interest in the Omai mine to Cambior in 2002,
Cambior indemnified us from any claims related to the mine.

We are not currently subject to any material pending legal proceedings. We are, however, engaged in routine litigation
incidental to our business. No material legal proceedings, involving us or our business are pending, or, to our knowl-
edge, contemplated, by any governmental authority. We are not aware of any material events of noncompliance with
environmental laws and regulations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of 2003.

P A R T I I
O T H E R I N F O R M AT I O N

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY

AND REL ATED STOCKHOLDER MATTERS

In June 2002 our common shares began trading on the American Stock Exchange under the symbol GSS. Our com-
mon shares are also traded on the Toronto Stock Exchange (“TSX”) under the trading symbol “GSC”. From January
2001 to June 2002 our common shares had traded in the US on the NASDAQ OTC Bulletin Board. As of January 29,
2004, 133,140,528 common shares were outstanding and we had 991 shareholders of record. On January 29, 2004,
the closing price per share for our common shares as reported by the TSX was Cdn$7.09 and as reported by the
American Stock Exchange was $5.31.

The following table sets forth, for the periods indicated, the high and low market closing prices per share of our com-
mon shares as reported by the TSX, the OTC Bulletin Board and the American Stock Exchange:

2003

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

2002

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Toronto Stock Exchange

Cdn $ High

Cdn $ Low

American Stock Exchange(1)
$ High

$ Low

3.49

3.77

6.15

10.77

2.25

2.43

3.42

5.10

2.29

2.80

4.53

8.30

1.54

1.68

2.46

3.77

Toronto Stock Exchange

OTC Bulletin Board and
American Stock Exchange(1)

2.90

3.58

2.70

2.90

0.86

1.70

1.34

1.66

1.90

2.42

1.80

1.90

0.54

1.05

0.84

1.04

(1) During 2002 our stock traded on the OTC Bulletin Board until June 18, 2002 and on the American Stock Exchange on
and after June 19, 2002.

We have not declared or paid cash dividends on our common shares since our inception and we expect for the fore-
seeable future to retain all of our earnings from operations for use in expanding and developing our business. Future
dividend decisions will consider then current business results, cash requirements and our financial condition.

R E C E N T S A L E S O F U N R E G I S T E R E D S E C U R I T I E S

The issuances discussed under this section were exempted from registration under Section 4(2) of the Securities Act
or Rule 506 thereunder as indicated. All purchasers of the following securities acquired the shares for investment pur-
poses only and all stock certificates reflect the appropriate legends.

Common Stock

In the fourth quarter of 2003 1,157,273 shares were issued upon exercise of warrants for total consid-
eration to the Company of $810,091. The warrants exercised were originally issued in January 2002
with a $0.70 exercise price.
In the fourth quarter of 2003 370,000 shares were issued upon exercise of warrants for total consider-
ation to the Company of $555,000. The warrants exercised were originally issued in December 2002
with a $1.50 exercise price.

C E RTA I N C A N A D I A N F E D E R A L I N C O M E TA X C O N S I D E R AT I O N S

The following summarizes the principal Canadian federal income tax considerations applicable to the holding and dis-
position of a common share of the Company (a “Common Share”) by a holder (the “Holder”) of one or more
Common Shares, for tax purposes, who is resident in the United States of America and holds the Common Shares

as capital property. This summary is based on the current provisions of the Canada-United States Income Tax
Convention (1980) (the “Treaty”), Income Tax Act (Canada) (the “Tax Act”), the regulations thereunder and all amend-
ments to the Tax Act publicly proposed by the Government of Canada to the date hereof. It is assumed that each
such amendment will be enacted as proposed and there is no other relevant change in any governing law, although
no assurance can be given in these respects. Limited Liability Corporations cannot access any of the benefits of the
Treaty as described in the paragraphs.

Every Holder is liable to pay a withholding tax on every dividend that is or is deemed to be paid or credited to him
on his Common Shares. Under the Act, every non-resident person shall pay a tax at 25%. Under the Treaty, the rate
of withholding tax is reduced to 5% of the gross amount of the dividend where the Holder is a company that owns
at least 10% of our voting stock and beneficially owns the dividend, and 15% in any other case.

Under the Tax Act, a Holder will not be subject to Canadian tax on any capital gain realized on an actual or deemed
disposition of a Common Share, including a deemed disposition at death, provided that he did not hold the Common
Share as capital property used in carrying on a business in Canada, and that neither he nor persons with whom he
did not deal at arm’s length alone or together owned 25% or more of the issued shares of any class of our stock at
any time in the 60 month period immediately preceding the disposition.

A Holder who is liable under the Tax Act for Canadian tax in respect of a capital gain realized on an actual or deemed
disposition of a Common Share could be relieved under the Treaty from such liability unless:

(a) the Common Share formed part of the business property of a permanent establishment or fixed base
in Canada that the Holder has or had within the twelve-month period preceding the disposition; or

(b) the Holder was an individual; and

(i) was resident in Canada for 120 months during any period of 20 consecutive years preceding

the disposition; and

(ii) was resident in Canada at any time during the ten years immediately preceding the disposition; and
(iii) owned the Common Share when he ceased to be a resident of Canada.

This summary is of a general nature and is not intended, nor should it be construed, to be legal or tax advice to any
particular Shareholder. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISERS AS TO THE INCOME
AND OTHER TAX CONSEQUENCES ARISING IN THEIR PARTICULAR CIRCUMSTANCES.

C E RTA I N U N I T E D S TAT E S F E D E R A L I N C O M E TA X C O N S I D E R AT I O N S

ITEM 6. SELECTED FINANCIAL DATA

The selected financial data set forth below are derived from our audited consolidated financial statements for the years
ended December 31, 2003, 2002, 2001, 2000 and 1999, and should be read in conjunction with those financial state-
ments and the footnotes thereto. The consolidated financial statements have been prepared in accordance with
Canadian GAAP. Selected financial data derived in accordance with US GAAP has also been provided and should be read
in conjunction with footnote 22 to the financial statements. Reference should also be made to “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations”.

S u m m a r y o f F i n a n c i a l C o n d i t i o n

(Amounts in thousands except per share data)

Cdn GAAP

Working capital

Current assets

Total assets

Current liabilities
Shareholders’ equity

Cdn GAAP

Revenue

Net income/(loss)

Net income/(loss) per share — basic

US GAAP

Working capital

Current assets

Total assets

Current liabilities

Shareholders’ equity

US GAAP

Revenue

Net income/(loss)

Net income/(loss) per share — basic

As of
Dec. 31,
2003

As of
Dec. 31,
2002

As of
Dec. 31,
2001

As of
Dec. 31,
2000

As of
Dec. 31,
1999

$ 96,784

$ 21,963

$ (5,149)

$ 4,452

$ 6,020

104,935

222,391

8,151
198,362

32,843

74,135

10,880
49,384

9,636

36,552

14,785
12,342

12,960

49,469

8,508
26,040

13,957

74,352

7,937
40,501

For the
Year Ended
Dec. 31,
2003

For the
Year Ended
Dec. 31,
2002

For the
Year Ended
Dec. 31,
2001

For the
Year Ended
Dec. 31,
2000

For the
Year Ended
Dec. 31,
1999

$ 64,370

$ 38,802

$ 24,658

$ 31,171

$ 11,254

21,956

0.198

As of
Dec. 31,
2003

4,856

0.070

As of
Dec. 31,
2002

(20,584)

(0.488)

As of
Dec. 31,
2001

(14,881)

(0.400)

As of
Dec. 31,
2000

(24,366)

(0.760)

As of
Dec. 31,
1999

$ 96,784

$ 22,262

$ (5,149)

$ 4,452

$ 6,020

104,935

200,337

8,151

180,417

33,391

62,644

10,880

41,069

9,636

24,232

14,785

1,533

12,960

24,020

8,508

(478)

13,957

45,635

7,937

11,145

For the
Year Ended
Dec. 31,
2003

For the
Year Ended
Dec. 31,
2002

For the
Year Ended
Dec. 31,
2001

For the
Year Ended
Dec. 31,
2000

For the
Year Ended
Dec. 31,
1999

$ 64,370

$ 38,802

$ 24,658

$ 31,171

$ 11,254

13,357

0.120

6,752

0.093

(5,352)

(0.126)

(12,465)

(0.330)

(11,335)

(0.350)

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial
statements and related notes. The financial statements have been prepared in accordance with accounting principles
generally accepted in Canada (“Cdn GAAP”). For a reconciliation to accounting principles generally accepted in the
United States (“US GAAP”), see Note 22 to the attached consolidated financial statements.

(dollar figures in thousands, except per ounce amounts)

Mining operations expense

Less royalties

Cash operating expense

Gold sold (oz)
Cash operating cost per ounce ($)

2003

$ 32,125

3,222

$ 28,903

174,315
166

2002

$ 26,747

2,768

$ 23,979

124,400
193

2001

$ 24,824

1,103

$ 23,721

87,936
271

We have included total cash cost and cash operating cost information to provide investors with information about the
cost structure of our mining operations. We use this information for the same purpose and for monitoring the per-
formance of our operations. This information differs from measures of performance determined in accordance with
GAAP in Canada and the United States and should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. These measures are not necessarily indicative of operating profit or
cash flow from operations as determined under GAAP and may not be comparable to similarly titled measures of
other companies.

All figures in this Item 7 are on a 100% basis, which represents our current beneficial interest in gold production and
revenues. Once all capital has been repaid, the Government of Ghana would receive 10% of the dividends from the
subsidiaries owning the Bogoso/Prestea and Wassa mines.

O U R B U S I N E S S

Through our subsidiaries and joint ventures we own a controlling interest in four gold properties in Southern Ghana:
the Bogoso property (“Bogoso”), the Prestea property (“Prestea”), the Wassa property (“Wassa”) and the Prestea
underground property (“Prestea Underground”). Bogoso and Prestea are adjoining properties, operating as a single
operation and referred to as “Bogoso/Prestea”. Bogoso/Prestea and the Prestea Underground are owned by our 90%
owned subsidiary, Bogoso Gold Limited (“BGL”).

We hold a 90% equity interest in Wexford Goldfields Limited (“WGL”), which owns Wassa, located some 35 kilometers
east of Bogoso/Prestea. Wassa is currently in development, and we expect gold production to commence in early 2004.

The Prestea Underground is located on the Prestea property and consists of a currently inactive underground gold mine
and associated support facilities. As of December 31, 2003 BGL owned an approximately 66% operating interest in this
mine and we are currently seeking to determine if the underground mine can be reactivated on a profitable basis.

B U S I N E S S S T R AT E G Y A N D D E V E L O P M E N T

production at Bogoso/Prestea. At our Wassa property, we commenced development in mid-2003, and now expect
to commence production in early 2004 by processing material from the existing heap leach pads left by the former
owner. In early 2005 we plan to commence ore production from the Wassa open pit mine. If the above mentioned expan-
sion and development plans are approved and permitted (as expected), our annualized production should exceed 350,000
ounces of gold commencing in 2005. However, there can be no assurance that development and start-up can be com-
pleted as anticipated or that our production goals will be achieved.

O V E R V I E W O F 2 0 0 3

Our financial condition showed a significant improvement during 2003 with records being set in several operating
and financial parameters including, ounces sold, revenues, net income and operating cash flow. Revenues of $64.4
million were up 66% over 2002, based on a 40% increase in the number of ounces sold and a 17% increase in aver-
age realized gold prices. Net income of $22.0 million was up 350% from the prior year, primarily due to the improved
revenues. Our gold sales increased to 174,315 ounces, a 40% increase over 2002’s level, and the London P.M. fix
gold price, which began the year at $344 per ounce, trended upward though most of 2003 to finish the year at $416
per ounce. The spot price averaged $363 per ounce during 2003.

Our cash balance at the end of 2003 was $90.0 million, an increase of $70.0 million from $20.0 million at the end
of 2002. Improvements in gold prices and gold production levels combined to provide $29.1 million of cash flow from
operations, an increase of $24.2 million as compared to 2002, and equity offerings provided $102.9 million during
the year. We ended 2003 with $0.8 million of debt versus $5.3 million at the end of 2002. In addition several other
significant milestones were achieved during 2003:

• In July we completed a feasibility study and established mineral reserves at our Wassa develop-
ment property and immediately initiated construction of a CIL processing plant. We now expect
gold production from this property early in 2004;

• We acquired two new exploration land packages totaling 125 square kilometers extending north of
Bogoso/Prestea along the Ashanti Trend which include 162,000 ounces of new mineral reserves at
the Mampon deposit;

• We acquired a used 4,500 tonne per day CIL processing plant which we plan to relocate and
reassemble 6 kilometers south of the town of Prestea, to facilitate a significant expansion of gold
production at Bogoso/Prestea by 2005;

• We completed public equity offerings which provided $102.9 million of cash;
• We initiated an underground exploration drilling program in the Prestea Underground and we continued

engineering and geologic studies of the economic potential of the property;

• We purchased the gold production royalties encumbering Bogoso/Prestea and Wassa for approximately

$12.0 million and $11.5 million, respectively;

• We continued to pursue new growth opportunities for the Company; and
• We added 900,000 ounces of new reserves at Bogoso/Prestea and 665,000 ounces of new reserves

at Wassa.

T r e n d s A F F E C T I N G O U R O P E R AT I O N S D u r i n g 2 0 0 3

Gold prices have now trended generally upward for nearly three years from a low of $256 in early April 2001 to $411 per ounce
at January 28, 2004, an average annual increase of 16%. The higher average gold price added approximately $9.2 million to
our revenues during 2003 over what we would have realized had gold prices remained at 2002 levels.

Mining costs were higher in 2003 compared to 2002, mainly due to increases in haulage costs and fuel costs, the
Plant North pit being farther from the Bogoso processing plant than were the ore sources mined during 2002. Waste
stripping costs were higher due to increased tonnages moved in 2004. Processing costs were also higher. The met-
allurgical characteristics of Plant North ore required more reagents, especially cyanide, and longer retention times
during the recovery process. Royalties were also significantly higher as compared to 2002 because of the increase
in sales revenues. While mining and processing costs per tonne were higher, the higher grades of the Plant North
ore and better gold recovery rates more than compensated, yielding a much improved net income and decreases in
unit costs per ounce compared to 2002.

As mining proceeds deeper into the Plant North pit in 2004 we expect to encounter increasing amounts of harder
transition and sulfide ores which are not optimally suited for processing in the Bogoso processing plant as currently
configured and thus we are expecting lower gold recovery rates and higher processing costs than experienced with
the oxide ore milled in 2003. To maximize gold recoveries on transition and sulfide ores, the existing flotation circuit
at the Bogoso processing plant has been refurbished and will be recommissioned during 2004 at a cost of approxi-
mately $2 million. Once the refurbished flotation circuit is operational, we expect to successfully treat the transition
ores from the Plant North pit and other areas. While we expect that gold recovery and processing costs would be at
acceptable levels following the flotation circuit refurbishment, we cannot provide assurance that gold recovery will be
as high as experienced during 2002 and 2003 and that operating costs will be as low as those in 2003.

The market for gold company equities generally strengthened during 2003. Our common share price began the year at
$1.89 and ended the year at $6.97. The increased interest in investing in gold and gold mining companies during the past
two years has made expansion and development capital more readily available. As a result, we successfully raised a net
$113.4 million of new equity funds during 2003 including option and warrant exercises. We used portions of the cash to
pay debt, acquire new exploration properties and reserves in Ghana and elsewhere in West Africa, to buy back royalties
on future Bogoso/Prestea and Wassa gold production and to fund exploration and development activities including the
work to date on the Wassa and Prestea Underground projects. In 2004 we anticipate using our cash to complete Wassa,
to proceed with the planned expansion project at Bogoso/Prestea, to continue our evaluation of the Prestea Under-
ground, to fund other exploration and development activities and for other general corporate purposes.

R E S U LT S O F O P E R AT I O N S

2003 Compared to 2002

Net income totaled $22.0 million or $0.198 per share on revenues of $64.4 million for 2003, versus net income of
$4.9 million or $0.070 per share on revenues of $38.8 million during 2002. Higher gold prices, increased gold pro-
duction, a $2.3 million gain on currency exchange rates and a $1.9 million gain on the sale of marketable securities
were the major factors contributing to the earnings improvement. Realized gold prices averaged $364 per ounce for
the year, a 17% increase from the $311 per ounce realized in 2002. Gold revenues for 2003 were based on sales of
174,315 ounces, a 49,915 ounce increase from 124,400 ounces in 2002.

FINANCIAL RESULTS

Gold sold (oz)

Average price realized ($/oz)

Revenues (in $ thousands)

Net income/(loss) (in $ thousands)

Net income/(loss) per share — basic ($)

2003

174,315

364

64,370

21,956

0.198

2002

124,400

311

38,802

4,856

0.070

2001

87,936

271

24,658

(20,584)

(0.490)

Higher depreciation, depletion and amortization costs are related to higher gold production versus 2002. General and
administrative costs rose by $1.7 million from 2002 due to increases in compensation expense, including stock option
expense, purchase of gold puts, travel and tax and other professional services related to an expanded scope of cor-
porate activities. The increase in foreign exchange gains is mostly related to the effect of a weakening US dollar off-
set by the associated impact on the value of cash equivalents invested in Canadian dollar instruments.

We did not record a tax expense or benefit during 2003. While we have substantial tax assets in Canada, France and
Ghana from past losses, capital allowances and tax pools, a tax valuation allowance has been provided in an amount
equal to our net tax assets. We will continue to monitor our expected future income tax position and may in the
future deem it appropriate to recognize certain tax assets and liabilities in our balance sheet.

BOGOSO/PRESTEA OPERATIONS

Ore mined (t)

Waste mined (t)

Ore milled (t)

Grade milled (g/t)

Recovery (%)

Cash operating cost ($/oz)

Royalties ($/oz)

Total cash cost ($/oz)

2003

2,001,905

6,791,926

2,093,600

3.29

81.2

166

184

2002

2,222,767

5,211,335

2,271,747

2.31

74.4

193

215

2001

1,701,129

4,851,255

2,098,165

2.69

49.6

271

283

During 2003, Bogoso/Prestea processed an average of 5,736 tonnes per day of Plant North ore at an average grade
of 3.29 grams per tonne. This compares to 6,223 tonnes per day at 2.31 grams per tonne in 2002. The lower pro-
cessing plant through-put was related to increased amounts of transition ores versus 2002. Mechanical difficulties
with a long lead-time component of the processing plant conveyor system during the second quarter of 2003 and
other processing plant maintenance projects during the year also contributed to the reduced processing plant
through-put. Recoveries rose to 81%, up from 74% in 2002. The improved grade and better recoveries combined to
yield a 40% increase in gold production versus 2002. Bogoso/Prestea sold 174,315 ounces of gold in 2003, up from
124,400 ounces in 2002. Cash operating costs of $166 per ounce were 14% better than the $193 per ounce costs
during 2002. Similarly, total cash costs fell from $215 per ounce in 2002 to $184 per ounce in the current year.

2002 Compared to 2001

During 2002 we generated net income of $4.9 million or $0.070 per share, compared to a loss of $20.6 million or
$0.488 per share during the twelve months ended December 31, 2001. The major factors contributing to the
improved earnings were higher gold production primarily from Prestea ore bodies, improved gold prices, and the
absence of write-offs of deferred exploration costs.

During much of 2001 the Bogoso processing plant was fed with transition ores mined from the Bogoso pits. The
metallurgical properties of the transition ores render them unsuitable for effective processing in the Bogoso process-
ing plant, and a low gold recovery rate of 49.6% was experienced during 2001 as a result. During 2002 the entire
Bogoso processing plant feed was comprised of oxide ores from various pits on the northern end of the Prestea
property, and the processing characteristics of these Prestea ores were better suited for processing in the Bogoso
processing plant than were the Bogoso transition ores processed in 2001, resulting in a 74.4% overall recovery rate
during 2002. The improved recovery added just over 41,000 ounces to our production versus what would have
occurred had recoveries stayed at the 2001 rate of 49.6%.

Revenues rose from $24.7 million in 2001 to $38.8 million in 2002. In addition to the higher gold production for the
year, 2002 gold prices were higher than in the prior year. Our realized sales price averaged $311 per ounce in 2002,
up from $271 per ounce in 2001. Gold shipments totaled 124,400 ounces during 2002. This 41% increase over 2001
was due to the better gold recoveries and an 8% increase in tonnes milled.

While the cost of mining operations, as shown on the statement of operations, increased 8% from the 2001 level,
mostly due to an 8% increase in the number of tonnes milled, the improvement in gold output yielded a decrease
in cash operating cost per ounce, from $271 in 2001 to $193 in 2002. Improved gold recoveries were the most sig-
nificant factor contributing to the lower cash operating cost per ounce.

D E V E L O P M E N T A C T I V I T I E S

Wassa

In September 2002 we acquired a 90% interest in the Wassa gold property located 35 kilometers east of our
Bogoso/Prestea gold operations in Ghana and immediately began a drilling program and engineering studies designed
to evaluate the economic viability of the property as a conventional 10,000 tonnes per day CIL gold operation. Based
on initial drill results and engineering data, a feasibility study was begun shortly after acquisition and was completed
in July 2003. In July 2003 we announced that the project would proceed and that construction of the CIL processing
plant would commence immediately. The feasibility study was prepared by our staff supported by a team of independ-
ent consultants led by Metallurgical Design and Management (Pty) Ltd. (“MDM”) of South Africa. In July 2003 we
also awarded a fixed price contract to MDM to construct the new CIL plant and associated processing facilities.

Prestea Underground

During 2003 we completed digitization of information related to the underground workings, old drill records, survey
pegs and channel chip samples. We continued geological mapping of underground workings and geological compi-
lations were completed for several levels. Extensive sampling of underground workings has resulted in the creation
of a three-dimensional computer model of the underground workings and main zones of mineralization. For the first
time in Prestea’s 100 year plus history, data from widely different sources and formats have now been standardized
and grouped into a single computer database, making interpretation and inferences from modeling much easier.

While awaiting preparation of access to the less developed and less explored lower levels of the Prestea under-
ground workings, we initiated in mid 2003 a series of drill holes at shallow levels where access had already been
established. A total of 28 holes were drilled averaging 97 meters in length. These holes were in areas that had
received extensive mining and development in the past. No significant new mineralized zones were discovered. By
the end of the year we had obtained access to new areas deeper in the mine, where we expect to concentrate our
efforts in 2004.

Bogoso/Prestea Expansion

in early 2004; and (c) refractory transition and sulfide ores which would require some form of oxidation process prior
to gold recovery. The oxide ores are found at surface, down to the general level of the water table, while sulfide ores
are located at depth. Between these two distinct ore types lies the transition ore, of varying thickness, a zone of
partially oxidized ore. Our Bogoso/Prestea reserves at the end of 2003 are comprised of approximately 13% oxide
ore, 15% transition ores, and 72% sulfide ores on a gold content basis.

To facilitate efficient processing of the sulfide and transition ores and to expand the productive capacity of
Bogoso/Prestea we plan to make major modification to the existing Bogoso processing plant during 2004 and 2005
and at the same time add a second processing plant on the Prestea property, which will be designed to process
oxide ores and other non-refractory ores.

In July 2003 we purchased a used 4,500 tonne per day conventional CIL processing plant, associated stores inven-
tory, and a six-megawatt powerhouse from an inactive mine site in Ghana. This facility was dismantled in the third
and fourth quarters of the year and will be moved to Prestea in early 2004. During 2004 we plan to reassemble this
processing plant at a site approximately 6 kilometers south of the town of Prestea. With the appropriate modifica-
tions it should be able to process oxide ores and some of the transition ores found at Bogoso/Prestea. This new pro-
cessing plant is now referred to as the Bondaye processing plant. We expect the Bondaye processing plant to be
operational in the fourth quarter of 2004 if the required approvals and permits are obtained as expected.

BIOX bench and pilot scale tests on Bogoso sulfide ores have consistently yielded gold recoveries in excess of 86%.
This compares to 55% achievable by direct cyanide treatment. The cost of BIOX treatment is estimated to be approx-
imately $10.40 per tonne of ore processed. This is higher than the current operating costs for oxide ores at Bogoso
but is expected to be cost effective when compared to other options for treating refractory sulfide ores.

The Bogoso/Prestea expansion plans outlined above are subject to the completion of technical studies now underway,
subsequent board approval, obtaining all requisite environmental permits and successful resolution of potential techni-
cal difficulties that could be encountered during the construction and start-up of the new facilities.

E X P L O R AT I O N

We spent approximately $8.5 million in exploration activities during 2003 including $2.2 million at Wassa establishing
mineral reserves in the existing pits and in areas outside the pits, $3.1 million at the Prestea Underground, including
underground care and maintenance costs, approximately $2.3 million on exploration projects outside the Wassa and
Bogoso/Prestea areas and $0.9 million developing new mineral reserves in the Plant North area. Exploration spending
during 2003 was less than expected due to a shortage of drill rigs in Ghana. Recent increases in exploration activity in
Ghana by us and our competitors have adversely impacted drill rig availability and as a result some of our planned work
was delayed, including drilling at the Prestea Underground which was delayed several months.

We entered, subject to definitive documentation and government approval, into a joint venture agreement in late
2003 to invest up to $6 million over the next four years in the Mano River project in Sierra Leone via an earn-in agree-
ment with a junior exploration company which now holds a group of gold exploration properties in Sierra Leone. The
initial $6 million, if fully funded (we can terminate the joint venture agreement after spending $1.0 million) would
yield a 51% interest in the joint venture. Further provisions of the joint venture agreement provide the opportunity
to acquire up to 85% of the joint venture by continued long term funding. Spending was nil in 2003.

In late 2003 we entered into a second joint venture agreement, subject to definitive documentation and government
approval, agreeing to fund exploration work on the Mininko gold property in Mali. Funding of $2.6 million would earn
a 51% interest in the joint venture. We can terminate the joint venture agreement after spending $0.4 million, of
which $0.1 million was spent in 2003. The joint venture agreement provides that we can earn up to an 82.5% inter-
est by continued funding of exploration and development if warranted.

We also provided $0.9 million of funding during 2003 to a junior exploration company working in South America. The
Guyanor properties were maintained on a care and maintenance basis during 2003 but we expect to initiate new explo-
ration efforts there in 2004 focusing on further evaluation of our existing properties and recently acquired properties.

L I Q U I D I T Y A N D C A P I TA L R E S O U R C E S

Equity offerings and profitable operations at Bogoso/Prestea contributed to a $70.0 million net increase in cash and
cash equivalents since December 31, 2002. During 2003 we raised a net $102.9 million from equity offerings, $1.9
million from exercise of stock options and $8.6 million from exercises of warrants. Cash flow from operations before
working capital changes totaled $30.5 million, versus $7.2 million in 2002. Higher gold prices and higher gold produc-
tion were responsible for the improvement in cash from operations. Higher gold prices and a higher stock price have
generated interest in the gold industry and in our company and allowed us access to the equity markets during 2003.
There can be no assurance that such favorable market conditions will continue or that we will be able to access the
equity markets in the future on such favorable conditions.

Investing activities consumed $70.2 million of cash during the year. Cash spent at Wassa on the feasibility study, proper-
ty-holding costs, a royalty buy-out, and construction totaled $32.5 million while development work and new fixed assets
at Bogoso/Prestea consumed $14.9 million including $4.3 million for the Bondaye processing plant purchase. We spent

$4.5 million on deferred exploration projects, including $2.2 million on the sulfide project, and invested an additional $3.7
million in equipment, site maintenance, engineering and geologic analysis at the Prestea Underground. Miscellaneous
items accounted for $1.2 million. Spending to acquire and develop the Mampon property totaled $13.4 million. The first of
three $1.0 million deferred payments from the Gross Rosebel sale in 2001 was received early in 2003.

Liquidation of debt, including the $2.0 million due the sellers of BGL, consumed $5.3 million of cash leaving only $0.8
million of debt on the balance sheet at year-end. Shareholders’ equity stood at $198.4 million at December 31, 2003,
up from $49.4 million at the end of December 2002, and working capital totaled $96.8 million at December 31, 2003,
up from $22.0 million at the end of 2002.

Outlook
We expect that Bogoso/Prestea will continue generating positive operating cash flows in 2004, but will require additional
cash for the expansion project described above. It is anticipated that Wassa will also generate a positive operational cash
flow once operations begin in early 2004 but will need additional funds in late 2004 when the mining fleet is purchased.

At December 31, 2003 there was approximately $90.0 million of cash and cash equivalents on hand. We anticipate
capital spending of approximately $88 million in 2004:

Project

Wassa

Bogoso/Prestea

Prestea Underground

Other

Total

LOOKING AHEAD

Our main objectives in 2004 are:

Amount (millions)

$ 31

$ 88

• Continued orderly and efficient mining of Prestea Plant North ores allowing an adequate flow of

oxide and transition ores to the Bogoso processing plant;

• Completion of construction and orderly start-up of Wassa gold production;
• Re-assembly of the Bondaye processing plant near Prestea to treat non-refractory ores by the end

of 2004;

• Commence conversion of the Bogoso processing plant to a BIOX facility to treat refractory sulfide

and transition ores beginning in 2005;

• Continued evaluation of the Prestea Underground reserve potential;
• A substantial increase in exploration efforts with a focus on Ghana and West Africa and follow-up

of certain properties in South America;

• Continuation of efforts to seek out and evaluate acquisition and growth opportunities in Ghana and

elsewhere; and

• Evaluate and rationalize our South American assets.

We expect gold production at Bogoso/Prestea of approximately 135,000 to 155,000 ounces in 2004 at a projected
cash operating cost of $200 to $225 per ounce and production of approximately 50,000 to 55,000 ounces at Wassa
at a cash operating cost of about $200 to $240 per ounce bringing total 2004 production to approximately 185,000 to
210,000 ounces at an average cash operating cost of around $200 to $225 per ounce. The Bogoso/Prestea produc-
tion estimate excludes any contribution from the expansion project.

As more fully disclosed in Item 1 Risk Factors, numerous factors could cause our estimates and expectations to be
wrong or could lead our management to make changes in our plans. Under any of these circumstances, the esti-
mates described above would likely change materially.

R e c e n t A c c o u n t i n g P r o n o u n c e m e n t s

In 2003, the Canadian Institute of Chartered Accountants (“the CICA”) issued AcG 14 — “Disclosure of Guarantees”.
The guideline presents the views of the Canadian Accounting Standards Board on financial statement disclosures to
be made by a guarantor about its obligations under guarantees. The guideline is effective for all fiscal years beginning

on or after January 1, 2003, which is our fiscal year beginning January 1, 2003 in our case. The adoption of this guide-
line had no material impact on our results of operations or financial position during 2003.

In 2002, the CICA issued Section 3063 — “Impairment of Long-Lived Assets” (“CICA 3063). The guidelines in CICA
3063 establish standards for the recognition, measurement and disclosure of the impairment of non-monetary long-
lived assets held for use. The guideline is effective for all fiscal years beginning on or after April 1, 2003, which is our
fiscal year beginning January 1, 2004. We have not yet determined the expected effect, if any, on our results of oper-
ations or financial position upon the implementation of this guideline.

In 2002, the CICA issued Section 3475 — “Disposal of Long-Lived Assets and Discontinued Operations”. The guide-
lines in CICA 3475 establish standards for the recognition, measurement, presentation and disclosure of the disposal
of long-lived assets. It also establishes standards for the presentation and disclosure of discontinued operations,
whether or not they include long-lived assets. The guideline is effective for asset disposals after May 1, 2003. The adop-
tion of this guideline had no material impact on our results of operations or financial position during 2003.

In 2002, the CICA issued Section 3110 — “Asset Retirement Obligations”. The guideline establishes standards for the
recognition, measurement and disclosure of liabilities for asset retirement obligations and the associated costs. The guide-
line is effective for all fiscal years beginning on or after January 1, 2004, which is our fiscal year beginning January 1, 2004.
We adopted the provisions of CICA 3110 as of January 1, 2003 which was treated as a change in accounting principle. See
Notes 2 and 13 in the attached financial statements for a discussion of the impact of this action.

In November 2003, the CICA amended CICA 3870 — “Stock-based Compensation and Other Stock-base Payments”
to require recognition at the date of grant, of expense for stock option grants after December 31, 2003 in an amount
equal to the fair value of the option. In light of this development we began expensing stock options, as required in
CICA 3870, during 2003. The impact of this election resulted in recognition of approximately $1.0 million of stock
option expense in 2003.

In December 2001, the CICA issued Accounting Guideline 13 (“AcG-13”), “Hedging Relationships”. The guideline estab-
lishes requirements for the identification, documentation and effectiveness of hedging relationships, which would have
been effective for fiscal years beginning on or before July 1, 2002. During 2002, the implementation date was delayed
and the guidance is now effective for fiscal years beginning after July 1, 2003. We do not expect AcG-13 to have a mate-
rial impact on our results of operation or financial position since we have no hedge relationships.

m i n i n g i n g h a n a

We continuously evaluate the social and political aspects of Ghana and of West Africa in general to apprise ourselves of
the social situation and political risks that exist in the region. Ghana has benefited from an extended period of political
stability and a democratic governmental system including orderly governmental transitions. It is our belief that Ghana is
committed to creating a stable political and economic environment that will foster additional economic growth.

Ghana is endowed with abundant mineral resources and is actively pursuing policies designed to support expansion
of its mineral industry. Because of the political stability and supportive policies, several international mineral compa-
nies have initiated activities in Ghana in recent years and we understand that these companies now have in place
plans to invest significant new sums in gold exploration and development.

It is our intent to be a responsible corporate citizen of Ghana and as such we have worked diligently to establish excel-
lent working relationships with both local and federal governmental authorities as well as with the local citizens in the
areas surrounding our operations.

We have experienced ongoing incidents of artisanal miners illegally working on our properties in Ghana. While we are
sympathetic to the economic needs of those engaged in this activity, illegal mining typically results in uncontrolled
environmental damage and is often conducted in an unsafe manner. In addition, failure to discourage illegal mining on
our properties could jeopardize legal title to our mineral rights. As such we have sought to discourage this activity both
by dialogue and by establishing a security presence. The governmental authorities in western Ghana are aware of the
illegal mining situation and have been of assistance in our efforts to discourage such activity.

S e a s o n a l i t y

Most of our operations are in tropical climates which experience annual rainy seasons. Mining operations are not materi-
ally affected by the rainy seasons in Ghana but exploration efforts in Ghana and in the Guiana Shield in South America are
generally timed to avoid the rainy periods to ease transportation logistics associated with wet roads and swollen rivers.

R e l at e d Pa rt y T r a n s a c t i o n S

Our President and CEO, Peter J. Bradford, participated in our private placement in January 2002, paying $0.1 million
for 200,000 units, each unit consisting of one share of our common stock and one half warrant to purchase our com-
mon shares at $0.70 until January 11, 2004. In December 2003 Mr. Bradford exercised the 100,000 warrants
obtained in this transaction.

During 2003 we obtained legal services from a legal firm to which one of our directors is of counsel. Total value of
all services purchased during 2003 was $0.2 million. Our director did not personally perform any legal services for
us during 2003 nor did he benefit directly or indirectly from payments for the services performed by the firm.

C R I T I C A L A C C O U N T I N G P O L I C I E S A N D E S T I M AT E S

Our financial statements reflect the application of Cdn GAAP, which is different in certain material respects from US
GAAP. The accounting policies reflected therein are generally those applied by similarly situated mining companies in
Canada. Our accounting policies under Canadian GAAP are described in Note 3 to our consolidated financial statements.

Preparation of our consolidated financial statements requires the use of estimates and assumptions that can affect
reported amounts of assets, liabilities, revenues and expenses. Accounting policies relating to asset impairments,
deprecation and amortization of mine property and property plant and equipment, and site reclamation/closure
accruals are subject to estimates and assumptions regarding reserves, gold recoveries, future gold prices and future
mining activities.

Decisions to write off (or not to write off) all or a portion of our investment in various properties, especially exploration
properties, subject to impairment analysis are based on our judgment as to the actual value of the properties and are
therefore subjective in most cases. In recent years we have written off substantially all of our pre-1999 investments in
exploration properties based upon our assessments of the amounts recoverable from these properties. Additional
exploration properties were found to be impaired in the current period and were written off during 2003. We continue
to retain title to certain properties after impairment write-offs as future events and discoveries may ultimately prove
that they have significant value.

Mine properties recorded on our financial records are amortized using a units-of-production method over proven and
probable reserves. Reserve estimates, which serve as the denominator in units of production amortization calcula-
tions, involve the exercise of subjective judgment and are based on numerous assumptions about future operating
costs, future gold prices, continuity of mineralization, future gold recovery rates, spatial configuration of gold
deposits, and other factors that may prove to be incorrect.

Accruals of site reclamation and closure costs involve estimates of the extent and timing of future environmental
disturbances, the cost of and technology available to reclaims such disturbances, changing environmental require-
ments, mine life and reserves to be mined.

O F F B A L A N C E S H E E T A R R A N G E M E N T S

We have no off balance sheet arrangements.

TA B L E O F C O N T R A C T U A L O B L I G AT I O N S

Payment due by period (thousands)

Less than
1 year

1 - 3
years

3 - 5
years

More than
5 years

186

$ 372

$ 356

$ —

—

3,696

Total

914

—

7,980

350

3,518

195

3,917

Contractual Obligations
(as of December 31, 2003)

Long term debt

Capital lease obligations

Operating lease obligations

Purchase obligations

Other long term liabilities reflected
on the balance sheet under GAAP

ITEM 7. QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

Our exposure to market risk includes, but is not limited to, the following risks: changes in interest rates on our invest-
ment portfolio, changes in foreign currency exchange rates and commodity price fluctuations.

Interest Rate Risk

We currently have minimal debt and thus no material interest rate exposure related to debt. When appropriate we invest
excess cash in short-term debt instruments of the United States and Canadian Governments and their agencies on a
fixed interest rate basis. Over time the rates received on such investments may fluctuate with changes in economic con-
ditions. As a result our investment income may fall short of expectations during periods of lower interest rates. We esti-
mate that given the cash balances expected during 2004, a one percent change in interest rates would result in a $0.7
million change in interest income. We may in the future actively manage our exposure to interest rate risk.

Foreign Currency Exchange Rate Risk

The price of gold is denominated in United States dollars and the majority of our revenues and expenses are denom-
inated in United States dollars. To the extent there are fluctuations in local currency exchange rates against the dollar,
the devaluation of a local currency is generally economically neutral or beneficial to the operation because local
salaries and supplies will decrease against the US dollar revenue stream. Approximately 26% of our cash and cash
equivalents were invested in Canadian dollar treasury notes at December 31, 2003. While we have realized exchange
gains on such investments during 2003, a decrease in the value of the Canadian dollar versus the US dollar could
result in exchange losses. We currently do not utilize market risk sensitive instruments to manage our exposure.

Commodity Price Risk

We are engaged in gold mining and related activities, including exploration, extraction, processing and reclamation.
Gold is our primary product and, as a result, changes in the price of gold could significantly affect our results of opera-
tions and cash flows. According to current estimates, a $10 change in the price of gold would result in a $2 million
change in pre-tax earnings and cash flows during 2004. We have in the past purchased puts but we have no puts out-
standing at the end of 2003. We may in the future more actively manage our exposure through hedging programs.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

I n d e x t o C o n s o l i d at e d F i n a n c i a l S tat e m e n t s o f

G o l d e n S ta r R e s o u r c e s Lt d .

Management’s Responsibility for Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Consolidated Balance Sheets as of December 31, 2003 and 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Consolidated Statements of Operations for the years ended
December 31, 2003, 2002 and 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Consolidated Statement of Changes in Shareholders’ Equity for the years ended
December 31, 2003, 2002 and 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Consolidated Statements of Cash Flows for the years ended
December 31, 2003, 2002 and 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59-76

M A N A G E M E N T ’S R E S P O N S I B I L I T Y F O R F I N A N C I A L I N F O R M AT I O N

To the Shareholders of
Golden Star Resources Ltd.:

The consolidated financial statements and all information in the Annual Report are the responsibility of the Board of
Directors and management. The consolidated financial statements have been prepared by management based on infor-
mation available to January 29, 2004, and are in accordance with accounting principles generally accepted in Canada.

A system of internal accounting and administrative controls is maintained by management in order to provide reason-
able assurance that financial information is accurate and reliable, and that our assets are safeguarded. Limitations
exist in all cost effective systems of internal controls. Our systems have been designed to provide reasonable but not
absolute assurance that financial records are adequate to allow for the completion of reliable financial information and
the safeguarding of our assets. We believe that the systems are adequate to achieve the stated objectives.

The Audit Committee of the Board of Directors is comprised of three outside directors, operates in accordance with
its charter and meets quarterly with management and the independent auditors to ensure that management is main-
taining adequate internal controls and systems and to approve the annual and quarterly consolidated financial state-
ments of the Company. The Committee also reviews the audit plan of the independent auditors and discusses the
results of their audit and their report prior to submitting the consolidated financial statements to the Board of
Directors for approval.

The consolidated financial statements have been audited by PricewaterhouseCoopers LLP, Chartered Accountants, who
were appointed by the shareholders. The auditors’ report outlines the scope of their examination and their opinion on the
consolidated financial statements.

/s/ Peter J. Bradford
Peter J. Bradford
President and
Chief Executive Officer

January 29, 2004

/s/ Allan J. Marter
Allan J. Marter
Senior Vice President and
Chief Financial Officer

January 29, 2004

A U D I T O R S ’ R E P O RT

To the Shareholders of
Golden Star Resources Ltd.:

We have audited the consolidated balance sheets of Golden Star Resources Ltd. as of December 31, 2003 and 2002
and the consolidated statements of operations, changes in shareholders’ equity and cash flows for each of the three
years in the period ended December 31, 2003. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in Canada and in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that
we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclo-
sures in the financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the consolidated financial
position of the Company as of December 31, 2003 and 2002, and the consolidated results of its operations and cash
flows for each of the three years in the period ended December 31, 2003, in accordance with accounting principles
generally accepted in Canada.

/s/ PricewaterhouseCoopers LLP
Chartered Accountants
Calgary, Alberta, Canada

January 29, 2004

G O L D E N S TA R R E S O U R C E S LT D .

C O N S O L I D AT E D b a l a n c e s h e e t s

(Stated in thousands of United States dollars except per share amounts)

ASSETS

CURRENT ASSETS

Cash and cash equivalents (Note 3)
Marketable securities (Note 5)
Accounts receivable
Inventories (Note 6)
Due from sale of property (Note 7)
Other current assets

Total Current Assets

RESTRICTED CASH (Note 14)
DUE FROM SALE OF PROPERTY (Note 7)
DEFERRED EXPLORATION AND DEVELOPMENT COSTS (Note 8)
PROPERTY, PLANT AND EQUIPMENT (Note 9)
MINING PROPERTIES (Note 10)
MINE CONSTRUCTION-IN-PROGRESS (Note 11)
OTHER ASSETS

Total Assets

LIABILITIES
CURRENT LIABILITIES
Accounts payable
Construction retention payable
Royalties payable
Other accrued liabilities
Current debt (Note 12)

Total Current Liabilities

LONG TERM DEBT (Note 12)
ASSET RETIREMENT OBLIGATIONS (Note 13)

Total Liabilities

MINORITY INTEREST

COMMITMENTS AND CONTINGENCIES (Note 14)

SHAREHOLDERS‚ EQUITY

SHARE CAPITAL

As of December 31,
2002
2003

$ 89,970
—
790
12,661
1,000
514
104,935

3,317
1,000
9,108
18,202
56,808
27,376
1,645
$ 222,391

3,268
1,350
532
2,859
142
8,151

657
7,745

16,553

7,476

$ 20,016
906
1,977
8,421
1,000
523
32,843

3,365
2,000
4,743
8,490
17,580
4,543
571
$ 74,135

4,109
—
338
2,870
3,563
10,880

1,727
7,246

19,853

4,898

First Preferred Shares, without par value, unlimited shares authorized.
No shares issued
Common shares, without par value, unlimited shares authorized.
Shares issued and outstanding: 132,924,278 at December 31, 2003;
87,400,702 at December 31, 2002

DEFICIT

Total Shareholders‚ Equity

—

327,578
(129,216)

198,362

201,039
(151,655)

49,384

Total Liabilities and Shareholders Equity

$ 222,391

$ 74,135

The accompanying notes are an integral part of these consolidated financial statements.

By: /s/ David K. Fagin — Director

By: /s/ Peter J. Bradford — Director

G O L D E N S TA R R E S O U R C E S LT D .

C O N S O L I D AT E D S TAT E M E N T S o f o p e r at i o n s

(Stated in thousands of United States dollars except per share amounts)

For the years ended December 31
2002

2001

2003

REVENUE

Gold sales
Interest and other

EXPENSES

Mining operations
Depreciation, depletion and amortization
Accretion of asset retirement amortization
Exploration expense
General and administrative expense
Abandonment and impairment of mineral properties
Gain on sale of assets
Interest expense
Foreign exchange gain
Total expenses

INCOME/(LOSS) BEFORE THE UNDERNOTED

Gain on sale of marketable securities (Note 5)
Omai preferred share redemption premium
Income/(loss) before minority interest
Minority interest

NET INCOME/(LOSS) BEFORE TAX

Income tax (Note 17)

NET INCOME/(LOSS)

NET INCOME/(LOSS) PER COMMON SHARE —

BASIC (Note 18)

NET INCOME/(LOSS) PER COMMON SHARE —

DILUTED (Note 18)

WEIGHTED AVERAGE SHARES OUTSTANDING

(in millions of shares)

$ 63,512
858
64,370

$ 38,091
711
38,802

$ 23,801
857
24,658

32,125
4,993
578
594
5,566
175
—
42
(2,331)
41,742

22,628
1,905
—
24,533
(2,577)

21,956
—

$ 21,956

0.198

0.186

111.0

26,747
2,459
—
485
3,886
—
(425)
265
(139)
33,278

5,524
—
170
5,694
(838)

4,856
—

4,856

0.070

0.063

72.4

24,824
3,420
—
204
2,669
15,010
—
833
(50)
46,910

(22,252)
—
583
(21,669)
1,085

(20,584)
—

$ (20,584)

$ (0.488)

42.2

The accompanying notes are an integral part of these consolidated financial statements.

G O L D E N S TA R R E S O U R C E S LT D .

CONSOLIDATED STATEMENTS of changes in shareholder’s equit y

(Stated in thousands of United States dollars except per share amounts)

Common
Stock
Number of
Shares

Share
Capital

Equity
Component
of
Convertible
Warrants Debentures

Deficit

Balance at December 31, 2000

37,588,988

$ 159,642

$ 1,341

984

$ (135,927)

Shares issued under warrants
Warrants issued
Warrants exercised
Debenture conversions
Shares issued
Net loss
Balance at December 31, 2001

Shares issued
Issue costs
Shares issued under options
Shares issued under warrants
Stock bonus
Debenture conversions
Warrants issued
Warrants exercised
Warrants issued to acquire property
Other
Net income
Balance at December 31, 2002

Shares issued
Issue costs
Warrants issued
Warrants exercised
Shares issued under options
Shares issued under warrants
Stock bonus
Shares issued to acquire property
Cummulative effect of change
in accounting method (Note 13)
Net income
Balance at December 31, 2003

2,738,660
—
—
2,098,567
6,833,333
—
49,259,548

31,506,000
—
547,916
2,535,960
107,000
2,994,278
—
—
—
450,000
—
87,400,702

33,030,000
—
—
—
1,518,420
8,167,956
57,200
2,750,000

1,282
—
1,332
1,469
4,204
—
167,929

27,507
(2,558)
520
1,778
78
2,903
—
397
—
400
—
198,954

107,598
(6,455)
—
1,504
2,858
8,595
118
12,045

—
401
(1,332)
—
—
—
410

—
—
—
—
—
—
1,817
(397)
255
—
—
2,085

—
—
1,780
(1,504)
—
—
—
—

—
—
—
(439)
—
—
545

—
—
—
—
—
(545)
—
—
—
—
—
—

—
—
—
—
—
—
—
—

—
—
—
—
—
(20,584)
(156,511)

—
—
—
—
—
—
—
—
—
—
4,856
(151,655)

—
—
—
—
—
—
—
—

—
—
132,924,278

—
—
$ 325,217

—
—
$ 2,361

—
483
21,956
—
— $ (129,216)

The accompanying notes are an integral part of these consolidated financial statements.

G O L D E N S TA R R E S O U R C E S LT D .

C O N S O L I D AT E D S TAT E M E N T S o f c a s h f l o w s

(Stated in thousands of United States dollars)

For the years ended December 31,
2002

2003

2001

OPERATING ACTIVITIES:
Net income/(loss)

Reconciliation of net income/(loss) to
net cash used in operating activities:
Depreciation, depletion and amortization
Convertible debentures accretion
Premium on Omai preferred share redemption
Non-cash employee compensation
Abandonment and impairment of mineral properties
Gain on sale of assets
Change in note receivable
Restricted cash
Reclamation expenditures
Asset retirement obligation
Minority interest

Changes in assets and liabilities:

Accounts receivable
Inventories
Accounts payable
Marketable securities
Other

Net Cash Provided by Operating Activities

INVESTING ACTIVITIES:
Expenditures on deferred exploration
and development
Expenditures on mining properties
Expenditures on property, plant and equipment
Expenditures on mine construction-in-progresss
Omai preferred share redemption
Asset retirement obligation related assets
Sale of property
Other

Net Cash Used in Investing Activities

FINANCING ACTIVITIES:
Issuance of share capital, net of issue costs
Debt repayment
Increase in debt
Other

Net Cash Provided by Financing Activities

Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents end of period

$ 21,956

4,856

$ (20,584)

4,993
—
—
1,085
175
—
—
—
(841)
578
2,577
30,523

1,187
(4,240)
690
906
10
29,076

(4,539)
(31,142)
(10,691)
(22,833)
—
1,192
1,000
(1,027)
(68,040)

113,408
(5,289)
799
—
108,918

2,459
46
(170)
78
—
(425)
—
—
(465)
—
838
7,217

(746)
(424)
45
(906)
(293)
4,893

(208)
(12,075)
(3,430)
—
310
—
5,425
(392)
(10,370)

29,095
(6,502)
2,384
7
24,984

69,954
20,016
$ 89,970

19,507
509
$ 20,016

3,423
209
(583)
—
15,010
—
(89)
782
(244)
—
(1,085)
(3,161)

(255)
3,139
2,742
—
(36)
2,429

(2,798)
(2,376)
(1,018)
—
1,068
—
—
(62)
(5,186)

2,282
(1,068)
826
235
2,275

(482)
991
509

See Note 19 for supplemetal cash flow information.
The accompanying notes are an integral part of these consolidated financial statements.

G O L D E N S TA R R E S O U R C E S LT D .

N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

(All amounts in tables are in thousands of United States dollars unless noted otherwise)

1. Description of Business

We are an international gold mining and exploration company producing gold in Ghana in West Africa. Through our sub-
sidiaries and joint ventures we own a controlling interest in four gold properties in Ghana; the Bogoso property (“Bogoso”),
the Prestea property (“Prestea”), the Wassa property (“Wassa”) and the Prestea underground property (“Prestea
Underground”). Bogoso and Prestea are adjoining properties and both are owned by our 90% owned subsidiary Bogoso
Gold Limited (“BGL”). These two properties now function as a single operation referred to as “Bogoso/Prestea”.

The Prestea Underground, acquired in 2002 via a joint venture, is located under our Prestea property and consists of a
currently inactive underground gold mine and associated support facilities, which ceased operating in early 2002. BGL
owns a 66% managing interest in this joint venture as of December 31, 2003 and studies are now underway, under
our direction, to determine if the Prestea Underground mine can be profitably reactivated under our management.

We also own a 90% equity interest in Wexford Goldfields Limited (“Wexford”) which owns Wassa and its associated
mining rights, located some 35 kilometers east of Bogoso/Prestea. A CIL processing plant and associated facilities
are currently under construction at Wassa and we expect gold production to commence early in 2004.

We hold active exploration properties in Ghana and in Suriname and, through our 73%-owned subsidiary, Guyanor
Ressources S.A. (“Guyanor”), we hold interests in gold exploration properties in French Guiana. We also hold inter-
ests in exploration joint ventures, managed by our joint venture partners, in South America, and in Mali and Sierra
Leone in West Africa.

2. Changes in Accounting Policies

(a) Asset retirement obligations — On January 1, 2003 we adopted the provisions of Canadian Institute
of Chartered Accountant’s Handbook Section 3110, “Asset Retirement Obligations” (“CICA 3110).
We also adopted for our US GAAP financial statements, the Financial Accounting Standards Board’s
Statement of Financial Accounting Standard No. 143, “Accounting for Asset Retirement
Obligations” (“SFAS 143’) which is essentially identical to CICA 3110 and which was effective
January 1, 2003. Prior to the adoption of these new standards an accrual was made on each ton
mined in an amount designed to accumulate an accrual equal to estimated future reclamation and
closure costs. CICA 3110 and SFAS 143 require that estimated future cash reclamation and closure
costs be discounted and an asset recorded for the discounted value of the estimated future costs.
It also requires that an accretion expense be recognized in each period which increments the
recorded liability to eventually equal the cash reclamation costs by the time the projected reclama-
tion work is performed.

(b) Stock option expense — In 2003 we adopted the provisions of CICA 3870, “Stock-Based
Compensation and Other Stock-Based Payments”. Accordingly we adopted a fair value based
approach wherein the fair value of option grants is established at the date of the grant using a Black-
Scholes option pricing model. Compensation expense, equal to the option’s fair value, is then rec-
ognized over the option’s vesting periods. For our US GAAP financial statements we also adopted
SFAS 148, “Accounting for Stock-Based Compensation – Transition and Disclosure: an amendment
of SFAS 123,” which prescribes essentially the same accounting treatment for stock options as
does CICA 3870.

3. Summary of Significant Accounting Policies

Basis of Consolidation and the Preparation of Financial Statements

These consolidated financial statements are prepared and reported in United States dollars and in accordance with
generally accepted accounting principles in Canada, (“Canadian GAAP”) which differ in some respects from GAAP
in the United States (“US GAAP”). These differences are quantified and explained in Note 22. The consolidated finan-
cial statements include the accounts of the Company and its majority owned subsidiaries and joint ventures. All
material inter-company balances and transactions have been eliminated.

Fiscal Year

Our fiscal year runs from January 1 to December 31.

Use of Estimates

Preparation of our consolidated financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that can affect reported amounts of assets, liabilities,
revenues and expenses. Accounting policies relating to asset impairments, deprecation and amortization of mine
property and property plant and equipment, and site reclamation/closure accruals are subject to estimates and
assumptions regarding reserves, gold recoveries, future gold prices and future mining activities.

Cash and Cash Equivalents

We consider all highly liquid marketable securities with maturities at date of purchase of less than 91 days to be
cash equivalents. Our cash equivalents consist mostly of US and Canadian government treasury bills, agency notes
and money market funds.

Inventories

Stockpiled ore, in-process ore and finished inventory are recorded at the lower of cost or market, including direct
production costs and attributable operating expenses including depreciation. Materials and supplies are valued at the
lower of average cost or replacement cost.

Marketable Securities

Short term investments in publicly traded marketable securities are recorded at the lower of cost or quoted market
prices, with unrealized losses included in income. The market value is based on the closing price at the end of the
period, as reported on recognized securities exchanges.

Exploration Property Acquisition, Deferred Exploration and Development Costs

Acquisition, exploration and development costs of exploration properties are capitalized until viability of the mineral inter-
est owned, or under option, is determined. Exploration costs not directly related to a property are expensed as incurred.

Management periodically reviews the carrying value of investments in acquisition, deferred exploration and develop-
ment costs. A decision to abandon, reduce or expand a specific project is based upon many factors including general
and specific assessments of reserves and mineralized material, anticipated future mineral prices, the anticipated future
costs of exploring, developing and operating a producing mine, the expiration term and ongoing expenses of maintain-
ing leased mineral properties and the general likelihood that we will continue exploration. We do not set a pre-deter-
mined holding period for properties with unproven reserves; however, properties which have not demonstrated suit-
able metal concentrations at the conclusion of each phase of an exploration program are re-evaluated to determine if
future exploration is warranted and if their carrying values are appropriate.

If an exploration property is abandoned or it is determined that its carrying value cannot be supported by future pro-
duction or sale, the related costs are charged against operations in the year of abandonment or determination of
value. Any costs incurred for a particular project afterward are expensed as incurred.

The accumulated costs of mineral properties are reclassed as mine property and depleted on a units-of-production
basis at such time as production commences.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the car-
rying value may not be recoverable. If deemed impaired, an impairment loss is measured and recorded based upon
the recoverable value of the asset which generally will be computed using discounted future cash flows. Estimates
of future cash flows are subject to risks and uncertainties and therefore, it is possible that unexpected changes could
affect the recoverability of investments in long-lived assets.

Property, Plant and Equipment

Property, plant and equipment assets, including buildings, machinery, equipment, facilities and vehicles are recorded at
cost, including direct acquisition costs. Depreciation is computed using the straight-line method at rates calculated to
depreciate the cost of the assets, less their anticipated residual values, if any, over their estimated useful lives.
Buildings and processing facilities are depreciated over the life of the reserves of the associated mining property.
Mining equipment, miscellaneous equipment and light vehicles are depreciated over five years. The net book value of
property, plant and equipment assets at property locations is charged against income if the site is abandoned and it is
determined that the assets cannot be economically transferred to another project or sold. Major overhauls of mining
equipment that extend the life of such equipment are capitalized and depreciated on a straight-line basis.

Environmental Rehabilitation

Environmental reclamation and closure liabilities are recognized at the time of environmental disturbance in amounts
equal to the discounted value of expected future reclamation and closure costs. The discounted cost of future reclama-
tion and closure activities is capitalized into mine property and amortized over the life of the property. The estimated
future cash costs of such liabilities are based primarily upon environmental and regulatory requirements of the various
jurisdictions in which we operate. Cash expenditures for environmental remediation and closure are netted against the
accrual as incurred.

Foreign Currencies and Foreign Currency Translation

Our functional currency is the United States dollar. Transaction amounts denominated in foreign currencies are trans-
lated to US dollars at exchange rates prevailing at the date of the transaction. The carrying value of monetary assets
and liabilities is translated at the rate of exchange prevailing at the balance sheet date. Non-monetary assets are
translated at the rates of exchange prevailing when the assets were acquired or the liabilities assumed. Revenue
and expense items are translated at the average rate of exchange during the period. Translation gains or losses are
included in net earnings for the period.

Canadian currency in these financial statements is denoted as “Cdn$”, French currency is denoted as “Euro”, and
Ghanaian currency is denoted as “Cedi” or “Cedis”.

Net Income/(Loss) per Share

Basic income per share is calculated by dividing income/(loss) available to common shareholders by the weighted
average number of common shares outstanding during the period. The calculation of diluted net income/(loss) per
common share uses the treasury stock method to compute the dilutive effects of stock options and warrants.

Revenue Recognition

Revenue from the sale of gold is recognized when title and the risk of ownership pass to the buyer. Title and risk of
ownership pass to the buyer when doré is delivered into the buyer’s custody. Our gold is sold to a European bank
and revenue is recognized when title is transferred to the customer at the Accra International Airport in Ghana. The
sales price is based on the London P.M. fix on the day of delivery.

Stock Based Compensation

As permitted by CICA Handbook Section 3870, “Stock Based Compensation and other Stock-based Payments” we
elected in the fourth quarter of 2003 to prospectively measure and expense the fair value of options granted to
employees and directors during 2003. The fair value of options granted is established at the date of the grant, using
the Black-Scholes option-pricing model. Compensation expense for options with immediate vesting is recognized in
the period of the grant. Compensation expense for options with graded vesting is recognized on a straight line basis
over the vesting periods.

4. Financial Instruments

(a) Fair Value — Our financial instruments are comprised of cash, short-term investments, accounts receivable,
restricted cash, accounts payable, accrued liabilities, accrued wages, payroll taxes and debt. The fair value of cash
and short-term investments, accounts receivable, accounts payable, accrued liabilities and accrued wages, payroll
taxes and debt equals their carrying value due to the short-term nature of these items. The fair value of restricted
cash is equal to the carrying value as the cash is invested in short-term, high-quality instruments.

(b) Commodity Instruments — In the past we have purchased put option contract (“puts”). Puts provide the right,
but not the obligation, to sell a specified number of ounces of gold at a specified price on a specified future trans-
action date. Put options thereby provide a floor price for a portion of future production but they do not limit the
upside potential of higher gold prices in excess of the specified price. If we opt to forego exercising a put option,
the put expires on its specified transaction date. We have not entered into a hedging program nor do we currently
otherwise manage exposure to commodity price risk. We may in the future more actively manage our commodity
price exposure through hedging programs.

5. Marketable Securities

All of our marketable securities were sold in June 2003 for $2.8 million, yielding a realized gain of $1.9 million.

6. Inventories

Stockpiled ore

In-process

Materials and supplies

Total

As of December 31,

2003

4,167

2,821

5,673

2002

$ 2,039

965

5,417

$ 12,661

$ 8,421

7. Guiana Shield Transaction — Gross Rosebel Royalty

In 2001 we sold our 50% interest in the Gross Rosebel exploration property in South America to Cambior Inc. In
addition to a $5.0 million payment received at closing in 2002, terms of the sale agreement provided that Cambior
would make three deferred payments of $1.0 million each and also pay a royalty on future gold production. The first
of the deferred payments was received in the first quarter of 2003. The second deferred payment is expected in the
first quarter of 2004, and the third and final payment is expected in the first quarter of 2005.

8. Deferred Exploration and Development Costs

The consolidated property expenditures for our exploration projects for the year ended December 31, 2003 were as follows:

Deferred
Exploration &

Capitalized
Development Costs Exploration
Expenditures

as of 12/31/02

Deferred
Exploration &

Acquisitions

Impairment Development Costs
Write-offs

as of 12/31/03

AFRICA:

Obuom

Bogoso Sulfide Project

Akropong Trend Properties

Beta Boundary

Other Bogoso Area Properties

Other West Africa

SURINAME:

Saramacca

FRENCH GUIANA

Yaou

Dorlin

TOTAL

Bogoso Sulfide Project

$ 269

3,621

787

—

119

972

814

109

130

197

—

$ —

2,190

—

$ —

—

(109)

—

(33)

$ 278

5,930

1,759

814

—

130

197

—

$ 4,743

$ 2,350

$ 2,190

$ (175)

$ 9,108

The 1999 Bogoso purchase agreement required us to pay the Bogoso sellers an amount equal to $5.0 million plus
subsequent increases for inflation when we initiated sulfide mining at Bogoso. The payment date was to be the first
anniversary of the commencement of treatment of sulfide ore at the Bogoso Mine. In February 2003 we paid the
Bogoso sellers $2.0 million, plus expenses of approximately $0.2 million, to satisfy these obligations in full.

Consolidated property expenditures for our exploration projects for the year ended December 31, 2002 were as follows:

Deferred
Exploration &
Development Costs
as of 12/31/01

Capitalized
Exploration
Expenditures

$ —

3,572

642

8,066

—

145

—

Acquisitions

Sale of
Property

$ 255

$ —

—

(8,066)

—

Deferred
Exploration &
Development Costs
as of 12/31/02

$ 269

3,621

787

—

$12,280

$ 208

$ 321

$(8,066)

$ 4,743

AFRICA:

Obuom

Bogoso Sulfide Project

Akropong Trend Properties

SURINAME:

Gross Rosebel

FRENCH GUIANA

Yaou

Dorlin

TOTAL

9. Property, Plant and Equipment

As of December 31, 2003

As of December 31, 2002

Property
Plant and
Equipment
at Cost

Accumulated
Depreciation

Property.
Plant and
Equipment
Net Book
Value

Property,
Plant and
Equipment
at Cost

Property
Plant and
Equipment
Net Book
Value

Accumulated
Depreciation

Bogosa/Prestea

$ 15,765

4,143

$ 11,622

$ 5,829

3,180

$ 2,649

Prestea Underground

Guyanor

Wassa

Corporate & other

227

1,985

6,259

782

—

1,952

—

721

227

6,259

325

1,981

5,460

732

—

1,940

—

717

325

5,460

TOTAL

$ 25,018

6,816

$ 18,202

$ 14,327

$ 5,837

$ 8,490

10. Mining Properties

As of December 31, 2003

As of December 31, 2002

Mine
Property
at Cost

Accumulated
Amortization

Mine
Property, Net
Book Value

Mine
Property
at Cost

Accumulated
Amortization

Mine
Property, Net
Book Value

Bogosa/Prestea

$ 41,885

$ 16,856

$ 25,029

$ 24,798

$ 12,842

$ 11,956

Prestea Underground

Wassa

Mampon

TOTAL

8,560

9,778

13,441

—

8,560

9,778

13,441

5,525

—

5,525

—

$ 73,664

$ 16,856

$ 56,808

$ 30,422

$ 12,842

$ 17,580

Some prior period numbers have been adjusted to conform with current year presentation.

Mampon Gold Property Transaction

In June 2003, we acquired from Ashanti Goldfields Company Limited their rights to Mampon for $9.5 million.
Mampon is located on the Asikuma prospecting license in Ghana which was owned by Birim Goldfields Inc. and which
is contiguous with the northern boundary of Bogoso/Prestea. Ashanti acquired the rights to Mampon from Birim in
1999. Exploration data supports the establishment of a probable mineral reserve of approximately 161,000 ounces.
In addition to the $9.5 million purchase price, we agreed to assume Ashanti’s responsibility to pay a royalty to Birim
for any future production from Mampon.

Subsequent to the Mampon purchase, in a separate transaction in August 2003, we purchased from Birim for $3.4
million its right to collect the Mampon royalty, effectively canceling the Mampon royalty. As part of the same Birim
transaction we purchased Birim’s rights to the Asikuma and Mansiso prospecting licenses which we now refer to as
the Dunkwa properties.

11. Mine Construction-in-Progress

Mine construction in progress represents costs incurred at the Wassa project subsequent to acquisition. The balance
includes feasibility study costs, equipment purchases and construction costs, including interim payments to the con-
struction contractor and development costs.

12. Debt

Current Debt

Overdraft facility at BGL (Note a)

Bank loan at BGL (Note b)

Accrual of liability to sellers of BGL (Note c)

Current portion bank loan at Wassa (Note d)

Equipment financing loans — Wassa (Note e)

Total Current debt

Long Term Debt

Bank loan at Wassa (Note d)

Equipment financing loans — Wassa (Note e)

Total Long Term debt

As of December 31,

2003

$ —

—

142

$ —

657

$ 657

2002

914

534

2,000

115

—

$ 3,563

$ 1,727

—

$ 1,727

(a) Overdraft facility at BGL — Revolving Over-Draft Facility at BGL from Barclays Bank (Ghana) in the amount of $1.0 million.
At December 31, 2003 no amounts were drawn on this line of credit.

(b) Bank Loan — A term loan to BGL from CAL Merchant Bank in Ghana in the original amount of $0.8 million. The final
installment on this loan was paid in December 2003.

(c) Accrual of Liability to Sellers — The original BGL purchase agreement of September 1999 included a contingent $2.0
million reserve-acquisition payment, due the sellers of BGL, which was triggered by BGL’s acquisition of the Prestea
reserves in late 2001. This liability was paid in February 2003.

(d) Wassa Bank Loan — A $1.8 million term loan provided by the sellers of Wassa. Repayment was scheduled to begin
on December 13, 2003 with installments following every three months thereafter, and final payment on September 13,
2007. Interest from September 13, 2002 until repayment begins was capitalized into the loan. This loan, including accrued
interest, was repaid in October 2003.

(e) Caterpillar Financial Services Corporation — A $0.8 million installment loan used to purchase mobile equipment at
Wassa. Repayable in 60 equal monthly installments beginning January 2004. Interest rate is 6.25%.

13. Asset Retirement Obligations — Change in Accounting Method

Effective January 1, 2003, we changed our accounting policy for asset retirement obligations to comply with CICA
Handbook Section 3110, “Asset Retirement Obligations.” This change was made on a retroactive basis. Upon the
adoption of this new standard, we recognized a $0.5 million reduction in the carrying value of liabilities related to
future reclamation and other asset retirement obligations. The cumulative effect of the adoption of this new stan-
dard totaled $0.5 million and was recorded as a reduction in the deficit account in shareholders’ equity.

Our Asset Retirement Obligations (“ARO”) recognize the present value of the ultimate closure cost associated with
reclamation, demolition and stabilization of our mining properties. Included in this liability are the costs of mine closure
and reclamation, processing plant and infrastructure demolition, tailings pond stabilization and reclamation and environ-
mental monitoring costs.

The changes in the carrying amount of the ARO during 2003:

Asset Retirement Obligations

Balance at beginning of the year as adjusted by the adoption of CICA 3110

Accretion expense

Reclamation work performed

New AROs incurred during the period

Balance at December 31, 2003

Year ended
December 31, 2003

$ 6,816

578

(841)

1,192

$ 7,745

Prior periods have not been restated in the financial statements due to the immaterial amounts of the adjustments.
We also adopted Statement of Financial Accounting Standard 143, “Accounting for Asset Retirement Obligations”
for US GAAP reporting purposes at the beginning of 2003. The provisions of SFAS 143 are very similar to the provi-
sions of CICA 3110.

14. Commitments and Contingencies

(a) Environmental Regulations and Asset Retirement Obligations — We are not aware of any events of material
non-compliance with environmental laws and regulations in our operations which could have a material adverse effect
on our operations or financial condition. The exact nature of environmental control problems, if any, which we may
encounter in the future cannot be predicted, primarily because of the changing character of environmental require-
ments that may be enacted within foreign jurisdictions. Asset retirement obligations, which include environmental reha-
bilitation liabilities for reclamation and for closure costs, were $5.2 million at Bogoso/Prestea at December 31, 2003,
up from $4.9 million at December 31, 2002. Asset retirement obligations at Wassa totaled $2.5 million at December
31, 2003, up from $2.3 million at the end of 2002.

(b) Cash Restricted for Environmental Rehabilitation Liabilities — In 1999, we were required, according to the
acquisition agreement with the sellers of BGL, to restrict $6.0 million of cash to be used for the ongoing and final
reclamation and closure costs at Bogoso. The withdrawal of these funds must be agreed to by the sellers, who are
ultimately responsible for the reclamation in the event of our non-performance. In the past the sellers have agreed to
allow disbursement of portions of the restricted cash to us equal to the cash costs we have incurred for work per-
formed but there have been no agreements for disbursements since 2001. Following the final payment to the sellers
of BGL, we are seeking to obtain an amendment to the agreement that would remove the restriction and in its place
establish a reclamation bond to meet Ghana’s Environmental Protection Agency’s reclamation bonding requirements.
At December 31, 2003, approximately $3.3 million of restricted cash was held as a cash provision against future recla-
mation commitments at Bogoso.

(i) Wassa: As part of the consideration paid for the Wassa assets, a gold production royalty (“First
Royalty”) was to be paid to the sellers on future production from the Wassa property. The First
Royalty was set at $7.00 per ounce of gold produced, increasing by $1.00 per ounce for each $10.00
increase in the price of gold above $280 per ounce up to a maximum royalty of $15.00 per ounce
at gold prices of $350 per ounce and above. This royalty was capped at $38 million over the life of
the mine. We also agreed to pay the sellers a second production royalty of $8.00 per ounce capped
at $5.5 million. This royalty was in addition to the First Royalty described above. In October 2003
both of these royalties were repurchased from the sellers of Wassa for a total of $11.5 million.
(ii) Bogoso/Prestea: A gold production royalty was included as a component of total consideration paid
for the acquisition of Prestea in October 2001. The royalty was payable on the first one million
ounces of gold produced from Bogoso/Prestea following our purchase of Prestea. The amount of
the royalty varied, according to a gold price formula, from a minimum of $6.00 per ounce at gold
prices less than $260 per ounce to a maximum of $16.80 per ounce at gold prices at or above $340
per ounce. In November 2003 we repurchased this royalty for $12.0 million.

(iii) Dunkwa Properties:

In August 2003, as part of the transaction described in Note 10 above, we
agreed to pay Birim a net smelter return royalty on future gold production from the Mansiso and
Asikuma properties (the Dunkwa Properties), excluding any royalty on the first 200,000 ounces pro-
duced from Mampon which is located on the Asikuma property. The amount of the royalty is based
on a sliding scale which ranges from 2% of net smelter return at gold prices of or below $300 per
ounce up to 3.5% for gold prices in excess of $400 per ounce.

(iv) Government of Ghana: Under the laws of Ghana, a holder of a mining lease is required to pay an
annual royalty of not less than 3% and not more than 12% of the total revenues earned from the
lease area. The royalty is payable on a quarterly basis. We currently pay a 3% annual royalty on gold
production from Bogoso/Prestea and expect to pay a royalty at a similar rate on Wassa production.
The Government of Ghana retains the right to increase the amount of the royalty to as much as
12% based upon a formula related to a company’s operating margin.

(d) Wassa Construction Contract — We entered into a contract with Metallurgical Design and Management (Pty)
Ltd. (“MDM”), a South African company, in July 2003, for the construction of the CIL processing plant facility and
other associated processing facilities at Wassa. Payments to MDM during 2003 totaled $12.6 million. The total con-
tract amount is set at $14.3 million.

(e) Mano River Joint Venture — We entered into a joint venture agreement in late 2003 to invest up to $6 million over
the next four years in the Mano River project in Sierra Leone via an earn-in agreement with a junior exploration compa-
ny which now holds a group of gold exploration properties in Sierra Leone. The initial $6 million, if fully funded (we can
terminate the agreement after spending $1.0 million) would yield a 51% interest in the joint venture. Further provisions
of the joint venture agreement provide the opportunity to acquire up to 85% of the joint venture by continued long term
funding. The joint venture agreement is subject to completion of documentation. Spending during 2003 was nil.

(f) Mininko Joint Venture — In late 2003 we entered into a joint venture agreement, agreeing to fund exploration work
on the Mininko gold property in Mali. Funding of $2.6 million would earn a 51% interest in the joint venture. We can ter-
minate the joint venture after spending $0.4 million of which $0.1 million was spent in 2003 and included in deferred
exploration costs. The joint venture agreement provides that we can earn up to an 82.5% interest by continued funding
of exploration and development, if warranted. The joint venture agreement is subject to completion of documentation.

15. Warrants

At December 31, 2003 there were five series of warrants outstanding to purchase a total of 17.3 million common
shares. Of the total, 8.7 million were issued during 2003 and 8.6 million were issued during 2002:

Issued with:

Equity offering

Broker warrants

Private placement

Equity offering

Broker warrants

Total

Date issued

July 24, 2002

Dec. 12, 2002

Feb. 14, 2003

Warrants
outstanding

7,728,700

385,000

490,000

8,448,334

280,500

17,332,534

Exercise
price

Cdn$2.28

$1.50

Cdn$4.60

Cdn$3.00

Term

2 years
2 years(1)
2 years

Expiration
date

July 24, 2004

July 24, 2005

December 12, 2004

4 years

February 14, 2007

1.25 years

May 14, 2004

(1) The July 24, 2002 broker warrants are exercisable during a two-year period beginning July 24, 2003.

The investors’ warrants issued in conjunction with the July 24, 2002 equity offering are traded on the Toronto Stock
Exchange under the symbol GSC.WT. The investors’ warrants issued in conjunction with the February 14, 2003 equity offer-
ing are traded on the Toronto Stock Exchange under the symbol GSC.WT.A. There is no public market for our other warrants.

16. Stock Based Compensation

(a) Stock Options — We have one stock option plan, the 1997 Stock Option Plan, as amended (the “GSR Plan”) and
options are granted under this plan from time to time at the discretion of the Board of Directors. Options granted are
non-assignable and are exercisable for a period of ten years or such other period as stipulated in a stock option agree-
ment between Golden Star and the optionee. Under the GSR Plan, we may grant options to employees, consultants
and directors of the Company or its subsidiaries for up to 9,000,000 shares of common stock. Options take the form
of non-qualified stock options, and the exercise price of each option is not less than the market price of our stock on
the date of grant. Options typically vest over periods ranging from immediately, to four years from the date of grant.
Vesting periods are determined at the discretion of the Board of Directors.

The following tables summarize information about options under the GSR Plan:

GSR Plan

Outstanding at beginning of year

Granted

Exercised

Forfeited

Outstanding at end of year

Options vested and

Shares
(000s)

4,489

2,354

(1,518)

(84)

5,241

exercisable at year-end

3,803

Weighted-average fair value of

options granted during the year

2003

2002

2001

Weighted-
Average
Exercise
Price (Cdn$)

1.36

3.99

1.73

2.92

2.41

1.81

1.25

Shares
(000s)

4,595

640

(548)

(198)

4,489

4,006

Weighted-
Average
Exercise
Price (Cdn$)

1.42

1.17

1.49

1.76

1.36

1.40

0.86

Shares
(000s)

4,821

938

—

(1,164)

4,595

3,607

Weighted-
Average
Exercise
Price (Cdn$)

1.56

1.02

—

1.69

1.42

1.49

1.02

Options Outstanding

Options Exercisable

GSR Plan
Range of Exercise
Prices (Cdn$)

1.00 to 2.50

2.51 to 4.00

4.01 to 7.00

7.01 to 10.00

Number
Outstanding at
Dec. 31, 2003
(000s)

Weighted-
Average
Remaining
Contractual
Life (years)

3,423

1,379

225

214

5,241

6.4

9.2

9.7

10.0

7.4

Options granted during 2003:

Weighted-
Average
Exercise
Price (Cdn$)

Number
Exercisable
Dec. 31, 2003
(000s)

Weighted-
Average
Exercise
Price (Cdn$)

1.41

3.44

5.25

8.83

2.41

3,167

526

3,803

Date
Granted

January 30, 2003

March 21, 2003

July 30, 2003

September 18, 2003

October 30, 2003

December 18, 2003

Total

Options granted during 2002:

Date
Granted

January 29, 2002

July 29, 2002

Total

Number of
Options
(000s)

1,134

225

556

225

182

2,354

Number of
Options
(000s)

608

640

Strike Price
(Cdn$)

Fair Value per
option (Cdn$)

Total Fair
Value
(000s of Cdn$)

3.14

2.39

4.00

5.25

7.45

9.07

0.96

0.90

1.17

1.94

2.21

2.67

1,093

203

648

436

486

2,937

Strike Price
(Cdn$)

Fair Value per
option (Cdn$)

1.16

1.40

0.83

1.27

Total Fair
Value
(000s of Cdn$)

505

546

1.37

3.34

5.25

8.83

1.81

Option
Life

10 years

Option
Life

10 years

The fair value of options granted during 2003, 2002 and 2001 were estimated at the grant dates using the Black-
Scholes option-pricing model with the following weighted average assumptions:

Expected volatility

Risk-free interest rate

Expected lives

Dividend yield

2003

34%

2002

2001

89% to 102%

81% to 84%

3.01% - 4.46%

3.68% - 4.47%

4.94% - 5.08%

4 to 5 years

5 years

In November 2003 the Accounting Standards Board of the Canadian Institute of Certified Accountants amended CICA
Handbook CICA 3870, — “Stock-based Compensation and other Stock-based Payments” to require expensing of all
stock based compensation awards for fiscal years beginning on or after January 1, 2004. In light of this development in
2003 we adopted the new provision of CICA 3870. As a result we recognized stock based compensation expense of
approximately $1.0 million in 2003 for stock options granted during 2003. As an incentive for early adoption, Section 3870
did not require retroactive adjustments and restatements of prior years’ financial data.

Prior to 2003 we did not recognize compensation costs related to stock options granted. Had compensation costs
been recognized for options vesting in 2002 and 2001, our net income and earnings per share would have been
reduced to the pro forma amounts shown below:

Net income/(loss)

Net income/(loss) per share

As reported

Pro forma

As reported

Pro forma

2003

$ 21,956

$ 21,882

0.198

2002

$ 4,856

$ 4,339

$ 0.07

$ 0.06

2001

$ (20,584)

$ (21,073)

(0.49)

(0.50)

(b) Stock Bonus Plan — In December 1992, we established an Employees’ Stock Bonus Plan (the “Bonus Plan”)
for any full-time or part-time employee (whether or not a director) of the Company or any of our subsidiaries who
has rendered meritorious services, which contributed to the success of the Company or any of its subsidiaries. The
Bonus Plan provides that a specifically designated committee of the Board of Directors could grant bonus common
shares on terms that it might determine, within the limitations of the Bonus Plan and subject to the rules of appli-
cable regulatory authorities. The Bonus Plan, as amended, provided for the issuance of 900,000 common shares of
bonus stock of which 445,820 common shares have been issued as of December 31, 2003.

During 2003, 2002 and 2001 a total of 57,200, 107,000 and nil common shares respectively were issued to employees
pursuant to the Bonus Plan. We recognized compensation expense related to bonuses under the Bonus Plan during
2003, 2002 and 2001 of $117,800, $78,000 and nil.

17. Income Taxes

We recognize future tax assets and liabilities based on the difference between the financial reporting and tax basis
of assets and liabilities using the enacted tax rates expected to be in effect when the taxes are paid or recovered.
We provide a valuation allowance against future tax assets for which we do not consider realization of such assets
to meet the required “more likely than not” standard.

We have not provided current nor future income tax for any of the periods presented because our loss carryovers
and other future tax assets exceed our future tax liabilities. A full valuation allowance has been provided against our
net future tax assets.

Our future tax assets and liabilities at December 31, 2003 and 2002 include the following components:

Future tax assets:

Offering costs

Loss carryovers

Tax pools

Valuation allowance

Future tax assets

Future tax liabilities:

Mine property costs

Future tax liabilities

Net future tax assets/(liabilities)

2003

2002

$ 2,835

$ 1,226

62,745

16,366

(66,222)

47,287

13,456

(60,295)

$ 15,724

1,674

$ (15,724)

—

$ (1,674)

—

A reconciliation of expected income tax on net income/(loss) before minority interest at statutory rates with the actual
expenses (benefit) for income taxes is as follows:

Net income (loss) before minority interest

Statutory tax rate

Tax expense (benefit) at statutory rate

Enacted future tax rate reductions

Foreign tax rates

Change in tax rates

Expired loss carryovers

Ghana investment allowance

Nondeductible stock option compensation

Loss carry over not previously recognized

Ghana property basis not previously recognized

Foreign exchange (gain) loss

Change in valuation allowance

Income tax expense (benefit)

2003

2002

$ 24,533

$ 5,694

34.1%

8,365

(490)

(6,489)

—

2,866

(636)

129

—

716

(8,283)

3,822

36.1%

2,057

(228)

(797)

5,870

1,861

(339)

—

(9,766)

(5,571)

(3,214)

10,127

2001

$ (22,252)

45.6%

(10,151)

(391)

—

1,214

(79)

—

1,130

8,277

—

During 2003, 2002 and 2001, we recognized $6,445,000, $2,558,000 and $1,874,000, respectively, of share offering costs.
Shareholders’ equity had been credited in the amounts of $2,074,000, $822,000 and $602,000 for the tax benefits of these
deductions; however a valuation allowance had been provided against the full amount of these tax benefits.

At December 31, 2003 we had loss carryovers expiring as follows:

2004

2005

2006

2007

2008

2009

2010

Indefinite

Total

Canada

4,513

9,483

2,334

1,360

2,006

19,564

50,953

$ 90,259

Ghana

—

12,660

—

58,279

$ 70,939

France

$ 11,467

21,301

44,140

2,517

2,591

—

$ 82,016

18. Earnings per Common Share

The following table provides a reconciliation between basic and diluted earnings per common share:

Net Income/(Loss)

Shares (in millions)

Weighted average number of common shares

Dilutive Securities:

Options

Warrants

Weighted average number of dilutive common shares

Basic Income/(Loss) Per Common Share

Diluted Income/(Loss) Per Common Share

For the years ended December 31,

2003

2002

2001

$ 21,956

$ 4,856

$ (20,584)

111.0

2.7

4.2

117.9

0.198

0.186

72.4

1.6

2.7

76.7

42.2

—(1)
—(1)

42.2

$ 0.070

$ 0.063

$ (0.488)

(1) Since there was a loss in 2001, inclusion of dilutive securities would have been anti-dilutive.

19. Supplemental Cash Flow Information

The following is a summary of non-cash transactions:

For the years ended December 31,

2003

2002

2001

Investing:

Depreciation charged to projects

Repayment of note by minority interest holder

Adjustment to minority interest from note payments

Mining properties

Anvil Purchase transaction:

Purchase of Anvil’s minority interest

Common shares issued for Anvil’s minority interest

Mining property

Extinguishment of note receivable from Anvil

Mine property Prestea reserve liability

Mine property Prestea

Prestea acquisition costs paid with common shares

Common shares issued for Prestea acquisition cost
Receivable on sale of property

Acquisition, deferred exploration and development

Wassa property acquisition

Property, plant and equipment

Reclamation liability assumed

Assumption of bank debt

Minority interest in Prestea Underground joint venture

Mine property Prestea Underground joint venture

Warrants issued for Obuom acquisition

Obuom property acquisition

Acquisition of properties in French Guiana

Guiana Shield transaction property exchange

Barnex royalty buy-back

Common shares issued for Barnex royalty buy-back

Financing:

Equity component of convertible debentures

Common shares issued upon conversion of convertible debentures

Conversion of convertible debentures

Adjustment of final amount due sellers of BGL

Accrual of liability due the sellers

Common shares issued to Barnex for Prestea purchase

—

—
—

—

12,045

(12,045)

—

(400)

400
(3,000)

3,000

(4,120)

2,302

1,818

2,400

(2,400)

255

(255)

(66)

—

(545)

2,903

(2,358)

—

150

(150)

(1,549)

1,081

(1,388)

1,857

(2,000)

(2,493)

—

—
—

—

(439)

1,469

(1,030)

(85)

2,000

2,493

There was no cash paid for taxes during 2003, 2002 and 2001. Cash paid for interest was less than $0.1 million in
2003, $0.4 million in 2002 and $0.4 million in 2001.

20. Operations by Geographic Area

The following geographic data includes revenues based on product shipment origin and long-lived assets based on phys-
ical location. The corporate entity has assets in Canada and in the United States.

2003

South America

Africa

North America — Corporate

Total

2002

South America

Africa

North America — Corporate

Total

2001

South America
Africa

North America — Corporate

Total

21. Related Parties

Revenues

Net
Income (Loss)

Identifiable
Assets

102

$ (1,411)

352

63,640

628

23,082

285

129,409

92,630

$ 64,370

$ 21,956

$ 222,391

466

$ (1,106)

189

38,199

137

8,089

(2,127)

50,707

23,239

$ 38,802

$ 4,856

74,135

548
24,105

$ 24,658

$ (15,373)
(3,019)

(2,192)

$ (20,584)

8,429
27,572

551

$ 36,552

Our President and CEO, Peter J. Bradford, participated in our private placement in January 2002, paying $98,000 for
200,000 units, each unit consisting of one share of our common stock and one half warrant to purchase our common
shares at $0.70 until January 11, 2004. In December 2003 Mr. Bradford exercised the 100,000 warrants obtained in
this transaction.

During 2003 we obtained legal services from a legal firm to which one of our directors is of counsel. Total value of
all services purchased during 2003 was $169,000. Our director did not personally perform any legal services for us
during 2003 nor did he benefit directly or indirectly from payments for the services performed by the firm.

22. Generally Accepted Accounting Principles in Canada and the United States

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted
in Canada which differ from US GAAP. The effect of applying US GAAP to our financial statements is shown below.

(a) Balance Sheets Under US GAAP

Cash and short term investments

Accounts receivable

Inventories

Due from sale of property

Marketable securities (note 1)

Other current assets

Total current assets

Restricted cash

Acquisition, deferred exploration and
development costs (note 2)

Due from sale of property

Mine construction in progress

Property, plant and equipment, net

Mining property (note 3)

Other assets

Total Assets

Current liabilities

Long term debt

Asset retirement obligations (note 4)

Total Liabilities

Minority interest (notes 2 and 3)

Share capital

Accumulated comprehensive income (note 1)

Deficit (note 4)

Total Shareholders’ Equity

Total Liabilities and Shareholders’ Equity

As of December 31,

2003

$ 89,970

2002

$ 20,016

790

12,661

1,000

—

514

104,935

3,317

—

1,000

25,647

18,202

46,478

758

$ 200,337

8,151

657

7,745

16,553

3,367

324,609

1,316

(145,508)

180,417

$ 200,337

1,977

8,421

1,000

1,454

523

33,391

3,365

—

2,000

610

8,490

14,216

572

$ 62,644

10,88

1,727

7,246

19,853

1,722

198,070

1,864

(158,865)

41,069

$ 62,644

(b) Statements of Operations under US GAAP

2003

2002

2001

Net income/(loss) under Cdn GAAP

$ 21,956

$ 4,856

$ (20,584)

For the Years ended December 31,

Acquisition and deferred exploration expenditures

expensed per US GAAP (note 2)

Gain On Sale of exploration property (note 5)

Effect of mining property depletion

Capitalized mine property acquisition costs

expensed for US GAAP (note 3)

Other

Net income/(loss) under US GAAP before minority interest

Minority interest, as adjusted (note 2 and 3)

Net income/(loss) under US GAAP before

cumulative effect of change in accounting method

Cumulative effect of change in accounting method (note 4)

Net Income/(loss) under US GAAP

Other comprehensive income — gain on

marketable securities (note 1)

Comprehensive income/(loss)

Basic net income/(loss) per share under US GAAP before
cumulative effect of change in accounting method

Cumulative effect of change in accounting method

Basic net income/(loss) per share under US GAAP after
cumulative effect of change in accounting method

Diluted net income/(loss) per share under US GAAP before
cumulative effect of change in accounting method

Cumulative effect of change in accounting method

Diluted net income/(loss) per share under US GAAP after
cumulative effect of change in accounting method

(5,252)

—

(4,763)

—

11,941

933

12,874

483

13,357

(548)

(529)

8,066

—

(7,246)

(7)

5,140

1,612

6,752

—

6,752

548

13,815

—

500

—

633

(5,636)

334

(5,302)

—

$ 12,809

7,300

$ (5,302)

0.116

0.004

$ 0.093

$ (0.126)

—

0.120

$ 0.093

$ (0.126)

0.109

0.004

$ 0.088

$ (0.126)

—

0.113

$ 0.088

$ (0.126)

2003

2002

2001

For the years ended December 31,

Cash provided by (used in):

Operating Activities

Investing activities

Financing activities

Increase/(Decrease) in cash and cash equivalents for the year

Cash and cash equivalent beginning of the year

Cash and cash equivalents end of the year

(d) Notes

$ 19,029

$ 1,040

799

(57,993)

108,918

69,954

20,016

(6,517)

24,984

19,507

509

$ 89,970

$ 20,016

(3,556)

2,275

(482)

991

509

(1) Under US GAAP, marketable securities available for sale are marked to market and gains or losses
are recognized in Other Comprehensive Income until the securities are sold. Under Cdn GAAP, mar-
ketable securities are accounted for at the lower of cost or market.

(2) Under US GAAP, exploration, acquisition and general and administrative costs related to exploration
projects are charged to expense as incurred. Under Cdn GAAP, exploration, acquisition and general
and administrative costs related to exploration projects are capitalized. In each subsequent period,
the exploration, engineering, financial and market information for each exploration project is
reviewed by management to determine if any of the capitalized costs are impaired. If found
impaired, the asset’s cost basis is reduce in accordance with US GAAP provisions.

(3) Under US GAAP, the initial purchase cost of mining properties is capitalized. Pre-acquisition costs and
subsequent development costs incurred, until such time as a final feasibility study is completed, are
expensed in the period incurred. Under Cdn GAAP, the purchase costs of new mine properties as
well as all development costs incurred after acquisition are capitalized, and subsequently reviewed
each period for impairment. If found impaired, the asset’s cost basis is reduce in accordance with US
GAAP provisions.

(4) Asset retirement obligations: Under US GAAP the cumulative effect of applying SFAS 143
“Accounting for Asset Retirement Obligations” in January 2003 is included in net income for the
period. In Cdn GAAP, under CICA 3110 “Asset Retirement Obligations”, the cumulative effect of the
application of this new standard was recorded as an adjustment to beginning deficit account.

(5) The US GAAP basis in the Gross Rosebel deferred exploration had been expensed in prior periods.
Thus under US GAAP the full amount of the sales price was a gain. In Cdn GAAP, this property’s
basis approximated the sales price and thus there was no material impact on the statement of oper-
ations from the sale.

(e) Impact of Recently Issued Accounting Standards

In August 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting
Standard No. 143, “Accounting for Asset Retirement Obligations,” (“SFAS 143”), that established a uniform method-
ology for accounting for estimated reclamation and abandonment costs. The statement was effective January 1,
2003. We adopted the provisions of SFAS 143 as of January 1, 2003. There was no material effect on prior year’s
reported financial statements. See Note 13 for the impact on our current year’s consolidated financial statements.

In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections”. SFAS 145 updates, clarifies and simplifies existing accounting pronounce-
ments by rescinding SFAS 4, which required all gains and losses from extinguishment of debt to be aggregated and, if
material, classified as an extraordinary item, net of related income tax effect. As a result, the criteria in Accounting
Principles Board Opinion No. 30 will now be used to classify those gains and losses. Additionally, SFAS 145 amends
SFAS 13 to require that certain lease modifications that have economic effects similar to sale-leaseback transactions be
accounted for in the same manner as sale-leaseback transactions. Finally, SFAS 145 also makes technical corrections
to existing pronouncements. While those corrections are not substantive in nature, in some instances, they may
change accounting practice. The provisions of SFAS 145 that amend SFAS 13 are effective for transactions occurring
after May 15, 2002, with all other provisions of SFAS 145 being required to be adopted by us in our consolidated finan-
cial statements for the first quarter of fiscal year 2003. We believe that the adoption of SFAS 145 will not have a mate-
rial impact on our consolidated financial statements.

On July 30, 2002, the FASB issued SFAS 146 “Accounting for Costs Associated with Exit or Disposal Activities.”
SFAS 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred
rather than at the date of a commitment to an exit or disposal plan. Examples of costs covered by the standard
include lease termination costs and certain employee severance costs that are associated with a restructuring, dis-
continued operation, plant closing or other exit or disposal activity. SFAS 146 replaces the prior guidance that was
provided by EITF Issue No. 94-3 “Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring).” SFAS 146 is to be applied prospectively to
exit or disposal activities initiated after December 31, 2002. We believe that the adoption of SFAS 146 will not have
a material impact on our consolidated financial statements.

In December 2002, the FASB issued SFAS 148 “Accounting for Stock-Based Compensation, Transition and
Disclosure, an amendment of FASB Statement No. 123.” SFAS 148 provides alternative methods of transition for
an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compen-
sation. It also amends the disclosure provisions of SFAS 123 to require prominent disclosure about the effects of
reported net income of an entity’s accounting policy decisions with respect to stock-based employee compensation.
Finally, this statement amends APB Opinion No. 28, “Interim Financial Reporting,” to require disclosure about those
effects in interim financial information. The amendments to SFAS 123 are effective for financial statements for fiscal
years ending after December 15, 2002. We adopted the fair value accounting provisions of SFAS 123, and the impact
of the adoption is reflected in our financial statements as of December 31, 2003.

In November 2002, the FASB issued FASB Interpretation No. 45, “Guarantor’s Accounting for Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an interpretation of FASB 5,
57 and 107 and rescission of FASB Interpretation No. 34, Disclosure of Indirect Guarantees of Indebtedness of
Others” (FIN 45). FIN 45 clarifies the requirements for a guarantor’s accounting for and disclosure of certain guaran-
tees issued and outstanding. It also requires a guarantor to recognize, at the inception of a guarantee, a liability for
the fair value of the obligation undertaken in issuing the guarantee. This interpretation also incorporates without recon-
sideration the guidance in FASB Interpretation No. 34, which is being superseded. The adoption of FIN 45 did not have
a material effect on our consolidated financial statements.

In January 2003, the FASB issued SFAS Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpre-
tation of Accounting Research Bulletin (ARB) No. 51, Consolidated Financial Statements” (FIN 46). FIN 46 clarifies the
application of ARB No. 51 to certain entities in which equity investors do not have the characteristics of a controlling
financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subor-
dinated financial support from other parties. The adoption of FIN 46 did not have a material effect on our consolidated
financial statements.

In April 2003, the FASB issued Statement No. 149 “Amendment of Statement 133 on Derivative Instruments and
Hedging Activities”. This statement, effective as of June 30, 2003, amends Statement 133 for decisions made (1) as part
of the derivatives Implementation Group process that effectively required amendments to Statement 133, (2) in connec-
tion with other FASB projects dealing with financial instruments, and (3) in connection with implementation issues raised
in relation to the application of the definition of a derivative, in particular the meaning if an initial net investment that is
smaller than would be required for other types of contracts that would be expected to have similar response to changes
in market factors, the meaning of underlying, and the characteristics of a derivative that contains financing components.
The adoption of SFAS 149 did not have a material effect on our consolidated financial statements.

In May 2003, the FASB issued Statement No. 150 Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity”. It requires that an issuer classify a financial instrument that is within its scope as a lia-
bility (or an asset in some circumstances). Many of these instruments were previously classified as equity. Some of
the provisions of this statement are consistent with the current definition of liabilities in FASB’s Concept Statement
No. 6, Elements of Financial Statements. The remaining provisions of this statement are consistent with FASB’s pro-
posal to revise the definition to encompass certain obligations that a reporting entity can or must settle by issuing its
own equity shares, depending on the nature of the relationship established between the holder and the issuer. FASB
150 became effective May 31, 2003 and had no material effect on our consolidated financial statements.

23. Quarterly Financial Data — Unaudited

Net Sales

Gross Profit

Net Income

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

2003

$ 15,141

$ 12,693

$ 18,801

$ 17,735

5,572

3,968

3,434

3,984

7,838

6,090

9,236

7,914

Basic Earning Per Common Share

$ 0.041

$ 0.037

$ 0.053

$ 0.067

Net Sales

Gross Profit

Net Income

2002

$ 9,332

$ 9,699

$ 8,350

$ 11,421

2,447

1,454

2,954

1,557

1,762

834

1,948

1,011

Basic Earnings Per Common Share

$ 0.024

0.010

$ 0.009

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no disagreements with PricewaterhouseCoopers LLP, our chartered accountants, regarding any
matter of accounting principles or practices or financial statement disclosure.

ITEM 9A. CONTROLS AND PROCEDURES

We carried out an evaluation, under the supervision and with the participation of our principal executive officer and princi-
pal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-
15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on this evaluation, the principal executive
officer and principal financial officer have concluded that our disclosure controls and procedures are effective.

We periodically conduct an evaluation, under the supervision and with the participation of our principal executive officer
and principal financial officer as well as our Audit Committee, of our internal controls and procedures. There have been
no significant changes in our internal controls or in other factors that could significantly affect our internal controls sub-
sequent to the date of the most recent evaluation.

P A R T I I I

ITEM 10, 11, 12, 13, AND 14

In accordance with General Instruction G(3), the information required by Part III is hereby incorporated by reference
from our proxy statement to be filed pursuant to Regulation 14A not later than 120 days after the fiscal year covered
by this report.

P A R T I V

ITEM 15: E XHIBITS, FINANCIAL STATEMENT SCHEDULES AND

REPORTS ON FORM 8-K

(a) The following documents are filed as part of this Report:

Financial Statements

• Management’s Report
• Auditors’ Report
• Consolidated Balance Sheets as of December 31, 2003 and 2002
• Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001
• Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31,

2003, 2002 and 2001

• Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001
• Notes to the Consolidated Financial Statements

Financial Statement Schedules

Financial Statement schedules have been omitted since they are either not required, are not appli-
cable, or the required information is shown in the financial statements or related notes.

(b) Reports on Form 8-K

A report on Form 8-K was filed with the Securities and Exchange Commission on October 31, 2003
pursuant to Items 7 and 12 to announce financial results for the third quarter.
A report on form 8-K was filed with the Securities and Exchange Commission on December 19, 2003
with the underwriting and agency agreements entered into in connection with the December 2003
public offering.

3(i)

3(ii)

4.1

4.2

Incorporating Documents of the Company, including: Articles of Arrangement dated May 14, 1992, with
Plan of Arrangement attached, with Certificate of Amendment with respect thereto dated May 15, 1992;
Certificate of Amendment dated May 15, 1992, with Articles of Amendment; Certificate of Amendment
dated March 26, 1993, with Articles of Amendment; Articles of Arrangement dated March 7, 1995, with
Plan of Arrangement attached, with Certificate of Amendment with respect thereto dated March 14,
1995; Certificate of Amendment dated July 29, 1996, with Articles of Amendment; and Certificate of
Amendment dated July 10, 2002, with Articles of Amendment (all incorporated by reference to Exhibit
4.1 to the Company’s Form 8-K filed on January 23, 2003).
Bylaws of the Company, including: Bylaw Number One, amended and restated as of April 3, 2002
(incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-3
(Reg. No. 333-102225) filed on December 27, 2002); Bylaw Number Two, effective May 15, 1992
(incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed on January 23, 2003); and
Bylaw Number Three, effective May 15, 1992 (incorporated by reference to Exhibit 4.2 to the
Company’s Form 8-K filed on January 23, 2003).
Form of Specimen Certificate for Common Shares (incorporated by reference to Exhibit 4.1 to the
Company’s Registration Statement on Form S-3/A (Reg. No. 333-91666) filed on July 15, 2002).
Rights Agreement dated as of April 24, 1996, between the Company and the R-M Trust Company
as Rights Agent (incorporated by reference to Exhibit 4.3 to the Company’s Form 8-K filed on
January 23, 2003); Amendment to Rights Agreement between the Company and CIBC Mellon Trust
Company (formerly, the R-M Trust Company) dated as of June 30, 1999 (incorporated by reference
to Exhibit 10.1 to the Company’s Form 10-Q for the period ended June 30, 1999).

4.3 Warrants dated as of September 11, 2001 between the Company and Barnato Exploration Limited (incor-
porated by reference to Exhibit 4.4 to the Company’s Form 10-K for the year ended December 31, 2002).
4.4 Warrants dated as of September 11, 2001 between the Company and Ware Limited (incorporated

by reference to Exhibit 4.5 to the Company’s Form 10-K for the year ended December 31, 2002).

4.5

Form of Warrant, dated as of January 2, 2002 (incorporated by reference to the Company’s Form S-3
(Reg. No. 333-82106) filed on February 4, 2002).

4.6 Warrant Indenture, dated July 17, 2002, among the Company and CIBC Mellon Trust, as Trustee,
including the Form of Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K
filed on August 5, 2002).
Form of Underwriters’ Warrants (incorporated by reference to Exhibit 4.3 to the Company’s
Registration Statement on Form S-3/A (Reg. 333-91666) filed on July 15, 2002).
Form of Warrant, dated December 12, 2002 (incorporated by reference to Exhibit 4.1 to the
Company’s Form 8-K filed on December 13, 2002).

4.8

4.7

4.9 Warrant Indenture, dated as of February 14, 2003, between Golden Star Resources Ltd. and CIBC
Mellon Trust Company, including the Form of Warrant (incorporated by reference to Exhibit 4.1 of
the Company’s Form 8-K filed on February 14, 2003).

4.10 Form of Underwriters’ Warrant, dated February 14, 2003 (incorporated by reference to Exhibit 4.2

of the Company’s Form 8-K filed on February 14, 2003).

10.1 Summary of Executive Management Performance Bonus Plan (incorporated by reference to Exhibit 10.1

of the Company’s Form 8-K filed on January 23, 2003).

10.2 Amended and Restated 1997 Stock Option Plan, effective as of April 3, 2002 (incorporated by ref-

erence to Exhibit 10.2 of the Company’s Form 8-K filed on January 23, 2003).

10.3 Form of Indemnification Agreement between the Company and its officers and directors (incorpo-

rated by reference to Exhibit 10.3 of the Company’s Form 8-K filed on January 23, 2003).

10.4 Summary of Severance Arrangements between the Company and certain executive officers (incor-
porated by reference to Exhibit 10.4 of the Company’s Form 8-K filed on January 23, 2003).
10.5 Employees’ Stock Bonus Plan amended and restated to April 6, 2000 (incorporated by reference to

Exhibit 10(j) to the Company’s Form 10-K for the year ended December 31, 2000).

10.6 Guyanor Ressources S.A. Stock Option Plan amended and restated as of June 15, 1999 (English
translation) (incorporated by reference to Exhibit 10.35(a) to the Company’s Form 10-K for the year
ended December 31, 1999).

10.7 Employment contract with Mr. Peter Bradford dated November 1, 1999 (incorporated by reference

to Exhibit 10.38 (c) to the Company’s Form 10-K for the year ended December 31, 1999).

10.8 Employment agreement with Mr. Allan J. Marter dated November 8, 1999 (incorporated by refer-
ence to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended September 30, 2003).
10.9 Employment agreement with Mr. Douglas Jones dated February 16, 2003 (incorporated by refer-
ence to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended March 31, 2003).
10.10 Employment agreement with Mr. Bruce Higson-Smith dated September 22, 2003 (incorporated by
reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended September 30, 2003).
10.11 Agreements between the Company and its outside directors granting them options to purchase
Guyanor Class “B” common shares, (1) dated December 8, 1995, and December 10, 1996 (incorpo-
rated by reference as Exhibit 10.39 to the Company’s Form 10-K for the year ended December 31,
1996), (2) dated December 9, 1997 (incorporated by reference to Exhibit 10.39(a) to the Company’s
Form 10-K for the year ended December 31, 1997), (3) dated December 8, 1998 (incorporated by ref-
erence to Exhibit 10.39(b) to the Company’s Form 10-K for the year ended December 31, 1998), (4)
dated June 15, 1999 (incorporated by reference to Exhibit 10.39(c) to the Company’s Form 10-K for
the year ended December 31, 1999), and (5) dated August 16, 2001.

10.12 Agreement for the Sale and Purchase of Certain of the Assets of Satellite Goldfields Limited between
The Law Debenture Trust Corporation P.L.C. and Wexford Goldfields Limited dated March 1, 2002
(incorporated by reference to Exhibit 2.1 of the Company’s Form 8-K filed on September 30, 2002).

10.13 Agreement for the Sale and Purchase of Certain of the Assets of Satellite Goldfields Limited
between Satellite Goldfields Limited, The Law Debenture Trust Corporation P.L.C. and Wexford
Goldfields Limited dated March 15, 2002 (incorporated by reference to Exhibit 2.2 of the Company’s
Form 8-K filed on September 30, 2002).

10.14 Common Terms Agreement for Wassa Gold Project between Wexford Goldfields Limited, any other
Obligor Party thereto from time to time, Standard Bank London Limited and The Law Debenture
Trust Corporation P.L.C. dated June 26, 2002 (incorporated by reference to Exhibit 2.3 of the
Company’s Form 8-K filed on September 30, 2002).

10.15 Wassa Project Facility Agreement between Wexford Goldfields Limited, the lenders listed in
Schedule 1 thereto and Standard Bank London Limited dated June 25, 2002 (incorporated by refer-
ence to Exhibit 2.4 of the Company’s Form 8-K filed on September 30, 2002).

10.16 Royalty Agreement between Wexford Goldfields Limited and The Law Debenture Trust Corporation
P.L.C. dated June 26, 2002 (incorporated by reference to Exhibit 2.5 of the Company’s Form 8-K
filed on September 30, 2002).

10.17 Agreement for the Sale and Purchase of 90% of the Issued Capital of Wexford Goldfields Limited
between The Law Debenture Trust Corporation P.L.C. and Wasford Holdings dated June 26, 2002,
and amendment thereto dated September 13, 2002 (incorporated by reference to Exhibit 2.6 of the
Company’s Form 8-K filed on September 30, 2002).

10.18 Support Agreement for Wassa Gold Project between Golden Star Resources Ltd. and Standard
Bank London Limited dated September 13, 2002 (incorporated by reference to Exhibit 2.7 of the
Company’s Form 8-K filed on September 30, 2002).

10.19 Wassa Project Conversion Agreement between Wexford Goldfields Limited, Bayerische Hypo-Und
Vereinsbank AG, Dresdner Bank AG London Branch, Fortis Bank (Nederland) N.V. and Standard Bank
London Limited dated September 13, 2002 (incorporated by reference to Exhibit 2.8 of the Company’s
Form 8-K filed on September 30, 2002).

10.20 Wassa Gold Project Second Royalty Agreement between Wexford Goldfields Limited, the persons
from time to time party thereto and Standard Bank London Limited dated September 13, 2002
(incorporated by reference to Exhibit 2.9 of the Company’s Form 8-K filed on September 30, 2002).
10.21 Sale of Shares Agreement with Barnato Exploration Ltd., dated June 21, 2001, for the purchase of
Prestea mining lease rights and Barnex Isle of Man (incorporated by reference to Exhibit 10(z) of the
Company’s Form 10-K for the year ended December 31, 2001).

10.22 Agreement, dated November 16, 2001, between Bogoso Gold Limited and Prestea Gold Resources
Limited for the purchase of Prestea mining lease rights and option payments (incorporated by ref-
erence to Exhibit 10.2 to the Company’s Form 8-K filed on March 6, 2002).

10.23 Share and Asset Acquisition Agreement, dated August 6, 2001, among Anvil Mining NL, Anvil
International Finance Limited and the Company, regarding purchase of 20% interest in Bogoso Gold
Limited (incorporated by reference to Exhibit 10(bb) to the Company’s Form 10-K for the year ended
December 31, 2001).

10.24 Guiana Shield Transaction Agreement with Cambior Inc. dated October 25, 2001 for the sale and
swap of Golden Star’s interest in Gross Rosebel and other properties (incorporated by reference to
Exhibit 10.3 to the Company’s Form 8-K filed March 6, 2002).

10.25 Mining lease, dated June 29, 2001, between the Government of the Republic of Ghana and Bogoso
Gold Limited, relating to the Prestea property (incorporated by reference to Exhibit 10.1 to the
Company’s Form 8-K filed on March 6, 2002).

10.26 Joint Operating Agreement, dated January 31, 2002, between Bogoso Gold Limited and Prestea
Gold Resources Limited (incorporated by reference to Exhibit 10.25 to the Company’s Form 10-K for
the year ended December 31, 2002).

10.27 Memorandum of Agreement, dated March 14, 2002, among Prestea Gold Resources, Bogoso Gold
Limited and others (incorporated by reference to Exhibit 10.26 to the Company’s Form 10-K for the
year ended December 31, 2002).
Subsidiaries of the Company
Consent of PricewaterhouseCoopers LLP

21
23
31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certificate of Principal Executive Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-

Oxley Act of 2002).

32.2 Certificate of Principal Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-

Oxley Act of 2002).

S I G N AT U R E S

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GOLDEN STAR RESOURCES LTD.
Registrant

By:

/s/ Peter J. Bradford
Peter J. Bradford
President & Chief Executive Officer

Date:

January 30, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the fol-
lowing persons on behalf of the registrant and in the capacities and on the dates indicated:

By:

/s/ Peter J. Bradford

By:

/s/ Allan J. Marter

Name: Peter J. Bradford
Title:
Date:

President & Chief Executive Officer
January 30, 2004

Name: Allan J. Marter
Title:
Date:

Senior Vice-President & Chief Financial Officer
January 30, 2004

By:

/s/ David K. Fagin

Name: David K. Fagin
Director
Title:
January 30, 2004
Date:

By:

/s/ Lars-Eric Johansson

Name: Lars-Eric Johansson
Title:
Date:

Director
January 30, 2004

By:

/s/ James E. Askew

Name: James E. Askew
Title:
Director
January 30, 2004
Date:

By:

/s/ Ian MacGregor

Name:
Title:
Date:

Ian MacGregor
Director
January 30, 2004

By:

/s/ Robert R. Stone

Name: Robert R. Stone
Title:
Director
January 30, 2004
Date:

Directors
James E. Askew 3 *
Denver, Colorado
Corporate director
Former CEO of Golden Star and
Golden Shamrock, an Australian mining company

Peter J. Bradford
Littleton, Colorado
President and Chief Executive Ofﬁcer

David K. Fagin 1 *, 2
Denver, Colorado
Corporate director
Former CEO of Golden Star and President of Homestake

Lars-Eric Johansson 1
Oakville, Ontario
Former CFO of Noranda, a Canadian mining company
(a director since January 2004)

Ian MacGregor 1, 2 *
Toronto, Ontario
Chairman of the Board
Corporate director
Of Counsel with Fasken Martineau DuMoulin,
specializing in global mining

Robert R. Stone 1, 2, 3
Vancouver, British Columbia
Immediate past Chairman
Corporate director
Former CFO of Cominco, a Canadian mining company
(retiring as a director May 2004)

1 Audit Committee Member

2 Legal and Corporate Governance Committee Member

3 Compensation Committee Member
* Committee Chairman

Management
Peter Bradford
President and Chief Executive Ofﬁcer

Mark Collopy
Vice President, General Manager
Bogoso/Prestea

Andrew Goode
Vice President, General Manager
Wassa

Richard Gray
Senior Vice President and Chief Operating Ofﬁcer

Bruce Higson-Smith
Vice President, Corporate Development

Dr. Doug Jones
Vice President, Exploration

Allan Marter
Senior Vice President,
Chief Financial Ofﬁcer and Corporate Secretary

Roger Palmer
Controller

Marcel Pretorius
Vice President, General Manager
Technical Services

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Stock Exchange Listings

Toronto Stock Exchange
Common stock: GSC
Warrants expiring July 2004: GSC.WT
Warrants expiring February 2007: GSC.WT.A

American Stock Exchange
Common stock: GSS

Registr ar and Tr ansfer Agent

Questions regarding the change of stock ownership,
consolidation of accounts, lost certiﬁcates, change of
address and other such matters should be directed to:
CIBC Mellon Trust Company
Attention: Shareholder Services
P. O. Box 1900
Vancouver, British Columbia
Canada V6C 3K9
Toll free: (800) 387-0825

Corpor ate Headquarters

Golden Star Resources Ltd.
10901 W. Toller Road, Suite 300
Littleton, CO 80127, U.S.A.
Telephone: (303) 830-9000
(800) 553-8436
Toll free:
(303) 830-9094
Fax:

Ghanaian Office

Golden Star Resources Ltd.
32 Akosombo Road
Airport Residential Area
P.O. Box 16075
Airport Post Ofﬁce
Accra, Ghana

Investor Relations Contacts

Allan Marter, CFO, and
Jill Thompson, Administrative Manager
E-mail:
info@gsr.com
Toll free: (800) 553-8436
Website: www.gsr.com

Auditors

PricewaterhouseCoopers LLP
Calgary, Alberta, Canada

Form 10-K

The Company’s 2003 Annual Report on Form 10-K is
contained herein. Exhibits to the Form 10-K will be
available upon payment of reproduction costs. Requests
should be addressed to Corporate Headquarters.

Annual Meeting

The Annual General Meeting of Shareholders will be
held on Thursday, May 20, 2004, at 2:00 p.m. at the TSX
Broadcast & Conference Centre, Gallery Facility, 130
King Street West, Toronto, Ontario, Canada.

G O L D E N S T A R R E S O U R C E S L T D .

P r o f i t a b l e , l o w - c o s t g o l d p r o d u c e r

F u l l y l e v e r a g e d t o t h e g o l d p r i c e

S t r o n g g r o w t h , d o u b l i n g p r o d u c t i o n r a t e b y 2 0 0 5

L a r g e a n d g r o w i n g r e s e r v e b a s e

M a j o r e x p l o r a t i o n b u d g e t o f $ 2 1 m i l l i o n f o r 2 0 0 4

M a n a g e m e n t t e a m w i t h f o c u s a n d d e p t h

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w w w . g s r. c o m

To r o n t o S t o c k E x c h a n g e : G S C

A m e r i c a n S t o c k E x c h a n g e : G S S