Bogoso
Pampe
Wassa
GHANA
Chujah-Dumasi
Buesichem
Prestea Mine
Bogoso North
Bogoso
Processing
Plants
Mine &
Processing Plant
Prestea
Prestea South
Benso
Subriso Pits
Hwini-Butre
Adoikrom
Father Brown
Active Pits
Deposits
Mining Lease
Exploration - GSR
Exploration - JV
100 km
North
Golden Star Resources Ltd. is a mid-tier gold mining company that pro-
duced 354,904 ounces of gold in 2010 and plans to produce approximately 330,000 to 360,000
ounces in 2011. The Company has two operating mines in Ghana, West Africa.
Our Bogoso/Prestea and Wassa mines, acquired in 1999 and 2002, respectively, were both purchased
during a low gold price environment, allowing the Company to acquire both properties at relatively
attractive prices. The Company is the largest holder of mining properties on the prolific Ashanti Gold
Trend. The HBB properties were acquired in late 2005. Both Bogoso/Prestea and Wassa/HBB are
district-scale sized properties with excellent infrastructure in place.
Golden Star’s growth strategy is to explore and develop our two mines in Ghana as well as explore
other prospective projects in Western Africa and Brazil. Additionally, the Company will investigate
potential acquisitions that are accretive to shareholder value.
Shares of Golden Star are widely held by both retail and institutional shareholders and are traded on
the NYSE Amex Stock Exchange, Toronto Stock Exchange and Ghana Stock Exchange under the
symbols GSS, GSC and GSR, respectively.
Front Cover
This year, 2010, was the year of exploration for Golden Star. Our exploration budget was increased to $20 million,
from $9 million in 2009. As a result of our successful exploration efforts and increased gold prices, our 2010
mineral reserves (net of depletion) were up 24% from 2009 and our Mineral Resources increased 63% over 2009.
From our beginnings as a producing company in 1999 with mineral reserves of 40.0 million tonnes grading 1.4
g/t for 1.8 million ounces of gold and mineral resources of 43.9 million tonnes grading 2.5 g/t gold, to our current
reserves of 65.3 million tonnes grading 2.20 g/t for 4.62 million ounces of gold in reserves and resources of 54.9
million tonnes grading 1.99 g/t gold, we have made significant progress in growth of reserves and resources. The
goal of management continues to be to build shareholder value through increased gold production, increased
mineral reserves and resources, and reduced costs across the board, accomplished in a safe manner. These
goals will be attained due to the efforts of our employees, who are the fundamental drivers of our success.
Forward-Looking Statements are made in this report to give the reader an indication of our business prospects, plans and objectives. Although we
believe these statements are reasonable as of the date of this report, readers are cautioned that forward-looking statements are inherently uncertain
and involve risks and uncertainties that could cause actual results, performance or achievements to differ materially from those stated. There can be
no assurance that future developments affecting Golden Star will be those anticipated by us. Readers should refer to the risks involved in making
forward-looking statements, which are given on pages 2 and 13 of our Form 10-K, contained herein.
Non-GAAP 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 prepared in accordance with GAAP. Readers should examine the cautionary and explanatory statement on
pages 2 and 34 of our Form 10-K, contained herein.
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 Canada’s
National Instrument 43-101, 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
Inferred Mineral Resources will ever be upgraded to a higher category. In accordance with Canadian rules, estimates of Inferred Mineral Resources
cannot 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.
Tom Mair
President & CEO
Le t te r to S h a r e h o Ld e r S
2010 was a year of highs and lows, ups and downs
• Year-end cash balance of $178.0 million
for our company. On the positive side, we were
• Net loss of $8.3 million or $0.03 per share
very successful in growing our Company in terms
• Net cash provided by operating activities of
of reserves and resources as a result of focusing
$115.2 million or $0.45 per share
on exploration drilling and re-engineering our
• Reserves increased 24% net of depletion,
resource models. The higher gold price accounted
resources increased 63%
for approximately half of the resource growth. On
the down side, the results from Bogoso/Prestea
during the second half of the year were poor.
The “perfect storm” that affected Bogoso/Prestea
included unusually wet weather affecting the
sourcing of ore, resulting in lower grades and sub-
optimal metallurgical recovery. In spite of this, we
remained cashflow positive, maintained our finan-
cial strength and flexibility, and ended the year
with $178 million in cash.
2010 Results Summary
• Gold sales of 354,904 ounces
• Average realized gold price of $1,219 per ounce
Focus on Exploration
During 2010 we focused on brownfields explora-
tion at Golden Star. We increased our exploration
budget from $9 million in 2009 to $20 million in
2010. The lion’s share of this budget was spent
within haul distance of one of our plants.
We were successful in significantly increasing our
reserves and resources in 2010. Our reserve base
increased 24%, net of depletion, and our resource
base increased 63% over 2009. While approxi-
mately half of this increase is attributable to the
rising gold prices, we can proudly state that our
exploration team has delivered significant explo-
• Gold revenues of $432.7 million
ration success.
• Cash operating costs of $766 per ounce of gold
2010 Annual Report | 1
we entered into a joint venture with Votorantim, a
large Brazilian company. This added a 3,400 km²
land package in Mato Grosso to our extensive
Brazilian portfolio.
One of our stated goals is to increase
the mine lives of our operations. The
most economical method to achieve
this is through the drill bit, hence the
increased exploration budget in 2010.
At Bogoso/Prestea, we have only
explored some 30 kilometers of our
85 kilometer land package area.
Similarly, the corridor along our haul road from
Operations
the Wassa plant down to Hwini-Butre has had
insufficient exploration since we acquired these
concession areas in late 2005. The exploration
potential in these areas is immense. It requires
time and money to drill out these areas and add
to our reserve and resource base.
The second half of 2010 was challenging at Bogoso/
Prestea. The unusually heavy rains contributed to
delays in the commencement of mining at one of
our new pits. This resulted in processing relatively
high quantities of lower grade and lower recovery
transitional ore at the Bogoso Sulfide Plant leading
In other parts of West Africa, we earned a 51%
to lower than expected production. Going forward
interest on the Sonfon project in Sierra Leone and
at Bogoso/Prestea, we expect improving recoveries
we continue to explore this project. Our joint venture
as we mine deeper in our pits, accessing more fresh
partner, Riverstone Resources, continues successful
sulfide ores. The improvement will be most notice-
exploration activities at Goulagou and Rounga. In
able in the second half of 2011. We still have work to
Côte d’Ivoire, we continue the early stage explora-
do at the Bogoso Sulfide Plant, but we have been
tion activities at Amelekia and Abengourou.
successful in the past and are confident we will be
We continue to explore for gold in Brazil with 9
successful again in the near future.
greenfields exploration projects in Mato Grosso,
At Wassa, we anticipate 2011 performance to be
Minas Gerais and Goias. In addition, during 2010,
very similar to what we achieved this year. Wassa
has been and continues to be a reliable operation.
2 | Gol den Star
We mine high grade ores at the HB concession
at both Father Brown and Adoikrom pits and
haul this to the Wassa plant, where it is blended
with the Wassa ores. This strategy provides a
certain degree of operational flexibility which
translates into predictability and stability. We
will continue to focus on cost containment at
both Bogoso/Prestea and Wassa/HBB in the
face of continuing cost pressures.
What’s Next?
In the second half of 2011, in order to take advantage
of the underutilized Bogoso Oxide plant, we expect
to see the start of production from our Bogoso
Tailings Retreatment Project, which should provide
I want to thank our employees, the management
team and the Board of Directors for their efforts
through the past year. It has been a year with chal-
lenges, some within our control and some not.
Regardless, our team remains dedicated to deliv-
ering solid operational and financial results.
about 40,000 ounces of gold (on an annualized
Yours sincerely,
Tom Mair
President & CEO
March 10, 2011
basis) at low cash operating costs. In addition, we
expect to start mining the Pampe oxide pit late in
the year and combine this ore with the tailings into
the Bogoso Oxide Plant. We also will continue with
the permitting of Prestea South oxide pits and the
Mampon deposit. We are completing a study on the
Prestea Underground project and expect to make a
decision on this project during the year. We have
once again increased the exploration budget to
$30 million so we expect to have another year of
good exploration results during 2011.
2010 Annual Report | 3
Mineral reserves
The following table summarizes our estimated Proven and Probable Mineral Reserves as of December 31, 2010 and December 31, 2009:
Proven
Probable
Total
Tonnes
(millions)
Gold
Grade
(g/t)
Contained
Ounces
(millions)
Tonnes
(millions)
Gold
Grade
(g/t)
Contained
Ounces
(millions)
Tonnes
(millions)
Gold
Grade
(g/t)
Contained
Ounces
(millions)
1.3
12.0
13.2
0.6
0.6
1.9
12.0
13.9
11.6
1.58
2.79
2.67
1.14
1.14
1.43
2.79
2.60
2.86
0.06
1.07
1.14
0.02
0.02
0.09
1.07
1.16
1.06
7.0
26.9
34.0
17.5
17.5
24.5
26.9
51.5
36.8
2.31
2.45
2.42
1.44
1.44
1.69
2.45
2.09
2.26
0.52
2.13
2.65
0.81
0.81
1.33
2.13
3.46
2.67
8.3
38.9
47.2
18.1
18.1
26.4
38.9
65.3
48.3
2.20
2.56
2.49
1.43
1.43
1.67
2.56
2.20
2.40
0.59
3.20
3.78
0.83
0.83
1.42
3.20
4.62
3.73
Property
Bogoso/Prestea
Non Refractory
Refractory
Total
Wassa
Non Refractory
Total
Totals
Non Refractory
Refractory
Total 2010
Total 2009
Notes to the Mineral Reserves Statement:
(1) The stated Mineral Reserve for Bogoso/Prestea includes Prestea South, Pampe and Mampon.
(2) The stated Mineral Reserve for Wassa includes the Hwini-Butre and Benso properties.
(3) The stated Mineral Reserves have been prepared in accordance with Canada’s National Instrument 43-101 Standards
of Disclosure for Mineral Projects and are classified in accordance with the Canadian Institute of Mining, Metallurgy
and Petroleum’s “CIM Definition Standards – For Mineral Resources and Mineral Reserves”. Mineral Reserves are
equivalent to “proven” and “probable reserves” as defined by the SEC Industry Guide 7. Mineral Reserve estimates
reflect the Company’s reasonable expectation that all necessary permits and approvals will be obtained and
maintained. Mining dilution and mining recovery vary by deposit and have been applied in estimating the Mineral
Reserves.
(4) The 2010 and 2009 Mineral Reserves were prepared under the supervision of Mr. Karl Smith, Vice President Technical
Services for the Company. Mr. Smith is a “Qualified Person” as defined by Canada’s National Instrument 43-101.
(5) The Mineral Reserves at December 31, 2010, were estimated using a gold price of $1,025 per ounce, which is
approximately equal to the three-year average gold price. At December 31, 2009, Mineral Reserves were estimated
using a gold price of $850 per ounce.
(6) The terms “non-refractory” and “refractory” refer to the metallurgical characteristics of the ore and are defined in the
Glossary of Terms. We plan to process the refractory ore in our sulfide bio-oxidation plant at Bogoso and to process the
non-refractory ore using our more traditional gravity, flotation and/or cyanidation techniques.
(7) The slope angles of all pit designs are based on geotechnical criteria as established by external consultants. The
size and shape of the pit designs are guided by consideration of the results from a pit optimization program which
incorporates historical and projected operating costs at Bogoso/Prestea, Wassa and Hwini-Butre and Benso.
Metallurgical recoveries are based on historical performance or estimated from test work and typically range from
80% to 95% for non-refractory ores and from 70% to 85% for refractory ores. A government royalty of 5% of gold
revenues is allowed as are other applicable royalties.
(8) Numbers may not add due to rounding.
Mineral resources
Measured
Indicated
Measured & Indicated
Inferred
Property
Bogoso/Prestea 1
Prestea Under-
ground
Wassa
Benso
Chichiwelli Manso
Hwini-Butre
Father Brown
Undergraound 8
Goulagou 7
Total 2010 6
Total 2009
Tonnes
(millions)
8.5
–
0.1
–
–
–
–
–
8.6
4.8
Gold Grade
(g/t)
1.94
–
0.88
–
–
–
–
–
1.93
1.87
Tonnes
(millions)
19.3
1.1
20.3
0.8
0.9
0.5
0.8
2.7
46.4
21.8
Gold Grade
(g/t)
2.00
15.80
1.07
2.53
1.80
2.07
6.68
1.75
2.00
2.66
Tonnes
(millions)
27.8
1.1
20.4
0.8
0.9
0.5
0.8
2.7
54.9
26.6
Gold Grade
(g/t)
1.98
15.80
1.07
2.53
1.80
2.07
6.68
1.75
1.99
2.52
Tonnes
(millions)
Gold Grade
(g/t)
10.6
4.1
0.1
0.1
0.1
0.7
0.4
0.5
16.5
11.0
2.11
8.20
2.27
3.56
2.23
1.71
5.97
1.00
3.66
4.62
Notes to the Mineral Resources Statement:
(1) The Mineral Resources for Bogoso/Prestea include Pampe and Mampon.
(2) The Mineral Resources were estimated in accordance with the definitions and requirements of Canada’s National
Instrument 43-101. The Mineral Resources are equivalent to Mineralized Material as defined by the SEC Industry Guide 7.
(3) The Mineral Resources, other than for Goulagou (see Note 7), were estimated using optimized pit shells at a gold
price of $1,300 per ounce from which the Mineral Reserves have been subtracted. Other than gold price, the same
optimized pit shell parameters and modifying factors used to determine the Mineral Reserves were used to determine
the Mineral Resources. The Prestea Underground resource was estimated using a $1,300 per ounce gold price and
operating cost estimates. In 2009, we used a gold price of $1,000 per ounce for the optimized shell.
(4) The Mineral Resources are not included in and are in addition to the Mineral Reserves described above.
(5) The Qualified Person for the estimation of the Mineral Resources is S. Mitchel Wasel, Golden Star Resources Vice
President of Exploration.
(6) Numbers may not add due to rounding.
(7) The Mineral Resources for Goulagou were estimated using optimized pit shells at a gold price of $560. Pit optimization
parameters for the Goulagou Mineral Resources were estimated based on feasibility studies on other similar gold
deposits in Burkina Faso, Golden Star’s experience in West Africa, and from limited metallurgical test work on the
Goulagou ores. Heap leach processing was the assumed processing option for this deposit. Goulagou is 10% owned
by an unrelated party.
(8) The Father Brown Underground resource has been estimated below the $1,300 pit shell down to the 700 m elevation
using an economic gold grade cut off of 4.5 g/t.
4 | Go lde n Star
4 | Go lden Star
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year ended December 31, 2010
Commission file number 1-12284
GOLDEN STAR RESOURCES LTD.
(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
NYSE Amex
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes No
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 (the “Act”) 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 No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
and post such files). Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chap-
ter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or informa-
tion statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer
or a smaller reporting company. (See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act). (Check one):
Large accelerated filer: Accelerated filer: Non-accelerated filer: Smaller reporting company:
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant was
approximately $1,126.1 million as of June 30, 2010, based on the closing price of the shares on the NYSE Amex as of
that date of $4.38 per share.
Number of Common Shares outstanding as at February 22, 2011: 258,559,486
DOCUMENTS INCORPORATED BY REFERENCE
Portions of our Definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to
Regulation 14A in connection with the 2011 Annual Meeting of Shareholders are incorporated by reference to Part III
of this Annual Report on Form 10-K.
2 0 1 0 A n n u a l R e p o r t | 1
REPORTING CURRENCY,
FINANCIAL AND
OTHER INFORMATION
All amounts in this report are expressed in United States
(“US”) dollars, unless otherwise indicated. Canadian cur-
rency is denoted as “Cdn$”.
Financial information is presented in accordance with ac-
counting principles generally accepted in Canada (“Cdn
GAAP” or Canadian GAAP”). Differences between account-
ing principles generally accepted in the U.S. (“U.S. GAAP”)
and Canadian GAAP, as applicable to Golden Star Resources
Ltd., are explained in Note 27 to the Consolidated Financial
Statements.
References to “Golden Star,” the “Company,” “we,” “our,”
and “us” mean Golden Star Resources Ltd., its predeces-
sors and consolidated subsidiaries, or any one or more of
them, as the context requires.
NON-GAAP FINANCIAL MEASURES
In this Form 10-K, we use the terms “total cash cost per
ounce” and “cash operating cost per ounce” which are
considered non-GAAP financial measures as defined in
Securities and Exchange Commission (“SEC”) Regulation
S-K Item 10 and applicable Canadian securities law and
should not be considered in isolation or as a substitute
for measures of performance prepared in accordance
with Cdn GAAP or U.S. GAAP. See Item 7 Management’s
Discussion and Analysis of Financial Condition and
Results of Operations for a definition of these measures
as used in this Form 10-K.
STATEMENTS REGARDING
FORWARD-LOOKING INFORMATION
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 Securities
Exchange Act of 1934, as amended, and within the mean-
ing of applicable Canadian securities law. Words such as
“anticipates,” “expects,” “intends,” “forecasts,” “plans,”
“believes,” “seeks,” “estimates,” “may,” “will,” and similar
expressions (including negative and grammatical varia-
tions) tend to identify forward-looking statements.
Although we believe that our plans, intentions and ex-
pectations reflected in these forward-looking state-
ments are reasonable, we cannot be certain that these
plans, intentions or expectations will be achieved. Actual
results, performance or achievements could differ mate-
rially from those contemplated, expressed or implied by
the forward-looking statements contained in this Form
10-K.
These statements include comments regarding: produc-
tion and cash operating cost estimates for 2011; antici-
pated commencement dates of mining and production
at Prestea South and Pampe; development of the Dumasi
pit; completion of the Bogoso tailings processing proj-
ect; production capacity, production rates, and produc-
tion costs; cash operating costs generally; gold sales;
mining operations and recovery rates; ore delivery; ore
processing; potential mine life; permitting; establish-
ment and estimates of Mineral Reserves and Resources;
geological, environmental, community and engineering
2 | G o l d e n S t a r
studies; expectations of the resettlement of communities;
exploration efforts and activities; availability, cost and ef-
ficiency of mining equipment; ore grades; reclamation
work; expected reclamation expenditures over the
next five years; expected PFIC (as defined below) sta-
tus in 2011 and in the future; our anticipated investing
and exploration spending in 2011; identification of acqui-
sition and growth opportunities; power costs; the ability
to meet total power requirements; retention of earnings
from our operations; our objectives for 2011; and sources
of and adequacy of liquidity to meet capital and other
needs in 2011.
Forward statements are subject to risk, uncertainties,
and other factors which could cause actual results to dif-
fer materially from future results expressed, projected,
or implied by the forward-looking statements. Such risks
include, but are not limited to, the following:
• significant increases or decreases in gold prices;
• losses or gains in Mineral Reserves from changes in
operating costs and/or gold prices;
• failure of exploration efforts to expand Mineral
Reserves around our existing mines;
• unexpected changes in business and economic conditions;
• variances in Mineral Reserves and non-reserves estimates;
• changes in interest and currency exchange rates;
• timing and amount of gold production;
• unanticipated variations in ore grade, tonnes mined
and crushed or milled;
• unanticipated recovery or production problems;
• effects of illegal mining on our properties;
• changes in mining and processing costs, including
changes to costs of raw materials, supplies, services
and personnel;
• changes in metallurgy and processing;
• availability of skilled personnel, contractors, materials,
equipment, supplies, power and water;
• changes in project parameters or mine plans;
• costs and timing of development of new Mineral Reserves;
• weather, including drought or excessive rainfall in
West Africa;
• changes in regulatory frameworks based upon per-
ceived climate trends;
• results of current and future exploration activities;
• results of pending and future feasibility studies;
• acquisitions and joint venture relationships;
• political or economic instability, either globally or in
the countries in which we operate;
• changes in regulations affecting our operations, particu-
larly in Ghana, where our principal producing properties
are located;
• local and community impacts and issues, including
resettlement;
• availability and cost of replacing Mineral Reserves;
• timing of receipt and maintenance of government
approvals and permits;
• unanticipated transportation costs and shipping inci-
dents and losses;
• accidents, labor disputes and other operational haz-
ards;
• environmental liabilities, costs and risks;
• unanticipated title issues;
• competitive factors, including competition for property
acquisitions;
• possible litigation; 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.
More detailed information regarding these factors is pro-
vided in the other risk factors disclosed and discussed in
Item 1A below. We undertake no obligation to update
forward-looking statements except as may be required
by applicable laws.
CONVERSION FACTORS AND ABBREVIATIONS
All units in this report are stated in metric measurements
unless otherwise noted.
For ease of reference, the following conversion factors
are provided:
1 acre =
0.4047
hectare
1 mile =
1.6093
kilometers
1 foot = 0.3048 meter
1 troy ounce = 31.1035 grams
1 gram per
metric tonne
1 short ton
(2000 pounds)
=
0.0292 troy
ounce/short ton
= 0.9072 tonne
1 tonne =
1 hectare =
1,000 kg or
2,204.6 lbs
10,000 square
meters
1 square mile =
2.59 square
kilometers
1 square
kilometer
= 100 hectares
1 kilogram =
2.204 pounds
or 32.151 troy oz
1 hectare = 2.471 acres
The following abbreviations may be used herein:
m = meter
g = gram
g/t =
grams per
tonne
ha = hectare
km = kilometer
T or t = tonne
oz = troy ounce
km2 =
square
kilometers
kg = kilogram
GLOSSARY OF TERMS
We report our Mineral Reserves to two separate stan-
dards to meet the requirements for reporting in both
Canada and the United States. Canadian reporting re-
quirements for disclosure of mineral properties are gov-
erned by National Instrument 43-101 (“NI 43-101”). The
definitions in NI 43-101 are adopted from those given by
the Canadian
Institute of Mining, Metallurgy and
Petroleum. U.S. reporting requirements for disclosure of
mineral properties are governed by the SEC Industry
Guide 7. These reporting standards have similar goals in
terms of conveying an appropriate level of confidence in
the disclosures being reported, but embody differing
approaches and definitions.
We estimate and report our Mineral Resources and Mineral
Reserves according to the definitions set forth in NI 43-101 and
modify them as appropriate to conform to SEC Industry Guide
7 for reporting in the U.S. The definitions for each reporting
standard are presented below with supplementary explana-
tion and descriptions of the similarities and differences.
NI 43-101 DEFINITIONS
Mineral Reserve The term “Mineral Reserve” refers to the
economically mineable part of a Measured or Indicated
Mineral Resource demonstrated by at least a preliminary
feasibility study. The study must include adequate infor-
mation 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 allowanc-
es for losses that may occur when the material is mined.
Proven Mineral Reserve 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 ad-
equate information on mining, processing, metallurgical,
economic, and other relevant factors that demonstrate, at
the time of reporting, that economic extraction is justified.
Probable Mineral Reserve 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 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.
Mineral Resource The term “Mineral Resource” refers to
a concentration or occurrence of diamonds, natural solid
inorganic material, or natural solid fossilized organic ma-
terial including base and precious metals, coal, and indus-
trial minerals in or on the Earth’s crust in such form and
quantity and of such a grade or quality that it has reason-
able 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.
Measured Mineral Resource The term “Measured Mineral
Resource” refers to that part of a Mineral Resource for
which quantity, grade or quality, densities, shape and
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 evalua-
tion of the economic viability of the deposit. The esti-
mate is based on detailed and reliable exploration, sam-
pling and
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.
information gathered
testing
Indicated Mineral Resource 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 applica-
tion 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 re-
liable 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 conti-
nuity to be reasonably assumed.
Inferred Mineral Resource 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
2 0 1 0 A n n u a l R e p o r t | 3
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.
Qualified Person(1) 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 or operation or mineral project as-
sessment, or any combination of these, has experience
relevant to the subject matter of the mineral project and
the technical report and is a member in good standing of
a professional association.
SEC INDUSTRY GUIDE 7 DEFINITIONS
reserve The term “reserve” refers to that part of a min-
eral deposit which could be economically and legally ex-
tracted or produced at the time of the reserve determina-
tion. Reserves must be supported by a feasibility study(2)
done to bankable standards that demonstrates the eco-
nomic extraction. (“bankable standards” implies that the
confidence attached to the costs and achievements de-
veloped in the study is sufficient for the project to be eli-
gible for external debt financing.) A reserve includes ad-
justments to the in-situ tonnes and grade to include
diluting materials and allowances for losses that might
occur when the material is mined.
proven reserve The term “proven reserve” refers to re-
serves for which (a) quantity is computed from dimensions
revealed in outcrops, trenches, workings or drill holes; grade
and/or quality are computed from the results of detailed
sampling and (b) the sites for inspection, sampling and mea-
surement are spaced so closely and the geologic character
is so well defined that size, shape depth and mineral
content of reserves are well-established.
probable reserve The term “probable reserve” refers
to reserves for which quantity and grade and/or qual-
ity are computed from information similar to that used
for proven (measured) reserves, but the sites for in-
spection, sampling, and measurement are farther
apart or are otherwise less adequately spaced. The de-
gree of assurance, although lower than that for proven
reserves, is high enough to assume continuity between
points of observation.
mineralized material(3) The term “mineralized material”
refers to material that is not included in the reserve as it
does not meet all of the criteria for adequate demonstra-
tion for economic or legal extraction.
non-reserves The term “non-reserves” refers to mineral-
ized material that is not included in the reserve as it does
not meet all of the criteria for adequate demonstration
for economic or legal extraction.
(1) Industry Guide 7 does not require designation of a qualified
person.
(2) For Industry Guide 7 purposes the feasibility study must in-
clude adequate information on mining, processing, metallurgi-
cal, economic, and other relevant factors that demonstrate, at
the time of reporting, that economic extraction is justified.
(3) This category is substantially equivalent to the combined
categories of Measured Mineral Resource and Indicated
Mineral Resource specified in NI 43-101.
ADDITIONAL DEFINITIONS
assay a measure of the valuable mineral content
bio-oxidation a processing method that uses bacteria to
oxidize refractory sulfide ore to make it amenable to nor-
mal 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
CIL or carbon-in-leach an ore processing method in-
volving the use of cyanide where activated carbon,
which has been added to the leach tanks, is used to ab-
sorb gold as it is leached by cyanide
craton a stable relatively immobile area of the earth’s crust
cut-off grade when determining economically viable
Mineral Reserves, the lowest grade of mineralized mate-
rial that qualifies as ore, i.e. that can be mined and pro-
cessed at a profit
cyanidation the process of introducing cyanide to ore to
recover gold
diamond drilling rotary drilling using diamond-set or
diamond-impregnated bits, to produce a solid continu-
ous core of rock sample
dip the angle that a structural surface, a bedding or fault
plane, makes with the horizontal, measured perpendicular
to the strike of the structure
doré unrefined gold bullion bars containing various im-
purities 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
feasibility study a comprehensive study of a mineral
deposit in which all geological, engineering, legal, oper-
ating, economic, social, environmental and other rele-
vant factors are considered in sufficient detail that it
could reasonably serve as the basis for a final decision
by a financial institution to finance the development of
the deposit for mineral production
exploration stage An “exploration stage” prospect is one
which is not in either the development or production stage.
formation a distinct layer of sedimentary rock of similar
composition
development stage A “development stage” project is
one which is undergoing preparation of an established
commercially mineable deposit for its extraction but
which is not yet in production. This stage occurs after
completion of a feasibility study.
production stage A “production stage” project is actively
engaged in the process of extraction and beneficiation
of Mineral Reserves to produce a marketable metal or
mineral product.
geochemical the distribution and amounts of the chem-
ical elements in minerals, ores, rocks, solids, water, and
the atmosphere
geophysical the mechanical, electrical, gravitational
and magnetic properties of the earth’s crust
geophysical surveys a survey method used primarily in
the mining industry as an exploration tool, applying the
methods of physics and engineering to the earth’s surface
4 | G o l d e n S t a r
grade quantity of metal per unit weight of host rock
greenstone a sequence of usually metamorphosed volcanic-
sedimentary rock assemblages
heap leach a mineral processing method involving the
crushing and stacking of an ore on an impermeable liner
upon which solutions are sprayed to dissolve metals i.e.
gold, copper etc.; the solutions containing the metals are
then collected and treated to recover the metals
host rock the rock in which a mineral or an ore body may
be contained
hydrothermal the products of the actions of heated wa-
ter, such as a mineral deposit precipitated from a hot solu-
tion
in-situ in its natural position
life-of-mine a term commonly used to refer to the likely
term of a mining operation and normally determined by
dividing the tonnes of Mineral Reserve by the annual rate
of mining and processing
mineral a naturally occurring inorganic crystalline mate-
rial having a definite chemical composition
mineralization a natural accumulation or concentration
in rocks or soil of one or more potentially economic min-
erals, also the process by which minerals are introduced
or concentrated in a rock
National Instrument 43-101 or NI 43-101 standards of dis-
closure for mineral projects prescribed by the Canadian
Securities Administration
non-refractory ore containing gold that can be satisfac-
torily recovered by basic gravity concentration or simple
cyanidation
open pit surface mining in which the ore is extracted
from a pit or quarry, the geometry of the pit may vary
with the characteristics of the ore body
ore mineral bearing rock that can be mined and treated
profitably under current or immediately foreseeable
economic conditions
ore body a mostly solid and fairly continuous mass of
mineralization estimated to be economically mineable
ore grade the average weight of the valuable metal or
mineral contained in a specific weight of ore i.e. grams
per tonne of ore
oxide gold bearing ore which results from the oxidation
of near surface sulfide ore
Precambrian period of geologic time, prior to 700 million
years ago
preliminary assessment a study that includes an eco-
nomic analysis of the potential viability of Mineral
Resources taken at an early stage of the project prior to
the completion of a preliminary feasibility study
preliminary feasibility study and pre-feasibility study
each mean a comprehensive study of the viability of a
mineral project that has advanced to a stage where the
mining method, in the case of underground mining, or the
pit configuration in the case of an open pit, has been es-
tablished and an effective method of mineral processing
has been determined, and includes a financial analysis
based on reasonable assumptions of technical, engi-
neering, legal, operating, economic, social, and environ-
mental factors and the evaluation of other relevant fac-
tors which are sufficient for a qualified person, acting
reasonably, to determine if all or part of the Mineral
Resource may be classified as a Mineral Reserve
the more recent time division of the
Proterozoic
Precambrian; rocks aged between 2,500 million and 550
million years old
put a financial instrument that provides the right, but
not the obligation, to sell a specified number of ounces
of gold at a specified price
QA/QC Quality Assurance/Quality Control is the pro-
cess of controlling and assuring data quality for assays
and other exploration and mining data
RC (reverse circulation) drilling a drilling method using
a tri-cone bit, during which rock cuttings are pushed
from the bottom of the drill hole to the surface through
an outer tube, by liquid and/or air pressure moving
through an inner tube
refractory ore containing gold that cannot be satisfac-
torily recovered by basic gravity concentration or simple
cyanidation
resettlement the relocation or resettlement of a com-
munity or part of a community
rock indurated naturally occurring mineral matter of vari-
ous compositions
sampling and analytical variance/precision an estimate
of the total error induced by sampling, sample prepara-
tion and analysis
shield a large area of exposed basement rocks often
surrounded by younger rocks, e.g. Guiana Shield
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; metallic sulfur-bearing mineral
often associated with gold mineralization
tailings fine ground wet waste material produced from
ore after economically recoverable metals or minerals
have been extracted
Tarkwaian a group of sedimentary rocks of Proterozoic
age named after the town of Tarkwa in southern Ghana
where they were found to be gold bearing
tectonic relating to the forces that produce movement
and deformation of the Earth’s crust
transition ore is an ore zone lying between the oxide ore
and the sulfide ore; ore material that is partially weath-
ered and oxidized
vein a thin, sheet-like crosscutting body of hydrother-
mal mineralization, principally quartz
VTEM a proprietary airborne geophysical survey sys-
tems that identifies electrical conductivity of rock units
2 0 1 0 A n n u a l R e p o r t | 5
P A R T I
ITEM 1. BUSINESS
OVERVIEW OF GOLDEN STAR
We are a Canadian federally–incorporated, international
gold mining and exploration company producing gold in
Ghana, West Africa. We also conduct gold exploration in
other countries in West Africa and in South America.
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 corpora-
tion originally incorporated under the provisions of the
Alberta Business Corporations Act on March 7, 1984 as
Southern Star Resources Ltd. Our principal office is lo-
cated at 10901 West Toller Drive, Suite 300, Littleton,
Colorado 80127, and our registered and records offices
are located at 333 Bay Street, Bay Adelaide Centre, Box
20, Toronto, Ontario M5H 2T6.
We own controlling interests in several gold properties
in southwest Ghana:
• Through a 90% owned subsidiary, Golden Star (Bogoso/
Prestea) Limited (“GSBPL”), we own and operate the
Bogoso/Prestea gold mining and processing opera-
tions (“Bogoso/Prestea”) located near the town of
Bogoso, Ghana. GSBPL operates a gold ore process-
ing facility at Bogoso/Prestea with a capacity of up to
3.5 million tonnes of ore per annum, which uses bio-
oxidation technology to treat refractory sulfide ore
(“Bogoso sulfide plant”). In addition, GSBPL has a
carbon-in-leach (“CIL”) processing facility located
next to the sulfide plant, which is suitable for treating
oxide gold ores (“Bogoso oxide plant”) at a rate up to
1.5 million tonnes per annum. Bogoso/Prestea pro-
duced and sold 170,973 ounces of gold in 2010 and
186,054 ounces of gold in 2009.
• Through another 90% owned subsidiary, Golden Star
(Wassa) Limited (“GSWL”), we own and operate the
Wassa open-pit gold mine and carbon-in-leach pro-
cessing plant (“Wassa”), located approximately 35 km
east of Bogoso/Prestea. The design capacity of the
carbon-in-leach processing plant at Wassa (“Wassa
plant”) is nominally 3.0 million tonnes per annum but
varies depending on the ratio of hard to soft ore.
GSWL also owns the Hwini-Butre and Benso conces-
sions (the “HBB properties”) in southwest Ghana. The
HBB properties send their ore to Wassa for process-
ing. The Hwini-Butre and Benso concessions are lo-
cated approximately 80 km and 50 km, respectively,
by road south of Wassa. Wassa/HBB produced and
sold 183,931 ounces of gold in 2010 and 223,848 ounc-
es of gold in 2009.
We also hold interests in several gold exploration projects
in Ghana and elsewhere in West Africa including Sierra
Leone, Burkina Faso, Niger and Côte d’Ivoire, and in South
America where we hold exploration properties in Brazil.
All our operations, with the exception of certain explo-
ration projects, transact business in U.S. dollars and
keep financial records in U.S. dollars. Our accounting
records are kept in accordance with Cdn GAAP. Our
fiscal year ends December 31. We are a reporting is-
suer or the equivalent in all provinces of Canada, in
Ghana and in the United States and file disclosure doc-
uments with securities regulatory authorities
in
Canada and Ghana, and with the United States
Securities and Exchange Commission.
Note that gold productions Mineral Reserves and Mineral
Resources are shown on a 100% basis in this Form 10-K,
which represents our current beneficial interest. While
the Government of Ghana owns a 10% carried interest in
GSBPL and in GSWL, the Government’s interest is limit-
ed to 10% of any dividends distributed from GSBPL and
GSWL but only after their outstanding loans and interest
have been repaid to Golden Star. The Mineral Resources
at Prestea Underground, which are owned by GSBPL,
are also subject to the Government of Ghana’s 10% mi-
nority interest, resulting in an effective 81% interest.
GOLD SALES AND PRODUCTION
Ghana has been a significant gold producing country
for over 100 years with AngloGold Ashanti’s Obuasi
mine and our inactive underground mine at Prestea his-
torically being the two major producers. Several other
areas in Ghana have also produced large amounts of
gold. Ghana produced just under 3 million ounces of
gold in 2009.
Currently, all our gold production is shipped to a South
African gold refinery in accordance with a long-term
gold sales contract. Our gold is sold in the form of doré
bars that average approximately 90% gold by weight
with the remaining portion being silver and other metals.
The sales price is based on the London P.M. fix on the day
of shipment to the refinery.
GOLD PRICE HISTORY
The price of gold is volatile and is affected by numerous
factors all of which are beyond our control such as the
sale or purchase of gold by various central banks and
financial institutions, inflation, recession, fluctuation in
the relative values of the U.S. dollar and foreign curren-
cies, changes in global and regional gold demand, and
the political and economic conditions of major gold-
producing countries throughout the world.
6 | G o l d e n S t a r
The following table presents the high, low and average
London P.M. fixed prices for gold per ounce on the
London Bullion Market over the past ten years.
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
To February 22,
2011
Average
Price
Received by
Golden Star
271
311
364
410
446
607
713
870
978
1,219
Average
271
310
363
410
445
603
695
872
972
1,225
Low
256
278
320
375
411
525
608
713
810
1,058
High
293
349
416
454
537
725
841
1,011
1,213
1,421
1,403
1,319
1,358
NA
The following diagram depicts the organizational structure
of Golden Star and its significant subsidiaries:
fourth quarter of 2008, and in May 2009 the Hwini-Butre
mine began shipping ore to the Wassa plant for processing.
Our overall objective is to grow our business to become
a mid-tier gold producer. We continue to evaluate poten-
tial acquisition and merger opportunities that could fur-
ther increase our annual gold production. However, we
presently have no agreement or understanding with
respect to any specific potential transaction.
In addition to our gold mining and development ac-
tivities, we actively explore for gold in West Africa and
South America, investing approximately $9.0 million
on such activities during 2009 and approximately $20
million during 2010. We are conducting regional re-
connaissance projects in Ghana, Cote d’Ivoire and
Brazil, and have drilled more advanced targets in
Ghana, Niger, Sierra Leone, Burkina Faso and Brazil.
See Item 2 – “Description of Properties” for additional
details on our assets.
GOLD PRODUCTION AND UNIT COSTS
The following table shows historical and projected gold
production and cash operating costs.
Bogoso
Holdings
(Cayman Islands)
100%
Wasford
Holdings
(Cayman Islands)
100%
Golden Star
Exploration Holdings
(Cayman Islands)
100%
WASSA/HBB
Gold Sales
(thousands of
ounces)
125.4
223.8
183.9
Golden Star
Resources Ltd.
(Canada)
Caystar
Holdings
(Cayman Island)
100%
Golden Star
(Bogoso/Prestea)
Limited
(Ghana)
90%
Golden Star
(Wassa)
Limited
(Ghana)
90%
Various Exploration
Entities
(West Africa &
South America)
100%
BUSINESS STRATEGY AND DEVELOPMENT
Our business and development strategy has been fo-
cused primarily on the acquisition of producing and de-
velopment-stage gold properties in Ghana and on the
exploration, development and operation of these proper-
ties. We have also pursued exploration activities in South
America and other countries in West Africa.
We acquired Bogoso in 1999 and have operated the
Bogoso oxide plant most of the time since then to process
oxide and other nonrefractory ores. In 2001, we acquired
the Prestea property located adjacent to our Bogoso prop-
erty and mined surface deposits at Prestea from late 2001
to late 2006. In late 2002, we acquired Wassa, and con-
structed the Wassa plant, which began commercial opera-
tion in April 2005. In July 2007, we completed construc-
tion and development of the Bogoso sulfide plant.
In late 2005, we acquired the HBB properties consisting
of the Benso and Hwini-Butre properties. Benso develop-
ment activities started in late 2007, and in 2008 we began
trucking ore from the Benso mine to the Wassa plant for
processing. Hwini-Butre development was initiated in the
160.0 -
180.0
950 -
1,050
170.0 -
180.0
650 -
700
330.0 -
360.0
800 -
870
2008
2009
2010
2011
Projected
Production and
Cost Per Ounce(1)
BOGOSO/PRESTEA
Gold Sales
(thousands of
ounces)
Cash Operating Cost
($/oz)
837
705
863
170.5
186.1
171.1
Cash Operating Cost
($/oz)
554
447
677
CONSOLIDATED
Consolidated Total
Sales
(thousands of
ounces)
295.9
409.9
354.9
Consolidated Cash
Operating Cost ($/oz)
717
564
766
(1) See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” for a definition of cash
operating cost per ounce.
MINERAL RESERVES
Our Proven and Probable Mineral Reserves are estimat-
ed in conformance with definitions set out in NI 43-101.
We have filed Technical Reports regarding the initial dis-
closure of Mineral Reserves and Mineral Resources for
Bogoso/Prestea and Wassa/HBB as required by NI 43-
101. The Proven and Probable Mineral Reserves are those
ore tonnages contained within economically optimized
pits, configured using current and predicted mining and
processing methods and related operating costs and
performance parameters. We believe that our Mineral
Reserves are estimated on a basis consistent with the
definition of proven and probable reserves prescribed
for use in the U.S. by the U.S. Securities and Exchange
Commission and set forth in SEC Industry Guide 7. See
our “Glossary of Terms.”
2 0 1 0 A n n u a l R e p o r t | 7
In estimating Mineral Reserves, we first design an eco-
nomically optimized pit based on all operating costs, in-
cluding the costs to mine. Since all material lying within
the optimized pit will be mined, the cut-off grade used in
determining our Mineral Reserves is estimated based on
the material that, having been mined, is economic to
transport and process without regard to primary mining
costs (i.e. mining costs that were appropriately applied at
the economic optimization stage).
The QA/QC controls program used in connection with
the estimation of our Mineral Reserves consists of regu-
lar insertion and analysis of blanks and standards to
monitor laboratory performance. Blanks are used to
check for contamination. Standards are used to check
for grade-dependence biases.
The following table summarizes our estimated Proven
and Probable Mineral Reserves as of December 31, 2010
and December 31, 2009:
PROVEN AND PROBABLE MINERAL RESERVES
Property Mineral Reserve Category
Bogoso/Prestea(1)
Proven Mineral Reserves
Non-refractory
Refractory
Total Proven
Probable Mineral Reserves
Non-refractory
Refractory
Total Probable
Total Proven and Probable
Non-refractory
Refractory
Total Bogoso/Prestea Proven and Probable
Wassa(2)
Proven Mineral Reserves
Non-refractory
Probable Mineral Reserves
Non-refractory
Total Wassa Proven and Probable
Totals
Proven Mineral Reserves
Non-refractory
Refractory
Total Proven
Probable Mineral Reserves
Non-refractory
Refractory
Total Probable
Total Proven and Probable
Non-refractory
Refractory
Total Proven and Probable(8)
As at December 31, 2010
Gold Grade
(g/t)
Tonnes
(millions)
Ounces
(millions)
As at December 31, 2009
Gold Grade
(g/t)
Tonnes
(millions)
Ounces
(millions)
1.3
12.0
13.2
7.0
26.9
34.0
8.3
38.9
47.2
0.6
17.5
18.1
1.9
12.0
13.9
24.5
26.9
51.5
26.4
38.9
65.3
1.58
2.79
2.67
2.31
2.45
2.42
2.20
2.56
2.49
1.14
1.44
1.43
1.43
2.79
2.60
1.69
2.45
2.09
1.67
2.56
2.20
0.06
1.07
1.14
0.52
2.13
2.65
0.59
3.20
3.78
0.02
0.81
0.83
0.09
1.07
1.16
1.33
2.13
3.46
1.42
3.20
4.62
1.1
9.7
10.8
5.0
15.5
20.5
6.1
25.1
31.2
0.8
16.3
17.1
1.9
9.7
11.6
21.3
15.5
36.8
23.2
25.1
48.3
1.60
3.08
2.92
2.60
2.65
2.64
2.42
2.81
2.74
1.91
1.79
1.79
1.73
3.08
2.86
1.98
2.65
2.26
1.96
2.81
2.40
0.06
0.96
1.01
0.42
1.32
1.73
0.47
2.27
2.75
0.05
0.94
0.99
0.11
0.96
1.06
1.35
1.32
2.67
1.46
2.27
3.73
Notes to the Mineral Reserve Statement:
(1) The stated Mineral Reserve for Bogoso/Prestea includes Prestea South, Pampe and Mampon.
(2) The stated Mineral Reserve for Wassa includes the Hwini-Butre and Benso properties.
(3) The stated Mineral Reserves have been prepared in accordance with Canada’s National Instrument 43-101 Standards of Disclosure
for Mineral Projects and are classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum’s “CIM
Definition Standards – For Mineral Resources and Mineral Reserves”. Mineral Reserves are equivalent to “proven” and “probable
reserves” as defined by the SEC Industry Guide 7. Mineral Reserve estimates reflect the Company’s reasonable expectation that
all necessary permits and approvals will be obtained and maintained. Mining dilution and mining recovery vary by deposit and
have been applied in estimating the Mineral Reserves.
(4) The 2010 and 2009 Mineral Reserves were prepared under the supervision of Mr. Karl Smith, Vice President Technical Services
for the Company. Mr. Smith is a “Qualified Person” as defined by Canada’s National Instrument 43-101.
8 | G o l d e n S t a r
(5) The Mineral Reserves at December 31, 2010, were estimated using a gold price of $1,025 per ounce, which is approximately equal
to the three-year average gold price. At December 31, 2009, Mineral Reserves were estimated using a gold price of $850 per ounce.
(6) The terms “non-refractory” and “refractory” refer to the metallurgical characteristics of the ore and are defined in the Glossary
of Terms. We plan to process the refractory ore in our sulfide bio-oxidation plant at Bogoso and to process the non-refractory
ore using our more traditional gravity, flotation and/or cyanidation techniques.
(7) The slope angles of all pit designs are based on geotechnical criteria as established by external consultants. The size and shape
of the pit designs are guided by consideration of the results from a pit optimization program which incorporates historical and
projected operating costs at Bogoso/Prestea, Wassa and Hwini-Butre and Benso. Metallurgical recoveries are based on histori-
cal performance or estimated from test work and typically range from 80% to 95% for non-refractory ores and from 70% to 85%
for refractory ores. A government royalty of 5% of gold revenues is allowed as are other applicable royalties.
(8) Numbers may not add due to rounding.
STOCKPILED ORES
Stockpiled ores are included in the Mineral Reserves for both Bogoso/Prestea and Wassa. Details of the Proven and Probable
stockpiles included in the Mineral Reserves at year-end 2010 and 2009 are summarized in the table below.
PROVEN AND PROBABLE STOCKPILES INCLUDED IN MINERAL RESERVES
Property Mineral Reserve Category
Bogoso/Prestea
Proven Stockpiles
Non-refractory
Refractory
Total Proven Stockpiles
Probable Stockpiles
Non-refractory
Refractory
Total Probable Stockpiles
Total Proven and Probable
Non-refractory
Refractory
Total Bogoso/Prestea Proven and Probable
Wassa
Proven Stockpiles
Non-refractory
Probable Stockpiles
Non-refractory
Total Wassa Proven and Probable Stockpiles
Totals
Proven Stockpiles
Non-refractory
Refractory
Total Proven Stockpiles
Probable Stockpiles
Non-refractory
Refractory
Total Probable Stockpiles
Total Proven and Probable Stockpiles
Non-refractory
Refractory
Total Proven and Probable Stockpiles
As at December 31, 2010
Gold Grade
(g/t)
Tonnes
(millions)
Ounces
(millions)
As at December 31, 2009
Gold Grade
(g/t)
Tonnes
(millions)
Ounces
(millions)
0.0
0.0
0.1
—
0.2
0.2
0.0
0.2
0.3
0.3
2.6
2.8
0.3
0.0
0.3
2.6
0.2
2.8
2.9
0.2
3.1
2.56
2.10
2.42
—
2.31
2.31
2.56
2.30
2.33
0.78
0.52
0.55
0.98
2.10
1.03
0.52
2.31
0.67
0.57
2.30
0.70
0.00
0.00
0.00
—
0.02
0.02
0.00
0.02
0.02
0.01
0.04
0.05
0.01
0.00
0.01
0.04
0.02
0.06
0.06
0.02
0.07
0.0
0.1
0.1
—
0.7
0.7
0.0
0.7
0.8
0.3
2.7
3.0
0.3
0.1
0.4
2.7
0.7
3.4
3.0
0.7
3.8
2.32
2.67
2.57
—
2.34
2.34
2.32
2.37
2.37
1.08
0.52
0.57
1.20
2.67
1.49
0.52
2.34
0.87
0.59
2.37
0.93
0.00
0.01
0.01
—
0.05
0.05
0.00
0.06
0.06
0.01
0.05
0.06
0.01
0.01
0.02
0.05
0.05
0.10
0.06
0.06
0.11
2 0 1 0 A n n u a l R e p o r t | 9
RECONCILIATION OF MINERAL RESERVES AS SHOWN UNDER NI 43-101 AND UNDER SEC INDUSTRY GUIDE 7
Since we report our Mineral Reserves to both NI 43-101 and SEC Industry Guide 7 standards, it is possible for our
Mineral Reserve figures to vary between the two. Where such a variance occurs it will arise from the differing
requirements for reporting Mineral Reserves. For example, NI 43-101 has a minimum requirement that Mineral
Reserves be supported by a pre-feasibility study, whereas SEC Industry Guide 7 requires support from a de-
tailed feasibility study that demonstrates that economic extraction is justified.
For the Mineral Reserves at December 31, 2010, and 2009, there is no difference between the Mineral Reserves as
disclosed under NI 43-101 and those disclosed under SEC Industry Guide 7, and therefore no reconciliation is pro-
vided.
RECONCILIATION OF PROVEN AND PROBABLE MINERAL RESERVES —
DECEMBER 31, 2009 TO DECEMBER 31, 2010
Mineral Reserves at December 31, 2009
Gold Price Increase(1) and (6)
Exploration Changes(2) and (7)
Mining Depletion(3)
Engineering(4)
Mineral Reserves at December 31, 2010(5)
Notes to the reconciliation of Mineral Reserves:
Tonnes
(millions)
Contained Ounces
(millions)
Tonnes
(% of Opening)
Ounces
(% of Opening)
48.3
15.5
4.3
(4.3)
1.5
65.3
3.73
0.74
0.51
(0.46)
0.10
4.62
100%
32%
9%
(9)%
3%
135%
100%
20%
14%
(12)%
3%
124%
(1) Gold Price Increase represents changes resulting from an increase in gold price used in the Mineral Reserve estimates from $850
per ounce in 2009 to $1,025 per ounce in 2010.
(2) Exploration Changes include changes due to geological modeling, data interpretation and resource block modeling methodol-
ogy as well as exploration discovery of new mineralization.
(3) Mining Depletion represents the 2009 Mineral Reserve within the volume mined in 2010 with adjustments to account for stock-
pile addition and depletions during 2010 and therefore does not correspond with 2010 actual gold production.
(4) Engineering includes changes as a result of engineering facts such as changes in operating costs, mining dilution and recovery
assumptions, metallurgical recoveries, pit slope angles and other mine design and permitting considerations.
(5) Numbers may not add due to rounding.
(6) Pit design changes that are primarily due to a higher gold price are included here.
(7) Pit design changes that are primarily due to exploration discoveries are included here.
NON-RESERVES — MEASURED AND INDICATED MINERAL RESOURCES
Cautionary Note to U.S. Investors Concerning Estimates of Measured and Indicated Mineral Resources
This section uses the terms “Measured Mineral Resources” and “Indicated Mineral Resources.” We advise U.S. investors
that while those terms are recognized and required by Canadian regulations, the U.S. 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 our
Mineral Resources that have been converted to Proven and Probable Mineral Reserves as shown above, and have
been estimated in compliance with definitions set out in NI 43-101. Golden Star Resources has filed Technical Reports
regarding the initial disclosure of Mineral Reserves and Mineral Resources for Bogoso/Prestea, Wassa and the HBB
properties as required by NI 43-101 regulations. See our “Glossary of Terms.”
Except as otherwise provided, the total Measured and Indicated Mineral Resources for all properties have been esti-
mated at an economic cut-off grade based on a gold price of $1,300 per ounce for December 31, 2010, and $1,000 per
ounce for December 31, 2009, and on economic parameters deemed realistic. The economic cut-off grades for Mineral
Resources are lower than those for Mineral Reserves and are indicative of the fact that the Mineral Resource estimates
include material that may become economic under more favorable conditions including increases in gold price.
1 0 | G o l d e n S t a r
The following table summarizes our estimated non-reserves — Measured and Indicated Mineral Resources as of
December 31, 2010, as compared to the totals for December 31, 2009:
Measured
Indicated
Measured & Indicated
Property
Bogoso/Prestea(1)
Prestea Underground
Wassa
Benso
Chichiwelli Manso
Hwini-Butre
Father Brown Underground (8)
Goulagou(7)
Total 2010(6)
Total 2009
Tonnes
(millions)
Gold Grade
(g/t)
1.94
—
0.88
—
—
—
—
—
1.93
1.87
8.5
—
0.1
—
—
—
—
—
8.6
4.8
Tonnes
(millions)
19.3
1.1
20.3
0.8
0.9
0.5
0.8
2.7
46.4
21.8
Gold Grade
(g/t)
2.00
15.80
1.07
2.53
1.80
2.07
6.68
1.75
2.00
2.66
Tonnes
(millions)
27.8
1.1
20.4
0.8
0.9
0.5
0.8
2.7
54.9
26.6
Gold Grade
(g/t)
1.98
15.80
1.07
2.53
1.80
2.07
6.68
1.75
1.99
2.52
Notes to Non-Reserves — Measured and Indicated Mineral Resources Table:
(1) The Mineral Resources for Bogoso/Prestea include Pampe and Mampon.
(2) The Mineral Resources were estimated in accordance with the definitions and requirements of Canada’s National Instrument 43-101.
The Mineral Resources are equivalent to Mineralized Material as defined by the SEC Industry Guide 7.
(3) The Mineral Resources, other than for Goulagou (see Note 7), were estimated using optimized pit shells at a gold price of $1,300
per ounce from which the Mineral Reserves have been subtracted. Other than gold price, the same optimized pit shell parameters
and modifying factors used to determine the Mineral Reserves were used to determine the Mineral Resources. The Prestea
Underground resource was estimated using a $1,300 per ounce gold price and operating cost estimates. In 2009, we used a gold
price of $1,000 per ounce for the optimized shell.
(4) The Mineral Resources are not included in and are in addition to the Mineral Reserves described above.
(5) The Qualified Person for the estimation of the Mineral Resources is S. Mitchel Wasel, Golden Star Resources Vice President of
Exploration.
(6) Numbers may not add due to rounding.
(7) The Mineral Resources for Goulagou were estimated using optimized pit shells at a gold price of $560. Pit optimization param-
eters for the Goulagou Mineral Resources were estimated based on feasibility studies on other similar gold deposits in Burkina
Faso, Golden Star’s experience in West Africa, and from limited metallurgical test work on the Goulagou ores. Heap leach pro-
cessing was the assumed processing option for this deposit. Goulagou is 10% owned by an unrelated party.
(8) The Father Brown Underground resource has been estimated below the $1,300 pit shell down to the 700 m elevation using an
economic gold grade cut off of 4.5 g/t.
NON-RESERVES — INFERRED MINERAL RESOURCES
Cautionary Note to U.S. Investors Concerning Estimates of Inferred Mineral Resources
This section uses the term “Inferred Mineral Resources.” We advise U.S. investors that while this term is recognized and
required by NI 43-101, the U.S. 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 feasibil-
ity. It cannot be assumed that all or any part of Inferred Mineral Resources will ever be upgraded to a higher category.
In accordance with Canadian rules, estimates of Inferred Mineral Resources cannot form the basis of feasibility or other
economic studies. U.S. 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 have been estimated in compliance with definitions defined by NI 43-101. Golden Star
Resources has filed Technical Reports regarding the initial disclosure of Mineral Reserves and Mineral Resources for
Bogoso/Prestea, Wassa and the HBB properties as required by NI 43-101. See our “Glossary of Terms.”
The total Inferred Mineral Resources for all of our open pit deposits are those ore tonnages contained within economi-
cally optimized pits, configured using current and predicted mining and processing methods and related operating
costs and performance parameters. Except as otherwise indicated, the Inferred Mineral Resources for all properties
have been estimated at economic cut-off grades based on gold prices of $1,300 per ounce and $1,000 per ounce as of
December 31, 2010, and December 31, 2009, respectively, and economic parameters deemed realistic.
2 0 1 0 A n n u a l R e p o r t | 1 1
The following table summarizes estimated non-reserves
— Inferred Mineral Resources as of December 31, 2010, as
compared to the total for December 31, 2009:
Property
Bogoso/Prestea(1)
Prestea Underground
Wassa
Benso
Hwini-Butre
Chichiwelli Manso
Father Brown Underground(8)
Goulagou(7)
Total 2010
Total 2009
Tonnes
(millions)
10.6
4.1
0.1
0.1
0.7
0.1
0.4
0.5
16.5
11.0
Gold Grade
(g/t)
2.11
8.20
2.27
3.56
1.71
2.23
5.97
1.00
3.66
4.62
Notes to Non-Reserves — Inferred Mineral Resources Table
(1) The Inferred Mineral Resources for Bogoso/Prestea incorpo-
rates Pampe and Mampon.
(2) The Inferred Mineral Resources were estimated in accor-
dance with the definitions and requirements of Canada’s
National Instrument 43-101. Inferred Mineral Resources are
not recognized by the United States Securities and Exchange
Commission.
(3) The Inferred Mineral Resources, other than for Goulagou,
were estimated using an optimized pit shell at a gold price
of $1,300 per ounce from which the Mineral Reserves have
been subtracted. Other than gold price, the same opti-
mized pit shell parameters and modifying factors used to
determine the Mineral Reserves were used to determine
the Mineral Resources. For Goulagou optimized pit shell at
a gold price of $560 was used. The Prestea Underground
resource was estimated using an $1,300 per ounce gold
price and operating cost estimates.
(4) The Inferred Mineral Resources are not included in and are in
addition to the Mineral Reserves described above.
(5) The Qualified Person for the estimation of the Inferred Mineral
Resources is S. Mitchel Wasel, Golden Star Resources Vice
President of Exploration.
(6) Numbers may not add due to rounding.
(7) Pit optimization parameters for the Goulagou Inferred Mineral
Resources were estimated based on feasibility studies on other
similar gold deposits in Burkina Faso, Golden Star’s experience
in West Africa, and from limited metallurgical test work on the
Goulagou ores. Heap leach processing was the assumed pro-
cessing option for this deposit.
(8) The Father Brown Underground resource has been estimat-
ed below the $1,300 pit shell down to the 700 m elevation
using an economic gold grade cut off of 4.5 g/t.
EMPLOYEES
As of December 31, 2010, Golden Star, including our ma-
jority-owned subsidiaries, had approximately 2,120 full
time employees and approximately 370 contract employ-
ees, for a total of 2,490, a 13% increase from the approxi-
mately 2,200 full time and contract employees at the end
of 2009. The 2010 total includes 20 employees at our
principal office in Littleton, Colorado and 4 exploration
personnel in South America.
CUSTOMERS
Currently all of our gold production is shipped to a South
African gold refinery in accordance with a gold sales
contract. The refinery arranges for sale of the gold on
the day it is shipped from the mine site and we receive
payment for gold sold approximately two working days
1 2 | G o l d e n S t a r
after the gold leaves the mine site. The global gold mar-
ket 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 materi-
ally delay or disrupt revenues.
COMPETITION
Our competitive position depends upon our ability to
successfully and economically explore, acquire and develop
new and existing gold properties. Factors that allow
gold producers to remain competitive in the market over
the long term include the quality and sizeof ore bodies,
cost of operation, and the acquisition and retention of
qualified employees. We compete with other mining com-
panies in the acquisition, exploration, financing and de-
velopment of new mineral properties. Many of these com-
panies are larger and better capitalized than we are.
There is significant competition for a limited number of gold
acquisition and exploration opportunities. We also com-
pete with other mining companies for skilled mining en-
gineers, mine and processing plant operators and me-
chanics, mining equipment, geologists, geophysicists
and other experienced technical personnel.
SEASONALITY
All of our operations are in tropical climates that experi-
ence annual rainy seasons. Ore output from our surface
mining operations can be reduced during wet periods.
While mine plans anticipate periods of high rain fall each
year, in the third and fourth quarters of 2010 unusually
heavy rainfall disrupted operations at both Bogoso/
Prestea and Wassa/HBB
for extended periods.
Exploration activities are generally timed to avoid the
rainy periods to ease transportation logistics associated
with wet roads and swollen rivers.
AVAILABLE INFORMATION
We make available, free of charge, on or through our
Internet website, our annual report on Form 10-K, quar-
terly reports on Form 10-Q, current reports on Form 8-K
and amendments to those reports filed or furnished pur-
suant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 as soon as reasonably practicable after we
electronically 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 connect-
ed thereto are not intended to be, and are not incorpo-
rated into this Annual Report on Form 10-K.
ITEM 1A. RISK FACTORS
You should consider the following discussion of risks in ad-
dition to the other information contained in or included by
reference in this Form 10-K. In addition to historical infor-
mation, the information in this Form 10-K contains “for-
ward-looking statements” about our future business and
performance. Our actual operating results and financial
performance may be very different from what we expect
as of the date of this Form 10-K. The risks below address
material factors that may affect our future operating
results and financial performance.
GENERAL RISKS
A substantial or prolonged decline in gold prices would
have a material adverse effect on us.
The price of our common shares, our financial results and
our exploration, development and mining activities have
previously been, and would in the future be significantly
adversely affected by a substantial or prolonged decline in
the price of gold. The price of gold is volatile and is affect-
ed by numerous factors beyond our control such as the
sale or purchase of gold by various central banks and fi-
nancial institutions, inflation or deflation, fluctuation in the
value of the United States dollar and foreign currencies,
global and regional demand, and the political and econom-
ic conditions of major gold-producing countries through-
out the world. Any drop in the price of gold adversely im-
pacts our revenues, profits and cash flows. In particular, a
sustained low gold price could:
• cause suspension of our mining operations at Bogoso/
Prestea and Wassa/HBB if these operations become
uneconomic at the then-prevailing gold price, thus
further reducing revenues;
• cause us to be unable to fulfill our obligations under
agreements with our partners or under our permits
and licenses which could cause us to lose our interests
in, or be forced to sell, some of our properties;
• cause us to be unable to fulfill our debt payment obligations;
• halt or delay the development of new projects; and
• reduce funds available for exploration, with the result
that depleted mineral reserves are not replaced.
Furthermore, the need to reassess the feasibility of any of
our projects because of declining gold prices could cause
substantial delays or could interrupt operations until a re-
assessment could be completed. Mineral reserve estima-
tions 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 investment in mining properties and in-
creased amortization, reclamation and closure charges.
We have incurred and may in the future incur substan-
tial losses that could make financing our operations and
business strategy more difficult and that may affect our
ability to service our debts as they become due.
While we had net income of $16.5 million in 2009, we
experienced net losses of $8.3 million, $119.3 million and
$35.3 million in 2010, 2008 and 2007, respectively, and
have experienced net losses in other prior fiscal years. In
recent years, increasing operating costs, natural varia-
tion in ore grades and gold recovery rates within the pits
mined, and impairment write-offs of mine property and
exploration property costs have been the primary fac-
tors contributing to such losses. In the future, these fac-
tors, as well as declining gold prices, could cause us to
continue to be unprofitable. Future operating losses
could adversely affect our ability to raise additional cap-
ital if needed, and could materially and adversely affect
our operating results and financial condition. In addition,
continuing operating losses could affect our ability to
meet our debt payment obligations.
Our obligations could strain our financial position and
impede our business strategy.
We had total consolidated debt and liabilities as of
December 31, 2010, of $282.3 million, including $15.7 mil-
lion in equipment financing loans; $108.8 million ($125.0
million including the loan’s equity portion) pursuant to
the convertible debentures; $88.5 million of current
trade payables, accrued current and other liabilities; $21.6
million of current and future taxes; $2.7 million payable un-
der capital leases and a $45.0 million accrual for environ-
mental rehabilitation liabilities. Our indebtedness and other
liabilities may increase as a result of general corporate ac-
tivities. These liabilities could have important consequences,
including the following:
• increasing our vulnerability to general adverse eco-
nomic and industry conditions;
• limiting our ability to obtain additional financing to fund
future working capital, capital expenditures, explora-
tion costs and other general corporate requirements;
• requiring us to dedicate a significant portion of our
cash flow from operations to make debt service pay-
ments, which would reduce our ability to fund working
capital, capital expenditures, exploration and other
general corporate requirements;
• limiting our flexibility in planning for, or reacting to, chang-
es in our business and the industry; and
• placing us at a disadvantage when compared to our
competitors that have less debt relative to their mar-
ket capitalization.
Our estimates of Mineral Reserves and non-reserves
could be inaccurate, which could cause actual produc-
tion and costs to differ from estimates.
There are numerous uncertainties inherent in estimating
Proven and Probable Mineral Reserves and non-reserve
Measured, Indicated and Inferred Mineral Resources,
including many factors beyond our control. The accura-
cy of estimates of Mineral Reserves and nonreserves is a
function of the quantity and quality of available data and
of the assumptions made and judgments used in engi-
neering and geological interpretation, which could prove
to be unreliable. These estimates of Mineral Reserves
and non-reserves may not be accurate, and Mineral
Reserves and non-reserves may not be able to be mined
or processed profitably.
Fluctuation in gold prices, results of drilling, metallurgi-
cal testing, changes in operating costs, production, and
the evaluation of mine plans subsequent to the date of
any estimate could require revision of the estimates. The
volume and grade of Mineral Reserves mined and pro-
cessed and recovery rates might not be the same as cur-
rently anticipated. Any material reductions in estimates
of our Mineral Reserves and non-reserves, or of our abil-
ity 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 two sources of operational cash
flows, which could be insufficient by themselves to fund
our continuing exploration and development activities.
While we have received significant infusions of cash
from sales of equity and debt securities, our only cur-
rent significant internal sources of funds are operation-
al cash flows from Bogoso/Prestea and Wassa/HBB.
The anticipated continuing exploration and develop-
ment of our properties are expected to require signifi-
cant expenditures over the next several years. Although
we expect sufficient internal cash flow to cover all of
these projects, such expenditures may exceed free
cash flows generated by Bogoso/Prestea and Wassa/
HBB in future years, and therefore, we may require ad-
ditional external debt or equity financing. Our ability to
2 0 1 0 A n n u a l R e p o r t | 1 3
raise significant new capital will be a function of macro-
economic conditions, future gold prices, our operation-
al performance and our then current cash flow and debt
position, among other factors. In light of the current
limited global availability of credit, we may not be able
to obtain adequate financing on acceptable terms or at
all, which could cause us to delay or indefinitely post-
pone further exploration and development of our prop-
erties. As a result, we could lose our interest in, or could
be forced to sell, some of our properties.
We are subject to fluctuations in currency exchange
rates, which could materially adversely affect our finan-
cial position.
Our revenues are in United States dollars, and we main-
tain most of our working capital in United States dollars
or United States dollar-denominated securities. We con-
vert our United States funds to foreign currencies as cer-
tain payment obligations become due. Accordingly, we
are subject to fluctuations in the rates of currency ex-
change between the United States dollar and these for-
eign currencies, and these fluctuations could materially
affect our financial position and results of operations. A
significant portion of the operating costs at Bogoso/
Prestea and Wassa/HBB is based on the Ghanaian cur-
rency, the Cedi. We are required by the Government of
Ghana to convert into Cedis 20% of the foreign exchange
proceeds that we receive from selling gold, but the
Government could require us to convert a higher per-
centage of gold sales proceeds into Cedis in the future.
We obtain construction and other services and materials
and supplies from providers in South Africa and other
countries. The costs of goods and services could in-
crease or decrease due to changes in the value of the
United States dollar or the Cedi, the Euro, the South
African Rand or other currencies. Consequently, opera-
tion and development of our properties could be more
costly than anticipated.
tions. Any acquisition would be accompanied by risks. For
example, there may be a significant change in commodity
prices after we have committed to complete a transaction
and established the purchase price or exchange ratio, a
material ore body may prove to be below expectations or
the acquired business or assets may have unknown liabili-
ties which may be significant. We may lose the services of
our key employees or the key employees of any business
we acquire or have difficulty integrating operations and
personnel. The integration of an acquired business or as-
sets may disrupt our ongoing business and our relation-
ships with employees, suppliers and contractors. Any one
or more of these factors or other risks could cause us not to
realize the anticipated benefits of an acquisition of proper-
ties or companies, and could have a material adverse effect
on our current business and financial condition and on our
ability to grow.
We are subject to litigation risks.
All industries, including the mining industry, are subject
to legal claims, with and without merit. As such, we are
involved in various routine legal proceedings incidental
to our business. Defense and settlement costs can be
substantial, even with respect to claims that have no mer-
it. Due to the inherent uncertainty of the litigation pro-
cess, the resolution of any particular legal proceeding
could have a material effect on our future financial posi-
tion and results of operations.
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 haz-
ards including:
• power shortages;
• mechanical and electrical equipment failures;
• parts availability;
• unexpected changes in ore grades;
Our hedging activities might be unsuccessful and incur losses.
• unexpected changes in ore chemistry and gold recov-
During the second quarter of 2010, we entered into con-
tracts with respect to 32,000 ounces of gold to address
potential gold price volatility. All of these contracts expired
by the end of the second quarter of 2010. As of December
31, 2010, we had no outstanding hedge contracts. While we
may enter into additional hedging arrangements in the future,
further hedging activities might not 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 pro-
gram, we could be obligated to sell gold at a price lower
than the then-current market price.
Risks inherent in acquisitions that we might undertake
could adversely affect our current business and finan-
cial condition and our growth.
We plan to continue to pursue the acquisition of producing,
development and advanced stage exploration properties
and companies. The search for attractive acquisition op-
portunities and the completion of suitable transactions are
time consuming and expensive, divert management atten-
tion from our existing business and may be unsuccessful.
Success in our acquisition activities depends on our ability
to complete acquisitions on acceptable terms and inte-
grate the acquired operations successfully with our opera-
erability;
• environmental hazards;
• discharge of pollutants or hazardous chemicals;
• industrial accidents;
• labor disputes and shortages;
• supply and shipping problems and delays;
• shortage of equipment and contractor availability;
• unusual or unexpected geological or operating condi-
tions;
• cave-ins of underground workings;
• slope failures and failure of pit walls or dams;
• fire;
• marine and transit damage and/or loss;
• changes in the regulatory environment, including in
the area of climate change;
• delayed or restricted access to ore due to community
interventions; and
• natural phenomena such as inclement weather condi-
tions, floods, droughts and earthquakes.
These or other occurrences could result in damage to, or
destruction of, mineral properties or production facili-
ties, personal injury or death, environmental damage,
delays in mining, delayed production, monetary losses
and possible legal liability. Satisfying such liabilities
1 4 | G o l d e n S t a r
could be very costly and could have a material adverse
effect on our financial position and results of operations.
rially adverse effect on our business, financial condition,
results of operations and cash flows.
Our mining operations are subject to numerous environ-
mental laws, regulations and permitting requirements
and bonding requirements that can delay production
and adversely affect operating and development costs.
Compliance with existing regulations governing the dis-
charge of materials into the environment, or otherwise
relating to environmental protection, in the jurisdictions
where we have projects may have a material adverse
effect on our exploration activities, results of operations
and competitive position. New or expanded regulations,
if adopted, could affect the exploration, development, or
operation of our projects or otherwise have a material
adverse effect on our operations.
Portions of our Wassa property, as well as some of our ex-
ploration properties in Ghana, including Dunkwa, are lo-
cated within forest reserve areas. Although Dunkwa and
Wassa have been identified by the Government of Ghana
as eligible for mining permits, subject to normal proce-
dures and a site inspection, permits for projects in forest
reserve areas may not be issued in a timely fashion, or at all,
and such permits may contain special requirements with
which it is burdensome or uneconomic to comply.
Mining and processing gold from our future develop-
ment projects in Ghana will require mining, environmen-
tal, and other permits and approvals
from the
Government of Ghana. These permits and approvals may
not be issued on a timely basis or at all, and such permits
and approvals, when issued, may be subject to require-
ments or conditions with which it is burdensome or un-
economic to comply. For example, although we received
mining permits for Prestea South in 2008, we are still
awaiting the environmental permit from the Government
of Ghana. Such permitting issues could adversely affect
our projected production commencement dates, pro-
duction amounts and costs.
Developing our pit at Dumasi will require us to imple-
ment a resettlement action plan and reach agreements
both with the residents that live close to the pit and oth-
er stakeholders. These negotiations could be difficult or
unsuccessful and may materially affect our ability to ac-
cess these mineral reserves and mineral resources.
Due to an increased level of non-governmental organiza-
tion activity targeting the mining industry in Ghana, the
potential for the Government of Ghana to delay the issu-
ance of permits or impose new requirements or condi-
tions upon mining operations in Ghana may increase.
Any changes in the Government of Ghana’s policies, or
their application, may be costly to comply with and may
delay mining operations. The exact nature of other envi-
ronmental control problems, if any, which we may en-
counter in the future, cannot be predicted primarily be-
cause of the changing character of environmental
requirements that may be enacted within the various ju-
risdictions where we operate.
As a result of the foregoing risks, project expenditures,
production quantities and rates and cash operating
costs, among other things, could be materially and ad-
versely affected and could differ materially from an-
ticipated expenditures, production quantities and rates,
and costs. In addition, estimated production dates could
be delayed materially. Any such events could have a mate-
The development and operation of our mining projects
involve numerous uncertainties that could affect the
feasibility or profitability of such projects.
Mine development projects, including our recent devel-
opment at Benso and Hwini-Butre, typically 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 and so-
cioeconomic assessments, the issuance of necessary gov-
ernmental permits and receipt of adequate financing. The
economic feasibility of development projects is based on
many factors such as:
• estimation of mineral reserves and mineral resources;
• mining rate, dilution and recovery;
• anticipated metallurgical characteristics of the ore and
gold recovery rates;
• environmental and community considerations includ-
ing resettlement, permitting and approvals;
• future gold prices; and
• anticipated capital and operating costs.
Estimates of proven and probable mineral reserves and
operating costs developed in feasibility studies are
based on reasonable assumptions including geologic
and engineering analyses and may not prove to be ac-
curate.
The management of mine development projects and the
start up of new operations are complex. Completion of
development and the commencement of production
may be subject to delays, as occurred in connection with
the Bogoso sulfide expansion project. Any of the follow-
ing 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 spe-
cific environment;
• cost of processing and refining;
• availability of economic sources of power and fuel;
• availability of qualified staff;
• adequacy of water supply;
• adequate access to the site including competing land
uses (such as agriculture and illegal mining);
• unanticipated transportation costs and shipping inci-
dents and losses;
• significant increases in the cost of diesel fuel, cyanide
or other major components of operating costs;
• government regulations and changes to existing regula-
tions (including regulations relating to prices, royalties, du-
ties, taxes, permitting, restrictions on production, quotas
on exportation of minerals, protection of the environment
and agricultural lands, including bonding requirements);
• fluctuations in gold prices; and
• accidents, labor actions and force majeure events.
2 0 1 0 A n n u a l R e p o r t | 1 5
Adverse effects on the operations or further development
of a project could also adversely affect our business
(including our ability to achieve our production estimates),
financial condition, results of operations and cash flow.
We need to continually discover, develop or acquire
additional Mineral Reserves for gold production and a
failure to do so would adversely affect our business and
financial position in the future.
Because mines have limited lives based on Proven and
Probable Mineral Reserves, we must continually replace
and expand Mineral Reserves as our mines produce gold.
We are required to estimate mine life in connection with
our estimation of reserves, but our estimates may not be
correct. In addition, mine life would be shortened if we ex-
pand production or if we lose reserves due to changes in
gold price or operating costs. Our ability to maintain or in-
crease our annual production of gold will be dependent in
significant part on our ability to bring new mines into pro-
duction and to expand or extend the life of existing mines.
Gold exploration is highly speculative, involves sub-
stantial expenditures, and is frequently non-productive.
Gold exploration, including the exploration of the Prestea
Underground and other projects, involves a high degree
of risk. Exploration projects are frequently unsuccessful.
Few prospects that are explored are ultimately developed
into producing mines. We cannot assure you that our gold
exploration efforts will be successful. The success of gold
exploration is dependent in part on the following factors:
• the identification of potential gold mineralization
based on surface analysis;
• availability of prospective land;
• availability of government-granted exploration and
exploitation permits;
with respect to our Bogoso/Prestea, Wassa, Prestea
Underground and HBB properties. Title insurance gener-
ally is not available, and our ability to ensure that we
have obtained a secure claim to individual mineral prop-
erties or mining concessions is limited. We generally do
not conduct surveys of our properties until they have
reached the development stage, and therefore, the pre-
cise area and location of such properties 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 re-
spect 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 executive personnel. Due to
the relatively small size of our management team, the loss of
one or more of these persons or our inability to attract and
retain additional highly skilled employees could have an
adverse effect on our business and future operations.
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;
• the quality of our management and our geological and
• marine transit and shipping damage and/or losses;
technical expertise; and
• natural phenomena such as inclement weather condi-
• the funding available for exploration and development.
tions, floods and earthquakes; and
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. Because of these uncertainties,
we cannot assure you that current and future explora-
tion programs will result in the discovery of Mineral
Reserves, the expansion of our existing Mineral Reserves
or 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 gold. 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 attractive min-
ing properties on terms we consider acceptable or at all.
Consequently, our future revenues, operations and finan-
cial condition could be materially adversely affected.
Title to our mineral properties could be challenged.
We 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. We have mining leases
• political risks including expropriation and civil war.
Such occurrences could result in:
• damage to mineral properties or production facilities
and equipment;
• personal injury or death;
• loss of legitimate title to properties;
• environmental damage to our properties or the proper-
ties of others;
• delays in mining, processing and development;
• monetary losses; and
• possible legal liability.
risks at economically
Although we maintain insurance in amounts that we be-
lieve 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
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 environmen-
tal 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
1 6 | G o l d e n S t a r
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 Ghanaian) 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 cor-
poration and these entities, or among these entities, could
restrict our ability to fund our operations efficiently, or to
repay the convertible debentures or other debt. Any such
limitations, or the perception that such limitations might
exist now or in the future, could have an adverse impact
on available credit and our valuation and stock price.
We are subject to changes in the regulatory environ-
ment where we operate which may increase our costs of
compliance.
Our mining operations and exploration activities are
subject to extensive regulation governing various
matters, including:
• licensing;
• production;
• taxes;
• disposal of process water or waste rock;
• toxic substances;
• development and permitting;
• exports and imports;
• labor standards;
• mine and occupational health and safety;
• environmental protection and corporate responsibility;
and
• mine rehabilitation and closure plans.
Compliance with these regulations increases the costs of
the following:
• planning;
• designing;
• drilling;
• operating;
• developing;
• constructing; and
• closure, reclamation and rehabilitation and post closure.
We believe that we are in substantial compliance with cur-
rent laws and regulations in Ghana and elsewhere. However,
these laws and regulations are subject to frequent change
and reinterpretation. Amendments to current laws and reg-
ulations governing operations and activities of mining compa-
nies or more stringent implementation or interpretation of
these laws and regulations could have a material adverse
impact on us. These factors could cause a reduction in lev-
els of production and delay or prevent the development or ex-
pansion of our properties in Ghana.
The implementation of changes in regulations that limit the
amount of proceeds from gold sales that could be with-
drawn from Ghana could also have a material adverse im-
pact on us, as Bogoso/Prestea and Wassa are currently our
only sources of internally generated operating cash flows.
Environmental bonding requirements are under review
in Ghana and bonding requirements may be increased.
As part of its periodic assessment of mine reclamation
and closure costs, the Ghana Environmental Protection
Agency (the “EPA”) reviews the adequacy of reclama-
tion bonds and guarantees. In certain cases, it has re-
quested higher levels of bonding based on its findings. If
the EPA were to require additional bonding at our prop-
erties, it may be difficult, if not impossible, to provide
sufficient bonding. If we are unable to meet any such
increased requirements or negotiate an acceptable solu-
tion with the Ghanaian government, our operations and
exploration and development activities in Ghana may be
materially adversely affected.
The Government of Ghana has the right to increase its
interest in certain subsidiaries.
In accordance with the Minerals and Mining Act, 2006
(Act 703), the Government of Ghana has a 10% carried
interest in the mineral operations of Ghanaian mining
companies. The carried interest comes into existence at
the time the government issues a mining license. As such,
the Government of Ghana currently has a 10% carried
interest in our subsidiaries that own the Bogoso/Prestea
properties, and the Wassa/HBB properties.
Under Act 703, the Government has 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 a pre-emptive right to purchase all gold and
other minerals produced by such subsidiaries. A “golden
share” carries no voting rights and does not participate
in dividends, profits or assets. While the Government of
Ghana has not sought to exercise any of these rights at
our properties, any such attempts to do so in the future
could adversely affect our financial results.
During the first quarter of 2010, the Government of Ghana
amended the Minerals and Mining Act to change the
method of calculating mineral royalties payable to the
Government. The prior rules established a royalty rate of
not less than 3% and not more than 6% of a mine’s total
revenues, the exact amount being determined by each
mine’s margin as defined in the law. Under the old rules,
our mines have, since their inception, qualified for and
paid a 3% rate. Under the amended law, the royalty has
been set at a flat rate of 5% of mineral revenues with an
effective date of March 19, 2010. In October 2010, we
were notified that the effective date was extended to the
end of March 2011.
Certain mining companies operating in Ghana, including
our subsidiaries GSBPL and GSWL, operate under tax
stabilization agreements which govern, among other
things, royalty rates and various tax rules. Discussions
with the Ministry of Finance and Economic Planning are
ongoing to determine the applicability of this new roy-
alty legislation to GSBPL and GSWL after March 2011.
2 0 1 0 A n n u a l R e p o r t | 1 7
We are subject to risks relating to exploration, develop-
ment and operations in foreign countries.
Our assets and operations are affected by various politi-
cal and economic uncertainties in the countries where
we operate, including:
• war, civil unrest, terrorism, 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 (such as the temporary
national stabilization levy imposed by the Government
of Ghana inJuly 2009, which require payments equal
to 5% of “profits before tax”);
• unilaterally imposed increases in royalty rates;
• 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 has occurred on our properties, it is diffi-
cult to control, can disrupt our business and can expose
us to liability.
We continue to experience illegal mining activity on our
mining and exploration properties. Most of this activity is
on our Prestea South and Hwini-Butre properties. While
we are proactively working with local, regional and na-
tional governmental authorities to obtain protection of
our property rights, any action on the part of such au-
thorities may not occur, may not fully address our prob-
lems or may be delayed.
In addition to the impact on our mineral reserves and non-
reserves, the presence of illegal miners can lead to project
delays and disputes and delays regarding the development or
operation of commercial gold deposits. Illegal miners could
cause environmental damage or other damage to our prop-
erties, or personal injury or death, for which we could poten-
tially be held responsible. Illegal miners may work on other of
our properties from time to time, and they may in the future
increase their presence and have increased negative impacts
such as those described above on such other properties.
Our activities are subject to complex laws, regulations
and accounting standards that can adversely affect oper-
ating and development costs, the timing of operations,
the ability to operate our mines and our financial results.
Our business, mining operations and exploration and
development activities are subject to extensive Canadian,
United States, Ghanaian and other foreign, federal, state,
provincial, territorial and local laws and regulations gov-
erning exploration, development, production, exports,
taxes, labor standards, waste disposal, protection of the
environment, reclamation, historic and cultural resource
preservation, mine safety and occupational health, toxic
substances, reporting and other matters, as well as account-
ing standards. Compliance with these laws, regulations
and standards or the imposition of new such require-
ments could adversely affect operating and development
costs, the timing of operations and the ability to operate
and financial results.
Failure to maintain effective internal controls could
have a material adverse effect on our business and
share price.
Annually, we are required to test our internal controls
over financial reporting to satisfy the requirements of
Section 404 of the Sarbanes-Oxley Act of 2002, which
requires annual management assessments of the effec-
tiveness of our internal controls over financial reporting.
Failure to maintain effective internal controls could have
a material adverse effect on our business and share price.
MARKET RISKS
The market price of our common shares has experienced
volatility and could continue to do so in the future.
Our common shares are listed on the NYSE Amex, the
Toronto Stock Exchange and the Ghana Stock Exchange.
Companies with market capitalizations similar to ours 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 macro-
economic 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 operations 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 fol-
low our securities;
• the trading volume and general market interest in our
securities could affect an investor’s ability to trade sig-
nificant numbers of common shares;
• the size of the public float in our common shares may
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 NYSE Amex, the Toronto Stock
Exchange and/or the Ghana 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 ac-
curately reflect our long-term value. The stock markets
in general have recently suffered major declines.
Securities class action litigation often has been brought
against companies following periods of market price
volatility that affects the market price of particular secu-
rities without regard to the performance of the company
whose stock price is affected. We could in the future be
the target of similar litigation. Securities litigation could
result in substantial costs and damages and divert man-
agement’s attention and resources.
Investors could have difficulty or be unable to enforce
certain civil liabilities on us, our directors and our experts.
Golden Star is a Canadian corporation. A majority of our
assets are located outside of Canada and the United States,
and our head office is located in the United States. It might
not be possible for investors to collect judgments obtained
in Canadian courts predicated on the civil liability provi-
sions of Canadian or U.S. securities legislation. It could also
1 8 | G o l d e n S t a r
be difficult for investors to effect service of process in con-
nection with any action brought in the United States upon
our directors and officers. Execution by United States
courts of any judgment obtained against us, or any of the
directors or executive officers, in the United States courts
would be limited to our assets or the assets of such persons
in the United States. The enforceability in Canada of United
States judgments or liabilities in original actions in Canadian
courts predicated solely upon the civil liability provisions of
the federal securities laws of the United States is doubtful.
There are certain U.S. federal income tax risks associ-
ated with ownership of Golden Star common shares.
Holders of our common shares or options to purchase
our common shares or convertible debentures, referred
to as “equity securities”, who are U.S. taxpayers should
consider that we could be considered to be a “passive
foreign investment company” (“PFIC”) for U.S. federal
income tax purposes. Although we believe that we were
not a PFIC in 2010 and do not expect to become a PFIC
in the foreseeable future, the tests for determining PFIC
status depend upon a number of factors, some of which
are beyond our control, and can be subject to uncertain-
ties, and we cannot assure you that we will not be a PFIC.
We undertake no obligation to advise holders of our equity
securities as to our PFIC status for any year.
If we are a PFIC for any year, any person who holds our
equity securities who is a U.S. person for U.S. income tax
purposes, referred to as a U.S. holder and whose holding
period for those equity securities includes any portion of
a year in which we are a PFIC generally would be subject
to a special adverse tax regime in respect of “excess dis-
tributions.” Excess distributions include certain distribu-
tions received with respect to PFIC shares in a taxable
year. Gain recognized by a U.S. holder on a sale or other
transfer of our equity securities (including certain trans-
fers that would otherwise be tax free) also would be
treated as an excess distributions. Such excess distribu-
tions and gains would be allocated ratably to the U.S.
holder’s holding period. For these purposes, the holding
period of shares acquired either through an exercise of
options or the conversion of convertible debentures in-
cludes the holder’s holding period in the option or con-
vertible debt.
The portion of any excess distribution (including gains
treated as excess distributions) allocated to the current
year would be includible as ordinary income in the current
year. The portion of any excess distribution allocated to
prior years would be taxed at the highest marginal rate
applicable to ordinary income for each such year (regard-
less of the taxpayer’s actual marginal rate for that year
and without reduction by any losses or loss carry for-
wards) and would be subject to interest charges to reflect
the value of the U.S. income tax deferral.
Elections may be available to mitigate the adverse tax
rules that apply to PFICs (the so-called “QEF” and “mark-
to-market” elections), but these elections may acceler-
ate the recognition of taxable income and may result in
the recognition of ordinary income. The QEF and mark-
to-market elections are not available to U.S. holders with
respect to options to acquire our common shares or con-
vertible debentures. We have not decided whether we
would provide to U.S. holders of our common shares the
annual information that would be necessary to make the
QEF election.
Additional special adverse rules also apply to investors
who are U.S. holders who own our common shares if we
are a PFIC and have a non-U.S. subsidiary that is also a
PFIC. Special adverse rules that impact certain estate
planning goals could apply to our equity securities if we
are a PFIC.
The conversion feature of the convertible debentures could
limit increases in the trading price of our common shares.
The conversion price of the convertible debentures is
$5.00 and represented a 26% premium over the closing
price of our common shares on the NYSE Amex on
February 22, 2011. In the event our share price is greater
than the conversion price, this conversion feature may lim-
it the increase in the price of our common shares, since any
increase in the stock price above the conversion price will
make it more likely that the convertible debentures will be
converted, thereby exerting a downward pressure on the
market price of the common shares.
The existence of outstanding rights to purchase or acquire
common shares could impair our ability to raise capital.
for
As of February 22, 2011, there were options outstanding
to purchase up to 6,675,272 common shares at exercise
prices ranging from Cdn$1.02 to Cdn$6.95 per share. In
addition, 11,004,446 additional common shares are avail-
issuance under our stock option plans.
able
Furthermore, 25.0 million common shares are currently
issuable upon conversion of the convertible debentures
(additional shares may be issuable in certain circumstanc-
es.) During the life of the options, convertible debentures
and other rights, the holders are given an opportunity to
profit from a rise in the market price of common shares,
with a resulting dilution in the interest of the other share-
holders. 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 options, convertible debentures and other
rights can be expected to exercise or convert them at a
time when we would, in all likelihood, be able to obtain
any needed capital by a new offering of securities on
terms more favorable than those provided by the out-
standing rights.
Current global financial conditions may affect our abil-
ity to obtain financing and may negatively affect our
asset values and results of operations.
Global financial conditions during the past three years
have been characterized by heightened volatility and un-
certainty. As a result, access to financing has been nega-
tively impacted, which may affect our ability to obtain
equity or debt financing in the future on favorable terms.
Additionally, these factors, as well as other related fac-
tors, may cause decreases in asset values that are
deemed to be other than temporary, which may result in
impairment losses. If such increased levels of volatility
and market turmoil continue or worsen, our operations
could be adversely impacted and the trading price of our
common shares may be adversely affected.
2 0 1 0 A n n u a l R e p o r t | 1 9
ITEM 1B.
UNRESOLVED STAFF COMMENTS
None
ITEM 2.
DESCRIPTION OF PROPERTIES
MAPS OF OPERATIONS AND PROPERTIES
The maps below show the locations of Bogoso, Prestea, Wassa, Pampe, the Hwini-Butre, Benso and Mampon in
Ghana, and various exploration properties in other areas of West Africa and Brazil. These properties are described
in further detail below.
2 0 | G o l d e n S t a r
2 0 1 0 A n n u a l R e p o r t | 2 1
PROPERTY STATUS TABLE
The chart below summarizes information regarding our more significant properties, which are described in further
detail below:
Bogoso
(Ghana)
Bogoso
(Ghana)
Prestea
(Ghana)
Property
Bogoso Mining
Lease 1
Bogoso Mining
Lease 2
Bogoso
Prospecting
License
Prestea Mining
Surface Lease
Prestea
Underground
(Ghana)
Prestea
Underground
Mining Lease
Wassa
(Ghana)
Wassa Mining
Lease
Wassa
Regional
(Ghana)
Accra
Newtown
Adaase
Type of Interest
Government
granted mining
leases held by
a 90% owned
subsidiary
Prospecting
license
Government
granted mining
lease held by
a 90% owned
subsidiary
Government
granted mining
lease held by a
81% beneficial
interest
Government
granted mining
lease held by
a 90% owned
subsidiary
Prospecting
license
Prospecting
license
Ateiku-Twifo
Reconnaissance
license
Dwaben (Safric) Reconnaissance
Dunkwa-Asikuma
(Ghana)
Dunkwa-Mansiso
(Ghana)
Akropong
(Ghana)
Moseaso
license
Prospecting
license
Prospecting
license
Prospecting
license
Kobra-Riyadh
East
Pampe Mining
Lease
Reconnaissance
license
Mining lease
Expiry Date
8/20/2017
Property size
50 km2
2010 Status
Active
Comments
Mining stage
8/15/2018
45 km2
3/10/2004
Renewal under
application
6/28/2031
58.52 km2
Inactive
Exploration stage
115.5 km2
Active
Mining and
development
stage
7/6/2031
11.3 km2 lies
directly below
Prestea surface
lease
Active
Exploration stage
9/16/2022
52.89 km2
Active
Mining stage
7/27/2011
15.68 km2
Active
Exploration stage
45.6 km2
Exploration stage
12/15/2009
Renewal under
application
1/5/2010 Renewal
under application
2/1/2007
Renewal under
application
7/21/2011
39.7 km2
24.05 km2
66 km2
7/21/2011
56 km2
1/10/2010
Renewal under
application
Conversion to PL
in advanced stage
6/3/2012
138 km2
50 km2
Exploration stage
Exploration stage
Active
Active
Development stage
Exploration stage
43.2 km2
Active
Exploration stage
Mining lease
1/10/2012
40 km2
3 Prospecting
licenses and joint
venture agreements
Mining lease
Various
221.07 km2
Active
9/26/2011
20.38 km2
Active
Active
Active
Exploration stage
Mining and
Exploration stage
Mining and
Exploration stage
Exploration stage
Mining and
Exploration stage
Abura
Adubrim
Afranse
Hotopo
Oseneso
Prospecting
license
11/18/2010
Renewal under
application
22.46 km2
Active
Exploration stage
Prospecting
license – joint
venture
Reconnaissance
license
Prospecting
license – joint
venture
Reconnaissance
licence – joint
venture
Prospecting
license – joint
venture
Reconnaissance
licence – joint
venture
2/3/2012
129.05 km2
Active
Exploration stage
12/3/2008
Conversion to PL
under application
2/23/2011
12/19/2008
Renewal under
application
3/1/2011
1/5/2010
Renewal under
application
85.17 km2
77.46 km2
18.06 km2
66.21 km2
66.4 km2
Wassa Akropong
(Rocco 1)
2 2 | G o l d e n S t a r
Pampe
Hwini-Butre
(Ghana)
Manso
(Ghana)
Benso–Subriso
Block
(Ghana)
Benso-Amantin &
Chichiwelli
Blocks
(Ghana)
Ghana
Regional
Property
Amelekia
Côted’Ivoire
Regional
Abengourou
Agboville
Mano JV
(Sierra Leone)
Burkina Faso
Sonfon South
Goulagou
Rounga
Youba
Tougou
Bangodo
Kampouaga
Niger
Deba
Tialkam
Brazil
MT-Iriri
MT-Nhandu/
Fabinho/Natal
MG-Sao
Bartolomeu
Type of Interest
Exploration
license
Exploration
license
Exploration
license (Renewal
has been granted
but documents
are pending due
to current political
situation)
Mano River
Resources Inc
Agreement allow
earning up to
90%
Agreement allow
earning up to
90%
Agreement allow
earning up to
90%
Exploration Per-
mit – 100% held
by GSE-BF (GSR
subsidiary)
Exploration Per-
mit – 100% held
by GSE-BF (GSR
subsidiary)
100 % held by
GSE-BF (GSR
Subsidiary)
Exploration Per-
mit – 100% held
by GSE-Niger
(GSR subsidiary)
Exploration Per-
mit – 100% held
by GSE-Niger
(GSR subsidiary)
41 Prospecting
Licenses – Joint
Venture
5 Prospecting
Licenses – 100%
held by Caystar-
Brasil (GSR
subsidiary)
7 Prospecting
Licenses – JV
Agreement allow
earning up to
65%
MG-Alto da
Varginha
3 Prospecting
Licenses – JV
GO -
Cafundo/Goianesia
7 Prospecting
Licenses – 100%
held by Caystar-
Brasil (GSR
subsidiary)
Expiry Date
8/10/2010
Property size
403.5 km2
2010 Status
Active
Comments
Exploration stage
8/10/2010
537.3 km2
8/10/2010
481.0 km2
8/18/2011
153 km2
Active
Exploration stage
11/11/2011
185.25 km2
Active
11/13/2012
240 km2
10/17/2011
61.75 km2
8/21/2011
128 km2
Optioned to
Riverstone
Resources Inc.
Optioned to
Riverstone
Resources Inc.
Optioned to
Riverstone
Resources Inc.
Formerly part
of the optioned
Goulagou permit
Exploration stage
10/17/2011
249.77 km2
Exploration stage
10/17/2011
243.99 km2
Exploration stage
12/27/2013
275 km2
Active
12/27/2013
183 km2
3,348 km2
Active
JV with AMI
Resources Inc.
who are earning
into properties
Exploration stage
JV with
Votorantim
Metais Zinco S/A
1/23/2011
3/14/2011
Renewal under
application
7/14/2011
12/3/2012
4/4/2011
Renewal under
application
1/24/2013
9/12/2010
Renewal under
application
6/27/2011
12/15/2011
6/7/2012
2/18/2012
5/11/2013
7/2/2013
7/13/2013
395 km2
Active
Exploration stage
98 km2
Active
Optioned to
Kinross Brasil
Mineracao S/A
47 km2
Active
134 km2
Active
Optioned to
Mineracao Iam-
gold Brasil Ltda.
Exploration stage
2 0 1 0 A n n u a l R e p o r t | 2 3
MINING IN GHANA
Ghanaian Ownership and Special Rights
Ghana is situated on the west coast of Africa, approxi-
mately 600 km north of the Equator on the Gulf of Guinea.
Accra, the capital city of Ghana, is located almost exactly
on the Prime Meridian. The former British colony changed
its name from the Gold Coast to Ghana on achieving inde-
pendence on March 6, 1957. Ghana is now a republic with
a population of approximately 23 million people and a
democratically elected government. English remains the
official and commercial language.
The total land area of the country is approximately
238,000 square kilometers and the topography is rela-
tively flat. Ghana has a tropical climate with two rainy
seasons and two dry seasons each year, particularly in
the Western Region where Golden Star Resources has its
two operations.
Rights to explore and develop a mine are administered by
the Minister of Lands and Natural Resources, through the
Minerals Commission, a governmental organization designed
to promote and regulate the development of Ghana’s min-
eral wealth in accordance with the Minerals and Mining Act
of 2006 (Act 703), which came into effect in March 2006
(“2006 Mining Act”).
A company or individual can apply to the Minerals
Commission for a renewable exploration license granting
exclusive rights to explore for a particular mineral in a select-
ed area for an initial period not exceeding three years.
When exploration has successfully delineated a Mineral
Reserve, an application may be 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, normally for a period of 20 to 30 years or
a lesser period that may be agreed upon with the applicant.
The 2006 Mining Act requires that any person who in-
tends to acquire a controlling share of the equity of any
mining company that has been granted a mining lease,
must first give notice of its intent to the Government and
obtain its consent prior to acquiring a controlling share.
Under the 2006 Mining Act, the Government of Ghana holds
a 10% free-carried interest in all companies that hold min-
ing leases. The 10% free carried interest entitles the
Government to a pro-rata share of future dividends. The
Government has no obligation to contribute development
capital or operating expenses. GSBPL and GSWL owe
$389.3 million and $118.0 million, respectively, to Golden
Star or its subsidiaries as of December 31, 2010, for past
advances and interest on these advances, and these
amounts would be repaid before payment of any dividends.
Under the 2006 Mining Act, the Government of Ghana is
empowered to acquire a special or golden share in any
mining company. The special share would constitute a
separate class of shares with such rights as the Government
and the mining company might agree. Though deemed a
preference share, it could be redeemed without any con-
sideration or for a consideration determined by the min-
ing company and payable to the holder on behalf of the
Government of Ghana.
In the absence of such agreement, the special share
would have the following rights:
• it would carry no voting rights, but the holder would
be entitled to receive notice of and to attend and
2 4 | G o l d e n S t a r
speak at any general meeting of the members or any
separate meeting of the holders of any class of shares;
• it 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 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;
• it would not confer a right to participate in the dividends,
profits or assets of the company or a return of assets in a
winding up or liquidation of the company; and
• the holder of a special share may require the com-
pany to redeem the special share at any time for no
consideration or for a consideration determined by
the company.
GSBPL and GSWL have not issued, nor to date been requested
to issue, a special share to the Government of Ghana.
The Government of Ghana has a pre-emptive right to pur-
chase all gold and other minerals produced by mines in
Ghana. The purchase price would be agreed by the
Government of Ghana and the mining company, or the
price established by any gold hedging arrangement be-
tween the company and any third party approved by the
Government, or the publicly quoted market price prevail-
ing 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 gold or other minerals
so long as mining companies sell gold in accordance with
certain procedures approved by the Bank of Ghana.
Ghanaian Royalty Requirements
During the first quarter of 2010, the Government of
Ghana amended its mining act to change the method of
calculating mineral royalties payable to the Government.
The prior rules established a royalty rate of not less than
3% and not more than 6% of a mine’s total revenues, the
exact amount being determined by each mine’s margin
as defined in the law. Under the old rules, our mines have,
since their inception, qualified for and paid a 3% rate.
The amended law set the royalty at a flat rate of 5% of
mineral revenues. While the new law was initially effec-
tive as of as March 19, 2010, we were subsequently noti-
fied by the government that the effective date was ex-
tended to March 31, 2011. We paid a 3% royalty of $13.1
million, $12.8 million and $7.8 million in 2010, 2009 and
2008, respectively.
Environmental Laws and Regulations
Environmental matters in Ghana, including those related to
mining, fall under the oversight of the Environmental
Protection Agency (“EPA”), with some responsibilities ly-
ing with the Minerals Commission. The EPA has rules and
guidelines that govern environmental and socioeconomic
impact statements, environmental management plans,
mine operations, the quality of water discharges to the
receiving environment, environmental auditing and review,
and mine closure and reclamation, among other matters to
which our operations are subject. Additional provisions
governing surface uses by our stakeholders are provided in
the 2006 Mining Act.
All phases of our operations are subject to environmental
laws and regulations in the various jurisdictions where we
operate. These regulations may define, among other
things, air and water quality standards, waste man-
agement requirements, and mine closure and land reha-
bilitation obligations. In general, environmental legislation
is evolving to require stricter operating standards, more
detailed social and environmental assessments of pro-
posed projects, and a heightened degree of responsibility
for companies and their officers, directors, and employ-
ees for social responsibility and health and safety. Changes
in environmental regulations could affect the way we op-
erate, resulting in higher environmental and social operat-
ing costs that may affect the viability of our operations. In
Ghana, we have noted a trend toward increasing environ-
mental requirements and changes in the way the EPA re-
views project proposals and operational compliance.
We use hazardous chemicals in our gold recovery activi-
ties, and thus generate environmental contaminants that
may adversely affect air and water quality. To mitigate
these effects, we have established objectives to achieve
regulatory requirements in all of our exploration, devel-
opment, operation, closure, and post-closure activities
so that our employees, the local environment and our
stakeholder communities are protected and that the
post-closure land use contributes to the sustainability of
the local economy. In order to meet our objectives, we:
• educate our managers so that they are committed to
creating a culture that makes social and environmental
matters an integral part of short and long-term opera-
tions and performance management systems;
• work with our employees so that they understand and
accept environmental and social policies and proce-
dures as a fundamental part of the business;
• signed and implemented the International Cyanide
Management Code and attained certification for the
Wassa and Bogoso/Prestea operations;
• signed and publicly stated our support for the UN
Global Compact and completed our commitments that
are provided in our communications on progress (COP);
• establish, and continue to improve operating stan-
dards and procedures that aim to meet or exceed re-
quirements in relevant laws and regulations, the com-
mitments made
impact
statements, environmental and socioeconomic man-
agement plans, rehabilitation and closure plans and any
international protocols to which we are a signatory;
in our environmental
• incorporated environmental and human rights perfor-
mance requirements into all relevant contracts;
• provide training to employees and contractors in envi-
ronmental matters;
Governmental approvals and permits are currently re-
quired, and will likely continue to be required in the fu-
ture, in connection with our operations and development
activities. To the extent that such approvals are required
and not obtained, we could be limited or prohibited from
continuing our mining and processing operations or
from proceeding with planned exploration or the devel-
opment of mineral properties.
Our mining, processing, development and mineral explo-
ration activities are subject to various laws governing
labor
prospecting, development, production, taxes,
standards, occupational health and safety requirements,
land claims of local people and other matters. New rules
and regulations may be enacted or existing rules and
regulations may be modified and applied in a manner
that could have an adverse effect on our financial position
and results of operations.
Reclamation activities were ongoing at both Wassa/
HBB and Bogoso/Prestea during 2010 to rehabilitate
disturbed lands and reduce some of the long-term liabil-
ities including re-profiling waste dumps, capping hard
rock with oxide materials, topsoil spreading and planting
for both slope stabilization and long-term rehabilitation.
Our consolidated reclamation expenditures totaled $9.7
million, $2.0 million and $1.2 million in 2010, 2009 and
2008 respectively. The increase in 2010 spending re-
flects backfilling of a pit. We believe all our operations in
Ghana are currently in substantial compliance with all
environmental requirements.
Corporate Social Responsibility
In keeping with our health and safety, environmental,
community relations and human rights policies, we strive
at all times to conduct our business as a responsible cor-
porate citizen. We believe our ongoing success in Ghana
depends on our continuing efforts to build good relations
with our local stakeholder communities, and by reviewing
broader stakeholder comments and addressing stake-
holder concerns in our developing projects and ongoing
operations. We believe our success as an employer, as a
neighbor and as an important part of the local economy,
is furthered by contributing to the diversification of the
local economy with initiatives such as our Oil Palm Project
and by our support of community-driven improvement
projects through our Golden Star Development Foundation.
During 2010, the Development Foundation worked with
our local Community Mine Consultation Committees to
fund and sponsor several community–driven projects in-
cluding an outpatients ward, a medical clinic, continuing
scholarships for local students, supplying of medical equip-
ment in partnership with Project C.U.R.E., school buildings and
community electrification projects.
• regularly prepare, review, update and implement site-
specific environmental management and rehabilita-
tion and closure plans;
• work to progressively rehabilitate disturbed areas in
conformance with the site-specific environmental
management and rehabilitation and closure plans;
• consult local communities and regulators to provide
us with input on our environmental management poli-
cies and procedures;
• regularly review our environmental performance; and
• publicly report our social, health, safety, and environ-
Our Oil Palm Project continued to advance during 2010
and now has over 790 hectares of palm oil trees under cul-
tivation. We have also provided palm seedlings and
other agricultural assistance to a group of local farmers
who are developing an additional 100 hectares of palm oil
trees on their own farms. GSR also supports a skills training
program for stakeholders aimed at local economic devel-
opment. The Golden Star Skills Training and Employability
Program (GSSTEP) provides practical training for local
people in construction and in high tech services such as
cell phone repair. We currently have about 100 graduates
who are now able to provide skilled services.
mental performance.
2 0 1 0 A n n u a l R e p o r t | 2 5
until late 2010 when limited mining and waste stripping
resumed. We plan to resume mining at Pampe before
the end of 2011 after completing a waste strip program.
The Pampe ore will be moved by truck to the Bogoso
processing plants.
Prestea South — This property, located 20 km south of
the Bogoso/Prestea processing plants, is discussed in
more detail below under
“DEVELOPMENT
PROPERTIES” section.
the
Prestea Underground — This property is discussed in
more detail below under the “EXPLORATION STAGE
PROPERTIES IN GHANA” section.
Geology at Bogoso/Prestea
Bogoso/Prestea lies within the Eburnean Tectonic Province
in the West African Precambrian Shield along the Ashanti
Trend located immediately south of the town of Bogoso.
The area is dominated 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 kilome-
ters west of the Ashanti Trend in the Bogoso region.
Mineral Reserves at Bogoso/Prestea
At December 31, 2010, Bogoso/Prestea had Proven and
Probable Mineral Reserves, including the Probable Mineral
Reserves at Prestea South, Mampon and Pampe, of 47.2
million tonnes grading 2.49 g/t containing approximately
3.8 million ounces of gold before any reduction for recov-
ery losses and the Government of Ghana’s 10% minority
interest. See the Proven and Probable Mineral Reserves
table and the Non-Reserves — Measured and Indicated
Mineral Resource table in Item 1 of this Form 10-K.
Operating Results for Bogoso/Prestea
The following tables show historical operating results:
BOGOSO/PRESTEA
OPERATING RESULTS
Ore mined refractory (t)
Ore mined
non-refractory (t)
Total ore mined (t)
Waste mined (t)
Refractory ore
processed (t)
Refractory ore grade
(g/t)
Gold recovery –
refractory ore (%)
Non-refractory ore
processed (t)
Non-refractory ore
grade (g/t)
Gold recovery –
non-refractory ore (%)
Gold sales (oz)
Cash operating cost
($/oz)
Royalties ($/oz)
Total cash cost ($/oz)
2010
2,733,730
2009
2,940,822
2008
2,604,639
115,417
2,849,147
140,036
—
2,744,675
2,940,822
17,839,043 14,929,249 19,464,979
2,776,160
2,887,400
2,736,379
2.81
65.7
146,252
2.91
2.78
70.7
—
—
2.82
66.5
359,669
2.38
43.5
170,973
—
186,054
66.0
170,499
863
36
899
705
30
735
837
26
863
In our efforts to promote transparency in governance, we
continue to work with the Extractive Industry Transparency
Initiative and throughout 2010 we published our payments
to the government of Ghana (e.g. taxes, royalties, fees). We
furthered our work in human rights and against child and
forced labor with an extensive training program within
Golden Star and met with our major suppliers to outline our
socioeconomic commitments.
Our commitment to the development of our stakeholder
communities demonstrates Golden Star’s dedication to
Ghana and to sharing the success of our operations with
our local communities. As we continue to expand our
community development programs, we plan to integrate
more local people and communities into our economic
development and outreach programs, so assisting the
Western Region of Ghana to achieve its full potential
within the broader Ghana development.
OPERATING PROPERTIES
The Bogoso/Prestea Gold Mine
Bogoso/Prestea consists of a gold mining and processing op-
eration located along the Ashanti Trend in western Ghana,
approximately 35 kilometers northwest of the town of Tarkwa.
It can be reached by paved roads from Tarkwa, a local com-
mercial center, and from Accra, the capital of Ghana. Bogoso
and Prestea are adjoining mining concessions that together
cover approximately 40 kilometers of strike along the south-
west-trending Ashanti gold district. Mining areas at Bogoso
and Prestea are linked to the Bogoso processing plants by
paved and gravel haul-roads located on our properties.
There are two ore processing facilities at Bogoso/Prestea
and open pit mining methods are employed. Ore is
hauled by truck from the pits to the processing plants.
Equipment and facilities include the nominal 1.5 million
tonne per annum Bogoso oxide plant, the nominal 3.5
million tonne per annum Bogoso sulfide plant, a fleet of
haul trucks, loaders, drills and mining support equip-
ment. In addition, there are numerous ancillary support
facilities
including warehouses, maintenance shops,
roadways, administrative offices, an employee residen-
tial complex, power and water supply systems, a medical
clinic, and a tailings storage facility.
We acquired Bogoso in 1999 and Prestea in 2001. Bogoso/
Prestea gold sales totaled 170,973 ounces in 2010 and
186,054 in 2009. See the “Operating Results for Bogoso/
Prestea” section below for additional details on historical
production and operating costs. In addition to the Bogoso/
Prestea complex described above, Bogoso/Prestea assets
include the following properties:
Mampon — The Mampon deposit is located approximately
35 kilometers north of the Bogoso Sulfide plant. Mampon
is an undeveloped gold deposit with, as of December 31,
2010, an estimated 1.9 million tonnes of Probable Mineral
Reserves at an average gold grade of 4.33 g/t, which we
plan to mine by open pit mining methods. It is expected
that Mampon ore will be hauled by truck to the Bogoso
processing plants when mining is initiated here.
Pampe — The Pampe deposit is located approximately
19 kilometers west of the Bogoso processing plants.
As of December 31, 2010, we have estimated a Probable
Mineral Reserve of 1.7 million tonnes at an average
gold grade of 3.51 g/t. Pampe was mined during 2007
and 2008 but was placed on a care and maintenance
2 6 | G o l d e n S t a r
Exploration at Bogoso/Prestea
During 2010, Bogoso/Prestea area exploration activities
focused on drilling VTEM geophysical targets and testing
extensions of gold mineralization in proximity to the oper-
ating pits. Our drilling efforts were rewarded early in the
year with the discovery of the Buesichem South deposit
and our drilling program was re-focused on this new dis-
covery. Two multipurpose drill rigs were used over the en-
tire year bringing this resource from the Inferred Mineral
Resource category to Probable Reserves and Indicated
Mineral Resource at year end. In addition to the Buesichem
South drilling we conducted initial drilling on a structure
east of the Buesichem trend which will be tested further in
2011. VTEM drilling in the vicinity of the Bogoso North pit
has delineated a 1.2 kilometer zone beneath this pit which
requires further follow up in 2011. We expect develop-
ment drilling on the Bogoso North, Chujah and Ablifa pits
to be our main focus for 2011.
Bogoso/Prestea Outlook for 2011
During 2011 we expect that the Bogoso sulfide plant will
continue to process refractory sulfide ores from the Chujah
Main and Bogoso North pits at Bogoso/Prestea. The
Bogoso oxide plant may also process sulfide ores, if
needed, to maintain optimum sulfide concentrate feed
to the Bogoso sulfide bio-oxidation reactors. We expect
Bogoso/Prestea will produce approximately 160,000 to
180,000 ounces of gold in 2011 at an average cash oper-
ating cost between $950 and $1,050 per ounce.
The Wassa Gold Mine
We own and operate the Wassa gold mine located approx-
imately 35 kilometers east of Bogoso/Prestea in southwest
Ghana. The property was acquired in 2001 from a former
owner who had operated Wassa as a heap leach gold mine.
The property, as now constituted, includes several open-pit
mines, the nominal 3.0 million tonne per annum CIL Wassa
plant with its crushing and grinding circuits, a fleet of min-
ing equipment, a tailings storage facility, ancillary facilities
including an administration building, a warehouse, a main-
tenance shop, a stand-by power generating facility and an
employee residential complex. We completed construc-
tion of the Wassa plant in early 2005, and the plant was
placed in commercial service on April 1, 2005.
GSWL also owns and operates the Hwini-Butre and
Benso mines located 80 and 50 km, respectively, south
of Wassa. In the third quarter of 2008, following comple-
tion of a 50 km haul road, we started mining at Benso
and began hauling its ore to Wassa for processing. In
May 2009, following completion of a 30 km road exten-
sion, the Hwini-Butre mine began trucking ore to the
Wassa processing plant. The Benso and Hwini-Butre mines
include multiple open pits at both locations as well as
mining equipment, equipment repair shops, warehouses
and other ancillary support equipment and buildings.
Geology at Wassa
Wassa lies within the Eburnean Tectonic Province in the
West African Precambrian Shield. The Proterozoic rocks
that comprise mostof the West African craton and host
the major gold mineralization in Ghana are subdivided
into meta-sedimentary and volcanic rocks of the Birimian
and Tarkwaian sequences. Wassa is hosted within the
same Birimian volcano-sedimentary greenstone pack-
age as Bogoso/Prestea. However, Wassa is situated on
the southeastern flank of the Ashanti Belt while Bogoso
and Prestea occur along the northwestern flank.
Mineral Reserves at Wassa
As at December 31, 2010, Wassa, including the HBB prop-
erties, had Proven and Probable Mineral Reserves of 18.1
million tonnes with an average grade of 1.43 g/t containing
approximately 0.83 million ounces of gold before recovery
losses and any reduction for the Government of Ghana’s
10% minority interest. See the Proven and Probable Mineral
Reserves table and the Non-Reserves — Measured and
Indicated Mineral Resource table in Item 1 of this Form 10-K.
Operating Results for Wassa
The following table displays historical operating results at Wassa.
WASSA/HBB
OPERATING RESULTS
Ore mined (t)
Waste mined (t)
Ore processed (t)
Grade processed (g/t)
Recovery (%)
Gold sales (oz)
Cash operating cost
($/oz)
Royalties ($/oz)
Total cash cost ($/oz)
2010
2,561,088
2009
2,222,511
19,172,059 16,708,312
2,652,939
2.76
95.3
223,848
2,648,232
2.29
94.7
183,931
2008
2,885,985
7,416,516
3,187,230
1.33
93.6
125,427
677
37
714
447
32
479
554
26
580
Exploration at Wassa/HBB
Exploration activities on the Wassa mining lease during
2010 focused on ground geophysical surveys and in-pit
development drilling. A ground geophysical induced-po-
larization survey was conducted in 2010 which outlined anoma-
lous trends south of the main Wassa mineralized trend
along strike. Following up on the geophysical targets, we
initiated first pass drilling which confirmed that the Wassa
gold mineralized trend continues south of the existing pits.
These southern extensions of the main Wassa mineraliza-
tion are scheduled for further testing in 2011. Other drilling at
Wassa in 2010 tested higher grade portions of known mineral-
ized zones within our 2009 year-end Measured, Indicated
and Inferred Mineral Resource pit shells. This drilling was
successful in confirming higher gold grades extended at
depth on the 242, SE and B-Shoot structures. The new drill-
ing results have been used to update the mineral resource
model which was used for the 2010 Mineral Resource and
Reserve statements.
Exploration activities on the HBB concessions during
2010 concentrated mainly on deep drilling programs at
Father Brown, Adoikrom and Subriso West. The objec-
tives of these programs were to test the extensions at
depth of the known zones of high grade gold mineral-
ization to determine whether they have potential for
underground exploitation. A certain number of regional
targets were also tested during 2010. Targets located
north of the Subriso zones were drilled and have dem-
onstrated that the structures hosting the deposit ex-
tend further north. Drilling programs were also con-
ducted south of the Adoikrom deposit along a regional
structural trend.
infill drilling to convert
Mineral Resource activities at Chichiwelli, south of Wassa,
Inferred Mineral
involved
Resources to an Indicated category. Mineral Resource
conversion drilling was completed and an updated re-
source model was estimated. In addition to the drilling
programs, we also conducted a ground-based induced-
polarization geophysical survey which was successful in
2 0 1 0 A n n u a l R e p o r t | 2 7
identifying the known mineralization as well as defining
several other trends which we plan to test in 2011.
Wassa/HBB Outlook for 2011
Wassa/HBB is expected to produce approximately
170,000 to 180,000 ounces of gold in 2011 at an average
cash operating cost between $650 and $700 per ounce.
DEVELOPMENT PROPERTIES
Bogoso Tailings Processing Project
In the second quarter of 2010, $8 million was approved for
construction of a hydraulic tailings recovery system and
associated piping that will feed tailings from a decommis-
sioned tailings storage facility to the Bogoso oxide plant’s
CIL circuit. The project is expected to come online in late
2011, subject to permitting. While the grade of the tailings
material is lower than the ores typically treated in the
Bogoso oxide plant, the operating costs are expected to
be low since reclaimed tailings can be fed directly into the
existing CIL circuit thereby resulting in lower overall pro-
cessing costs. The system is designed to handle approxi-
mately 2.4 million tonnes of tailings per annum over its five
year life yielding up to approximately 40,000 to 50,000
additional ounces per year. Engineering has been complet-
ed, and permitting and equipment procurement com-
menced during the fourth quarter of 2010.
Prestea South Properties
The Prestea South project is located on the Ashanti
Trend, southwest of the town of Prestea and approxi-
mately 20 kilometers southeast of the Bogoso process-
ing plants. Gold mineralization is associated with the
same Ashanti Trend fault structure that continues to the
north through our Bogoso and Prestea properties. While
various sections of the mineral resources at Prestea
South were mined by prior owners using underground
methods, the surface oxide mineral resources have not
been extensively mined, and there are sulfide mineral re-
sources accessible by open pit mining. Our past explo-
ration efforts have identified several deposits along this
trend which can be mined by surface mining methods.
We received mining permits for this area in 2008 and
subsequently applied for environmental permits. We ex-
pect to initiate development at Prestea South, including
its 10 kilometer haul road extension, once the environ-
mental permits are received. The Prestea South oxide
ore will be transported to Bogoso and processed through
the Bogoso oxide plant. The Prestea South sulfide ore
will be processed through the Bogoso sulfide plant.
As of December 31, 2010, the Prestea South properties
had total Proven and Probable Mineral Reserves of 6.8
million tonnes grading 2.32 g/t containing approximately
0.51 million ounces before any reduction for the
Government of Ghana’s 10% minority interest.
EXPLORATION PROPERTIES
Prestea Underground
The Prestea Underground is an inactive underground
gold mine located to the south of Bogoso and adjacent
to the town of Prestea. The property consists of two use-
able access shafts and extensive underground workings
and support facilities. Access to the mine site is via a
paved road from Tarkwa and Accra maintained by the
Government of Ghana.
From the 1870’s to 2002 when mining ceased following an
low gold prices, the Prestea
extended period of
Underground operations produced approximately nine
million ounces of gold, the second highest production of
any mine in Ghana. The underground workings are exten-
sive, reaching depths of approximately 1,450 meters and
extending along a strike length of approximately nine ki-
lometers. Underground workings can currently be ac-
cessed via two surface shafts, one near the town of
Prestea (Central Shaft) and a second approximately four
kilometers to the southwest at Bondaye.
GSBPL now holds a 90% ownership in the Prestea
Underground with the Government of Ghana holding a
10% ownership interest in Prestea Underground as well
as its 10% holding in GSBPL, resulting in an 81% benefi-
cial ownership by Golden Star.
Exploration activities at the Prestea Underground in 2010
were limited to desk-top reviews, but a new scoping study
was completed which evaluated the economic potential
of a resumption of underground mining activities. The
study results are now being evaluated. We continue to
dewater the Prestea Underground, and we are refurbish-
ing the Central Shaft and assessing services on 12, 17 and
24 levels. Dewatering and ongoing maintenance costs as
included in the statement of operations, totaled approxi-
mately $5.3 million during 2010.
Geology of Prestea Underground
The Prestea Underground deposits are located along the
same Ashanti Trend structure as are our Bogoso deposits
a few kilometers to the north and our Prestea South depos-
its a few kilometers to the south with most of the gold min-
eralization found in a narrow tabular fault zone which dips
steeply to the northwest.
Akropong Trend Properties
The Akropong properties are located along a fault struc-
ture which roughly parallels the Ashanti Trend and is lo-
cated approximately 20 kilometers to the west of our
Bogoso sulfide plant. Our 2010 exploration programs
focused on identifying additional mineral reserve oppor-
tunities within truck haulage distance from Bogoso/
Prestea. Drilling tested several previously identified au-
ger soil anomalies late in 2010, and this program is con-
tinuing into 2011. We also started a drilling program de-
signed to test the down dip higher-grade portions of the
Pampe deposit below the current open pit designs. We
also plan to test for potential trend extensions to the
north and south of Pampe during 2011 and to follow up
with additional in-fill drilling.
Dunkwa Properties
The Dunkwa Properties, which are located directly north
of our Bogoso mining lease, consist of two prospecting
licenses, Mansiso and Asikuma, the latter hosting our
Mampon ore deposit.
The Mansiso and Asikuma concessions were both part of
the 2008 VTEM airborne geophysical survey. The
chargeability response from this survey has enhanced
the understanding of the major structures running
through the property, and several new targets have been
identified, some of which were explored in 2009. We
continue to follow up on targets generated by the VTEM
survey and have designed a 2011 drilling program to test
the Opon East anomaly which we identified in 2009.
2 8 | G o l d e n S t a r
Deeper drilling to test the high grade down plunge
extension of the Mampon deposit has also been budgeted
for 2011.
OTHER EXPLORATION STAGE PROPERTIES IN AFRICA
Sierra Leone
During 2010, exploration field activities at our 51% owned
Sonfon project in Sierra Leone focused on ground geo-
physical surveys and diamond drilling testing the high
grade zones intersected in the 2008 drill holes. The
ground IP geophysical survey conducted in 2010 was
used to help guide the follow-up drilling programs.
In addition to giving direction for the 2010 drilling effort,
the geophysical survey has generated several other re-
sistive and chargeable targets which could be associat-
ed with silicified zones bearing sulfides. The results of
the 2010 drilling and ground geophysics analysis will be
used to plan field exploration programs in 2011. The
Sonfon project is owned by a joint venture between
Golden Star and African Aura Mining, with Golden Star
as the majority owner and project manager.
Cote d’Ivoire
The 2010 exploration programs in Cote d’Ivoire fo-
cused on our Amélekia and Agboville concessions
which cover northeast trending structures which ex-
tend from the Sefwi greenstone belt in Ghana. Infill soil
sampling program over previously defined soil anoma-
lies on the Amelekia and Agboville concessions were
conducted early in 2010. Drilling programs originally
planned for 2010 were rescheduled for 2011, subject to
stabilization of the political situation. These programs
are designed to test the soil anomalies defined by our
early sampling programs.
Burkina Faso
We hold a 90% beneficial interest in the Goulagou and
adjoining Rounga gold properties, with a local Burkina
Faso partner owning a 10% interest. The Government of
Burkina Faso will receive a statutory 10% carried interest
upon the granting of a mining lease. The two properties
are located approximately 100 kilometers west of
Ouagadougou, the capital city of Burkina Faso, and 20
kilometers north of the city of Ouahigouya. Drilling pro-
grams carried out by the prior owner and its predeces-
sors identified several areas of gold mineralization in-
cluding two parallel zones on the Goulagou property
— the Goulagou I and II deposits.
In October 2007, we granted Riverstone Resources Inc.
(“Riverstone”) an option to purchase the Goulagou and
Rounga concessions. Exploration programs in 2010 were
managed and implemented by Riverstone and mainly
consisted of infill reverse circulation drilling on the
Goulagou concession. We expect that Riverstone will
continue its exploration efforts and complete the feasibil-
ity on the Goulagou deposit by late 2011.
In addition to the Goulagou and Rounga concessions, Golden
Star holds three other licenses in Burkina Faso where prelimi-
nary reconnaissance work was carried out during 2010.
Deba and Tialkam Projects, Niger
Our interest in the Deba and Tialkam gold properties in
Niger were optioned to AMI Resources in 2009, which is
earning into the properties.
EXPLORATION STAGE PROPERTIES IN SOUTH AMERICA
Saramacca Property
The Saramacca property, located in Suriname, consists of
three concessions totaling approximately 486 square kilo-
meters. In 2009, Newmont earned a 51% interest in the
Saramacca project by spending $6 million on exploration
and has since taken over management of the project. In
November 2009, we entered into an agreement with
Newmont to sell them our interest in the Saramacca joint
venture for approximately $8.0 million. Proceeds of the
sale continue to reside in escrow pending the Suriname
government’s transfer of the mineral rights to
Newmont. We expect the transfer process to be completed
during 2011.
French Guiana
Activities in French Guiana were terminated in mid 2010
with the sale of our local French registered subsidiary to
Auplata, a French Guiana gold company, for $2.1 million.
This sale involved the transfer to Auplata all of Golden
Star’s rights, titles and interests to the Bon Espoir, Iracoubo
Sud and Paul Isnard exploration properties, as well as
the entirety of the subsidiary and its assets.
Brazil
Several potential joint venture earn-in opportunities were
identified and new concessions were staked in northern
Brazil during 2010. We farmed out our Sao Bartolomeau
concessions in Minas Gerais State to Kinross Gold
Corporation in late 2010, and also granted a two year ex-
tension to IamGold Corporation’s current earn-in on the
Alto Varginha property also in Minas Gerais. Golden Star
has either significant equity (Sao Bartolomeau) or royalty
rights (Alta Varginha) in these two farm-outs.
Golden Star’s 2010 exploration efforts concentrated on
Northern Mato Grosso, where we plan to conduct recon-
naissance programs in 2011, evaluating new prospects,
as well as looking for potential associations with explora-
tion juniors with strong land positions in the area. In
Brazil we have entered into a joint venture with
Votorantim Metals on a 3,400 square kilometer land
package in Northern Mato Grosso. This joint venture re-
quires us to spend $5 million to earn 50% of the precious
metal rights on this package over a three year period,
and additional ownership can be acquired if a project ad-
vances to the feasibility stage and we complete a feasibil-
ity study. The initial joint venture work during 2011 is an-
ticipated to involve greenfields soil sampling and follow
up on several targets generated by the Votorantim geo-
physical and stream sediment data sets as well as initial
stream sediment sampling in areas not previously sam-
pled. We are also seeking high potential farm-in or acqui-
sition opportunities in other locations in Brazil.
ITEM 3. LEGAL PROCEEDINGS
We are engaged in routine litigation incidental to our busi-
ness none of which is deemed to be material. No material
legal proceedings, involving us or our business are pend-
ing, or, to our knowledge, contemplated, by any govern-
mental authority. We are not aware of any material events
of noncompliance with environmental laws and regulations.
2 0 1 0 A n n u a l R e p o r t | 2 9
P A R T I I
ITEM 5. MARKET FOR THE REGISTRANT’S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASE OF EQUITY SECURITIES
Our common shares trade on the Toronto Stock Exchange (“TSX”) under the trading symbol “GSC”, on the NYSE
Amex (formerly known as the American Stock Exchange) under the symbol “GSS” and on the Ghana Stock Exchange
under the symbol “GSR”. As of February 22, 2011, 258,559,486 common shares were outstanding and we had 937
registered shareholders. On February 22, 2011, the closing price per share for our common shares as reported by the
TSX was Cdn$3.92 and as reported by the NYSE Amex exchange was $3.96.
The following table sets forth, for the periods indicated, the high and low market closing prices per share of our
common shares as reported by the TSX and the NYSE Amex.
2010
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2009
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Toronto Stock Exchange
NYSE AMEX
Cdn$ High
Cdn$ Low
$ High
$ Low
3.85
4.85
5.35
6.03
2.92
3.90
4.15
4.27
3.79
4.72
5.19
5.96
2.72
3.92
3.92
4.17
Toronto Stock Exchange
NYSE AMEX
Cdn$ High
Cdn$ Low
$ High
$ Low
2.32
2.53
3.81
4.59
1.21
1.50
2.12
3.19
1.82
2.33
3.56
4.39
1.01
1.20
1.83
2.96
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.
PERFORMANCE GRAPH AND TABLE
The following graph and table illustrates the cumulative total shareholder return on the common shares for the fiscal
years ended December 31, 2006, through 2010, together with the total shareholder return of the S&P/TSX Composite
Index, and the Amex Gold Bugs Index for the same period.
The graph and table assumes an initial investment of Cdn$100 at December 31, 2005 in Golden Star common shares
and a hypothetical Cdn$100 investment in the two associated indices at the same time. The lines show the change in
the value of the initial Cdn$100 investment at the end of each of the next five years, allowing an investor to compare
Golden Star’s share performed to the performance of the two indices. Because we did not pay dividends on our common
shares during the measurement period, the calculation of the cumulative total shareholder return on the common
shares does not include dividends.
$
n
d
C
200
180
160
140
120
100
80
60
40
20
0
Golden Star Resources Ltd.
S&P/TSX Composite Index
AMEX Gold Bugs Index (1)
2006
2007
2008
2009
2010
3 0 | G o l d e n S t a r
Golden Star Resources Ltd.
Dollar Value
Annualized Return Since Base Year
Return Over Previous Year
S&P /TSX Composite Index
Dollar Value
Annualized Return Since Base Year
Return Over Previous Year
Amex Gold Bugs Index(1)
Dollar Value
Annualized Return Since Base Year
Return Over Previous Year
2005
2006
2007
2008
2009
2010
$ 100.00
$ 111.70
$ 101.47
$
11.7%
11.7%
0.7%
(9.2)%
39.80
(26.4)%
(60.8)%
$ 106.12
1.5%
166.7%
$ 148.36
8.2%
39.8%
$ 100.00
$ 114.48
$ 104.03
$
14.5%
14.5%
2.0%
(9.1)%
$
83.77
(5.7)%
(19.5)%
93.57
(1.7)%
11.7%
$ 101.76
0.4%
8.8%
$ 100.00
$ 122.11
$ 125.33
$ 114.74
$ 139.41
22.1%
22.1%
12.0%
2.6%
4.7%
(8.5)%
$ 176.67
12.1%
26.7%
8.7%
21.5%
(1) Prior to 2007, we utilized the Canadian Gold Index. This index is no longer published. For 2007 and afterward, we utilized the
Amex Gold Bugs Index, which is comparable to the Canadian Gold Index.
RECENT SALES OF UNREGISTERED SECURITIES
No sales of unregistered securities occurred during 2010.
CERTAIN CANADIAN FEDERAL
INCOME TAX CONSIDERATIONS
The following is a summary of the principal Canadian
federal income tax considerations that apply to the hold-
ing and disposition of our common shares. This summary
only applies to a holder who is for Canadian income tax
purposes not resident in Canada, is resident in the United
States of America under the provisions of the Canada-
United States Income Tax Convention (1980) (the“Treaty”)
and holds our common shares as capital property.
This summary is based on the current provisions of the
Income Tax Act (Canada) and the regulations there under
(the “Tax Act”) and all amendments to the Tax Act pub-
licly proposed by the Government of Canada to the date
hereof. This summary is also based on the current provi-
sions of the Treaty and our understanding of the current
publicly available administrative and assessing practices
published in writing by the Canada Revenue Agency.
It is assumed that each proposed 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. This summary does not oth-
erwise take into account any change in law or adminis-
trative practice, whether by judicial, governmental, legis-
lative or administrative action, nor does it take into
account provincial, territorial or foreign income tax con-
sequences, which may vary from the Canadian federal
income tax considerations described herein.
A particular U.S. resident person may not be entitled to
benefits under the Treaty if the “limitations of benefits”
provisions of the Treaty apply to the particular U.S. resi-
dent person. The limitation of benefits provisions under
the Treaty are complex and U.S. residents are advised to
consult their own tax advisors in this regard.
Under the Treaty members of a limited liability corpora-
tion created under the limited liability company legisla-
tion in the U.S. and treated as a partnership or disregard-
ed entity under U.S. tax law (“LLC”) (and holders of
interests in similarly fiscally transparent U.S. entities) may
be entitled to benefits under the Treaty in certain circum-
stances provided that the members of the LLC are taxed
in the United States on any income, profits or gains earned
through the LLC in the same way they would be if they
had earned it directly. Note, the recently concluded Fifth
Protocol to the Treaty will affect those shareholders that
hold their shares through an LLC or other fiscally trans-
parent or “hybrid” entity. If you utilize such entities to hold
your common shares, then you consult your tax advisors
about the impact of the Fifth Protocol on your holdings.
Special rules, which are not discussed in this summary,
may apply if you are an insurer carrying on business in
Canada and elsewhere, or a financial institution as de-
fined by section 142.2 of the Tax Act. If you are in any
doubt as to your tax position, you should consult with
your tax advisor.
This summary is of a general nature only and it is not in-
tended to be, nor should it be construed to be, legal or
tax advice to any holder of the common shares and no
representation with respect to Canadian federal income
tax consequences to any holder of common shares is
made
SHAREHOLDERS
SHOULD CONSULT THEIR OWN TAX ADVISERS AS TO
THE
INCOME AND OTHER TAX CONSEQUENCES
ARISING IN THEIR PARTICULAR CIRCUMSTANCES.
herein. ACCORDINGLY,
Taxation of Dividends
Dividends paid or credited (or deemed to be paid or
credited) by us to a holder of one or more common
shares will be subject to Canadian non-resident with-
holding tax at the rate of 25% on the gross amount of the
dividend. Under the Treaty, the rate of withholding tax is
reduced to 15% if the holder is the beneficial owner of the
dividends or 5% if the holder is a company that owns at
least 10% of the company’s voting stock and beneficially
owns the dividend. Dividends paid to religious, scientific,
charitable and similar tax exempt organizations and pen-
sion organizations that are resident and exempt from tax
in the U.S. and that have complied with the administra-
tive procedures specified in the Treaty are exempt from
this Canadian withholding tax.
Taxation of Capital Gains
Gains realized by a holder on a sale, disposition or
deemed disposition of our common shares, will not be
subject to tax under the Tax Act unless the common
shares constitute “taxable Canadian property” within
the meaning of the Tax Act at the time of the sale, dispo-
2 0 1 0 A n n u a l R e p o r t | 3 1
sition or deemed disposition (including a deemed dispo-
sition upon death of a holder). Our common shares are
not “taxable Canadian property” provided that they are
listed on a designated stock exchange (which includes
the TSX), and that neither you nor one or more persons
with whom you did not deal at arm’s length, alone or to-
gether, at any time in the five years immediately preced-
ing the disposition, owned 25% or more of the issued
shares of any class or series of our capital stock. Even if
our common shares are taxable Canadian property to you,
under the Treaty you will generally be exempt from pay-
ing Canadian income tax on any gain provided that you
are a resident of the United States for the purposes of the
Treaty (and are otherwise eligible for the benefits of the
Treaty), and further provided that the value of our com-
mon share is not derived principally from real property
situated in Canada.
Currently, our common shares do not derive their value
principally from real property situated in Canada and
therefore capital gains realized from the disposition of
our common shares would be exempt from tax by virtue
of the provisions of the Tax Treaty; however, the determi-
nation as to whether Canadian tax would be applicable
on a sale, disposition or deemed disposition of common
shares must be made at the time of that sale, disposition
or deemed disposition.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a general summary of the material
U.S. federal income tax consequences of the ownership
and disposition of our common shares by a holder of our
common shares that is an individual resident of the United
States or a United States corporation (a “U.S. Holder”). This
summary is general in nature and does not address the
effects of any state or local taxes, U.S. federal estate, gift,
or generation-skipping taxes, or the tax consequences in
jurisdictions other than the United States. In addition,
This discussion does not discuss all aspects of U.S. federal
income taxation that may be relevant to investors subject
to special treatment under U.S. federal income tax law (in-
cluding, for example, owners of 10.0% or more of the vot-
ing shares of the Company).
YOU SHOULD CONSULT YOUR OWN ADVISOR REGARD-
ING THE U.S. FEDERAL INCOME TAX CONSEQUENCES
OF THE ACQUISITION, OWNERSHIP AND DISPOSITION
OF OU R COMMON SHARES IN LIG HT OF YOU R
PARTICULAR CIRCUMSTANCES.
Sale or Other Disposition of Our Common Shares
Subject to the passive foreign investment company rules
discussed below, a U.S. Holder that sells or otherwise dis-
poses of our common shares will recognize capital gain or
loss for U.S. federal income tax purposes equal to the dif-
ference between (i) the U.S. dollar value of the amount
realized on the sale or disposition and (ii) the tax basis,
determined in U.S. dollars, of those common shares. If the
U.S. Holder is an individual, any capital gain generally will
be subject to U.S. federal income tax at preferential rates
if specified minimum holding periods are met. Long-term
capital gains of non-corporate taxpayers, including indi-
viduals, are generally subject to a 15% maximum U.S. fed-
eral income tax rate for capital gains recognized in tax-
able years beginning before January 1, 2013. Under
current law, long-term capital gains of non-corporate
taxpayers, including individuals, recognized in taxable
years beginning after December 31, 2012 will be taxed at a
maximum U.S. federal income tax rate of 20%. The de-
ductibility of capital losses is subject to limitations.
Distributions
We do not expect to pay dividends in the foreseeable
future. However, subject to the passive foreign invest-
ment company rules discussed below, a U.S. Holder must
include in gross income as dividend income the gross
amount of any distribution (including the amount of any
Canadian withholding tax thereon) paid by the Company
out of its current or accumulated earnings and profits (as
determined for U.S. federal income tax purposes) with
respect to our common stock.
Except as described below, dividends received by a non-
corporate U.S. Holder before January 1, 2013 would be
taxed at preferential rates as “qualified dividend income”
to such U.S. Holder and will generally be subject to a 15%
maximum U.S. federal income tax rate. Under current
law, dividends received in taxable years beginning after
such date will generally be taxed at the same rate as or-
dinary income. A distribution on our common stock in
excess of current or accumulated earnings and profits
will be treated as a tax-free return of capital to the extent
of the U.S. Holder’s adjusted basis in such stock (thus
reducing, but not below zero, the adjusted tax basis of
such stock), and thereafter as gain from the sale or ex-
change of common stock. See “Sale or Other Disposition
of Our Common Shares” above. However, dividend in-
come will not be qualified dividend income (and will be
taxed at ordinary income rates) if (i) the U.S. Holder fails
to hold the common shares for at least 61 days during
the 120 day period beginning 60 days before the ex-div-
idend date; (ii) the Internal Revenue Service determines
that the Treaty is not a comprehensive income tax treaty
that entitles our dividends to qualified dividend treat-
ment and our common shares are no longer readily trad-
able on an established securities market in the United
States; or (iii) we are a passive foreign investment com-
pany for the taxable year in which the dividend is paid
or in the preceding taxable year.
For foreign tax credit limitation purposes, dividends paid
by us will be income from sources outside the United
States. Subject to various limitations, Canadian withhold-
ing taxes will be treated as foreign taxes eligible for cred-
it against a U.S. Holder’s U.S. federal income tax liability.
The limitation on foreign taxes eligible for credit is calcu-
lated separately with respect to specific classes of in-
come. Dividend income generally will constitute “passive
category” income, or in the case of certain U.S. Holders,
“general category” income. The use of foreign tax credits
is subject to complex conditions and limitations. In lieu of
a credit, a U.S. Holder who itemizes deductions may elect
to deduct all of such holder’s foreign taxes in the taxable
year. A deduction does not reduce U.S. tax on a dollar-for-
dollar basis like a tax credit, but the deduction for foreign
taxes is not subject to the same limitations applicable to
foreign tax credits. U.S. Holders are urged to consult their
own tax advisors regarding the availability of foreign tax
credits.
Passive Foreign Investment Company Rules
A non–U.S. corporation will be classified as a passive for-
eign investment company (a “PFIC”) in any taxable year in
which, after taking into account the income and assets of
certain subsidiaries, either (i) at least 75% of its gross in-
3 2 | G o l d e n S t a r
can be made for a lower-tier PFIC, but only if we provide
the U.S. Holder with the financial information necessary
to make such an election.
Special adverse rules that impact certain estate planning
goals could apply to our common shares if we are a PFIC.
Special rules apply with respect to the calculation of the
amount of the foreign tax credit with respect to excess
distributions by a PFIC. In general, these rules allocate
creditable foreign taxes over the U.S. Holder’s holding
period for common shares and otherwise coordinate the
foreign tax credit limitation rules with the PFIC rules.
U.S. Holders who own common shares during any year in
which we are a PFIC must file Internal Revenue Service
Form 8621 with their U.S. federal income tax return for
each year in which such holder owns our common shares,
even if we subsequently would not be considered a PFIC.
Recently Enacted Legislation
The recently enacted Patient Protection and Affordable
Care Act (the “PPACA”) requires certain U.S. Holders to
pay up to an additional 3.8% tax on dividends and capital
gains for taxable years beginning after December 31,
2012. The PPACA is the subject of a number of constitu-
tional challenges, and at least one court has held that the
PPACA is void.
U.S. Holders should also consult their tax advisors regarding
potential reporting obligations under the Hiring Incentives
to Restore Employment Act, signed into law on March 18,
2010, which provides rules relating to ownership of for-
eign financial assets or ownership of securities issued by a
foreign issuer.
Information Reporting and Backup Withholding
Dividend payments made with respect to shares of our
common shares and proceeds from the sale or other
disposition of our common shares may be subject to in-
formation reporting requirements and to U.S. backup
withholding (currently at a rate of 28%).
In general, backup withholding will apply with respect to
reportable payments made to a U.S. Holder unless (i) the
U.S. Holder is a corporation or other exempt recipient
and, if required, demonstrates such exemption, or (ii) the
U.S. Holder furnishes the payor with a taxpayer identifi-
cation number on Internal Revenue Service Form W-9 in
the manner required, certifies under penalty of perjury
that such U.S. Holder is not currently subject to backup
withholding and otherwise complies with the backup
withholding requirements.
Backup withholding is not an additional tax. Rather, the
amount of any backup withholding imposed on a pay-
ment to a holder will be allowed as a refund or a credit
against such holder’s U.S. federal income tax liability,
provided that the required information is furnished to
the Internal Revenue Service.
come is passive income, or (ii) at least 50% of the average
value of its assets is attributable to assets that produce or
are held for the production of passive income. Whether or
not we will be classified as a PFIC in any taxable year is a
factual determination and will depend upon our assets,
the market value of our common shares, and our activities
in each year and is therefore subject to change.
Although we believe that we were not a PFIC for the cur-
rent tax year and do not expect to become a PFIC in the
foreseeable future, the tests for determining PFIC sta-
tus depend upon a number of factors, some of which are
beyond our control, and can be subject to uncertainties.
Accordingly, we cannot assure U.S. Holders that we are not
or will not be a PFIC for this or any future year. We under-
take no obligation to advise U.S. Holders of our common
shares as to our PFIC status for any year.
If we are a PFIC for any year, a U.S. Holder whose holding
period for our common shares includes any portion of a
year in which we are a PFIC generally would be subject to
a special adverse tax regime in respect of “excess distri-
butions.” Excess distributions include certain distribu-
tions received with respect to PFIC shares in a taxable
year. Gain recognized by a U.S. Holder on a sale or other
transfer of our common shares (including certain trans-
fers that would otherwise be tax-free) also would be treat-
ed as excess distributions. Such excess distributions and
gains would be allocated ratably to the U.S. Holder’s hold-
ing period. For these purposes, the holding period of
shares acquired either through an exercise of options or
the conversion of convertible debentures includes the U.S.
Holder’s holding period in the option or convertible de-
benture.
The portion of any excess distribution (including gains
treated as excess distributions) allocated to the current
year and to prior years before we first became a PFIC
would be includible as ordinary income in the current
year. The portion of any excess distribution allocated to
all other prior years would be taxed at the highest mar-
ginal rate applicable to ordinary income for each such
year (regardless of the U.S. Holder’s actual marginal rate
for that year and without reduction by any losses or loss
carryforwards) and would be subject to interest charges.
Elections may be available to mitigate the adverse tax
rules that apply to PFICs (the so-called “QEF” and “mark-
to-market” elections), but these elections may acceler-
ate the recognition of taxable income and may result in
the recognition of ordinary income. The QEF and mark-
to-market elections are not available to U.S. Holders
with respect to options to acquire our common shares or
convertible debentures. We have not decided whether
we would provide to U.S. Holders the annual information
that would be necessary to make the QEF election.
In addition, dividends received from us are not “qualified
dividend income” if we are a passive foreign investment
company for the taxable year in which the dividend is
paid or in the preceding taxable year.
If we are a PFIC in a taxable year and own shares in
another PFIC (a “lower-tier PFIC”), a U.S. Holder also will
be subject to the excess distribution regime with respect
to its indirect ownership of the lower-tier PFIC. The
mark-to-market election would not be available for any
indirect ownership of a lower-tier PFIC. A QEF election
2 0 1 0 A n n u a l R e p o r t | 3 3
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, 2010, 2009, 2008, 2007 and 2006, and should be read in conjunction with those financial
statements and the notes thereto. The consolidated financial statements have been prepared in accordance with
Canadian GAAP. Selected financial data derived in accordance with U.S. GAAP has also been provided and should
be read in conjunction with Note 27 to the financial statements. Reference should also be made to “Item 7,
Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
SUMMARY OF FINANCIAL CONDITION
(Amounts in thousands except per share data)
Canadian GAAP
Working capital
Current assets
Total assets
Current liabilities
Long-term liabilities
Shareholder’s equity
Canadian GAAP
Revenues
Net income/(loss)
Net income/(loss) per share – basic
US GAAP
Working capital
Current assets
Total assets
Current liabilities
Long-term liabilities
Shareholder’s equity
US GAAP
Revenues
Net income/(loss)
Net income/(loss) per share – basic
2010
2009
$ 139,347 $ 144,560 $
As of December 31,
2008
1,651 $
262,431
801,455
123,084
159,212
517,881
219,496
753,879
74,936
158,623
520,320
91,973
694,299
90,322
175,810
428,167
2007
71,589 $
145,826
789,876
74,237
166,979
542,500
2006
28,258
90,534
659,988
62,276
131,974
458,314
For the
Year Ended
Dec 31, 2009
For the
For the
For the
Year Ended
Year Ended
Year Ended
Dec 31, 2010
Dec 31, 2006
Dec 31, 2008
$ 432,693 $ 400,739 $ 257,355 $ 175,614 $ 126,612
65,173
0.314
For the
Year Ended
Dec 31, 2007
16,519
0.070
(119,303)
(0.506)
(35,290)
(0.154)
(8,281)
(0.032)
2010
2009
$ 139,410 $ 145,206 $
2008
1,651 $
2007
71,407 $
As of December 31,
262,494
753,226
123,084
193,023
437,119
220,142
722,708
74,936
201,891
443,357
91,973
663,344
90,322
193,871
379,151
146,599
728,977
75,192
202,870
449,278
2006
21,383
90,534
606,095
69,151
129,624
404,418
For the
Year Ended
Dec 31, 2009
For the
For the
For the
Year Ended
Year Ended
Year Ended
Dec 31, 2010
Dec 31, 2006
Dec 31, 2008
$ 432,693 $ 400,739 $ 257,355 $ 175,614 $ 128,690
57,875
0.279
For the
Year Ended
Dec 31, 2007
(69,204)
(0.313)
(41,749)
(0.182)
(15,882)
(0.044)
(8,903)
(0.048)
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 audited consolidated
financial statements and related notes. The financial statements have been prepared in accordance with Canadian
GAAP. For a reconciliation to accounting principles generally accepted in the United States (“US GAAP”), see Note
27 to the consolidated financial statements. This Management’s Discussion and Analysis of Financial Condition and
Results of Operations includes information available to February 22, 2011.
NON-GAAP FINANCIAL MEASURES
In this Form 10-K, we use the terms “total cash cost per ounce” and “cash operating cost per ounce.”
“Cost of sales” as found in our statements of operations, includes all mine-site operating costs, including the costs
of mining, processing, maintenance, work-in-process inventory changes, mine-site overhead as well as production
3 4 | G o l d e n S t a r
taxes, royalties, mine site depreciation, depletion, amortization, asset retirement obligation accretion and by-
product credits, but does not include cost of waste stripping capitalized under betterment waste stripping rules,
exploration costs, property holding costs, corporate office general and administrative expenses, impairment
charges, corporate business development costs, gains and losses on asset sales, capital gains and losses on for-
eign currency conversions, interest expense, gains and losses on derivatives, gains and losses on investments and
income tax expense/benefit.
“Total cash cost per ounce” for a period is equal to “Cost of sales” for the period less mining related depreciation and
amortization costs, accretion of asset retirement obligation costs and operations-related foreign currency gains and
losses for the period, divided by the number of ounces of gold sold during the period. “Cash operating cost per
ounce” for a period is equal to “Total cash costs” for the period less royalties and production taxes, divided by the
number of ounces of gold sold during the period.
The following table shows the derivation of these measures:
Mining operations costs
Royalties
Costs (to)/from metals inventory
Mining related depreciation and amortization
Accretion of asset retirement obligations
Cost of sales — GAAP
Less royalties
Less operations-related foreign exchange gains (losses)
Less mining related depreciation and amortization
Less accretion of asset retirement obligations
Cash operating costs
Plus royalties
Total cash costs
Ounces sold
Derivation of cost per ounce measures:
Cash operating cost per ounce
Total cash cost per ounce
Mining operations costs
Royalties
Costs (to)/from metals inventory
Mining related depreciation and amortization
Accretion of asset retirement obligations
Cost of sales — GAAP
Less royalties
Less operations-related foreign exchange gains (losses)
Less inventory write-offs
Less mining related depreciation and amortization
Less accretion of asset retirement obligations
Cash operating costs
Plus royalties
Total cash costs
Ounces sold
Derivation of cost per ounce measures:
Cash operating cost per ounce
Total cash cost per ounce
$
$
$
$
$
$
$
$
$
$
$
$
$
$
For the year ended December 31, 2010
Wassa
126,314
6,865
(1,967)
63,363
950
195,525
(6,865)
125
(63,363)
(950)
124,472
6,865
131,337
183,931
Bogoso/Prestea
150,466
6,194
(2,932)
37,285
1,853
192,866
(6,194)
(43)
(37,285)
(1,853)
147,491
6,194
153,685
170,973
$
$
$
$
$
$
Combined
276,780
13,059
(4,899)
100,648
2,803
388,391
(13,059)
82
(100,648)
(2,803)
271,963
13,059
285,022
354,904
677
714
$
$
863
899
$
$
766
803
$
Bogoso/Prestea
For the year ended December 31, 2009
Wassa
98,858
7,306
1,417
71,291
818
131,947
5,457
1,606
42,983
1,347
$
179,690
(7,306)
(281)
—
(71,291)
(818)
99,994
7,306
107,300
223,848
447
479
$
$
$
$
$
183,340
(5,457)
(1,418)
(890)
(42,983)
(1,347)
131,246
5,457
136,703
186,054
705
735
$
$
$
$
$
Combined
230,805
12,763
3,023
114,274
2,165
363,030
(12,763)
(1,699)
(890)
(114,274)
(2,165)
231,240
12,763
244,003
409,902
564
595
We use total cash cost per ounce and cash operating cost per ounce as key operating indicators. We monitor these
measures monthly, comparing each month’s values to prior periods’ values to detect trends that may indicate
increases or decreases in operating efficiencies. These measures are also compared against budget to alert manage-
ment about trends that may cause actual results to deviate from planned operational results. We provide these
measures to our investors to allow them to also monitor operational efficiencies of our mines. We calculate these
measures for both individual operating units and on a consolidated basis.
2 0 1 0 A n n u a l R e p o r t | 3 5
Total cash cost per ounce and cash operating cost per
ounce should be considered as non-GAAP financial
measures as defined in SEC Regulation S-K Item 10 and in
applicable Canadian securities laws and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. There
are material limitations associated with the use of such
non-GAAP measures. Since these measures do not incor-
porate revenues, changes in working capital and non-oper-
ating cash costs, they are not necessarily indicative of op-
erating profit or cash flow from operations as determined
under GAAP. Changes in numerous factors including, but not
limited to, mining rates, milling rates, gold grade, gold re-
covery, costs of labor, consumables and mine site gen-
eral and administrative activities can cause these measures
to increase or decrease. We believe that these measures
are the same as, or similar to, the measures of other gold min-
ing companies, but may not be comparable to similarly ti-
tled measures in every instance.
TRENDS AND EVENTS IN THE TWELVE MONTHS
ENDED DECEMBER 31, 2010
Gold Prices
Gold prices have generally trended upward during the
last ten years from a low of $260 per ounce in 2001 to a
high of $1,421 per ounce in November 2010. Realized
gold prices for our shipments averaged $1,219 per ounce
during 2010, up from $978 per ounce during 2009.
Royalties
During the first quarter of 2010, the Government of Ghana
amended its 2006 Mining Act to change the method of
calculating mineral royalties payable to the Government.
The prior rules established a royalty rate of not less than
3% and not more than 6% of a mine’s total revenues, the
exact amount being determined by each mine’s margin as
defined in the law. Under the old rules, our mines have,
since their inception, qualified for and paid a 3% rate.
Under the amended law, the royalty has been set at a flat
rate of 5% of mineral revenues with an effective date of
March 19, 2010. In October 2010, we were notified that
the effective date was extended to the end of March 2011.
Certain mining companies operating in Ghana, including
our subsidiaries GSBPL and GSWL, operate under tax
stabilization agreements which govern, among other
things, royalty rates and various tax rules. Discussions
with the Ministry of Finance and Economic Planning are
ongoing to determine the applicability of this new roy-
alty legislation to GSBPL and GSWL after March 2011.
Increases in Power, Fuel and Labor Rates in Ghana
We experienced significant upward pressure on the
costs of several of our operating consumables during
2010 including higher prices for diesel fuel, electricity
and processing reagents. In December 2010, following
several months of discussions, the Ghanaian national
power authority announced an increase in electric power
rates which was made retroactive back to June 1, 2010.
While our mines had anticipated an increase in power
rates and had thus accrued higher power costs since
June 2010 at the expected new rate, an additional $4.5
million accrual was required in the fourth quarter to
properly reflect the full impact of the new higher-than-ex-
pected rate announced in December. In January 2011, the
government of Ghana announced a series of increases in
fuel prices which resulted in a 23% total increase over the
December 2010 level.
Adoption of U.S. GAAP in 2011
Golden Star has, since its inception, reported to security
regulators in both Canada and the U.S. using Canadian
GAAP financial statements with a footnote reconciliation
to US GAAP. However, a change in SEC position in late
2009 required that beginning in 2011, Canadian compa-
nies such as Golden Star, which do not qualify as foreign
private issuers, to file their financial statements in the
U.S. using U.S. GAAP. In response, we adopted U.S.
GAAP for years beginning on or after January 1, 2011 for
all future U.S., Ghanaian and Canadian regulatory filings.
Increase in Revolving Credit Facility
In August 2010, our revolving credit facility was amended
and restated to reflect changes to the syndicate and to in-
crease the borrowing capacity from $30 million to $45 million.
All other material terms of the facility remain unchanged. At
December 31, 2010, the borrowing capacity on the revolving
credit facility decreased by $4.5 million as was scheduled in
the revolving credit facility loan agreement.
Expansion of Buesichem Deposit at Bogoso/Prestea
Exploration drilling earlier in the year identified a new
deposit of gold mineralization, now called Buesichem
South, located adjacent to our existing Buesichem pit at
Bogoso. On going drilling after July was successful in
converting a large portion of the previously announced
Mineral Resources to Proven and Probable Reserves
totaling 4.9 million tonnes at a grade of 2.85 grams per
tonne as of the end of 2010. During the second half of
2010 we also identified additional Mineral Resources at
Buesichem South, which are in addition to the Proven
and Probable Reserves, totaling 3 million tonnes of
Measured and Indicated Resources grading 2.26 grams
per tonne and also 0.72 million tonnes of Inferred Mineral
Resources grading 2.18 grams per tonne. Bogoso has
mined ore from the adjacent Buesichem pit since 2001
producing approximately 500,000 ounces of gold to
date from this deposit.
Cautionary Note to U.S. Investors concerning estimates of
Measured, Indicated and Inferred Mineral Resources —
The disclosure
immediately above about the new
Buesichem South resources, uses the terms “Measured
and Indicated Mineral Resources” and “Inferred Mineral
Resources.” U.S. Investors are cautioned not to assume
that any part or all of the mineral deposits in these cate-
gories will ever be converted into mineral reserves.
Inferred Mineral Resources have a greater amount of un-
3 6 | G o l d e n S t a r
certainty as to their existence and as to their economic and
legal feasibility. In accordance with Canadian rules, esti-
mates of Inferred Mineral Resources cannot form the basis
of feasibility or other economic studies. U.S. investors are
cautioned not to assume that part or all of the Inferred
Mineral Resource exists, or is economically or legally
mineable.
Recent Development:
Employment Agreement Amendment
On February 22, 2011, Golden Star Management
Services Company, a Delaware corporation, and a whol-
ly-owned subsidiary of Golden Star, entered into a First
Amendment (the “Amendment”) to the Amended and
Restated Employment Agreement of Mr. Thomas G.
Mair dated March 7, 2008 (the “Agreement”). The
Amendment amends terms relating to severance and
change of control payments.
The Amendment provides for an increase in the payment
due to Mr. Mair upon termination of employment without
cause or upon a termination by Mr. Mair in the event of a
material breach of the Agreement by the Company. The
severance payment, which is in addition to the payment
of accrued compensation at the time of termination, is
increased from one to two times the sum of (1) Mr. Mair’s
then current base salary, (2) the average of the target
bonus for Mr. Mair for the current calendar year and the
bonus paid to Mr. Mair for the previous year, (3) the
amount of Company contributions to Mr. Mair’s 401(k)
account for the most recent plan year before the termi-
nation date and (4) the amount paid by the Company for
welfare benefits on behalf of Mr. Mair for the most recent
year, subject to limitation in certain circumstances.
The Amendment also provides for an increase in the pay-
ment due to Mr. Mair in the event of a termination upon a
“change in control” as defined in the Agreement. The
change in control severance, which is in addition to the
payment of accrued compensation at the time of the ter-
mination upon a change in control and a pro rata portion
of Mr. Mair’s target bonus for the current calendar year, is
increased from two times to three times the sum of (1)
Mr. Mair’s base salary for the calendar year in which the
termination became effective, (2) the average of the tar-
get bonus for Mr. Mair for the current calendar year and
the bonus paid to Mr. Mair for the previous year, (3) the
amount of Company contributions to Mr. Mair’s 401(k)
account for the most recent plan year before the termi-
nation date and (4) the amount paid by the Company for
welfare benefits on behalf of Mr. Mair for the most recent
year. Mr. Mair would also receive a portion of the target
bonus for the current calendar year which is pro rata to
the portion of such year prior to Mr. Mair’s change of
control termination.
To address U.S. Internal Revenue Code Sections 280G
and 4999 non-deductibility and excise taxes on “excess
parachute payments,” the Amendment provides that, in
the event any payment or distribution by the Company
to or for the benefit of Mr. Mair would, absent the provi-
sions of the Amendment’s excise tax payment provision,
be subject to the excise tax imposed by Section 4999 of
the U.S. Internal Revenue Code, then the payment shall
be reduced to equal the maximum amount that may be
paid to Mr. Mair without triggering the application of
the excise tax.
RESULTS OF OPERATIONS —
2010 COMPARED TO 2009
Consolidated Results
Consolidated 2010 financial results include a net loss of
$8.3 million or $0.032 per share as compared to net in-
come of $16.5 million or $0.070 per share in 2009.
Increased revenues on higher gold prices offset in-
creases in cost of sales yielding a $6.6 million increase
in mine operating margin as compared to 2009. But in-
creases in non-operating costs and interest during 2010
offset the improved mine operating margin yielding a
$0.3 million pre-tax loss, down from a $0.9 million pre-
tax loss in 2009.
Our 2010 consolidated tax expense was $7.9 million, as
compared to a $17.4 million tax benefit in 2009. The
2009 benefit was a result of recognizing Wassa’s de-
ferred tax assets at the end of 2009 upon transfer of the
HBB mining leases to Wassa and improved operational
performance at Wassa. The $7.9 million tax expense in
2010 reflects the ongoing use of Wassa’s tax assets to
offset 2010 taxable income, and the cost of a temporary
tax levy in Ghana.
Gold sales totaled 354,904 ounces in 2010, down from
409,902 ounce sold in 2009. The major factors contrib-
uting to the decrease in gold sold were lower gold re-
covery at Bogoso and lower ore grades at Wassa.
Realized gold prices averaged $1,219 per ounce during
2010, up 25% from $978 per ounce in 2009. Wassa pro-
cessed essentially the same tonnes in 2010 as in 2009,
but ore grades were lower than in 2009 as mining
moved into lower grade areas of the Benso and Hwini-
Butre ore bodies during 2010. In contrast, Bogoso pro-
cessed higher grade ore during 2010 than in 2009, but
its gold output was adversely impacted by lower gold
recoveries during most of the year. Lower gold recov-
ery at Bogoso was related to a change in ore sources
during the year. In 2009 and the first quarter of 2010,
Bogoso’s main ore source was fresh ore from deep in
the Buesichem pit, which yielded good recoveries. By
mid 2010, the Buesichem pit was exhausted and Bogoso
moved its main mining fleet to the Chujah Main pit
where mining in the initial benches encountered par-
tially oxidized ore which yielded lower flotation recov-
ery of the gold. Bogoso initiated mining at the Bogoso
North pit in October to supplement the Chujah Main pit
ore. See additional discussion of Wassa and Bogoso’s
operations below.
SUMMARY OF FINANCIAL
RESULTS
Gold sales (oz)
Average realized price ($/oz)
Revenues ($ in thousands)
Cash flow provided by
operations ($ in thousands)
Net income/(loss)
($ in thousands)
Net income/(loss)
per share – basic ($)
2010
354,904
1,219
432,693
2009
409,902
978
400,739
2008
295,927
870
257,355
115,204
104,615
30,043
(8,281)
16,519
(119,303)
(0.032)
0.070
(0.506)
2 0 1 0 A n n u a l R e p o r t | 3 7
Our 2010 general and administrative expense was $17.1
million, up $2.9 million over the 2009 level. The increase
was mostly due to higher community development spending
in Ghana and to higher stock-based compensation ex-
pense. The corporate office overhead expense, excluding
stock based compensation expense, was up 5% from
2009. Property holding costs are primarily the costs in-
curred in care and maintenance activities at the Prestea
Underground project. An increase in scheduled accretion
of the convertible debentures was the major factor con-
tributing to the increase in interest expense.
Bogoso/Prestea Operations 2010 Compared to 2009
Bogoso/Prestea gold shipments totaled 170,973 ounces
in 2010 at an average gold price of $1,207 per ounce,
down from 186,054 ounces in 2009 at an average price
of $978 per ounce. While plant feed grades and total
tonnes processed were marginally higher in 2010, a drop
in gold recovery resulted in lower gold output. The drop
in refractory ore gold recovery to 65.7% in 2010 from
70.7% in 2009 was related to a change in ore sources dur-
ing the year. In 2009 and the first quarter of 2010,
Bogoso’s main feed source was fresh ore from deep
in the Buesichem pit which yielded good recoveries. But
by mid 2010, the Buesichem pit was exhausted and
Bogoso moved its main mining fleet to the Chujah Main
pit where mining encountered partially oxidized ore at
shallow levels resulting in lower flotation recovery of
the gold. Bogoso also processed stockpiled transition
ores at various time late in 2010, which also contributed
to lower gold recovery rates. The Bogoso North pit was
opened in the fourth quarter of 2010 to provide addi-
tional ore. Unusually heavy rain fall in the second half of
2010 and dewatering issues impeded mining operations
and pit scheduling at both Chujah and Bogoso North.
The Bogoso sulfide plant processed refractory ore
throughout the year, and in various periods the oxide
plant was operated to provide additional refractory con-
centrate to the bio-oxidation circuit. In the fourth quarter
of 2010, the oxide plant processed oxide ore from a small
stockpile accumulated from sundry sources over the
past few quarters. Mining was temporarily reinitiated at
the Pampe pit 19 km west of Bogoso in the fourth quarter
of 2010. We expect that resumption of oxide ore mining
from Pampe and the new tailings reprocessing project at
Bogoso, assuming permits are received, should al-
low extended periods of oxide ore processing at the
Bogoso oxide plant starting late in 2011.
3 8 | G o l d e n S t a r
BOGOSO/PRESTEA
OPERATING RESULTS(1)
Ore mined refractory (t)
Ore mined non-refractory (t)
Total ore mined (t)
Waste mined (t)
Refractory ore
processed (t)
Refractory ore grade (g/t)
Gold recovery –
refractory ore (%)
Non-refractory
ore processed (t)
Non-refractory
ore grade (g/t)
Gold recovery –
non-refractory ore (%)
Gold sales (oz)
Cash operating cost
($/oz)
Royalties ($/oz)
Total cash cost ($/oz)
2009
2,940,822
2010
2,733,730
115,417
2,849,147
2008
2,604,639
— 140,036
2,744,675
2,940,822
17,839,043 14,929,249 19,464,979
2,776,160
2.81
2,887,400
2.78
2,736,379
2.82
65.7
70.7
66.5
146,252
— 359,669
2.91
—
2.38
43.5
170,973
—
186,054
66.0
170,499
863
36
899
705
30
735
837
26
863
Bogoso/Prestea’s cash operating costs totaled $147.5
million in 2010, up from $131.2 million in 2009. Higher
electric power, fuel, cyanide and labor costs were the
key items responsible for Bogoso’s cost increase. Higher
cash operating costs coupled with lower gold output
pushed cash operating costs to $863 per ounce, up from
$705 per ounce in 2009.
Bogoso expects to see improved gold recovery during 2011
as mining at the Chujah Main accesses fresher ore at deeper
levels in the pit and as more ore comes from the Bogoso
North pit. At the same time we continue efforts to increase
recovery and plant throughput at the Bogoso sulfide plant
while seeking ways to reduce Bogoso’s over-all cost struc-
ture. Bogoso’s major 2011 capital expenditures will include
development work at the Dumasi pit, additional reserve drill-
ing and completion of the tailings processing project.
As explained in “Item 1 Business” above, Bogoso added a
net 1.0 million ounces of new Proven and Probable
Reserves during 2010, bringing the 2010 year-end re-
serves to 47.2 million tonnes at an average grade of 2.49
g/t, or 3.8 million ounces before recovery losses.
The Prestea Underground mine remained on a care and
maintenance basis during 2010, and dewatering contin-
ued. A scoping study evaluating the operational and
economic potential of an underground mining operation
was updated during 2010.
The current portion of Bogoso’s asset retirement obliga-
tion increased in 2010 due to the need to back fill the
plant North Pit at Prestea, and to rehabilitate the associ-
ated waste rock dump site. These two items are expect-
ed to cost approximately $18.1 million during 2011.
Wassa/HBB Operations 2010 Compared to 2009
While Wassa processed essentially the same number of
tonnes of ore in 2010 as it did in 2009, ore grades and
gold recovery were lower resulting in lower gold sales. In
addition, Wassa experienced increases in its cash oper-
ating costs, the effects of which were offset by higher
gold prices. Wassa sold 183,931 ounces in 2010 at an av-
erage realized gold price of $1,230 per ounce as com-
pared to 223,848 ounces at an average realized price of
$978 per ounce in 2009.
Lower plant feed grade in 2010 reflected a transition of
mining into lower grade areas of the Benso and Hwini-
Butre pits during 2010. Mining is now ramping up at
Hwini-Butre, and by mid-2011, we expect to begin mining
at the high-grade Father Brown deposit, sending the ore
to Wassa for processing.
WASSA/HBB
OPERATING RESULTS
Ore mined (t)
Waste mined (t)
Ore processed (t)
Ore grade processed (g/t)
Recovery (%)
Gold sales (oz)
Cash operating cost
($/oz)
Royalties ($/oz)
Total cash cost ($/oz)
2010
2,561,088
2009
2,222,511
19,172,059 16,708,312
2,652,939
2.76
95.3
223,848
2,648,232
2.29
94.7
183,931
2008
2,885,985
7,416,516
3,187,230
1.33
93.6
125,427
677
37
714
447
32
479
554
26
580
Cash operating costs rose to $124.5 million in 2010, up
from $100.0 million in 2009. Increases in labor, fuel, ex-
plosives and electric power accounted for most of the in-
crease over 2009 levels. Also, as Wassa ramped up its
mining effort at Benso and Hwini-Butre during 2010, it
incurred higher costs for contract mining, ore haulage
costs and equipment rental than in 2009. Wassa/HBB
moved a total of 21.7 million tonnes of ore and waste in
2010, as compared to 18.9 million tonnes in 2009.
The higher cash costs and lower gold sales contributed
to a cash operating cost of $677 per ounce in 2010, as
compared to $447 per ounce in 2009. Lower gold pro-
duction resulted in lower depreciation and amortization
costs which were down $7.9 million from 2009.
RESULTS OF OPERATIONS —
2009 COMPARED TO 2008
Consolidated Results
Our consolidated net income totaled $16.5 million or
$0.070 per share for 2009 as compared to a net loss of
$119.3 million or $0.506 per share, in 2008. The signifi-
cant earnings improvement, as compared to 2008, was
largely related to a $79.3 million improvement in mine
operating margins which was the result of a 38.5%, or
113,975 ounce increase in gold sales and a $108 per
ounce increase in average realized gold price. An $8.3
million increase in tax benefits and $65.3 million reduc-
tion in impairment losses also contributed to the earn-
ings improvement from 2008. A $64.1 million increase in
cost of sales partially offset the improvements in gold
sales and gold price.
Bogoso’s gold sales improved by 9%, or 15,555 ounces,
mostly due to improved gold recoveries. Higher grade ores
during 2009 from Wassa’s new Hwini-Butre and Benso
mines (“HBB properties”) yielded a 78%, or 98,421 ounce
increase in Wassa’s gold sales. These higher ounces com-
bined with the gold price improvements resulted in a 56%
increase in gold revenues over 2008 levels. Bogoso’s cost
of sales declined from 2008 levels, but the extra costs
associated with the new HBB mining operations resulted in
increases in Wassa’s cost of sales, resulting in our overall
increase in cost of sales.
Transfer of the HBB mining leases to Wassa in 2009 and
improved operational performance at Wassa, which al-
lowed release of deferred tax asset valuation allowances,
provided the tax benefit.
Our 2009 general and administrative expense was down
$1.1 million reflecting lower legal and tax audit costs than
in 2008 and the cost cutting programs implemented in
early 2009. Property holding costs are mostly the costs
incurred in care and maintenance activities at the Prestea
Underground which was deemed impaired and written
off at the end of 2008. Higher derivative costs reflect the
increased use of gold price derivatives during 2009 as
compared to 2008. Most of the increase in interest ex-
pense was related to scheduled increases in accretion
of the convertible debentures equity component.
Bogoso/Prestea Operations 2009 Compared to 2008
Bogoso/Prestea gold shipments increased to 186,054 ounc-
es in 2009 at an average price of $978 per ounce, up from
170,499 ounces in 2008 at an average price of $873 per
ounce. The increase in gold recovery to 70.7% in 2009
from 66.5% in 2008 was the major factor in the gold sales
improvement. While the Bogoso oxide plant processed
refractory ore at various times during 2009, there was no
non-refractory ore processed at Bogoso during the year.
Oxide ore mining remained on stand-by at Pampe awaiting
receipt of permits for Prestea South. Once Prestea South
permits are issued, we expect to mine oxide ore from
both Pampe and Prestea South in amounts sufficient to
run the Bogoso oxide mill at capacity.
Bogoso/Prestea operations resulted in a $1.5 mil-
lion operating margin loss, an improvement from its
$47.2 million operating margin loss in 2008. Cash oper-
ating costs fell from $142.7 million in 2008 to $131.2 mil-
lion in 2009 on lower fuel, power and consumable costs.
Lower cash operating costs coupled with increases in
gold output resulted in an improvement in unit costs to
$705 per ounce, down from $837 per ounce in 2008.
The Prestea Underground mine remained on a care and
maintenance basis during 2009, and dewatering contin-
ued as we evaluated various plans that could allow under-
ground mining to restart.
Wassa Operations 2009 Compared to 2008
Wassa mining operations underwent significant changes
during 2009 due to the impact of its two new mining
operations at Benso and Hwini-Butre located 50 and 80
kilometers south of Wassa, respectively. Both of these
ore bodies are much higher grade than the pits located
adjacent to the Wassa plant site which have furnished
ore to the Wassa plant since 2005. As a result of the new
ores from Benso and Hwini-Butre during 2009, Wassa
saw higher ore grades, increased gold sales, better gold re-
coveries and lower costs per ounce.
With the new HBB ores, Wassa’s plant feed grade aver-
aged 2.76 grams per tonne during 2009 as compared to
1.33 grams per tonne in 2008. Total tonnes processed
during 2009 were 16.8% lower than in 2008, but
gold recovery increased to 95.3%, up from 93.6% in
2008. Tonnes processed were lower as Wassa cut back
on processing low-grade heap leach material to maxi-
mize ore residence time in the plant to achieve higher
recovery from the higher grade HBB ores.
2 0 1 0 A n n u a l R e p o r t | 3 9
DEVELOPMENT PROJECTS 2010
Bogoso Tailings Processing Project
In the second quarter of 2010, $8 million was approved for
construction of a hydraulic tailings recovery system and
associated piping that will feed tailings from a decommis-
sioned tailings storage facility to the Bogoso oxide plant’s
CIL circuit. The project is expected to come online in late
2011, subject to permitting. While the grade of the tailings
material is lower than the ores typically treated in the
Bogoso oxide plant, the operating costs are expected to
be low since reclaimed tailings can be fed directly into the
existing CIL circuit thereby resulting in lower overall pro-
cessing costs. The system is designed to handle approxi-
mately 2.4 million tonnes of tailings per annum over its
five year life yielding up to approximately 40,000 to
50,000 additional ounces per year. Engineering has been
completed, and permitting and equipment procurement
commenced during the fourth quarter of 2010.
Prestea South Properties
We received mining permits for Prestea South in 2008
and continue to work on the environmental permits. We
expect to initiate development at Prestea South, includ-
ing its 10 kilometer haul road extension, once the envi-
ronmental permit is received. The Prestea South oxide
ore will be transported to Bogoso and processed through
the Bogoso oxide plant. The Prestea South sulfide ore
will be processed through the Bogoso sulfide plant. The
Ghana Environmental Protection Agency (“EPA”) has re-
quested an update to the Prestea South Project
Environmental Impact Statement (“EIS”). We are cur-
rently working with our environmental consultant to
finalize the study and expect that the revised EIS will be
submitted in the first quarter of 2011.
EXPLORATION PROJECTS
Exploration expenditures in 2010 totaled approximately
$20.0 million, up from $9.0 million in 2009. The 2010
exploration programs concentrated on converting re-
sources to reserves at Wassa, Hwini-Butre, Benso,
Chichiwelli, Pampe and Buesichem South and on further
VTEM geophysical target drilling at Bogoso and Prestea.
Other West African exploration activities included drill-
ing at our Burkina Faso properties by a joint venture
partner; initial drilling on the Niger properties by another
joint venture partner who is earning into the Deba and
Tialkam licenses; infill soil sampling on the Cote D’Ivoire
properties at Amelekia, Abengorou and Agboville; and
further diamond drilling and geophysics at the Sonfon
joint venture in Sierra Leone.
In South America, 2010 exploration efforts concentrated
on our Brazilian properties where we have entered into a
joint venture to earn an ownership position in a large
package of properties in Northern Mato Grosso State as
well as initial soil sampling and prospecting on our 100%
held ground in Mato Grosso, Goias and Minas Geris
States. In 2009 we sold our interest in the Saramacca
property in Suriname to Newmont Mining Corporation
and are now awaiting the government’s transfer of the
properties to Newmont. When the transfer is completed we
will receive the $8 million purchase price which is cur-
rently being held in escrow. All of our French Guiana as-
sets were sold in 2010.
2011 Exploration Plans
We have budgeted approximately $30 million for explora-
tion activities in 2011, and plan to focus efforts on resource
definition drilling in and around our mining leases in Ghana,
testing deeper potential underground targets below higher
grade portions of the current open pits and drilling of geo-
physical targets at Bogoso/Prestea, Wassa, Hwini-Butre
and Benso. We expect that the West African exploration
programs outside of Ghana will involve continued drilling
and assessment of the Burkina Faso and Niger properties
undertaken by joint venture partners as well as initial drilling
of geochemical targets in Cote D’Ivoire and additional drill-
ing on the Sonfon joint venture in Sierra Leone.
We expect to step up the level of exploration activity in
South America during 2011, especially in Brazil where
we have entered into a joint venture with Votorantim
Metals on a 3,400 square kilometer land package in
Northern Mato Grosso. This joint venture requires us to
spend $5 million to earn 50% of the precious metal
rights on this package over a three year period and ad-
ditional ownership can be acquired if a project advanc-
es to the feasibility stage and we complete a feasibility
study. The initial joint venture work during 2011 is an-
ticipated to involve greenfields soil sampling and follow
up on several targets generated by the Votorantim geo-
physical and stream sediment data sets as well as initial
stream sediment sampling in areas not previously sam-
pled. In addition to exploration on the joint venture
properties, we plan to conduct further soil and stream
sampling on our 100% owned land holdings in Mato
Grosso, Goias and Minas Geris States. In Suriname we
will continue to assist Newmont with the transfer of the
Saramacca joint venture properties.
LIQUIDITY AND CAPITAL RESOURCES
During 2010, our cash and cash equivalents increased by
$23.9 million, reaching $178.0 million at December 31,
2010. The increase in cash was a function of the $115.2
million of cash generated from operating activities dur-
ing 2010. Operating cash flow of $115.2 million in 2010
was $10.6 million higher than the $104.6 million in 2009
and was sufficient to meet all of our operational, invest-
ing and debt needs. Cash flow from changes in working
capital was the major factor contributing to the cash
flow improvement over 2009.
Our capital projects used $83.8 million of cash during
2010, up from $48.8 million in 2009. Capital projects used
the following amounts during 2010: $20.9 million for mine
development projects, $30.9 million for purchases of cap-
ital equipment, $15.1 million for deferred waste stripping,
and $16.9 million for mine site exploration and drilling.
Outstanding debt decreased by $2.7 million during 2010
reflecting reduction in the equipment financing loans
balance. While there were $5.7 million of new equipment
loans during 2010, $10.7 million of scheduled payments
yielded a net reduction of $5.0 million. Non-cash accre-
tion raised the convertible debenture balance by $7.1 mil-
lion to $108.8 million during 2010. Continuing periodic
accretion fees will bring the convertible debenture bal-
ance to its $125.0 million face amount by its November
30, 2012 due date. The $5.0 million opening balance on
our revolving credit facility was paid during 2010 leaving
a nil balance as the end of 2010 and the balance on the
capital leases was reduced to $2.8 million by period pay-
ments during 2010. Our $35 million equipment financing
4 0 | G o l d e n S t a r
facility had an outstanding balance of $15.7 million at
December 31, 2010, with available credit of $19.3 million.
Our revolving credit facility ended the year with no out-
standing balance and $40.5 million of available credit.
See Note 5 to the attached financial statements for a
table of schedule future debt payments. We were in
compliance with all loan covenants at December 31, 2010.
During 2010, all of our cash and cash equivalents were
held as cash or was invested in funds that held only U.S.
treasury notes and bonds.
LIQUIDITY OUTLOOK
Our liquidity position improved in 2010 as cash balances
continued to grow, reaching $178.0 million at December
31, 2010, up from $154.1 million at the end of 2009 and
$33.6 million at the end of 2008. A total of $115.2 million
of cash flow from operating activities during 2010 was
the major factor contributing to the increase.
In addition to the improved cash balances, we maintain a
$40.5 million revolving line of credit and have an addi-
tional $19.3 million of borrowing capacity under our
equipment financing credit facility. We also have a shelf
registration statement on file with the U.S. Securities and
Exchange Commission which enables Golden Star to is-
sue common shares, preferred shares, debt securities
and warrants from time to time.
We expect to use approximately $100 million for capital
projects during 2011. This total is expected to include
$38 million of mine property development, $20 million
of mine site drilling and approximately $42 million for
equipment and facilities.
During 2011, we expect to pay $8.2 million of principal and
interest on our equipment financing facility, $5.0 million
of interest payments on the convertible debentures and
$2.8 million in interest and principal of our capital leases.
Operational cash flow in 2011, along with the revolv-
ing credit facility and equipment financing facility,
should be sufficient to cover capital and operating
needs during 2011.
LOOKING AHEAD
Our main objectives for 2011 are:
• permitting, development and operation of a tailings
recovery process at Bogoso to provide feed to the Bogoso
oxide plant;
• optimize and stabilize ore feed at Bogoso to improve
metallurgical recoveries;
• continue reserve and resource definition drilling at
Bogoso/Prestea and Wassa/HBB;
• reopen the Pampe pit to provide oxide ore to the
Bogoso oxide processing plant;
• finalization of the permitting and development of the
Prestea South project; and
• advance the development of the Prestea Underground.
We are estimating 2011 Bogoso/Prestea gold production
of 160,000 to 180,000 ounces at an average cash oper-
ating cost of $950 to $1,050 per ounce. We expect
Wassa to produce approximately 170,000 to 180,000
ounces during 2011 at an average cash operating cost of
$650 to $700 per ounce, with combined total produc-
tion of approximately 330,000 to 360,000 ounces at an
average cash operating cost of $800 to $870 per ounce.
As more fully disclosed in the Risk Factors in Item 1A of
this Form 10-K, numerous factors could cause our estimates
and expectations to be wrong or could lead to changes
in our plans. Under any of these circumstances, the esti-
mates described above could change materially.
ENVIRONMENTAL LAWS AND REGULATIONS
In the various jurisdictions where we operate, all phases of
our exploration, project development, and operations are
subject to environmental laws and regulations. These
laws and regulations may define, among other things, air
and water quality standards, waste management require-
ments, and closure and rehabilitation obligations. In general,
environmental legislation is evolving to require more strict
operating standards, more detailed socioeconomic and en-
vironmental impact assessments of proposed projects,
and a heightened degree of responsibility for companies
and their officers, directors, and employees for corporate
social responsibility, and health and safety. Changes in en-
vironmental regulations, and the way they are interpreted
by the regulatory authorities, could affect the way we op-
erate, resulting in higher environmental and social operat-
ing costs that may affect the viability of our operations.
We note a continuing trend toward substantially increasing
environmental requirements and greater corporate social
responsibility expectations in Ghana. This includes the
need for more permits, analysis, data gathering, commu-
nity hearings and negotiations than have been required in
the past to resolve both routine operational needs and for
new development projects. In Ghana, the trend to longer
lead times in obtaining environmental permits has contin-
ued such that we are no longer able to estimate permit-
ting times. These increases in permitting requirements
could affect our environmental management activities
including but not limited to tailings disposal facilities and
water management projects at our mines.
SOCIO-ECONOMIC DEVELOPMENT PROJECTS
As part of our commitment to corporate social responsi-
bility, we support and fund the Golden Star Development
Foundation and the Golden Star Oil Palm Plantations
Limited (GSOPP). Both these entities aim to improve the
standard of living and diversify the economic base with-
in our stakeholder communities by sharing our success
with our stakeholders. Funding for each of the projects is
$1/ounce of gold produced plus 0.1% of pre-tax profits.
The Golden Star Development Foundation funds primar-
ily infrastructure projects (e.g. schools and clinics), that
are selected by stakeholder consultative committees. In
this manner, we are able to support projects selected by
our communities. The GSOPP is developing oil palm
plantations on disturbed lands and then assigns small-
holdings to local farmers who then tend the oil palms.
Each smallholder receives support from GSOPP and also
receives money from the sale of the palm fruit. To date,
790 hectares have been planted and 200 plots of pro-
ducing trees have been assigned to local farmers includ-
ing at our new project near Hwini-Butre. We have also
assisted farmers develop 100 hectares of palm planta-
tions on their own farms.
2 0 1 0 A n n u a l R e p o r t | 4 1
RELATED PARTY TRANSACTIONS
We obtained legal services from a legal firm to which
one of our board members is of counsel. The total value
of all services purchased from this law firm during 2010
and 2009 was $0.9 million and $0.6 million, respectively.
Our board member did not personally perform any legal
services for us during the period nor did he benefit di-
rectly or indirectly from payments for the services per-
formed by the firm.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our financial statements reflect the application of Cdn
GAAP, which is different in certain material respects
from U.S. GAAP. The accounting policies reflected there-
in are generally those applied by similarly situated min-
ing companies in Canada. Our accounting policies under
Cdn GAAP are described in Note 3 of our consolidated
financial statements.
Preparation of our consolidated financial statements requires
the use of estimates and assumptions that can affect report-
ed amounts of assets, liabilities, revenues and expenses.
Accounting policies relating to asset impairments, de-
preciation and amortization of mining property, plant
and equipment, stock based compensation, tax assets,
determination of fair values of financial instruments and
site reclamation/closure accruals are subject to estimates
and assumptions regarding reserves, gold recoveries, fu-
ture gold prices, future operating and reclamation costs
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. Certain explora-
tion properties have been found to be impaired in the
past and were written off in prior years. We continue to
retain title to certain properties after impairment write-
offs as future events and discoveries may ultimately
prove that they have value.
Listed below are the accounting policies and estimates
that we believe are critical to our financial statements
based on the degree of uncertainty regarding the esti-
mates or assumptions involved and the magnitude of the
asset, liability, revenue or expense being reported.
• Ore stockpiles: Stockpiles represent coarse ore that
has been extracted from the mine and is available for
further processing. Stockpiles are measured by physi-
cal surveys or by estimating the number of tonnes of
ore added and removed from the stockpile during a
period. The number of recoverable ounces of gold in
stockpiles is based on assay data and the gold recov-
ery rate expected when the ore is processed. Stockpile
values include mining and mine maintenances costs
incurred in bringing the ore to the stockpile, and also a
share of direct overhead and applicable depreciation,
depletion and amortization relating to mining opera-
tions. Costs are added to a stockpile based on current
mining costs and are removed at the average cost per
tonne of the total stockpile. Stockpiles are reduced as
material is removed and fed to the processing plant. A
10% adjustment of a typical stockpile value would
change the carrying value of the stockpile inventory
by approximately $0.4 million.
4 2 | G o l d e n S t a r
• Impairment Charges: We periodically review and evaluate
our long-lived assets for impairment when events or
changes in circumstances indicate the related carrying
amounts may not be recoverable from continued opera-
tion of the asset. An asset impairment is considered to
exist if the sum of all estimated future cash flows,
on an undiscounted basis, are less than the carrying
value of the long-lived asset. The determination of ex-
pected future cash flows requires numerous estimates
about the future, including gold prices, operating costs,
production levels, gold recovery rates, reclamation
spending, ore reserves, amounts of recoverable gold
and capital expenditures.
• Amortization: Capital expenditures for mining prop-
erties, mine development and certain property plant
and equipment items, are amortized using a units-of-
production method over Proven and Probable Mineral
Reserve ounces of gold. Capital expenditures that
benefit an entire mining property, such as the cost of
building an administrative facility, are amortized over
all ounces contained on the property. Capital expen-
ditures that benefit only a specific asset such as the
preproduction stripping costs of a pit, are amortized
over only the ounces located in the associated pit.
Reserve estimates, which serve as the denominator in
units of production amortization calculations, 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 de-
posits, and other factors that may prove to be incor-
rect. A 10% adjustment in estimated total December
31, 2010, reserves at Wassa and at Bogoso/Prestea
could result in an approximately $7 million annual
change in amortization expense.
• Tax Assets: Recognition of future tax assets requires
an analysis of future taxable income expectations to
evaluate the probability of sufficient future taxable in-
come to utilize the accrued tax benefits. Determination
of expected future taxable income requires numerous
estimates of future variable including but not limited
to, gold prices, operating costs, gold recovery, ore re-
serves, gold production, ore grades, administrative
costs, tax rates, and potential changes in tax laws.
• Asset retirement obligation and reclamation expendi-
tures: Accounting for future reclamation obligations
requires management to make estimates, at each mine
site, of future reclamation and closure costs. In many
cases a majority of such costs are incurred at the end
of a mine’s life which can be several years in the future.
Such estimates are subject to changes in mine plans,
reclamation requirements, inflation rates and technol-
ogy. As a result, future reclamation and closure costs
are difficult to estimate. Our estimates of future recla-
mation and closing cost are reviewed frequently and
are adjusted as needed to reflect new information
about the timing and expected future costs of our en-
vironmental disturbances. Based upon our current
situation, we estimate that a 10% increases in total fu-
ture reclamation and closure cash costs would result in
an approximately $0.5 million increase in our asset re-
tirement obligations.
ACCOUNTING DEVELOPMENTS
See Note 3 to the financial statements attached below this “Management’s Discussion and Analysis of Consolidated
Financial Condition and Results of Operations” for a discussion of Recently Adopted Accounting Pronouncements and
Recently Issued Accounting Pronouncements.
Adoption of U.S. GAAP in 2011
Golden Star has, since its inception, reported to security regulators in both Canada and the U.S. using Canadian
GAAP financial statements with a foot note reconciliation to U.S. GAAP. However, a change in SEC position in late
2009 required that after 2010, Canadian companies such as Golden Star, which do not qualify as foreign private is-
suers, file their financial statements in the U.S. using U.S. GAAP after 2010. In response, we adopted U.S. GAAP for
years beginning on or after January 1, 2011 for all future U.S., Ghanaian and Canadian regulatory filings.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
TABLE OF CONTRACTUAL OBLIGATIONS
Debt(1)
Interest on long term debt
Operating lease obligations
Capital lease obligations
Asset retirement obligations(2)
Total
Total
140.2
11.7
4.1
3.0
84.3
243.3
$
$
Payment due (in millions) by period
Less than
1 Year
3 to 5
years
$
$
7.2
6.0
3.3
2.8
25.3
44.6
$
$
1 to 3
years
132.9
5.7
0.7
0.2
13.6
153.1
$
$
0.1
—
0.1
—
5.2
5.4
$
More than
5 Years
—
—
—
—
40.2
40.2
$
(1) Includes $125.0 million of convertible debentures maturing in November 2012. Golden Star has the right to repay the $125.0 mil-
lion in cash or in common shares at the due date under certain circumstances. The presentation shown above assumes payment
is made in cash and also assumes no conversions of the debt to common shares by the holders prior to the maturity date.
(2) Asset retirement obligations include estimates about future reclamation costs, mining schedules, timing of the performance of recla-
mation work and the quantity of ore reserves, an analysis of which determines the ultimate closure date and impacts the discounted
amounts of future asset retirement liabilities. The discounted value of these projected cash flows is recorded as “Asset retirement
obligations” on the balance sheet of $45.0 million as of December 31, 2010. The amounts shown above are undiscounted to show
full expected cash requirements.
OUTSTANDING SHARE DATA
This “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” includes informa-
tion available to February 22, 2011. As of February 22,
2011, we had outstanding 258,559,486 common shares,
options to acquire 6,675,272 common shares, and con-
vertible notes which are convertible into 25,000,000
common shares.
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
debt, changes in foreign currency exchange rates and
commodity price fluctuations.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate be-
cause of changes in market interest rates. Our convertible
senior unsecured debentures and the outstanding loans
under our equipment financing facility bear interest at a
fixed rate and are not subject to gains or losses in inter-
est rate. Our revolving credit facility has a variable inter-
est rate of the higher of the applicable lender’s cost of
funds (capped at 1.25% per annum above LIBOR) and
LIBOR plus a margin of 5%. As of December 31, 2010, we
had a nil balance outstanding on this facility. We have not
entered into any agreements to hedge against unfavorable
changes in interest rates, but may in the future actively
manage our exposure to interest rate risk.
2 0 1 0 A n n u a l R e p o r t | 4 3
Foreign Currency Exchange Rate Risk
Currency risk is risk that the fair value of future cash
flows will fluctuate because of changes in foreign cur-
rency exchange rates. In addition, the value of cash and
cash equivalents and other financial assets and liabilities
denominated in foreign currencies can fluctuates with
changes in currency exchange rates.
Since our revenues are denominated in U.S. dollars and
our operating units transact much of their business in
U.S. dollars, we are typically not subject to significant
impacts from currency fluctuations. Even thus, certain
purchases of labor, operating supplies and capital assets
are denominated in Ghana cedis, euros, British pounds,
Australian dollars and South African rand. To accommodate
these purchases, we maintain operating cash accounts in
non–US dollar currencies and appreciation of these non–US
dollar currencies against the U.S. dollar results in a foreign
currency gain and a decrease in non–US dollar currencies
results in a loss. In the past we have entered into forward
purchase contracts for South African rand, euros and other
currencies to hedge expected purchase costs of capital as-
sets. During 2010 and 2009 we had no currency related de-
rivatives. At December 31, 2010, and 2009 we held $9.4
million and $4.3 million, respectively, of foreign currency.
Commodity Price Risk
Gold is our primary product and, as a result, changes in
the price of gold significantly affects our results of operations
and cash flows. Based on our expected gold production
in 2011, a $10 per ounce change in gold price would result
in a $3 to 4 million change in our sales revenues and
operating cash flows. To reduce gold price volatility, we
have at various times entered into gold price derivatives.
At December 31, 2010, and December 31, 2009, we did
not hold any gold price derivatives and thus, there were
no financial instruments subject to gold price risk at
December 31, 2010. Information about our gold price
derivative activity can be found in Note 14 of our finan-
cial statements. In January 2011, we entered into a series
of put and call contracts covering 76,800 ounces of fu-
ture gold production between February and December
2011. The contracts are spread evenly in each week over
this period and are structured as cashless collars with a
floor of $1,200 per ounce and a cap of $1,457 per ounce.
In early February 2011 we entered into a second set of
put and call contracts covering 75,200 ounces of future
gold production between February and December 2011.
The contacts are spread evenly in each week during this
period and are structured as cashless collars with a floor
of $1,200 per ounce and a cap of $1,503 per ounce.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
To the Shareholders of
Golden Star Resources Ltd.
We have completed integrated audits of Golden Star Resources Ltd.’s 2010, 2009 and 2008 consolidated financial
statements and of its internal control over financial reporting as at December 31, 2010. Our opinions, based on our
audits, are presented below.
4 4 | G o l d e n S t a r
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of
Golden Star Resources Ltd.
We have completed integrated audits of Golden Star Resources Ltd.’s 2010, 2009 and 2008 consolidated financial
statements and their internal control over financial reporting as at December 31, 2010. Our opinions, based on our
audits, are presented below.
Report on the consolidated financial statements
We have audited the accompanying consolidated financial statements of Golden Star Resources Ltd., which comprise the
consolidated balance sheet as at December 31, 2010 and December 31, 2009 and the consolidated statements of opera-
tions and comprehensive income (loss), changes in shareholders’ equity and cash flows for each of the years in the three
year period ended December 31, 2010, and the related notes including a summary of significant accounting policies.
Management’s responsibility for the consolidated financial statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accor-
dance with Canadian generally accepted accounting principles and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether
due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We con-
ducted our audits in accordance with Canadian generally accepted auditing standards and 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 consolidated financial statements are free from material
misstatement. Canadian generally accepted auditing standards require that we comply with ethical requirements.
An audit involves performing procedures to obtain audit evidence, on a test basis, about the amounts and disclo-
sures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error. In making those risk assessments, the auditor considers internal control relevant to the company’s prepara-
tion and fair presentation of the consolidated financial statements in order to design audit procedures that are ap-
propriate in the circumstances. An audit also includes evaluating the appropriateness of accounting principles and
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the over-
all presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for
our audit opinion on the consolidated financial statements.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
Golden Star Resources Ltd. as at December 31, 2010 and December 31, 2009 and the results of their operations and
cash flows for each of the years in the three year period ended December 31, 2010 in accordance with Canadian
generally accepted accounting principles.
Report on internal control over financial reporting
We have also audited Golden Star Resources Ltd.’s internal control over financial reporting as at December 31, 2010,
based on criteria established in Internal Control — Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
Management’s responsibility for internal control over financial reporting
Management is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting included in Item 9A of the Annual Report on Form 10-K.
Auditor’s responsibility
Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our
audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was main-
tained in all material respects.
An audit of internal control over financial reporting includes obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control,based on the assessed risk, and performing such other procedures as we
consider necessary in the circumstances.
2 0 1 0 A n n u a l R e p o r t | 4 5
We believe that our audit provides a reasonable basis for our audit opinion on the company’s internal control over
financial reporting.
Definition of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with Canadian generally accepted accounting principles. A company’s internal control over financial reporting includes
those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with Canadian
generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
Inherent limitations
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inade-
quate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, Golden Star Resources Ltd. maintained, in all material respects, effective internal control over financial re-
porting as at December 31, 2010 based on criteria established in Internal Control — Integrated Framework, issued by COSO.
/s/ PriceWaterhouseCoopers LLP
Chartered Accountants
February 23, 2011
Vancouver, British Columbia
4 6 | G o l d e n S t a r
GOLDEN STAR RESOURCES LTD.
CONSOLIDATED BALANCE SHEETS
(Stated in thousands of U.S. dollars except shares issued and outstanding)
As of
As of
December 31, 2010
December 31, 2009
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 4)
Accounts receivable (Notes 4 and 7)
Inventories (Note 6)
Deposits (Note 8)
Prepaids and other (Notes 4 and 9)
Total current assets
RESTRICTED CASH (Notes 4 and 18)
DEFERRED EXPLORATION AND DEVELOPMENT COSTS (Note 10)
PROPERTY, PLANT AND EQUIPMENT (Note 11)
INTANGIBLE ASSETS (Note 13)
MINING PROPERTIES (Note 12)
OTHER ASSETS
Total assets
LIABILITIES
CURRENT LIABILITIES
Accounts payable (Note 4)
Accrued liabilities (Note 4)
Asset retirement obligations (Note 15)
Current tax liability (Note 17)
Current debt (Note 16)
Total current liabilities
LONG TERM DEBT (Notes 4 and 16)
ASSET RETIREMENT OBLIGATIONS (Note 15)
FUTURE TAX LIABILITY (Note 17)
Total liabilities
MINORITY INTEREST
COMMITMENTS AND CONTINGENCIES (Note 18)
SHAREHOLDERS’ EQUITY
SHARE CAPITAL
$ 178,018
11,885
65,141
5,865
1,522
262,431
1,205
14,487
229,081
7,373
283,711
3,167
$ 801,455
$
34,522
53,935
23,485
1,128
10,014
123,084
117,289
21,467
20,456
$ 282,296
1,278
$ 154,088
7,021
52,198
4,774
1,415
219,496
3,804
12,949
231,855
9,480
276,114
181
$ 753,879
$
28,234
34,178
1,938
616
9,970
74,936
114,595
30,031
13,997
$ 233,559
—
First preferred shares, without par value, unlimited shares authorized. No shares
issued and outstanding
Common shares, without par value, unlimited shares authorized. Shares issued
and outstanding: 258,511,236 at December 31, 2010, 257,362,561 at December 31,
2009
CONTRIBUTED SURPLUS
EQUITY COMPONENT OF CONVERTIBLE DEBENTURES
ACCUMULATED OTHER COMPREHENSIVE INCOME
DEFICIT
Total shareholders’ equity
Total liabilities and shareholders’ equity
—
—
693,853
17,552
34,542
643
(228,709)
517,881
$ 801,455
690,423
15,759
34,542
24
(220,428)
520,320
$ 753,879
The accompanying notes are an integral part of the consolidated financial statements.
2 0 1 0 A n n u a l R e p o r t | 47
GOLDEN STAR RESOURCES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME/(LOSS)
(Stated in thousands of U.S. dollars except share and per share data)
For the years ended December 31,
2010
2009
2008
restated (note 3)
REVENUE
Gold revenues
Cost of sales (Note 20)
Mine operating margin/(loss)
OTHER EXPENSES, (GAINS) AND LOSSES
Exploration expense
General and administrative expense
Abandonment and impairment
Derivative mark-to-market losses (Note 14)
Property holding costs
Foreign exchange (gain)/loss
Interest expense
Interest and other income
Loss on sale of assets
Gain on sale of investments
Income/(loss) before minority interest
Minority interest
Loss before income tax
Income tax (expense)/benefit (Note 17)
Net income/(loss)
OTHER COMPREHENSIVE INCOME/(LOSS)
Unrealized (gain)/loss on available-for-sale investments
Comprehensive income/(loss)
Net income/(loss) per common share — basic (Note 22)
Net income/(loss) per common share — diluted (Note 22)
Weighted average shares outstanding (millions)
Weighted average number of diluted shares (millions)
$
432,693
388,391
44,302
$
400,739
363,030
37,709
$
257,355
298,930
(41,575)
1,860
17,065
—
850
5,299
872
16,946
(362)
829
—
943
(1,278)
(335)
(7,946)
(8,281)
619
(7,662)
(0.032)
(0.032)
258.0
258.0
834
14,156
3,079
3,538
4,196
(2,995)
15,647
(197)
304
—
(853)
—
(853)
17,372
16,519
113
16,632
0.070
0.069
237.2
238.4
1,954
15,221
68,380
980
—
(2,587)
14,591
(805)
575
(5,402)
(134,482)
6,150
(128,332)
9,029
(119,303)
(3,280)
(122,583)
(0.506)
(0.506)
235.7
235.7
$
$
$
$
$
$
$
$
$
$
$
$
The accompanying notes are an integral part of the consolidated financial statements.
4 8 | G o l d e n S t a r
GOLDEN STAR RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Stated in thousands of U.S. dollars)
Number of
Common
Shares Share Capital
Warrants
Options
Contributed Surplus
Equity
Component
of Convertible
Debentures
Accumulated
Other
Comprehensive
Income/(Loss)
Retained
Deficit
Total
Shareholders’
Equity
(restated note 3)
Balance at
December 31, 2007
Shares issued under
options
Options granted net
of forfeitures
Realized gain on
available for sale
securities
Unrealized loss on
available for sale
securities
Common shares
issued
Issue costs
Payment of loan
fees
Net loss
Balance at
December 31, 2008
Shares issued under
options
Options granted net
of forfeitures
Unrealized gain on
available for sale
securities
Common shares
issued
Issue costs
Net income
Balance at
December 31, 2009
Shares issued under
options
Options granted net
of forfeitures
Unrealized gain on
available for sale
securities
Issue costs
Net loss
Balance at
December 31, 2010
233,703,681 $ 609,103 $
5,138 $
8,092 $
34,620 $
3,192 $
(117,644) $
542,501
360,000
1,023
—
—
—
—
(121)
2,088
—
—
—
—
—
—
902
2,088
—
—
—
—
—
(5,402)
—
(5,402)
—
—
1,881,630
—
—
—
5,674
(337)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(78)
—
2,122
—
—
—
—
—
—
—
—
2,122
5,674
(337)
(78)
(119,303)
(119,303)
235,945,311 $ 615,463 $
5,138 $
10,059 $
34,542 $
(88) $
(236,947) $
428,167
1,417,250
4,008
—
—
—
—
20,000,000
—
—
75,000
(4,048)
—
—
—
—
—
—
—
(1,470)
2,032
—
—
—
—
—
—
—
—
—
—
—
—
112
—
—
—
—
—
—
—
—
16,519
2,538
2,032
112
75,000
(4,048)
16,519
237,362,561 $ 690,423 $
5,138 $
10,621 $
34,542 $
24 $
(220,428) $ 520,320
1,148,675
3,537
—
—
—
—
—
—
(107)
—
—
—
—
—
—
(1,182)
2,975
—
—
—
—
—
—
—
—
—
—
619
—
—
—
—
—
—
(8,281)
2,355
2,975
619
(107)
(8,281)
258,511,236 $ 693,853 $
5,138 $
12,414 $
34,542 $
643 $
(228,709) $
517,881
The accompanying notes are an integral part of these financial statements.
There were no treasury shares held as of December 31, 2010.
2 0 1 0 A n n u a l R e p o r t | 4 9
GOLDEN STAR RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in thousands of U.S. dollars)
OPERATING ACTIVITIES:
Net income/(loss)
Reconciliation of net income/(loss) to net cash provided by
operating activities:
Depreciation, depletion and amortization
Amortization of loan acquisition cost
Abandonment and impairment
Gain on sale of equity investments
Loss on sale of assets
Non-cash employee compensation
Future income tax expense/(benefit)
Derivatives mark to market gain/(loss)
Accretion of convertible debt
Accretion of asset retirement obligations
Minority interests
Reclamation expenditures
Changes in non-cash working capital:
Accounts receivable
Inventories
Deposits
Accounts payable and accrued liabilities
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
Proceeds from sale of equity investment
Proceeds from the sale of assets
Change in payable on capital expenditures
Change in deposits on mine equipment and material
Other
Net cash used in investing activities
FINANCING ACTIVITIES:
Issuance of share capital, net of issue costs
Principal payments on debt
Proceeds from equipment financing facility and revolving debt facility
Other
Net cash provided by/(used in) financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
For the years ended December 31,
2010
2009
2008
restated (note3)
$
(8,281)
$
16,519
$
(119,303)
100,762
1,888
—
—
829
2,975
6,459
(216)
7,079
2,802
1,279
(9,704)
105,872
(4,010)
(14,351)
235
26,978
480
115,204
(3,538)
(49,390)
(30,849)
—
1,467
901
(1,326)
2,598
(80,137)
113,977
1,201
3,079
—
304
2,033
(19,127)
(1,838)
6,624
2,165
—
(1,985)
122,952
(2,702)
(4,327)
(845)
(10,848)
385
104,615
(3,460)
(32,839)
(12,468)
—
2
(962)
(54)
445
(49,336)
2,248
(38,049)
25,674
(1,010)
(11,137)
23,930
154,088
$ 178,018
73,489
(28,856)
22,837
(2,219)
65,251
120,530
33,558
$ 154,088
$
60,583
732
68,380
(5,402)
575
2,088
(9,029)
2,076
6,198
778
(6,150)
(1,163)
363
4,060
3,229
—
24,618
(2,227)
30,043
(6,937)
(42,830)
(24,660)
7,104
1,351
(5,235)
2,881
(2,740)
(71,066)
6,238
(17,816)
11,456
(1,051)
(1,173)
(42,196)
75,754
33,558
(See Note 23 for supplemental cash flow information)
5 0 | G o l d e n S t a r
GOLDEN STAR RESOURCES LTD.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(All amounts in table are in thousands of U.S. dollars unless
noted otherwise)
1. NATURE OF OPERATIONS
Through our 90% owned subsidiary Golden Star (Bogoso/
Prestea) Ltd (“GSBPL”) we own and operate the Bogoso/
Prestea gold mining and processing operation (“Bogoso/
Prestea”) located near the town of Bogoso, Ghana.
Through our 90% owned subsidiary Golden Star (Wassa)
Ltd (“GSWL”) we also own and operate the Wassa gold
mine (“Wassa”), located approximately 35 kilometers east
of Bogoso/Prestea. Wassa mines ore from pits near the
Wassa plant and also processes ore mined at our Hwini-
Butre and Benso (“HBB”) mines located south of Wassa.
We hold interests in several gold exploration projects in
Ghana and elsewhere in West Africa including Sierra Leone,
Burkina Faso, Niger and Côte d’Ivoire, and in South America
we hold and manage exploration properties in Brazil.
2. BASIS OF PRESENTATION
Our consolidated financial statements are prepared and
reported in United States (“US”) dollars and in accor-
dance with generally accepted accounting principles in
Canada (“Cdn GAAP” or “Canadian GAAP”) which differ
in some respects from GAAP in the United States (“US
GAAP”). These differences in GAAP are quantified and
explained in Note 27. Our consolidated financial state-
ments have been prepared on a going concern basis,
which contemplates the realization of assets and dis-
charge of all liabilities in the normal course of business.
With the exception of a few exploration offices, the func-
tional currency, including the Ghanaian operations, is the
U.S. dollar.
These consolidated financial statements include the accounts
of the Company and its majority owned subsidiaries, whether
owned directly or indirectly. All inter-company balances
and transactions have been eliminated. Subsidiaries are
defined as entities in which the company holds a control-
ling interest, is the general partner or where it is subject to
the majority of expected losses or gains. Our fiscal year-
end is December 31. Certain comparative figures have
been reclassified to conform to the presentation adopted
for the current period and to reflect retroactive restate-
ments of certain balances required upon the adoption of new
accounting guidance.
Adoption of U.S. GAAP in 2011
Golden Star has, since its inception, reported to security
regulators in both Canada and the U.S. using Canadian
GAAP financial statements with a reconciliation to U.S.
GAAP. However, a change in SEC position in late 2009 re-
quired Canadian companies such as Golden Star that do not
qualify as a foreign private issuers, file their financial state-
ments in the U.S. using U.S. GAAP after December 31, 2010.
We therefore have adopted U.S. GAAP as of January 1, 2011
for all subsequent U.S. and Canadian filings. Canadian secu-
rities regulators have announced that they will continue to
accept U.S. GAAP financial statements.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
Preparation of our consolidated financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assump-
tions that can affect reported amounts of assets, liabilities,
future income tax liabilities, and expenses. The more sig-
nificant areas requiring the use of estimates include asset
impairments, stock based compensation, tax assets, de-
preciation and amortization of assets, and site reclamation
and closure accruals. Accounting for these areas is subject
to estimates and assumptions regarding, among oth-
er things, ore reserves, gold recoveries, future gold pric-
es, future operating costs, asset usage rates, and future
mining activities. Management bases its estimates on his-
torical experience and on other assumptions we believe to
be reasonable under the circumstances. However, actual
results may differ from our estimates.
Cash and Cash Equivalents
Cash includes cash deposits in any currency residing in
checking accounts, money market funds and sweep ac-
counts. Cash equivalents consist of highly liquid invest-
ments purchased with maturities of three months or less.
Investments with maturities greater than three months and
up to one year are classified as short-term investments,
while those with maturities in excess of one year are classi-
fied as long-term investments. Cash equivalents are stated
at cost, which typically approximates market value.
Inventories
Inventory classifications include “stockpiled ore,” “in-pro-
cess inventory,” “finished goods inventory” and “materi-
als and supplies.” All of our inventories, except materials
and supplies, are recorded at the lower of weighted aver-
age cost or net realizable value. The stated value of all
production inventories include direct production costs
and attributable overhead and depreciation incurred
to bring the materials to it current point in the process-
ing cycle, except for our materials and supplies invento-
ries. General and administrative costs for corporate of-
fices are not included in any inventories.
Stockpiled ore represents coarse ore that has been extracted
from the mine and is waiting processing. Stockpiled ore
is measured by estimating the number of tonnes (via
truck counts or by physical surveys) added to, or removed
from the stockpile, the number of contained ounces
(based on assay data) and estimated gold recovery per-
centage. Stockpiled ore value is based on the costs in-
curred (including depreciation and amortization) in
bringing the ore to the stockpile. Costs are added to the
stockpiled ore based on current mining costs per tonne
and are removed at the average cost per tonne of ore in
the stockpile.
In-process inventory represents material that is currently
being treated in the processing plants to extract the
contained gold and to transform it into a saleable prod-
uct. The amount of gold in the in-process inventory is
determined by assay and by measure of the quantities of
the various gold-bearing materials in the recovery pro-
cess. The in-process gold is valued at the average of the
beginning inventory and the cost of material fed into the
processing stream plus in-process conversion costs in-
cluding applicable mine-site overhead, depreciation and
amortization related to the processing facilities.
2 0 1 0 A n n u a l R e p o r t | 5 1
Finished goods (precious metals) inventory is composed
of saleable gold in the form of doré bars that have been
poured but not yet shipped from the mine site. The bars
are valued at the lower of total cost or net realizable value.
Included in the total costs are the direct costs of the min-
ing and processing operations as well as direct mine-site
overhead, amortization and depreciation.
Materials and supplies inventories consist mostly of
equipment parts, fuel, lubricants and reagents con-
sumed in the mining and ore processing activities.
Materials and supplies are valued at the lower of aver-
age cost or replacement cost and includes tax and
freight costs incurred in purchasing the individual in-
ventory items.
Ore Reserve Quantities Used in
Units-of-Production Amortization
Gold ounces contained in stockpiled ore are excluded
from total reserves when determining units-of-produc-
tion amortization of mining property, asset retirement as-
sets and other assets.
Exploration Costs and Deferred Exploration Properties
Exploration costs not directly related to an identifiable
mineral deposit are expensed as incurred.
Exploration costs related to specific, identifiable mineral
deposits, including the cost of acquisition, exploration
and development, are capitalized as Deferred Exploration.
Management periodically reviews, on a property-by-proper-
ty basis, the carrying value of such properties including
the costs of acquisition, exploration and development in-
curred to date. A decision to abandon, reduce or ex-
pand a specific project is based upon many factors in-
cluding general and specific assessments of contained
or potential mineralized materials, potential reserves,
anticipated future mineral prices, the anticipated costs
of additional exploration and, if warranted, costs of po-
tential future development and operations, and the expi-
ration terms and ongoing expenses of maintaining
leased mineral properties. We do not set a pre-determined
holding period for properties with unproven reserves; how-
ever, properties which have not demonstrated suitable metal
concentrations at the conclusion of each phase of an ex-
ploration program are re-evaluated to determine if fu-
ture exploration is warranted and if their carrying values
are appropriate.
If a Deferred Exploration property is abandoned or it is
determined that its carrying value cannot be supported
by future production cash flows or sale, the related costs
are charged against operations in the year of impair-
ment. Subsequent costs, if any, incurred for that prop-
erty are expensed as incurred.
The accumulated costs of Deferred Exploration proper-
ties are reclassified as Mine Property when proven and
probable mineral reserves are established and such
costs are subsequently depleted on a units-of-produc-
tion basis once mining commences.
Property, Plant and Equipment
Property, plant and equipment assets, including machin-
ery, processing equipment, mining equipment, mine site fa-
cilities, vehicles and expenditures that extend the life
of such assets are recorded at cost,which include acqui-
sition and installation costs. The costs of self-constructed
assets include direct construction costs and allocated in-
terest during the construction phase. Indirect overhead
costs are not included in the cost of self-constructed as-
sets. Depreciation for mobile equipment and other assets
having estimated lives shorter than the estimated life of
the ore reserves, 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.
Mining Properties
Mining property assets, including tailings dams, mine-
site drilling costs where proven and probable reserves
have been established, preproduction waste stripping,
condemnation drilling, roads, feasibility studies and
wells are recorded at cost. The costs of such self-con-
structed assets include direct construction costs, a share
of direct mine-site overhead costs and allocated interest
during the construction phase. Indirect overhead costs
are not included in the cost of self-constructed assets.
Drilling costs incurred during the production phase for
operational ore control are allocated to inventory costs
and then included in cost of sales.
Mineral property acquisition, exploration and develop-
ment costs, buildings, processing plants and other long-
lived assets which have an estimated life equal to or
greater than the estimated life of the ore reserves, are
amortized over the life of the proven and probable reserves
of the associated mining property using a units-of-
production amortization method. The net book value of
property, plant and equipment assets at property loca-
tions is charged against income if the site is abandoned
and it is determined that the assets cannot be economi-
cally transferred to another project or sold.
Deferred Mining Costs
When employing open pit mining methods, the cost of
waste stripping (i.e., the costs of removing overburden
and waste material to access mineral deposits) incurred
prior to a mine’s in-service date are capitalized and sub-
sequently amortized on a units of production basis over
the ounces in pit.
In accordance with EIC 160 “Stripping Costs Incurred in
the Production Phase of Mining Operation”, expendi-
tures for waste stripping subsequent to a mine’s in-ser-
vice date that can be shown to be a betterment of the
mineral property are capitalized and subsequently am-
ortized on a units-of-production basis over the mineral
reserves that directly benefit from the specific waste
striping activity. Waste stripping costs incurred during
the production phase of a mine which do not qualify as a
betterment, are considered variable production costs
and are included as a component of inventory produced
during the period in which stripping costs are incurred.
Impairment of Long-Lived Assets
We review and evaluate our long-lived assets for impair-
ment at least annually and also when events or changes
in circumstances indicate the related carrying amounts
may not be recoverable. An asset impairment is consid-
ered to exist if an asset’s recoverable value is less than its
carrying value as recorded on our Consolidated Balance
Sheet. In most cases, an asset ’s recoverable value is
assumed to be equal to the sum of the asset’s expected
future cash flows on an undiscounted basis. If the sum of
the undiscounted future cash flows does not exceed the
asset’s carrying value, an impairment loss is measured
5 2 | G o l d e n S t a r
and recorded based on discounted estimated future
cash flows from the asset. Future cash flows are based on es-
timated quantities of gold and other recoverable metals,
expected price of gold and other commodity (consider-
ing current and historical prices, price trends and related
factors), production levels and cash costs of production,
capital and reclamation costs, all based on detailed engi-
neering life-of-mine plans.
In estimating future cash flows, assets are grouped at
the lowest levels for which there are identifiable cash
flows that are largely independent of future cash flows
from other asset groups. With the exception of mine-
related exploration potential and exploration potential
in areas outside of the immediate mine-site, all assets at
a particular operation are considered together for pur-
poses of estimating future cash flows. In the case of
mineral interests associated with other mine-related ex-
ploration potential and exploration potential in areas
outside of the immediate mine-site, cash flows and fair
values are individually evaluated based primarily on re-
cent exploration results.
Numerous factors including, but not limited to, unexpect-
ed grade changes, gold recovery problems, shortages of
equipment and consumables, equipment failures, and col-
lapse of pit walls, could impact our ability to achieve fore-
casted production schedules from proven and probable
reserves. Additionally, commodity prices, capital expen-
diture requirements and reclamation costs could differ
from the assumptions used in the cash flow models used
to assess impairment. The ability to achieve the estimated
quantities of recoverable minerals from exploration stage
mineral interests involves further risks in addition to those
factors applicable to mineral interests where proven and
probable reserves have been identified due to the lower
level of confidence that the identified mineralized mate-
rial can ultimately be mined economically.
Material changes to any of these factors or assumptions
discussed above could result in future impairment
charges to operations.
Asset Retirement Obligations
In accordance with the requirements of the CICA
Handbook Section 3110, “Asset Retirement Obligations,”
environmental reclamation and closure liabilities are recog-
nized at the time of environmental disturbance in amounts
equal to the discounted value of expected future recla-
mation and closure costs. The discounted cost of future
reclamation and closure activities is capitalized as 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 require-
ments of the various jurisdictions in which we operate.
Cash expenditures for environmental remediation and clo-
sure are charged as incurred against the accrual.
Foreign Currencies and Foreign Currency Translation
Our functional currency is the U.S. dollar.
The carrying value of monetary assets and liabilities are
translated at the rate of exchange prevailing at the bal-
ance sheet date. Nonmonetary assets and liabilities 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$,” European Common Market currency is denot-
ed as “Euro” or “€,” and Ghanaian currency is denoted as
“Ghana Cedi” or “Ghana Cedis.”
Income Taxes
Income taxes comprise the provision for (or recovery of)
taxes actually paid or payable and for future taxes. Future
income taxes are computed using the asset and liability
method whereby future income tax assets and liabilities
are recognized for the expected future tax consequences
attributable to temporary differences between the tax
basis of assets and liabilities and their reported amounts
in the financial statements. Future income tax assets and
liabilities are computed using income tax rates in effect
when the temporary differences are expected to reverse.
The effect on the future tax assets and liabilities of a
change in tax rates is recognized in the period of substan-
tive enactment. The provision for or the recovery of future
taxes is based on the changes in future tax assets and li-
abilities during the period. In estimating future income tax
assets, a valuation allowance is provided to reduce the
future tax assets to amounts that are more likely than not
to be realized.
Net Income Per Share
Basic income per share of common stock is calculated
by dividing income available to common shareholders
by the weighted average number of common shares out-
standing during the period. In periods with earnings, the
calculation of diluted net income per common share
uses the treasury stock method to compute the dilutive
effects of stock options, and other dilutive instruments. In
periods of loss, diluted net income per share is equal
to basic income per share.
Revenue Recognition
Revenue from the sale of metal is recognized when there
is persuasive evidence that an arrangement exists, the
price is determinable, the metal has been delivered, title
and risk of ownership has passed to the buyer and collec-
tion is reasonably assured. All of our gold is sent to a
South African gold refiner who locates and arranges for
the sale to a third party on the day of shipment from the
mine site. The sales price is based on the London P.M. fix
on the day of shipment. Title and risk of ownership pass to
the buyer on the day doré is shipped from the mine sites.
Stock Based Compensation
Under the company’s common share option plan (see
note 21), common share options may be granted to execu-
tives, employees, consultants and non-employee direc-
tors. Compensation expense for such grants is recorded
in the Consolidated Statements of Operations as general
and administrative expense, with a corresponding in-
crease recorded in the Contributed Surplus account in the
Consolidated Balance Sheets.
The expense is based on the fair values of the option at the
time of grant and is recognized over the vesting periods of
the respective options. Consideration paid to the company
on exercise of options is credited to share capital.
2 0 1 0 A n n u a l R e p o r t | 5 3
Leases
Leases that transfer substantially all the benefits and
risks of ownership to the company are recorded as capi-
tal leases and classified as property, plant and equip-
ment with a corresponding amount recorded with cur-
rent and long-term debt. All other leases are classified as
operating leases under which leasing costs are expensed
in the period incurred.
Financial Instruments
Our financial instruments include cash, cash equivalents,
restricted cash, available for sale investments, accounts
receivable, derivative contracts, accounts payable, ac-
crued liabilities and current and long term debts. Each
financial asset and financial liability instrument is initially
measured at fair value, adjusted for any associated trans-
action costs. In subsequent periods, the estimated fair
values of financial instruments are determined based on
our assessment of available market information and ap-
propriate valuation methodologies including reviews
of current interest rates, related market values and cur-
rent pricing of financial instruments with comparable
terms; however, these estimates may not necessarily be
indicative of the amounts that could be realized or set-
tled in a current market transaction.
The carrying value of the convertible senior unsecured
debentures is split to recognize the debt and equity
components of the instrument. The debt component of
the instrument is accreted to its maturity value through
charges to income over the term of the notes based on
the effective yield method.
Financing costs associated with the issuance of debt are
deferred, amortized over the term of the related debt using
the effective yield method and presented as a reduction
of the related debt.
Financial assets, financial liabilities and derivative finan-
cial instruments are classified into one of five catego-
ries: held-to-maturity, available-for-sale, loans and re-
ceivables, other financial liabilities and held-for-trading.
All financial instruments classified as available-for-sale or
held-for-trading are subsequently measured at fair value.
Changes in the fair value of financial instruments designated
as held-for-trading are charged or credited to the state-
ment of operations for the relevant period, while chang-
es in the fair value of financial instruments designated as
available-for-sale, excluding impairments, are charged
or credited to other comprehensive income until the instru-
ment is realized. All other financial assets and liabili-
ties are accounted for at cost or at amortized cost de-
pending upon the nature of the instrument. After their
initial fair value measurement, they are measured at am-
ortized cost using the effective interest rate method.
5 4 | G o l d e n S t a r
Following is a summary of the categories the Company
has elected to apply to each of its significant financial
instruments:
Financial Instrument
Cash and cash equivalents
Restricted cash
Marketable equity securities
Accounts receivable
Convertible senior
unsecured debentures
Accounts payable and
accrued liabilities
Debt facilities
Derivatives
Category
Loans and receivables
Loans and receivables
Available-for-sale
Loans and receivables
Other financial liabilities
Other financial liabilities
Other financial liabilities
Held-for-trading
Comprehensive Income
Components of comprehensive income/loss consist of
unrealized gains (losses) on available-for-sale securities
and net income. Unrealized gains or losses on securities
are net of any reclassification adjustments for realized
gains or losses included in net income.
Derivatives
At various times we utilize foreign exchange and commodity
price derivatives to manage exposure to fluctuations in
foreign currency exchange rates and gold prices, respec-
tively. We do not employ derivative financial instruments
for trading purposes or for speculative purposes. Our
derivative instruments are recorded on the balance sheet
at fair value with changes in fair value recognized in the
statement of operations at the end of each period in an
account titled “Derivative mark-to-market gain/(loss)”.
(“Section
“Business Combinations”
Recent Changes in Accounting Pronouncements
In January 2009, the CICA issued Handbook Section
1582”).
1582,
Section 1582 requires that all assets and liabilities of an
acquired business will be recorded at fair value at ac-
quisition. Obligations for contingent considerations
and contingencies will also be recorded at fair value at
the acquisition date. The standard also states that ac-
quisition–related costs will be expensed as incurred and
that restructuring charges will be expensed in the peri-
ods after the acquisition date. Section 1582 applies pro-
spectively to business combinations for which the ac-
quisition date is on or after the beginning of the first
annual reporting period on or after January 1, 2011.
Since we have adopted U.S. GAAP as of January 1, 2011,
this new Canadian standard will have no impact on our
financial statements.
In January 2009, the CICA issued Handbook Section
1601 “Consolidations” (“Section 1601”), and section 1602
“Non-controlling Interests” (“Section 1602”). Section
1601 establishes standards for the preparation of con-
solidated financial statements. Section 1602 establishes
standards for accounting for a non-controlling interest in
a subsidiary in consolidated financial statements subse-
quent to a business combination. These standards apply
to interim and annual consolidated financial statements
relating to fiscal years beginning on or after January 1,
2011. Since we have adopted U.S. GAAP as of January 1,
2011, this new Canadian standard will have no impact on
our financial statements.
The Canadian Accounting Standards Board (“AcSB”)
issued Canadian Institute of Chartered Accountants:
Handbook (“CICA”) Section 3064, “Goodwill and
Intangible Assets” which replaces CICA 3062 and es-
tablishes standards for the recognition, measurement
and disclosure of goodwill and intangible assets. CICA
3064 expands on the criteria for recognition of intan-
gible assets that can be recognized and applies to in-
ternally-generated intangible assets as well as to pur-
chased intangible assets. Section 3064 dictates that
certain expenditures not meeting the recognition cri-
teria of an intangible asset are expensed as incurred.
Emerging
“EIC” 27
issues committee decision
(Revenues and Expenditures in the pre-operation pe-
riod) is no longer applicable for entities that have ad-
opted CICA 3064. Section 3064 became effective
January 1, 2009 and required that we retrospectively
adjust our financial statements to reflect the impact of
the changes to the accounting for intangible assets. In
response to this new standard, the accompanying
December 31, 2010 financial statements and compara-
tive period financials include the impact of the reclas-
sification of certain 2005 plant start-up period costs
to expense, such costs having been initially capitalized
as Mining Property assets. Depreciation expense was
decreased by $0.8 million in 2008.
Future Guidance
As explained above, Golden Star has adopted U.S. GAAP
as of January 1, 2011, and thus future changes in GAAP in
Canada will have no impact on our future US GAAP
financial statements. Future changes in U.S. GAAP are
discussed in note 27.
4. FINANCIAL INSTRUMENTS
The carrying amounts and fair values of our financial assets and liabilities are as follows:
Financial Assets
Assets
Cash and cash equivalents(1)
Restricted cash(1)
Accounts receivable(1)
Category
Loans and receivables
Loans and receivables
Loans and receivables
Derivative Instrument — Riverstone Held-for-trading
Available for sale investments(4)
Available-for-sale
Total financial assets
As of December 31, 2010
Carrying
Estimated
Fair Value
Value
$ 178,018
$ 178,018
1,205
1,205
11,885
11,885
375
375
928
928
$ 192,411
$ 192,411
As of December 31, 2009
Carrying
Estimated
Fair Value
Value
$ 154,088
$ 154,088
3,804
3,804
7,021
7,021
158
158
181
181
$ 165,252
$ 165,252
Financial Liabilities
Liabilities
Accounts payable and
accrued liabilities(1)
Convertible senior
unsecured debentures(2) (3)
Revolving credit facility(2)
Equipment financing loans(2)
Total financial liabilities
Category
As of December 31, 2010
Carrying
Estimated
Value
Fair Value
As of December 31, 2009
Carrying
Estimated
Value
Fair Value
Other financial liabilities
$ 88,457
$ 88,457
$ 62,412
$ 62,412
Other financial liabilities
Other financial liabilities
Other financial liabilities
114,477
—
16,113
$ 219,047
108,763
—
15,715
$ 212,935
104,617
5,053
21,028
$ 193,110
101,024
2,543
20,998
$ 186,977
(1) Carrying amount is a reasonable approximation of fair value.
(2) The fair values of the debt portion of the convertible senior unsecured debentures, the equipment financing loans, and the revolv-
ing credit facility are determined by discounting the stream of future payments of interest and principal at the estimated prevailing
market rates of comparable debt instruments. The carrying values of these liabilities are shown net of any capitalized loan fees. As
of December 31, 2010, the revolving credit facility had nil outstanding and the related loan fees are being carried in other assets.
(3) The carrying value of the convertible senior unsecured debentures is being accreted to maturity value through charges to in-
come over their term based on the effective yield method. Financing costs allocated to the issuance of debt are deferred, amor-
tized over the term of the related debt using the effective yield method and presented as a reduction of the related debt.
(4) The fair value represents quoted market prices in an active market.
2 0 1 0 A n n u a l R e p o r t | 5 5
The following tables illustrate the classification of the Company’s financial instruments within the fair value hierarchy
as at December 31, 2010, and December 31, 2009:
The three levels of the fair value hierarchy are:
• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;
• Level 2 — Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
• Level 3 — Inputs that are not based on observable market data.
Available for sale investments
Warrants
Available for sale investments
Warrants
Gold forward contracts
Financial assets measured at fair value as at December 31, 2010
Level 1
$ 928
—
$ 928
Level 2
$ —
375
$ 375
Level 3
$ —
—
$ —
Financial assets measured at fair value as at December 31, 2009
Level 1
$ 181
—
—
$ 181
Level 2
$ —
158
—
$ 158
Level 3
$ —
—
—
$ —
Total
$ 928
375
$ 1,303
Total
$ 181
158
—
$ 339
No financial liabilities are measured at fair value on the Canadian GAAP balance sheet as at December 31, 2010, or
December 31, 2009.
5. FINANCIAL INSTRUMENT RISK EXPOSURE AND RISK MANAGEMENT
The Company is exposed in varying degrees to a variety of financial instrument risks. The type of risk exposure and
the way in which such exposure is managed is provided as follows:
Liquidity Risk
Liquidity risk is the risk that we will encounter difficulty in meeting obligations associated with financial liabilities that
are settled by delivering cash or another financial asset. We manage the liquidity risk inherent in these financial ob-
ligations by preparing quarterly forecasts and annual long-term budgets which forecast cash needs and expected
cash availability to meet future obligations. Typically these obligations are met by cash flows from operations and
from cash on hand. Scheduling of capital spending and acquisitions of financial resources may also be employed, as
needed and as available, to meeting the cash demands of our obligations.
Our ability to repay or refinance our future obligations depends on a number of factors, some of which may be be-
yond our control. Factors that influence our ability to meet these obligations include general global economic condi-
tions, credit and capital market conditions, results of operations and the price of gold.
Scheduled payments on outstanding debt as of December 31, 2010:
Liabilities
Equipment financing loans
Principal
Interest
Capital leases
Principal
Interest
Revolving credit facility
Principal
Interest
Convertible debentures
Principal
Interest
Total
2011
2012
2013
2014
2015
Maturity
$ 7,224
989
$ 4,914
468
$ 2,991
164
$
586
17
$
2,601
151
—
—
224
2
—
—
—
—
—
—
—
5,000
$ 15,965
125,000
5,000
$ 135,608
—
—
$ 3,155
$
—
—
—
—
—
—
603
$
2010 to 2014
2/28/2012
9/30/2012
11/30/2012
—
—
—
—
—
—
—
—
—
Credit Risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing
to discharge an obligation. Our credit risk is primarily associated with liquid financial assets and derivatives. Our total
financial liquid assets exposed to credit risk is $191 million as of December 31, 2010. We limit exposure to credit risk
on liquid financial assets by holding our cash, cash equivalents, restricted cash and deposits at highly-rated financial
institutions. During 2010, all of our excess cash was invested in funds that hold only U.S. treasury bills. We mitigate
the credit risks of our derivatives by entering into derivative contracts with only high quality counterparties. Risks
5 6 | G o l d e n S t a r
associated with gold trade receivables is considered
minimal as we sell gold to a credit-worthy buyer who
settles promptly within a week of receipt of gold bullion.
Market Risk
The significant market risk exposures include foreign
currency exchange rate risk, interest rate risk and com-
modity price risk. These are discussed further below.
Foreign Currency Exchange Rate Risk
Foreign currency exchange rate risk is the risk that the
fair value of future cash flows of a financial instrument
will fluctuate because of changes in foreign exchange
rates. The value of cash and cash equivalents denominated
in foreign currencies fluctuates with changes in foreign
currency exchange rates.
While most of our currency is held in U.S. dollar accounts,
we maintain various operating cash accounts in non–US
dollar currencies. Appreciation of these non–US dollar
currencies results in a foreign currency gain and a de-
crease in non–US dollar currencies results in a loss. In the
past, we have entered into forward purchase contracts for
South African Rand, Euros and other currencies to hedge
expected purchase costs of capital assets. As of December
31, 2010, and December 31, 2009, we had no currency
related derivatives and $9.4 million and $4.3 million, re-
spectively, of cash in foreign currency bank accounts.
Interest Rate Risk
Interest rate risk is the risk that the fair value of future
cash flows of a financial instrument will fluctuate be-
cause of changes in market interest rates. Our con-
vertible senior unsecured debentures and the outstand-
ing loans under the equipment financing facility are not
subject to interest rate risk as they bear interest at a
fixed rate and are not subject to fluctuations in interest
rate. Our revolving credit facility has a variable interest
rate of the higher of the applicable lender’s cost of funds
(capped at 1.25% per annum above LIBOR) and LIBOR
plus a margin of 5%. As of December 31, 2010, we had nil
outstanding on this facility. We have not entered into any
agreements to hedge against unfavorable changes in inter-
est rates, but may in the future actively manage our expo-
sure to interest rate risk.
Commodity Price Risk
Gold is our primary product, and as a result, changes in
the price of gold could significantly affect our results of
operations and cash flows. To reduce gold price volatility,
we have at various times, entered into gold price deriva-
tives. At December 31, 2010, and December 31, 2009, we
did not hold any gold price derivatives and thus there
were no financial instruments subject to gold price risk
as of the period end. Information about derivative activ-
ity within the periods can be found in note 14.
6. INVENTORIES
Stockpiled ore
In–process
Materials and supplies
Finished goods
Total
As of December 31,
2010
2,551
13,776
48,814
—
65,141
$
$
2009
4,335
8,501
39,362
—
52,198
$
$
There were approximately 20,000 and 26,000 recover-
able ounces of gold in the ore stockpile inventories
shown above at December 31, 2010, and December 31,
2009, respectively. Stockpile inventories are short-term
surge piles expected to be processed within the next 12
months. Bogoso/Prestea recognized a $2.0 million write
down of its in-process inventory due to poor gold recov-
ery from transition ore processed in the fourth quarter.
7. ACCOUNTS RECEIVABLE
As of December 31,
2010
9,518
2,367
11,885
$
$
$
$
2009
6,378
643
7,021
Value added tax refund
Other
Total
8. DEPOSITS
Represents cash advances and payments for equipment
and materials purchased by our mines which are not yet
delivered on-site.
9. AVAILABLE-FOR-SALE INVESTMENTS
As of December 31, 2010
Riverstone Resources Inc.
As of December 31, 2009
Riverstone Resources Inc.
Fair Value
Shares
Fair Value
Shares
Balance beginning of period
Acquisitions
OCI — unrealized gain/(loss)
Balance end of period
$
$
181
128
619
928
700,000
600,000
—
1,300,000
$
$
29
40
112
181
300,000
400,000
—
700,000
2 0 1 0 A n n u a l R e p o r t | 5 7
10. DEFERRED EXPLORATION AND DEVELOPMENT COSTS
Consolidated capitalized expenditures on our exploration projects for the year ended December 31, 2010, were as follows:
AFRICAN PROJECTS
Ghana
Sonfon — Sierra Leone
Other Africa
SOUTH AMERICAN PROJECTS
Saramacca — Suriname(1)
Paul Isnard — French Guiana(2)
Total
Deferred
Exploration &
Costs as of
12/31/2009
Capitalized
Exploration
Expenditures
Transfer
to Mining
Properties
Impairments
(see Note 25)
Deferred
Exploration &
Development
Costs as of
12/31/2010
Other
$
5,935 $
2,845
1,018
2,112 $
1,426
—
1,151
2,000
$ 12,949 $
—
—
3,538 $
— $
—
—
—
—
— $
— $
—
—
— $
—
—
8,047
4,271
1,018
—
—
— $
—
1,151
(2,000)
—
(2,000) $ 14,487
Consolidated property expenditures on our exploration projects for the year ended December 31, 2009, were
as follows:
AFRICAN PROJECTS
Ghana
Sonfon — Sierra Leone
Other Africa
SOUTH AMERICAN PROJECTS
Saramacca — Suriname(1)
Paul Isnard — French Guiana(2)
Total
Deferred
Exploration &
Costs as of
12/31/2008
Capitalized
Exploration
Expenditures
Transfer
to Mining
Properties
Impairments
(see Note 25)
Deferred
Exploration &
Development
Costs as of
12/31/2009
Other
$
4,437 $
2,674
1,295
2,643 $
171
13
(1,145)
$
—
—
— $
—
(290)
— $
—
—
5,935
2,845
1,018
781
4,526
$ 13,713 $
370
263
3,460 $
—
—
(1,145) $
—
(2,789)
(3,079) $
1,151
—
—
2,000
— $ 12,949
(1) In November 2009 we entered into an agreement to sell our interest in the Saramacca joint venture to Newmont for approxi-
mately $8.0 million. Proceeds of the sale have been put in escrow pending the receipt of required governmental approvals and
certain additional customary conditions.
(2) During the first quarter of 2010 all of our rights, title and interest in our exploration company that was operating in French Guiana
were sold for approximately $2.1 million.
11. PROPERTY, PLANT AND EQUIPMENT
As of December 31, 2010
As of December 31, 2009
Bogoso/Prestea
Bogoso sulfide plant
Wassa/HBB
Corporate & other
Total
Property,
Plant and
Equipment
at Cost
84,507 $
$
Accumulated
Depreciation
(42,636)
(50,988)
(45,607)
(775)
192,648
90,589
1,343
Property,
Plant and
Equipment
Net Book
Value
41,871
141,660
44,982
568
$
Property,
Plant and
Equipment
at Cost
64,527 $
$
Accumulated
Depreciation
(36,434)
(35,797)
(33,792)
(661)
189,426
83,468
1,118
Property,
Plant and
Equipment
Net Book
Value
28,093
153,629
49,676
457
$
$ 369,087 $ (140,006)
$ 229,081
$ 338,539
$ (106,684)
$ 231,855
There was no interest capitalized in new additions to Property, Plant and Equipment during the two years ended
December 31, 2010 and 2009. As of December 31, 2010, capital lease assets totaled $5.5 million with $0.7 million of
accumulated depreciation for a net book value of $4.8 million. As of December 31, 2009, capital lease assets totaled
$0.6 million with $0.1 million of accumulated depreciation for a net book value of $0.5 million.
5 8 | G o l d e n S t a r
12. MINING PROPERTIES
As of December 31, 2010
As of December 31, 2009
Bogoso/Prestea
Bogoso Sulfide
Mampon
Wassa / HBB
Other
Total
Accumulated
Amortization
(37,902)
(23,324)
$
Mining
Properties
at Cost
87,274 $
63,596
15,995
313,837
22,801
(155,189)
(3,377)
$ 503,503 $ (219,792)
—
$
Mining
Properties,
Net Book
Value
49,372
40,272
15,995
158,648
19,424
$ 283,711
Accumulated
Amortization
(35,894)
(14,959)
$
Mining
Properties
at Cost
61,421 $
57,314
15,914
281,662
17,844
(103,811)
(3,377)
$ 434,155 $ (158,041)
—
$
Mining
Properties,
Net Book
Value
25,527
42,355
15,914
177,851
14,467
$ 276,114
There was no interest capitalized in new additions to Mining Properties during the two years ended December 31,
2010 and 2009. Deferred betterment stripping costs shown in the table immediately below are included in the Mining
Properties totals shown in the table above:
Opening balance
Additions to deferral
Gross asset
Amortization
Net book value
Wassa/HBB
2010
Bogoso/
Prestea
$
4,218 $
9,491
13,709
(774)
— $
5,558
5,558
—
$
12,935 $
5,558
$
Total
4,218
15,049
19,267
(774)
18,493
Wassa/HBB
2009
Bogoso/
Prestea
$
— $
4,218
4,218
—
$
4,218
$
— $
—
—
—
— $
Total
—
4,218
4,218
—
4,218
It is expected that Wassa’s deferred betterment strip-
ping costs will be amortized in 2011 and 2012. Bogoso’s
deferred betterment stripping costs are expected to be
amortized between 2012 and 2015.
14. DERIVATIVES
The derivative mark-to-market (gains)/losses recorded
in the Consolidated Statements of Operations are com-
prised of the following amounts:
13. INTANGIBLE ASSET
We, along with three other gold mining companies oper-
ating in Ghana, organized a consortium that purchased
and constructed a nominal 80 megawatt power station
in Ghana. Construction was completed in 2008, and the
plant has since generated power, adding its output to
the Ghana national grid. Our share of the acquisition and
construction costs totaled $12.4 million. At June 30,
2009, the four owners transferred ownership and opera-
tional responsibility of the plant to the Ghana power au-
thority. In response, at the end of the second quarter of
2009, our 25% ownership share in the power plant, with
a net book value of $10.5 million, was transferred from
fixed assets to intangible assets in our balance sheet.
Our intangible asset represents a right to receive, from
the Ghana national grid, an amount of electric power
equal to one fourth of this plant’s power output over and
above any rationing limit that might be imposed in the
future by the Ghana national power authority. The intan-
gible asset is being amortized over five years. As of
December 31, 2010, the carrying value of the intangible
asset was $7.4 million.
Riverstone Resources, Inc. –
warrants
Forward currency
purchasing contracts
EURO Resources S.A.
shares
Gold forward price
contracts
Derivative (gain)/loss
Realized (gain)/loss
Unrealized (gain)/loss
Derivative (gain)/loss
$
For the years ended December 31,
2010
2009
2008
$
(216)
$
(139)
$
285
—
—
124
—
—
(31)
1,066
3,677
$
850 $ 3,538 $
$ 1,066 $ 3,677 $
(216)
850 $ 3,538 $
(139)
602
980
(995)
1,975
980
Riverstone Resources Inc. — Warrants
In the first quarter of 2008, we received 2 million war-
rants from Riverstone Resources Inc. (“Riverstone”) as
partial payment for the right to earn an ownership inter-
est in our exploration projects in Burkina Faso. These
warrants are exercisable through January 2012 at prices
between Cdn $0.40 and Cdn $0.45, depending on the
timing of exercise.
2 0 1 0 A n n u a l R e p o r t | 5 9
Gold Price Derivatives
We held no gold price hedging instruments at the end of
2010. During the second quarter of 2010, we entered into
contracts for 32,000 ounces at an average settlement
price of $1,201.30 per ounce. These contracts expired in
the second quarter, resulting in a $1.1 million realized loss.
In 2009, we entered into a series of short-term (less than
90 days) gold price hedging contracts and recognized a
$3.6 million loss for the year. In January 2011, we entered
into a series of put and call contracts covering 76,800
ounces of future gold production between February and
December 2011. The contracts are spread evenly in each
week over this period and are structured as cashless col-
lars with a floor of $1,200 per ounce and a cap of $1,457
per ounce. In early February 2011 we entered into a sec-
ond set of put and call contracts covering 75,200 ounces
of future gold production between February and
December 2011. The contacts are spread evenly in each
week during this period and are structured as cashless
collars with a floor of $1,200 per ounce and a cap of
$1,503 per ounce.
15. ASSET RETIREMENT OBLIGATIONS
At the end of each period, Asset Retirement Obligations
(“ARO”) are equal to the present value of all estimated
future costs required to remediate any environmental
disturbances that exist as of the end of the period, using
discount rates applicable at the time of initial recogni-
tion of each component of the liability. Included in this
liability are the costs of closure, reclamation, demolition
and stabilization of the mines, processing plants, infra-
structure, tailings storage facilities, waste dumps and
ongoing post-closure environmental monitoring and
maintenance costs. While the majority of these costs will
be incurred near the end of the mines’ lives, it is expect-
ed that certain on-going reclamation costs will be in-
curred prior to mine closure. These costs are recorded
against the asset retirement obligation liability as in-
curred. At December 31, 2010, the total undiscounted
amount of the estimated future cash needs was estimated
to be $84.3 million. Discount rates typically range be-
tween 8% and 10%. The schedule of payments required
to settle the December 31, 2010, ARO liability extends
through 2029.
The changes in the carrying amount of the ARO during
2010 and 2009 are as follows:
Balance at January 1
Accretion expense
Additions and change in
estimates
Cost of reclamation work
performed
Balance at December 31
Current portion
Long term portion
For the years ended December 31,
2010
$ 31,969
2,802
2009
$ 31,656
2,165
19,885
133
(9,704)
$ 44,952
$ 23,485
$ 21,467
(1,985)
$ 31,969
$ 1,938
$ 30,031
The 2010 increase in current ARO liability as compared
to 2009, is related to the cost of filling an exhausted pit
and reclaiming the associated waste dump near the
town of Prestea.
16. DEBT
Current debt:
Equipment
financing loans
Debt facility
Capital lease
As of December 31,
2010
2009
2008
$ 7,189 $ 9,691 $ 12,152
—
—
2,825
279
626
—
Total current debt
$ 10,014 $ 9,970 $ 12,778
Long term debt:
Revolving credit facility $
Equipment
financing loans
Capital lease
— $ 2,543 $
—
8,526 11,028 18,911
—
—
—
Convertible debentures 108,763 101,024 93,738
Total long term debt $ 117,289 $ 114,595 $ 112,949
Equipment Financing Credit Facility
GSBPL and GSWL maintain a $35 million equipment fi-
nancing facility with Caterpillar Financial Services
Corporation, with Golden Star as the guarantor of all
amounts borrowed. The facility provides credit for new
and used mining equipment. Amounts drawn under this
facility are repayable over five years for new equipment
and over two years for used equipment. The interest rate
for each drawdown is fixed at the date of the draw-down
using the Federal Reserve Bank 2-year or 5-year swap
rate or London Interbank Offered Rate (“LIBOR”) plus
2.38%. At December 31, 2010, approximately $19.3 mil-
lion was available to draw down. The average interest
rate on the outstanding loans was approximately 7.4% at
December 31, 2010. Each outstanding equipment loan is
secured by the title of the specific equipment purchased
with the loan until the loan has been repaid in full. See
note 5 for a table of amounts payable under these loans.
Capital Leases
In February 2010, GSBPL accepted delivery of a nominal
20 megawatt power plant upon successful commission-
ing of the power plant by its owner/operator. Upon ac-
ceptance, a $4.9 million liability was recognized which is
equal to the present value of future lease payments. The
life of the lease is two years from the plant’s February 2010
in-service date. We are required to pay the owner/operator a
minimum of $0.3 million per month on the lease, of
which $0.23 million will be allocated to principal and in-
terest on the recognized liability and the remainder of the
monthly payments will be charged as operating costs.
Convertible Debentures
Interest on the $125 million aggregate principal amount of
4.0% convertible senior unsecured debentures due
November 30, 2012, (the “Debentures”) is payable semi-
annually in arrears on May 31 and November 30 of each
year. The Debentures are, subject to certain limitations,
convertible into common shares at a conversion rate of
200 shares per $1,000 principal amount of Debentures
(equal to a conversion price of $5.00 per share) subject to
adjustment under certain circumstances. The Debentures
are not redeemable at our option.
On maturity, we may, at our option, satisfy our repayment
obligation by paying the principal amount of the Debentures
in cash or, subject to certain limitations, by issuing that num-
6 0 | G o l d e n S t a r
ber of our common shares obtained by dividing the princi-
pal amount of the Debentures outstanding by 95% of the
weighted average trading price of our common shares on
the NYSE Amex stock exchange for the 20 consecutive
trading days ending five trading days preceding the matu-
rity date (the “Market Price”). Upon the occurrence of cer-
tain change in control transactions, the holders of the
Debentures may require us to purchase the Debentures for
cash at a price equal to 101% of the principal amount plus ac-
crued and unpaid interest. If 10% or more of the fair market
value of any such change in control consideration con-
sists of cash, the holders may convert their Debentures
and receive a number of additional common shares, deter-
mined as set forth in the Indenture.
The Debentures are direct senior unsecured indebted-
ness of Golden Star Resources Ltd., ranking equally and
ratably with all our other senior unsecured indebtedness,
and senior to all our subordinated indebtedness. None of
our subsidiaries have guaranteed the Debentures, and
the Debentures do not limit the amount of debt that we
or our subsidiaries may incur.
The Debentures were accounted for in accordance with
EIC 164, “Convertible and other Debt Instruments with
Embedded Derivatives”. Under this statement, the issu-
ance date fair value of the Conversion feature is record-
ed as equity. The issuance date fair value of the
Company’s obligation to make principal and interest
payments was estimated at $89.1 million and was record-
ed as convertible senior unsecured debentures. The issu-
ance date fair value of the holder’s conversion option
was estimated at $35.9 million and was recorded as the
“equity component of convertible debentures”. Fees to-
taling $4.7 million relating to the issuance of these de-
bentures were allocated pro-rata between deferred fi-
nancing fees of $3.4 million and equity of $1.3 million.
Periodic accretion of the liability portion of the loan has
brought the December 31, 2010, balance to $110.0 mil-
lion, before loan fees. See note 5 for a table of amounts
payable under this loan.
Revolving Credit Facility
In August 2010, we amended and restated our revolving
credit facility agreement (the “Facility Agreement”) to
bring the total borrowing capacity under the facility
from $30 million up to $45 million, and to reflect chang-
es to the syndicate. All other material terms of the facility
remain unchanged. The Facility Agreement is between
Standard Chartered Bank, Golden Star Resources and
our subsidiaries which own the Bogoso/Prestea, Wassa
and HBB properties.
The term of the Facility Agreement extends through
September 30, 2012. The amount available under the
Facility was reduced by $4.5 million on December 31,
2010, and will be further reduced by $9.0 million on
December 31, 2011. The Facility bears interest at the high-
er of LIBOR or the applicable lenders’ cost of funds rate
(which is capped at 1.25% per annum above LIBOR), plus
a margin of 5% per annum. As of December 31, 2010, the
outstanding balance was nil. Covenants require that we
meet certain financial ratios at the end of each quarter,
including that in excess of 90% of our assets are retained
within a group of subsidiaries whose common shares are
pledged as collateral for amounts drawn under the revolv-
ing credit facility. We were in compliance with all covenants
at December 31, 2010.
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 substantively 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.
Our future tax assets and liabilities at December 31, 2010,
and 2009 include the following components:
Future tax assets:
Offering costs
Non-capital loss carryovers
Capital loss carryovers
Mine property costs
Reclamation costs
Derivatives
Unrealized loss
Other
Valuation allowance
Future tax assets
Future tax liabilities:
Mine property costs
Other
Future tax liabilities
Net future tax
assets/(liabilities)
As of December 31,
2009
2010
$ 1,338
171,007
513
9,700
9,406
(45)
(7)
3,393
(109,072)
86,233
$ 1,567
172,199
449
9,882
6,160
16
(7)
3,571
(99,994)
93,843
106,332
357
106,689
107,483
357
107,840
$ (20,456)
$ (13,997)
The composition of our valuation allowance by tax juris-
diction is summarized as follows:
Canada
U.S.
Ghana
Burkina Faso
Total valuation allowance
2010
As of December 31,
2009
$ 41,343 $ 38,237
587
66,734 60,646
524
$ 109,073 $ 99,994
399
597
The income taxes (recovery)/expense includes the fol-
lowing components:
For the years ended December 31,
2008
2009
2010
Current
Canada
Foreign
Future
Canada
Foreign
Total
$
— $
— $
1,487
1,755
—
6,459
(19,127)
$ 7,946 $ (17,372)
$
—
—
—
—
(9,029)
(9,029)
2 0 1 0 A n n u a l R e p o r t | 6 1
A reconciliation of expected income tax on net income before minority interest at statutory rates with the actual expenses
(recovery) for income taxes is as follows:
For the years ended December 31,
Net income/(loss) before minority interest
Statutory tax rate
Tax expense/(benefit) at statutory rate
Foreign tax rates
Change in tax rates
Non-taxable portion of capital (gains)/losses
Expired loss carryovers
Ghana investment allowance
Non-deductible stock option compensation
Non-deductible expenses
Loss carryover not previously recognized
Ghana property basis not previously recognized
Change in future tax assets due to exchange rates
Change in valuation allowance
National Tax Levy
Other
Income tax expense/(recovery)
During 2009, we recognized $4 million of share offering
costs. Shareholders’ equity has been credited in the
amounts of $1.2 million for the tax benefits of these de-
ductions. In addition, in 2008 we recognized $3.3 million
of unrealized loss on marketable equity securities. Other
comprehensive income has been credited for the $1 mil-
lion tax benefit of these future tax deductions. A $1.2 mil-
lion valuation allowance has been provided in sharehold-
ers’ equity for the net tax impact of the share offering
costs. In addition, a $1 million valuation allowance has
been provided in other comprehensive income for the net
tax impact of the unrealized loss.
At December 31, 2010, we had tax pool and loss carry-
overs expiring as follows:
2010
2011
2012
2013
2014
2015
2026
2027
2028
2029
2030
Indefinite
Total
Canada
—
—
—
—
4,215
8,273
15,967
16,266
14,621
22,483
19,018
3,603
104,446
$
$
Ghana
—
—
32,545
46,294
—
—
—
—
—
—
—
488,805
567,644
$
$
$
$
2010
943
28.5%
269
(7,916)
659
—
—
(761)
848
2,561
2,321
912
(1,864)
8,856
1,488
573
$ 7,946
$
$
2009
(853)
29.0%
(247)
(6,951)
476
—
—
(63)
560
1,924
(2,849)
(7,601)
(4,018)
(359)
1,756
—
$ (17,372)
2008
$ (134,482)
29.5%
$ (39,672)
(6,435)
3,317
(392)
99
(1,288)
616
1,611
399
—
5,792
26,924
—
—
(9,029)
$
18. COMMITMENTS AND CONTINGENCIES
Our commitments and contingencies include the following
items:
Environmental Bonding in Ghana
In 2005, pursuant to a reclamation bonding agreement
between the Ghana Environmental Protection Agency
(“EPA”) and GSWL, we bonded $3.0 million to cover future
reclamation obligations at Wassa. To meet the bonding
requirements, we established a $2.85 million letter of cred-
it and deposited $0.15 million of cash with the EPA.
Pursuant to a further bonding agreement between the
EPA and GSBPL, we bonded $9.5 million in early 2006
to cover our rehabilitation and closure obligations at
Bogoso/Prestea. To meet these requirements, we de-
posited $0.9 million of cash with the EPA with the bal-
ance covered by a letter of credit. In 2008, the GSBPL
letter of credit was increased by $0.5 million to cover the
Pampe mining areas. The cash deposits are recorded as
Restricted Cash in our balance sheet.
In 2008, Bogoso/Prestea resubmitted an updated draft
of the Environmental Management Plan (“EMP”) to the
EPA that included an updated estimate of the reclamation
and closure costs prepared by a third party consultant. A
consultant was commissioned to prepare the reclama-
tion and closure cost estimate and the final EMP was sub-
mitted to the EPA in February, 2009. Bogoso/Prestea
has completed all the legal requirements and is waiting
for the environmental certificate. In 2009, Wassa sub-
mitted an updated draft EMP that covered Wassa opera-
tions, including the Benso and Hwini-Butre mines, to the
EPA that included an updated estimate of the reclama-
tion and closure costs. The EPA has reviewed the EMP
and their comments were included in the resubmission.
GSWL has paid the certificate fees and the EPA is ex-
pected to issue the certificate.
6 2 | G o l d e n S t a r
Royalties
Dunkwa Properties
As part of the acquisition of the Dunkwa properties in
August 2003, we agreed to pay the seller a net smelter
return royalty on future gold production from the
Mansiso and Asikuma properties. As per the acquisition
agreement, there will be no royalty due on the first
200,000 ounces produced from Mampon which is lo-
cated on the Asikuma property. The amount of the roy-
alty is based on a sliding scale which ranges from 2% of
net smelter return at gold prices at or below $300 per
ounce and progressively increases to 3.5% for gold pric-
es in excess of $400 per ounce.
Government of Ghana
During the first quarter of 2010, the Government of
Ghana announced that it was amending its Mining Act
2006 to change the method of calculating mineral royal-
ties payable to the Government effective in March 2010.
The prior rules established a royalty rate of no less than
3% and no more than 6% of a mine’s total revenues, the
exact amount being determined by each mine’s margin
as defined in the law. Under the new law, the royalty has
been set at a flat rate of 5% of mineral revenues. We were
notified in October 2010 that the effective date has been
extended to the end of March 2011.
Our subsidiaries GSBPL and GSWL operate under tax
stabilization agreements which govern, among other
things, royalty rates and various tax rules. Accordingly,
the applicability to GSBPL and GSWL of this new royalty
legislation has not yet been determined.
Benso
Benso pays a $1.00 per ounce gold production royalty to
former owners.
Pampe
Certain areas of the Pampe property are subject to a
7.5% net smelter return royalty.
Prestea Underground
Areas of the Prestea Underground below a point 150 me-
ters below sea level are subject to a 2.5% net profits in-
terest on future income. Ownership of the 2.5% net prof-
it interest is currently held by the bankruptcy trustee
overseeing liquidation of our former joint venture part-
ner in the Prestea Underground. While we believe that
the joint venture agreement provides for the 2.5% net
profit interest, confirmation of this position has not been
received from the bankruptcy trustee.
Hwini-Butre
As part of the agreement for the purchase of the Hwini-
Butre properties, Golden Star agreed to pay B.D.
Goldfields Ltd, Hwini-Butre’s former owner, $1.0 million if
at least one million ounces of gold are produced and
recovered in the first five years of production from the
area covered by the Hwini-Butre prospecting license.
Gold production was initiated at Hwini-Butre in May
2009. It is not possible at this time to know if future
exploration work will increase Hwini-Butre’s reserves
sufficiently to yield production of one million ounces
prior to May 2014.
Obuom
In October 2007, we entered into an agreement with AMI
Resources Inc. (“AMI”), which gives AMI the right to earn
our 54% ownership position in the Obuom property in
Ghana. Should AMI eventually obtain full rights to our posi-
tion on the property and develop a gold mining operation
at Obuom, we would receive from AMI a 2% net smelter
return royalty on 54% of the property’s gold production.
Goulagou and Rounga
In October 2007, we entered into an option agreement
with Riverstone Resources Inc. (“Riverstone”) whereby
Riverstone has the right to acquire our 90% interest in the
Goulagou and Rounga properties in Burkina Faso. To ex-
ercise the option, Riverstone is required to spend Cdn$4
million on exploration programs on the Goulagou and
Rounga properties over a four-year period, and may then
purchase our interest for $18.6 million in cash or Riverstone
common shares. We are entitled to receive up to 2 million
shares of Riverstone over the term of the option, of which
1.3 million shares have been received as of December 31,
2010 (Note 9). In addition we received 2 million common
share purchase warrants of Riverstone during 2008. The
Riverstone purchase warrants have remaining exercise
prices that range from Cdn$0.40 to Cdn$0.45.
Litigation
Ghana Crop Damage Action — On October 22, 2008, a
Ghanaian court awarded plaintiffs a settlement of ap-
proximately $1.9 million in damages against GSBPL in a
legal action filed against GSBPL in 2000 related to a 1991
crop damage claim. The plaintiffs claimed that emissions
from a now defunct processing plant at Bogoso, which
was operated from 1991 to 1994, injured the plaintiffs co-
coa trees and reduced their cocoa output. We appealed
the judgment to the Ghana Supreme Court in 2009
which rendered its decision in August 2010 awarding
743,000 Ghanaian cedis (approximately $0.5 million) to
the plaintiff of which $0.2 million had been deposited
with the court in 2004 as a partial settlement, leaving an
outstanding amount due of approximately $0.3 million,
which was paid in September 2010, bringing this legal action
to a close.
Bogoso Power Plant
During the first quarter of 2010, construction was com-
pleted on a nominal 20 megawatt stand-by power plant
at Bogoso. We have accounted for the new power facility
as a 24 month capital lease (Note 16) beginning in
February 2010. We also provided a letter of credit in fa-
vor of the power plant provider during the construction
period, and this letter expired during the second quarter
of 2010. At expiry of the letter of credit, we procured a
new letter of credit in favor of the plant owner/operator
which will expire at the end of January 2012. At that time,
the lease agreement transfers ownership of the power
plant to us for no additional payment.
19. CAPITAL DISCLOSURES
Our objectives when managing capital are to safeguard
access to sufficient funding as needed to continue our
acquisition and development of mineral properties and
to maintain a flexible capital structure which optimizes
the costs of capital at an acceptable level of risk.
In the management of capital, we include the compo-
nents of shareholders’ equity and debt. We manage the
capital structure and make adjustments in light of chang-
es in economic conditions and the risk characteristics of
the underlying assets. To maintain or adjust the capital
structure, we may issue new shares, issue new debt, ac-
quire or dispose of assets or adjust the amount of
2 0 1 0 A n n u a l R e p o r t | 6 3
Non-cash employee compensation expense recognized
in the statements of operations with respect to the Plan
are as follows:
Total stock
compensation expense
during the year
$ 2,975 $ 2,033 $ 2,088
2010
2009
2008
We granted 1,598,500, 1,760,000 and 1,964,000 options
during 2010, 2009 and 2008, respectively. We do not receive
a tax deduction for the issuance of options and as a result, did
not recognize any income tax benefit related to the stock
compensation expense during 2010, 2009 and 2008.
The fair value of options granted during 2010, 2009 and
2008 were estimated at the grant dates using the Black-
Scholes option-pricing model based on the assumptions
noted in the following table:
Expected
volatility
Risk–free
interest rate
Expected
lives
Dividend yield
2010
68.67% to
77.37%
1.18% to
2.58%
2009
68.39% to
74.25%
1.88% to
2.94%
2008
47.52% to
67.78%
2.11% to
3.32%
6 to 9 years
0%
4 to 7 years
0%
4 to 7 years
0%
Expected volatilities are based on the mean reversion ten-
dency of the volatility of Golden Star’s shares. Golden Star
uses historical data to estimate share option exercise and
employee departure behavior is used in the Black–Scholes
model. Groups of employees that have dissimilar histori-
cal behavior are considered separately for valuation pur-
poses. The expected term of the options granted repre-
sents the period of time that the options granted are
expected to be outstanding; the range given above re-
sults from certain groups of employees exhibiting differ-
ent post–vesting behaviors. The risk–free rate for periods
within the contractual term of the option is based on the
Canadian Chartered Bank administered interest rates in
effect at the time of the grant.
investments. Other than the revolving credit facility es-
tablished in 2009, we have no restrictions or covenants
on our capital structure as of December 31, 2010.
Revolving credit facility covenants require that we meet
certain financial ratios at the end of each quarter, includ-
ing that in excess of 95% of our assets are retained within
a group of specified subsidiaries whose common shares
are pledged as collateral for amounts drawn under the
revolving credit facility. We were in compliance with all
covenants at December 31, 2010.
In order to facilitate the management of capital require-
ments, we prepare annual expenditure budgets which
project expected cash and debt positions over several
years and which are updated as necessary depending on
various factors, including successful capital deployment
and general industry conditions. The annual and updat-
ed budgets are approved by the Board of Directors.
In order to maximize cash available for development ef-
forts, we do not pay dividends. Our cash investment pol-
icy is to invest cash in highly liquid short-term interest-
bearing investments with maturities of three months or
less when acquired, selected with regards to the expect-
ed timing of expenditures from continuing operations.
20. COST OF SALES
Mining operations costs
Change in inventories
(costs from/(to)
metals inventory)
Mining related
depreciation and
amortization
Accretion of asset
retirement obligations
Total cost of sales
2010
2008
$ 289,839 $ 243,568 $ 228,037
2009
(4,899)
3,023
9,670
100,648 114,274 60,445
2,803
778
$ 388,391 $ 363,030 $ 298,930
2,165
21. STOCK BASED COMPENSATION
Stock Options
We have one stock option plan, the Third Amended and
Restated 1997 Stock Option Plan (the “Plan”) approved
by shareholders in May 2010, under which options are
granted 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 agreement between Golden Star and
the optionee. Under the Plan, we may grant options to
employees, consultants and directors of the Company or
its subsidiaries for up to 25,000,000 shares, of which
11,004,446 are available for grant as of December 31,
2010, and the exercise price of each option is not less
than the closing price of our shares on the Toronto Stock
Exchange on the day prior to the date of grant. Options
typically vest over periods ranging from immediately to
three years from the date of grant. Vesting periods are
determined at the discretion of the Board of Directors.
6 4 | G o l d e n S t a r
A summary of our activity under the plan during 2010 follows:
Outstanding as of December 31, 2009
Granted
Exercised
Forfeited, cancelled and expired
Outstanding as of December 31, 2010
Exercisable at December 31, 2010
Weighted–
Average
Exercise Price
(Cdn$)
3.19
3.77
2.11
4.27
3.35
3.48
Options
(000)
7,283
1,599
(1,149)
(1,009)
6,724
4,622
Weighted–
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic Value
Cdn($000)
7.0
9.3
5.4
—
7.0
6.3
4,221
—
2,423
—
9,001
5,770
A summary of option activity under the Plan as of December 31, 2009, and changes during the year then ended is
presented below:
Outstanding as of December 31, 2008
Granted
Exercised
Forfeited, cancelled and expired
Outstanding as of December 31, 2009
Exercisable at December 31, 2009
Weighted–
Average
Exercise Price
(Cdn$)
3.23
1.96
1.94
3.06
3.19
3.46
Options
(000)
7,478
1,760
(1,417)
(538)
7,283
5,158
Weighted–
Average
Remaining
Contractual
Term (Years)
Aggregate
intrinsic Value
Cdn($000)
5.9
9.3
2.8
—
7.0
6.3
3,154
—
(1,662)
—
4,221
383
The number of options outstanding by strike price as of December 31, 2010, and 2009 is shown in the following
tables:
Range of exercise prices (Cdn$)
0 to 2.50
2.51 to 4.00
4.01 to 7.00
Range of exercise prices (Cdn$)
0 to 2.50
2.51 to 4.00
4.01 to 7.00
Number
outstanding at
December 31,
2010 (000)
1,472
3,965
1,287
6,724
Options outstanding
Weighted–
average
remaining
contractual life
(years)
7.5
7.2
6.0
7.0
Weighted-
average
exercise price
(Cdn$)
1.61
3.43
4.98
3.35
Options exercisable
Number
exercisable at
December 31,
2010 (000)
804
2,845
973
4,622
Weighted-
average
exercise price
(Cdn$)
1.53
3.44
5.10
3.48
Number
outstanding at
December 31,
2009 (000)
2,285
3,365
1,633
7,283
Options outstanding
Weighted–
average
remaining
contractual life
(years)
7.5
7.1
6.0
7.0
Weighted-
average
exercise price
(Cdn$)
1.54
3.43
4.98
3.19
Options exercisable
Number
exercisable at
December 31,
2009 (000)
1,138
2,587
1,433
5,158
Weighted-
average
exercise price
(Cdn$)
1.39
3.46
5.11
3.46
The weighted–average grant date fair value of share options granted during the years ended December 31, 2010, 2009
and 20 0 8 was Cdn$ 2 . 5 4 , Cdn$1 . 21 and Cdn$3 . 3 1 , respectively. The intrinsic value of options exercised during
the years ended December 31, 2010, 2009 and 2008 was Cdn$2.4 million, Cdn$1.7 million and Cdn$0.6 million, re-
spectively.
2 0 1 0 A n n u a l R e p o r t | 6 5
A summary of the status of non–vested options at
December 31, 2010, and 2009 and changes during the
years ended December 31, 2010 and 2009, is presented
below:
22. EARNINGS PER COMMON SHARE
The following table provides a reconciliation between
basic and diluted earnings per common share:
Number of
options
(000)
2,125
1,599
(1,491)
(131)
2,102
Weighted
average
grant date
fair value
(Cdn$)
1.49
2.54
1.94
1.73
1.90
Non-vested at January 1, 2010
Granted
Vested
Forfeited, cancelled and expired
Non-vested at December 31, 2010
Net income/(loss)
Weighted average num-
ber of common shares
(millions)
Dilutive securities:
Options
Convertible notes
Convertible
debentures
Warrants
2010
(8,281)
2009
2008
$ 16,519 $ (119,303)
$
258.0
237.2
235.7
—
—
—
—
1.2
—
—
—
—
—
—
—
258.0
238.4
235.7
(0.032)
$
0.070 $
(0.506)
(0.032)
$
0.069 $
(0.506)
Weighted average
number of diluted shares
Basic earnings/(loss)
per share
Diluted earnings/(loss)
per share
$
$
In 2010 and 2008, 1.8 million and 1.1 million options were
in the money, respectively, compared to the average
stock price for the year.
Number of
options
(000)
1,926
1,760
(1,386)
(175)
2,125
Weighted
average
grant date
fair value
(Cdn$)
1.92
1.21
1.76
1.22
1.49
Non-vested at January 1, 2009
Granted
Vested
Forfeited, cancelled and expired
Non-vested at December 31, 2009
As of December 31, 2010, there was a total unrecognized
compensation cost of Cdn$2.5 million related to share-
based compensation granted under the Plan. That cost
is expected to be recognized over a weighted-average
period of 2.0 years. The total fair values of shares vested
during the years ended December 31, 2010, 2009 and
2008 were Cdn$2.9 million, Cdn$2.4 million and Cdn$1.5
million, respectively.
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 may grant bonus common shares on terms that
it might determine, within the limitations of the Bonus
Plan and subject to the rules of applicable regulatory au-
thorities. The Bonus Plan, as amended, provides for the
issuance of 900,000 common shares of bonus stock, of
which 545,845 common shares had been issued as of
December 31, 2010. No shares were issued to employees
under the Bonus Plan during 2010, 2009 and 2008.
6 6 | G o l d e n S t a r
23. OPERATIONS BY SEGMENT AND GEOGRAPHIC AREA
The following segment and geographic data includes revenues based on product shipment origin and long-lived assets
based on physical location.
As of and for the year ended December 31,
Africa
Bogoso/
Prestea
Wassa/
HBB
Other
America Corporate
Total
South
2010
Revenues
Net income/(loss)
Income tax (expense) benefit
Capital expenditures
Total assets
2009
Revenues
Net income/(loss)
Income tax (expense) benefit
Capital expenditures
Total assets
2008
Revenues
Net income/(loss)
Income tax (expense) benefit
Capital expenditures
Total assets
$ 206,448 $ 226,245 $
— $
— $
5,247
—
42,145
378,458
20,380
(7,946)
37,906
266,290
(1,575)
—
3,637
9,395
4,463
—
—
899
$ 181,820 $ 218,919 $
— $
— $
(3,883)
—
11,077
347,974
55,490
17,372
36,739
272,019
(728)
—
291
9,208
(3,629)
—
638
9,412
$ 148,765 $ 108,590 $
— $
— $
(89,385)
—
13,544
371,134
6,732
1,267
54,194
289,749
(15,822)
7,762
5,130
11,087
(1,047)
—
1,439
12,112
26. ASSET IMPAIRMENTS
(36,796)
— $ 432,693
(8,281)
(7,946)
83,777
801,455
—
89
146,413
(30,731)
— $ 400,739
16,519
17,372
48,767
753,879
—
22
115,266
(19,781)
— $ 257,355
(119,303)
9,029
74,427
694,299
—
120
10,217
24. SUPPLEMENTAL CASH FLOW INFORMATION
In 2010, $1.0 million of cash was paid for taxes, down
from $1.1 million paid in 2009. There was no cash paid for
income taxes during 2008. In 2010, $7.1 million of cash
was paid for interest, down from $7.6 million in 2009 and
$7.9 million in 2008.
In February 2010, GSBPL accepted delivery of a nominal
20 megawatt power plant upon successful commissioning
of the power plant by its owner/operator. Upon accep-
tance, a $4.9 million liability was recognized which is equal
to the present value of future lease payments. In addition
to the liability, a $4.9 million asset was placed in-service.
See Note 16 for more discussions on capital leases.
Asset
Prestea Underground
exploration property
Prestea South —
development property
Niger —
exploration properties
Burkina Faso —
exploration properties
Ivory Coast —
exploration property
French Guiana —
exploration properties
Other
Total
2010
2009
2008
$
— $
— $ 44,550
—
—
1,815
—
—
1,589
—
— 18,886
—
—
1,539
—
—
—
—
— $ 3,079 $ 68,379
2,789
290
$
25. RELATED PARTIES
During 2010, we obtained legal services from a firm to which
one of our board members is of counsel. The cost of services
incurred from this firm during 2010 and 2009 was $0.9 mil-
lion and $0.6 million, respectively. Our board member did
not personally provide any legal services to the Company
during 2010 or 2009 nor did he benefit directly or indirectly
from payments for the services performed by the firm.
2010 Asset Impairments
None
2009 Asset Impairments
French Guiana
In late 2009, an agreement was reached to sell our
French Guiana exploration properties. In response to the
pending sales agreement, at December 31, 2009, the
carrying value of the French Guiana exploration proper-
ties was written down to the agreed sales price.
2 0 1 0 A n n u a l R e p o r t | 6 7
2008 Asset Impairments
Prestea Underground
As of December 31, 2008, Bogoso/Prestea had incurred
$44.6 million in drilling, maintenance, shaft refurbishment,
dewatering and engineering study costs. A pre-feasibili-
ty study prepared in 2008 indicated that substantial
amounts of capital would be required to reopen the mine
and the resulting operating cash flows would not materi-
ally increase cash flows from Bogoso/Prestea’s existing
surface mining operations. The pre-feasibility did not in-
clude the additional costs of ongoing dewatering and
maintenance costs of the underground mine outside of
the active mining areas. Furthermore, the pre-feasibility
study did not anticipate the sharp increases in mine op-
erating costs during 2008 due to higher power, fuel, re-
agents and labor costs.
Based on the pre-feasibility study results, the increases
in operating costs since the study was completed in
2008, especially in the cost of electric power, and due to
the high costs of maintaining access to the underground
workings, Bogoso/Prestea temporarily stopped its de-
velopment activities at this project in late 2008. As a re-
sult, the carrying value of the property was fully written
down as of December 31, 2008, and an impairment
charge of $44.6 million was recorded in the consolidated
statements of operations.
Prestea South
Portions of the Prestea South properties near the town
of Prestea were deemed impaired at the end of 2008 be-
cause the cost of relocating homes and town site infra-
structure which negated the economic benefit of the re-
serves. The development costs of $1.8 million were
written off and an impairment charge was recorded in
the consolidated statements of operations.
Niger Exploration Projects
As of December 31, 2008, approximately $2.6 million
had been spent on exploration work at the Deba and
Tialkam gold projects in Niger since acquiring them from
St. Jude in 2005. We plan to continue to hold these
properties on a care and maintenance basis and evaluate
various alternatives for them. In response to our decision
to scale back near-term exploration activities, the proj-
ects were written down by $1.6 million.
Burkina Faso Exploration Projects
The Goulagou/Rounga project was acquired in 2005,
and a total of $18.2 million in purchase cost was allocat-
ed to these projects at that time. Between then and
December 31, 2008 an additional $1.1 million was spent
on exploration at these two properties.
A reevaluation of the economics of the project at the end
of 2008 indicated that there was insufficient resources
to proceed with development. Based on this analysis, the
project was written off and an impairment charge re-
corded in the consolidated statements of operations.
Ivory Coast Exploration Projects
Approximately $1.5 million was spent on exploration ef-
forts at the Afema project in the Ivory Coast through the
end of 2008. Exploration results failed to identify re-
sources that warranted further work and the project was
impaired and written off in 2008.
6 8 | G o l d e n S t a r
27. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE UNITED STATES
Our consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in Canada, which differ from U.S. GAAP. The effect of applying U.S. GAAP to our financial statements
is shown below.
(a) Consolidated Balance Sheets under U.S. GAAP
As of December 31,
2010
2009
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable
Inventories (Note d4)
Deposits
Other current assets
Total current assets
Restricted cash
Available-for-sale and long term investments
Deferred exploration and development costs (Note d1)
Property, plant and equipment (Note d2)
Intangible assets
Mining properties (Notes d2 and d4)
Other assets (Note d3)
Total assets
LIABILITIES
Current liabilities
Long term debt (Note d6)
Asset retirement obligations
Future tax liability (Note d5)
Total liabilities
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Share capital (Note d7)
Contributed surplus (Note d6)
Accumulated comprehensive income and other
Deficit
Total Golden Star Resources’ equity
Noncontrolling interest
Total equity
Total liabilities and shareholders’ equity
$
$
$
$
178,018
11,885
65,204
5,865
1,522
262,494
1,205
928
—
228,367
7,373
250,620
2,239
753,226
123,084
155,878
21,467
15,678
316,107
—
693,487
16,560
1,959
(274,036)
437,970
(851)
437,119
753,226
$
$
$
$
154,088
7,021
52,844
4,774
1,415
220,142
3,804
181
—
231,141
9,480
255,503
2,457
722,708
74,936
160,172
30,031
11,688
276,827
—
690,056
14,767
1,340
(262,806)
443,357
2,524
445,881
722,708
2 0 1 0 A n n u a l R e p o r t | 6 9
(b) Consolidated Statements of Operations under U.S. GAAP
Net income/(loss) under Cdn GAAP
Deferred exploration expenditures expensed under US GAAP
(Notes d1 and d2)
Reverse write offs of deferred exploration properties (Note d1)
Reverse disposal of deferred exploration properties (Note d1)
Derivative gain on non-US$ warrants
Reverse depreciation on assets already written off for US GAAP
(Note d2)
Fair value adjustment on debentures (Note d6)
Debt Accretion Reversal (Note d6)
Expense betterment stripping under US GAAP (Note d4)
Other
Net income/(loss) under US GAAP before adjustments to income tax
Income tax expense adjustment (Note d5)
Net loss under US GAAP before adjustments to
noncontrolling interest
Net (income)/loss adjustment attributable to
noncontrolling interest
Net loss attributable to Golden Star Resources
Basic and diluted net loss per share under US GAAP
Consolidated Statement of Comprehensive Loss under US GAAP
Net loss under US GAAP
Other comprehensive income — on marketable securities
Comprehensive loss under US GAAP
Comprehensive (income)/loss adjustment attributable to
noncontrolling interest
Comprehensive loss attributable to Golden Star Resources
(c) Consolidated Statements of Cash Flows under US GAAP
Cash provided by (used in):
Operating activities (Note d8)
Investing activities (Note d8)
Financing activities
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalent beginning of period
Cash and cash equivalents end of period
For the years ended December 31,
2010
2009
$
(8,281)
$
16,519
2008
restated (note 3)
(119,303)
$
(3,538)
—
2,000
—
2,569
(3,208)
7,739
(15,632)
—
(18,351)
2,469
(15,882)
4,654
(11,229)
(0.044)
(15,882)
619
(15,263)
4,654
(10,610)
(3,457)
3,076
—
—
3,813
(31,181)
3,610
(3,571)
1,145
(10,046)
1,143
(8,903)
(2,524)
(11,427)
(0.048)
(8,903)
113
(8,790)
(2,524)
(11,314)
$
$
$
$
$
$
$
$
(13,279)
43,420
—
954
488
11,438
6,197
—
1,229
(68,856)
(348)
(69,204)
(4,513)
(73,717)
(0.313)
(69,204)
(4,737)
(73,941)
(4,513)
(78,454)
$
$
$
$
$
$
$
$
For the years ended December 31,
2010
2009
2008
96,617
(61,550)
(11,137)
23,930
154,088
178,018
$
$
96,940
(41,661)
65,251
120,530
33,558
154,088
$
$
16,764
(57,787)
(1,173)
(42,196)
75,754
33,558
$
$
$
$
$
$
$
$
$
$
7 0 | G o l d e n S t a r
(d) Notes:
(1) Under U.S. GAAP, exploration, acquisition (except
for property purchase costs), and general and ad-
ministrative costs related to exploration projects
are charged to expense as incurred. For Cdn GAAP
purposes, exploration, acquisition and direct gen-
eral and administrative costs related to exploration
projects have been capitalized by the company. In
each subsequent period, the exploration, engineer-
ing, financial and market information for each ex-
ploration project is reviewed by management to
determine if any of the capitalized costs are im-
paired. If found impaired, the asset’s cost basis is
reduced in accordance with Cdn GAAP provisions.
Amounts written off in the current year under Cdn
GAAP, which have previously been expensed under
U.S. GAAP, result in an adjustment when reconcil-
ing net income for the year. Amounts expensed in
prior years for U.S. GAAP but sold in the current
year are recognized as increases in the gains related
to the amount still capitalized for Cdn GAAP.
(2) Under U.S. GAAP, the initial purchase cost of mining
properties is capitalized. Pre-acquisition costs and
subsequent development costs incurred, until a final
feasibility study is completed, are expensed in the
period incurred. Under Cdn GAAP, the purchase
costs of new mining properties as well as all develop-
ment costs incurred after acquisition are eligible to
be capitalized and are subsequently reviewed each
period for impairment. If found impaired, the asset’s
cost basis is reduced in accordance with Cdn GAAP
provisions. Amounts written off in the current year
under Cdn GAAP which have previously been ex-
pensed under U.S. GAAP result in an adjustment
when reconciling net income for the year.
(3) Under U.S. GAAP, loan fees are capitalized as an asset
and amortized over the life of loan. This amortized
amount is netted against the loan liability for Cdn
GAAP.
(4) Under Cdn GAAP, expenditures for stripping costs
(i.e., the costs of removing overburden and waste
material to access mineral deposits) that can be
shown to be a betterment of the mineral property
are capitalized and subsequently amortized on a
units-of-production basis over the mineral re-
serves that directly benefit from the specific waste
striping activity. U.S. GAAP has no provision of
betterment stripping costs and as such, amounts
capitalized for Cdn GAAP are reversed and ex-
pensed for US GAAP. This adjustment also increas-
es the operating costs used for the valuation of
metals inventory for U.S. GAAP, resulting in a high-
er value for metals inventory under U.S. GAAP.
(5) While tax accounting rules are essentially the same
under both U.S. and Cdn GAAP, tax account differ-
ences can arise from differing treatment of various
assets and liabilities. For example, most explora-
tion expenditures and certain mine development
cost are capitalized under Cdn GAAP and ex-
pensed under U.S. GAAP, as explained in notes 1
and 2 above. An analysis of these differences indi-
cates that there are larger potential tax benefits
under U.S. GAAP than under Cdn GAAP in the
GSBPL and GSWL tax jurisdiction.
On January 1, 2007, we adopted the provisions of
ASC topic 740 “Income Taxes” (“ASC 740”) for U.S.
GAAP purposes. ASC 740 prescribes a recognition
threshold and measurement attribute for the finan-
cial statement recognition and measurement of a
tax position taken or expected to be taken in a tax
return. ASC 740 requires that we recognize in our
consolidated financial statements, only those tax
positions that are “more-likely-than-not” of being
sustained as of the adoption date, based on the
technical merits of the position. As a result of the
implementation of ASC 740, we performed a com-
prehensive review of our material tax positions in
accordance with recognition and measurement
standards established by ASC 740. Based on this review
the provisions of ASC 740 had no effect on our finan-
cial position, cash flows or results of operations at
either December 31, 2010 or December 31, 2009.
We and our subsidiaries are subject to the follow-
ing material taxing jurisdictions: Ghana, Canada
and Burkina Faso. The tax years that remain open
to examination by the Ghana Internal Revenue
Service are years 2008 through 2010. The tax
years that remain open to examination by Revenue
Canada are years 2006 through 2009. All tax
years remain open to examination in Burkina Faso.
Our policy is to recognize interest and penalties
related to uncertain tax benefits in general and ad-
ministrative expense. In 2009 we accrued immate-
rial penalties related to ongoing CRA Audits in
Canada. All outstanding 2003, 2004 and 2005
Canadian tax audit issues were resolved in Canada
at an amount less than the accrual made for the
audits in 2009.
(6) Under Cdn GAAP, the fair value of the conversion
feature of convertible debt is classified as equity
and the balance is classified as a liability. The liabil-
ity portion is accreted each period in amounts
which will increase the liability to its full face
amount of the convertible instrument as of the ma-
turity date. Accretion is recorded as interest ex-
pense. For U.S. GAAP purposes, the entire amount
of convertible debt is classified as a liability and
recorded at fair value at the end of each period,
with the change in fair value recorded in the state-
ment of operations in accordance with ASC topic
820 “Fair Value Measurements and Disclosures”.
(7) Numerous transactions since the Company’s orga-
nization in 1992 have contributed to the difference
in share capital versus the Cdn GAAP balance, includ-
ing: (i) under U.S. GAAP, compensation expense
was recorded for the difference between quoted
market prices and the strike price of options grant-
ed to employees and directors under stock option
plans while under Cdn GAAP, recognition of com-
pensation expense was not required; (ii) in May
1992 our accumulated deficit was eliminated
through an amalgamation (defined as a quasi-re-
organization under U.S. GAAP) — under U.S. GAAP
the cumulative deficit was greater than the deficit
under Cdn GAAP due to the past write-offs of cer-
tain deferred exploration costs; and (iii) gains rec-
ognized in Cdn GAAP upon issuances of subsidiar-
ies’ shares are not allowed under U.S. GAAP.
2 0 1 0 A n n u a l R e p o r t | 7 1
(8) Under U.S. GAAP, exploration expenditures and
betterment stripping costs are treated as operating
cash flows. Cdn GAAP treats certain exploration
expenditures as investing cash flows (see note 1).
This creates differences in the statement of cash flows.
(9) The fair value hierarchy disclosure for financial as-
sets and liabilities under U.S. GAAP also includes
the convertible debt as it is measured at fair value
as noted in Note d6.
Available for sale investments
Warrants
Convertible senior unsecured debentures
Available for sale investments
Warrants
Gold forward contracts
Gold forward contracts
Convertible senior unsecured debentures
Level 1
Financial assets measured at fair value as at December 31, 2010
Total
928
375
$ 1,303
928
—
928
—
375
375
—
—
—
Level 2
Level 3
$
$
$
$
$
$
$
Level 1
Financial liabilities measured at fair value as at December 31, 2010
Total
$ 147,779
147,779
Level 3
$ 147,779
147,779
—
—
—
—
Level 2
$
$
$
Level 2
Level 1
Financial assets measured at fair value as at December 31, 2009
Total
181
158
—
339
—
158
—
158
181
—
—
181
—
—
—
—
Level 3
$
$
$
$
$
$
$
Level 1
Financial liabilities measured at fair value as at December 31, 2009
Total
$
—
144,651
$ 144,651
$
—
144,651
$ 144,651
—
—
—
—
—
—
Level 2
Level 3
$
$
$
$
The convertible senior unsecured debenture is recorded at fair market value for U.S. GAAP purposes only in this note.
These debentures are valued based on discounted cash flows for the debt portion and based on a Black Scholes
model for the equity portion. Inputs used to determine these values were: discount rate 8.91%, risk free interest rate
of 1.67%, volatility of 57.5%, and a remaining life of 1.9 years. The December 31, 2010, volatility estimate incorporated
other market data in addition to historical volatility, to estimate future volatility.
Balance of December 31, 2009
(Gain) loss included in net income
Balance at December 31, 2010
Fair value measurements using Level 3 inputs
Convertible senior
unsecured debentures
$ 144,651
3,127
$ 147,779
Total
$ 144,651
3,127
$ 147,779
Recently Adopted Standards
In January 2010, the FASB issued Accounting Standards Update No. 2010-06, “Improving Disclosures about Fair Value
Measurements,” which amends Subtopic 820-10 of the FASB Accounting Standards Codification to require new disclo-
sures for fair value measurements and provides clarification for existing disclosures requirements. More specifically,
this update required (a) an entity to disclose separately the amounts of significant transfers in and out of Levels 1 and
2 fair value measurements and to describe the reasons for the transfers; and (b) information about purchases, sales,
issuances and settlements to be presented separately (i.e. present the activity on a gross basis rather than net) in the
reconciliation for fair value measurements using significant unobservable inputs (Level 3 inputs). This update clarified
existing disclosure requirements for the level of disaggregation used for classes of assets and liabilities measured at fair
value and requires disclosures about the valuation techniques and inputs used to measure fair value for both recurring
and nonrecurring fair value measurements using Level 2 and Level 3 inputs. We adopted this new guidance since the
first quarter of 2010 and it did not materially expand our consolidated financial statement footnote disclosures.
In December 2007, FASB issued new standards for Non-controlling Interests in Consolidated Financial Statements.
This standard establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for
the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary (minority interest) is an
ownership interest in the consolidated entity that should be reported as equity in the Consolidated Financial
Statements and separate from the parent company’s equity. Among other requirements, this statement requires
consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the
7 2 | G o l d e n S t a r
non-controlling interest. It also requires disclosure, on the face of the Consolidated Statement of Operations, of the
amounts of consolidated net income attributable to the parent and to the non-controlling interest. This standard became
effective for us on January 1, 2009.
Recently Issued Standards
In April 2010, the FASB issued Accounting Standards Update No. 2101-12 which amends topic 718 “Compensation —
Stock Compensation”. The amendment addresses the classification of an employee share-based payments awards
with an exercise price denominated in the currency of a market in which the underlying equity security trades, stating
that a share-based award with an exercise price denominated in the currency of a market in which a substantial portion
of the entity’s equity trades shall not be considered to contain a market, performance, or service condition. Therefore,
such an award is not to be classified as a liability if it otherwise qualifies as equity. This new provision is effective for
fiscal years, and interim periods within those years, beginning on or after December 15, 2010. While our stock option
plan denominates option strike prices in Canadian dollars, a substantial portion of our common shares trade in
Canada and thus it is expected that this new guidance will not affect our consolidated financial position, cash flows,
nor results of operations upon adoption in 2011.
28. QUARTERLY FINANCIAL DATA (UNAUDITED)
2010 Quarters ended
2009 Quarters ended
($ millions,
except per share data)
Revenues
Net income/(loss)
Net earnings/(loss) per share
Dec. 31
$ 105.4
(18.0)
Sept. 30
Jun. 30
$ 103.7 $ 120.3
7.6
(1.8)
Mar. 31
$ 103.3
3.9
Dec. 31
$ 117.4
19.5
Sept. 30
$ 103.8
(2.3)
Jun. 30
$ 91.9
0.4
Mar. 31
$ 87.6
(1.1)
Basic
Diluted
$ (0.070)
$ (0.070)
$ (0.007)
$ (0.007)
$ 0.030
$ 0.029
$ 0.015
$ 0.015
$ 0.083
$ (0.010)
$ 0.082 $ (0.010)
$ 0.002 $ (0.005)
$ 0.002 $ (0.005)
ITEM 9. CHANGES IN AND
DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no disagreements with Pricewaterhouse-Coopers LLP, our auditors, regarding any matter of accounting
principles or practices or financial statement disclosure.
ITEM 9A.
CONTROLS AND PROCEDURES
EVALUATION OF
DISCLOSURE CONTROLS AND PROCEDURES
As of December 31, 2010, an evaluation was carried out under the supervision and with the participation of the Company’s
management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and
operation of Golden Star’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934). Based on the evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that as of December 31, 2010, disclosure controls and procedures were effective.
2 0 1 0 A n n u a l R e p o r t | 7 3
MANAGEMENT’S REPORT ON
CONSOLIDATED FINANCIAL STATEMENTS
Management has concluded that the consolidated finan-
cial statements present fairly, in all material respects, the
financial position of the Company as of December 31,
2010, and 2009 and the results of its operations and its
cash flows for each of the three years in the periods end-
ed December 31, 2010, in accordance with Canadian gen-
erally accepted accounting principles. The consolidated fi-
nancial
by
have
PricewaterhouseCoopers LLP as stated in their report
which expressed an unqualified opinion thereon.
statements
audited
been
MANAGEMENT’S ANNUAL REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management of Golden Star is responsible for establish-
ing and maintaining adequate internal control over fi-
nancial reporting as defined in Rule 13a-15(f) of the
Exchange Act. Golden Star’s internal control over finan-
cial reporting is a process designed under the supervi-
sion of Golden Star’s Chief Executive Officer and Chief
Financial Officer to provide reasonable assurance re-
garding the reliability of financial reporting and the prep-
aration of the Company’s financial statements for exter-
nal reporting purposes in accordance with Canadian
GAAP. As of December 31, 2010, management conduct-
ed an assessment of the effectiveness of the Company’s
internal control over financial reporting based on the
criteria established in Internal Control — Integrated
Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
Based on its assessment using those criteria, manage-
ment concluded that Golden Star maintained effec-
tive internal control over financial reporting as of
December 31, 2010. The effectiveness of Golden Star’s
internal control over financial reporting at December 31,
2010, has been audited by PricewaterhouseCoopers LLP,
as stated in their report, which appears herein.
CHANGES IN INTERNAL CONTROL OVER
FINANCIAL REPORTING
There was no change in Golden Star’s internal control
over financial reporting identified in connection with the
evaluation required by paragraph (d) of Rule 13a-15 un-
der the Exchange Act that occurred during the
Company’s last fiscal quarter of 2010 that has materially
affected or is reasonably likely to materially affect Golden
Star’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
74 | G o l d e n S t a r
P A R T I I I
ITEMS 10, 11, 12, 13 AND 14
In accordance with General Instruction G(3) of Form 10-K,
the information required by Part III is hereby incorporated
by reference from our proxy circular to be filed pursuant
to Regulation 14A not later than 120 days after the end of
the fiscal year covered by this report.
P A R T I V
ITEM 15. EXHIBITS, FINANCIAL
STATEMENT SCHEDULES
The following documents are filed as part of this Report:
1. Financial Statements
• Management’s Report
• Auditors’ Report
• Consolidated Balance Sheets as of December 31,
2010 and 2009
• Consolidated Statements of Operations for the
years ended December 31, 2010, 2009 and 2008
• Consolidated
in
Shareholders’ Equity for the years ended December
31, 2010, 2009 and 2008
Statements
Changes
of
• Consolidated Statements of Cash Flows for the
years ended December 31, 2010, 2009 and 2008
• Notes to the Consolidated Financial Statements
2. Financial Statement Schedules
Financial Statement schedules have been omitted since
they are either not required, are not applicable, or the
required information is shown in the financial statements
or related notes.
3. Exhibits
3(i) Incorporating Documents of the Company, includ-
ing: 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 refer-
ence to Exhibit 4.1 to the Company’s Form 8-K filed on
January 23, 2003); Articles of Amendment dated
May 6, 2005 (incorporated by reference to Exhibit
3(i) of the Company’s Form 10-K for the year end-
ed December 31, 2006)
3(ii) Bylaws of the Company, including: Bylaw Number One,
amended and restated as of April 3, 2002 (incorpo-
rated 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); Amendment No. 1 to Bylaw
Number One, effective March 9, 2006 (incorporated
by reference to Exhibit 3(ii) of the Company’s
Registration Statement on Form S-3 (File No. 333-
148296) filed on December 21, 2007)
4.1 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
(File No. 333-91666) filed on July 15, 2002)
4.2 Amended and Restated Shareholder’s Rights Plan
dated as of May 6, 2010, between the Company
and CIBC Mellon Trust Company, as rights agent
(incorporated by reference to Exhibit 4.1 to the
Company’s Form 8-K filed on May 12, 2010)
4.3 Indenture dated November 8, 2007, between the
Company and The Bank of New York for the
Company’s 4.0% Convertible Senior Unsecured
Debentures due November 30, 2012, (incorporat-
ed by reference to Exhibit 4.1 to the Company’s Form
8-K filed on November 13, 2007)
4.4 Form of Canadian Global Debenture dated November
8, 2007, for the Company’s 4.0% Convertible (in -
corporated by reference to Exhibit 4.3 to the
Company’s Form 8-K filed on November 13, 2007)
4.5 Form of U.S. Global Debenture dated November 8,
2007, for the Company’s 4.0% Convertible Senior
Unsecured Debentures (incorporated by reference
to Exhibit 4.3 to the Company’s Form 8-K filed on
November 13, 2007)
4.6 Registration Rights Agreement dated November 8,
2007, between the Company and BMO Nesbitt
Burns Inc. for the Company’s 4.0% Convertible
Senior Unsecured Debentures (incorporated by
reference to Exhibit 4.4 to the Company’s Form 8-K
filed on November 13, 2007)
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 Third Amended and Restated 1997 Stock Option
Plan, dated May 6, 2010, (incorporated by reference
to Exhibit 10.1 of the Company’s Form 8-K filed on
May 12, 2010)
10.3 Form of Stock Option Agreement (Employee)
10.4 Form of Stock Option Agreement (Director)
10.5 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)
10.6 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)
10.7 First Amendment to the Amended and restated
Employment Agreement of Mr. Thomas G. Mair dated
as of February 22, 2011, by and between Golden
Star Management Services Company and Mr. Thomas
G. Mair
10.8 Amended and Restated Employment Agreement
dated effective April 1, 2008, between Golden Star
Management Services Company and Mr. Thomas
G. Mair (incorporated by reference to Exhibit 10.1
to the Company’s Form 10-Q for the quarter end-
ed September 30, 2008)
10.9 Employment Agreement dated as of August 20,
2008 by and between Golden Star Management
Services Company and John A. Labate (incorpo-
rated by reference to Exhibit 10.1 to the Company’s
Form 8-K filed on August 26, 2008)
10.10 Amended and Restated Employment Agreement
dated effective April 1, 2008, between Golden Star
Management Services Company and Bruce Higson-
Smith (incorporated by reference to Exhibit 10.2 to
the Company’s Form 10-Q for the quarter ended
September 30, 2008)
10.11 Amended and Restated Employment Agreement
dated effective April 1, 2008, between Golden Star
Resources Ltd. and Mitch Wasel (incorporated by
reference to Exhibit 10.2 to the Company’s Form
8-K filed on October 6, 2008)
10.12 Employment Agreement dated as of April 2, 2008,
by and between Golden Star Management Services
Company and D. Scott Barr (incorporated by refer-
ence to Exhibit 10.1 to the Company’s Form 8-K
filed April 7, 2008)
10.13 Agreements between the Company and its outside
directors granting them options to purchase Guyanor
Class “B” common shares, dated August 16, 2001,
(incorporated by reference to Exhibit 10.9 to
the Company’s Form 10-K for the year ended
December 31, 2002)
10.14 Mining lease, dated August 16, 1988, between the
Government of the Republic of Ghana and Canadian
Bogosu Resources Limited, relating to the Bogoso
property (incorporated by reference to Exhibit
10.14 to the Company’s Form 10-K for the year end-
ed December 31, 2005)
10.15 Mining lease, dated August 21, 1987, between the
Government of the Republic of Ghana and Canadian
Bogosu Resources Limited, relating to the Bogoso
property (incorporated by reference to Exhibit
10.15 to the Company’s Form 10-K for the year
ended December 31, 2005)
10.16 Mining lease, dated June 29, 2001, between the
Government of the Republic of Ghana and Bogoso
Gold Limited, relating to the Prestea property (incor-
porated by reference to Exhibit 10.1 to the
Company’s Form 8-K filed on March 6, 2002)
2 0 1 0 A n n u a l R e p o r t | 7 5
10.27 Letter Agreement dated October 10, 2007, be-
tween the Company and Riverstone Resources Inc.
for the purchase and sale of the Goulagou/Rounga
Properties and Yantenga Holdings (incorporated
by reference to Exhibit 10.4 to the Company’s
Form 10-Q for the quarter ended September 30,
2007)
10.28 Amended and Restated Credit Facility Agreement,
dated May 1, 2009, between the Company andSt-
dard Chartered Bank as Arranger, Original Lender,
Agent, Security Trustee and Account Bank; with St.
Jude Resources Ltd., First Canadian Goldfields
Limited, Fairstar Ghana Limited, Golden Star
(Bogoso/Prestea) Limited and Golden Star (Wassa)
Limited as guarantors (incorporated by reference
to Exhibit 10.1 to the Company’s Form 10-Q for the
quarter ended September 30, 2010)
14 Code of Ethics for Directors, Senior Executive and
Financial Officers and Other Executive Officers (in-
corporated by reference to Exhibit 14 to the
Company’s Form 10-K for the year ended December
31, 2005)
21 Subsidiaries of the Company (incorporated by ref-
erence to Exhibit 21 to the Company’s Form 10-K
for the year ended December 31, 2007)
23 Consent of PricewaterhouseCoopers LLP
31.1 Certification of Principal Executive Officer, as adopt-
ed pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
31.2 Certification of Principal Financial Officer, as adopt-
ed pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
32.1 Certification of Principal Executive Officer pursuant
to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley
Act of 2002)
32.2 Certification of Principal Financial Officer pursuant
to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley
Act of 2002)
10.17 Mining lease, dated September 17, 1992 between
the Government of the Republic of Ghana and
Satellite Goldfields Limited, with letter dated April
25, 2002 from the Ministry of Mines consenting to as-
signment to Wexford Goldfields Ltd., relating to the
Wassa property (incorporated by reference to
Exhibit 10.26 to the Company’s Form 10-K for the
year ended December 31, 2004)
10.18 Mining lease dated June 29, 2001, between the
Government of the Republic of Ghana and Prestea
Gold Resources, relating to the Prestea Underground
property (incorporated by reference to Exhibit
10.27 to the Company’s Form 10-K for the year
ended December 31, 2004)
10.19 Mining lease, dated January 11, 2008, between the
Government of the Republic of Ghana and First
Canadian Goldfields Limited relating to the Hwini-
Butre property (incorporated by reference to
Exhibit 10.20 to the Company’s Form 10-K for the
year ended December 31, 2008)
10.20 Mining lease, dated September 27, 2007, between
the Government of the Republic of Ghana and First
Canadian Goldfields Limited relating to the Benso
property (incorporated by reference to Exhibit
10.21 to the Company’s Form 10-K for the year
ended December 31, 2009)
10.21 Joint Operating Agreement, dated January 31,
2002, between Bogoso Gold Limited and Prestea
Gold Resources Limited (incorporated by refer-
ence to Exhibit 10.25 to the Company’s Form 10-K
for the year ended December 31, 2002)
10.22 Memorandum of Agreement, dated March 14,
2002, among Prestea Gold Resources, Bogoso
Gold Limited and others (incorporated by refer-
ence to Exhibit 10.26 to the Company’s Form 10-K
for the year ended December 31, 2002)
10.23 License Agreement, dated June 28, 2004, be-
tween Biomin Technologies S.A. and Bogoso Gold
Limited (incorporated by reference to Exhibit
10. 24 to the Company’s Form 10-K for the year
ended December 31, 2005)
10.24 EPCM Services Agreement, dated April 16, 2006,
between Bogoso Gold Limited, GRD Minproc (Pty)
Limited and GRD Minproc Limited (incorporated
by reference to Exhibit 10.1 to the Company’s Form
10-Q for the quarter ended June 30, 2006)
10.25 Medium Term Loan Agreement, dated October 11,
2006, between Ghana Limited, Cal Bank Ghana
Limited and the Company (incorporated by refer-
ence to Exhibit 10.3 to the Company’s Form 10-Q
for the quarter ended September 30, 2006)
10.26 Management Services Agreement dated July 1, 2007,
between the Company and Golden Star Manage-
ment Services Company (incorporated by refer-
ence to Exhibit 10.30 to the Company’s Form 10-K for
the year ended December 31, 2007)
7 6 | G o l d e n S t a r
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
Golden Star Resources Ltd.
Registrant
By:
/s/ Thomas G. Mair
Thomas G. Mair
President and CEO
February 23, 2011
Date:
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/ Ian MacGregor
Name:
Title:
Date:
Ian MacGregor
Director
February 23, 2011
By:
/s/ James E. Askew
Name: James E. Askew
Director
Title:
February 23, 2011
Date:
By:
/s/ Thomas G. Mair
Name: Thomas G. Mair
Title:
President and Chief Executive Officer
(principal executive officer and director)
February 23, 2011
Date:
By:
/s/ John A. Labate
Name: John A. Labate
Title:
Senior Vice President and Chief Financial Officer
(principal financial and accounting officer)
February 23, 2011
Date:
By:
/s/ David K. Fagin
Name: David K. Fagin
Title:
Date:
Director
February 23, 2011
By:
/s/ Robert E. Doyle
Name: Robert E. Doyle
Director
Title:
February 23, 2011
Date:
By:
/s/ Michael Martineau
Name: Michael Martineau
Director
Title:
February 23, 2011
Date:
By:
/s/ Christopher M.T. Thompson
Name: Christopher M.T. Thompson
Title:
Date:
Director
February 23, 2011
2 0 1 0 A n n u a l R e p o r t | 7 7
EXHIBIT 31.1
CERTIFICATION
I, Thomas G. Mair, certify that:
1. I have reviewed this report on Form 10-K of Golden Star Resources Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial re-
porting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its con-
solidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial re-
porting and the preparation of financial statements for external purposes in accordance with generally ac-
cepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over fi-
nancial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal con-
trol over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors
(or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize
and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
/s/ Thomas G. Mair
Thomas G. Mair
President and Chief Executive Officer
February 23, 2011
7 8 | G o l d e n S t a r
EXHIBIT 31.2
CERTIFICATION
I, John A. Labate, certify that:
1. I have reviewed this report on Form 10-K of Golden Star Resources Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial re-
porting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its con-
solidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial re-
porting and the preparation of financial statements for external purposes in accordance with generally ac-
cepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over fi-
nancial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal con-
trol over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors
(or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize
and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
/s/ John A. Labate
John A. Labate
Senior Vice President and Chief Financial Officer
February 23, 2011
2 0 1 0 A n n u a l R e p o r t | 7 9
EXHIBIT 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
I, Thomas G. Mair, President and Chief Executive Officer of Golden Star Resources Ltd., certify, to the best of my
knowledge, based upon a review of the Annual Report on Form 10-K for the period ended December 31, 2010 of
Golden Star Resources Ltd. that:
(1) The Annual Report on Form 10-K fully complies with the requirements of Section 13(a) of the Securities Exchange
Act of 1934, as amended; and
(2) The information contained in the Annual Report on Form 10-K fairly presents, in all material respects, the finan-
cial condition and results of operations of Golden Star Resources Ltd.
/s/ Thomas G. Mair
Thomas G. Mair
President and Chief Executive Officer
February 23, 2011
EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
I, John A. Labate, Senior Vice President and Chief Financial Officer of Golden Star Resources Ltd., certify, to the best
of my knowledge, based upon a review of the Annual Report on Form 10-K for the period ended December 31, 2010
of Golden Star Resources Ltd. that:
(1) The Annual Report on Form 10-K fully complies with the requirements of Section 13(a) of the Securities Exchange
Act of 1934, as amended; and
(2) The information contained in the Annual Report on Form 10-K fairly presents, in all material respects, the finan-
cial condition and results of operations of Golden Star Resources Ltd.
/s/ John A. Labate
John A. Labate
Senior Vice President and Chief Financial Officer
February 23, 2011
8 0 | G o l d e n S t a r
Directors & Management
Directors
Chris M.T. Thompson 2, 3
Chairman of the Board of Directors
Ian MacGregor 1, 2, 3*, 4
Tom Mair
James Askew 4*
Robert Doyle 1*, 3
David Fagin 1
Management
Dr. Michael Martineau 2*, 4
1
audit committee
2 compensation committee
3 nominating and corporate
governance committee
4 sustainability committee
* committee chairman
Tom Mair
President and Chief Executive Officer
Neale Laffin
General Manager, Wassa
Nigel Tamlyn
General Manager, Bogoso/Prestea
D. Scott Barr
Executive Vice President and
Chief Operating Officer
Bruce Higson-Smith
Vice President Corporate Development
John Labate
Senior Vice President and
Chief Financial Officer
Daniel Owiredu
Vice President Operations, Ghana
Mark Thorpe
Vice President Sustainability
Roger Palmer
Vice President Finance and Controller
S. Mitchel Wasel
Vice President Exploration
Karl Smith
Vice President Technical Services
Corporate Information
Corporate Headquarters
Ghana Office
Investor Relations Contacts
Golden Star Resources Ltd.
10901 W. Toller Drive, Suite 300
Littleton, CO 80127 U.S.A.
Telephone: (303) 830-9000
(800) 553-8436
Toll-free:
(303) 830-9094
Fax:
Stock Exchange Listings
Golden Star Resources Ltd.
Level 2, No. 1 Milne Close
Airport Residential Area
P.O. Box 16075
KIA, Accra, Ghana
NYSE Amex Stock Exchange
Common stock: GSS
Ghana Stock Exchange
Common stock: GSR
Toronto Stock Exchange
Common stock: GSC
Registrar and Transfer Agent
Questions regarding the change of stock ownership, consolidation of
accounts, lost certificates, change of address and other such matters
should be directed to:
Canadian Stock Transfer Company
Attention: Shareholder Services
P.O. Box 1900
Vancouver, British Columbia
Canada V6C 3K9
GCB Share Registry
Ghana Commercial Bank
Thorpe Road/High Street
P.O. Box 134
Accra, Ghana
Telephone: +233 21 668712
+233 21 668656
+233 21 668712
Fax:
Online inquiry:
www.cibcmellon.com/investorinquiry
Online access to shareholder data:
http://www.cibcmellon.com/
AnswerLineRegistration
E-mail: inquiries@cibcmellon.com
Toll-free: (800) 387-0825
(Canada and U.S.—collect elsewhere)
(416) 643-5500
(8:30 a.m. to 6:30 p.m. ET,
Monday through Friday)
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Bruce Higson-Smith,
Vice President Corporate Development
Anne Hite,
Investor Relations Manager
Email:
Toll-free:
Website: www.gsr.com
info@gsr.com
(800) 553-8436
Auditors
PricewaterhouseCoopers
Vancouver, British Columbia,
Canada
Annual Report On Form 10-K
The Company’s 2010 Annual
Report on Form 10-K is contained
herein. Exhibits to the Form 10-K
will be available upon payment of
the reproduction costs. Requests
should be addressed to Corporate
Headquarters.
Annual Meeting
Wednesday, May 11, 2011 at
2:00 p.m. ET at the
St. Lawrence/Rideau Boardroom,
333 Bay Street, Suite 2400,
Bay Adelaide Centre, Toronto,
Ontario, M5H 2T6, Canada.
(800) 553-8436
www.gsr.com
NYSE Amex: GSS
Toronto Stock Exchange: GSC
Ghana Stock Exchange: GSR