Golden Star to Develop Wassa Gold Project in Ghana; Total Production to Double at Cash Costs Below $200 Per Ounce

DENVER--()--July 10, 2003--Golden Star Resources Ltd. (Amex: GSS)(TSX: GSC) is pleased to announce the development of its Wassa gold project in Ghana, West Africa, 35 kilometers from the Company's Bogoso/Prestea gold operations. A feasibility study has been completed by Golden Star and a team of independent consultants led by Metallurgical Design and Management (Pty) Ltd. ("MDM") of South Africa, which estimates annualized production of over 140,000 ounces of gold in 2005 at average cash costs just below $200 per ounce. (All currency in this news release is expressed in U.S. dollars.) Golden Star has a 90% interest in the project, with a 10% carried interest held by the Government of Ghana.

Golden Star has awarded a lump sum, turnkey construction contract to MDM for the new processing plant and associated facilities at Wassa.

Commenting on the decision to build Wassa, President and CEO Peter Bradford said: "The Wassa feasibility study indicates a healthy internal rate of return for the project of 28% at $325 per ounce of gold, and around 38% at current prices. This project is another step towards our objective of becoming a mid-tier producer by adding 140,000 ounces annually for a modest capital investment. Combined with our expansion plans at the Bogoso/Prestea mine, gold production should be well over 300,000 ounces in 2005 at cash costs below $200 per ounce." Bogoso/Prestea is expected to produce approximately 140,000 ounces of gold at a projected cash cost of $185 per ounce in 2003.


Funding in Place

-- Open pit mine, with a carbon-in-leach (CIL) gold recovery plant

-- Reserves of 598,000 contained ounces, grading 1.27 g/t of gold

-- Indicated Resources of 268,000 ounces and Inferred Resources of 930,000 ounces

-- An eight-kilometer trend at an early stage of exploration

-- Significant regional land position

-- Initial production planned for 2004 of 75,000 ounces, at a cash cost of $211 per ounce

-- 2005 and beyond: +140,000 ounces per year, at a cash cost of under $200 per ounce

-- Development costs $25.5 million, to be funded from cash resources

-- Production anticipated in the first quarter 2004

-- Initial mine life of four years, based on current reserves only

-- Internal rate of return for the project of 28% at $325 per ounce gold (1) Based on 100%. Golden Star's share is 90% of reserves, resources and production, and 100% of costs.


Early Production from Previous Owner's Heap Leach Material

Final design work for the 10,000-tonne per day (3.5 million-tonne per year) milling and CIL process is nearing completion, and pre-construction work commenced in May 2003.

The total development cost is estimated to be $25.5 million. This includes a $1.0 million contingency, $2.5 million of sunk costs to acquire two ball mills and to commence detailed design and engineering work, and a lump sum, turnkey contract to construct the processing facilities. Construction is expected to be completed in early 2004, with gold production anticipated in the first quarter.

Since the original estimate, the construction cost now incorporates a 17% expansion in processing tonnage to 3.5 million-tonne per year and a direct, more reliable power line connection to the national grid. The revised cost estimate also incorporates the increase in construction costs due to the impact of the stronger South African Rand relative to the U.S. dollar.

Wassa will commence operations by processing material from the previous owner's heap leach pads. The early reprocessing of this material will make the leach pad area available for tailings containment. Production from the heap leach material in 2004 is expected to be about 75,000 ounces of gold at an estimated cash cost of $211 per ounce.

Open pit mining development is projected to commence in December 2004 and will result in gold production increasing to more than 140,000 ounces of gold per year, at an average cash cost of less than $200 per ounce.

Prior to Golden Star's acquisition, Wassa was mined as an open pit, heap leach operation between 1998 and 2001 and was closed due to the ore not being amenable to heap leaching.


Some Inferred Resource Upgraded to Indicated Since December 2002

Golden Star has calculated its Wassa Gold Reserves and Resources as at May 31, 2003, which were estimated based on $300 per ounce for reserves and $325 per ounce for resources:

                                      Tonnes      Grade   Gold Content
Probable Reserves                    (millions)  (g/t Au)   (ounces)

Weathered (oxide)                         3.4      1.15     125,000
Fresh (sulfide)                           6.9      1.68     374,000
Heap Leach Pads                           4.4      0.70      99,000
Total Probable Reserves (100%)           14.7      1.27     598,000
(Golden Star's 90% share)                                  (538,000)

Cautionary Note to U.S. Investors regarding Resource estimates: We refer U.S. investors to our cautionary note concerning estimates of Measured and Indicated Resources and Inferred Resources at the end of this news release.

Indicated Resources             Cut-off    Tonnes    Grade    Content
                                (g/t Au) (millions) (g/t Au) (ounces)

Weathered (oxide)                    0.5     1.1      1.07    38,000
Fresh (sulfide)                      0.6     4.6      1.38   204,000
Heap Leach Pads                      0.4     0.8      1.00    26,000
Total Indicated Resources(100%)              6.5      1.28   268,000
Total Probable Reserves and
 Indicated Resources (100%)                                  866,000
(Golden Star's 90% share)                                   (779,000)

Inferred Resources
Weathered (oxide)                    0.5     2.1      1.02    69,000
Fresh (sulfide)                      0.6    23.3      1.15   861,000
Total Inferred Resources (100%)             25.4      1.14   930,000
(Golden Star's 90% share)                                   (837,000)

The conversion of Indicated Resources from previously classified Inferred Resources and the subsequent conversion of Indicated Resources to Probable Reserves was the result of additional semi-variogram modeling of previously mined grade control data and the re-evaluation of the overall geological continuity of the gold mineralized zones.

Golden Star believes that the potential to increase resources on the eight-kilometer mineralized trend at Wassa is high. As a result, the current exploration and drilling program will continue in parallel with construction activity and the first year's operations.

Supported by Well-Recognized, Independent Consultants

The Feasibility Study and the capital cost estimates were prepared
by Golden Star, with the support of well-recognized, independent
engineering firms, as follows:

Exploration and Geology:           Golden Star, with review by SRK

Reserve and Resource Estimation:   Golden Star, with review by SRK

Mine Design and Planning:          Golden Star, with review by SRK

Pit Slopes and Geotechnical:       SRK

Metallurgical testwork:            Lakefield Research Laboratories and
                                   Ammtec Metallurgical Laboratory, 
                                   with review by MDM and Golden Star

Process Plant Design:              MDM, with review by Golden Star

Tailings Storage Facility:         Knight Piesold

Environmental Assessment:          Scott Wilson Mining

Power Line:                        Volta River Authority Limited 
                                   and MDM

Project Evaluation:                Golden Star

The Feasibility Study envisages the construction of a new 3.5 million-tonne per year CIL processing plant, a tailings facility and a powerline. The previous owner's crushing circuit, gold recovery process, water supply and site infrastructure saves an estimated $25 million in capital expenditures.

Metallurgical test work has demonstrated that the Wassa oxide and sulfide ores are highly amenable to milling and CIL processing. Bond work indexes for weathered and fresh (sulfide) rock averaged 8.0 and 14.8 kWh/t, respectively. Expected recoveries are high, at approximately 93% and 92% respectively, and reagent consumption has been demonstrated to be low. The average recovery for the partly processed heap leach material is expected to be approximately 86%.

With initial production coming from reclaimed heap leach material, there would be no open pit mining during the first year of operation. The Feasibility Study envisages that pre-strip mining would commence in December 2004. In the meantime Golden Star will assess alternative equipment options, including fleet ownership based on 85% vendor financing which is being offered.

The Feasibility Study assumes that accounting, purchasing and some technical services will be shared with Golden Star's Bogoso/Prestea operation, which results in some benefit to both operations.


Includes Lump Sum, Turnkey Construction Contract

The capital cost estimate for the development of Wassa, which will be 100% funded by Golden Star, is as follows:

           Description              $ (millions)         Basis
Mining Infrastructure                   0.5       Estimate
Front End Loaders for Heap Pad                    Vendor quotation
 Reclaim                                0.9
CIL Processing Plant                              Lump sum, turnkey
                                       14.3        contract
Tailings Dam Construction               1.7       Engineered estimate
Power Supply from National Grid         2.8       Engineered estimate
First Fill & Spares                     1.2       Estimate
Infrastructure & Vehicles               1.0       Estimate
Project Management & Training           1.9       Estimate
Environmental Bond                      0.2       Estimate
Sub-total                              24.5
Contingency                             1.0       Allowance
Total Capital Expenditure              25.5

The project is expected to be completed in the first quarter of 2004 and will be funded from existing cash resources.

The construction portion of the cost estimate at $18.8 million is higher than the original estimate of $14.0 million made in 2002 as a result of: the strengthening South African Rand relative to the U.S. dollar; the increased scale of the processing plant from 3.0 to 3.5 million tonnes per year; and the decision to connect the powerline directly to the main national grid for greater reliability, rather than to the closer sub-station located at Gold Fields' Abosso mine.

The processing plant design incorporates scope for the expansion of the gravity circuit and for a 33% increase of the CIL tank capacity.

When mining commences in December 2004, it is envisaged that a fleet of three 100-tonne backhoe excavators and nine 95-tonne dump trucks will be used to mine approximately 35,000 tonnes per day of ore and other material. The mining fleet is expected to be Company-owned, which will require an additional capital expenditure of approximately $14.2 million between 2004 and 2005. Vendor financing is expected to be available for 85% of the cost.

Sustaining capital of about $0.4 million per year has been allowed for in the Feasibility Study.

An environmental impact assessment is in process and is expected to be completed in the third quarter of 2003. However, Golden Star does not expect that this will identify any major issues, as the Wassa site was previously permitted and mined from 1998 to 2001. No significant issues were identified in this mining-friendly area during the public hearing held in May 2003.


A Low Mining Strip Ratio

The processing plant has been designed to process 10,000 tonnes per day, or 3.5 million tonnes per year, of hard rock material (blended approximately one-third weathered oxide and two-thirds fresh sulfide ore). During the first year of operation, when only the heap leach material is being processed, the designed processing rate is 4.0 million tonnes per year. When open pit mining commences in December 2004, an average mining rate of approximately 35,000 tonnes per day of ore and other material is planned.

The proposed Wassa production profile, based only on the Probable Gold Reserves, is:

Year   Mined  Processed    Grade    Recovery   Gold Sold(1) Cash Costs
       (Mt)      (Mt)     (g/t Au)     (%)       (ounces)     ($/oz)
2004     1.0      4.0      0.70       86.0        75,000       211
2005    14.1      3.9      1.32       92.0       150,000       202
2006    10.3      3.5      1.62       92.3       167,000       165
2007    12.5      3.3      1.51       92.2       150,000       199
Total   37.9     14.7      1.27       91.2       542,000       192

(1) 100%. Golden Star's share is 90%


Healthy Returns at $325 per ounce

The Feasibility Study demonstrates that the Wassa project is economically viable with a positive project Internal Rate of Return at gold prices above $275 per ounce. Based solely on the current Probable Gold Reserves and an average price over the life of the mine of $325 per ounce, the after-tax undiscounted Net Present Value for the project is estimated to be $22 million with an IRR of 28%.

                                              Based on Probable
Category                           Units        Reserves only
Total Mined                          Mt                37.9
Strip ratio                                           2.7:1
Ore Processed                        Mt                14.7
Grade Processed                  g/t Au                1.27
Recovery                              %                91.2
Gold Produced                    ounces             542,000(1)
Cash Costs                         $/oz                 192
Undiscounted NPV at $325      $ million                  22
Project IRR at $325                   %                  28

(1) Based on 100%. Golden Star's share is 90%.

The NPV and project IRR analysis is inclusive of a 3% government royalty and an allowance of $3.5 million for post-mining reclamation. The analysis assumes Company-owned mining equipment, with 85% of the capital cost of the mining fleet being debt financed. Property acquisition costs are excluded from the analysis.

The economic evaluation is highly sensitive to the gold price and to the expected increase in Reserves from conversion of Indicated and Inferred Resources and from additions to all categories of mineralization. The gold price sensitivity is:

                              $300/oz $325/oz $350/oz $375/oz  $400/oz
Undiscounted NPV ($ millions)     12      22      31      40       48
Project IRR (%)                   16      28      38      48       58

Golden Star plans to fund the Wassa construction cost from its existing cash resources.


Indicates Additional Production Likely from Current Resources

Although good geological continuity has been demonstrated for the mineralized material at Wassa, the Mineral Resource has been classified as Indicated and Inferred. None of the Resource has been classified as Measured, primarily due to the high sample variability observed in the quality-control work, which is attributed to the high nugget effect and low semi-variogram ranges observed in the geostatistical analysis.

Additional drilling planned for 2003 is intended to increase the drill density in the Inferred Resources at depth to enable this material to be upgraded to Indicated. Prior to the mining grade-control stage, the Company does not plan to increase drill density in order to upgrade any of the material to Measured Resources.

For planning purposes and to guide additional drilling programs in the mineralized areas, Golden Star has carried out pit optimizations to include the Indicated and Inferred Resources. If the relevant Resources are confirmed and upgraded, total ounces available to be mined within the current pits could increase by up to 750,000 ounces, based on a gold price of $300 per ounce (as used for Reserve calculations).

The pit optimizations are a guide to the ultimate Mineral Reserve potential of the currently defined deposits at Wassa.


Based on $300 per ounce

The Gold Reserve estimate has been derived from an optimized pit shell generated at a $300 per ounce gold price. Appropriate factors to allow for mining recovery and dilution have been used in the estimate. The optimization process and factors used have been independently reviewed by SRK and found to be reasonable.

The Mineral Reserve estimate was prepared by Golden Star, in conformity with the terminology and guidelines for reserve estimation developed by the Canadian Institute of Mining, Metallurgy and Petroleum, as required under Canada's National Instrument 43-101.

The total Probable Reserves of 14.7 Mt grading 1.27 g/t Au corresponds to the U.S. Securities and Exchange Commission's definition. No Proven Reserves have been estimated.

Golden Star's Qualified Person for the estimation of the Gold Reserves is David Alexander, project mining manager of the Company. Mr. Alexander is a qualified mining engineer, a member of the Institution of Mining and Metallurgy and a Chartered Engineer under the auspices of the Engineering Council of the U.K.

The Qualified Person for the estimation of the Gold Resources at May 2003 is S. Mitchel Wasel, exploration manager with the Company. Mr. Wasel is a qualified geologist and a member of the Australian Institute of Mining & Metallurgy.

Copies of the technical report supporting the Gold Resources estimates as at December 31, 2002, which were filed in accordance with Canada's National Instrument 43-101, can be found on Golden Star's website at

Golden Star holds a 90% equity interest in the Bogoso/Prestea open-pit gold mine, a 57% managing equity interest in the currently inactive Prestea underground gold mine, and a 90% equity interest in the Wassa gold project, all in Ghana, West Africa. In addition, the Company has other gold exploration interests elsewhere in West Africa and in the Guiana Shield in South America. 2003 production at the Bogoso/Prestea mine is expected to be approximately 140,000 ounces of gold at a projected cash cost of $185 per ounce.

Cautionary Note to U.S. Investors Concerning Estimates of Gold Resources

This news release uses the terms "measured resources" and "indicated resources." We advise U.S. investors that, while those terms are recognized and required by Canadian regulations in order to give an overview of the potential of a deposit, the U.S. Securities and Exchange Commission does not recognize these categories. U.S. investors are therefore cautioned not to assume that any part of the mineralization in these categories will ever be converted into reserves.

"Inferred resources" have a greater amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of the inferred resources will ever be converted to a higher category. Under Canadian rules, estimates of inferred resources may not form the basis of feasibility or other economic studies. U.S. investors are cautioned not to assume that part or all of the inferred resource exists, or is economically or legally mineable.

Statements Regarding Forward-Looking Information

Some statements contained in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause actual results to differ materially. Such statements include comments regarding the establishment and estimates of mineral reserves and non-reserve mineral resources, future increase in mineral reserves, the recovery of any mineral reserves, construction cost estimates, construction completion dates, equipment requirements, production, production commencement dates, project internal rates of return and net present values, grade, processing capacity, potential mine life, results of feasibility studies, timing and results of environmental impact studies, development, costs, expenditures, mine re-opening and exploration. Factors that could cause actual results to differ materially include timing of and unexpected events during construction, expansion and start-up; variations in ore grade, tons mined, crushed or milled; delay or failure to receive board or government approvals; timing and availability of external financing on acceptable terms for equipment and other purposes; technical, permitting, mining or processing issues, and fluctuations in gold price and costs. There can be no assurance that future developments affecting the Company will be those anticipated by management. Please refer to the discussion of these and other factors discussed in our Form 10-K for 2002. The forecasts contained in this press release constitute management's current estimates, as of the date of this press release, with respect to the matters covered thereby. We expect that these estimates will change as new information is received and that actual results will vary from these estimates, possibly by material amounts. While we may elect to update these estimates at any time, we do not undertake to update any estimate at any particular time or in response to any particular event. Investors and others should not assume that any forecasts in this press release represent management's estimate as of any date other than the date of this press release.


Golden Star Resources Ltd.
Peter Bradford, President and CEO, 303-894-4613
Allan Marter, Chief Financial Officer, 303-894-4631
General Inquiries, 800-553-8436


Golden Star Resources Ltd.
Peter Bradford, President and CEO, 303-894-4613
Allan Marter, Chief Financial Officer, 303-894-4631
General Inquiries, 800-553-8436