Replies to post #2631 on Golden Star Resources Ltd (GSS)

[keyotee]

It will be s massive trade, look at Transocean, down 63% this year, ticker rig. I agree uwti, USO, Exxon ,chevron, especially uwti my favorite.

[JohnCM]

Golden Star Resources Q3 Financials Show Significant Improvements

Nov. 8, 2014 8:42 AM ET

by Ben Kramer-Miller Seeking Alpha

Golden Star Resources reduced its quarterly loss to $1.3 million as production costs came down significantly.

This is better than I had expected.

The company still has high costs, but it is one of the cheapest gold producers on the market with the potential to skyrocket from current levels.

Golden Star Resources (NYSEMKT:GSS) recently announced its third quarter financial results. The company reduced its quarterly loss to just $1.3 million vs. a loss of $7.5 million in the second quarter. This is largely due to significant improvements at the company's higher cost producer Bigosi, which saw cash costs plunge from $1,415/oz. down to $1,041/oz.

This is still high but it is a big leap forward. In addition the company released a PEA outlining the expansion plan for its lower cost producing project - Wassa. This is going to be a low cost underground mine that the company can easily afford to develop.

As I argued a year ago Golden Star Resources is one of the top turnaround stories in the gold mining space, and it is being overshadowed by the falling gold price. In spite of the fact that production costs have come down significantly at Bigosi, the company struggles to turn a profit given its high expenses in addition to operating costs. With this in mind the stock remains risky. But those investors looking for the gold price to improve should relish the opportunity here as there aren't too many gold miners that produce more than 200,000 oz. per year with valuations of less than $70 million.

Investors should keep in mind that in spite of these improvements and the opportunity, the company continues to have a lot of debt, which could hurt the company in the event of a spike downward in the gold price. However, the company recently got credit to expand its Wassa Project, meaning that financiers still believe in the company. Investors should also take care to note that the company's operations are in West Africa which has been problematic given Ebola fears. But more likely than not this won't amount to much and any negative price action on related headlines should be used to accumulate shares.