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Impairments

Upon completion of the Company's quarterly assessment of the carrying value, the Company recorded non-cash impairment charges totaling $169.6 million after tax ($0.65 per share) comprised of $86.0 million for Bogoso/Prestea, $80.6 million for Wassa/HBB and $2.9 million related to investments. The impairment charge at Bogoso/Prestea included a charge of $49.3 million related to mine property, a charge of $36.4 million related to property, plant and equipment and a charge of $0.4 million related to the intangible assets.

At Wassa/HBB, $65.9 million of the impairment charge relates to mine property and $14.7 million is related to property, plant and equipment. The resulting non-cash charge was due the impact of the lower expected gold prices over the life of the mines and the shorter mine life at Wassa/HBB due to the lower gold price.

Conference Call and Webcast

The Company will be holding a conference call and webcast at 10:00 am (ET) on August 12, 2013, for analysts and investors. Dial-in information for the call is as follows:

Participant (Toll-Free): 877-407-8289
Participant (International): 201-689-8341
The webcast can be accessed at www.gsr.com

A recording of the conference call will be available until September 2, 2013. To access the encore recording of the call, please dial:

Replay (Toll-Free): 877-660-6853
Replay (International): 201-612-7415
Conference ID: 418620

Summary of Consolidated Financial Results:

Second Quarter 2013 Financial Summary

• Revenue decrease: In the second quarter of 2013, the Company recorded revenue of $120.7 million, down approximately 12% compared to the second quarter of 2012.
  
  

• Net loss and impairment: The Company had a net loss attributable to Golden Star shareholders of $128.8 million, or a loss per share of $0.50, versus a net income of $0.03 million, or nil income per share in the second quarter of 2012. The major factor contributing to the loss this quarter is the impairment charges totaling $169.6 million after tax ($0.65 per share) recorded to write down Bogoso/Prestea and Wassa/HBB's carrying value.
  
  

• Reduced realized gold prices: The Company's average realized gold price declined to $1,418 per ounce ("oz") in the second quarter of 2013, down 11% from $1,600 per oz in the second quarter of 2012.
  
  

• Increase in cash operating costs per ounce¹: In the second quarter of 2013, the Company's combined cash operating cost rose to $1,078/oz, up from $971/oz in the second quarter of 2012. Cash operating costs at Wassa/HBB in the second quarter of 2013 were $736/oz, down from $831/oz realized in the second quarter of 2012 due to higher amount of ounces sold. Cash operating cost at Bogoso/Prestea in the second quarter of 2013 rose approximately 44% to $1,584/oz from 1,101/oz in the second quarter of 2012 due to fewer ounces sold, as well as the $7.7 million draw-down of ore stockpiles and in-plant inventory in 2013 compared with a $1.1 million inventory build-up in 2012, partially offset by the $1.7 million increase in stripping cost capitalized during the quarter.
  
  

• All-in costs ^3,4: Combined all-in sustaining costs were $1,378/oz, an increase of 15% from the second quarter of 2012. Combined all-in costs were $1,596/oz, an increase of 17% from the second quarter of 2012.
  
  

^1,2,3,4 See "Non GAAP Financial Measures" commencing on page 20 of the Company's 2013 Q2 Management Discussion and Analysis for a reconciliation of cash operating cost per ounce, all-in sustaining costs per ounce and all-in costs per ounce to cost of sales excluding depreciation and amortization, and for a reconciliation of adjusted net loss attributable to Golden Star shareholders to net (loss)/income attributable to Golden Star shareholders.

Second Quarter 2013 Operational Highlights

The following sets forth the operational highlights at Wassa/HBB and Bogoso/Prestea for the second quarter of 2013.

Wassa/HBB

• The Wassa/HBB non-refractory plant processed 651,453 tonnes ("t") of ore in the second quarter of 2013 versus 641,359 tonnes of ore in the second quarter of 2012.
  
  

• The Company produced and sold 50,774 ounces of gold at Wassa/HBB in the second quarter of 2013, up 9,706 ounces from the second quarter of 2012. The increase in gold production was due primarily to higher ore grade processed.
  
  

• Metallurgical recoveries at the Wassa/HBB plant were 95.0% for the second quarter of 2013, showing a slight improvement from the second quarter of 2012 in which recoveries were 94.8%.
  
  

• Gold revenue at Wassa/HBB totaled $72.1 million in the second quarter of 2013, up $6.4 million from $65.7 million in the second quarter of 2012.
  
  

• Cash operating costs at Wassa/HBB were $736/oz in the second quarter 2013, lower than $831/oz in the second quarter of 2012. Operating margins at Wassa/HBB were $13.5 million during the second quarter of 2013, up from $10.9 million in the second quarter of 2012.
  
  

Wassa/HBB Second Quarter Operating Results

Bogoso/Prestea

• The Bogoso/Prestea refractory plant processed 646,191 tonnes of ore in the second quarter of 2013 versus 570,450 tonnes of ore in the second quarter of 2012.
  
  

• The Company produced and sold 29,856 ounces of gold from the Bogoso/Prestea refractory plant versus 34,051 ounces in the second quarter of 2012. Metallurgical recovery at the refractory processing plant was 67.3% in the second quarter of 2013, slightly lower than 71.3% in the second quarter of 2012.
  
  

• The Bogoso/Prestea non-refractory plant processed 63,154 tonnes of ore in the second quarter of 2013 versus 201,912 tonnes of ore in the second quarter of 2012.
  
  

• The Company produced and sold 4,460 ounces of gold from the Bogoso/Prestea non-refractory plant versus 10,064 ounces in the second quarter of 2012. Metallurgical recovery at the Bogoso/Prestea non-refractory plant was 54.1% in the second quarter of 2013, down from 62.2% in the same period of 2012.
  
  

• The Company commenced processing of the TSF1 tailings in July 2013, targeting a daily throughput of 4,000 tonnes per day.
  
  

• Revenue from Bogoso/Prestea in the second quarter of 2013 totaled $48.6 million, down $22.0 million from $70.6 million in the second quarter of 2012. The decrease in revenue is the result of lower realized gold prices and the suspension of the Pampe open-pit mining operation due to pit wall stability problems. The Pampe pit was the primary ore source for the Company's non-refractory operation. Consequently, non-refractory gold sales were down 55.7% over the second quarter of 2012. Another factor affecting Bogoso/Prestea revenue was the lower refractory gold grade processed and slightly lower gold recoveries, which resulted in a 12.3% decline in refractory gold sales.
  
  

Bogoso/Prestea Second Quarter Operating Results

Subsequent Events

Subsequent to quarter end, on July 29, 2013, the Company completed the sale of our non-core assets for net proceeds of $7.4 million.

On July 30, 2013, the Company through its subsidiary Golden Star (Wassa) Limited ("GSWL") closed a $50 million secured Medium Term Loan Facility ("Ecobank loan") with Ecobank Ghana Limited ("Ecobank"), a pan-African full service bank, who acted as sole lender and arranger to the Company. The use of proceeds is to finance Wassa, inclusive of pre-feasibility studies, drilling operations, settlement, partial relocation and other capital expenditures. GSWL has drawn down $10 million of this loan for cash management purposes. The Ecobank loan has a term of 60 months from the date of initial drawing and is secured, among other things, against Wassa's existing plant, machinery and equipment. The interest rate will be three month LIBOR + 9%, per annum, payable monthly in arrears. Payment of interest and principal commences six months following the first drawdown.

Company Profile

Golden Star holds a 90% equity interest in Golden Star (Bogoso/Prestea) Limited and Golden Star (Wassa) Limited, which respectively own the Bogoso/Prestea and Wassa/HBB open-pit gold mines in Ghana. In addition, Golden Star has a 90% interest in the currently inactive Prestea Underground mine in Ghana. Golden Star also holds gold exploration interests elsewhere in Ghana, in other parts of West Africa and in Brazil, South America.

Statements Regarding Forward-Looking Information:

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 and applicable Canadian securities laws. 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 our plans to reduce operating costs; the potential of Wassa/HBB; our production expectations for 2013; and processing throughput from the TSF1 tailings facility Factors that could cause actual results to differ materially include timing of and unexpected events at the Bogoso/Prestea refractory and non-refractory processing plants or at the Wassa/HBB processing plant; variations in ore grade, tonnes mined, crushed or milled; variations in relative amounts of refractory, non-refractory and transition ores; delay or failure to receive board or government approvals and permits; the availability and cost of electrical power; timing and availability of external financing on acceptable terms; technical, permitting, mining or processing issues; changes in U.S. and Canadian securities markets; and fluctuations in gold price and input costs and general economic conditions. 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 in our Annual Report or Form 10-K for 2012. 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.

Non-GAAP Financial Measures:
In this news release, we use the terms "cash operating cost per ounce", "all-in sustaining cost per ounce", "all-in costs" and "adjusted net loss attributable to Golden Star Shareholders",. These measures should be considered as Non-GAAP Financial Measures as defined in applicable securities laws and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. We use cash operating cost per ounce as a key operating indicator. We monitor this measure monthly, comparing each month's values to prior period's values to detect trends that may indicate increases or decreases in operating efficiencies. This measure is also compared against budget to alert management to trends that may cause actual results to deviate from planned operational results. We provide this measure to our investors to allow them to also monitor operational efficiencies of our mines. We calculate this measure for both individual operating units and on a consolidated basis. We believe that "all-in sustaining costs" and "all-in costs" will better meet the needs of analysts, investors and other stakeholders of the Company in understanding the costs associated with producing gold, understanding the economics of gold mining, assessing our operating performance and also our ability to generate free cash flow from current operations and to generate free cash flow on an overall Company basis. In order to indicate to stakeholders the Company's earnings excluding the non-cash (gain)/loss on the fair value of debentures and non-cash impairment charges, the Company calculates "adjusted net (loss)/income attributable to Golden Star shareholders" to supplement the condensed interim consolidated financial statements. There are material limitations associated with the use of such non-GAAP measures. Since these measures do not incorporate revenue, changes in working capital and non-operating cash costs, they are not necessarily indicative of operating 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 recovery, and the costs of labor, consumables and mine site general and administrative activities can cause these measures to increase or decrease. We believe that these measures are the same or similar to the measures of other gold mining companies, but may not be comparable to similarly titled measures in every instance. See "Non GAAP Financial Measures" commencing on page 20 of the Company's 2013 Q2 Management Discussion and Analysis for a reconciliation of cash operating cost per ounce, all-in sustaining costs per ounce and all-in costs per ounce to cost of sales excluding depreciation and amortization, and for a reconciliation of adjusted net loss attributable to Golden Star shareholders to net (loss)/income attributable to Golden Star shareholders.