Golden Star Resources Ltd. (USA) (NYSEMKT:GSS) is an international gold mining company. It has operations in West Africa and South America. The company has shown almost relentless determination to cut cost and improve financial performance. However, the fall in gold prices has also given it enough problems.
Read what this analyst has to say about the fundamentals of GSS.
Financial highlight
In its 3Q, the company managed to reduce its net loss to $1.3 million compared to $7.5 million in the previous quarter. It generated revenue of $77.76 million in the most recent quarter, which was more than 34% below what was there in the same quarter a year earlier. Revenue for the latest quarter also fell short of the estimate by $3.16 million.
The company said its mine operating expenses declined 6% to $70 million in the latest quarter. It further stated that the cost of producing every ounce of gold fell 12% in the quarter.
As can be seen from the quarterly financial highlight, aggressive cost-cutting is helping Golden Star Resources Ltd. (USA) (NYSEMKT:GSS) to improve its bottom line. However, fallout in the gold market is also putting pressure on revenue.
Power deficiency
On December 4, Golden Star Resources Ltd. (USA) (NYSEMKT:GSS) updated on the anticipated decline in production in this month. The company said that it will reduce its electricity usage this month to support the Ghanaian government’s load shedding plan. As such, the company will reduce its energy consumption by 25% during the month of December. The management expects the reduction in power consumption to impact gold output. However, the company doesn’t anticipate material impact on its production this month because there are ways to mitigate the unexpected hitch.
Several analysts have weighed in on the stock of Golden Star Resources Ltd. (USA) (NYSEMKT:GSS). On November 5, the analysts at Zacks upgraded the stock to “Neutral” from “Underweight” and set $0.30 target price on it.
Shares of Golden Star Resources Ltd. (USA) (NYSEMKT:GSS) have declined nearly 40% since the beginning of the year. However, no attempts to artificially inflate the price of the stock have been noticed in the company.
Technical
Golden Star Resources Ltd. (USA) (NYSEMKT:GSS) had a very decisive moment last October when it firmly broke below the 6 year support around $0.40 levels. The monthly close in October decisively asserted the bearish force. Now a huge supply can be expected to push the price down on any attempt to rally. In the second half of 2014, the 50 day Moving Average has also been acting as a stiff resistance and any close above it can be an early signal of bulls increasing their strength.
