Golden Star Reports Unaudited Financial Results for the Fourth Quarter and 2005 Year

2005 RESULTS

-- A net loss of $12.1 million, or $0.08 per share

-- Increase in revenues of 47% to $96.0 million

-- Record Gold sales of 200,968 ounces from the Bogoso/Prestea and Wassa mines in Ghana

-- Realized gold price of $446 per ounce

-- Average cash operating cost of $365 per ounce, before deferred stripping writedown

FOURTH QUARTER RESULTS

-- Net loss of $3.9 million, or $0.03 per share

-- Revenues of $28.1 million

-- Gold sales of 54,196 ounces from the Bogoso/Prestea and Wassa mines

2006 & 2007 FORECASTS

-- 2006 production of 300,000 ounces at average cash operating costs of $335 per ounce

-- 2007 production of 500,000 ounces at average cash operating costs of $335 per ounce

OVERVIEW

We incurred a net loss of $12.1 million or $0.08 per share onrevenues of $96.0 million during 2005 based on our unaudited resultsversus net income of $2.6 million or $0.02 per share on revenues of$65.0 million during 2004. While total revenues were $31.0 millionhigher than in 2004, due mostly to nine months' production in 2005from our new Wassa mine and from higher realized gold prices,operating costs were $48.5 million higher, due mostly to costs fromWassa and higher overall costs for fuel, materials and labor at Wassaand Bogoso/Prestea. Realized gold prices averaged $446 per ounceduring 2005, a 9% increase from the $410 per ounce realized in 2004.The major factors contributing to the $14.7 million swing in operatingresults versus 2004 include a $9.1 million operating loss at Wassaduring its early operating phase and a $10.0 million reduction inoperating income at Bogoso/Prestea resulting from lower goldproduction and higher operating costs.

A $2.8 million mark-to-market loss on gold and currencyderivatives, a $2.4 million increase in interest expense and a $1.4million impairment write off of exploration properties were more thanoffset by a $4.3 million reduction in corporate development costs, a$1.7 million increase in royalty income, and tax provision credits of$4.8 million relating to Bogoso/Prestea and EURO.

Looking forward, the forecast for 2006 total production is 300,000ounces at an average cash operating cost of $335 an ounce, benefitingfrom a full year's production at Wassa and the first production fromthe Bogoso sulfide expansion project. The 2007 forecast of 500,000ounces at an average cash operating cost of $335 an ounce is based ona full year's production from the Bogoso sulfide expansion project.

We expect to complete the audited consolidated statements for 2005and to file our Form 10-K with the SEC on or about February 23, 2006.

FINANCIAL SUMMARY
Year ended December 31, 2005
(unaudited)

2005 2004
----------------------------------------------------------------------
Gold sold (ounces) 200,968 147,875
Price realized ($ per ounce) 446 410
Cash operating cost ($ per ounce) (1) 383 250
Royalties ($ per ounce) 13 14
Total cash cost ($ per ounce) (1) 396 264
Revenues (in thousands $) 96,011 65,029
Net (loss)/income (in thousands $) (12,052) 2,642
Net (loss)/income per share ($) (0.08) 0.02
Net (loss)/income per fully diluted share ($) (0.08) 0.02
Average shares outstanding (in millions) 143.6 138.3
Average fully diluted shares (in millions) 146.8 143.7
Shares outstanding end of year (in millions) 206.0 142.2
----------------------------------------------------------------------

(1) See note on non-GAAP financial measures below.



Fourth Quarter 2005
(unaudited)

For the three months ended
December 31,
---------------------------------
2005 2004
----------------------------------------------------------------------
Gold sold (ounces) 54,196 31,112
Price realized ($ per ounce) 486 437
Cash operating cost ($ per ounce) (1) 430 295
Deferred stripping adjustment 64 -
Royalties ($ per ounce) 15 14
Total cash cost ($ per ounce) (1) 509 309
Revenues (in thousands $) 28,106 15,233
Net (loss) income (in thousands $) (3,855) 591
Net (loss) income per share ($) (0.03) 0.00
Average shares outstanding (in millions) 146.7 142.0
----------------------------------------------------------------------

(1) See note on non-GAAP financial measures below.



OPERATIONAL SUMMARY
Year ended December 31, 2005
(unaudited)

2005 2004
--------------------------------
Bogoso/ Wassa (2) Bogoso/
Prestea Prestea
----------------------------------------------------------------------
Ore mined (thousands of tonnes) 1,646 2,060 1,411
Waste mined (thousands of tonnes) 10,741 7,848 8,066
Tonnes milled (thousands) 1,558 2,692 1,650
Average grade milled (g/t) 4.14 0.91 4.09
Mill recovery (%) 60.7 88.7 67.3
Gold sold 131,898 69,070 147,875
Cash operating cost ($ per ounce) (1)
(3) 338 468 250
Total cash cost ($ per ounce) (1) (3) 351 482 264
----------------------------------------------------------------------



Fourth Quarter 2005
(unaudited)

For the three months ended
December 31,
-----------------------------
2005 2004
-----------------------------
Bogoso/ Wassa Bogoso/
Prestea Prestea
----------------------------------------------------------------------
Ore mined (thousands of tonnes) 296 679 439
Waste mined (thousands of tonnes) 2,477 3,432 2,624
Tonnes milled (thousands) 391 915 341
Average grade milled (g/t) 3.21 0.91 5.07
Mill recovery (%) 67.4 88.2 63.1
Cash operating cost ($ per ounce) (1) (3) 396 473 295
Total cash cost ($ per ounce) (1) (3) 410 488 309
----------------------------------------------------------------------

(1) See note on non-GAAP financial measures below.

(2) Wassa's operating statistics relate to the nine months of
commercial production which commenced on April 1.

(3) Before deferred stripping writedown in the fourth quarter 2005 at
Bogoso/Prestea .

BOGOSO/PRESTEA

Bogoso/Prestea generated $3.3 million of after-tax operatingincome during 2005 on sales of 131,898 ounces of gold, down from $13.3million of after-tax operating income on sales of 147,875 ounces in2004. The major factors contributing to 2005's lower results werelower gold output and increases in operating costs. Gold productionwas down 15,977 ounces in 2005 due to a combination of lower plantthroughput and lower gold recovery, both resulting from themetallurgical characteristics of the deeper, harder non-refractorysulfide Plant-North pit ores processed in 2005 versus the shallowerand softer oxide and non-refractory sulfide ores milled in 2004. Thefirst five months of 2004 had benefited from oxide ores which yieldedhigher mill throughput rates, better recovery and lower operatingcosts than the transition and non-refractory sulfide ores processedsince mid-2004 and throughout 2005. Milling of low-grade stockpiledores for more than six weeks in September, October and November duringthe stoppage at the Plant-North pit, as requested by the EPA, alsocontributed to the lower gold production.

Mining costs increased $7.1 million at Bogoso/Prestea versus 2004.Increases in fuel and labor accounted for approximately half of thisincrease. We also saw increased demand and higher costs for servicesand materials, including explosives, ore haulage contracts, drillingsupplies, grinding balls, maintenance and tires, reflecting a generaltrend in the mining industry, driven in part by higher oil prices.

Bogoso/Prestea generated a loss of $2.3 million in the fourthquarter of 2005 versus income of $2.7 million in the same period of2004. The major factor contributing to the 2005 fourth quarter losswas a $3.4 million writedown of deferred stripping cost which wasrequired due to a revised mining plan for the Plant-North pit. The newplan, completed in January 2006, which results in an additional 38,000ounces of gold mined, anticipates a higher stripping ratio during theremaining 10-month life of the pit than did the December 2004 miningplan. This change required that $3.4 million of deferred strippingcosts as of December 31, 2005 be written off as it would not berecovered during the pit's life.

In addition, Bogoso/Prestea's fourth quarter 2005 operating costswere adversely impacted by the suspension of mining at the Plant-Northpit at the request of the EPA at the end of the third quarter. Whilemining was suspended for approximately six weeks, the Bogoso/Presteaplant continued to process low-grade and stockpiled ores. Most of thefixed and semi-variable costs continued during the fourth quarter eventhough mining was shut down at Plant-North. These, along withincreases in costs for various materials and services, resulted in a$3.7 million increase in the fourth quarter cash operating costsversus the third quarter of 2005 before the impact of the fourthquarter's deferred stripping adjustment. The higher costs in thefourth quarter were partially offset by higher gold prices andrecognition of tax provision credits.

Bogoso/Prestea's forecast for 2006 is production of 180,000 ouncesat a cash operating cost of $330 an ounce, with the year benefitingfrom initial production from the sulfide expansion project in thefourth quarter. In 2007, assuming a full year's operation of thesulfide expansion project, production is forecast at 370,000 ounces,with estimated cash operating costs of $330 an ounce.

WASSA

Wassa commenced commercial production on April 1, 2005, andgenerated a $9.1 million after-tax operating loss on sales of 69,070ounces of gold during the nine months of 2005.

Overall, Wassa's operating results were disappointing. We hadanticipated higher mill through-put, higher grades, and loweroperating costs. Operating costs were adversely impacted early in theyear by high power costs from our diesel-fired, on-site power plant.This was remedied by late June when Wassa was connected to theregional power grid. Mining costs were also higher than expected earlyin the year as we utilized rented mining equipment. By the end of 2005we had completed the acquisition of our own fleet of new, nominal 100tonne mining trucks and new hydraulic loaders. The lower power costsand more efficient mining equipment should contribute to lower costsduring 2006.

Several design bottlenecks were identified at the processing plantduring the year and certain improvements were made, but we are stilldealing with frequent plant blockages mostly related to the high claycontent of the weathered, near-surface ore. However, by the end of2005 we had mined to sufficient depth in the pit to access ore thathas lower clay content and expect better mill throughput in 2006. Wealso expect that as we progress deeper into the unweathered ore thatthe ore grades will improve and result in higher gold recovery.

Wassa generated a $2.8 million loss in the fourth quarter of 2005on revenues of $11.7 million. As with the previous two quarters sincecommercial production began in April, fourth quarter results weredisappointing. Gold prices were higher than expected but gold shippedand sold was below our plan, while operating costs exceeded plan as inthe two earlier quarters. The improvements we experienced duringOctober were not continued later in the quarter. Improvements in millthroughput, feed grade and operating costs are anticipated in 2006 asmining moves to deeper, higher-grade levels in the pits.

In 2006, Wassa is expected to produce 120,000 ounces at a cashoperating cost of $340 an ounce, based on a full year's operations.The forecast for 2007 is to produce 130,000 ounces at a cash operatingcost of $340 an ounce.

BOGOSO SULFIDE EXPANSION PROJECT

Construction of the Bogoso sulfide expansion project commencedmid-year, following the receipt of environmental permits and Boardapprovals. The project is designed to expand the existing Bogosoprocessing plant facility by adding a sulfide processing plant with anominal capacity of 3.5 million tonnes per year of refractory sulfideore. The sulfide plant will utilize the BIOX(R) bio-oxidation process.Reserves at Bogoso/Prestea are nearly 75% refractory sulfide ore,which cannot be economically processed in the oxide plant.

We estimate the total capital cost of the project, includingexpansion of the mining fleet, to be approximately $125 million.Ordering of the long lead time items is substantially complete as isthe detailed design. The project is currently on time and withinbudget, and commercial production at the sulfide plant is expected tobe achieved in the fourth quarter.

The existing 1.5 million tonnes per year Bogoso oxide processingplant is unaffected by the sulfide expansion project and is providingoperating cash flow during the expansion.

MINING SUSPENSION AT BOGOSO/PRESTEA

In mid-September 2005 the Ghana Environmental Protection Agencyrequested suspension of mining activities at our Plant-North pit untilvarious mitigation measures then underway were completed. Therequested measures included completion of: a new Prestea policestation to replace the previous police station due to it's proximityto the pit; a fence around portions of the pit; a bypass road todivert traffic away from the southern end of the pit; andsensitization of the communities and vendors adjacent to the area.

All of the EPA's requests were completed by mid-October and,following the EPA's inspection, mining operations at Plant-Northrecommenced in early November. During the requested suspension,operations continued at the Bogoso processing plant using stockpiledore and low-grade oxide ore from the newly re-opened Ablifa pit.Operations at the Wassa mine and construction activities on the Bogososulfide expansion project continued without interruption during thisperiod.

EXPLORATION IN GHANA

Exploration expenditures for the year totaled $17.1 million,comparable to 2004's $18 million, with $13.2 million being spent atour mining properties and the balance outside our active mining areas.

Exploration around our mines focused on converting resources toreserves, and defining further resources, including:

-- Drilling of refractory sulfide mineralization at Chujah and Dumasi, which converted a large portion of the inferred and indicated resources to reserves. These reserves will be processed at the sulfide plant currently being built at Bogoso.

-- Drilling of underground targets continued at the Prestea Underground and at year-end we were in the process of commissioning another two drill rigs underground. Underground inferred resources were increased by 4.5 million tonnes to 6.1 million tonnes grading 8.14 grams per tonne, justifying plans for an initial feasibility study in 2006 for the recommencement of underground mining.

-- Drilling around the South Akyempim zone at Wassa delineated significant new zones of mineralization at higher grades, providing the basis for an increase in resources and a modest increase in reserves at Wassa.

-- Drilling at Pampe on the Akropong Trend west of Bogoso defined a small reserve which can be processed through the Bogoso oxide circuit.

-- Drilling at Mampon improved the reserve categories prior to permitting in 2006 for an open pit mine.

ST. JUDE ACQUISITION

On December 21, 2005, we completed the acquisition of St. JudeResources Ltd. St. Jude was a Canadian gold exploration company withproperties in Ghana, Burkina Faso and Niger. Our total cost to acquireSt. Jude was approximately $112.8 million through an exchange ofshares. The transaction resulted in St. Jude shareholders holdingapproximately 19% of Golden Star on a fully diluted basis at the closeof the transaction.

St. Jude's principal assets are the Hwini-Butre and Benso goldprojects at the southeastern end of the Ashanti gold belt. Thedeposits are 80 km and 60 km, respectively, south of our Wassa Minewhere this mineralization could be processed.

FINANCINGS

On April 15, 2005, we sold $50 million of senior unsecuredconvertible notes maturing April 15, 2009. The notes were issued atpar, bear interest at 6.85% and are convertible to common shares at afixed conversion price of $4.50 per share. On December 30, 2005 weclosed a bought-deal equity offering of 31.6 million common shares atCdn$2.80 per share and realized gross proceeds of Cdn$88.5 million.The net proceeds of the financings are being used to fund thedevelopment of the Bogoso sulfide expansion project during 2006, andfor general corporate purposes.

PUT AND CALL OPTIONS

We purchased gold put options in two tranches during early 2005,when gold prices were fluctuating between $410 and $420 an ounce, toprovide down-side gold price protection of between $400 and $410 anounce. This action was taken to ensure cash flow for a portion of ourgold sales during the Bogoso sulfide expansion project construction in2006 and early 2007 and the puts were spread evenly over this period.The first tranche of 140,000 ounces was purchased for $1.0 million,whereas the second tranche of 90,000 ounces was purchased by selling alike amount of calls at $525 an ounce. The calls are exercisable at afixed 5,000 ounces per month between October 2005 and March 2007. InDecember we bought back 15,000 ounces of calls due to be exercised inDecember 2005 and January and February 2006.

When gold is above $525 an ounce, our sales for these ounces willbe capped at that price for the respective months while the balance ofour production will be sold at market price. We therefore expect toreceive a maximum of $525 an ounce if the gold price is above thatprice for 17% of estimated 2006 production and for 3% of estimated2007 production, with the balance being sold at market price.

Derivative accounting rules require that at the end of eachperiod, the remaining unexpired puts and calls be revalued to theirmark-to-market fair value (the price we could sell the puts for or theprice at which we could buy back the call options). Losses and gainsare recorded in the income statement. For 2005, we recorded amark-to-market loss on the puts and calls of $3.2 million, which waspartially offset by a $1.0 million mark-to-market gain on our forwardcurrency contracts entered into for the Bogoso sulfide expansionproject. In addition, there was a $0.5 million expense on EURO's goldforward contracts.

EURO RESSOURCES

On January 8, 2005, EURO Ressources S.A., a 53% owned subsidiary(formerly named Guyanor Ressources S.A.), paid $6.0 million to GoldenStar as the first installment for the purchase of the Rosebel royaltyon the Rosebel Mine in Suriname. The royalty was purchased from GoldenStar for a price of $12.0 million, plus future participation, inDecember 2004. In September 2005 EURO paid a further $3.0 million toGolden Star and expects to pay the remaining $3.0 million during 2006.

CASH AND OPERATING CASH FLOW

Our cash, cash equivalents and short term investments balancestood at $89.7 million at December 31, 2005, up from $51.7 million atthe end of 2004. Operations used a net $1.0 million of cash during theyear, compared to $14 million of cash flow generated by operations in2004. The lower gold output at Bogoso/Prestea and higher than expectedcosts at both Bogoso/Prestea and Wassa contributed to the reduction incash flow from operations versus 2004.

SUMMARY FINANCIAL STATEMENTS

The following information is summarized and excerpted from theCompany's unaudited consolidated financial statements:
Condensed Consolidated Balance Sheets
as of December 31
(unaudited)

($ in thousands) 2005 2004
-------------------------------------------- ---------- ----------
Cash and short term investments $ 89,709 $ 51,727
Other current assets 38,154 27,119
Property, plant and equipment 84,527 28,653
Deferred exploration 167,532 7,452
Mine properties 118,088 74,197
Construction-in-progress 36,707 51,159
Other long term assets 21,805 11,853
---------- ----------
Total assets $ 556,522 $ 252,160
-------------------------------------------- ---------- ----------

Current liabilities $ 35,411 $ 17,480
Long term debt 64,298 1,707
Asset retirement obligations 11,393 8,660
Deferred income tax payable 45,072 -
Minority interest 6,629 6,353
Shareholders' equity 393,719 217,960
---------- ----------
Total liabilities and shareholders' equity $ 556,522 $ 252,160
-------------------------------------------- ---------- ----------



Condensed Consolidated Statements of Operations
for the year ended December 31
(unaudited)

($ in thousands, except per share amounts) 2005 2004
--------------------------------------------- ---------- ----------
Revenues $ 96,011 $ 65,029
Mining operations expense 79,599 39,095
Depreciation, depletion and amortization 15,983 8,096
Accretion of asset retirement obligation 752 645
General and administrative expenses 8,631 8,197
Corporate development expense 248 4,504
Abandonment and impairment of properties 1,413 470
Foreign exchange loss 574 280
Interest expense 2,416 -
Derivative mark-to-market adjustments 2,806 -
Gain on subsidiary's sale of common shares (977) -
Other expenses 1,190 1,365
---------- ----------
Net (loss)/income before minority interest (16,624) 2,377
Minority interest (277) (1,277)
Income tax benefit 4,849 1,542
---------- ----------
Net (loss)/income $ (12,052) $ 2,642
---------- ----------
Earning/(loss) per share - basic $ (0.08) $ 0.02
Earnings/(loss) per share - diluted $ (0.08) $ 0.02
--------------------------------------------- ---------- ----------



Condensed Consolidated Statements of Cash Flows
for the year ended December 31
(unaudited)

($ in thousands) 2005 2004
------------------------------------------------ -------- ---------
Cash (used in)/provided by operations $ (998) $ 13,910
Cash used in investing activities (65,474) (108,448)
Cash provided by financing activities 143,304 17,445
-------- ---------
Increase/(decrease) in cash and cash equivalents 76,832 (77,093)
Cash and cash equivalents at end of year $ 89,709 $ 12,877
------------------------------------------------ -------- ---------

COMPANY PROFILE

Golden Star holds a 90% equity interest in the Bogoso/Prestea andWassa open-pit gold mines in Ghana. In addition, Golden Star has an81% interest in the currently inactive Prestea Underground mine inGhana and various property interests elsewhere in the country, as wellas other gold exploration interests in West Africa and in the GuianaShield of South America. Golden Star's production is expected toincrease to 500,000 ounces in 2007, compared to production of about201,000 ounces in 2005. Golden Star has approximately 206 millioncommon shares outstanding at December 31, 2005.

Statements Regarding Forward-Looking Information: Some statementscontained in this news release are forward-looking statements withinthe meaning of the Private Securities Litigation Reform Act of 1995.Investors are cautioned that forward-looking statements are inherentlyuncertain and involve risks and uncertainties that could cause actualresults to differ materially. Such statements include commentsregarding the total capital cost of the Bogoso sulfide expansionproject and the estimated commencement of commercial production, our2006 and 2007 production estimates for the new Bogoso sulfide plantonce completed, use of proceeds for the December 2005 equity offering,the establishment and estimates of mineral reserves and non-reservemineral resources, the recovery of any mineral reserves, plannedoperations, anticipated funding, construction cost estimates,construction completion dates, equipment requirements, production,production commencement dates, grade, processing capacity, recoveries,potential mine life, results of feasibility and technical studies,development, costs, expenditures, mine re-opening and exploration.Factors that could cause actual results to differ materially includetiming of and unexpected events during construction, expansion andstart-up; variations in ore grade, tonnes mined, crushed or milled;variations in relative amounts of refractory, non-refractory andtransition ores; delay or failure to receive board or governmentapprovals; timing and availability of external financing on acceptableterms; technical, permitting, mining or processing issues, andfluctuations in gold price and costs. There can be no assurance thatfuture developments affecting the Company will be those anticipated bymanagement. Please refer to the discussion of these and other factorsin our Form 10-K for 2004. The forecasts contained in this pressrelease constitute management's current estimates, as of the date ofthis press release, with respect to the matters covered thereby. Weexpect that these estimates will change as new information is receivedand that actual results will vary from these estimates, possibly bymaterial amounts. While we may elect to update these estimates at anytime, we do not undertake to update any estimate at any particulartime or in response to any particular event. Investors and othersshould not assume that any forecasts in this press release representmanagement's estimate as of any date other than the date of this pressrelease.

Non-GAAP Financial Measures: In this news release, we use theterms "total production cost per ounce," "total cash cost per ounce"and "cash operating cost per ounce." Total cash cost per ounce isequal to total production costs less depreciation, depletion,amortization and asset retirement obligation accretion divided by thenumber of ounces of gold sold during the period. Cash operating costper ounce is equal to total cash costs less production royalties andproduction taxes, divided by the number of ounces of gold sold duringthe period. We use total cash cost per ounce and cash operating costper ounce as key operating indicators. We monitor these measuresmonthly, comparing each month's values to prior period's values todetect trends that may indicate increases or decreases in operatingefficiencies. These measures are also compared against budget to alertmanagement to trends that may cause actual results to deviate fromplanned operational results. We provide these measures to ourinvestors to allow them to also monitor operational efficiencies ofour mines. We calculate these measures for both individual operatingunits and on a consolidated basis. Total cash cost per ounce and cashoperating cost per ounce should be considered as Non-GAAP FinancialMeasures as defined in SEC Regulation S-K Item 10 and should not beconsidered in isolation or as a substitute for measures of performanceprepared in accordance with GAAP. There are material limitationsassociated with the use of such non-GAAP measures. Since thesemeasures do not incorporate revenues, changes in working capital andnon-operating cash costs, they are not necessarily indicative ofoperating profit or cash flow from operations as determined underGAAP. Changes in numerous factors including, but not limited to,mining rates, milling rates, gold grade, gold recovery, and the costsof labor, consumables and mine site general and administrativeactivities can cause these measures to increase or decrease. Webelieve that these measures are the same or similar to the measures ofother gold mining companies, but may not be comparable to similarlytitled measures in every instance.