GOLDEN STAR RESOURCES LTD - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

Commission file number 1-12284

GOLDEN STAR RESOURCES LTD.
(Exact Name of Registrant as Specified in Its Charter)

CANADA 98-0101955
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

10579 BRADFORD ROAD, SUITE 103
LITTLETON, COLORADO 80127-4247
(Address of Principal Executive Office) (Zip Code)

Registrant's telephone number, including area code (303) 830-9000

Securities registered or to be registered pursuant to Section 12 (b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Warrants Issued July 2002
Warrants Issued February 2003

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form l0-K. _____

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [X] No [ ]

The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the Registrant was approximately $109.8 million as of June 28,
2002, based on the closing price of the shares on the American Stock Exchange of
$1.80 per share.

Number of Common Shares outstanding as at March 14, 2003: 106,317,535.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of our Definitive Proxy Statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A in connection with the 2003
Annual Meeting of Shareholders are incorporated by reference to Part III of this
Report on Form 10-K.

REPORTING CURRENCY, FINANCIAL AND OTHER INFORMATION

All amounts in this Report are expressed in United States dollars, unless
otherwise indicated. Canadian currency is denoted as "Cdn$", French currency is
denoted as "FF" in 2001 and as "Euro" afterward, and Ghanaian currency is
denoted as "Cedi" or "Cedis".

Financial information is presented in accordance with accounting principles
generally accepted in Canada ("Cdn GAAP"). Differences between accounting
principles generally accepted in the United States ("US GAAP") and those applied
in Canada, as applicable to the Registrant, are explained in Note 26 to the
Consolidated Financial Statements.

Information in Part I of this report includes data expressed in various
measurement units and contains numerous technical terms used in the mining
industry. To assist readers in understanding this information, a conversion
table and glossary are provided at the end of Item 1 of Part I.

References to "we", "our", and "us" mean Golden Star Resources Ltd., its
predecessors and consolidated subsidiaries, or any one or more of them, as the
context requires.

STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

This Form 10-K contains forward-looking statements, within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act, with
respect to our financial condition, results of operations, business, prospects,
plans, objectives, goals, strategies, future events, capital expenditure, and
exploration and development efforts. Words such as "anticipates," "expects,"
"intends," "plans," "forecasts," "budgets," "believes," "seeks," "estimates,"
"may," "will," and similar expressions identify forward-looking statements.
Although we believe that our plans, intentions and expectations reflected in
these forward-looking statements are reasonable, we cannot be certain that these
plans, intentions or expectations will be achieved. Actual results, performance
or achievements could differ materially from those contemplated, expressed or
implied by the forward-looking statements contained or incorporated by reference
in this Form 10-K.

The following, in addition to the factors described in "Risk Factors" discussed
in this Form 10-K, are among the factors that could cause actual results to
differ materially from the forward-looking statements:

o unexpected changes in business, legal, regulatory and economic
conditions;

o significant increases or decreases in gold prices;

o timing and amount of production;

o unanticipated grade changes;

o unanticipated recovery or production problems;

o mining and milling costs;

o mining, metallurgy, processing, access, availability of materials and
equipment, transportation of supplies and availability of utilities,
including water and power;

o uncertainties associated with developing a new mining operation,
including potential cost over-runs and unreliability of estimates in
early stages of mine development

o determination of reserves;

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o changes in project parameters;

o costs and timing of development of new reserves;

o results of current and future exploration activities;

o results of pending and future feasibility studies;

o joint venture relationships;

o political or economic instability, either globally or in the countries
in which we operate;

o local and community impacts and issues;

o availability, terms, conditions and timing of receipt of government
approvals;

o accidents and labor disputes;

o environmental costs and risks;

o competitive factors, including competition for property acquisitions;
and

o financial market conditions and the availability of financing on
reasonable terms.

These factors are not intended to represent a complete list of the general or
specific factors that may affect us. We may note additional factors elsewhere in
this Form 10-K and in any documents incorporated by reference into this Form
10-K. We undertake no obligation to update forward-looking statements.

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

OVERVIEW

We are an international gold mining and exploration company producing gold in
Ghana in West Africa. Through our various subsidiaries and joint ventures we own
a controlling interest in four gold properties in Ghana, the Bogoso property
("Bogoso"), the Prestea property ("Prestea"), the Wassa property ("Wassa") and
the Prestea underground property ("Prestea Underground"). Bogoso and Prestea are
adjoining properties and both are owned by our 90% owned subsidiary Bogoso Gold
Limited ("BGL"). These two properties now function as a single operation
referred to as ("Bogoso/Prestea") and are expected to produce approximately
140,000 ounces of gold in 2003.

We own a 90% equity interest in Wexford Goldfields Limited ("Wexford"), which
owns the Wassa gold property, located some 35 kms east of Bogoso/Prestea. A
feasibility study is currently underway which seeks to establish the economic
viability of this property.

The Prestea Underground, acquired in 2002, is located on the Prestea property
and consists of a currently inactive underground gold mine and associated
support facilities, which ceased operating in early 2002 following a strike by
workers. As of December 31, 2002 BGL owned a 54% operating interest in this
mine, and studies are now underway to determine if the underground mine can be
reactivated on a profitable basis.

We also hold other active exploration properties in Suriname and in Ghana and
through our 73%-owned subsidiary, Guyanor Ressources S.A. ("Guyanor"), we have
interests in several gold exploration properties in French Guiana.

BUSINESS STRATEGY AND DEVELOPMENT

BOGOSO/PRESTEA: Faced with a continuing low gold price environment and the
difficulty in raising funds from the equity markets for pure exploration,
management decided in 1999 to change its business strategy from a pure
exploration company to a production, development, and advanced stage exploration
company. The first step in the implementation of our new strategy was the
September 1999 acquisition of a 70% beneficial interest in Bogoso in Ghana. The
Bogoso acquisition provided us with an operating gold mine and a source of
internally generated cash flow. In 2001, we acquired an additional 20%
beneficial interest in Bogoso, raising our ownership to 90%. The Government of
Ghana retains a 10% interest.

Immediately after acquiring Bogoso, our focus shifted to the acquisition of
additional oxide gold reserves in the immediate vicinity of Bogoso, which could
be processed through the Bogoso mill once the Bogoso oxide and transition ore
reserves were exhausted in late 2001. We were successful in this endeavor
acquiring, in mid-2001, a surface mining lease for Prestea located adjacent to
Bogoso. We commenced mining gold from Prestea in the third quarter of 2001.

We were successful, through exploration efforts in 2000 and 2001, in delineating
several zones of sulfide gold mineralization at Bogoso. In late 2001 we
completed a feasibility study that established a sulfide gold Mineral Reserve of
approximately 0.8 million ounces. Approximately $20 million of capital
expenditures would be required at the Bogoso mill to allow processing of sulfide
ore. In our current mining plan, mining of sulfide Mineral Reserves would not
take place until oxide and other non-refractory Mineral Reserves from
Bogoso/Prestea are exhausted, which is now expected to occur no earlier than
2007 at current production rates.

While most of the past production at Prestea came from underground operations,
there are several zones of oxide and other non-refractory reserves which can be
accessed via surface operations and which can be efficiently processed in the
existing Bogoso mill. Currently our Mineral Reserves at Prestea are sufficient
to provide non-refractory feed for the Bogoso mill for approximately five years.
In addition, we have identified 0.3 million ounces of additional sulfide Mineral
Reserves at Prestea and this material has been incorporated into
the Bogoso sulfide feasibility study. Other zones of near-surface, oxide gold
mineralization are known to exist within truckable distance of the Bogoso mill
and efforts to evaluate and acquire more of these properties continues.

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WASSA: On September 13, 2002, we completed the acquisition of a 90% beneficial
interest in Wassa in Ghana, with the remaining 10% interest being retained by
the Government of Ghana. Wassa was developed by its former owner in the late
1990s at a capital cost of approximately $43 million as a conventional open pit,
heap leach gold operation. Operations under the former owner ceased in mid-2001.
While operating as a heap leach property, Wassa produced approximately 90,000
ounces of gold per annum for a period of just over two years. In mid-2001, the
secured lenders to the project ("the Wassa Sellers") enforced their security
rights in the project and, following a bidding process, agreed to sell the Wassa
asset to us.

We paid the Wassa Sellers an initial cash consideration of approximately $1.6
million at closing, assumed approximately $1.8 million of seller-financed
five-year debt and agreed to pay a royalty on future production at a rate of
$8.00 per ounce up to a maximum of $5.5 million. In addition, a second gold
production royalty is payable to the sellers on future gold production from
Wassa. This royalty is to be paid quarterly and will be determined by
multiplying the quarterly production from Wassa by a base royalty rate of $7.00
per ounce. The royalty is increased above the base rate by $1.00 per ounce for
each $10.00 increase in the average market price of gold above $280 per ounce up
to a maximum of $15.00 per ounce at gold prices of $350 and above.

We have initiated a drilling program at Wassa designed to evaluate its gold
potential. Engineering studies are also underway to evaluate the feasibility of
redeveloping Wassa as a conventional Carbon-in-Leach ("CIL") operation. The
feasibility study is scheduled for completion in mid-2003.

PRESTEA UNDERGROUND: In March 2002, BGL formed a joint venture with Prestea Gold
Resources Limited ("PGR"), former owner of the Prestea Underground, and the
Government of Ghana to evaluate and, if warranted, to restart and operate the
Prestea Underground mine. BGL is the managing partner in the joint venture and
has the sole right to finance the exploration and development of, and operate
the mine. BGL paid $2.4 million to PGR for a 45% interest in the joint venture,
and PGR contributed its ownership position in the Prestea Underground mine to
earn its 45% interest. The Government of Ghana continues to hold the remaining
10% interest. Subsequent cash contributions to the joint venture by BGL have
raised its interest in the joint venture to 54%. Geologic and engineering
studies are now underway, and care and maintenance efforts have been undertaken
to keep the mine and its shafts in a workable condition.

GUIANA SHIELD TRANSACTION: In May 2002, we sold our interests in the Gross
Rosebel, Headleys and Thunder Mountain properties in Suriname, and our interest
in Omai Gold Mines Limited ("OGML") in Guyana, to Cambior Inc. ("Cambior"), our
former partner in the exploration, development and/or operation of these
properties.

We received $5.0 million cash in 2002 and $1.0 million in 2003 for the sale of
the Gross Rosebel property and expect to receive two additional deferred
payments of $1.0 million each in 2004 and 2005 based on Cambior's development
and operation of Gross Rosebel. In addition, Cambior will pay us a royalty equal
to 10% of the excess of the average quarterly market price above a gold price
hurdle on the first 7 million ounces of gold production from Gross Rosebel. For
soft and transitional rock the gold price hurdle is $300 per ounce and for hard
rock the gold price hurdle is $350 per ounce.

For the Headleys and Thunder Mountain properties, we will receive a deferred
consideration of $0.5 million per property when and if Cambior commences
commercial mining from each of these properties.

As payment for our 30% equity interest and preferred shares in OGML, we received
a release and waiver from OGML, Cambior and the Guyana Government in respect of
all liabilities, of any nature, related to the Omai gold mine. In the
transaction we also acquired Cambior's 50% interests in the Yaou and Dorlin
exploration properties in French Guiana.

GROWTH STRATEGY: Since 1999, we have focused primarily on the acquisition of
producing and development stage gold properties in Ghana and on the exploration,
development and operation of these properties. As a result, we now have Proven
and Probable Mineral Reserves, at Bogoso/Prestea, from which we expect to
produce an average of approximately 135,000 ounces per annum for an estimated
mine life in excess of ten years, assuming sulfide ores are processed as
contemplated in the feasibility study. If the feasibility study at our Wassa
property is favorable, we plan to commence development of Wassa in the third
quarter of 2003. If we are able to fast-track development and start-up, we
believe that Wassa could commence production in early 2004 at an estimated
capital cost of $14

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million. However, there can be no assurance that the feasibility study will be
favorable, that development and start-up can be completed in early 2004, or that
our production goals will be achieved.

Our objective is to grow our business to become a mid-tier gold producer (which
we understand to be a producer with annual production of approximately 500,000
ounces) over the next few years. Due to higher gold prices and our improved
financial condition, we believe we are well placed to pursue the acquisition of
producing, development and advanced stage exploration gold properties and
companies, primarily in Ghana and elsewhere in Africa. We are actively
investigating potential acquisition and merger candidates, some of which have
indicated to potential acquirers or their advisors that they or certain of their
properties may be available for acquisition. However, we presently have no
agreement or understanding with respect to any potential transaction.

We also intend to significantly increase exploration activities and expenditures
on our current exploration properties, primarily in Ghana, as well as on
properties we may acquire.

RESERVES

The following table summarizes our estimated Proven and Probable Mineral
Reserves of gold as of December 31, 2002, which have been prepared by qualified
members of our staff.

The Proven and Probable Mineral Reserves at Bogoso/Prestea at December 31, 2002
of 23.1 million tonnes at an average grade of 2.98 g/t, representing
approximately 2.2 million ounces, were determined using a gold price of $300 per
ounce, and are compared to Mineral Reserves at December 31, 2001 of 19.1 million
tonnes at an average grade of 2.97 g/t, representing approximately 1.8 million
ounces of gold, which were calculated at a gold price of $275 per ounce.
Included in the Proven Mineral Reserves category are 1.26 million tonnes of ores
at an average grade of 1.47 g/t in stockpiles at Bogoso.

Our Proven and Probable Mineral Reserves are estimated in conformance with
definitions set out in Canada's National Instrument 43-101 as more fully
described "Item 2: Description of Properties". Also see our "Glossary of Terms".
The Proven and Probable Mineral Reserves are those ore tonnages contained within
either engineered pits or economically optimized pit envelopes, designed for the
oxide, transition and refractory sulfide resources, and using current and
predicted mine operating costs and performance parameters.

We consider that the definitions of Proven and Probable Mineral Reserves are
consistent with the definition of proven and probable reserves prescribed for
use in the United States by the U.S. Securities and Exchange Commission and set
forth in SEC Industry Guide 7.

NON-RESERVES

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED AND
INDICATED MINERAL RESOURCES

This section uses the terms "measured mineral resources" and 'indicated
mineral resources". We advise U.S. investors that while those terms are
recognized and required by Canadian regulations, the U.S. Securities and
Exchange Commission does not recognize them. U.S. INVESTORS ARE CAUTIONED
NOT TO ASSUME THAT ANY PART OR ALL OF THE MINERAL DEPOSITS IN THESE
CATEGORIES WILL EVER BE CONVERTED INTO RESERVES.

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The following table summarizes our Measured and Indicated Mineral Resources as
at December 31, 2002 which have been estimated by qualified members of our
staff, unless otherwise indicated, in conformance with required standards as
better set out in "Item 2. Description of Properties".

Our Measured and Indicated Mineral Resources, which are reported exclusive of
that part of the Mineral Resource converted to Proven and Probable Mineral
Reserves, have been estimated in conformance with definitions set out in
Canada's National Instrument 43-101 as more fully described in "Item 2:
Description of Properties". Also see our "Glossary of Terms".

The Measured and Indicated Mineral Resource for our properties, with the
exception of Yaou and Dorlin, have been estimated at an economic cut off grade
based on a $325 per ounce gold price and economic constraints that are believed
to be realistic. At Yaou and Dorlin a gold price of $300 per ounce was used.

Inferred Mineral Resources

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF INFERRED MINERAL
RESOURCES

This section uses the term "inferred mineral resources". We advise U.S.
investors that while this term is recognized and required by Canadian
regulations, the U.S. Securities and Exchange Commission does not recognize
it. "Inferred mineral resources" have a great amount of uncertainty as to
their existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of the inferred
mineral resources will ever be upgraded to a higher category. Under
Canadian rules estimates of inferred mineral 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 MINERAL RESOURCE
EXISTS, OR IS ECONOMICALLY OR LEGALLY MINEABLE.

EMPLOYEE RELATIONS

As of March 14, 2003, we had a total of 1,084 full-time employees and contact
employees, an 82% increase from the 594 people employed at the end of 2001. The
total includes seven employees at our headquarters in Littleton, Colorado.

CUSTOMERS

As is customary in the gold mining business, all of our gold production is sold
to a single customer in accordance with an annually negotiated contract. In
accordance with the refining/sales agreement, cash payment for gold sold is
received in our account two to three working days after each shipment and gold
is shipped weekly. The gold

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refining business is competitive with numerous refineries willing to buy on
short notice. As such we believe that the loss of our customer would not
materially delay or disrupt revenues.

COMPETITION

We compete with major mining companies and other natural resource companies in
the acquisition, exploration, financing and development of new prospects. Many
of these companies are larger and better capitalized than we are. There is
significant competition for the limited number of gold acquisition and
exploration opportunities. Our competitive position depends upon our ability to
successfully and economically explore, acquire and develop new and existing
mineral prospects. Factors that allow producers to remain competitive in the
market over the long term include the quality and size of the ore body, cost of
operation, and the acquisition and retention of qualified employees. We also
compete with other mining companies for skilled mining engineers, mine and mill
operators and mechanics, geologists, geophysicists and other technical
personnel. This may result in higher turnover and greater labor costs.

INCORPORATION

Golden Star Resources Ltd. was established under the Canada Business
Corporations Act on May 15, 1992 as a result of the amalgamation of South
American Goldfields Inc., a corporation incorporated under the federal laws of
Canada, and Golden Star Resources Ltd., a corporation originally incorporated
under the provisions of the Alberta Business Corporations Act on March 7, 1984
as Southern Star Resources Ltd. Our fiscal year ends on December 31.

Our head office is located at 10579 Bradford Road, Suite 103, Littleton,
Colorado 80127-4247, and the registered and records office is located at 19th
Floor, 885 West Georgia Street, Vancouver, British Columbia, Canada V6C 3H4.

AVAILABLE INFORMATION

We make available free of charge on or through our Internet website our annual
report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K
and amendments to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable
after we electronically file such material with, or furnish it to, the SEC. Our
Internet address is http://www.gsr.com. Our Internet website and the information
contained therein or connected thereto are not intended to be incorporated into
this Annual Report on Form 10-K.

RISK FACTORS

You should consider carefully the following discussions of risks, in addition to
the other information contained in, or incorporated by reference into, this
report.

FINANCIAL RISKS

OUR BUSINESS IS SUBSTANTIALLY DEPENDENT ON GOLD PRICES.

The price of our common shares, our financial results and our exploration,
development and mining activities have previously been, and may in the future
be, significantly adversely affected by declines in the price of gold. The price
of gold is volatile and is affected by numerous factors beyond our control such
as the sale or purchase of gold by various central banks and financial
institutions, inflation or deflation, fluctuation in the value of the United
States dollar and foreign currencies, global and regional demand, and the
political and economic conditions of major gold-producing countries throughout
the world. If gold prices were to decline significantly or for an extended
period of time, we might be unable to continue our operations, develop our
properties or fulfill our obligations under our agreements with our partners or
under our permits and licenses. As a result, we could lose our interest in, or
may be forced to sell, some of our properties.

Furthermore, reserve calculations and life-of-mine plans using significantly
lower gold prices could result in material write-downs of our investment in
mining properties and increased amortization, reclamation and closure charges.

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WE HAVE RECORDED SUBSTANTIAL LOSSES IN RECENT YEARS.

While we were profitable in 2002, we reported net losses of $20.6 million in
2001, $14.9 million in 2000, $24.4 million in 1999 and $22.2 million in 1998.
Numerous factors, including declining gold prices, lower than expected ore
grades or higher than expected operating costs, and impairment write-offs of
mine property and/or exploration property costs could cause us to become
unprofitable in the future. Any future operating losses may make financing our
operations and our business strategy, or raising additional capital, difficult
or impossible and may materially and adversely affect our operating results and
financial condition.

OUR OBLIGATIONS MAY STRAIN OUR FINANCIAL POSITION AND IMPEDE OUR BUSINESS
STRATEGY.

We have total debts and liabilities as of December 31, 2002 of $19.8 million,
including $3.3 million payable to financial institutions, $2.0 million due to
the former owners of BGL, $7.3 million of current trade payables and accrued
current liabilities and $7.2 million in environmental rehabilitation
liabilities. We expect that our liabilities will increase as a result of our
corporate development activities. This indebtedness may have important
consequences, including the following:

o increasing our vulnerability to general adverse economic and industry
conditions;

o limiting our ability to obtain additional financing to fund future
working capital, capital expenditures, operating and exploration costs
and other general corporate requirements;

o requiring us to dedicate a significant portion of our cash flow from
operations to make debt service payments, which would reduce our
ability to fund working capital, capital expenditures, operating and
exploration costs and other general corporate requirements;

o limiting our flexibility in planning for, or reacting to, changes in
our business and the industry; and

o placing us at a disadvantage when compared to our competitors that
have less debt relative to their market capitalization.

OUR ESTIMATES OF RESERVES AND MINERALIZED MATERIAL MAY BE INACCURATE.

There are numerous uncertainties inherent in estimating proven and probable
reserves and mineralized material, including many factors beyond our control.
The estimation of mineralized material and reserves is a subjective process, and
the accuracy of any such estimates are a function of the quantity and quality of
available data and of the assumptions made and judgments used in engineering and
geological interpretation, which may prove to be unreliable. There can be no
assurance that these estimates will be accurate, that reserves and other
mineralization figures will be accurate, or that reserves or mineralization
could be mined or processed profitably. In 1998, we had to revise estimates of
mineralized material disclosed with respect to two of our projects.

Fluctuation in gold prices, results of drilling, metallurgical testing and
production and the evaluation of mine plans subsequent to the date of any
estimate may require revision of such estimate. The volume and grade of reserves
mined and processed and recovery rates may not be the same as currently
anticipated. Any material reductions in estimates of our reserves and other
mineralization, or of our ability to extract these reserves or mineralization,
could have a material adverse effect on our results of operations and financial
condition.

WE CURRENTLY HAVE ONLY ONE SOURCE OF OPERATIONAL CASH FLOWS.

While we have recently received significant infusions of cash from sales of
equity, our only internal source of funds is operational cash flows from Bogoso/
Prestea. The anticipated continuing exploration and development of our
properties will require significant expenditures over the next several years. We
expect that these expenditures will exceed free cash flows generated by Bogoso/
Prestea during that period, and therefore we may be required to use our excess
cash and may in the future require additional outside capital. Lower gold prices
during the five years prior to 2002 adversely affected our ability to obtain
financing, and recurring lower gold prices could have similar effects in the
future. We cannot assure you that in the future we will be able to obtain
adequate financing on acceptable terms. If we are unable to obtain additional
financing, we may need to delay or indefinitely postpone further exploration and
development of our properties, and as a result, we could lose our interest in,
or may be forced to sell, some of our properties.

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IMPLEMENTATION OF A HEDGING PROGRAM MIGHT BE UNSUCCESSFUL AND INCUR LOSSES.

We continue to review whether or not, in light of the potential for gold prices
to fall, if it would be appropriate to establish a hedging program. To date, we
have not decided to implement a hedging program, although we have purchased and
expect to continue to purchase puts from time to time, which give us the right
to sell gold in the future at a fixed price. The implementation of a hedging
program may not, however, protect adequately against declines in the price of
gold.

In addition, although a hedging program may protect us from a decline in the
price of gold, it might also prevent us from benefiting fully from price
increases. For example, as part of a hedging program, we could be obligated to
sell gold at a price lower than the then-current market price. Finally, if
unsuccessful, the costs of any hedging program may further deplete our financial
resources.

WE ARE SUBJECT TO FLUCTUATIONS IN CURRENCY EXCHANGE RATES, WHICH COULD
MATERIALLY ADVERSELY AFFECT OUR FINANCIAL POSITION.

Our revenues are in United States dollars, and we maintain most of our working
capital in United States dollars or United States dollar-denominated securities.
We convert funds to foreign currencies as payment obligations become due. A
significant portion of the operating costs at Bogoso/ Prestea is based on the
Ghanaian currency, the Cedi. BGL is required to convert only 20% of the foreign
exchange proceeds that BGL receives from selling gold into Cedis, but the
Government of Ghana could require BGL to convert a higher percentage of such
sales proceeds into Cedis in the future. In addition, we currently have future
obligations that are payable in Euros, and receivables collectible in Euros.
Accordingly, we are subject to fluctuations in the rates of currency exchange
between the United States dollar and these currencies, and such fluctuations may
materially affect our financial position and results of operations. We currently
do not hedge against currency exchange risks.

THERE MAY BE NO OPPORTUNITY TO EVALUATE THE MERITS OR RISKS OF ANY FUTURE
ACQUISITION UNDERTAKEN BY US.

As a key element of our growth strategy, we have stepped up the active pursuit
of acquisitions of producing, development and advanced stage exploration
properties and companies. We are actively investigating potential acquisition
and merger candidates. Acquisition and merger transactions in our business are
often initiated and completed over a particularly short period of time. Risks
related to acquiring and operating acquired properties and companies, could have
a material adverse effect on our results of operations and financial condition.
In addition, to acquire properties and companies, we would use available cash,
incur debt, issue our common shares or other securities, or a combination of any
one or more of these. This could limit our flexibility to raise capital, to
operate, explore and develop our properties and to make additional acquisitions,
and could further dilute and decrease the trading price of our common shares.
There may be no opportunity for our shareholders to evaluate the merits or risks
of any future acquisition undertaken by us except as required by applicable laws
and regulations.

RISKS INHERENT IN ACQUISITIONS THAT WE MAY UNDERTAKE COULD ADVERSELY AFFECT OUR
GROWTH AND FINANCIAL CONDITION.

We are actively pursuing the acquisition of producing, development and advanced
stage exploration properties and companies. Acquisition transactions involve
inherent risks, including:

o accurately assessing the value, strengths, weaknesses, contingent and
other liabilities and potential profitability of acquisition
candidates;

o ability to achieve identified and anticipated operating and financial
synergies;

o unanticipated costs;

o diversion of management attention from existing business;

o potential loss of our key employees or the key employees of any
business we acquire; and

o unanticipated changes in business, industry or general economic
conditions that affect the assumptions underlying the acquisition.

Any one or more of these factors or other risks could cause us not to realize
the benefits anticipated to result from the acquisition of properties or
companies, and could have a material adverse effect on our ability to grow and
on our financial condition.

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WE ARE SUBJECT TO LITIGATION RISKS.

All industries, including the mining industry, are subject to legal claims, with
and without merit. We are involved in various routine legal proceedings
incidental to our business. We believe it is unlikely that the final outcome of
these legal proceedings will have a material adverse effect on our financial
position or results of operation. However, defense and settlement costs can be
substantial, even with respect to claims that have no merit. Due to the inherent
uncertainty of the litigation process, there can be no assurance that the
resolution of any particular legal proceeding will not have a material effect on
our financial position or results of operations.

OPERATIONAL RISKS

THE TECHNOLOGY, CAPITAL COSTS AND COST OF PRODUCTION OF SULFIDE RESERVES AND
MINERALIZED MATERIAL AT BOGOSO/ PRESTEA ARE STILL SUBJECT TO A NUMBER OF
UNCERTAINTIES, INCLUDING FUNDING UNCERTAINTIES.

Based upon the completion of our Bogoso sulfide mining feasibility study in 2001
and its subsequent review by a qualified, independent mineral reserves
consultant, the sulfide material on Bogoso and on various portions of Prestea
has been included in our proven and probable reserves and constitutes
approximately 40% of our reserves. While the sulfide feasibility study indicates
that sulfide reserves can be profitably mined and processed at gold prices at or
above $275 per ounce, the cost to retrofit the Bogoso mill to process sulfide
ore would require a minimum of $20 million of new capital. We cannot assure you
that we will have access to capital, whether from internal or external sources,
in the required amounts or on acceptable terms. While the processing technology
envisioned in the feasibility study has been successfully utilized at other
mines, we cannot assure you, in spite of our testing, engineering and analysis,
that the technology will perform successfully at commercial production levels on
the Bogoso/Prestea ores. However, we do not presently anticipate start-up of
sulfide processing operations prior to 2007, after currently known oxide and
non-refractory ores are exhausted.

DEVELOPMENT OF WASSA IN GHANA IS SUBJECT TO A NUMBER OF UNCERTAINTIES.

We are in the process of completing a feasibility study regarding the possible
development of and commencement of production at Wassa in Ghana using
conventional carbon-in-leach processing techniques. We cannot assure you that
the results of the Wassa feasibility study will be favorable or that development
or production will commence when we currently anticipate. If the feasibility
study is favorable, we cannot assure you that development will be completed at
the cost and on the schedule predicted in the feasibility study, or that
production rates or costs anticipated in the feasibility study will be achieved.
Any development of Wassa is subject to all of the risks described in this Form
10-K, including "Risk Factors -- Operational Risks -- The development and
operation of our mining projects involve numerous uncertainties".

DECLINING GOLD PRICES COULD REDUCE OUR ESTIMATES OF RESERVES AND MINERALIZED
MATERIAL AND COULD RESULT IN DELAYS IN DEVELOPMENT UNTIL WE CAN MAKE NEW
ESTIMATES AND DETERMINE NEW POTENTIAL ECONOMIC DEVELOPMENT OPTIONS UNDER THE
LOWER GOLD PRICE ASSUMPTIONS.

In addition to adversely affecting our reserve estimates and our financial
condition, declining gold prices can impact operations by requiring a
reassessment of the feasibility of a particular project. Such a reassessment may
be the result of a management decision or may be required under financing
arrangements related to the project. Even if the project is ultimately
determined to be economically viable, the need to conduct such a reassessment
may cause substantial delays or may interrupt operations until the reassessment
can be completed.

WE ARE SUBJECT TO A NUMBER OF OPERATIONAL HAZARDS THAT CAN DELAY PRODUCTION OR
RESULT IN LIABILITY TO US.

Our activities are subject to a number of risks and hazards including:

o environmental hazards;

o discharge of pollutants or hazardous chemicals;

o industrial accidents;

o labor disputes;

o supply problems and delays;

o unusual or unexpected geological or operating conditions;

11

o slope failures;

o cave-ins of underground workings;

o failure of pit walls or dams;

o fire;

o changes in the regulatory environment; and

o natural phenomena such as inclement weather conditions, floods and
earthquakes.

These or other occurrences could result in damage to, or destruction of, mineral
properties or production facilities, personal injury or death, environmental
damage, delays in mining, delayed production, monetary losses and possible legal
liability. We may incur liability as a result of pollution and other casualties.
Satisfying such liabilities may be very costly and could have a material adverse
effect on our financial position and results of operations.

OUR MINING OPERATIONS ARE SUBJECT TO NUMEROUS ENVIRONMENTAL LAWS AND REGULATIONS
THAT CAN ADVERSELY AFFECT OPERATING AND DEVELOPMENT COSTS.

We cannot assure you that compliance with existing regulations governing the
discharge of materials into the environment, or otherwise relating to
environmental protection, in the jurisdictions where we have projects will not
have a material adverse effect on our exploration activities, results of
operations or competitive position. New or expanded regulations, if adopted,
could affect the exploration or development of our projects or otherwise have a
material adverse effect on our operations.

As a result of the foregoing risks, project expenditures, production quantities
and rates and cash operating costs, among other things, may be materially and
adversely affected and may differ materially from anticipated expenditures,
production quantities and rates, and costs. In addition, estimated production
dates may be delayed materially. Any such events could materially and adversely
affect our business, financial condition, results of operations and cash flows.

THE DEVELOPMENT AND OPERATION OF OUR MINING PROJECTS INVOLVE NUMEROUS
UNCERTAINTIES.

Mine development projects, including our planned projects, typically require a
number of years and significant expenditures during the development phase before
production is possible.

Development projects are subject to the completion of successful feasibility
studies, issuance of necessary governmental permits and receipt of adequate
financing. The economic feasibility of development projects is based on many
factors such as:

o estimation of reserves;

o anticipated metallurgical recoveries;

o future gold prices; and

o anticipated capital and operating costs of such projects.

Our mine development projects may have limited relevant operating history upon
which to base estimates of future operating costs and capital requirements.
Estimates of proven and probable reserves and operating costs determined in
feasibility studies are based on geologic and engineering analyses.

Any of the following events, among others, could affect the profitability or
economic feasibility of a project:

o unanticipated changes in grade and tonnage of ore to be mined and
processed;

o unanticipated adverse geotechnical conditions;

o incorrect data on which engineering assumptions are made;

o costs of constructing and operating a mine in a specific environment;

o availability and cost of processing and refining facilities;

o availability of economic sources of power;

o adequacy of water supply;

o adequate access to the site;

o unanticipated transportation costs;

12

o government regulations (including regulations relating to prices,
royalties, duties, taxes, restrictions on production, quotas on
exportation of minerals, as well as the costs of protection of the
environment and agricultural lands);

o fluctuations in gold prices; and

o accidents, labor actions and force majeure events.

Adverse effects on the operations or further development of a project may also
adversely affect our business, financial condition, results of operations and
cash flow.

WE NEED TO CONTINUALLY OBTAIN ADDITIONAL RESERVES FOR GOLD PRODUCTION.

Because mines have limited lives based on proven and probable reserves, we must
continually replace and expand our reserves as our mines produce gold. We
currently estimate that Bogoso/Prestea has ten plus years of mine life remaining
without the development of additional reserves, but our estimates may not be
correct. Our ability to maintain or increase our annual production of gold will
be dependent in significant part on our ability to bring new mines into
production and to expand existing mines.

GOLD EXPLORATION IS HIGHLY SPECULATIVE, INVOLVES SUBSTANTIAL EXPENDITURES, AND
IS FREQUENTLY NON-PRODUCTIVE.

Gold exploration involves a high degree of risk and exploration projects are
frequently unsuccessful. Few prospects that are explored end up being ultimately
developed into producing mines. To the extent that we continue to be involved in
gold exploration, the long-term success of our operations will be related to the
cost and success of our exploration programs. We cannot assure you that our gold
exploration efforts will be successful. The risks associated with gold
exploration include:

o the identification of potential gold mineralization based on
superficial analysis;

o the quality of our management and our geological and technical
expertise; and

o the capital available for exploration and development.

Substantial expenditures are required to determine if a project has economically
mineable mineralization. It may take several years to establish proven and
probable reserves and to develop and construct mining and processing facilities.
As a result of these uncertainties, we cannot assure you that current and future
exploration programs will result in the discovery of reserves, the expansion of
our existing reserves and the development of mines.

WE FACE COMPETITION FROM OTHER MINING COMPANIES IN CONNECTION WITH THE
ACQUISITION OF PROPERTIES.

We face strong competition from other mining companies in connection with the
acquisition of properties producing, or capable of producing, precious metals.
Many of these companies have greater financial resources, operational experience
and technical capabilities. As a result of this competition, we may be unable to
maintain or acquire attractive mining properties on terms we consider acceptable
or at all. Consequently, our revenues, operations and financial condition could
be materially adversely affected.

TITLE TO OUR MINERAL PROPERTIES MAY BE CHALLENGED.

Our policy is to seek to confirm the validity of our rights to title to, or
contract rights with respect to, each mineral property in which we have a
material interest. However, we cannot guarantee that title to our properties
will not be challenged. Title insurance generally is not available, and our
ability to ensure that we have obtained secure claim to individual mineral
properties or mining concessions may be severely constrained. We may not have
conducted surveys of all of the properties in which we hold direct or indirect
interests and, therefore, the precise area and location of these claims may be
in doubt. Accordingly, our mineral properties may be subject to prior
unregistered agreements, transfers or claims, and title may be affected by,
among other things, undetected defects. In addition, we may be unable to operate
our properties as permitted or to enforce our rights with respect to our
properties.

WE DEPEND ON THE SERVICES OF KEY EXECUTIVES.

We are dependent on the services of key executives including our President and
Chief Executive Officer and a small number of highly skilled and experienced
executives and personnel. Due to the relatively small size of our company, the
loss of these persons or our inability to attract and retain additional highly
skilled employees may

13

adversely affect the exploration and development of our properties, which could
have a material adverse effect on our business and future operations.

OUR INSURANCE COVERAGE MAY BE INSUFFICIENT.

Our business is subject to a number of risks and hazards generally, including:

o adverse environmental conditions;

o industrial accidents;

o labor disputes;

o unusual or unexpected geological conditions;

o ground or slope failures;

o cave-ins;

o changes in the regulatory environment; and

o natural phenomena such as inclement weather conditions, floods and
earthquakes.

Such occurrences could result in:

o damage to mineral properties or production facilities;

o personal injury or death;

o environmental damage to our properties or the properties of others;

o delays in mining;

o monetary losses; and

o possible legal liability.

Although we maintain insurance in amounts that we believe to be reasonable, our
insurance will not cover all the potential risks associated with our business.
We may also be unable to maintain insurance to cover these risks at economically
feasible premiums. Insurance coverage may not continue to be available or may
not be adequate to cover any resulting liability. Moreover, insurance against
risks such as environmental pollution or other hazards as a result of
exploration and production is not generally available to us or to other
companies in the mining industry on acceptable terms. We might also become
subject to liability for pollution or other hazards which we cannot insure
against or which we may elect not to insure against because of premium costs or
other reasons. Losses from these events may cause us to incur significant costs
that could have a material adverse effect upon our financial performance and
results of operations.

GOVERNMENTAL AND REGULATORY RISKS

AS A HOLDING COMPANY, LIMITATIONS ON THE ABILITY OF OUR OPERATING SUBSIDIARIES
TO MAKE DISTRIBUTIONS TO US COULD ADVERSELY AFFECT THE FUNDING OF OUR
OPERATIONS.

We are a holding company that conducts operations through foreign (principally
African) subsidiaries and joint ventures, and substantially all of our assets
consist of equity in such entities. Accordingly, any limitation on the transfer
of cash or other assets between the parent corporation and such entities, or
among such entities, could restrict our ability to fund our operations
efficiently. Any such limitations, or the perception that such limitations may
exist now or in the future, could have an adverse impact on our valuation and
stock price.

WE ARE SUBJECT TO CHANGES IN THE REGULATORY ENVIRONMENT IN GHANA.

Our mining operations and exploration activities in Ghana are subject to
extensive regulation governing various matters, including:

o licensing o development

o production o exports

o taxes o imports

o water disposal o labor standards

o toxic substances o occupational health and safety

o mine safety o environmental protections

14

Compliance with these regulations increases the costs of the following:

o planning o developing

o designing o constructing

o drilling o mine and other facilities closure

o operating

We believe that we are in substantial compliance with current laws and
regulations in Ghana. However, these laws and regulations are subject to
frequent change. For example, the Ghanaian government has adopted new, more
stringent environmental regulations. Amendments to current laws and regulations
governing operations and activities of mining companies or more stringent
implementation or interpretation of these laws and regulations could have a
material adverse impact on us, cause a reduction in levels of production and
delay or prevent the development or expansion of our properties in Ghana.

Government regulations limit the proceeds from gold sales that may be withdrawn
from Ghana. Changes in regulations that increase these restrictions could have a
material adverse impact on us, as Bogoso/Prestea is our principal source of
internally generated cash.

THE GOVERNMENT OF GHANA HAS THE RIGHT TO PARTICIPATE IN THE OWNERSHIP AND
CONTROL OF BGL AND WEXFORD.

The Ghanaian government currently has a 10% carried interest in BGL, the Prestea
Underground and Wexford. The Ghanaian government also has or will have the right
to acquire up to an additional 20% equity interest in BGL and Wexford for a
price to be determined by agreement or arbitration. We cannot assure you that
the government will not seek to acquire additional equity interests in our
Ghanaian operations, or as to the purchase price that the Government of Ghana
would pay for any additional equity interest. A reduction in our equity interest
could reduce our income or cash flows from Bogoso/Prestea and amounts available
to us for reinvestment.

WE ARE SUBJECT TO RISKS RELATING TO EXPLORATION, DEVELOPMENT AND OPERATIONS IN
FOREIGN COUNTRIES.

Certain laws, regulations and statutory provisions in certain countries in which
we have mineral rights could, as they are currently written, have a material
negative impact on our ability to develop or operate a commercial mine. For
countries where we have exploration or development stage projects we intend to
negotiate mineral agreements with the governments of these countries and seek
variances or otherwise be exempted from the provisions of these laws,
regulations and/or statutory provisions. We cannot assure you, however, that we
will be successful in obtaining mineral agreements or variances or exemptions on
commercially acceptable terms.

Our assets and operations are affected by various political and economic
uncertainties, including:

o the risks of war or civil unrest;

o expropriation and nationalization;

o renegotiation or nullification of existing concessions, licenses,
permits, and contracts;

o illegal mining;

o changes in taxation policies;

o restrictions on foreign exchange and repatriation; and

o changing political conditions, currency controls and governmental
regulations that favor or require the awarding of contracts to local
contractors or require foreign contractors to employ citizens of, or
purchase supplies from, a particular jurisdiction.

ILLEGAL MINING OCCURS ON OUR PROPERTIES, IS DIFFICULT TO CONTROL, CAN DISRUPT
OUR BUSINESS AND EXPOSE US TO LIABILITY.

In Ghana and French Guiana, artisanal miners illegally work on our properties
from time to time, despite the fact that we have hired security personnel to
protect our properties. The presence of illegal miners could lead to project
delays and disputes regarding the development or operation of commercial gold
deposits. The work performed by the illegal miners could cause environmental
damage or other damage to our properties, or personal injury or death for which
we could potentially be held responsible.

15

OUR ACTIVITIES ARE SUBJECT TO COMPLEX LAWS, REGULATIONS AND ACCOUNTING STANDARDS
THAT CAN ADVERSELY AFFECT OPERATING AND DEVELOPMENT COSTS, THE TIMING OF
OPERATIONS, THE ABILITY TO OPERATE AND FINANCIAL RESULTS.

Our business, mining operations and exploration and development activities are
subject to extensive Canadian, U.S., Ghanaian and other foreign, federal, state,
provincial, territorial and local laws and regulations governing exploration,
development, production, exports, taxes, labor standards, waste disposal,
protection of the environment, reclamation, historic and cultural resources
preservation, mine safety and occupational health, toxic substances, reporting
and other matters, as well as accounting standards. We are currently evaluating
the impact of compliance with Statement of Financial Accounting Standards No.
143, "Accounting for Asset Retirement Obligations" ("SFAS No. 143"), which
establishes a uniform methodology for accounting for estimated reclamation and
abandonment costs under US GAAP. SFAS No. 143 will be required for our US GAAP
reconciliation reporting for periods after January 1, 2003. We may also adopt
the principles of SFAS No. 143 for our financial statements for periods after
January 1, 2003, as it is expected that SFAS No. 143 will be mirrored by
requirements under Cdn GAAP for periods ending after January 1, 2004.

MARKET RISKS

THE MARKET PRICE OF OUR COMMON SHARES MAY EXPERIENCE VOLATILITY AND COULD
DECLINE SIGNIFICANTLY.

Our common shares are listed on the American Stock Exchange, the Toronto Stock
Exchange and the Berlin Stock Exchange. Securities of micro-cap and small-cap
companies have experienced substantial volatility in the past, often based on
factors unrelated to the financial performance or prospects of the companies
involved. These factors include macroeconomic developments in North America and
globally and market perceptions of the attractiveness of particular industries.
Our share price is also likely to be significantly affected by short-term
changes in gold prices or in our financial condition or results of operations as
reflected in our quarterly earnings reports. Other factors unrelated to our
performance that may have an effect on the price of our common shares include
the following:

o the extent of analytical coverage available to investors concerning
our business may be limited if investment banks with research
capabilities do not continue to follow our securities;

o the limited trading volume and general market interest in our
securities may affect an investor's ability to trade significant
numbers of common shares;

o the relatively small size of the public float will limit the ability
of some institutions to invest in our securities;

o under certain circumstances, our common shares could be classified as
"penny stock" under applicable SEC rules; in that event,
broker-dealers in the United States executing trades in our common
shares would be subject to substantial administrative and procedural
restrictions which could limit broker interest in involvement in our
common shares; and

o a substantial decline in our stock price that persists for a
significant period of time could cause our securities to be delisted
from the American Stock Exchange, the Toronto Stock Exchange and the
Berlin Stock Exchange, further reducing market liquidity.

As a result of any of these factors, the market price of our common shares at
any given point in time may not accurately reflect our long-term value.
Securities class action litigation often has been brought against companies
following periods of volatility in the market price of their securities. We may
in the future be the target of similar litigation. Securities litigation could
result in substantial costs and damages and divert management's attention and
resources.

YOU MAY HAVE DIFFICULTY OR BE UNABLE TO ENFORCE CERTAIN CIVIL LIABILITIES ON US,
CERTAIN OF OUR DIRECTORS AND OUR EXPERTS.

We are a Canadian corporation. Substantially all of our assets are located
outside of Canada and the United States, and our head office is located in the
United States. Additionally, a number of our directors and the experts named in
this prospectus are residents of Canada. Although we have appointed Koffman
Kalef, Suite 1900, 885 West Georgia Street, Vancouver, British Columbia and
Field Atkinson Perraton LLP, 1900, 350 - 7th Avenue S.W., Calgary, Alberta as
our agents for service of process in the Provinces of British Columbia and
Alberta respectively, it may not be possible for investors to collect judgments
obtained in Canadian courts predicated on the civil liability provisions of
securities legislation. It may also be difficult for you to effect service of
process in connection with

16

any action brought in the United States upon such directors and experts.
Execution by United States courts of any judgment obtained against us, any of
the directors, executive officers or experts named in this prospectus in United
States courts would be limited to the assets of Golden Star Resources Ltd. or
the assets of such persons or corporations, as the case may be, in the United
States. The enforceability in Canada of United States judgments or liabilities
in original actions in Canadian courts predicated solely upon the civil
liability provisions of the federal securities laws of the United States is
doubtful.

WE DO NOT ANTICIPATE PAYING DIVIDENDS IN THE FORESEEABLE FUTURE.

We anticipate that we will retain all future earnings and other cash resources
for the future operation and development of our business. We do not intend to
declare or pay any cash dividends in the foreseeable future. Payment of any
future dividends will be at the discretion of our board of directors after
taking into account many factors, including our operating results, financial
condition, and current and anticipated cash needs.

FUTURE SALES OF OUR COMMON SHARES BY OUR EXISTING SHAREHOLDERS COULD DECREASE
THE TRADING PRICE OF THE COMMON SHARES.

Sales of a large number of our common shares in the public markets, or the
potential for such sales, could decrease the trading price of our common shares
and could impair our ability to raise capital through future sales of our common
shares. We completed sales of units, comprised of common shares and warrants, in
January, July and December 2002 at prices significantly less than the current
market price of our common shares. Accordingly, a significant number of our
shareholders have an investment profit in our securities that they may seek to
liquidate. Substantially all of our common shares not held by affiliates can be
resold without material restriction in the United States, and Canada.

THE EXISTENCE OF OUTSTANDING RIGHTS TO PURCHASE COMMON SHARES MAY IMPAIR OUR
ABILITY TO RAISE CAPITAL.

As of March 14, 2003, approximately 29.3 million common shares are issuable on
exercise of warrants, option or other rights to purchase common shares at prices
ranging from Cdn$1.02 to $4.60. During the life of the warrants, options and
other rights, the holders are given an opportunity to profit from a rise in the
market price of our common shares with a resulting dilution in the interest of
the other shareholders. Our ability to obtain additional financing during the
period such rights are outstanding may be adversely affected, and the existence
of the rights may have an adverse effect on the price of our common shares. The
holders of the warrants, options and other rights can be expected to exercise
them at a time when we would, in all likelihood, be able to obtain any needed
capital by a new offering of securities on terms more favorable than those
provided by the outstanding rights.

17

CONVERSION FACTORS AND ABBREVIATIONS

For ease of reference, the following conversion factors are provided:

1 acre = 0.4047 hectare 1 mile = 1.6093 kilometers
1 foot = 0.3048 meter 1 troy ounce = 31.1035 grams
1 gram per tonne = 0.0292 ounce per short ton 1 square mile = 2.59 square kilometers
1 short ton (2000 pounds) = 0.9072 tonne 1 square kilometer = 100 hectares
1 metric tonne = 1,000 kg or 2,204.6 pounds 1 kilogram = 2.2 pounds or 32.151 troy ounces

The following abbreviations of measurements are used herein:

Au = gold m(2) = square meter
g = gram m(3) = cubic meter
g/t = grams of gold per tonne mg = milligram
ha = hectare mg/m(3) = milligrams per cubic meter
km = kilometer t = metric tonne
kms = square kilometers oz = troy ounce
kg = kilogram ppb = parts per billion
m = meter Ma = million years

Note: All units in the text are stated in metric measurements unless otherwise
noted.

GLOSSARY OF TERMS

Note: The definitions of Proven and Probable Mineral Reserves and the
definitions for Measured, Indicated and Inferred Mineral Resources set forth
below are those used in Canada as required in accordance with National
Instrument 43-101. The definitions of Proven and Probable Mineral Reserves are
consistent with those prescribed for use in the United States by the Securities
and Exchange Commission and set forth in SEC Industry Guide 7.

MINERAL RESERVE A Mineral Reserve is the economically mineable
part of a Measured or Indicated Mineral
Resource demonstrated by at least a Preliminary
Feasibility Study. This Study must include
adequate information on mining, processing,
metallurgical, economic and other relevant
factors that demonstrate, at the time of
reporting, that economic extraction can be
justified. A Mineral Reserve includes diluting
materials and allowances for losses that may
occur when the material is mined.

PROVEN MINERAL RESERVES A 'Proven Mineral Reserve' is the economically
mineable part of a Measured Mineral Resource
demonstrated by at least a Preliminary
Feasibility Study. This Study must include
adequate information on mining, processing,
metallurgical, economic, and other relevant
factors that demonstrate, at the time of
reporting, that economic extraction is
justified.

PROBABLE MINERAL RESERVES A 'Probable Mineral Reserve' is the
economically mineable part of an Indicated, and
in some circumstances a Measured Mineral
Resource demonstrated by at least a Preliminary
Feasibility Study. This Study must include
adequate information on mining, processing,
metallurgical, economic, and other relevant
factors that demonstrate, at the time of
reporting, that economic extraction can be
justified.

MINERAL RESOURCE A Mineral Resource is a concentration or
occurrence of natural, solid, inorganic or
fossilized organic material in or on the
Earth's crust in such form and quantity and of
such a grade or quality that it has reasonable
prospects for economic extraction. The
location, quantity, grade, geological
characteristics and continuity of a Mineral
Resource are known, estimated or interpreted
from specific geological evidence and
knowledge.

18

MEASURED MINERAL RESOURCE A 'Measured Mineral Resource' is that part of a
Mineral Resource for which quantity, grade or
quality, densities, shape, physical
characteristics are so well established that
they can be estimated with confidence
sufficient to allow the appropriate application
of technical and economic parameters, to
support production planning and evaluation of
the economic viability of the deposit. The
estimate is based on detailed and reliable
exploration, sampling and testing information
gathered through appropriate techniques from
locations such as outcrops, trenches, pits,
workings and drill holes that are spaced
closely enough to confirm both geological and
grade continuity.

INDICATED MINERAL RESOURCE An 'Indicated Mineral Resource' is that part of
a Mineral Resource for which quantity, grade or
quality, densities, shape and physical
characteristics, can be estimated with a level
of confidence sufficient to allow the
appropriate application of technical and
economic parameters, to support mine planning
and evaluation of the economic viability of the
deposit. The estimate is based on detailed and
reliable exploration and testing information
gathered through appropriate techniques from
locations such as outcrops, trenches, pits,
workings and drill holes that are spaced
closely enough for geological and grade
continuity to be reasonably assumed.

INFERRED MINERAL RESOURCE An 'Inferred Mineral Resource' is that part of
a Mineral Resource for which quantity and grade
or quality can be estimated on the basis of
geological evidence and limited sampling and
reasonably assumed, but not verified,
geological and grade continuity. The estimate
is based on limited information and sampling
gathered through appropriate techniques from
locations such as outcrops, trenches, pits,
workings and drill holes.

QUALIFIED PERSON A "Qualified Person" means an individual who is
an engineer or geoscientist with at least five
years of experience in mineral exploration,
mine development, production activities and
project assessment, or any combination thereof,
including experience relevant to the subject
matter of the project or report and is a member
in good standing of a Self-Regulating
Organization.

We use the following definitions of the stages of the exploration and
development process. There can be no assurance that the terminology used by us
is consistent with the terminology used by other companies in the mining
industry or by industry analysts.

EXPLORATION STAGE an exploration stage prospect typically involves
testing one or more targets within an area which have
been determined to merit, first with a combination of
geological, geochemical and geophysical analysis, and
then, once better defined targets have been
established, by testing at depth, typically by
trenching and drilling, and generating the
information necessary to develop a three dimensional
geologic model of the mineralized zone, which may be
used to demonstrate mineralized materials and/or
reserves.

FEASIBILITY STAGE during the feasibility stage, exploration continues
to further increase confidence in mineralization
while attempting to further expand them. During this
stage, management develops in detail the necessary
engineering and costing for mining, processing, power
and infrastructure, as well as the designs for the
plant and equipment required to construct and operate
a modern mining operation. It is at the end of this
stage that mineralization may be categorized as
proven and/or probable reserves if a positive mining
decision is justified. The feasibility stage normally
incorporates several phases of work, which involve
increasing levels of detail including (i) scoping
study, (ii) pre-feasibility study, and (iii) bankable
feasibility study.

19

MINE mining is the process of transforming a reserve into
benefits for its owners (debt, equity and employees),
governments and communities. Exploration continues
during the mining process and, in many cases,
reserves are expanded during the life of the mine
operations as the exploration potential of the
deposit is realized.

ALTERATION any change in the mineral composition of a rock brought about by
physical or chemical means

ANOMALY a deviation from uniformity or regularity in geochemical or geophysical
quantities

ASSAY to analyze the proportions of metals in an ore

BASIC an igneous rock having a relatively low silica content, sometimes
delimited arbitrarily as less than 54%

BIO-OXIDATION a processing method that uses bacteria to oxidize refractory
sulfide ore to make it amenable to normal oxide ore processing techniques such
as carbon-in-leach

BIRIMIAN a thick and extensive sequence of Proterozoic age metamorphosed
sediments and volcanics first identified in the Birim region of southern Ghana

CASH OPERATING COSTS PER OUNCE includes direct mining and milling costs,
stripping costs, mine site general and administrative costs, third party
smelting and refining costs and by-product credits, but excludes royalties and
production taxes. This is consistent with the Gold Institute's definition

CIL OR CARBON-IN-LEACH an ore processing method involving the use of cyanide
where activated carbon which has been added to the leach tanks is used to absorb
gold containing solutions

CLASTIC a rock or sediment composed of broken fragments derived from preexisting
rocks or minerals

DIAMOND DRILLING a variety of rotary drilling in which diamond bits are used as
the rock-cutting tool to produce a recoverable core of rock for observation and
assay

DIP the angle that a structural surface, a bedding or fault plane, makes with
the horizontal, measured perpendicular to the strike of the structure

DISSEMINATED where minerals occur as scattered particles in the rock

DYKE a near vertical fracture in the earth's crust, which has been filled by an
intrusive rock

FAULT a surface or zone of rock fracture along which there has been displacement

FELSIC an adjective describing an igneous rock having most light colored
minerals and rich in Si, K and Na

FOLD a curve or bend of a planar structure such as rock strata, bedding planes,
foliation, or cleavage

FORMATION a distinct layer of sedimentary rock of similar composition

GEOCHEMISTRY the study of the distribution and amounts of the chemical elements
in minerals, ores, rocks, solids, water, and the atmosphere

GEOLOGICAL MAPPING the recording of geologic information such as the
distribution and nature of rock units and the occurrence of structural features,
mineral deposits, and fossil localities

GEOPHYSICS the study of the earth; in particular the physics of the solid earth,
the atmosphere and the earth's magnetosphere

GEOTECHNICAL the study of ground stability

GRANITE a medium to coarse grained igneous intrusive rock in which quartz
constitutes 10 to 50 percent of the felsic components

GRANODIORITE a medium to coarse-grained intrusive igneous rock, intermediate in
composition between quartz diorite and quartz monzonite

GREENSTONE a sequence of usually metamorphosed volcanic-sedimentary rock
assemblages

HEAP LEACH a mineral processing method involving the crushing and stacking of an
ore on an impermeable liner upon which solutions may be sprayed that dissolve
metals i.e. gold/copper etc.; the solutions containing the metals are then
collected and treated to recover the metals

HYDROTHERMAL the products of the actions of heated water, such as a mineral
deposit precipitated from a hot solution

INTRUSION; INTRUSIVE molten rock which is intruded (injected) into spaces or
fractures created in existing rock; spaces are created by a combination of
melting and displacement

LATERITE highly weathered residual surficial soils and decomposed rocks, rich in
iron and aluminum oxides that are characteristically developed in tropical
climates

MAFIC an adjective describing an igneous rock composed mostly of one or more
ferromagnesian, dark-colored minerals; also, said of those minerals

MASSIVE said of a mineral deposit, especially characterized by a great
concentration of ore in one place, as opposed to a disseminated or vein-like
deposit

METASEDIMENT a sedimentary rock which shows evidence of having been subjected to
metamorphism

METAVOLCANIC a volcanic rock which shows evidence of having been subjected to
metamorphism

MINERAL a naturally formed chemical element or compound having a definite
chemical composition and, usually, a characteristic crystal form

MINERALIZATION a natural occurrence in rocks or soil of one or more
metalliferous minerals

NON-REFRACTORY ore containing gold that can be satisfactorily recovered by basic
gravity concentration or simple cyanidation

OUTCROP that part of a geologic formation or structure that appears at the
surface of the earth

PROTEROZOIC the more recent time division of the Precambrian; rocks aged between
2500 and 550 million years old

PUTS a financial instrument that provides the right but not the obligation, to
sell a specified number of ounces of gold at a specified price.

PYRITIZATION the in situ alteration of a rock involving the additional of sulfur
to the rock mass in fluids which reacts with both iron oxides and mafic minerals
resulting in the formation of Iron Sulfide (Pyrite) often referred to as "fools
gold"

QUARTZ crystalline silica; silicon dioxide

REFRACTORY ore containing gold that cannot be satisfactorily recovered by basic
gravity concentration or simple cyanidation

20

REVERSE CIRCULATION DRILLING (RC) a drilling method used in geological
appraisals whereby air or drilling fluid passes inside the inner tube of a
double tube system to a down-the-hole percussion bit and returns to the surface
outside the inner tube but inside the outer tube carrying chips of rock

ROTARY AIR BLAST DRILLING (RAB), a drilling method used in geological appraisals
whereby the drilling fluid passes inside the drill stem to a down-the-hole
precision bit and returns to the surface outside the drill stem carrying chips
of rock

SAPROLITE a soft, earthy, clay-rich and thoroughly decomposed rock formed in
place by chemical weathering of igneous, sedimentary or metamorphic rocks which
retains the original structure of the unweathered rock

SHEAR ZONE a tabular zone of rock that has been crushed and brecciated by many
parallel fractures due to shear strain

SHEAR a form of strain resulting from stresses that cause or tend to cause
contiguous parts of a body of rock to slide relatively to each other in a
direction parallel to their plane of contact

SHIELD a large area of exposed basement rocks often surrounded by younger rocks,
e.g. Guyana Shield

SILICIFICATION the in situ alteration of a rock which involves an increase in
the proportion of silica minerals including quartz. The silica is frequently
introduced by hydrothermal solutions as for example in hot springs.

STOCK an igneous intrusion that is less than 100 square kilometers in surface
exposure

STOCKWORK a mineral deposit in the form of a network of veinlets diffused in the
country rock

STRIKE the direction or trend that a structural surface, e.g. a bedding or fault
plane, takes as it intersects the horizontal

STRIP to remove overburden in order to expose ore

SULFIDE a mineral including sulfur (S) and Iron (Fe) as well as other elements

SURFICIAL situated, formed, or occurring on or close to the Earth's surface

SYNCLINE a concave downward fold, the core of which contains the
stratigraphically younger rocks

TARKWAIAN a scattered group of mainly shallow water sedimentary rocks of
Proterozoic age named after the town of Tarkwa in southern Ghana where they were
found to be gold bearing

TOTAL CASH COST PER OUNCE equals cash operating cost per ounce plus royalties
and production taxes. This is consistent with the Gold Institute's definition.

ULTRAMAFIC an igneous rock composed chiefly of mafic minerals with unusually
high % of Mg, Ca and Fe

VEIN a thin, sheetlike crosscutting body of hydrothermal mineralization,
principally quartz

VOLCANIC MASSIVE SULFIDE (VMS) mineral deposits formed by volcanic processes and
the activities of thermal springs at the bottom of bodies of water

VOLCANICS those originally molten rocks, generally fine grained, that have
reached or nearly reached the Earth's surface before solidifying

VOLCANO/SEDIMENTARY rocks composed of materials of both volcanic and sedimentary
origin

WALL ROCK the rock adjacent to a vein

WEATHERING the destructive process constituting that part of erosion whereby
earthy and rocky materials on exposure to atmospheric agents at or near the
Earth's surface are changed in character with little or no transport of the
loosened or altered material

21

ITEM 2. DESCRIPTION OF PROPERTIES

INTRODUCTION

The maps below show the locations of Bogoso, Prestea, Wassa and the Prestea
Underground in Ghana, and of our Paul-Isnard, Yaou and Dorlin exploration
properties in French Guiana. These properties are described in further detail
below.

MAP - AFRICA
Map of "GOLDEN STAR PROPERTIES IN AFRICA," showing specific
project locations in Ghana.

MAP - SOUTH AMERICA
Map of "GOLDEN STAR PROPERTIES IN SOUTH AMERICA," showing specific
project locations in Suriname and French Guiana

The table below summarizes information regarding certain of our properties,
described in further detail below.

PROPERTY STATUS TABLE AS OF DECEMBER 31, 2002:

(1) Owned by BGL, our 90% owned subsidiary.

(2) We own a 50% interest in Yaou and Dorlin and our 73% owned subsidiary,
Guyanor owns a 50% interest.

22

BOGOSO/PRESTEA

Bogoso/Prestea consists of a gold mining/milling operation located along the
Ashanti Trend in western Ghana, approximately 35 kms northwest of the town of
Tarkwa from where it can be reached by paved roads. A paved road runs down most
of the 18.5 kms length of the property and connects the town of Bogoso in the
northeast with the town of Prestea in the southwest. Another paved road provides
access to a sealed airstrip located at the town of Obuasi, some 115 kms to the
north. The mining areas are connected by paved and gravel haul-roads to the
Bogoso mill.

Bogoso/Prestea is owned by BGL, one of our 90% owned Ghanaian subsidiaries. The
Government of Ghana owns the remaining 10% of BGL. The Government of Ghana is
entitled at all times to hold a 10% carried interest in all the rights and
obligations of BGL. The Government of Ghana acquired this interest for no
consideration and is not required to contribute any funds to pay any BGL
expenses.

Equipment and facilities at Bogoso/Prestea include several open pit mines, a
nominal 6,000 tonne per day CIL gold mill and a fleet of haul trucks, loaders
and mining support equipment. In addition there are numerous ancillary support
facilities such as power and water supply equipment, haul roads, housing for
management and technical staff, a medical clinic, tailings storage facility,
waste dumps, a warehouse, maintenance shops, offices and administrative
facilities.

Between our 1999 acquisition of Bogoso and 2001, we mined gold from pits at
Bogoso, processing the ore at the Bogoso mill to produce between 88,000
and 130,000 ounces of gold per year. In late 2001 we acquired Prestea located
adjacent to Bogoso and have since mined gold ore from Prestea, transporting the
Prestea ore by truck to the Bogoso mill for processing. Production in 2002,
utilizing Prestea ores, was 124,000 ounces. We expect that the main source of
ore to the Bogoso mill for at least the next five years will be from Prestea.

The Government of Ghana initially granted BGL a 30-year mining lease for Bogoso
in August 1987, giving BGL the exclusive right to work, develop and produce gold
in a mining area of 50 square kms. In August 1988, the Government of Ghana
granted BGL a second 30-year gold mining lease covering an additional 45 square
kms area adjacent to the first mining area.

In June 2001, BGL was granted a 30-year surface mining lease for Prestea
by the Government of Ghana. The surface lease allows mining of ores
down to a depth of 200 meters below the surface. Prestea is located immediately
south of, and adjacent to Bogoso, and covers an aggregate area of 129 square
kms. Under the three mining leases, BGL holds gold mining rights in a mining
area totaling 224 square kms, subject to the payment of nominal annual rents.

The Bogoso Acquisition

On September 30, 1999, we and an unrelated company acquired 70% and 20%,
respectively, of the common shares of BGL. Total acquisition cost, including
initial payments, future payments, financing costs and administrative costs was
$14.7 million with the Government of Ghana retaining a 10% equity interest. The
Bogoso sellers received $6.5 million cash at September 30, 1999 and agreed to
receive both contingent and non-contingent additional payments in the future.
Payment of all non-contingent amounts was completed by mid-2002.

Two contingent payments were still outstanding as of December 31, 2002. The
original 1999 purchase agreement required that a $2.0 million reserve
acquisition linked payment would be due the Bogoso sellers if mineable reserves
equivalent to 50,000 ounces of gold or greater were to be acquired elsewhere in
Ghana for processing at the Bogoso

23

mill before September 30, 2001. Acquisition of the Prestea surface mining lease,
with its contained reserves in excess of 50,000 ounces, triggered the reserve
acquisition payment and in February 2003 we made the $2.0 million payment to the
Bogoso sellers.

We were also required to pay the Bogoso sellers an amount equal to $5.0 million
plus subsequent increases for inflation. The payment date is the first
anniversary of the commencement of treatment of sulfide ore at the Bogoso Mine,
which we presently expect by no earlier than 2007. The Bogoso sellers agreed to
accept an immediate payment of $2.0 million to satisfy this obligation and this
payment was made in February 2003.

In June 2001 we purchased the 20% minority interest of BGL, thereby raising our
ownership to 90%. We paid 3,000,000 shares of our common stock and we cancelled
a $1.9 million note receivable from the minority shareholder. The stock and note
together brought the total purchase price of the 20% minority interest to $2.9
million.

The Prestea Acquisition

A surface mining lease for Prestea was granted to us by the Government of Ghana
on June 29, 2001, following extended negotiations with PGR, Barnato Exploration
Limited ("Barnex") and the Government of Ghana. Two separate transactions, one
with Barnex and one with PGR, were required to facilitate the granting of the
lease. Both transactions were required to remove all prior claims on the
property, which thereby allowed the Government of Ghana to grant the new surface
mining lease.

Pursuant to the agreement with Barnex, we issued to Barnex 3,333,333 common
shares and 1,333,333 warrants to subscribe for our common shares at a price of
$0.70 per share for three years. In addition, we are paying a royalty to Barnex
on the first 1,000,000 ounces of production from Bogoso/Prestea. The royalty
will vary, according to a gold price formula, from a minimum of $6.00 per ounce
at gold prices less than $260 per ounce to a maximum of $16.80 per ounce at gold
prices at or above $340 per ounce. The royalty is to be paid quarterly and is
determined by multiplying the production for the quarter by a royalty rate that
varies depending on the average spot gold price for the quarter, as per the
following table:

We also paid $2.1 million in cash to PGR, in connection with the Prestea
acquisition, including $1.3 million in 2001 and $0.8 million in January 2002.

The total cost of acquiring Prestea was $8.0 million. This included $2.2 million
for our stock and warrants issued to Barnex, $2.1 million of cash paid to PGR,
$2.0 million for the contingent liability to the Bogoso sellers which was
triggered by acquisition of Prestea, $0.7 million of pre-production development
costs and approximately $1.0 million in transactions costs. In addition to the
$8.0 million of direct purchase costs listed above, $0.4 million of unamortized
Bogoso purchase costs and $1.4 million of costs associated with the purchase of
the 20% minority interest position in BGL during 2001, were included in the new
Prestea amortization base, bringing the total amortizable cost basis to $9.8
million.

24

Geology of Bogoso/Prestea

Bogoso/Prestea lies within the Eburnean Tectonic Province
(1,800-2,166 Ma) in the West African Precambrian Shield. The paleoproterozoic
rocks that comprise most of the West African craton and host the major gold
mineralization in Ghana are subdivided into metasedimentary and volcanic rocks
of the Lower Birimian, Upper Birimian and Tarkwaian sequences.

The Lower Birimian is composed largely of phyllites, schists, greywackes and
volcanoclastics, and grades into the dominantly metavolcanic rocks (including
lavas, pyroclastics, and some finer-grained metasedimentary rocks) of the Upper
Birimian. Unconformably overlying the Birimian are the continental clastics of
the Tarkwaian sequence. These clastics were derived from the weathering of
Birimian rocks and granitic intrusions found within the Birimian.

The area is dominated by a major northeast-southwest trending structural fault
zone referred to as the Ashanti Trend, which hosts the Prestea, Bogoso, Obuasi
and Konongo gold deposits, among others. Parallel to the Ashanti Trend is the
Akropong trend, which hosts the Ayanfuri deposit. The Akropong Trend is about 15
kms west of the Ashanti Trend in the Bogoso region, and gradually converges with
it, coalescing at Obuasi and forming the basis for the world class Obuasi
deposit, owned and operated by Ashanti Goldfields Company Limited.

In the Bogoso area, the faulted contact zone is known as the "Main Crush Zone"
and passes through the central part of the Bogoso property for its entire 18.5
km length. The Main Crush Zone lies within a structural corridor that varies in
width from 1,000 to 2,500 meters. Some 90% of the gold mined to date at Bogoso
has come from the Main Crush Zone with the larger deposits being located at
bends and junctions along this major fault. Additional faults and splays in the
structural corridor may also be prospective for gold. The oxide ores tend to
have fine-grained free gold that has been liberated during the weathering of
pre-existing sulfides and oxidation extends from surface down to the approximate
elevation of the water table. Below this, a transition zone of up to 20 meters
of partially oxidized material directly overlies fresh sulfide mineralization.

Prestea covers a 22 km stretch of the Ashanti Trend located immediately south of
Bogoso. Within the concession, the fault belt comprises an anastomosing network
of faults with a dominant set of three or more northeasterly striking faults
that define a sinistral shear zone. These shears host the Prestea Main, East and
West reef zones, in addition to other minor reefs. Towards the south, in the
vicinity of the Bondaye-Tuapem shafts, the braided shear zone splits into two
groups of discrete widely separated shears. The Tuapem mineralization continues
along strike of the fault belt, whereas the Bondaye mineralization bends
southwards towards a highly prospective mineralized target zone at Nsuta.

Historical Mining Operations at Bogoso

Initial commercial mining at Bogoso dates back to the early years of the 20th
century, Marlu Gold Mining Areas Ltd. began the first major mining operation in
the Bogoso area in 1935, mining high-grade oxide ore from a series of open pits
extending along the north-east, south-west Ashanti trend at Bogoso. During its
20-year period of operations from 1935 to 1955, Marlu produced over 900,000
ounces of gold at an average recovered grade of 3.73 g/t.

Billiton International Metals took control of Bogoso in the late 1980's. Their
initial feasibility study established a mineable reserve of 5.96 million tonnes
grading 4.0 grams gold per tonne, of which 461,000 tonnes (or less than 8%)
comprised oxide ore. The feasibility study forecast gold recoveries of 83% from
sulfide ore and 78% from oxide ore and estimated a waste to ore ratio of 5.6:1.
Construction of a mining and processing facility was completed in 1991. The
facility was designed to process oxide ores by using conventional CIL technology
at a design capacity of 1.36 million tonnes per year and to process sulfide ores
by using flotation, fluid bed roasting and CIL technology at a design capacity
of 0.9 million tonnes per year. Operational difficulties with the fluid bed
roaster, forced closure of the flotation circuit and roaster in early 1994.
Following closure of the roaster, Billiton focused the Bogoso operations on
oxide ore. Billiton's exploration efforts were successful in adding to the
available quantity of oxide ore and Bogoso has operated as an oxide-only
operation since 1994.

Historical Mining Operations at Prestea

Underground mining has been conducted at Prestea for more than 130 years. From
1873 to 1965, Prestea was then comprised of a number of different licenses
operated by independent mining companies, which, in

25

1965, were amalgamated by the Government of Ghana into Prestea Goldfields
Limited, under the aegis of the State Gold Mining Corporation.

In 1994 JCI Limited ("JCI") won a bid for participation in the Prestea mining
operation. Subject to an agreement between the Government of Ghana, JCI and
Barnex, a subsidiary of JCI, assumed management of the Prestea Underground in
June 1996. While improvements were made in the productivities and efficiencies
of the underground operation, an exploration program aimed at delineating near
surface resources amenable to open pit mining was commenced.

However, owing to the declining gold price and continued financial losses, JCI
terminated its management role of the underground mining operation in September
1998, and elected to shut down the underground workings. This action was opposed
by the Prestea workforce and management, who subsequently pooled their severance
payments and formed PGR to operate the mine. They were granted a six-month
permit by the Government of Ghana to run the mine in December 1998.

In response to local political pressure, and to the de facto continuation of
underground operations by PGR, in November 2000 the Government of Ghana
abrogated the Barnex lease over Prestea, and formally awarded it to
PGR. This was followed in 2000 and 2001 by negotiations involving the Government
of Ghana, PGR, BGL and JCI, over the mining potential of the Prestea area. The
eventual outcome of these discussions was the issuance in June 2001 of two
separate leases for the property, one being for surface rights down to a depth
of 200 meters below general ground elevation, and one for all mineralization
below the 200 meter mark. The surface lease was awarded to BGL and the
underground lease to PGR, with the joint commitment of both parties to work
together to ensure effective and harmonious relations between the two
operations.

BGL started surface mining operations on the Prestea concession in September
2001, with the first ore being processed at the Bogoso mill in October 2001.
Total gold production from the Prestea area since recorded mining commenced in
the 1870s is reported by the Ghana Chamber of Mines to be in excess of nine
million ounces, making it the second largest historical gold producing area in
Ghana, after the Obuasi mine.

Production

Gold production from the existing Bogoso mill from start-up in 1991 through 2002
has totaled 1,227,384 ounces. Gold production from January to December 2002 was
124,400 ounces, compared to 87,936 ounces in 2001. This 41% increase in gold
production for 2002 compared to 2001, is attributable to higher gold recoveries
achieved when operating on Prestea ore during 2002 versus Bogoso transition ores
during much of 2001.

Comparisons of operating parameters and production with previous years are as
follows:

During 2002, all ore feed to the Bogoso process plant came from oxide and
non-refractory deposits at Prestea. Until November 2002, the feed came from the
Buesichem, Beposo and Brumasi pits, at the northern end of Prestea. In November
2002, an environmental permit was received to allow mining from the Plant North
pit, in the center of Prestea, close to Prestea township, and this has now
become the sole producing pit, with the previously mined pits being
rehabilitated.

26

Reserves

The following table presents the estimated Proven and Probable Mineral Reserves
for Bogoso/Prestea, including stockpile ores, as of December 31, 2002 and 2001.
See "Item 2. - Bogoso/Prestea" for a description of Bogoso/Prestea and "Risk
Factors" for a discussion of factors that could affect the following estimates.

Oxide, transition and non-refractory sulfide ores are suitable for processing in
the existing Bogoso mill. Refractory transition and sulfide ores will be
processed through the planned sulfide mill facility.

BOGOSO/PRESTEA PROVEN AND PROBABLE MINERAL RESERVES

We have reported Proven and Probable Mineral Reserves for year-end 2002 using a
$300 per ounce gold price versus $275 per ounce which was used in 2001. The
Mineral Reserves are those ore tonnages contained within practical design pit
envelopes or within economically optimized pit envelopes, designed for the
various ore types including oxide, transition, non-refractory sulfide and
refractory sulfide mineralized material. Gold recovery assumptions vary by ore
type: gold recovery from oxide ores are estimated to be 80% to 92%, for
transition ores 79% to 85%, for non-refractory sulfides 83% to 85% and for
refractory sulfides 83% to 89%. We have used appropriate current and predicted
mine operating costs and performance parameters.

Our Proven and Probable Mineral Reserves are estimated in conformance with
definitions set out in Canada's National Instrument 43-101. Also see our
"Glossary of Terms". The definitions of Proven and Probable Mineral Reserves are
considered consistent with the definitions for proven and probable reserves
prescribed for use in the United States by the U.S. Securities and Exchange
Commission and set forth in SEC Industry Guide 7. The Proven and Probable
Mineral Reserves are those ore tonnages contained within economically optimized
pit envelopes, designed for the oxide, transition and refractory sulfide mineral
deposits.

The Proven and Probable Mineral Reserves at Bogoso/Prestea on December 31, 2002
stood at 23.1 million tonnes at an average grade of 2.98 g/t, representing
approximately 2.2 million ounces of gold. This is compared to Proven and
Probable Mineral Reserves at December 31, 2001 of 19.1 million tonnes at an
average grade of 2.97 g/t, representing approximately 1.8 million ounces of
gold. The Qualified Person responsible for supervising the estimation of
reserves at Bogoso/Prestea is Mr. Dave Alexander, Projects Planning Manager. Mr.
Alexander is a qualified mining engineer, is a member of the Institution of
Mining and Metallurgy, and is a Chartered Engineer under the auspices of the
Engineering Council of UK.

The increase in our Mineral Reserves since December 31, 2001 is the result of
ongoing exploration work largely at Prestea. This work has identified
significant additional mineralized material both along the strike of the
deposits and at depth and resulted in greater certainty in some of the existing
mineralized material. Drill results and test work carried out on samples from
the Prestea mineral deposits indicates that the material can be successfully
treated through the Bogoso mill and consequently this material has been
converted into Mineral Reserves with due regard of the effects of mining losses
and dilution, and incorporated into the current Bogoso/Prestea mining plan.

27

Non Reserves

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED AND
INDICATED MINERAL RESOURCES

This section uses the terms "measured mineral resources" and 'indicated
mineral resources". We advise U.S. investors that while those terms are
recognized and required by Canadian regulations, the U.S. Securities and
Exchange Commission does not recognize them. U.S. investors are cautioned
not to assume that any part or all of the mineral deposits in these
categories will ever be converted into reserves.

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF INFERRED MINERAL
RESOURCES

This section uses the term "inferred mineral resources". We advise U.S.
investors that while this term is recognized and required by Canadian
regulations, the U.S. Securities and Exchange Commission does not recognize
it. "Inferred mineral resources" have a great amount of uncertainty as to
their existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of the inferred
mineral resources will ever be upgraded to a higher category. Under
Canadian rules estimates of inferred mineral 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 MINERAL RESOURCE EXISTS, OR
IS ECONOMICALLY OR LEGALLY MINEABLE.

At December 31, 2002, the estimated Measured and Indicated Mineral Resources,
exclusive of that part of the Mineral Resources converted to Proven and Probable
Mineral Reserves, at Bogoso/Prestea was 19.9 million tonnes grading 2.97 g/t. In
addition, there are 23.9 million tonnes of Inferred Mineral Resource at an
average grade of 2.91 g/t.

BOGOSO/PRESTEA MINERAL RESOURCE ESTIMATES AS OF DECEMBER 31, 2002

Our Mineral Resources for Bogoso/Prestea, which are reported exclusive of the
Proven and Probable Mineral Reserves, have been estimated in conformance with
definitions set out in Canada's National Instrument 43-101. Also see our
"Glossary of Terms".

The Mineral Resources have been estimated using a $325 per ounce gold price and
historic and predicted mining and processing costs and metallurgical recoveries.
The cut off grades used vary between 0.9 and 1.4 g/t for non-refractory oxide,
transition and non-refractory sulfide resources and between 1.8 and 2.0 g/t for
refractory sulfide and transition resources.

The Mineral Resource has been estimated using mining-processing costs between
$7.49 to $9.16 per tonne for oxide material, between $13.80 and $15.17 per tonne
for refractory transition material, between $15.13 and $15.41 per

28

tonne for refractory sulfide material, between $9.51 and $9.96 per tonne for
transitional material and between $10.43 and $10.88 per tonne for non-refractory
sulfide material. Processing recoveries between 80% to 87%, 80% to 83%, and 83%
to 86% were used for non-refractory oxide, transition, non-refractory sulfide,
refractory transition and refractory sulfide material respectively. An overall
mining recovery of 95% of the ore tonnes was also applied for all materials.
Processing costs and recoveries for transition and oxide materials are based on
historic numbers achieved with the existing CIL plant. Refractory sulfide
processing costs and recoveries has been based on estimates for bio-oxidation
based on variability and pilot test work conducted on drill core.

During October 2001, as required by the Ontario Securities Commission, an
independent technical report was produced by Associated Mining Consultants Ltd
("AMC") on our behalf. This report is still current under the guidelines
contained in Canada's National Instrument 43-101.

The Refractory sulfide portion of the Mineral Resource estimate was derived from
1,139 reverse circulation drill holes totaling 35,251 meters, 517 diamond drill
holes totaling 52,654 meters and 5,941 rotary air blast holes totaling 137,677
meters. Included in the drilling above were 221 new drill holes totaling 24,450
meters which were drilled during 2000 and 2001 as part of our sulfide
feasibility study, of which 8,187 meters were HQ or PQ core. This includes 1,110
meters of oriented core for geotechnical and hydrogeological modeling.

Resource estimates for Prestea are based on drilling carried out by JCI and
Barnex, who completed 1,003 drill holes totaling 88,331 meters of diamond,
reverse circulation and rotary air blast drilling between July 1995 and April
1999. This comprised 48,604 meters of reverse circulation drilling, 36,915
meters of diamond drilling and 2,813 meters of rotary air blast drilling and
resulted in 95,182 analytical samples. During 2002 we completed additional
drilling on the Prestea property including, 140 reverse circulation holes
totaling 14,237 meters, 462 rotary air blast holes totaling 11,779 meters, and
five diamond drill holes totaling 933 meters. This new drilling combined with
the existing data has been used to produce the end of 2002 Mineral Resource
estimates.

The information in this report that relates to the estimation of the
Bogoso/Prestea Mineral Resource is based on information compiled and/or
validated by Mr. S. Mitchel Wasel, Exploration Manager - Ghana. Mr. Wasel
qualifies as the Qualified Person being a qualified geologist who has 15 years
of experience in gold and base metal exploration and is a Member of the
Australasian Institute of Mining and Metallurgy.

THE WASSA PROPERTY

Wassa is located in western Ghana approximately 35 kms east of Bogoso/Prestea.
Wassa is currently inactive but includes an open pit mine, heap leach pads,
processing equipment (crusher, agglomeration plant, conveyors, and gold recovery
plant), parts and supplies inventory, maintenance shops, administrative offices,
an electric power generating facility, housing for employees, a community center
and miscellaneous other ancillary facilities. All assets are less than five
years old, functional and in good repair.

Paved roads are complete from Cape Coast to Twifu-Praso, some 28 kms from the
project site. The laterite road from Twifu-Praso to Akyempim has been recently
upgraded as far as Ateiku. The mine can be reached from Bogoso via Tarkwa via a
paved road to the town of Abosso or via Insu which is a shorter un-paved route.

Wassa Acquisition

We acquired our 90% interest in Wassa on September 13, 2002. The remaining 10%
interest is owned by the Government of Ghana. Wassa was developed by a former
owner in the late 1990s at a capital cost of $43 million as a conventional open
pit, heap leach gold operation and operated for approximately two years
producing approximately 90,000 ounces per year. Operations were suspended in
mid-2001. In 2001, the secured lenders to the project enforced their security
rights in the project and, following a bidding process, agreed to sell the Wassa
asset to us.

We paid the Wassa Seller, a syndicate of banks led by Standard Bank London
Limited, an initial consideration of $1.6 million at closing and assumed debt of
$1.8 million. We also agreed to pay two separate royalties on future production.
The seller-provided debt is repayable over a four-year term beginning on

29

December 13, 2003 with installments following every three months thereafter,
with the final payment on September 13, 2007. The interest rate is LIBOR plus
2.5% until gold production begins and LIBOR plus 2.0% after gold production
begins. Interest on the initial $1.8 million accruing prior to the initiation of
gold production at Wassa will be capitalized into the loan.

The first royalty is to be paid quarterly and the amount of the payments will be
determined by multiplying the production from Wassa for each quarter by a
royalty rate of $7.00 per ounce produced. The royalty rate is subject to
increase by $1.00 per ounce for each $10.00 increase in the average market price
for gold for each quarter above $280 per ounce up to a maximum of $15.00 per
ounce at gold prices of $350 per ounce and above. The second royalty is a flat
$8.00 per ounce, and is capped at $5.5 million.

We also assumed a reclamation liability of approximately $2.3 million for
restoration of the environmental disturbance at Wassa as of the date of the
acquisition. The amount of the restoration liability was determined by an
independent environmental engineering firm, commissioned by us to establish the
amount of the liability.

Geology of Wassa

Wassa lies within the Eburnean Tectonic Province (1,800-2,166 Ma) in the West
African Precambrian Shield. The paleoproterozoic rocks that comprise most of the
West African craton and host the major gold mineralization in Ghana are
subdivided into metasedimentary and volcanic rocks of the Birimian, and
Tarkwaian sequences.

Birimian rocks are composed largely of phyllites, schists, greywackes,
volcanoclastics, and metavolcanic rocks (including lavas and pyroclastic rocks).
Overlying the Birimian are the continental clastics of the Tarkwaian sequence.
The Tarkwaian clastics were derived from the weathering of an uplifted
continental edifice partially composed of Birimian rocks and granitic
intrusions.

Wassa is hosted within the same Birimian volcano-sedimentary greenstone package
as Bogoso/Prestea. Wassa is situated on the southeastern limb of the Tarkwa
Syncline while Bogoso and Prestea occur along the northwestern limb. The
northwestern belt hosts the Obuasi, Prestea, and Bogoso gold mines the
southeastern limb also is characterized by gold mines and mineral occurrences.
Tarkwaian hosted deposits along the south eastern limb include Goldfield's
Tarkwa and Abosso mines, Birimian hosted gold occurrences include St. Jude's
Hwini-Butre property and Wassa.

Birimian rocks at Wassa have been affected by at least three phases of
deformation, producing a polyphase fold pattern in the region. Discrete
high-strain zones locally dissect this fold system. The structural history of
the Wassa area is important in that the various deformational events have been
responsible for the emplacement of the gold mineralization as well as the
current day geometry of the ore zones themselves. Ore shoots at the Wassa mine
are related to vein swarms and associated sulfides that formed during the first
and second phase of ductile deformation, some mineralization may also be hosted
in tensional veins of the third phase of deformation.

Stratigraphically the Wassa area is underlain by mafic and felsic volcanics with
minor interdigitated graphitic shales and terrigeneous sediments (greywacke).
The stratigraphy can be generally subdivided into three principal sequences from
youngest to oldest: interlayered thin mafic and felsic volcanic flows; a
relatively thick felsic volcanic flow; and interlayered greywacke, mafic
volcanic flows and a basal diorite.

The first two phases of deformation have severely buckled the entire
stratigraphic sequence underlying the region, producing tight fold patterns and
discrete shear zones. The third phase of deformation is enigmatic in the sense
that it produced a flat lying crenulation cleavage that can only be associated
with a rock load that would have been superimposed onto the region. Rock loading
likely was superimposed tectonically by the means of thrust faulting and the
subsequent stacking of rock on top of the now exposed Wassa stratigraphic
packages.

30

Non Reserves

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED AND
INDICATED MINERAL RESOURCES

This section uses the terms "measured mineral resources" and 'indicated
mineral resources". We advise U.S. investors that while those terms are
recognized and required by Canadian regulations, the U.S. Securities and
Exchange Commission does not recognize them. U.S. INVESTORS ARE CAUTIONED
NOT TO ASSUME THAT ANY PART OR ALL OF THE MINERAL DEPOSITS IN THESE
CATEGORIES WILL EVER BE CONVERTED INTO RESERVES.

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF INFERRED MINERAL
RESOURCES

This section uses the term "inferred mineral resources". We advise U.S.
investors that while this term is recognized and required by Canadian
regulations, the U.S. Securities and Exchange Commission does not recognize
it. "Inferred mineral resources" have a great amount of uncertainty as to
their existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of the inferred
mineral resources will ever be upgraded to a higher category. Under
Canadian rules estimates of inferred mineral 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 MINERAL RESOURCE EXISTS, OR
IS ECONOMICALLY OR LEGALLY MINEABLE.

At December 31, 2002, the estimated Measured and Indicated Mineral Resource at
Wassa was 17.8 million tonnes grading 1.29 g/t. In addition, there are 26.0
million tonnes of Inferred Mineral Resource at an average grade of 1.15 g/t.

WASSA MINERAL RESOURCE ESTIMATES AS OF DECEMBER 31, 2002

Our Mineral Resource estimate for Wassa has been estimated in conformance with
definitions set out in Canada's National Instrument 43-101. Also see our
"Glossary of Terms".

The Mineral Resource has been estimated using a $325 per ounce gold price and
historic and predicted mining and processing costs and metallurgical recoveries.
The cut off grades used vary between 0.4 g/t and 0.6 g/t. The resource estimates
have been estimated using mining-processing costs between $5.66 to $6.40 per
tonne and processing recoveries between 92 and 93%. An overall mining recovery
of 95% of the ore tonnes was also applied for all materials.

As required by the Ontario Securities Commission, an independent technical
report is currently being produced by Associated Mining Consultants Ltd ("AMC")
on our behalf and we expect it to be filed in Canada and the U.S. in April 2003.

Mineral Resource estimates for Wassa were based on the data set collected by SGL
consisting of 934 reverse circulation drill holes totaling 74,485 meters, and
124 diamond drill holes totaling 17,822 meters. As part of the due diligence and
ongoing feasibility exercise GSR completed 765 RAB holes totaling 18,710 meters,
295 RC holes totaling 15,198 meters, 5,215 meters of RC pre-collar and 76
diamond drill holes totaling 9,357 meters.

The information in this report that relates to the estimation of the Wassa
Mineral Resource is based on information compiled and/or validated by Mr. S.
Mitchel Wasel,

31

Exploration Manager-Ghana. Mr. Wasel qualifies as the Qualified Person being a
qualified geologist who has 15 years of experience in gold and base metal
exploration and is a Member of the Australasian Institute of Mining and
Metallurgy.

Historical Mining Operations at Wassa

Mechanized gold mining began at Wassa in 1999 following approximately 10 years
of exploration work by various parties. The property was developed by a
consortium of European mining entities under the name of Satellite Goldfields
Ltd. ("Satellite"). The Satellite operation consisted of an open pit mine and a
conventional three million tonnes per year heap leach operation. Gold production
was approximately 90,000 ounces per year in 2001 and 2000. Operations under the
Satellite entity, ceased in mid-2001. See "Wassa Acquisition" above for
subsequent details.

Our Involvement

We are currently working on a feasibility study to determine if Wassa can be
reactivated on a profitable basis. A drilling program has been designed and
carried out in conjunction with a feasibility study to evaluate the gold
potential of the property. We are also conducting engineering and design studies
which indicate that it may be possible to establish profitable operations at
Wassa utilizing conventional CIL technology. CIL technology should provide
better gold recovery and lower unit costs than was achieved during the earlier
heap leach operational phase. We expect to complete the reserve analysis and
feasibility study by mid-2003 and if warranted, construction of a CIL mill
facility would begin immediately thereafter. The estimated capital cost of the
CIL plant and associated start-up costs is expected to be approximately $14
million. Gold production could begin by early 2004. Most of the existing
infrastructure, including the crushers, conveyors, the power plant, haul roads
and adsorption plant, as well as the town site and administrative facilities
would be useable in a CIL operation.

PRESTEA UNDERGROUND PROPERTY

The Prestea Underground has produced approximately nine million ounces of gold
during the last 130 years, the second highest output of any Ghanaian mine. The
underground workings are extensive, reaching depths of approximately 1,400
meters and extending along strike for approximately ten kms. Underground
workings can currently be accessed via two shafts, one near the town of Prestea
and a second approximately four kms to the southwest. Past mining was
concentrated along a steeply dipping tabular northeast trending shear zone that
was mineralized with gold-bearing quartz veins. Gold was also disseminated in
the crushed rock of shear zones. Cut-and-fill mining methods were employed in
most of the past operations due to the rock conditions in the shear zones.
Underground operations ceased in early 2002, following an extended period of low
gold prices.

Access to the mine site is via a paved road maintained by the Ghanaian
government. A rail line connects the town of Prestea to the town of Tarkwa, a
major mining supply center approximately 25 kms to the east, but there is
currently no service on the line.

We are currently engaged in a program to recondition the two shafts and their
associated hoists, which are in good operational condition. Ancillary facilities
include an administrative office, maintenance shops, a warehouse and electrical
substations. The 70 year-old mill facility was demolished by BGL in 2002 to gain
access to the surface reserves now being produced by BGL. Any potential future
production from the Prestea Underground would likely be trucked to the Bogoso
mill for processing.

The Prestea Underground is contained within a mining lease which covers the same
area as the surface mining lease granted to BGL on June 29, 2001. The surface
mining lease is restricted to a depth of 200 meters below the surface and the
underground mining lease is restricted to material deeper than 200 meters below
the surface. The underground mine lies directly beneath some of the surface
reserves now being mined by BGL. The consolidation of the underground mine with
the activities of BGL is therefore a natural progression to the orderly and
economic development of the area.

32

Prestea Underground Acquisition

In March 2002, BGL entered into an agreement with PGR, the Ghana Mineworkers
Union and the Ghana government, among others, relating to the Prestea
Underground. The salient features of the agreement are as follows:

(i) the Prestea Underground would be shut down and put on care and
maintenance;

(ii) the mining lease over the Prestea Underground would be transferred
from PGR to BGL, to be held by BGL on behalf of a joint venture
between BGL, PGR and Government. BGL had an initial 45% interest in
the joint venture, as did PGR. The Government of Ghana retained a 10%
interest;

(iii) BGL would take over the management of the Prestea Underground;

(iv) BGL would commence an assessment of the safety and economic viability
of the underground mine, which could take as much as two years to
complete; and

(v) certain infrastructure associated with the Prestea Underground would
be decommissioned and demolished by BGL to make way for the
development of BGL's surface mining operations at Prestea.

Pursuant to the new agreement, BGL, on behalf of PGR, paid $1.9 million of
employee back pay and severance costs to PGR's former employees, each of whom
entered into individual separation agreements with PGR. In addition, BGL paid
approximately $0.2 million cash to PGR during 2002 and made an additional
payment of $0.3 million, bringing the total cost of our initial 45% interest in
the joint venture to $2.4 million.

All aspects of the joint venture agreement as listed above, were carried out in
2002. BGL's subsequent spending on care and maintenance and on geological and
engineering studies raised BGL's interest in the joint venture to 54% by the end
of 2002.

Geology of the Prestea Underground

Three major Proterozoic stratigraphic units can be identified in the area: the
Lower Birimian, made up mostly of argillaceous and arenaceous sediments,
overlain by the Upper Birimian (basic to acid volcanics mixed with tuffaceous
sediments) which are in turn overlain by the Tarkwaian Group (conglomerates,
quartzites and phyllites). This sequence has been intruded by large Cape Coast
and smaller Dixcove granitoids as well as by mafic dykes and sills. All these
units have undergone low to moderate greenschist metamorphism at approximately
1.8 Ma during the waning stages of the Eburnean Orogeny. It is also during that
period that ore-related folding and shearing occurred.

The Prestea deposits are associated with the same Konongo-Axim shear zone which
extends over 220kms and which accounts for 80% to 90% of the total quartz
lode-hosted gold extracted in Ghana. Other mines located along the same shear
are the Bogoso pits, Obuasi and Konongo.

Prestea is located on the western limb of an overturned isoclinal mega syncline.
The rocks strike NE-SW and dip steeply 65(Degree) to 75(Degree) to the NW. The
younging direction is towards the SE. Both the Birimian and the Tarkwaian have
been subjected to complex polyphase deformation. Folding is intense, tending to
be isoclinal with the fold axis trending parallel to the rock units. Faulting
also tends to follow the fold axis strike and lies close to the contact between
the lower and upper Birimian units.

Two types of gold hosts have historically been recognized at Prestea:
shear-related hydrothermal quartz veins; and disseminated sulfide-hosted gold
mineralization associated with metavolcanic pods.

The veins are crack-and-seal types with country rock enclaves (generally
phyllites which are often mineralized themselves) encapsulated within the
composite vein mass. The veins (locally called "reefs") are intermittently
developed, steeply plunging pod-shaped quartz lenses located either within the
shear itself or in the extension joints in the footwall of the shear. They are
typically narrow (1-2 meters) and have short strike length relative to their
down plunge extension. The shear itself is marked by a carbonaceous or graphitic
gouge horizon. Where the shear is devoid of quartz veining, it usually carries
little or no gold.

33

Anastomozing branches from the main shear zone occur in places, giving rise to
both footwall and hanging wall veins that transgress stratigraphy.

There are essentially three reefs which have been mined at Prestea, by
decreasing order of importance:

o the Main Reef,

o the West Reef,

o the East Reef.

The Main Reef is the most laterally persistent of the three and has been
extensively mined. The West Reef lies in the Main Reef's hanging wall whereas
the East Reef is found in the footwall. Cross-sections show that the Main and
West Reefs diverge at depth. While the East Reef is a minor ore body in the
Central Shaft sector, it is the principal source of gold in the southern portion
of the mine around Bondaye Shaft.

Towards the south the shear splays out which may result in a greater number of
ore bodies over a larger structural corridor.

The shear zone also encompasses altered metavolcanic pods within which stock
work sulfide (mainly pyrite and acicular arsenopyrite) and associated gold
mineralization have been recorded. These pods tend to be found in the footwall
of the Main Reef and may have acted as buttresses against which the shear could
jog and create dilatational traps for hydrothermal fluids to precipitate. The
metavolcanics have en-echelon type arrangements and are elongated parallel to
the shear strike while cross-sections show the pods pinching and swelling
downdip. They range in thickness from a few meters to several 10's of meters.
Their true nature is still open to question as some workers have categorized
them as strongly carbonatized and sericitized greywackes whiles others have
identified saussuritized glass shards and remnants of ferro-magnesian minerals
that would qualify them as basic to intermediate tuffs.

MINING IN GHANA

Ghana is situated on the West Coast of Africa, approximately 750 kms north of
the equator on the Gulf of Guinea. Accra, the capital city of Ghana, is located
on the Greenwich Meridian. After a period as a British colony, Ghana achieved
independence in 1957 and it is now a republic with a democratically elected
government. Ghana has a population of approximately 19 million people. English
is the official and commercial language. The total land area of the country is
approximately 238,000 square kms and the topography is relatively flat. Ghana
has a tropical climate with two rainy seasons and two dry seasons.

Rights to explore and develop a mine are controlled through the Minerals
Commission, a governmental organization designed to promote and control the
development of Ghana's mineral wealth. A company or individual can apply to the
Minerals Commission for a renewable exploration concession granting exclusive
rights to explore for a particular mineral in a selected area for a period of
two years. When exploration has successfully delineated a mineable reserve, an
application is made to the Minerals Commission for conversion to a mining lease,
granting a company the right to produce a specific product from the concession
area for a period of normally 20 years. Production must begin within two years
of the date of granting a mining lease.

Government of Ghana Special Rights

The Government of Ghana has a 10% carried interest in BGL and Wexford and is
entitled to acquire up to an additional 20% interest in BGL and/or Wexford. The
carried interest entitles the Government of Ghana to a pro-rata share of future
dividends, if any, from BGL and Wexford once all third party loans and
shareholder loans owed to us are repaid. If the Government of Ghana wishes to
exercise the additional acquisition right, it must first give reasonable notice.
It must pay such purchase price for the additional 20% interest as the
Government of Ghana and BGL and/or Wexford may agree on at the time. If there is
no agreement, the purchase price will be the fair market value of such interest
at such time as determined by arbitration conducted by the International Center
for the Settlement of Investment Disputes. The Government of Ghana may also
acquire further interests in BGL and/or Wexford on terms mutually acceptable to
the Government and BGL and/or Wexford. To date the government has indicated no
desire to obtain additional ownership in any of our properties.

34

The Government of Ghana is entitled to acquire a special or golden share in any
mining company at any time for no consideration or such consideration as the
Government of Ghana and BGL and/or Wexford may agree. The special share will
constitute a separate class of shares with such rights as the Government of
Ghana and BGL and/or Wexford may agree. In the absence of such agreement, the
special share will have the following rights:

o the special share will carry no voting rights, but the holder will be
entitled to receive notice of and attend and speak at any general meeting
of the members or any separate meeting of the holders of any class of
shares;

o the special share may only be issued to, held by or transferred to the
Government or a person acting on behalf of the Government;

o the written consent of the holder of such special share must be obtained
for all amendments to the organizational documents of the company, the
voluntary winding-up or liquidation of the company or the disposal of any
mining lease or the whole or any material part of the assets of the
company; and

o the holder of the special share will be entitled to the payment of a
nominal sum of 1,000 Ghanaian Cedis in a winding-up or liquidation of the
company in priority to any payment to other members and may require the
company to redeem the special share at any time for a nominal sum of 1,000
Cedis.

BGL and Wexford have not issued or been requested to issue to date, any such
special share to the Government of Ghana.

The Government of Ghana has a pre-emptive right to purchase all gold and other
minerals produced by BGL and Wexford. The purchase price will be such price as
the Government of Ghana and BGL and Wexford may agree on, or the price
established by any gold hedging arrangement between BGL and any third party
approved by the Government, or the publicly quoted market price prevailing for
the minerals or products as delivered at the mine or plant where the right of
preemption was exercised. The purchase price must be paid in foreign exchange.
The Government of Ghana has agreed to take no preemptive action pursuant to its
right to purchase such gold or other minerals so long as BGL and Wexford sells
gold in accordance with certain procedures for selling gold approved by the Bank
of Ghana.

Government Royalties

Under the laws of Ghana, a holder of a mining lease is required to pay a
quarterly royalty of not less than 3% and not more than 12% of the total
revenues earned from the lease area. The Government of Ghana determines the
royalty percentage each year based on the ratio that the operating margin bears
to the value of gold produced from the lease in that year. In 2002, 2001 and
2000 the royalty rate for BGL was 3% of revenues, and the amounts paid were $1.2
million, $0.7 million and $0.9 million, respectively.

Environment

BGL and Wexford are in substantial compliance with the environmental
requirements imposed by Ghanaian laws and guidelines and applicable guidelines
and standards published by the World Bank. BGL completed significant work during
1999 to identify the outstanding reclamation liability and to prepare a
rehabilitation work plan. Significant work has been performed during 2000, 2001
and 2002 to advance this plan and to reduce the outstanding reclamation
liability. Expenditures for ongoing rehabilitation work, including the capping
of sulfide material, backfilling of worked out pits, and the contouring and
re-vegetation of waste dumps, were approximately $0.5 million during 2002 and
$0.7 million during 2000. An additional $0.2 million was spent on reclamation
activities during 2001. As at December 31, 2002, BGL had $3.3 million of
restricted funds set aside for environmental reclamation of Bogoso.

A reclamation liability of $2.3 million was recognized upon the acquisition of
Wassa, such amount representing the estimated cost of reclamation as of the date
of the acquisition.

35

EXPLORATION PROJECTS IN GHANA

We have entered into five option agreements along the Akropong trend since the
acquisition of BGL in September 1999. Each option agreement entitles BGL to
acquire a 90% interest, with a 10% government carried interest, in mineral
properties located on the Akropong trend and within approximately 20 to 25 kms
from the BGL plant. In addition to the option agreements, BGL has been granted
two prospecting licenses to the south and east of the Akropong trend and has one
application for a prospecting license on the western side of the trend. The
total surface area of the mineral properties covered in the option agreements
and applications is approximately 514 square kms. The objective of this work is
to acquire potential mining opportunities in the immediate vicinity of
Bogoso/Prestea that may, in the future, provide additional sources of mill feed
for the Bogoso mill. All these projects are at an early stage of exploration and
to date they do not have, and ultimately may not have, proven and probable
reserves. The eight properties are referred to hereinafter as the "Akropong
Projects".

In 2002, exploration activities on the Akropong Projects involved regional
stream sampling over the entire concession area. Anomalies were prioritized and
follow-up soil geochemistry programs were planned. Initial RAB drilling of the
Riyadh anomaly commenced in December and will continue into 2003. Exploration
expenditures for the Akropong Projects totaled just over $100,000 during 2002.

We expect to spend approximately $300,000 on Akropong Projects during 2003.
Exploration work for 2003 will involve soil geochemistry surveys, mechanized
trenching and RAB drilling. Testing of positive deep auger anomalies and up dip
extensions of mineralization intersected in previous diamond drill holes and a
preliminary RAB drilling program will be initiated along the Pampe South
anomaly. Follow up soil geochemistry will be conducted at Amenfi to delineate
the source of the alluvial gold defined by the stream sampling program.
Geochemical soil sampling is planned to test stream anomalies defined in 2002.
Pending positive results from the soil geochemistry these anomalies will be RAB
drilled in 2004. Expenditures given are estimates and may vary.

We signed letters of intent with seven Ghanaian concession holders in 2002.
These concessions are located south of the Prestea property and south east of
Tarkwa. As part of our due diligence we have conducted stream sediment and soil
sampling surveys on the concessions and have signed joint venture agreements on
five of these properties. The total land area encompassed by these five
concessions totals 192 square kms. We expect to spend approximately $180,000 on
these projects in 2003, including property payments.

The Obuom concession is currently under reapplication which is expected to be
granted in 2003. Exploration work scheduled for Obuom will involve confirmation
of the gold in soil anomalies previously defined by JCI.

At Wassa, exploration efforts are planned to investigate the potential in the
immediate vicinity of the existing infrastructure. Located just north of the
Wassa property is the Adasse prospecting license. Exploration scheduled for
Adasse includes regional stream sampling followed by wide spaced soil
geochemistry. Any economic gold mineralization delineated at Adasse could be
processed through at Wassa. We have applied for three reconnaissance permits
east, southeast and north west of the Wassa mining lease. These concessions are
currently under application and are expected to be granted in 2003.

Exploration activities at Prestea during 2002 concentrated on delineating
additional zones of mineralized material amenable to open pit mining. Zones of
mineralized materials were delineated along approximately 12 kms of the 22 km
Ashanti trend on the Prestea property. These zones were delineated through soil
geochemistry and then followed up by RAB and RC drilling. Mineralization on the
remaining 10 km portion of Prestea has been defined with soil geochemistry and
will be tested during the 2003 exploration programs.

Exploration for 2003 is expected to include both surface and underground
evaluation at Prestea. RAB and RC drilling has been planned to test the
continuity of mineralization between the Plant North and Beta Boundary pits.
Additional drilling has also been planned to better define the Beta Boundary
mineralization. RAB drilling to test the 10 km southern extension of the
mineralized trend has also been budgeted for 2003.

Compilation of the Prestea Underground data commenced in 2002 and will continue
for much of 2003. Underground drilling targets are currently being delineated
and drilling is expected to commence in the second half of 2003.

36

EXPLORATION PROJECTS IN SOUTH AMERICA

Guiana Shield Transaction

In May 2002, we sold our interests in the Gross Rosebel, Headleys and Thunder
Mountain properties in Suriname, and our interest in OGML in Guyana, to Cambior.

We received $5.0 million cash in 2002 and $1.0 million in 2003 for the sale of
Gross Rosebel and expect to receive two additional deferred payments of $1.0
million each in 2004 and 2005 based on Cambior's development and operation of
Gross Rosebel. In addition, Cambior will pay us a royalty equal to 10% of the
excess of the average quarterly market price above a gold price hurdle on the
first 7 million ounces of gold production from Gross Rosebel. For soft and
transitional rock the gold price hurdle is $300 per ounce and for hard rock the
gold price hurdle is $350 per ounce.

For the Headleys and Thunder Mountain properties, we will receive a deferred
consideration of $0.5 million each, when and if Cambior commences commercial
mining from these properties.

As payment for our 30% equity interest and preferred shares in OGML, we received
a release and waiver from OGML, Cambior and the Guyana Government in respect of
all liabilities, of any nature, related to the Omai gold mine. In the
transaction we also acquired Cambior's 50% interests in the Yaou and Dorlin
exploration properties in French Guiana.

French Guiana Properties

Most of our properties in South America are now located in French Guiana and
held through Guyanor, our 73% owned subsidiary, Guyanor Ressources S.A.
("Guyanor"). French Guiana is part of French national territory and has been an
overseas "Departement" of France since 1946. The Departement, with an area of
90,000 square kms and a population of approximately 160,000, has two
representatives in the French National Assembly and one representative in the
French Senate. Under the French Constitution, French Guiana is governed by the
same laws as metropolitan France, subject to modifications (including those
affecting tax and mining laws and regulations) that may be adopted to reflect
the historical, cultural, geographical and economic characteristics of French
Guiana and provide for regional administration.

In French Guiana, artisanal miners illegally work on our properties from time to
time. Local government authorities are striving to deal with the situation, but
given the remote location of our properties, the situation has still not been
fully resolved.

Guyanor is a societe anonyme incorporated under the laws of France on April 20,
1993 with its head and registered offices located at 9 Lot. Mont Joyeux, B.P.
750, 97337 Cayenne-Cedex, French Guiana.

At December 31, 2002, Guyanor owned mineral rights (either directly or through
its subsidiaries) for the Yaou, Dorlin and Paul Isnard properties. All of the
properties are in the exploration stage. Application was made in September 2002
for a new 5 km by 5 km exploration permit for the Bois Canon exploration
property in French Guiana.

On October 18, 2002, our subsidiary Societe des Mines de Saint-Elie s.a.r.l. was
sold to Companie Miniere Esperance S.A for $0.5 million.

During 2002 Guyanor spent approximately $0.3 million on care and maintenance of
its exploration properties. During 2001, Guyanor spent $1.0 million on
exploration and care and maintenance, of which $0.8 million was furnished by a
joint venture partner.

37

YAOU AND DORLIN

The Properties

The Yaou exploration permit covers an area of 52 square kms located some 210 kms
southwest of Cayenne, French Guiana. Access to the property is by helicopter or
four-wheel drive vehicle on 17 kms of dirt road from the town of Maripasoula,
which is accessible by chartered and daily scheduled fixed-wing aircraft from
Cayenne.

The Dorlin exploration permit covers an area of 84 square kms located some 180
kms southwest of Cayenne and 60 kms east of Maripasoula. The property is
accessible by helicopter and a 500 meter airstrip located on the property is
suitable for fixed wing aircraft. Access is also available by boat during the
rainy season.

Yaou and Dorlin are owned by an entity called Societe Miniere Yaou and Dorlin
S.A.S. ("SMYD"). SMYD was originally established as a joint venture with Guyanor
and Cambior each owning a 50% interest. In conjunction with the Guiana Shield
Transaction discussed above, Cambior transferred its 50% ownership of SMYD to us
in May 2002. Guyanor, our 73% owned subsidiary, retained its 50% interest.

Geology

The geology of the Yaou project area consists of a folded and sheared sequence
of Lower "Paramaca" Proterozoic mafic and ultramafic volcanics and
volcanoclastics, with minor intercalations of fine-grained clastic sediments.
Prior to folding, these were intruded by dioritic bodies. Two generations of
granitic plutons bound the property to the east and south. A north-north-west
striking dolerite dyke of late Proterozoic age cuts through the property.
Exploration has defined three principal zones of gold mineralization, mainly
associated with narrow, deformed felsic intrusive bodies and finely laminated
felsic tuffs. These zones have been evaluated by deep augering, trenching and
core drilling.

The geology of the Dorlin project area consists of sheared and folded greenstone
units of Lower Paramaca sequence. Exploration has identified an 11km long zone
of soil geochemistry anomalies associated with a radiometric potassium anomaly.
Within this anomalous zone one major, N-S trending gold mineralized system,
Montagne Nivre, associated with tourmalinization, silicification and
pyritization, has been intensively explored by deep auger, trenching and core
drilling.

Work Program

In 2002, the Yaou and Dorlin properties remained on care and maintenance. In
2002 and in 2001, expenditures on Yaou and Dorlin totaled less than $0.1 million
in each year.

Non Reserves

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED AND
INDICATED MINERAL RESOURCES

This section uses the terms "measured mineral resources" and 'indicated
mineral resources". We advise U.S. investors that while those terms are
recognized and required by Canadian regulations, the U.S. Securities and
Exchange Commission does not recognize them. U.S. INVESTORS ARE CAUTIONED
NOT TO ASSUME THAT ANY PART OR ALL OF THE MINERAL DEPOSITS IN THESE
CATEGORIES WILL EVER BE CONVERTED INTO RESERVES.

Our current share of the Measured and Indicated Mineral Resources for Yaou and
Dorlin, including 73% of Guyanor's 50% share and all of our 50% share, is
estimated to be 11.9 million tonnes grading 2.1 g/t. This estimate was made at
the end of 2000, using a long-term gold price assumption of $300/oz. The
Qualified Person responsible for the estimation of Mineral Resource for the Yaou
and Dorlin project is Mr. Francis Clouston, our employee, who is a former
project evaluation geologist for Cambior with over 20 years of experience in the
modeling and assessment of gold and base metal projects. Mr. Clouston is a
member of the Canadian Institute of Mining and Metallurgy and the Quebec Order
of Engineers. The amount of the Mineral Resource which may have been removed by
illegal mining is not known.

PAUL ISNARD

On October 29, 1994, Guyanor acquired an interest in the Paul Isnard exploration
projects by way of the acquisition of all of the outstanding shares of Societe
de Travaux Publics et de Mines Auriferes en Guyane ("SOTRAPMAG").

38

SOTRAPMAG holds eight mineral concessions which will expire on December 31,
2018 but which can be renewed for an additional 25 years. Total area of the
original eight concessions is 150 square km.

Guyanor also has additional exploration permits known as Exclusive Exploration
permits ("P.E.R."). They were granted to Guyanor on November 30, 1999 for an
initial period of three years, covering an area of approximately 283 square kms.
Their validity period expired on December 1, 2002. An application for renewal
for a five-year period and reduced surface area (100 square km) was sent to the
French Administration on July 30, 2002. The application is still under review,
awaiting a final decision from the Ministry of Industry.

The Properties

The Paul Isnard project is located in the western part of French Guiana, some
180 kms west of Cayenne. The property is accessible by air or from
St-Laurent-du-Maroni, by means of a 115 kms lateritic road. The first 62 kms
section of this road is maintained by the government and the remaining 53 kms
section by SOTRAPMAG.

Geology

The Paul Isnard project covers a Lower Proterozoic greenstone belt comprised
dominantly of mafic metavolcanic rocks with lesser felsic meta volcanic rocks,
metavolcaniclastics and meta sediments associated with intermediate, mafic and
minor ultramafic intrusives of similar age.

The Decou-Decou mountains located to the south of the property are formed of
volcanic rocks that, at the summit, are covered by degraded lateritic layers.
The Lucifer mountains to the northeast are formed of basic intrusive rocks. The
basin between the mountains is underlain by a Proterozoic sequence of mafic to
felsic volcanics and clastic sediments of the Paramaca and Orapu groups, cut by
ultramafic to felsic intrusives.

At Montagne D'Or, located on the northern slopes of Decou-Decou, the host
stratigraphy for mineralization is a +400 meter thick section of bi-modal felsic
and mafic volcanics with lesser volcanoclastics, particularly at the base. The
eastern part of the section contains more mafic volcanics than the western
section. The section is intruded by a largely post mineral and later deformation
swarm of mafic dykes or sills. The section contains at least two unique time
stratigraphic horizons marked by chemical sediments and thin lithologically
distinctive flows designated as "favorable sequences".

Mineralization consists of two principal types: disseminated zones or stringer
mineralization and semi-massive (SMS) mineralization. The SMS occurs mainly
within the favorable sequences that can be reasonably correlated between the
widely spaced (200 meter) drill sections. Both contain mainly pyrite with lesser
pyrrhotite, chalcopyrite, sphalerite and arsenopyrite. A third more localized
mineralization type, "highly chloritic one" has also been identified.

Work Program

No work was carried out at Paul Isnard during 2002 other than routine
maintenance, and total costs incurred were less than $0.1 million. Total
expenditures in 2001 were $1.0 million for Paul Isnard. During 2001 the
remaining $6.9 million of deferred exploration costs were also written off
bringing the capitalized basis to zero. There is currently no plan for further
work in Paul Isnard during 2003.

Non Reserves

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED AND
INDICATED MINERAL RESOURCES

This section uses the terms "measured mineral resources" and 'indicated
mineral resources". We advise U.S. investors that while those terms are
recognized and required by Canadian regulations, the U.S.

39

Securities and Exchange Commission does not recognize them. U.S. INVESTORS
ARE CAUTIONED NOT TO ASSUME THAT ANY PART OR ALL OF THE MINERAL DEPOSITS IN
THESE CATEGORIES WILL EVER BE CONVERTED INTO RESERVES.

In 1999 we have estimated our share of Measured and Indicated Mineral Resources
to be 4.4 million tonnes grading 2.8 g/t, using a $325 gold price. This reflects
only Measured and Indicated Mineral Resource estimated to be present within open
pits as modeled by our staff. The Qualified Person responsible for the
estimation of resource for the Paul Isnard project was Declan Costelloe, former
Manager Mining Geology, for Golden Star. The amount of the Mineral Resource
which may have been removed by illegal mining is not known.

Exploitation Authorization Given for Alluvial Mining Titles by Third Parties

Guyanor has granted the right to 16 small-scale mining companies or individuals
to apply for Exploitation Authorization on specific areas located at Paul Isnard
concessions and exploration permits. The French government created this new type
of mining title in connection with revisions to the Mining Code in 2000. This
new title, referred to as an "AEX", grants to small-scale alluvial miners the
right to mine alluvial deposits on our concessions and exploration permits,
within a specific area of one square km. The title-holder of an AEX is
responsible for all potential environmental damages. During the period 2000 to
2002, under separate agreements with each AEX applicant, Guyanor received a
certain percentage of the value of the gold extracted. However, recent revisions
in French Mining law may have exempted AEX holders from such payments. If this
royalty exception becomes effective, our AEX royalty income may cease. Guyanor's
AEX royalty income was approximately $0.45 million in 2002.

40

ITEM 3. LEGAL PROCEEDINGS

We are not currently subject to any material pending legal proceedings. We are,
however, engaged in routine litigation incidental to our business. No material
legal proceedings, involving us nor our business are pending, or, to our
knowledge, contemplated, by any governmental authority. We are not aware of any
material events of noncompliance with environmental laws and regulations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth
quarter of 2002.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

In June 2002 our common shares began trading on the American Stock Exchange
under the symbol GSS and on the Berlin exchange under the symbol "GS5". Our
common shares also traded on the Toronto Stock Exchange ("TSX") throughout 2002
under the trading symbol "GSC". Prior to June 2002 our common shares had traded
in the United States on the Nasdaq OTC Bulletin Board. As of March 14, 2003,
106,317,535 common shares were outstanding and we had 591 shareholders of
record. On March 14, 2003, the closing price per share for our common shares, as
reported by the TSX was Cdn$2.50 and as reported by the American Stock Exchange
was $1.70.

The following table sets forth, for the periods indicated, the high and low
market closing prices per share of our common shares as reported by the TSX, the
OTC Bulletin Board and the American Stock Exchange.

(1) During 2002 our stock traded on the OTC Bulletin Board until June 18, 2002
and on the American Stock Exchange from June 19, 2002.

We have not declared or paid cash dividends on our common shares since our
inception and we expect for the foreseeable future to retain all of our earnings
from operations for use in expanding and developing our business. Future
dividend decisions will consider then current business results, cash
requirements and our financial condition.

41

RECENT SALES OF UNREGISTERED SECURITIES

The issuances discussed under this section were exempted from registration under
Section 4(2) of the Securities Act or Rule 506 thereunder as indicated. All
purchasers of the following securities acquired the shares for investment
purposes only and all stock certificates reflect the appropriate legends.

Common Stock
- ------------

1. In January 2002, we issued 300,000 shares as payment for financial advisory
fees valued at $150,000

2. In March 2002, we issued 150,000 shares as payment for financial advisory
fees valued at $250,000

3. In June 2002, we issued 515,160 shares as payment for financial advisory
fees valued at $360,000

4. In April 2002, 1,370,000 common shares were issued upon conversion of
warrants. The warrants exercised were originally issued in January 2002
with a $0.70 exercise price. Total value of shares issued was $959,000.

5. In May 2002, 125,800 common shares were issued upon conversion of warrants.
The warrants exercised were originally issued in January 2002 with a $0.70
exercise price. Total value of shares issued was $88,060.

6. In June 2002, 1,040,160 common shares were issued upon conversion of
warrants. The warrants exercised were originally issued in January 2002
with a $0.70 exercise price. Total value of shares issued was $728,112.

Units
- -----

1. On January 11, 2002, we issued 11,516,000 units consisting of one common
share and one half of one warrant in a private placement to a group of
investors pursuant to Rule 506 under the Securities Act, for a purchase
price of $5.6 million. Each whole warrant provides the right to purchase
one common share for $0.70 until January 11, 2004.

2. On December 12, 2002, we issued 3,440,000 units consisting of one common
share and one fourth of one warrant in a private placement to a group of
investors pursuant to Rule 506 under the Securities Act, for a purchase
price of $4.3 million. Each whole warrant provides the right to purchase
one common share for $1.50 until December 12, 2004

Warrants
- --------

1. On July 19, 2002, we issued 333,334 warrants as payment for the purchase of
the common shares of an acquired company. Each warrant provides the right to
purchase one common share for $0.70 until July 19, 2005.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

The following summarizes the principal Canadian federal income tax
considerations applicable to the holding and disposition of a common share of
the Company (a "Common Share") by a holder (the "Holder") of one or more Common
Shares, for tax purposes, who is resident in the United States of America and
holds the Common Shares as capital property. This summary is based on the
current provisions of the Canada-United States Income Tax Convention (1980) (the
"Treaty"), Income Tax Act (Canada) (the "Tax Act"), the regulations there under
and all amendments to the Tax Act publicly proposed by the government of Canada
to the date hereof. It is assumed that each such amendment will be enacted as
proposed and there is no other relevant change in any governing law, although no
assurance can be given in these respects.

Every Holder is liable to pay a withholding tax on every dividend that is or is
deemed to be paid or credited to him on his Common Shares. Under the Act, every
non-resident person shall pay a tax at 25%. Under the Treaty, the rate of
withholding tax is reduced to 5% of the gross amount of the dividend where the
Holder is a company that owns at least 10% of our voting stock and beneficially
owns the dividend, and 15% in any other case.

42

Under the Tax Act, a Holder will not be subject to Canadian tax on any capital
gain realized on an actual or deemed disposition of a Common Share, including a
deemed disposition at death, provided that he did not hold the Common Share as
capital property used in carrying on a business in Canada, and that neither he
nor persons with whom he did not deal at arm's length alone or together owned
25% or more of the issued shares of any class of our stock at any time in the 60
month period immediately preceding the disposition.

A Holder who is liable under the Tax Act for Canadian tax in respect of a
capital gain realized on an actual or deemed disposition of a Common Share may
be relieved under the Treaty from such liability unless

(a) the Common Share formed part of the business property of a
permanent establishment or fixed base in Canada that the
Holder has or had within the twelve-month period preceding the
disposition, or

(b) the Holder

(i) was resident in Canada for 120 months during any period
of 20 consecutive years preceding the disposition, and

(ii) was resident in Canada at any time during the ten years
immediately preceding the disposition, and

(iii) owned the Common Share when he ceased to be a resident
of Canada.

This summary is of a general nature and is not intended, nor should it be
construed, to be legal or tax advice to any particular Shareholder. SHAREHOLDERS
SHOULD CONSULT THEIR OWN TAX ADVISERS AS TO THE INCOME AND OTHER TAX
CONSEQUENCES ARISING IN THEIR PARTICULAR CIRCUMSTANCES.

43

ITEM 6. SELECTED FINANCIAL DATA

The selected financial data set forth below are derived from our audited
consolidated financial statements for the years ended December 31, 2002, 2001,
2000, 1999 and 1998, and should be read in conjunction with those financial
statements and the foot notes thereto. The consolidated financial statements
have been prepared in accordance with Cdn GAAP. Selected financial data derived
in accordance with US GAAP has also been provided and should be read in
conjunction with footnote 26 to the financial statements. For US GAAP
reconciliation items, see the attached consolidated financial statements and
notes. Reference should also be made to "Item 7. Management's Discussion and
Analysis of Financial Conditions and Results of Operations".

SUMMARY OF FINANCIAL CONDITION DATA AT END OF PERIOD:
(Amounts in thousands except per share data)

44

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
accompanying consolidated financial statements and related notes. The financial
statements have been prepared in accordance with generally accepted accounting
principles in Canada ("Cdn GAAP"). For a reconciliation of our financial
statements to statements prepared in accordance with generally accepted
accounting principles in the United States ("US GAAP"), see Note 26 to the
accompanying consolidated financial statements and "Results of Operations".

INTRODUCTION

ACQUISITIONS

Since 1999, we have focused primarily on the acquisition of producing and
development stage gold properties in Ghana and on the exploration, development
and operation of these properties. We have acquired two operating properties
since 1999 and two development stage properties which we are now evaluating for
production potential.

Our acquisitions have included a 70% interest in Bogoso Gold Limited ("BGL") in
1999, which we increased to 90% in 2001. BGL provided us with an operating open
pit gold mine and mill. We acquired a 90% interest in the adjoining Prestea gold
property ("Prestea") in 2001, and commenced open-pit mining at Prestea in late
2001, with ore being processed at the Bogoso mill. We expect to produce
approximately 140,000 ounces from our Bogoso/Prestea operations
("Bogoso/Prestea") in 2003. Mining at Bogoso/Prestea is expected to continue for
approximately ten years, assuming sulfide ores are mined from Bogoso and
Prestea, once the non-refractory ores have been mined, as is currently
contemplated.

In September 2002, we acquired a 90% interest in the Wassa gold property
("Wassa"), previously operated by a former owner as an open pit, heap leach
operation. We are currently conducting a feasibility study regarding a
conventional carbon-in leach operation. If the feasibility study is favorable,
we believe that Wassa could re-commence production in early 2004. In 2001, via a
joint venture agreement, our 90% owned subsidiary BGL, acquired a 45% managing
interest in the Prestea underground gold property ("Prestea Underground"), which
includes a currently inactive underground mine. We are evaluating the
possibility of restarting underground production from this acquisition.

We are actively investigating the acquisition of producing, development and
advanced stage exploration gold properties and companies, primarily in Ghana and
elsewhere in Africa. We also intend to increase significantly our exploration
activities on our current exploration properties in Ghana as well as in other
areas in West Africa.

OPERATING RESULTS IN 2002

For the first time in the Company's history we recorded a profit for the full
year. We earned $4.9 million in 2002, versus a loss of $20.6 million in 2001.
There were no impairment write-offs in 2002 versus a $15.0 million write-off in
2001. Earnings also improved on higher gold prices and better gold recovery as
we commenced mining of Prestea ores. We received an average gold price of $311
per ounce in 2002, $40 per ounce higher than in 2001. Higher gold output, from
improved gold recoveries, reduced our average cash operating costs from $263 per
ounce in 2001 to $193 in 2002.

Future operating results are directly related to the price of gold, which can
fluctuate widely and is affected by numerous factors beyond our control. If gold
sales revenues fall for a substantial period below our cost of production, we
could cease production at any or all of our operations and development of some
or all of our projects.

FINANCING ACTIVITIES

Our liquidity improved in 2002. Cash balances increased from $0.5 million at the
end of 2001 to $20.0 million at year-end 2002. We raised net proceeds of
approximately $17.6 million in a public offering, $ 9.3 million in two

45

private placements, and approximately $5.5 million through the sale of certain
exploration properties. And in February 2003, we completed a public offering for
net proceeds of approximately $31.5 million.

SIGNIFICANT EVENTS DURING 2002 AND RECENT DEVELOPMENTS

JANUARY 2002 PRIVATE PLACEMENT - We sold 11,516,000 units in a private placement
at a price of $0.49, each unit consisting of one common share and one half
warrant, for net proceeds of $5.1 million. Each whole warrant is exercisable for
one common share at an exercise price of $0.70 until January 11, 2004.

GUIANA SHIELD TRANSACTION - In May 2002, we sold our interest in most of our
exploration properties in Suriname and Guyana, including the Gross Rosebel
property ("Gross Rosebel"), Headleys, Thunder Mountain and Omai Gold Mines
Limited ("OGML"), to Cambior Inc. ("Cambior"), our former partner in
exploration, development and/or operation of these properties.

We received $5.0 million cash in 2002 and $1.0 million of deferred payments in
2003 for the sale of Gross Rosebel and are entitled to receive two
additional deferred payments of $1.0 million each in 2004 and 2005. In addition,
Cambior is obligated to pay us a royalty equal to 10% of the excess of the
average quarterly market price above a gold price hurdle on the first 7 million
ounces of gold production from Gross Rosebel. For soft and transitional rock the
gold price hurdle is $300 per ounce and for hard rock the gold price hurdle is
$350 per ounce.

For the Headleys and Thunder Mountain properties, we will receive a deferred
consideration of $0.5 million per property when and if, Cambior commences
commercial mining from these properties. As payment for our 30% equity interest
and preferred shares in OGML, we received a release and waiver from OGML,
Cambior and the Guyana Government in respect of all liabilities, of any nature,
related to the Omai gold mine. In the transaction we also acquired Cambior's 50%
interests in the Yaou and Dorlin exploration properties in French Guiana.

ACQUISITION OF AN INTEREST IN THE PRESTEA UNDERGROUND - In March 2002, our 90%
owned subsidiary, BGL entered into a joint venture agreement with Prestea Gold
Resources Limited ("PGR") and the Government of Ghana, relating to the Prestea
Underground. The Prestea Underground operated for 130 years, producing
approximately nine million ounces of gold prior to 2001.

The joint venture agreement called for the following: shutting down the Prestea
Underground and putting it on a care and maintenance basis; the Prestea
Underground mining lease was transferred from PGR to BGL, to be held by BGL on
behalf of a joint venture; BGL and PGR would each own an initial 45% interest in
the joint venture and the government of Ghana would have a 10% interest; and BGL
would take over the day-to-day management of the Prestea Underground. Under
BGL's direction, an assessment of the safety and economic viability of the
Prestea Underground is now underway. The assessment could take as much as two
years to complete. The joint venture agreement also allowed certain
infrastructure items, associated with the Prestea Underground, to be
decommissioned and demolished to make way for the development of BGL's surface
mining operations at Prestea.

The Prestea Underground is contained within a mining lease which covers the same
area as the Prestea surface mining lease granted to BGL on June 29, 2001. The
surface mining lease is to a depth of 200 meters below the surface and the
underground mining lease is restricted to material deeper than 200 meters below
the surface.

BGL paid $2.4 million for its initial 45% interest in the joint venture.
Subsequent investments in the joint venture increased BGL's ownership to 54% by
December 31, 2002.

LISTINGS ON THE AMERICAN STOCK EXCHANGE AND THE BERLIN STOCK EXCHANGE - Our
common shares were listed on the American Stock Exchange and began trading on
June 19, 2002 under the symbol "GSS". Our shares were also listed on the Berlin
Stock Exchange in June 2002 under the symbol "GS5".

BOGOSO/PRESTEA RESERVE ADDITION - On June 20, 2002, we announced an increase in
Proven and Probable Mineral Reserves at Bogoso/Prestea of 263,000 ounces
contained in approximately 1.5 million tonnes of ore at an average grade of 5.32
grams per tonne. This increase is approximately two additional years production
at Bogoso/Prestea.

46

JULY 2002 PUBLIC OFFERING - On July 24, 2002, we completed a public offering in
the United States and Canada for the sale of 16.1 million units at Cdn$1.90
(approximately $1.20) per unit, to raise total gross proceeds of $19.4 million
or net cash of $17.6 million. Each unit consisted of one common share and
one-half of one common share purchase warrant. Each whole warrant is exercisable
during the two year period ending July 24, 2004 at a price of Cdn$2.28
(approximately $1.46) to purchase an additional common share. The share purchase
warrants have been listed with and trade on the Toronto Stock Exchange under the
symbol "GSC.WT".

ACQUISITION OF WASSA - On September 13, 2002, we completed the acquisition of a
90% interest in Wassa in Ghana. The remaining 10% interest was retained by the
Government of Ghana. Prior to our purchase, Wassa had operated for approximately
two years, as a conventional open pit, heap leach gold operation producing
approximately 90,000 ounces per year. In 2001, following cessation of operation,
the secured lenders to the project enforced their security rights in the project
and, following a bidding process, agreed to sell the Wassa assets to us.

Wassa was acquired via our acquisition of a 90% equity position in Wexford
Goldfields Limited ("Wexford"). Assets at Wassa include an open pit mine, heap
leach pads, processing equipment (crusher, agglomeration plant, conveyors, and a
gold recovery plant), parts and supplies inventory, maintenance shops,
administrative offices, housing for employees, a community center and
miscellaneous other ancillary facilities. Total cost of the Wassa assets was
$6.9 million, including approximately $1.6 million in cash, assumption of $1.8
million of debt provided by the seller, assumption of approximately $2.3 million
of liabilities and $1.2 million of other costs. In addition we agreed to pay the
Wassa sellers two separate royalties.

We are currently working on a feasibility study to determine if Wassa can be
redeveloped on a profitable basis. A drilling program has been designed and
carried out in conjunction with the feasibility study to evaluate the gold
potential of the property. We are also conducting engineering and design studies
which indicate that it may be possible to establish profitable operations at
Wassa utilizing conventional CIL technology. CIL technology should provide
better gold recovery and lower unit costs than was achieved during the earlier
heap leach operational phase. We expect to complete the reserve analysis and
feasibility study by mid-2003 and if warranted, construction of a CIL mill
facility would begin immediately thereafter. The estimated capital cost of the
CIL plant and associated start-up costs are expected to be approximately $14
million. Gold production could begin by early 2004. Much of the existing
infrastructure, including the crusher, conveyors, the power plant, haul roads
and a gold recovery plant, as well as the town site and administrative
facilities would be useable in a CIL operation.

DECEMBER 2002 PRIVATE PLACEMENT - On December 12, 2002 we completed a private
placement of 3.44 million units at a price of $1.25 per unit for gross proceeds
of $4.3 million. Each unit consists of one common share and one-quarter of a
warrant. Each whole warrant entitles the holder to the right, for a period of
two years, to acquire one common share at an exercise price of $1.50.

FEBRUARY 2003 EQUITY OFFERING - On February 14, 2003 we completed a fully
underwritten public offering of 17,000,000 units at Cdn$3.00 (approximately
$1.97) per unit, for gross proceeds of Cdn$51 million (approximately $33.5
million). Each unit consisted of one common share and one-half of one warrant to
purchase a common share. Each whole warrant is exercisable for a period of 48
months from its date of issue and shall entitle the holder to purchase one
common share for Cdn$4.60 (approximately $3.02) per share. The warrants have
been listed with and trade on the Toronto Stock Exchange under the symbol
GSC.WT.A.

PAYMENTS TO THE SELLERS OF BOGOSO - Provisions of the 1999 Bogoso purchase
agreement specified that if a sulfide mining operation was ever initiated at
Bogoso, utilizing sulfide ores from Bogoso, an additional payment would be due
to the original Bogoso sellers. The agreement called for a payment of $5.0
million, plus the agreement provided for the amount to escalate each year by an
inflation factor. Negotiations with the Bogoso sellers resulted in this
potential future payment being extinguished by the payment of $2.0 million in
February 2003. On the same date, the remaining $2.0 million liability due the
Bogoso sellers, triggered by acquiring more than 50,000 ounces of gold from
outside of Bogoso, was made, thereby liquidating and satisfying all liabilities
to the Bogoso sellers associated with the original Bogoso purchase.

47

RESULTS OF OPERATIONS

2002 COMPARED TO 2001

We generated net income of $4.9 million or $0.07 per share for the twelve months
ended December 31, 2002, compared to a loss of $20.6 million or $0.49 per share
during the twelve months ended December 31, 2001. The major factors contributing
to the marked improvement were higher gold production primarily from Prestea, an
improvement in the gold prices, and completion of write-offs of deferred
exploration costs in 2001.

During much of 2001, mill feed to the Bogoso mill consisted of transition ores
mined from Bogoso. The chemical composition of the transition ores was not well
suited for processing in the Bogoso mill, and a low gold recovery rate of 49.6%
was experienced during 2001 as a result. During 2002 all of the Bogoso mill feed
came from Prestea acquired in late 2001, and the milling characteristics of the
Prestea ores are much better suited for processing in the Bogoso mill, resulting
in a 74.4% recovery rate during 2002. The improved recovery added just over
41,000 ounces to our output versus what would have occurred had recoveries
stayed at the 2001 rate of 49.6%.

BOGOSO/PRESTEA OPERATING RESULTS

Revenues rose from $24.7 million in 2001 to $38.8 million in 2002. In addition
to the higher gold output for the year, 2002 gold prices were significantly
higher than in the prior year. Our realized sales price averaged $311 per ounce
in 2002, up $40 per ounce from $271 per ounce in 2001. The higher gold price
contributed approximately $5 million additional dollars to our revenues versus
the average price in 2001. Gold shipments, all from Bogoso/Prestea, totaled
124,400 ounces during 2002. This 41% increase over 2001 was due to the better
gold recoveries on the Prestea ores milled in 2002 and to an 8% increase in
tonnes milled.

While the cost of mining operations, as shown on the income statement, increased
8% from the 2001 level, mostly due to an 8% increase in the number of tonnes
milled, the improvement in gold output yielded a 27% decrease in cash operating
cost per ounce, from $263 in 2001 to $193 in 2002. Improved gold recoveries were
the most significant factor contributing to the lower cash operating cost per
ounce.

Depreciation and depletion charges in 2002 were down substantially from 2001
levels because essentially all of the initial BGL purchase cost, which included
the full purchase price of the Bogoso mill, mine equipment and other facilities,
was amortized over ounces produced from Bogoso during the two year period
between the September 1999 purchase and the September 2001 closure of the oxide
mining from Bogoso. Ounces from Prestea incurred amortization and depreciation
only to the extent of the Prestea purchase cost and for equipment purchased
after September 1999.

Due to low gold prices between 1996 and 2001, the lack of funds to continue
development work on many of our exploration properties and a new emphasis on
operations rather than exploration after 1999, most of our capitalized deferred
exploration costs were deemed impaired and written off between 1999 and 2001.
Cumulative deferred acquisition and exploration write-offs during this
three-year period totaled $55.6 million, including $15.0 million in 2001.
Exploration property write-offs were the single largest contributing factor to
the $20.6 million loss in 2001. By the end of 2001, all of our deferred
exploration properties had been written off or down to their recoverable values.

48

General and administrative costs rose from $2.7 million in 2001 to $3.9 million
in 2002. Most of the increase was related to expanded investor relations
spending and to operations at Guyanor where a lack of active exploration
projects required that certain costs be expensed as general and administrative
costs that would have been capitalized as project costs in prior periods.
Severance costs at Guyanor also contributed to the increase as down-sizing
continued at Guyanor.

We recorded a $0.4 million gain in 2002 on the sale of the St. Elie property in
Guyanor. The property was sold to a mining company in French Guiana in October
2002 for $0.5 million cash. Interest expense for 2002 was substantially lower
than in 2001, due to reduced balances on the convertible debentures and other
debt. Foreign exchange gains were mostly related to operations in Ghana where
the local currency continues to devalue against the dollar.

2001 COMPARED TO 2000

We experienced a net loss of $20.6 million during 2001 as compared to a net loss
of $14.9 million in 2000. The major factors contributing to the losses in both
years, were non-cash write-offs of deferred exploration costs incurred in
earlier years of our existence when our focus was on exploration. Given sharp
decreases in gold prices, a lack of funds to continue development work on many
of the exploration properties, unimpressive drill results and a new emphasis on
operations rather than exploration, most of our deferred exploration projects
suffered impairments and were written off in the three-year period beginning in
1999. Cumulative deferred acquisition and exploration write-offs have totaled
$31.7 million during 2000 and 2001.

Write-offs in 2001 included $6.9 million at the Paul Isnard property, triggered
by a joint venture partner's decision to withdraw from a multi-year joint
exploration agreement because of disappointing drill results from work done
during 2001. In addition, an $8.1 million write-down of Gross Rosebel was made
in 2001 to reflect its fair market value based upon the proposed sale of this
property to Cambior.

Lower gold sales also contributed to the larger loss in 2001 than in 2000,
mostly caused by lower gold production. For 2001, gold output dropped to 87,936
ounces from 108,643 ounces in 2000. As Bogoso neared the end of its
oxide and transition ore reserves in 2001, more complex ores were mined which
were not well suited to processing in the existing Bogoso mill. As a result, in
the first nine months of 2001, when Bogoso was supplying ore to the
Bogoso mill, mill feed grades actually increased slightly to 3.0 g/t from 2.6
g/t, but gold recovery dropped to 44.4% from 65.5% in the same periods of 2000.
The net result was that gold production for the first nine months of 2001
dropped to 63,331 ounces from 89,447 ounces in 2000.

Once Prestea ores became available in the fourth quarter, ore grades dropped but
recovery increased to more than off-set the lower grades and gold production in
the fourth quarter increased to 24,605 ounces compared to an average of only
21,111 ounces in the first three quarters of 2001 and 19,195 ounces in the
fourth quarter of 2000.

Realized gold prices averaged $271 per ounce in 2001, down from $280 in 2000.
The impact on sales revenues of the lower gold prices was $0.8 million. All
sales in 2001 were at spot. There was no gold price hedging activity in 2001 or
2000. Total cash operating cost per ounce averaged $271 per ounce in 2001, up
from $201 per ounce in 2000.

Cost of mining operations for 2001 fell 3% from the prior year. The more complex
nature of the Bogoso ore resulted in higher processing costs, most notably for
increased use of various chemical reagents in the milling process, but mining
property depletion was sharply lower than in 2000, reflecting lower gold output
and a lower mining property cost basis. BGL's mining property depletable basis
was reduced by $2.7 million in December 2000 after it became apparent that gold
prices were trending lower than initially anticipated, which, per the terms of
the original BGL purchase agreement, resulted in a lower ultimate cost basis for
the mining property.

Exploration costs decreased further in 2001, reflecting our decision to
temporarily de-emphasize exploration.

Deferred exploration spending in Ghana totaled $1.4 million in 2001, down from
$2.6 million in 2000. In both 2001 and in 2000 the majority of the deferred
exploration costs in Ghana were related to the sulfide feasibility study, with
such costs tapering off in 2001 as the feasibility work came to its conclusion.
In addition to the $1.0 million spent

49

on the feasibility study in 2001, $0.4 million was spent on exploration
activities at various properties in the Bogoso/Prestea vicinity. Comparable
costs for 2000 were $2.4 million for the sulfide feasibility and $0.2 million
for work on exploration properties in Ghana.

Deferred exploration costs in South America, net of partner recoveries, totaled
$1.4 million, up from $0.7 million in 2000. Of the total spent in 2001, $1.0
million was related to the Paul Isnard property and the balance is related to
the holding cost of Gross Rosebel.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity situation experienced a marked improvement during 2002. While
capital projects consumed much larger amounts of cash than was typical of the
past few years, cash generated from operations, cash from the sale of assets and
new equity more than compensated, leaving the December 31, 2002 cash balance at
$20.0 million, up from $0.5 million at the end of 2001.

Operating activities generated $5.8 million during the year, up from $2.4
million in 2001. Higher gold prices and higher gold output were directly
responsible for the improvement. Investing activities consumed $16.7 million of
cash during the year while the sale of Gross Rosebel in Suriname and St. Elie in
French Guiana contributed $5.4 million of cash. The acquisition and development
of Wassa used $5.9 million. Development work and new property, plant and
equipment at Bogoso/Prestea consumed $6.1 million. We also invested $3.5 million
in the Prestea Underground during 2002.

Issuance of new common shares contributed $26.8 million of cash during 2002.
Stock option exercises provided $0.5 million during the year, and warrant
exercises contributed an additional $1.8 million of cash. Liquidation of several
liabilities, including the amount due the Bogoso sellers, consumed $6.5 million
of cash.

At December 31, 2002, working capital stood at $22.0 million, versus a working
capital deficit of $5.1 million at the end of 2001.

In February 2003 a fully underwritten equity offering raised gross proceeds of
$33.5 million bringing total cash on hand to approximately $50 million by the
end of February 2003.

It is possible, even with the current cash balances of approximately $50
million, that additional funding could be required or desirable during 2003 to
pursue acquisition and growth opportunities. While capital funding has become
somewhat easier to acquire in the past year, we cannot assure you that we would
be successful in raising additional amounts during 2003 if the need arose.

OUTLOOK

Our main objectives in 2003 are: (i) continued orderly and efficient mining of
Prestea ore allowing an adequate flow of oxide and other non-refractory
ores to the Bogoso mill; (ii) completion of the Wassa feasibility study and
re-development of Wassa as a CIL operation if warranted by the feasibility
study; (iii) evaluation of the Prestea Underground reserve potential, and (iv) a
substantial increase in exploration efforts with a focus on Ghana and follow-up
of certain properties in South America.

We will also continue to seek out and evaluate acquisition and growth
opportunities in Ghana and elsewhere in Africa. We will strive to maximize
the value of our South American assets via joint venture financed exploration
activities and/or mergers and acquisitions where practical.

We expect gold production of approximately 140,000 ounces in 2003 at a projected
cash operating cost of $185 per ounce. Consolidated net exploration and
development expenditures are forecast to be up to approximately $11 million
during 2003, most of which will be spent in Ghana. Meanwhile our activities in
the Guiana Shield will be primarily care and maintenance, although we will
continue to seek joint venture funded opportunities in Suriname and Guyana.
There is no budgeted exploration spending at

50

Guyanor in 2003, although we are actively seeking joint venture partners which
could fund additional work at Paul Isnard or at our other properties.

During 2003 we expect to be able to fund currently anticipated expenditures from
cash generated by operations and cash on hand.

As more fully disclosed under Risk Factors, numerous factors could cause our
budget estimates to be wrong or could lead our management to make changes in our
plans and budgets. Under any of these circumstances, the estimates described
above would likely change materially.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2001, the CICA issued AcG 13 - "Hedging Relationships" ("AcG 13").
The guideline presents the views of the Canadian Accounting Standards Board on
the identification, designation, documentation and effectiveness of hedging
relationships, for the purpose of applying hedge accounting. The guideline is
effective for all fiscal years beginning on or after July 1, 2003, which is the
fiscal year beginning January 1, 2004 in our case. We do not believe that the
adoption of this guideline will have a material impact on our results of
operations or financial position, unless we were to enter into significant
hedging relationships prior to the implementation date.

In 2003, the CICA issued AcG 14 - "Disclosure of Guarantees" ("AcG
14"). The guideline presents the views of the Canadian Accounting Standards
Board on financial statement disclosures to be made by a guarantor about its
obligations under guarantees. The guideline is effective for all fiscal years
beginning on or after January 1, 2003, which is the fiscal year beginning
January 1, 2003 in our case. We believe that the adoption of this guideline will
not have a material impact on our results of operations or financial position.

In 2002, the CICA issued Section 3063 - "Impairment of Long-Lived Assets"
("CICA 3063). The guidelines in CICA 3063 establish standards for the
recognition, measurement and disclosure of the impairment of non-monetary
long-lived assets held for use. The guideline is effective for all fiscal years
beginning on or after April 1, 2003, which is the fiscal year beginning January
1, 2004 in our case. We have not yet determined the expected effect, if any, on
our results of operations or financial position upon the implementation of this
guideline.

In 2002, the CICA issued Section 3475 - "Disposal of Long-Lived Assets and
Discontinued Operations" ("CICA 3475"). The guidelines in CICA 3475 establish
standards for the recognition, measurement, presentation and disclosure of the
disposal of long-lived assets. It also establishes standards for the
presentation and disclosure of discontinued operations, whether or not they
include long-lived assets. The guideline is effective for asset disposals after
May 1, 2003. We have not yet determined the expected effect, if any, on our
results of operations or financial position upon the implementation of this
guideline.

In 2002, the CICA issued Section 3110 - "Asset Retirement Obligations", ("CICA
3110). The guideline establishes standards for the recognition, measurement and
disclosure of liabilities for asset retirement obligations and the associated
costs. The guideline is effective for all fiscal years beginning on or after
January 1, 2004 which is the fiscal year beginning January 1, 2004 in our case.
We have not yet determined the expected effect on our results of
operations or financial position upon the implementation of this guideline.

SEASONALITY

Most of our operations are in tropical climates which experience annual rainy
seasons. Mining operations are not materially affected by the rainy seasons in
Ghana but exploration efforts in Ghana and in the Guiana Shield are generally
timed to avoid the rainy periods to ease transportation logistics associated
with wet roads.

51

RELATED PARTY TRANSACTIONS

Our President and CEO, Peter J. Bradford, participated in our private placement
in January 2002, paying $98,000 for 200,000 units, each unit consisting of one
share of our common stock and one half warrant to purchase our common shares at
$0.70 until January 11, 2004.

During 2002 we obtained legal services from a legal firm in which one of our
directors is of counsel. Our director did not personally perform any legal
services for us.

During 1999, we, in conjunction with Anvil, acquired BGL. Our President and CEO,
was then and still is a director of Anvil. Based on the heads of agreement with
Anvil to effect the 1999 BGL acquisition, we provided Anvil with a promissory
note for their share of the purchase price and also a note for their share of
the acquisition costs. In June 2001, we acquired Anvil's 20% equity interest in
BGL in return for the issuance of 3,000,000 common shares of our common stock,
and forgave the remaining note receivable.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our financial statements reflect the application of Cdn GAAP, which is different
in certain material respects from US GAAP. The accounting policies reflected
therein are generally those applied by similarly situated mining companies in
Canada. As disclosed in the notes to our financial statements, the assessment of
our financial condition and results of operations reflected in our financial
statements are significantly affected by estimates that we, or experts that we
have retained, have made as to our proven and probable reserves and the value of
our exploration properties. Reserve estimates involve the exercise of subjective
judgment and are based on numerous assumptions that may prove to have been
incorrect. Decisions to write off (or not to write off) all or a portion of our
investment in various properties are based on our judgment as to the actual
value of the properties and are therefore subjective in most cases. As noted
elsewhere in this report, we have elected, over the past several years to write
off substantially all of our investment in exploration properties even though we
retain some of these properties and they may ultimately prove to have
significant value.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk includes, but is not limited to, the following
risks: changes in interest rates on our investment portfolio, changes in foreign
currency exchange rates and commodity price fluctuations.

INTEREST RATE RISK

When appropriate we invest excess cash in short-term debt instruments of the
United States Government and its agencies on a fixed interest rate basis. We may
also invest in short term debt instruments of the government of Canada. Over
time the rates received on such investments may fluctuate with changes in
economic conditions. As a result our investment income may fall short of
expectations during periods of lower interest rates. We may in the future
actively manage our exposure to interest rate risk.

FOREIGN CURRENCY EXCHANGE RATE RISK

The price of gold is denominated in United States dollars and the majority of
our revenues and expenses are denominated in United States dollars. As a result
of the limited exposure, we believe that we are not exposed to a material risk
as a result of any changes in foreign currency exchange rate changes, so we
currently do not utilize market risk sensitive instruments to manage our
exposure.

52

COMMODITY PRICE RISK

We are engaged in gold mining and related activities, including exploration,
extraction, processing and reclamation. Gold bullion is our primary product and,
as a result, changes in the price of gold could significantly affect results of
operations and cash flows. According to current estimates, a $25 change in the
price of gold could result in a $3.5 million effect on our results of operations
and cash flows. In late 2002 we entered into put agreements which locked in a
floor price of $280 for 96,000 ounces of production (8,000 ounces per month)
during 2003. The cost of the puts is equivalent to $2.00 per ounce of gold for a
total cost of $192,000. Other than puts, we have no other program to hedge, or
otherwise manage our exposure to commodity price risk. We may in the future more
actively manage our exposure through hedging programs.

53

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements of
Golden Star Resources Ltd. and Subsidiaries

Management's Responsibility for Financial Information ................... 55

Auditors' Report ........................................................ 56

Consolidated Balance Sheets as of December 31, 2002 and 2001 ............ 57

Consolidated Statements of Operations for the years ended
December 31, 2002, 2001 and 2000 ............................... 58

Consolidated Statement of Changes in Shareholders' Equity for the
years ended December 31, 2002, 2001 and 2000 ................... 59

Consolidated Statements of Cash Flows for the years ended
December 31, 2002, 2001 and 2000 ............................... 60

Notes to the Consolidated Financial Statements .......................... 61-81

54

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL INFORMATION

To the Shareholders of
Golden Star Resources Ltd.

The consolidated financial statements and all information in the Annual Report
are the responsibility of the Board of Directors and management. The
consolidated financial statements have been prepared by management based on
information available to March 19, 2003, and are in accordance with accounting
principles generally accepted in Canada.

A system of internal accounting and administrative controls is maintained by
management in order to provide reasonable assurance that financial information
is accurate and reliable, and that our assets are safeguarded. Limitations exist
in all cost effective systems of internal controls. Our systems have been
designed to provide reasonable but not absolute assurance that financial records
are adequate to allow for the completion of reliable financial information and
the safeguarding of its assets. We believe that the systems are adequate to
achieve the stated objectives.

The Audit Committee of the Board of Directors is comprised of three outside
directors, operates in accordance with its charter and meets quarterly with
management and the independent auditors to ensure that management is maintaining
adequate internal controls and systems and to approve the annual and quarterly
consolidated financial statements of the Company. The committee also reviews the
audit plan of the independent auditors and discusses the results of their audit
and their report prior to submitting the consolidated financial statements to
the Board of Directors for approval.

The consolidated financial statements have been audited by
PricewaterhouseCoopers LLP, Chartered Accountants, who were appointed by the
shareholders. The auditors' report outlines the scope of their examination and
their opinion on the consolidated financial statements.

/s/ Peter J. Bradford /s/ Allan J. Marter
- --------------------------- ----------------------------
Peter J. Bradford Allan J. Marter
President and Senior Vice President and
Chief Executive Officer Chief Financial Officer

March 19, 2003

55

AUDITORS' REPORT

To the Shareholders of
Golden Star Resources Ltd.

We have audited the consolidated balance sheets of Golden Star Resources Ltd. as
of December 31, 2002 and 2001 and the consolidated statements of operations,
changes in shareholders' equity and cash flows for each of the three years in
the period ended December 31, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in Canada and in the United States of America. Those standards require that we
plan and perform an audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Company as of
December 31, 2002 and 2001, and the consolidated results of its operations and
cash flows for each of the three years in the period ended December 31, 2002, in
accordance with accounting principles generally accepted in Canada.

/s/ PricewaterhouseCoopers LLP
Chartered Accountants
Calgary, Canada

March 19, 2003

56

GOLDEN STAR RESOURCES LTD.
CONSOLIDATED BALANCE SHEETS
(Stated in thousands of United States dollars except share amounts)

The accompanying notes are an integral part of these
consolidated financial statements.

By: /s/ Robert R. Stone - Director By: /s/ Peter J. Bradford - Director
-------------------------------- -------------------------------------

57

GOLDEN STAR RESOURCES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in thousands of United States dollars except per share amounts)

The accompanying notes are an integral part of these
consolidated financial statements.

58

GOLDEN STAR RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Stated in thousands of United States dollars except share amounts)

The accompanying notes are an integral part of these
consolidated financial statements.

59

GOLDEN STAR RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in thousands of United States dollars)

The accompanying notes are an integral part of these
consolidated financial statements.

60

GOLDEN STAR RESOURCES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of United States Dollars unless noted otherwise)

1. FORMATION OF THE COMPANY

In May 1992, the shareholders of Golden Star Resources Ltd. ("Golden Star" or
the "Company" or "we") and South American Goldfields Inc., respectively agreed
to a business combination of the two companies. Neither company was under common
control prior to the amalgamation. This combination was considered to be an
amalgamation under the Canada Business Corporations Act and was effective May
15, 1992. The amalgamation was treated as a purchase for accounting purposes.
Concurrent with the amalgamation, our common shares were consolidated on a
one-for-two basis. Our fiscal year-end is December 31, and commencing on May 15,
1992 we changed our reporting currency to the United States dollar. However, if
we were to declare a dividend to our shareholders, it would be paid in Canadian
dollars.

2. DESCRIPTION OF BUSINESS

We are an international gold mining and exploration company producing gold in
Ghana in West Africa. Through our various subsidiaries and joint ventures we own
a controlling interest in four gold properties in Ghana, the Bogoso property
("Bogoso"), the Prestea property ("Prestea"), the Wassa property ("Wassa") and
the Prestea underground property ("Prestea Underground"). Bogoso and Prestea are
adjoining properties and both are owned by our 90% owned subsidiary Bogoso Gold
Limited ("BGL"). These two properties now function as a single operation
referred to as "Bogoso/Prestea".

The Prestea Underground, acquired in 2002 via a joint venture, is located under
our Prestea property and consists of a currently inactive, underground gold mine
and associated support facilities, which ceased operating in mid-2001. BGL owns
a 54% managing interest in this joint venture and studies are now underway,
under our direction, to determine if the Prestea Underground can be profitably
reactivated under our management.

We also own a 90% equity interest in Wexford Goldfields Limited ("Wexford")
which owns Wassa and associated mining rights, located some 35 kms east of
Bogoso/Prestea. A feasibility study is currently underway which seeks to
establish the economic viability of this property.

We hold active exploration properties in Suriname, and in Ghana and, through our
73%-owned subsidiary, Guyanor Ressources S.A. ("Guyanor"),we have interests in
several gold exploration properties in French Guiana.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements have been prepared in accordance with
generally accepted accounting principles ("GAAP") in Canada. We have adopted the
following policies.

61

BASIS OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its more than 50%-owned subsidiaries and joint ventures. All material
inter-company balances and transactions have been eliminated. The consolidated
group includes the following as of December 31, 2002 (all entities are
100%-owned, unless otherwise noted):

FISCAL YEAR

Our fiscal year runs from January 1 to December 31.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Significance estimates are required to establish ore reserves and reclamation
accruals. Reserve estimates are based upon our professional assessment of all
available data including drill results, geologic data, geophysical data and
estimated future operating costs. Amortization expense of mine property is in
turn based on the reserves estimates. Estimates are also required to develop
projections of future reclamation costs. Actual results could differ materially
from those estimates with corresponding material adjustments to our financial
results.

CASH AND SHORT-TERM INVESTMENTS

We consider any liquid investments with an original maturity of three months or
less to be cash equivalents.

INVENTORIES

Stockpiled ore, in-process and finished inventory are recorded at the lower of
cost or market, including direct production costs and attributable operating
expenses. Materials and supplies are valued at the lower of average cost or
replacement cost.

62

MARKETABLE SECURITIES

Short term investments in publicly traded marketable securities are recorded at
the lower of cost or quoted market prices, with unrealized losses included in
income. The market value of our marketable securities is based on the closing
price at December 31, 2002, as reported on recognized securities exchanges. The
quoted market value of the securities held at December 31, 2002 is $1.5 million.
The carrying value at December 31, 2002 was $0.9 million.

RESTRICTED CASH

In certain countries where we conduct business, governments may require
performance bonds to be placed for certain amounts of the agreed-upon
exploration and/or reclamation expenditures. The cash collateral for these bonds
is shown as a non-current asset as the funds are not available for use in
operations until the bond amounts are reduced or released by the governments. In
relation to BGL, funds are restricted in accordance with the BGL acquisition
agreement for the final environmental rehabilitation of the mine site.

EXPLORATION PROPERTY ACQUISITION, DEFERRED EXPLORATION AND DEVELOPMENT COSTS

Acquisition, exploration and development costs of properties are generally
capitalized as incurred.

Management reviews the carrying value of its investments in acquisition,
deferred exploration and development costs. A decision to abandon, reduce or
expand a specific project is based upon many factors including general and
specific assessments of reserves and mineralized material, anticipated future
mineral prices, the anticipated future costs of exploring, developing and
operating a producing mine, the expiration term and ongoing expenses of
maintaining leased mineral properties and the general likelihood that we will
continue exploration. We do not set a pre-determined holding period for
properties with unproven reserves; however, properties which have not
demonstrated suitable metal concentrations at the conclusion of each phase of an
exploration program are re-evaluated to determine if future exploration is
warranted and if their carrying values are appropriate.

If an exploration property is abandoned or it is determined that its carrying
value cannot be supported by future production or sale, the related costs are
charged against operations in the year of abandonment or determination of value.
Any costs incurred for a particular project afterward are expensed as incurred.

The accumulated costs of mineral properties are depleted on a
units-of-production basis at such time as production commences.

IMPAIRMENT OF LONG-LIVED ASSETS

We evaluate our long-lived assets for impairment whenever events or changes in
circumstances indicate that the related carrying value may not be recoverable.
If deemed impaired, an impairment loss is measured and recorded based upon the
recoverable value of the asset which generally will be computed using
undiscounted future cash flows. Estimates of future cash flows are subject to
risks and uncertainties. Therefore, it is possible that changes could occur
which may affect the recoverability of our investments in long-lived assets.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment assets are stated at cost and include buildings,
machinery, equipment, facilities and vehicles. Depreciation is computed using
the straight-line method at rates calculated to depreciate the cost of the
assets less their anticipated residual values, if any, over the estimated useful
lives. Buildings and processing facilities are depreciated over the life of the
reserves of the associated mining property. Mining equipment, miscellaneous
equipment and light vehicles are depreciated over five years. The net book value
of property, plant and equipment assets at property locations is charged against
income if the site is abandoned and it is determined that the assets cannot be
economically transferred to another project or sold. Major overhauls of mining
equipment that extend the life of such equipment are capitalized and depreciated
on a straight-line basis.

63

ENVIRONMENTAL REHABILITATION

Estimate of future reclamation and closure costs are based primarily upon
environmental and regulatory requirements of the various jurisdiction in which
we operate. Estimates of future costs are accrued, on a non-discounted basis,
over the expected life of the reserves at each property. Cash costs incurred
prior to the end of the properties productive life are netted against the
accrual.

FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION

Our functional currency is the United States dollar. Monetary assets and
liabilities are translated at the rate of exchange prevailing at the end of the
period. Non-monetary assets and long-term liabilities are translated at the
rates of exchange prevailing when the assets were acquired or the liabilities
assumed. Revenue and expense items are translated at the average rate of
exchange during the year. Translation gains or losses are included in the
determination of net income for the period. Fully integrated foreign subsidiary
accounts are translated using the same method.

Canadian currency in these financial statements is denoted as "Cdn$", French
currency is denoted as "FF" in 2001 and as "Euro" afterward, and Ghanaian
currency is denoted as "Cedi" or "Cedis".

NET INCOME/(LOSS) PER SHARE

Basic earning (loss) per share is calculated by dividing net earnings (loss)
available to common shareholders by the weighted average number of common shares
outstanding during the period. The calculation of diluted earnings (loss) per
common share uses the treasury stock method to compute the dilutive effects of
stock options and warrants and the "if converted" method to compute the dilutive
effect of convertible debentures.

REVENUE RECOGNITION

Revenue from the sale of gold is recognized when title and the risk of ownership
passes to the buyer. Title and risk of ownership passes to the buyer on the day
the gold ore is shipped from the mine site.

STOCK BASED COMPENSATION

Effective January 1, 2002, we adopted the new Canadian Institute of Chartered
Accountants' standard for stock-based compensation. Compensation awards not
required to be expensed under the new standard, such as stock options, are
accounted for as capital transactions when the options are exercised.
Accordingly, no compensation cost has been recognized in the consolidated
statement of operations for common share options granted.

The fair value of options is established at the date of the grant, using the
Black-Scholes option-pricing model. Recognition of compensation costs occurs in
the period in which the options vest.

4. CASH AND SHORT TERM INVESTMENTS

Following a July 2002 public offering we instituted a new cash investment policy
to manage cash balances. The policy objectives, in order of importance, are
safety of principal, liquidity as needed, and maximization of yields subject to
the two prior objectives. Permitted investment vehicles include United States
government securities including those of its agencies and all securities bearing
the direct and indirect guarantee of the United States government. Each
individual investment must have a maturity of less than one year and,
collectively, all investments must have a maturity of less than nine months on a
weighted average basis.

At December 31, 2002, all of our investments are in compliance with the new
policy, with all amounts invested in a series of 90-day U.S. treasury notes.

64

5. SUPPLEMENTAL CASH FLOW INFORMATION

The following is a summary of non-cash transactions:

There was no cash paid for taxes during 2002 and 2001. Cash paid for interest
was $0.4 million during 2002 and $0.4 million during 2001.

6. FINANCIAL INSTRUMENTS

(a) FAIR VALUE - Our financial instruments are comprised of short-term
investments, accounts receivable, restricted cash, accounts payable, accrued
liabilities, accrued wages, payroll taxes and debt. The fair value of cash and
short-term investments, accounts receivable, accounts payable, accrued
liabilities and accrued wages, payroll taxes and debt equals their carrying
value due to the short-term nature of these items. The fair value of restricted
cash is equal to the carrying value as the cash is invested in short-term,
high-quality instruments.

(b) COMMODITY INSTRUMENTS - Put options contracts provide us the right, but not
the obligation, to sell a specified number of ounces of gold at a specified
price on a specified future transaction date. Put options thereby provide a

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floor price for a portion of our future production but they do not limit the
upside potential of higher gold prices in excess of the specified price. If we
opt to forego exercising a put option to sell at the put price, the put expires
on its specified transaction date. In December 2002 we entered into put options
for 96,000 ounces for delivery of 8,000 ounces per month during 2003 with a
strike price of $280 per ounce. The cost of the puts was $0.2 million or $2.00
per ounce. The cost of the puts was capitalized in current assets and one
twelfth of the cost will be expensed each month during 2003. We have not entered
into any hedging program nor do we currently otherwise manage exposure to
commodity price risk other than through the puts described above. We may in the
future more actively manage our commodity price exposure through hedging
programs.

7. INVENTORIES

8. CURRENT DEBT AND LONG TERM DEBT

(a) NOTE DUE OMAI GOLD MINES LIMITED - In December 1998, Omai Gold Mines Limited
("OGML") advanced $3.2 million to us as an unsecured loan to be repaid as and
when Class I preferred shares of OGML held by us are redeemed by OGML. The loan
was non-interest bearing until September 30, 2010. Subsequent redemption of
preferred shares reduced this liability to zero by the time the final payment
was made in the first quarter of 2002.

(b) AMOUNTS DUE TO THE SELLERS OF BOGOSO GOLD LIMITED - Amounts owed to the
sellers of BGL per terms of the September 1999 Bogoso purchase agreement. The
final installment of $2.9 million was paid in the first quarter of 2002.

(c) DUE TO A FINANCIAL INSTITUTION - Gold production related payment due to a
financial institution retained in 1999 to provide bridge financing for the BGL
acquisition. The final payment of $0.25 million was made in September 30, 2002.

(d) OVERDRAFT FACILITY AT BGL - Revolving Over-draft Facility at BGL from
Barclays Bank (Ghana) in the amount of $1.0 million.

(e) BGL BANK LOAN - A term loan to BGL from CAL Merchant Bank in Ghana in the
original amount of $0.8 million. It is denominated in U.S. dollars, carries an
interest rate of six-month LIBOR plus 3.5% and is repayable in six quarterly
installments beginning September 2002.

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(f) ACCRUAL OF LIABILITY TO BOGOSO SELLERS - The original BGL purchase agreement
of September 1999 included a contingent $2.0 million reserve-acquisition
payment, due the Bogoso sellers, which was triggered by BGL's acquisition of the
Prestea reserves in late 2001. This liability was liquidated in February 2003 by
a $2.0 million cash payment to the Bogoso sellers.

(g) CONVERTIBLE DEBENTURES - On August 24, 1999, we issued $4.15 million of
subordinated convertible debentures to raise financing for the acquisition of
BGL. The debentures had a maturity date of August 24, 2004 and bore interest at
the rate of 7.5% per annum from the date of issue, payable semi-annually on
February 15 and August 15, to the debenture-holders as of February 1 and August
1, respectively, commencing on February 15, 2000.

The debentures were convertible at the option of the holder into our common
shares at a conversion price of $0.70 per share, prior to the August 24, 2004
maturity date. Each $1,000 principal amount of debentures also entitled the
holder to warrants exercisable for 200 of our common shares at a price of $1.50
per share until August 24, 2001 and $1.75 per share for the remaining two years
until August 24, 2003.

During 2002, debentures with a face value of $2.4 million were converted into
3,444,278 shares of common stock. As of December 31, 2002, all of the
outstanding debentures had been converted to common stock. All of the 831,000
associated warrants were still outstanding as of December 31, 2002.

(h) WASSA BANK LOAN - A $1.8 million term loan provided by the Wassa sellers.
Repayment will begin on December 13, 2003 with installments following every
three months thereafter, with the final payment on September 13, 2007. The
interest rate is LIBOR plus 2.5% until gold production begins at Wassa and LIBOR
plus 2.0% after gold production begins. Interest from September 13, 2002 until
repayment begins will be capitalized into the loan.

9. PROPERTY, PLANT & EQUIPMENT

10. MINE PROPERTY

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11. ACQUISITION OF PRESTEA

We acquired Prestea in June 2001. Prestea lies immediately south of and adjacent
to Bogoso and contains gold reserves suitable for processing in our Bogoso mill.
Currently identified gold reserves at Prestea are expected to provide
non-refractory feed for the Bogoso mill until at least 2007.

Two transactions were required to acquire Prestea, one with Barnato Exploration
Limited ("Barnex"), and one with Prestea Gold Resources Limited ("PGR"). Both
transactions were required to remove all prior claims on the property, which
thereby allowed the Government of Ghana to grant BGL a new surface mining lease
over the property, which it did in June 2001. As payment to Barnex we issued
3,333,333 common shares and 1,333,333 warrants to subscribe for our common
shares at a price of $0.70 per share for three years.

In addition, we agreed to pay a royalty to Barnex on the first 1,000,000 ounces
of production from Bogoso/Prestea. The royalty will vary, according to a gold
price formula, from a minimum of $6.00 per ounce at gold prices less than $260
per ounce to a maximum of $16.80 per ounce at gold prices at or above $340 per
ounce. The royalty is to be paid quarterly and is determined by multiplying the
production for the quarter by a royalty rate that varies depending on the
average spot gold price for the quarter.

The purchase accounting method was applied to the Prestea acquisition. Total
direct costs of acquiring Prestea were $8.0 million. This included $2.2 million
for our stock and warrants issued to Barnex, $2.1 million of cash paid to PGR,
$2.0 million for the contingent liability to the Bogoso sellers which was
triggered by obtaining the Prestea surface lease, $0.7 million of pre-production
development costs and approximately $1.0 million in transactions costs. In
addition to the $8.0 million of direct purchase costs listed above, $0.4 million
of unamortized Bogoso purchase costs and $1.4 million of costs associated with
the purchase of the 20% minority interest position in BGL during 2001, were
included in the new Prestea amortization base, bringing the total amortizable
cost basis to $9.8 million.

12. ACQUISITION OF WASSA

On September 13, 2002, we completed the acquisition of a 90% interest in Wassa
in Ghana, the remaining 10% interest being retained by the Government of Ghana.
Wassa was developed by a former owner in the late 1990s at a capital cost of $43
million as a conventional open pit, heap leach gold operation and operated for
approximately two years producing approximately 90,000 ounces per year. In 2001,
the secured lenders to the project enforced their security rights in the project
and, following a bidding process, agreed to sell the Wassa asset to us.

Wassa includes an open pit mine, heap leach pads, processing equipment (crusher,
agglomeration plant, conveyors, and a gold recovery plant), parts and supplies
inventory, maintenance shops, administrative offices, housing for employees, a
community center and miscellaneous other ancillary facilities.

We paid the Wassa sellers, a syndicate of banks led by Standard Bank London
Limited, an initial consideration of $1.6 million at closing. We also assumed
$1.8 million of debt and we agreed in addition to pay two separate royalties on
future production. The seller-provided debt is repayable over a four-year term
beginning on December 13, 2003 with installments following every three months
thereafter, with the final payment on September 13, 2007. The interest rate is
LIBOR plus 2.5% until gold production begins and LIBOR plus 2.0% after gold
production begins. Interest on the initial $1.8 million accruing prior to the
initiation of gold production at Wassa will be capitalized into the loan.

The first royalty is to be paid quarterly and the amount of the payments will be
determined by multiplying the production from Wassa for each quarter by a
royalty rate of $7.00 per ounce produced. The royalty rate is subject to
increase by $1.00 per ounce for each $10.00 increase in the average market price
for gold for each quarter above $280 per ounce up to a maximum of $15.00 per
ounce at gold prices of $350 per ounce and above. The second royalty is a flat
$8.00 per ounce, and is capped at $5.5 million.

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We also assumed a $2.3 million reclamation liability for restoration of the
environmental disturbance at Wassa as of the date of the acquisition. The amount
of the restoration liability was determined by an independent environmental
engineering firm, commissioned by us to establish the amount of the liability.

Cost of the purchased assets was allocated as follows:

Purchase costs:
Bank loan assumed $1,818
Cash payment at closing 1,584
Environmental liabilities assumed 2,302
Pre-acquisition costs incurred 1,157
------
Total purchase costs $6,861
======

Allocation of purchase costs:
Inventory $ 331
Property, plant and equipment 5,460
Mine property 1,070
------
Total allocation $6,861
======

We have initiated a drilling program at Wassa designed to evaluate its gold
potential. Engineering studies are also underway to evaluate the feasibility of
redeveloping Wassa as a conventional CIL operation. The feasibility study is
scheduled for completion in mid-2003 and if the study results are favorable,
mill construction would begin shortly thereafter. Assuming favorable results
from the feasibility study, gold production could begin at Wassa as early as the
first quarter of 2004.

13. ACQUISITION OF PRESTEA UNDERGROUND

In March 2002, our 90% owned subsidiary, BGL entered into a joint venture
agreement with PGR and the Ghana Government, relating to the Prestea
Underground. The Prestea Underground operated for 130 years, producing
approximately nine million ounces of gold prior to its closure in 2001.

The joint venture agreement called for the following: shutting down the Prestea
Underground and putting it on a care and maintenance basis; the Prestea
Underground mining lease was transferred from PGR to BGL, to be held by BGL on
behalf of a joint venture; BGL and PGR would each own an initial 45% interest in
the joint venture and the government of Ghana would have a 10% interest; and BGL
would take over the day-to-day management of the Prestea Underground. Under
BGL's direction, an assessment of the safety and economic viability of the
Prestea Underground is now underway. The assessment could take as much as two
years to complete. The joint venture agreement also allowed certain
infrastructure items, associated with the Prestea Underground, to be
decommissioned and demolished to make way for the development of BGL's surface
mining operations at Prestea.

The Prestea Underground is contained within a mining lease which covers the same
area as the surface mining lease granted to BGL on June 29, 2001. The surface
mining lease is restricted down to a depth of 200 meters below the surface and
the underground mining lease is restricted to material deeper than 200 meters
below the surface.

BGL paid $2.4 million for its initial 45% interest in the joint venture.
Subsequent investments in the joint venture increased BGL's ownership to 54% by
December 31, 2002.

14. SALE OF ST ELIE

On October 21, 2002, Guyanor closed the transaction with Compagnie Miniere
Esperance S.A. ("CME") for the sale of Guyanor's 100% interest in Societe des
Mines de St-Elie SARL ("SMSE"), which holds the mining rights to the St. Elie
gold property in French Guiana ("St Elie").

The total consideration was as follows:

(1) $0.5 million of cash at closing;

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(2) the release by CME of a royalty obligation (approximately 3,000 ounces
of gold) owed by Guyanor on future production from St. Elie; and

(3) the payment of a 2.5% royalty on all future gold production from St.
Elie. In addition, at gold prices above $350 per ounce, an additional
royalty payment of 2.5% will be made by CME to Guyanor on the
incremental revenue above $350 per ounce. These payments are capped at
the amount of the shareholder debt owed by SMSE to Guyanor at closing,
provided that such shareholder debt does not exceed $ 7.5 million.

Guyanor utilized the cash proceeds of the transaction to repay a portion of the
inter-company advances received from us in the past.

15. ACQUISITION, DEFERRED EXPLORATION AND DEVELOPMENT COSTS

The consolidated property expenditures and abandonment costs for our exploration
projects for the fiscal year ended December 31, 2002 were as follows:

(1) In May 2002 we sold our interest in most of our exploration properties in
Suriname and Guyana, including Gross Rosebel, Headleys, Thunder Mountain and
Omai Gold Mines Limited, to Cambior.

We received $5.0 million cash in 2002 and in early 2003, the first of three
deferred $1.0 million deferred payments for the sale of the Gross Rosebel
property. We expect to receive two additional deferred payments of $1.0 million
each in 2004 and 2005. In addition, Cambior will pay us a royalty equal to 10%
of the excess of the average quarterly market price above a gold price hurdle on
the first 7 million ounces of gold production from Gross Rosebel. For soft and
transitional rock the gold price hurdle is $300 per ounce and for hard rock the
hurdle is $350 per ounce.

For the Headleys and Thunder Mountain properties, we will receive a deferred
consideration of $0.5 million per property when and if, Cambior commences
commercial mining from these properties. As payment for our 30% equity interest
and preferred shares in OGML, we received a release and waiver from OGML,
Cambior and the Guyana Government in respect of all liabilities, of any nature,
related to the Omai gold mine and we received Cambior's 50% interests in the
Yaou and Dorlin exploration properties in French Guiana.

(2) A 90% owned subsidiary

The consolidated property expenditures and abandonment costs for our exploration
projects for the fiscal year ended December 31, 2001 were as follows:

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(1) Sold to Cambior in 2002.

(2) Approximately 73% owned.

(3) A 90% owned subsidiary.

Deferred exploration and acquisition costs of the Paul Isnard property were
deemed impaired and written off in 2001 following disappointing results from
exploration work during the year and lower gold prices. An $8.1 million
impairment related write-off was deemed necessary at the Gross Rosebel project
following an agreement in September 2001 to sell this property to our joint
venture partner.

The recoverability of amounts shown for deferred acquisition and exploration is
dependent upon sale or the discovery of economically recoverable reserves, our
ability to obtain necessary financing to complete the development, and upon
future profitable production or proceeds from the disposition thereof. The
amounts deferred represent costs to be charged to operations in the future and
do not necessarily reflect the present or future values of the properties.

16. INVESTMENT IN OMAI GOLD MINES LIMITED

In May 2002 we sold our 30% common share equity investment and preferred shares
in OGML to Cambior. As payment for our 30% equity interest and preferred shares
in OGML, we received a release and waiver from OGML, Cambior and the Guyana
Government in respect of all liabilities, of any nature, related to the Omai
gold mine and we received Cambior's 50% interests in the Yaou and Dorlin
exploration properties in French Guiana.

OGML was a Guyana company established to build and operate the Omai mine in
Guyana. The common share investment in OGML was accounted for using the equity
method but, as of December 31, 2001 and 2000 our share of cumulative losses of
OGML exceeded the value of our initial common equity investment, and
accordingly, we discontinued applying the equity method in these years. Our
unrecorded share of OGML's losses was $33.6 million and $32.4 million at
December 31, 2001 and 2000, respectively.

We also acquired a redeemable preferred share equity interest (Class I preferred
redeemable shares) in OGML in recognition of cumulative exploration costs of
$5.0 million which we incurred on the Omai project. The aggregate

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redemption value of these shares approximated $11.0 million of which all $11.0
million was received, as of December 31, 2002.

17. WARRANTS

At December 31, 2002 there were six series of warrants outstanding to purchase a
total of 16.1 million common shares. Of the 16.1 million total, 14.0 million
were issued during 2002, 1.3 million were issued during 2001 and 0.8 million
were issued in 1999:

(1) Strike price is quoted in Cdn$ at Cdn$2.28.

The warrants issued in conjunction with the July 24, 2002 equity offering are
traded on the Toronto Stock Exchange under the symbol GSC.WT. There is no public
market for our other warrants at December 31, 2002.

18. STOCK OPTION PLAN

We have one stock option plan, the 1997 Stock Option Plan, as amended (the "GSR
Plan") and options are granted under this plan from time to time at the
discretion of the Board of Directors. Options granted are non-assignable and are
exercisable for a period of ten years or such other period as stipulated in a
stock option agreement between Golden Star and the optionee. Under the GSR Plan,
we may grant options to employees, consultants and directors of the Company or
its subsidiaries for up to 9,000,000 shares of common stock. Options may take
the form of non-qualified stock options, and the exercise price of each option
shall not be less than the market price of our stock on the date of grant.
Options vest over periods ranging from immediately, to four years from the date
of grant. Vesting periods are determined at the discretion of the Board of
Directors. The number of common shares vested and exercisable under the plan at
December 31, 2002 was 4,006,477. The number of common shares vested and
exercisable under the plan as of December 31, 2001 was 3,606,617.

The following table summarizes information about options under the GSR Plan:

19. INCOME TAXES

We recognize future tax assets and liabilities based on the difference between
the financial reporting and tax basis of assets and liabilities using the
enacted tax rates expected to be in effect when the taxes are paid or recovered.
We provide a valuation allowance against future tax assets for which we do not
consider realization of such assets to meet the required "more likely than not"
standard.

We have not provided current nor future income tax for any of the periods
presented because our loss carryovers and other future tax assets exceed our
future tax liabilities. A full valuation allowance has been provided against our
net future tax assets.

Our future tax assets and liabilities at December 31, 2002 and 2001 include the
following components:

A reconciliation of expected federal income tax on net income/(loss) before
minority interest at statutory rates with the actual expenses (benefit) for
income taxes is as follows:

During 2002 and 2001, we recognized $2,576,626 and $1,873,975, respectively, of
share offering costs. Shareholders' equity had been credited in the amounts of
$1,082,000 and $787,000 for the tax benefits of these deductions; however a
valuation allowance had been provided against the full amount of these tax
benefits.

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At December 31, 2002 we had loss carryovers expiring as follows:

20. OPERATIONS BY GEOGRAPHIC AREA

The following geographic data includes revenues based on product shipment origin
and long-lived assets based on physical location. The corporate entity has
locations in Canada and in the United States.

21. STOCK BASED COMPENSATION

(a) STOCK BONUS PLAN - In December 1992, we established an Employees' Stock
Bonus Plan (the "Bonus Plan") for any full-time or part-time employee (whether
or not a director) of the Company or any of our subsidiaries who has rendered
meritorious services, which contributed to the success of the Company or any of
its subsidiaries. The Bonus Plan provides that a specifically designated
committee of the Board of Directors may grant bonus common shares on terms that
it may determine, within the limitations of the Bonus Plan and subject to the
rules of applicable regulatory authorities. The Bonus plan, as amended, provided
for the issuance of 900,000 shares of bonus stock of which 388,620 have been
issued as of December 31, 2002.

During 2002, 2001 and 2000 a total of 107,000, nil and 40,000 common shares
respectively were issued to certain employees pursuant to the Bonus Plan. We
recognized compensation expense related to bonuses under the Bonus Plan during
2002, 2001 and 2000 of $78,000, nil and $35,000 respectively.

(b) OPTIONS - On January 29, 2002, we granted to eligible employees and
directors, options to acquire a total of 608,000 common shares at Cdn$1.16. The
average fair value of the common share options granted was determined to be
Cdn$0.83. On July 29, 2002, a second grant of options to acquire common shares
was made in the amount of 32,000 shares, with an exercise price of Cdn$1.40. The
fair value of this grant has been estimated to be Cdn$1.27 per option. We do not
recognize compensation costs related to stock options granted. Had compensation
costs been

74

recognized for options vesting in 2002, our net income and earnings per share
would have been reduced to the pro forma amounts shown below:

The fair value of each option granted during 2002, 2001 and 2000 is estimated on
the date of grant using the Black-Scholes option-pricing model with the
following weighted average assumptions:

22. EARNINGS PER COMMON SHARE

The following table provides a reconciliation between basic and diluted earnings
per common share:

(1) Since there was a loss in 2001 and 2000, inclusion of dilutive
securities would have been anti-dilutive.

23. RELATED PARTIES

Our President and CEO, Peter J. Bradford, participated in our private placement
in January 2002, paying $98,000 for 200,000 units, each unit consisting of one
share of our common stock and one half warrant to purchase our common shares at
$0.70 until January 11, 2004.

During 2002 we obtained legal services from a legal firm in which one of our
directors is of counsel. Our director did not personally perform any legal
services for us.

During 1999, we, in conjunction with Anvil, acquired BGL. Our President and CEO
was then and still is a director of Anvil. Based on the heads of agreement with
Anvil to effect the 1999 BGL acquisition, we provided Anvil with a promissory
note for their share of the purchase price and also a note for their share of
the acquisition costs. In June 2001, we acquired Anvil's 20% equity interest in
BGL in return for the issuance of 3,000,000 common shares of our common stock,
and forgave the remaining note receivable.

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24. COMMITMENTS AND CONTINGENCIES

ENVIRONMENTAL REGULATIONS

We are not aware of any event of material non-compliance with environmental laws
and regulations in our operations with, which could have a material adverse
effect on our operations or financial condition. The exact nature of
environmental control problems, if any, which we may encounter in the future
cannot be predicted, primarily because of the changing character of
environmental requirements that may be enacted within the various jurisdictions.
The environmental rehabilitation liability for reclamation and closure costs at
Bogoso was $4.9 million at December 31, 2002 and $5.4 million at December 31,
2001. Estimates of the final reclamation and closure costs for Prestea were
prepared in 2002 and an accrual for its reclamation liability will be recorded
during 2003. A $2.3 million reclamation liability was recorded in conjunction
with the Wassa acquisition in September 2002. This amount is estimated to be the
cost to reclaim environmental disturbances caused by the prior owner, as of the
date of our purchase. There have been no additional environmental disturbances
at Wassa since our September 2002 acquisition.

RESTRICTED CASH LONG-TERM (FOR THE ENVIRONMENTAL REHABILITATION LIABILITY)

Upon the closing of the acquisition of BGL in 1999, we were required, according
to the acquisition agreement, to restrict $6.0 million in cash, which was put on
deposit in a bank. These funds are to be used for the ongoing and final
reclamation and closure costs relating to Bogoso. The withdrawal of these funds
must be agreed to by the sellers of BGL, who are ultimately responsible for the
reclamation in the event of our non-performance. There were no drawdowns of
restricted cash during 2002. At December 31, 2002, the remaining balance in the
BGL reclamation cash fund was $3.3 million.

ROYALTIES

(a) WASSA - As part of the consideration for the purchase of the Wassa assets, a
gold production royalty ("First Royalty") will be paid to the sellers on future
production from Wassa. The First Royalty is set at $7.00 per ounce of gold
produced and increased by $1.00 per ounce for each $10.00 increase in the price
of gold above $280 per ounce up to a maximum royalty of $15.00 per ounce at gold
prices of $350 per ounce and above. This royalty is capped at $38 million (see
Note 12 above.)

We and the lenders agreed, subject to Bank of Ghana approval, that the $5.0
million deferred purchase price will be converted to a gold production royalty
of $8.00 per ounce capped at $5.5 million. This royalty would be in addition to
the First Royalty described above.

(b) BOGOSO/PRESTEA - A gold production royalty was included as a component of
total consideration paid for Prestea in October 2001. The royalty is due on the
first 1.0 million ounces of gold produced from Bogoso/Prestea following our
purchase of Prestea in October 2001. The amount of the royalty will vary,
according to a gold price formula, from a minimum of $6.00 per ounce at gold
prices less than $260 per ounce to a maximum of $16.80 per ounce at gold prices
at or above $340 per ounce.

(c) GOVERNMENT OF GHANA - Under the laws of Ghana, a holder of a mining lease is
required to pay a royalty of not less than 3% and not more than 12% of the total
revenues earned from the lease area. The royalty is payable on a quarterly
basis. We currently pay a 3% royalty on gold production from Bogoso/Prestea and
would expect to pay a royalty at a similar rate at Wassa, once it is in
production.

(d) ROYALTIES RECEIVABLE - We also have royalties receivable from the sale of
our interests in the Gross Rosebel property and the St. Elie property (see Note
14), contingent on future production from these properties.

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25. SUBSEQUENT EVENTS

PAYMENTS TO THE SELLERS OF BOGOSO

Provisions of the 1999 Bogoso purchase agreement specified that if a sulfide
mining operation was ever initiated at Bogoso, utilizing sulfide ores from
Bogoso, an additional payment would be due to the original Bogoso sellers. The
agreement called for a payment of $5.0 million which escalated each year by an
inflation factor. In early 2003, negotiations with the Bogoso sellers resulted
in this potential future payment being capped at $2.0 million and it was further
agreed that, in return for the reduction in the amount, the payment would be
accelerated. This payment was made in February 2003. On the same date, the
remaining $2.0 million liability due the Bogoso sellers, triggered by acquiring
more than 50,000 ounces of non-sulfide ores acquired from outside of Bogoso, was
made, thereby liquidating and satisfying any and all liabilities to the Bogoso
sellers associated with the original Bogoso purchase.

EQUITY OFFERING

On January 30, 2003 we entered into an agreement with an underwriting group for
the purchase by the underwriters of 17,000,000 units at Cdn$3.00 per unit for
gross proceeds of Cdn$51,000,000. Each unit consisted of one common share and
one-half of one warrant to purchase a common share. Each whole warrant is
exercisable for a period of 48 months from its date of issue and shall entitle
the holder to purchase one common share for Cdn$4.60 per share. The closing took
place on February 14, 2003.

26. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES

Our consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in Canada which differ from US GAAP.
The effect of applying US GAAP to our financial statements is shown below.

(a) BALANCE SHEETS IN US GAAP

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(b) STATEMENTS OF OPERATIONS IN US GAAP

Weighted average common shares outstanding are the same under US GAAP as under
Cdn GAAP for the periods presented.

(c) STATEMENTS OF CASH FLOWS IN US GAAP

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(d) FOOTNOTES

(1) Under US GAAP, marketable securities available for sale are marked to market
and gains or losses are recognized in Other Comprehensive Income until the
securities are sold. Under Cdn GAAP, marketable securities are accounted for at
the lower of cost or market.

(2) Under US GAAP, exploration, acquisition and general and administrative costs
related to exploration projects are charged to expense as incurred. Under Cdn
GAAP, exploration, acquisition and general and administrative costs related to
exploration projects are capitalized. In each subsequent period, the
exploration, engineering, financial and market information for each exploration
project is reviewed by management to determine if any of the capitalized costs
are impaired.

(3) Under US GAAP, the preferred share investment in OGML would have a carrying
value of nil since the preferred shares were received in recognition of past
exploration costs incurred by us, all of which were expensed for US GAAP
purposes. Therefore, the entire Omai preferred share redemption premium would
have been included in income. Under Cdn GAAP, a portion of the premium on the
OMGL preferred share redemption premium is included in income with the remainder
reducing the carrying value of our preferred stock investment.

(4) Under US GAAP, the initial purchase cost of mining properties is
capitalized. Pre-acquisition costs and subsequent development costs incurred,
until such time as a feasibility study had been completed, are expensed in the
period incurred. Under Cdn GAAP, all costs of new mine properties as well as
costs incurred after acquisition are capitalized, and subsequently reviewed each
period for impairment.

(5) Cdn GAAP requires that convertible debentures should be classified into
their component parts, as either a liability or equity, in accordance with the
substance of the contractual agreement. Under US GAAP, the convertible debenture
would be classified entirely as a liability.

(6) We eliminated our accumulated deficit through the amalgamation (defined as a
reorganization under US GAAP) effective May 15, 1992. Under US GAAP the
cumulative deficit was greater than the deficit under Cdn GAAP due to the
write-off of certain deferred exploration costs described in (2) above.

(7) For periods prior to May 15, 1992, our reporting currency was the Canadian
dollar. Subsequent to our amalgamation and moving our headquarters to the United
States, the reporting currency was changed to the United States dollar. As such,
for the financial statements for the period prior to May 15, 1992, our financial
statements were translated into United States dollars using a translation of
convenience. US GAAP required translation in accordance with the current rate
method.

(8) The US GAAP basis in the Gross Rosebel deferred exploration had been
expensed in prior periods. Thus under US GAAP the full amount of the sales price
was a gain. In Cdn GAAP, this property's basis approximated the sales price and
thus there was no material impact on the statement of operations from the sale.

(e) IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations," that established a uniform methodology for accounting for
estimated reclamation and abandonment costs. The statement was effective January
1, 2003. At that time we will record the estimated present value of reclamation
liabilities and increase the carrying amount of property, plant and mine
development. Subsequently, reclamation costs will be allocated to expense over
the life of the related assets and will be adjusted for changes resulting from
the passage of time and revisions to either the timing or amount of the original
present value estimate. We are currently in the process of quantifying the
effect of adoption on January 1, 2003 for both US GAAP and Cdn GAAP purposes.

79

The FASB issued SFAS No. 144 "Accounting for the Impairment or Disposal of
Long-Lived Assets." This statement addresses financial accounting and reporting
for the impairment or disposal of long-lived assets. It supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," and the accounting and reporting provisions of APB Opinion No.
30, "Reporting the Results of Operations - Reporting the Effects of Disposal of
a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions," for the disposal of a segment of a business. It also
amends APB No. 51, "Consolidated Financial Statements," to eliminate the
exception to consolidation for a subsidiary for which control is likely to be
temporary. The provisions of this statement are effective for financial
statements issued for fiscal years beginning after December 15, 2001, and
interim periods within those fiscal years, with early application encouraged.
The provisions of this statement generally are to be applied prospectively. The
adoption of this statement did not have a material effect on our financial
statements.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections"
(11 SFAS No. 145). SFAS No. 145 updates, clarifies and simplifies existing
accounting pronouncements, by rescinding SFAS No. 4, which required all gains
and losses from extinguishment of debt to be aggregated and, if material,
classified as an extraordinary item, net of related income tax effect. As a
result, the criteria in Accounting Principles Board Opinion No. 30 will now be
used to classify those gains and losses. Additionally, SFAS No. 145 amends SFAS
No. 13 to require that certain lease modifications that have economic effects
similar to sale-leaseback transactions be accounted for in the same manner as
sale-leaseback transactions. Finally, SFAS No. 145 also makes technical
corrections to existing pronouncements. While those corrections are not
substantive in nature, in some instances, they may change accounting practice.
The provisions of SFAS No. 145 that amend SFAS No. 13 are effective for
transactions occurring after May 15, 2002, with all other provisions of SFAS No.
145 being required to be adopted by us in our consolidated financial statements
for the first quarter of fiscal year 2003. We believe that the adoption of SFAS
No. 145 will not have a material impact on our consolidated financial
statements.

On July 30, 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 requires companies to recognize
costs associated with exit or disposal activities when they are incurred rather
than at the date of a commitment to an exit or disposal plan. Examples of costs
covered by the standard include lease termination costs and certain employee
severance costs that are associated with a restructuring, discontinued
operation, plant closing or other exit or disposal activity. SFAS No. 146
replaces the prior guidance that was provided by EITF Issue No. 94-3 "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)." SFAS No. 146 is
to be applied prospectively to exit or disposal activities initiated after
December 31, 2002. We believe that the adoption of SFAS No. 146 will not have a
material impact on our consolidated financial statements.

In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock-Based
Compensation, Transition and Disclosure, an amendment of FASB Statement No.
123." SFAS No. 148 provides alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for stock-based
employee compensation. It also amends the disclosure provisions of SFAS No. 123
to require prominent disclosure about the effects of reported net income of an
entity's accounting policy decisions with respect to stock-based employee
compensation. Finally, this statement amends APB Opinion No. 28, "Interim
Financial Reporting," to require disclosure about those effects in interim
financial information. The amendments to SFAS No. 123, which provides
alternative methods of transition for an entity that voluntarily changes to the
fair value based method of accounting for stock-based employee compensation is
effective for financial statements for fiscal years ending after December 15,
2002. The amendment to SFAS No. 123 relating to disclosures and the amendment to
Opinion 28 is effective for financial reports containing condensed financial
statements for interim periods beginning after December 15, 2002. We do not
intend to adopt the fair value accounting provisions of SFAS No. 123 and
currently believe that the adoption of SFAS No. 148 will not have a material
impact on our financial statements.

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting for Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, an interpretation of FASB Statements No.
5, 57 and 107 and rescission of FASB Interpretation No. 34, Disclosure of
Indirect Guarantees of Indebtedness of Others" (FIN 45). FIN 45 clarifies the
requirements for a guarantor's accounting for and disclosure

80

of certain guarantees issued and outstanding. It also requires a guarantor to
recognize, at the inception of a guarantee, a liability for the fair value of
the obligation undertaken in issuing the guarantee. This interpretation also
incorporates without reconsideration the guidance in FASB Interpretation No. 34,
which is being superseded. The adoption of FIN 45 will not have a material
effect on our consolidated financial statements and will be applied
prospectively.

In January 2003, the FASB issued FAS Interpretation No. 46, "Consolidation of
Variable Interest Entities, an interpretation of Accounting Research Bulletin
(ARB) No. 51, Consolidated Financial Statements" (FIN 46). FIN 46 clarifies the
application of ARB No. 51 to certain entities in which equity investors do not
have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. The adoption of
FIN 46 will not have a material effect on our consolidated financial statements.

27. QUARTERLY FINANCIAL DATA - UNAUDITED

81

ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

There have been no disagreements with PricewaterhouseCoopers LLP, our chartered
accountants, regarding any matter of accounting principles or practices or
financial statement disclosure.

PART III

ITEMS 10, 11, 12 AND 13

In accordance with General Instruction G(3), the information required by Part
III is hereby incorporated by reference from our proxy statement to be filed
pursuant to Regulation 14A not later than 120 days after the fiscal year covered
by this report.

ITEM 14 CONTROLS AND PROCEDURES

We carried out an evaluation, under the supervision and with the participation
of our principal executive officer and principal financial officer, of the
effectiveness of our disclosure controls and procedures (as defined in Exchange
Act Rules 13a-14 and 15d-14) within 90 days prior to the filing date of this
report. Based on this evaluation, the principal executive officer and principal
financial officer have concluded that our disclosure controls and procedures are
effective.

We periodically conduct an evaluation, under the supervision and with the
participation of our principal executive officer and principal financial officer
as well as our Audit Committee, of our internal controls and procedures. There
have been no significant changes in our internal controls or in other factors
that could significantly affect our internal controls subsequent to the date of
the most recent evaluation.

PART IV

ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS REPORT:

1. Financial Statements

o Management's Report

o Auditors' Report

o Consolidated Balance Sheets as of December 31, 2002 and 2001

o Consolidated Statements of Operations for the Years Ended December 31,
2002, 2001 and 2000

o Consolidated Statements of Changes in Shareholders' Equity for the
Years Ended December 31, 2002, 2001 and 2000

o Consolidated Statements of Cash Flows for the Years Ended December 31,
2002, 2001 and 2000

o Notes to Consolidated Financial Statements

2. Financial Statement Schedules

Financial Statement schedules have been omitted since they are either not
required, are not applicable, or the required information is shown in the
financial statements or related notes.

82

(b) REPORTS ON FORM 8-K.

1. A report on Form 8-KA was filed with the Securities and Exchange
Commission on November 29, 2002 defining the nature of the Wassa
acquisition as a purchase of assets.

2. A report on form 8-K was filed with the Securities and Exchange
Commission on December 13, 2002 announcing completion of a private
placement of 3,440,000 units at $1.25 each. Each unit consists of one share
of our common stock and one fourth of one warrant to acquire our common
shares at a price of $1.50.

(c) EXHIBITS

3(i) Incorporating Documents of the Company, including: Articles of
Arrangement dated May 14, 1992, with Plan of Arrangement attached,
with Certificate of Amendment with respect thereto dated May 15,
1992; Certificate of Amendment dated May 15, 1992, with Articles of
Amendment; Certificate of Amendment dated March 26, 1993, with
Articles of Amendment; Articles of Arrangement dated March 7, 1995,
with Plan of Arrangement attached, with Certificate of Amendment
with respect thereto dated March 14, 1995; Certificate of Amendment
dated July 29, 1996, with Articles of Amendment; and Certificate of
Amendment dated July 10, 2002, with Articles of Amendment (all
incorporated by reference to Exhibit 4.1 to the Company's Form 8-K
filed on January 23, 2003)

3(ii) Bylaws of the Company, including: Bylaw Number One, amended and
restated as of April 3, 2002 (incorporated by reference to Exhibit
4.3 to the Company's Registration Statement on Form S-3 (Reg. No.
333-102225) filed on December 27, 2002); Bylaw Number Two, effective
May 15, 1992 (incorporated by reference to Exhibit 4.2 to the
Company's Form 8-K filed on January 23, 2003); and Bylaw Number
Three, effective May 15, 1992 (incorporated by reference to Exhibit
4.2 to the Company's Form 8-K filed on January 23, 2003)

4.1 Form of Specimen Certificate for Common Shares (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on
Form S-3/A (Reg. No. 333-91666) filed on July 15, 2002)

4.2 Rights Agreement dated as of April 24, 1996, between the Company and
the R-M Trust Company as Rights Agent (incorporated by reference to
Exhibit 4.3 to the Company's Form 8-K filed on January 23, 2003);
Amendment to Rights Agreement between the Company and CIBC Mellon
Trust Company (formerly, the R-M Trust Company) dated as of June 30,
1999 (incorporated by reference to Exhibit 10.1 to the Company's
Form 10-Q for the period ended June 30, 1999)

4.3 Form of Four-Year Warrant (incorporated by reference to Exhibit 4.4
to the Company's Form 8-K filed August 31, 1999)

4.4 Warrant, dated as of September 11, 2001, between the Company and
Barnato Exploration Limited.

4.5 Warrant, dated July 19, 2002, between the Company and Ware Limited.

4.6 Form of Warrant, dated as of January 2, 2002 (incorporated by
reference to the Company's Form S-3 (Reg. No. 333-82106) filed on
February 4, 2002)

4.7 Warrant Indenture, dated July 17, 2002, among the Company and CIBC
Mellon Trust, as Trustee, including the Form of Warrant
(incorporated by reference to Exhibit 4.1 to the Company's Form 8-K
filed on August 5, 2002)

4.8 Form of Underwriters' Warrants (incorporated by reference to Exhibit
4.3 to the Company's Registration Statement on Form S-3/A (Reg.
333-91666) filed on July 15, 2002)

83

4.9 Form of Warrant, dated December 12, 2002 (incorporated by reference
to Exhibit 4.1 to the Company's Form 8-K filed on December 13, 2002)

4.10 Warrant Indenture, dated as of February 14, 2003, between Golden
Star Resources Ltd. and CIBC Mellon Trust Company, including the
Form of Warrant (incorporated by reference to Exhibit 4.1 of the
Company's Form 8-K filed on February 14, 2003)

4.11 Form of Underwriters' Warrant, dated February 14, 2003 (incorporated
by reference to Exhibit 4.2 of the Company's Form 8-K filed on
February 14, 2003)

10.1 Summary of Executive Management Performance Bonus Plan (incorporated
by reference to Exhibit 10.1 of the Company's Form 8-K filed on
January 23, 2003)

10.2 Amended and Restated 1997 Stock Option Plan, effective as of April
3, 2002 (incorporated by reference to Exhibit 10.2 of the Company's
Form 8-K filed on January 23, 2003)

10.3 Form of Indemnification Agreement between the Company and its
officers and directors (incorporated by reference to Exhibit 10.3 of
the Company's Form 8-K filed on January 23, 2003)

10.4 Summary of Severance Arrangements between the Company and certain
executive officers (incorporated by reference to Exhibit 10.4 of the
Company's Form 8-K filed on January 23, 2003)

10.5 Employees' Stock Bonus Plan amended and restated to April 6, 2000
(incorporated by reference to Exhibit 10(j) to the Company's Form
10-K for the year ended December 31, 2000)

10.6 Guyanor Ressources S.A. Stock Option Plan amended and restated as of
June 15, 1999 (English translation) (incorporated by reference to
Exhibit 10.35(a) to the Company's Form 10-K for the year ended
December 31, 1999)

10.7 Standardized Adoption Agreement for a 401-K Savings Plan adopted
January 1, 1996 (incorporated by reference to Exhibit 10.28 to the
Company's Form 10-K for the year ended December 31, 1995)

10.8 Employment contract with Mr. Peter Bradford dated November 1, 1999
(incorporated by reference to Exhibit 10.38 (c) to the Company's
form 10-K for the year ended December 31, 1999)

10.9 Agreements between the Company and its outside directors granting
them options to purchase Guyanor Class "B" common shares, (1) dated
December 8, 1995, and December 10, 1996 (incorporated by reference
as Exhibit 10.39 to the Company's Form 10-K for the year ended
December 31, 1996), (2) dated December 9, 1997 (incorporated by
reference to Exhibit 10.39(a) to the Company's Form 10-K for the
year ended December 31, 1997), (3) dated December 8, 1998
(incorporated by reference to Exhibit 10.39(b) to the Company's Form
10-K for the year ended December 31, 1998), (4) dated June 15, 1999
(incorporated by reference to Exhibit 10.39(c) to the Company's Form
10-K for the year ended December 31, 1999), and (5) dated August 16,
2001

10.11 Agreement for the Sale and Purchase of Certain of the Assets of
Satellite Goldfields Limited between The Law Debenture Trust
Corporation P.L.C. and Wexford Goldfields Limited dated

84

March 1, 2002 (incorporated by reference to Exhibit 2.1 of the
Company's Form 8-K filed on September 30, 2002)

10.12 Agreement for the Sale and Purchase of Certain of the Assets of
Satellite Goldfields Limited between Satellite Goldfields Limited,
The Law Debenture Trust Corporation P.L.C. and Wexford Goldfields
Limited dated March 15, 2002 (incorporated by reference to Exhibit
2.2 of the Company's Form 8-K filed on September 30, 2002)

10.13 Common Terms Agreement for Wassa Gold Project between Wexford
Goldfields Limited, any other Obligor Party thereto from time to
time, Standard Bank London Limited and The Law Debenture Trust
Corporation P.L.C. dated June 26, 2002 (incorporated by reference to
Exhibit 2.3 of the Company's Form 8-K filed on September 30, 2002)

10.14 Wassa Project Facility Agreement between Wexford Goldfields Limited,
the lenders listed in Schedule 1 thereto and Standard Bank London
Limited dated June 25, 2002 (incorporated by reference to Exhibit
2.4 of the Company's Form 8-K filed on September 30, 2002)

10.15 Royalty Agreement between Wexford Goldfields Limited and The Law
Debenture Trust Corporation P.L.C. dated June 26, 2002 (incorporated
by reference to Exhibit 2.5 of the Company's Form 8-K filed on
September 30, 2002)

10.16 Agreement for the Sale and Purchase of 90% of the Issued Capital of
Wexford Goldfields Limited between The Law Debenture Trust
Corporation P.L.C. and Wasford Holdings dated June 26, 2002, and
amendment thereto dated September 13, 2002 (incorporated by
reference to Exhibit 2.6 of the Company's Form 8-K filed on
September 30, 2002)

10.17 Support Agreement for Wassa Gold Project between Golden Star
Resources Ltd. and Standard Bank London Limited dated September 13,
2002 (incorporated by reference to Exhibit 2.7 of the Company's Form
8-K filed on September 30, 2002)

10.18 Wassa Project Conversion Agreement between Wexford Goldfields
Limited, Bayerische Hypo-Und Vereinsbank AG, Dresdner Bank AG London
Branch, Fortis Bank (Nederland) N.V. and Standard Bank London
Limited dated September 13, 2002 (incorporated by reference to
Exhibit 2.8 of the Company's Form 8-K filed on September 30, 2002)

10.19 Wassa Gold Project Second Royalty Agreement between Wexford
Goldfields Limited, the persons from time to time party thereto and
Standard Bank London Limited dated September 13, 200 (incorporated
by reference to Exhibit 2.9 of the Company's Form 8-K filed on
September 30, 2002)

10.20 Sale of Shares Agreement with Barnato Exploration Ltd., dated June
21, 2001, for the purchase of Prestea mining lease rights and Barnex
Isle of Man (incorporated by reference to Exhibit 10(z) of the
Company's Form 10-K for the year ended December 31, 2001)

10.21 Agreement, dated November 16, 2001, between Bogoso Gold Limited and
Prestea Gold Resources Limited for the purchase of Prestea mining
lease rights and option payments (incorporated by reference to
Exhibit 10.2 to the Company's Form 8-K filed on March 6, 2002)

10.22 Share and Asset Acquisition Agreement, dated August 6, 2001, among
Anvil Mining NL, Anvil International Finance Limited and the
Company, regarding purchase of 20% interest in Bogoso Gold Limited
(incorporated by reference to Exhibit 10(bb) to the Company's Form
10-K for the year ended December 31, 2001)

85

10.23 Guiana Shield Transaction Agreement with Cambior Inc. dated October
25, 2001 for the sale and swap of Golden Star's interest in Gross
Rosebel and other properties (incorporated by reference to Exhibit
10.3 to the Company's Form 8-K filed March 6, 2002)

10.24 Mining lease, dated June 29, 2001, between the Government of the
Republic of Ghana and Bogoso Gold Limited, relating to the Prestea
property (incorporated by reference to Exhibit 10.1 to the Company's
Form 8-K filed on March 6, 2002)

10.25 Joint Operating Agreement, dated January 31, 2002, between Bogoso
Gold Limited and Prestea Gold Resources Limited.

10.26 Memorandum of Agreement, dated March 14, 2002, among Prestea Gold
Resources, Bogoso Gold Limited and others

21.1 Subsidiaries of the Company

23.1 Consent of PricewaterhouseCoopers LLP

99.1 Certificate of Principal Executive Officer pursuant to 18 U.S.C.
1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

99.2 Certificate of Principal Financial Officer pursuant to 18 U.S.C.
1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

86

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

GOLDEN STAR RESOURCES LTD.
Registrant

By: /s/ Peter J. Bradford
Peter J. Bradford
President and CEO

Date: March 25, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:

By: /s/ Peter J. Bradford By: /s/ Allan J. Marter
Name: Peter J. Bradford Name: Allan J. Marter
Title: President and CEO Title: Senior Vice-President and CFO
Date: March 25, 2003 Date: March 25, 2003

By: /s/ James E. Askew By: /s/ David K. Fagin
Name: James E. Askew Name: David K. Fagin
Title: Director Title: Director
Date: March 25, 2003 Date: March 25, 2003

By: /s/ Ian MacGregor By: /s/ Robert R. Stone
Name: Ian MacGregor Name: Robert R. Stone
Title: Director Title: Director
Date: March 25, 2003 Date: March 25, 2003

87

CERTIFICATIONS

I, Peter J. Bradford, certify that:

1. I have reviewed this report on Form 10-K of Golden Star Resources Ltd.
("Registrant");

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The Registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the Registrant's auditors and the audit committee of
Registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the Registrant's ability to record, process,
summarize and report financial data and have identified for the Registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal controls; and

6. The Registrant's other certifying officer and I have indicated in this annual
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 25, 2003

/s/ Peter J. Bradford
----------------------------------
Peter J. Bradford
President and CEO

88

I, Allan J. Marter, certify that:

1. I have reviewed this annual report on Form 10-K of Golden Star Resources Ltd.
("Registrant");

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The Registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the Registrant's auditors and the audit committee of
Registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the Registrant's ability to record, process,
summarize and report financial data and have identified for the Registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal controls; and

6. The Registrant's other certifying officer and I have indicated in this annual
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 25, 2003

/s/ Allan J. Marter
----------------------------------------
Allan J. Marter
Senior Vice President and Chief
Financial Officer

89

EXHIBITS

3(i) Incorporating Documents of the Company, including: Articles of
Arrangement dated May 14, 1992, with Plan of Arrangement attached, with
Certificate of Amendment with respect thereto dated May 15, 1992;
Certificate of Amendment dated May 15, 1992, with Articles of
Amendment; Certificate of Amendment dated March 26, 1993, with Articles
of Amendment; Articles of Arrangement dated March 7, 1995, with Plan of
Arrangement attached, with Certificate of Amendment with respect
thereto dated March 14, 1995; Certificate of Amendment dated July 29,
1996, with Articles of Amendment; and Certificate of Amendment dated
July 10, 2002, with Articles of Amendment (all incorporated by
reference to Exhibit 4.1 to the Company's Form 8-K filed on January 23,
2003)

3(ii) Bylaws of the Company, including: Bylaw Number One, amended and
restated as of April 3, 2002 (incorporated by reference to Exhibit 4.3
to the Company's Registration Statement on Form S-3 (Reg. No.
333-102225) filed on December 27, 2002); Bylaw Number Two, effective
May 15, 1992 (incorporated by reference to Exhibit 4.2 to the Company's
Form 8-K filed on January 23, 2003); and Bylaw Number Three, effective
May 15, 1992 (incorporated by reference to Exhibit 4.2 to the Company's
Form 8-K filed on January 23, 2003)

4.1 Form of Specimen Certificate for Common Shares (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on
Form S-3/A (Reg. No. 333-91666) filed on July 15, 2002)

4.2 Rights Agreement dated as of April 24, 1996, between the Company and
the R-M Trust Company as Rights Agent (incorporated by reference to
Exhibit 4.3 to the Company's Form 8-K filed on January 23, 2003);
Amendment to Rights Agreement between the Company and CIBC Mellon Trust
Company (formerly, the R-M Trust Company) dated as of June 30, 1999
(incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q
for the period ended June 30, 1999)

4.3 Form of Four-Year Warrant (incorporated by reference to Exhibit 4.4 to
the Company's Form 8-K filed August 31, 1999)

4.4 Warrants dated as of September 11, 2001 between the Company and Barnato
Exploration Limited.

4.5 Warrant, dated July 19, 2002, between the Company and Ware Limited.

4.6 Form of Warrant, dated as of January 2, 2002 (incorporated by reference
to the Company's Form S-3 (Reg. No. 333-82106) filed on February 4,
2002)

4.7 Warrant Indenture, dated July 17, 2002, among the Company and CIBC
Mellon Trust, as Trustee, including the Form of Warrant (incorporated
by reference to Exhibit 4.1 to the Company's Form 8-K filed on August
5, 2002)

4.8 Form of Underwriters' Warrants (incorporated by reference to Exhibit
4.3 to the Company's Registration Statement on Form S-3/A (Reg.
333-91666) filed on July 15, 2002)

4.9 Form of Warrant, dated December 12, 2002 (incorporated by reference to
Exhibit 4.1 to the Company's Form 8-K filed on December 13, 2002)

4.10 Warrant Indenture, dated as of February 14, 2003, between Golden Star
Resources Ltd. and CIBC Mellon Trust Company, including the Form of
Warrant (incorporated by reference to Exhibit 4.1 of the Company's Form
8-K filed on February 14, 2003)

4.11 Form of Underwriters' Warrant, dated February 14, 2003 (incorporated by
reference to Exhibit 4.2 of the Company's Form 8-K filed on February
14, 2003)

10.1 Summary of Executive Management Performance Bonus Plan (incorporated by
reference to Exhibit 10.1 of the Company's Form 8-K filed on January
23, 2003)

90

10.2 Amended and Restated 1997 Stock Option Plan, effective as of April 3,
2002 (incorporated by reference to Exhibit 10.2 of the Company's Form
8-K filed on January 23, 2003)

10.3 Form of Indemnification Agreement between the Company and its officers
and directors (incorporated by reference to Exhibit 10.3 of the
Company's Form 8-K filed on January 23, 2003)

10.4 Summary of Severance Arrangements between the Company and certain
executive officers (incorporated by reference to Exhibit 10.4 of the
Company's Form 8-K filed on January 23, 2003)

10.5 Employees' Stock Bonus Plan amended and restated to April 6, 2000
(incorporated by reference to Exhibit 10(j) to the Company's Form 10-K
for the year ended December 31, 2000)

10.6 Guyanor Ressources S.A. Stock Option Plan amended and restated as of
June 15, 1999 (English translation) (incorporated by reference to
Exhibit 10.35(a) to the Company's Form 10-K for the year ended December
31, 1999)

10.7 Standardized Adoption Agreement for a 401-K Savings Plan adopted
January 1, 1996 (incorporated by reference to Exhibit 10.28 to the
Company's Form 10-K for the year ended December 31, 1995)

10.8 Employment contract with Mr. Peter Bradford dated November 1, 1999
(incorporated by reference to Exhibit 10.38 (c) to the Company's form
10-K for the year ended December 31, 1999)

10.9 Agreements between the Company and its outside directors granting them
options to purchase Guyanor Class "B" common shares, (1) dated December
8, 1995, and December 10, 1996 (incorporated by reference as Exhibit
10.39 to the Company's Form 10-K for the year ended December 31, 1996),
(2) dated December 9, 1997 (incorporated by reference to Exhibit
10.39(a) to the Company's Form 10-K for the year ended December 31,
1997), (3) dated December 8, 1998 (incorporated by reference to Exhibit
10.39(b) to the Company's Form 10-K for the year ended December 31,
1998), (4) dated June 15, 1999 (incorporated by reference to Exhibit
10.39(c) to the Company's Form 10-K for the year ended December 31,
1999), and (5) dated August 16, 2001

10.11 Agreement for the Sale and Purchase of Certain of the Assets of
Satellite Goldfields Limited between The Law Debenture Trust
Corporation P.L.C. and Wexford Goldfields Limited dated March 1, 2002
(incorporated by reference to Exhibit 2.1 of the Company's Form 8-K
filed on September 30, 2002)

10.12 Agreement for the Sale and Purchase of Certain of the Assets of
Satellite Goldfields Limited between Satellite Goldfields Limited, The
Law Debenture Trust Corporation P.L.C. and Wexford Goldfields Limited
dated March 15, 2002 (incorporated by reference to Exhibit 2.2 of the
Company's Form 8-K filed on September 30, 2002)

10.13 Common Terms Agreement for Wassa Gold Project between Wexford
Goldfields Limited, any other Obligor Party thereto from time to time,
Standard Bank London Limited and The Law Debenture Trust Corporation
P.L.C. dated June 26, 2002 (incorporated by reference to Exhibit 2.3 of
the Company's Form 8-K filed on September 30, 2002)

10.14 Wassa Project Facility Agreement between Wexford Goldfields Limited,
the lenders listed in Schedule 1 thereto and Standard Bank London
Limited dated June 25, 2002 (incorporated by reference to Exhibit 2.4
of the Company's Form 8-K filed on September 30, 2002)

10.15 Royalty Agreement between Wexford Goldfields Limited and The Law
Debenture Trust Corporation P.L.C. dated June 26, 2002 (incorporated by
reference to Exhibit 2.5 of the Company's Form 8-K filed on September
30, 2002)

91

10.16 Agreement for the Sale and Purchase of 90% of the Issued Capital of
Wexford Goldfields Limited between The Law Debenture Trust Corporation
P.L.C. and Wasford Holdings dated June 26, 2002, and amendment thereto
dated September 13, 2002 (incorporated by reference to Exhibit 2.6 of
the Company's Form 8-K filed on September 30, 2002)

10.17 Support Agreement for Wassa Gold Project between Golden Star Resources
Ltd. and Standard Bank London Limited dated September 13, 2002
(incorporated by reference to Exhibit 2.7 of the Company's Form 8-K
filed on September 30, 2002)

10.18 Wassa Project Conversion Agreement between Wexford Goldfields Limited,
Bayerische Hypo-Und Vereinsbank AG, Dresdner Bank AG London Branch,
Fortis Bank (Nederland) N.V. and Standard Bank London Limited dated
September 13, 2002 (incorporated by reference to Exhibit 2.8 of the
Company's Form 8-K filed on September 30, 2002)

10.19 Wassa Gold Project Second Royalty Agreement between Wexford Goldfields
Limited, the persons from time to time party thereto and Standard Bank
London Limited dated September 13, 200 (incorporated by reference to
Exhibit 2.9 of the Company's Form 8-K filed on September 30, 2002)

10.20 Sale of Shares Agreement with Barnato Exploration Ltd., dated June 21,
2001, for the purchase of Prestea mining lease rights and Barnex Isle
of Man (incorporated by reference to Exhibit 10(z) of the Company's
Form 10-K for the year ended December 31, 2001)

10.21 Agreement, dated November 16, 2001, between Bogoso Gold Limited and
Prestea Gold Resources Limited for the purchase of Prestea mining lease
rights and option payments (incorporated by reference to Exhibit 10.2
to the Company's Form 8-K filed on March 6, 2002)

10.22 Share and Asset Acquisition Agreement, dated August 6, 2001, among
Anvil Mining NL, Anvil International Finance Limited and the Company,
regarding purchase of 20% interest in Bogoso Gold Limited (incorporated
by reference to Exhibit 10(bb) to the Company's Form 10-K for the year
ended December 31, 2001)

10.23 Guiana Shield Transaction Agreement with Cambior Inc. dated October 25,
2001 for the sale and swap of Golden Star's interest in Gross Rosebel
and other properties (incorporated by reference to Exhibit 10.3 to the
Company's Form 8-K filed March 6, 2002)

10.24 Mining lease, dated June 29, 2001, between the Government of the
Republic of Ghana and Bogoso Gold Limited, relating to the Prestea
property (incorporated by reference to Exhibit 10.1 to the Company's
Form 8-K filed on March 6, 2002)

10.25 Joint Operating Agreement, dated January 31, 2002, between Bogoso Gold
Limited and Prestea Gold Resources Limited.

10.26 Memorandum of Agreement, dated March 14, 2002, among Prestea Gold
Resources, Bogoso Gold Limited and others

21.1 Subsidiaries of the Company

23.1 Consent of PricewaterhouseCoopers LLP

99.1 Certificate of Principal Executive Officer pursuant to 18 U.S.C. 1350
(Section 906 of the Sarbanes-Oxley Act of 2002)

99.2 Certificate of Principal Financial Officer pursuant to 18 U.S.C. 1350
(Section 906 of the Sarbanes-Oxley Act of 2002)