Golden Star 2007 ANNUAL REPORT Gold, Production & Ghana Golden Star Resources Ltd. is a mid-tier gold mining company with two operating mines in Ghana, West Africa. Production is expected to increase from our record production of 246,278 ounces in 2007 to between 370,000 to 425,000 ounces of gold in 2008. Our history of exploration success, combined with appropriate acquisitions, will provide growth opportunities for the future. Our strategy of acquiring property during the down cycle of 1999 to 2002 helped Golden Star become the dominant holder of mining properties on the prolific Ashanti Gold Trend. This land position, combined with the commissioning of our Bogoso sulfide processing plant, is the basis for gold production expansion at the Bogoso/Prestea mine and the source of future growth of the company. The Wassa mine has shown steady quarter-over-quarter improvement. While the majority of focus on the Company is directed toward the Bogoso/Prestea mine, the Wassa mine is proving to be an excellent source of profitability for Golden Star. Shares of Golden Star are widely held by both retail and institutional shareholders and are traded on the American Stock Exchange, Toronto Stock Exchange and Ghana Stock Exchange under the symbols GSS, GSC and GSR, respectively. Table of Contents 1 Highlights for 2007 14 Exploration 34 Consolidated Financial 2 Letter to Shareholders 16 Sustainability Statements 6 Mineral Reserves & Mineral 17 Selected Financial Data 64 Board of Directors Resources 18 Management’s Discussion IBC Corporate Information 9 Operations: Bogoso/Prestea and Analysis 13 Operations: Wassa Front Cover The history and evolution of Golden Star Resources rests on its employees and its physical assets. Since 1999, when the manage- ment of the Company determined to transform the company from an exploration company into a gold producer, the growth of the Company has depended on Golden Star employees. The Bogoso sulfide processing plant will be the cornerstone of our growth in the future, and the Wassa mine continues to deliver positive results. Our employees are the fundamental drivers of our success, and our Ghanaian workforce is second to none. Forward-Looking Statements are made in this report to give the reader an indication of our business prospects, plans and objectives. Al- though we believe these statements are reasonable as of the date of this report, readers are cautioned that forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause actual results, performance or achievements to differ materially from those stated. There can be no assurance that future developments affecting Golden Star will be those anticipated by us. Readers should refer to the risks involved in making forward-looking statements, which are given on page 3 and in “Risk Factors” in our Form 10-K, as filed at www.sedar.com and www.sec.gov. Non-GAAP Measures are used in this report, in particular “total cash cost” and “cash operating cost” on a per-ounce of gold basis. This information differs from measures of performance prepared in accordance with GAAP. Readers should examine the cautionary and explana- tory statements on pages 3 and 51 of our Form 10-K, as filed at www.sedar.com and www.sec.gov. Production1 Reserves1 (thousands ounces) (millions ounces) 500 5 400 4 300 3 200 2 100 1 0 0 03 04 05 06 07 08 09 03 04 05 06 07 Actual Proven & Probable Estimated Mineral Reserves Highlights for 2007 n Record gold sales of 246,278 ounces n Commercial production at Bogoso sulfide processing plant was commenced on July 1, 2007 n Power restrictions in Ghana were lifted; Golden Star has backup power in case of future restrictions n Initiated development of HBB Project n $83.0 million common share offering was completed n $125 million convertible debenture offering was completed n Initiated listing of common shares on Ghana Stock Exchange Results 2007 2006 Production (thousands oz)1 246.3 201.4 Reserves (millions oz)1 4.93 4.15 Cash operating cost ($/oz) $ 602 $ 442 Total cash cost ($/oz) $ 623 $ 460 Gold price realized ($/oz) $ 713 $ 607 Net (loss)/earnings ($ millions) $ (36.4) $ 64.7 (Loss)/earnings per share ($) $ (0.16) $ 0.31 Operating cash flow ($ millions) $ 6.7 $ 5.4 Capital expenditures ($ millions) $ 114.9 $ 170.7 Cash at year end ($ millions) $ 75.8 $ 27.1 Debt at year end ($ millions) $ 125.0 $ 86.3 Shares outstanding at year end (millions) 233.7 207.9 (1) Before minority interests All currency is stated in US dollars throughout this report, except where noted. GOLDEN STAR Tom Mair, President and CEO Letter to Shareholders This year, 2007, was pivotal in the development of Golden Star. By far, the most anticipated event for the Company during 2007 Most significantly we: was the completion of construction and commissioning of the Bogoso sulfide processing plant. Since more than 80% of the n Commenced commercial production at the Bogoso sulfide Mineral Reserves and Mineral Resources at the Bogoso/Prestea processing plant on July 1, 2007; property are refractory, we commenced construction of the n Increased Mineral Reserves, net of depletion, by 19 percent Bogoso sulfide processing plant in 2005. In March 2007, we or approximately 800,000 ounces; switched on the Bogoso sulfide processing plant and achieved n Received Board approval for the development of the commercial production in July 2007. Hwini-Butre and Benso project and commenced construction The commissioning of the new plant was not without difficulties. of the haul road; We experienced start-up issues with both the new flotation n Commenced mining at the Pampe pit; section and the bio-oxidation tank reactor agitator shafts. Modifi- cations to the flotation circuit late in the third quarter 2007 resulted n Worked toward energy independence with the joint power in achieving close to design flotation recovery. Due to a design station and the contract for a second power station at Bogoso; flaw with the bio-oxidation tank agitator shaft, all 14 shafts re- n Progressed the Prestea Underground project with a scoping quired replacement. These shafts are custom made pieces of study, due in early 2008; equipment and have long manufacturing lead time, therefore it n Listed Golden Star shares on the Ghana Stock Exchange; will take until first quarter 2008 to replace them all. n Issued $125 million in convertible notes. In response to drought conditions during 2006, which led to coun- try-wide power restrictions, we joined Newmont Mining The company achieved record gold sales of 246,278 ounces. Our goal Company, AngloGold Ashanti Limited and Gold Fields Limited is to increase gold sales in 2008 to between 370,000 – 425,000 ounc- in building a nominal 100 megawatt power station dedicated to the es and to between 500,000 – 560,000 ounces in 2009. four mining companies. Additionally, we signed a contract to con- struct a 20 megawatt power plant at Bogoso in 2008. These 2 2007 ANNUAL REPORT new power stations combined with our existing generating ca- Another exciting development during 2007was commencement of pacity shall ensure our continued production with full power development activities at the Hwini-Butre and Benso (HBB) depos- regardless of any future Ghana national power grid rationing. its. In May 2007, the Golden Star Board of Directors approved the development of the HBB project with an estimated capital cost of While all of these situations created difficult operating conditions approximately $50 million. In October 2007, we commenced con- throughout 2007, we were able to overcome and manage these struction of the haul road linking the Benso property with the challenges and, thanks to our employees’ diligence and hard work, Wassa processing plant. We anticipate that HBB ore will be deliv- Golden Star attained another record year of record gold sales. ered to the Wassa processing plant in the third quarter of 2008. The The scoping study for the Prestea Underground is anticipated to be high grade HBB ores that will be processed at the Wassa process- completed in early 2008. Much of 2007 was dedicated to the ing plant will have a significantly positive effect on gold production refurbishment of the Bondaye shaft at Prestea, which was damaged and profitability of the Wassa Mine. by illegal mining activities in 2006. Refurbishment of the Central On the exploration side, we increased Mineral Reserves by shaft continued in 2007, and this will give us safe access to the almost 1.1 million ounces not including approximately 300,000 Prestea Underground orebodies that will be the source of high ounces of depletion. We continue to explore for gold both near grade ore for the Bogoso sulfide processing plant in the future. In our operating mines and with greenfields programs in the Ivory addition, we completed a drilling program from the surface into the Coast, Burkina Faso, Niger, Sierra Leone, Suriname, Brazil and Footwall Reef orebody, which extends below the Plant-North pit. French Guiana. Of note for 2007 was the airborne geophysical We commenced mining at the Pampe deposit on the Akosombo programs that were carried out during the year at Bogoso/Prestea Trend, parallel to the Ashanti Trend, in the first quarter of 2007. and at the Paul Isnard Project in French Guiana. The airborne This deposit provided a source of oxide ore to the Bogoso oxide survey at Bogoso/Prestea covered our entire property position processing plant during 2007. In addition to Pampe, oxide ore pro- along the Ashanti Trend. Data for both the Bogoso/Prestea and duction will be enhanced for several years in the future by the Paul Isnard geophysical surveys is still being analyzed, but early mining of the Prestea South deposits starting in early 2009.