Bogoso Pampe Wassa GHANA Bogoso North Chujah-Dumasi Buesichem Bogoso Mine & Prestea Mine Processing Plants Processing Plant Prestea Prestea South Benso Subriso Pits Hwini-Butre Active Pits Mining Lease Deposits Exploration - GSR Adoikrom Exploration - JV Father Brown 100 km North Golden Star Resources Ltd. is a mid-tier gold mining company that pro- duced 354,904 ounces of gold in 2010 and plans to produce approximately 330,000 to 360,000 ounces in 2011. The Company has two operating mines in Ghana, West Africa. Our Bogoso/Prestea and Wassa mines, acquired in 1999 and 2002, respectively, were both purchased during a low gold price environment, allowing the Company to acquire both properties at relatively attractive prices. The Company is the largest holder of mining properties on the prolific Ashanti Gold Trend. The HBB properties were acquired in late 2005. Both Bogoso/Prestea and Wassa/HBB are district-scale sized properties with excellent infrastructure in place. Golden Star’s growth strategy is to explore and develop our two mines in Ghana as well as explore other prospective projects in Western Africa and Brazil. Additionally, the Company will investigate potential acquisitions that are accretive to shareholder value. Shares of Golden Star are widely held by both retail and institutional shareholders and are traded on the NYSE Amex Stock Exchange, Toronto Stock Exchange and Ghana Stock Exchange under the symbols GSS, GSC and GSR, respectively. Front Cover This year, 2010, was the year of exploration for Golden Star. Our exploration budget was increased to $20 million, from $9 million in 2009. As a result of our successful exploration efforts and increased gold prices, our 2010 mineral reserves (net of depletion) were up 24% from 2009 and our Mineral Resources increased 63% over 2009. From our beginnings as a producing company in 1999 with mineral reserves of 40.0 million tonnes grading 1.4 g/t for 1.8 million ounces of gold and mineral resources of 43.9 million tonnes grading 2.5 g/t gold, to our current reserves of 65.3 million tonnes grading 2.20 g/t for 4.62 million ounces of gold in reserves and resources of 54.9 million tonnes grading 1.99 g/t gold, we have made significant progress in growth of reserves and resources. The goal of management continues to be to build shareholder value through increased gold production, increased mineral reserves and resources, and reduced costs across the board, accomplished in a safe manner. These goals will be attained due to the efforts of our employees, who are the fundamental drivers of our success. Forward-Looking Statements are made in this report to give the reader an indication of our business prospects, plans and objectives. Although 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 pages 2 and 13 of our Form 10-K, contained herein. 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 explanatory statement on pages 2 and 34 of our Form 10-K, contained herein. Cautionary Note to US Investors concerning estimates of Inferred Mineral Resources This section uses the term “Inferred Mineral Resources.” We advise US investors that while this term is recognized and required by Canada’s National Instrument 43-101, the US 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 Inferred Mineral Resources will ever be upgraded to a higher category. In accordance with Canadian rules, estimates of Inferred Mineral Resources cannot form the basis of feasibility or other economic studies. US investors are cautioned not to assume that part or all of the Inferred Mineral Resource exists, or is economically or legally mineable. LETTER TO SHAREHOLDERS Tom Mair President & CEO 2010 was a year of highs and lows, ups and downs • Year-end cash balance of $178.0 million for our company. On the positive side, we were • Net loss of $8.3 million or $0.03 per share very successful in growing our Company in terms • Net cash provided by operating activities of of reserves and resources as a result of focusing $115.2 million or $0.45 per share on exploration drilling and re-engineering our • Reserves increased 24% net of depletion, resource models. The higher gold price accounted resources increased 63% for approximately half of the resource growth. On Focus on Exploration the down side, the results from Bogoso/Prestea During 2010 we focused on brownfields explora- during the second half of the year were poor. tion at Golden Star. We increased our exploration The “perfect storm” that affected Bogoso/Prestea budget from $9 million in 2009 to $20 million in included unusually wet weather affecting the 2010. The lion’s share of this budget was spent sourcing of ore, resulting in lower grades and sub- within haul distance of one of our plants. optimal metallurgical recovery. In spite of this, we remained cashflow positive, maintained our finan- We were successful in significantly increasing our cial strength and flexibility, and ended the year reserves and resources in 2010. Our reserve base with $178 million in cash. increased 24%, net of depletion, and our resource base increased 63% over 2009. While approxi- 2010 Results Summary mately half of this increase is attributable to the • Gold sales of 354,904 ounces rising gold prices, we can proudly state that our • Average realized gold price of $1,219 per ounce exploration team has delivered significant explo- • Gold revenues of $432.7 million ration success. • Cash operating costs of $766 per ounce of gold 2010 Annual Report | 1 we entered into a joint venture with Votorantim, a large Brazilian company. This added a 3,400 km² land package in Mato Grosso to our extensive Brazilian portfolio. One of our stated goals is to increase the mine lives of our operations. The most economical method to achieve this is through the drill bit, hence the increased exploration budget in 2010. At Bogoso/Prestea, we have only explored some 30 kilometers of our 85 kilometer land package area. Similarly, the corridor along our haul road from Operations the Wassa plant down to Hwini-Butre has had The second half of 2010 was challenging at Bogoso/ insufficient exploration since we acquired these Prestea. The unusually heavy rains contributed to concession areas in late 2005. The exploration delays in the commencement of mining at one of potential in these areas is immense. It requires our new pits. This resulted in processing relatively time and money to drill out these areas and add high quantities of lower grade and lower recovery to our reserve and resource base. transitional ore at the Bogoso Sulfide Plant leading In other parts of West Africa, we earned a 51% to lower than expected production. Going forward interest on the Sonfon project in Sierra Leone and at Bogoso/Prestea, we expect improving recoveries we continue to explore this project. Our joint venture as we mine deeper in our pits, accessing more fresh partner, Riverstone Resources, continues successful sulfide ores. The improvement will be most notice- exploration activities at Goulagou and Rounga. In able in the second half of 2011. We still have work to Côte d’Ivoire, we continue the early stage explora- do at the Bogoso Sulfide Plant, but we have been tion activities at Amelekia and Abengourou. successful in the past and are confident we will be successful again in the near future. We continue to explore for gold in Brazil with 9 greenfields exploration projects in Mato Grosso, At Wassa, we anticipate 2011 performance to be Minas Gerais and Goias. In addition, during 2010, very similar to what we achieved this year. Wassa has been and continues to be a reliable operation. 2 | Golden Star We mine high grade ores at the HB concession at both Father Brown and Adoikrom pits and haul this to the Wassa plant, where it is blended with the Wassa ores. This strategy provides a certain degree of operational flexibility which translates into predictability and stability. We will continue to focus on cost containment at both Bogoso/Prestea and Wassa/HBB in the face of continuing cost pressures. I want to thank our employees, the management What’s Next? team and the Board of Directors for their efforts through the past year. It has been a year with chal- In the second half of 2011, in order to take advantage lenges, some within our control and some not. of the underutilized Bogoso Oxide plant, we expect Regardless, our team remains dedicated to deliv- to see the start of production from our Bogoso ering solid operational and financial results. Tailings Retreatment Project, which should provide about 40,000 ounces of gold (on an annualized Yours sincerely, basis) at low cash operating costs. In addition, we expect to start mining the Pampe oxide pit late in Tom Mair the year and combine this ore with the tailings into President & CEO the Bogoso Oxide Plant.