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Denver-based Golden Star Resources Ltd. (GSS), which continues to see its shares flirt with the $5 mark after falling as low as $2.64 in the fall of 2006, reported financial results for the fourth quarter and 2006 year on Wednesday.

The gold miner with operations in Ghana, West Africa, said it produced 201,406 ounces of gold last year and expects that number to climb to 390,000 in 2007.

Given the more than 30% run-up for Golden Star shares in the past three months, UBS analyst Tony Lesiak is waiting to see if the company can fully deliver on its growth plans.

In order to achieve its production targets, Golden Star must successfully bring its Bogoso Sulphide project online during the next few quarters, Mr. Lesiak said in a research note.

He lowered his rating on the stock to “neutral” from “buy” and maintained his US$4.50 price target, which represents upside of roughly 12%.

Catherine Gignac at Wellington West is more optimistic, raising her price target on Golden Star to $5.25 from $4.75, while maintaining a “buy” recommendation.

While illegal miners, temporary power supply problems and a lower ore grade led to lower than expected output and higher costs last year, major operational risks seem to be behind the company, she said in a note to clients.

Ms. Gignac, who says Ghana is “Africa’s favorite mining-friendly country,” also notes that the Bogoso expansion project is being commissioned and commercial production is expected in the first half of 2007.

“As Golden Star demonstrates sustainable throughput, grades and recoveries, the Company should start to attain higher trading multiples more in line with peers,” Ms. Gignac said.

GSS 1-yr chart:

GSS 1-yr chart

Source: Analysts Mixed on Whether Golden Star Resources Can Deliver