Analysts Mixed On Golden Star Resources After Bogoso Delay

May. 9.07 | About: Golden Star (GSS)

Following news that there will be a delay for commissioning of Golden Star Resources Ltd.'s (NYSEMKT:GSS) Bogoso sulphide expansion project in Ghana, West Africa, analysts remain mixed on the company's prospects going forward.

Construction-related issues and mechanical problems have pushed back the start date from April 1.

Golden Start management did not provide a guidance update and are not expected to do so until a specific date for production is determined, UBS analyst Tony Lesiak said in a note to clients.

He lowered his rating on Golden Star shares to "reduce" from "neutral" and left his US$4.50 price target on the stock unchanged. Mr. Lesiak also cut his production and earnings estimates.

Canaccord Adams analyst Steven Butler is far more optimistic with a "buy" rating and US$6 price target.

While acknowledging the news was disappointing, he remains confident in Golden Star and considers any share price weakness a buying opportunity.

Blackmont Capital's Richard Gray also has a "buy" on the stock with a C$6 price target. In a note to clients, he said the company's gold production forecasts at Bogoso for 2007 and 2008 will be met.