GOLDEN STAR RESOURCES LTD., 40-F filed on 3/27/2020
Annual Report (foreign private issuer)
v3.20.1
DOCUMENT AND ENTITY INFORMATION Document
12 Months Ended
Dec. 31, 2019
shares
Document And Entity Information [Abstract]  
Entity Registrant Name GOLDEN STAR RESOURCES LTD.
Entity Central Index Key 0000903571
Document Type 40-F
Document Period End Date Dec. 31, 2019
Amendment Flag false
Entity Current Reporting Status Yes
Current Fiscal Year End Date --12-31
Document Fiscal Year Focus 2019
Document Fiscal Period Focus FY
Entity Emerging Growth Company false
Entity Interactive Data Current Yes
Entity Common Stock, Shares Outstanding 109,385,063
v3.20.1
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)
$ in Thousands, shares in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Profit or loss [abstract]    
Revenue $ 264,737 $ 273,017
Cost of sales excluding depreciation and amortization 186,340 223,729
Depreciation and amortization 29,054 33,939
Mine operating margin 49,343 15,349
Other expenses/(income)    
Exploration expense 3,195 2,959
General and administrative 19,091 16,428
Finance expense, net 7,623 18,072
Other expense/(income) 11,565 (3,603)
Impairment charges 56,762 0
Loss/(gain) on fair value of financial instruments, net 1,642 (6,786)
Loss before tax (50,535) (11,721)
Income tax expense 27,439 12,350
Net loss and comprehensive loss (77,974) (24,071)
Net loss attributable to non-controlling interest (10,540) (5,948)
Net loss attributable to Golden Star shareholders $ (67,434) $ (18,123)
Net loss per share attributable to Golden Star shareholders    
Basic (usd per share) $ (0.62) $ (0.21)
Diluted (usd per share) $ (0.62) $ (0.21)
Weighted average shares outstanding-basic (in shares) 109.0 84.3
Weighted average shares outstanding-diluted (in shares) 109.0 84.3
v3.20.1
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
CURRENT ASSETS    
Cash and cash equivalents $ 53,367 $ 96,507
Accounts receivable 6,503 3,213
Inventories 38,860 35,196
Prepaids and other 8,559 5,291
Total Current Assets 107,289 140,207
RESTRICTED CASH 2,082 6,545
MINING INTERESTS 264,689 270,640
DEFERRED TAX ASSETS 0 595
Total Assets 374,060 417,987
CURRENT LIABILITIES    
Accounts payable and accrued liabilities 90,842 78,484
Current portion of rehabilitation provisions 5,826 7,665
Current portion of deferred revenue 11,191 14,316
Current portion of long term debt 15,987 27,482
Other liability 0 6,410
Total Current Liabilities 123,846 134,357
REHABILITATION PROVISIONS 62,609 58,560
DEFERRED REVENUE 102,784 105,632
LONG TERM DEBT 90,782 73,224
DERIVATIVE LIABILITY 5,608 4,177
DEFERRED TAX LIABILITY 20,554 0
Total Liabilities 406,183 375,950
SHAREHOLDERS' EQUITY    
CONTRIBUTED SURPLUS 38,964 37,258
DEFICIT (898,779) (831,283)
Shareholders' equity attributable to Golden Star shareholders 50,390 114,010
NON-CONTROLLING INTEREST (82,513) (71,973)
Total Equity (32,123) 42,037
Total Liabilities and Shareholders' Equity 374,060 417,987
First preferred shares, without par value, unlimited shares authorized. No shares issued and outstanding    
SHAREHOLDERS' EQUITY    
SHARE CAPITAL 0 0
Common shares, without par value, unlimited shares authorized    
SHAREHOLDERS' EQUITY    
SHARE CAPITAL $ 910,205 $ 908,035
v3.20.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - First preferred shares - shares
Dec. 31, 2019
Dec. 31, 2018
Disclosure of classes of share capital [line items]    
Number of shares issued (shares) 0 0
Number of shares outstanding (shares) 0 0
v3.20.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
OPERATING ACTIVITIES:    
Net loss $ (77,974) $ (24,071)
Reconciliation of net loss to net cash provided by/(used in) operating activities:    
Depreciation and amortization 29,608 33,975
Impairment charges 56,762 0
Share-based compensation 3,119 1,278
Income tax expense 27,439 12,350
Unrealized loss on non-hedge derivative contracts 211 0
Recognition of deferred revenue (13,334) (13,738)
Reclamation expenditures (3,171) (5,316)
Other 12,949 11,925
Changes in working capital (13,988) (17,172)
Net cash provided by/(used in) operating activities 22,841 (7,555)
INVESTING ACTIVITIES:    
Additions to mining interests (73,381) (44,935)
Proceeds from asset disposal 0 38
Change in accounts payable and deposits on mine equipment and material 1,507 (3,014)
Decrease/(increase) in restricted cash 4,463 (40)
Net cash used in investing activities (67,411) (47,951)
FINANCING ACTIVITIES:    
Principal payments on debt (57,225) (15,607)
Proceeds from debt agreements, net 57,386 35,000
Royal Gold loan repayment   (20,000)
Shares issued, net 0 124,772
Exercise of options 1,269 61
Net cash provided by financing activities 1,430 124,226
(Decrease)/increase in cash and cash equivalents (43,140) 68,720
Cash and cash equivalents, beginning of period 96,507 27,787
Cash and cash equivalents, end of period 53,367 96,507
7% Convertible Debentures    
Reconciliation of net loss to net cash provided by/(used in) operating activities:    
Unrealized loss on non-hedge derivative contracts 1,431 (6,786)
FINANCING ACTIVITIES:    
Principal payments on debt 0 0
Royal Gold loan repayment   0
Royal Gold loan    
FINANCING ACTIVITIES:    
Principal payments on debt 0 0
Royal Gold loan repayment $ 0 $ (20,000)
v3.20.1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)
Dec. 31, 2019
Aug. 03, 2016
7% Convertible Debentures    
Disclosure of detailed information about borrowings [line items]    
Borrowings, interest rate 7.00% 7.00%
v3.20.1
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
$ in Thousands
USD ($)
shares
Share Capital
Common shares
USD ($)
shares
Contributed Surplus
USD ($)
Deficit
USD ($)
Non-Controlling Interest
USD ($)
Impact of adopting IFRS 15 $ (18,980)     $ (18,980)  
Balance at beginning of period (restated) (60,734) $ 783,167 $ 35,284 (813,160) $ (66,025)
Balance at beginning of period (shares) at Dec. 31, 2017 | shares   76,116,215      
Balance at beginning of period at Dec. 31, 2017 (41,754) $ 783,167 35,284 (794,180) (66,025)
Shares issued (see Note 13) (shares) | shares   32,642,100      
Shares issued (see Note 13) 125,672 $ 125,672      
Shares issued under DSUs (shares) | shares   36,194      
Shares issued under DSUs $ (145) $ 20 (165)    
Shares issued under options (shares) | shares 25,000 24,500      
Shares issued under options $ 61 $ 77 (16)    
Options granted net of forfeitures 1,248   1,248    
Deferred share units granted 565   565    
Performance and restricted share units granted 342   342    
Share issue costs (901) $ (901)      
Net loss (24,071)     (18,123) (5,948)
Balance at end of period (shares) at Dec. 31, 2018 | shares   108,819,009      
Balance at end of period at Dec. 31, 2018 42,037 $ 908,035 37,258 (831,283) (71,973)
Impact of adopting IFRS 15 (62)     (62)  
Balance at beginning of period (restated) $ 41,975 $ 908,035 37,258 (831,345) (71,973)
Shares issued under options (shares) | shares 438,000 437,772      
Shares issued under options $ 1,270 $ 2,054 (784)    
Options granted net of forfeitures 1,890   1,890    
Deferred share units granted 689   689    
Performance and restricted share units granted 592   592    
PRSU settlement (shares) | shares   128,282      
PRSU settlement, net of tax (565) $ 116 (681)    
Net loss (77,974)     (67,434) (10,540)
Balance at end of period (shares) at Dec. 31, 2019 | shares   109,385,063      
Balance at end of period at Dec. 31, 2019 $ (32,123) $ 910,205 $ 38,964 $ (898,779) $ (82,513)
v3.20.1
NATURE OF OPERATIONS
12 Months Ended
Dec. 31, 2019
Basis Of Consolidation [Abstract]  
NATURE OF OPERATIONS
1. NATURE OF OPERATIONS
Golden Star Resources Ltd. ("Golden Star" or "the Company" or "we" or "our") is an international gold mining and exploration company incorporated under the Canada Business Corporations Act and headquartered in Toronto, Canada. The Company's shares are listed on the Toronto Stock Exchange under the symbol GSC, the NYSE American (formerly NYSE MKT) under the symbol GSS and the Ghana Stock Exchange under the symbol GSR. The Company's registered office is located at 150 King Street West, Suite 1200, Toronto, Ontario, M5H 1J9, Canada.
Through our 90% owned subsidiary, Golden Star (Wassa) Limited, we own and operate the Wassa open-pit gold mine, the Wassa underground mine and a carbon-in-leach processing plant (collectively, "Wassa"), located northeast of the town of Tarkwa, Ghana. Through our 90% owned subsidiary Golden Star (Bogoso/Prestea) Limited, we own and operate the Bogoso gold mining and processing operations, the Prestea open-pit mining operations and the Prestea underground mine (collectively "Prestea") located near the town of Prestea, Ghana. We also hold and manage interests in several gold exploration projects in Ghana and in Brazil.
v3.20.1
BASIS OF PRESENTATION
12 Months Ended
Dec. 31, 2019
Corporate Information And Statement Of IFRS Compliance [Abstract]  
BASIS OF PRESENTATION
2. BASIS OF PRESENTATION
Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB") and with interpretations of the International Financial Reporting Interpretations Committee ("IFRIC") which the Canadian Accounting Standards Board has approved for incorporation into Part 1 of the CPA Canada Handbook – Accounting.
These consolidated financial statements were approved by the Board of Directors of the Company on February 18, 2020.
Basis of presentation
These consolidated financial statements include the accounts of the Company and its subsidiaries, whether owned directly or indirectly. The financial statements of the subsidiaries are prepared for the same period as the Company using consistent accounting policies for all periods presented, except for the changes in accounting policies described in Note 3 below. All inter-company balances and transactions have been eliminated. Subsidiaries are entities controlled by the Company. Non-controlling interests in the net assets of consolidated subsidiaries are a separate component of the Company's equity.
These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and discharge of all liabilities in the normal course of business.
The consolidated financial statements have been prepared on a historical cost basis, except for derivative financial instruments which are measured at fair value through profit or loss.
v3.20.1
SUMMARY OF ACCOUNTING POLICIES
12 Months Ended
Dec. 31, 2019
Significant Accounting Policies [Abstract]  
SUMMARY OF ACCOUNTING POLICIES
3. SUMMARY OF ACCOUNTING POLICIES
Cash and cash equivalents
Cash includes cash deposits in any currency residing in chequing and sweep accounts. Cash equivalents consist of money market funds and other highly liquid investments purchased with maturities of three months or less. Investments with maturities greater than three months and up to one year are classified as short-term investments, while those with maturities in excess of one year are classified as long-term investments. Cash equivalents and short-term investments are stated at amortized cost, which typically approximates market value.
Inventories
Inventory classifications include "stockpiled ore," "in-process inventory," "finished goods inventory" and "materials and supplies". The stated value of all production inventories include direct production costs and attributable overhead and depreciation incurred to bring the materials to their current point in the processing cycle. General and administrative costs for corporate offices are not included in any inventories.
Stockpiled ore represents coarse ore that has been extracted from the mine and is stored for future processing. Stockpiled ore is measured by estimating the number of tonnes (via truck counts or by physical surveys) added to, or removed from the stockpile, the number of contained ounces (based on assay data) and estimated gold recovery percentage. Stockpiled ore value is based on the costs incurred (including depreciation and amortization) in bringing the ore to the stockpile. Costs are added to the stockpiled ore based on current mining costs per tonne and are removed at the average cost per tonne of ore in the stockpile.
In-process inventory represents material that is currently being treated in the processing plants to extract the contained gold and to transform it into a saleable product. The amount of gold in the in-process inventory is determined by assay and by measure of the quantities of the various gold-bearing materials in the recovery process. The in-process gold is valued at the average of the beginning inventory and the cost of material fed into the processing stream plus in-process conversion costs including applicable mine-site overheads, depreciation and amortization related to the processing facilities.
Finished goods inventory is saleable gold in the form of doré bars. Included in the costs are the direct costs of the mining and processing operations as well as direct mine-site overheads, amortization and depreciation.
Materials and supplies inventories consist mostly of equipment parts and other consumables required in the mining and ore processing activities.
All inventories are valued at the lower of average cost or net realizable value.
Property, plant and equipment
Property, plant and equipment assets, including machinery, processing equipment, mining equipment, mine site facilities, buildings, vehicles and expenditures that extend the life of such assets, are initially recorded at cost including acquisition and installation costs. Property, plant and equipment are subsequently measured at cost, less accumulated depreciation and accumulated impairment losses.
The costs of self-constructed assets include direct construction costs and direct overhead during the construction phase. Indirect overhead costs are not included in the cost of self-constructed assets.
Depreciation for mobile equipment and other assets having estimated lives shorter than the estimated life of the ore reserves is calculated using the straight-line method at rates which depreciate the cost of the assets, less their anticipated residual values, if any, over their estimated useful lives. Mobile mining equipment is amortized over a five year life. Assets, such as processing plants, power generators and buildings, which have an estimated life equal to or greater than the estimated life of the ore reserves, are amortized over the life of the proven and probable reserves of the associated mining property using a units-of-production amortization method, less their anticipated residual values, if any. The net book value of property, plant and equipment assets is charged against income if the mine site is abandoned and it is determined that the assets cannot be economically transferred to another project or sold.
The residual values, useful lives and method of depreciation of property, plant and equipment are reviewed at each reporting period end, and adjusted prospectively if appropriate.
Gains and losses on the disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount, and are recognized net in the consolidated statement of operations.
Mining properties
Mining property assets, including property acquisition costs, tailings storage facilities, mine-site development and drilling costs where proven and probable reserves have previously been established, pre-production waste stripping, condemnation drilling, roads, feasibility studies and wells are recorded at cost. The costs of self-constructed assets include direct construction costs, direct overhead costs and allocated interest during the construction phase. Indirect overhead costs are not included in the cost of self-constructed assets.
Mining property assets are amortized over the life of the proven and probable reserves to which they relate, using a units-of-production amortization method. At open pit mines the costs of removing overburden from an ore body in order to expose ore during its initial development period are capitalized.
Underground mine development costs
Underground mine development costs include development costs to build new shafts, drifts and ramps that will enable the Company to physically access ore underground. The time over which the Company will continue to incur these costs depends on the mine life. These underground development costs are capitalized as incurred. Capitalized underground development costs incurred to enable access to specific ore blocks or areas of the underground mine, and which only provide an economic benefit over the period of mining that ore block or area, are depreciated on a units-of-production basis, whereby the denominator is estimated ounces of gold in proven and probable reserves and the portion of resources within that ore block or area that is considered probable of economic extraction. If capitalized underground development costs provide an economic benefit over the entire mine life, the costs are depreciated on a units-of-production basis, whereby the denominator is the estimated ounces of gold in total accessible proven and probable reserves and the portion of resources that is considered probable of economic extraction.
Borrowing costs
Borrowing costs attributable to the acquisition, construction or production of a qualifying asset are capitalized. Qualifying assets are assets that require a significant amount of time to prepare for their intended use, including projects that are in the exploration and evaluation, development or construction stages. Capitalized borrowing costs are considered an element of the cost of the qualifying asset which is determined based on gross expenditures incurred on an asset. Capitalization ceases when the asset is substantially complete or if active development is suspended or ceases. Where the funds used to finance a qualifying asset form part of general borrowings, the amount capitalized is calculated using a weighted average of rates applicable to the relevant borrowings during the period. Where funds borrowed are directly attributable to a qualifying asset, the amount capitalized represents the borrowing costs specific to those borrowings. Other borrowing costs are recognized as an expense in the period in which they are incurred.
Impairment of long-lived assets
The Company assesses at each reporting period whether there is an indication that an asset or group of assets may be impaired. When impairment indicators exist, the Company estimates the recoverable amount of the asset and compares it against the asset's carrying amount. The recoverable amount is the higher of its fair value less cost of disposal ("FVLCD") and the asset's value in use ("VIU"). If the carrying amount exceeds the recoverable amount, an impairment loss is recorded in the consolidated statement of operations.
In assessing VIU, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset not already reflected in the estimates of future cash flows. The cash flows are based on best estimates of expected future cash flows from the continued use of the asset and its eventual disposal.
FVLCD is best evidenced if obtained from an active market or binding sale agreement. Where neither exists, the fair value is based on the best estimates available to reflect the amount that could be received from an arm's length transaction.
Future cash flows are based on estimated quantities of gold and other recoverable metals, expected price of gold (considering current and historical prices, price trends and related factors), production levels and cash costs of production, capital and reclamation costs, all based on detailed engineered life-of-mine plans.
Numerous factors including, but not limited to, unexpected grade changes, gold recovery variances, shortages of equipment and consumables, and equipment failures could impact our ability to achieve forecasted production schedules from proven and probable reserves. Additionally, commodity prices, capital expenditure requirements and reclamation costs could differ from the assumptions used in the cash flow models used to assess impairment. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material can ultimately be mined economically.
If an impairment loss reverses in a subsequent period, the carrying amount (post reversal) of the related asset is increased to the revised estimate of recoverable amount to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset previously. Reversals of impairment losses are recognized in the statement of operations in the period the reversals occur.
Material changes to any of the factors or assumptions discussed above could result in future asset impairments.
Rehabilitation provisions
The Company records a liability and corresponding asset for the present value of the estimated costs of legal and constructive obligations for future site reclamation and closure where the liability is probable and a reasonable estimate can be made of the obligation. The estimated present value of the obligation is reassessed on a periodic basis or when new material information becomes available. Increases or decreases to the obligation usually arise due to changes in legal or regulatory requirements, the extent of environmental remediation required, methods of reclamation, cost estimates, inflation rates, or discount rates. Changes to the provision for reclamation and remediation obligations related to operating mines, which are not the result of current production of inventory, are recorded with an offsetting change to the related asset. Changes to the provision for reclamation and remediation obligations related to suspended mine operations are recognized in the consolidated statements of operations and comprehensive loss. The present value is determined based on current market assessments of the time value of money using discount rates based on the risk-free rate maturing approximating the timing of expected expenditures to be incurred, and adjusted for country related risks. The periodic unwinding of the discount is recognized in the consolidated statement of operations as a finance expense.
Deferred revenue
From January 1, 2018, deferred revenue consists of: 1) initial cash payments received by the Company for future delivery of payable gold under the terms of the Company’s Streaming Agreement as defined in Note 11, Deferred Revenue, and 2) a significant financing component of the Company’s Streaming Agreement. Deferred revenue is increased as interest expense is recognized based on the implicit interest rate of the discounted cash flows arising from the expected delivery of ounces under the Company’s Streaming Agreement.
The amount by which the deferred revenue balance is reduced and recognized into revenue is based on a rate per ounce of gold delivered under the stream. This rate per ounce of gold delivered relating to the payments received by the Company is based on the remaining deferred revenue balance divided by the ounces that are expected to be delivered over the term of the Stream Agreement.
As the Company’s Streaming Agreement contains a variable component, IFRS 15 requires that the transaction price be updated and re-allocated on an ongoing basis. As a result, the deferred revenue recognized per ounce of gold delivered under the Streaming Agreement will require an adjustment each time there is a significant change in the underlying gold production profile of a mine. Should a change in the transaction price be necessary, a cumulative catch-up adjustment to revenue will be made in the period in which the change occurs, to reflect the updated production profile expected to be delivered under the Streaming Agreement.
Foreign currency transactions
The Company's presentation currency of its consolidated financial statements is the U.S. dollar, as is the functional currency of its operations. The functional currency of all consolidated subsidiaries is the U.S. dollar. All values are rounded to the nearest thousand, unless otherwise stated.
Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars at period end exchange rates. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated into U.S. dollars at the exchange rate at the date that the fair value was determined. Income and expense items are translated at the exchange rate in effect on the date of the transaction. Exchange gains and losses resulting from the translation of these amounts are included in net loss, except those arising on the translation of equity investments at fair value through other comprehensive income that are recorded in other comprehensive income. Non-monetary assets and liabilities denominated in foreign currencies that are measured at historical cost are translated at the exchange rate in effect at the transaction date.
Income taxes
Income taxes comprise the provision for (or recovery of) taxes actually paid or payable (current taxes) and for deferred taxes.
Current taxes are based on taxable earnings in the year. Current tax is calculated using tax rates and laws that were enacted or substantively enacted at the balance sheet date in the respective jurisdictions.
Current income tax assets and current income tax liabilities are only offset if a legally enforceable right exists to offset the amounts and the Company intends to settle on a net basis or to realize the asset and settle the liability simultaneously.
Deferred income tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. Deferred income tax assets and liabilities are computed using enacted or substantially enacted income tax rates in effect when the temporary differences are expected to reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in the period of substantial enactment. The provision for or the recovery of deferred taxes is based on the changes in deferred tax assets and liabilities during the period.
The carrying amount of deferred income tax assets or liabilities are reviewed at the end of each reporting period and recognized to the extent that it is probable that taxable earnings will be available against which deductible temporary differences can be utilized.
Net income/(loss) per share
Basic income/(loss) per share of common stock is calculated by dividing income available to Golden Star's common shareholders by the weighted average number of common shares issued and outstanding during the period. In periods with earnings, the calculation of diluted net income per common share uses the treasury stock method to compute the dilutive effects of stock options, convertible debentures and other potentially dilutive instruments. In periods of loss, diluted net loss per share is equal to basic loss per share.
Revenue recognition
Revenue from the sale of metal is recognized when the Company transfers control over to a customer. All of our spot sales of gold are transported to a South African gold refiner who locates a buyer and arranges for sale of our gold on the same day that the gold is shipped from the mine site. The sales price is based on the London P.M. fix on the day of shipment.
Revenue recognition for the Company’s Streaming Agreement is disclosed in the accounting policy for deferred revenue.
Share-based compensation
Under the Company's Fourth Amended and Restated 1997 Stock Option Plan, common share options may be granted to executives, employees, consultants and non-employee directors. Compensation expense for such grants is recorded in the consolidated statements of operations and comprehensive loss, with a corresponding increase recorded in the contributed surplus account in the consolidated balance sheet. The expense is based on the fair value of the option at the time of grant, measured by reference to the fair value determined using a Black-Scholes valuation model, and is recognized over the vesting periods of the respective options on a graded basis. Consideration paid to the Company on exercise of options is credited to share capital.
Under the Company's Deferred Share Unit ("DSU") plan, DSUs may be granted to executive officers and directors. Compensation expense for such grants is recorded in the consolidated statements of operations and comprehensive loss with a corresponding increase recorded in the contributed surplus account in the consolidated balance sheets. The expense is based on the fair values at the time of grant and is recognized over the vesting periods of the respective DSUs. Upon exercise the Company's compensation committee may, at its discretion, issue cash, shares or a combination thereof.
Under the Company's Share Appreciation Rights ("SARs") plan allows SARs to be issued to executives, employees and directors. These awards are settled in cash on the exercise date equal to the Company's stock price less the strike price. Since these awards are settled in cash, the Company marks-to-market the associated expense for each award at the end of each reporting period using a Black-Scholes model. The Company accounts for these as liability awards and marks-to-market the fair value of the award until final settlement. 
Under the Company's Performance Share Units ("PSU") plan, PSUs may be granted to executives, employees and non-employee directors. Each PSU represents one notional common share that is redeemed for cash based on the value of a common share at the end of the three year performance period, to the extent performance and vesting criteria have been met. The PSUs vest at the end of a three year performance. The cash award is determined by multiplying the number of units by the performance adjusting factor, which ranges from 0% to 200%. The performance factor is determined by comparing the Company's share price performance to the share price performance of a peer group of companies as listed in the PSU plan. As the Company was required to settle these awards in cash, they were accounted for as liability awards with corresponding compensation expense recognized. The final PSU grant vested on December 31, 2018 and as a result the Company did not recognize a PSU expense in 2019.
Under the Company's 2017 performance and restricted share unit plan (the "2017 PRSU Plan"), performance share units ("2017 PSUs") and restricted share units ("2017 RSUs" and, together with the 2017 PSUs, the "Share Units") may be issued to any employee or officer of the Company or its designated affiliates. Share Units may be redeemed for: (i) common shares issued from treasury; (ii) common shares purchased in the secondary market; (iii) a cash payment; or (iv) a combination of (i), (ii) and (iii).
Each PRSU represents one notional common share that is redeemed for common shares or common shares plus cash subject to the consent of the Company based on the value of a common share at the end of the three year performance period, to the extent performance and vesting criteria have been met. The PRSUs vest at the end of a three year performance period. The award is determined by multiplying the number of Share Units by the performance adjustment factor, which ranges from 0% to 200%. The performance adjustment factor is determined by comparing the Company's share price performance to the share price performance of a peer group of companies as listed in the 2017 PRSU Plan. As the Company has a practice of settling these awards in common shares, they are accounted for as equity awards with corresponding compensation expense recognized.
Right of Use Asset and Lease Liabilities
Until December 31, 2018 leases that transfer substantially all of the benefits and risks of ownership to the Company were recorded as finance leases and classified as property, plant and equipment with a corresponding amount recorded with current and long-term debt. All other leases were classified as operating leases under which leasing costs were expensed in the period incurred.
On January 1, 2019, the Company adopted the requirements of IFRS 16 Leases. As a result, the Company updated its accounting policy for leases to align with the requirements of IFRS 16. The Company elected to use the modified retrospective approach to initially adopt IFRS 16 which resulted in recognizing the cumulative effect of prior period amounts as an adjustment to the opening balance sheet through opening deficit on January 1, 2019.
From January 1, 2019, the Company recognizes a lease liability and a right-of-use asset at the lease commencement date. 
The lease liability is initially measured as the present value of future lease payments discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, each operation’s applicable incremental borrowing rate. The incremental borrowing rate is the rate which the operation would have to pay to borrow, over a similar term and with a similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment. 
Lease payments included in the measurement of the lease liability comprise the following: fixed payments, including in-substance fixed payments, less any lease incentives receivable, variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date, amounts expected to be payable by the Company under residual value guarantees, the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and payments of penalties for terminating the lease, if the Company expects to exercise an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect lease payments made, and remeasuring the carrying amount to reflect any reassessment or lease modifications.
The lease liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. 
The right-of-use asset is initially measured at cost, which comprises the following: the amount of the initial measurement of the lease liability, any lease payments made at or before the commencement date, less any lease incentives received, any initial direct costs incurred by the Company, and an estimate of costs to be incurred by the Company in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories.
The right-of-use asset is subsequently measured at cost, less any accumulated depreciation and any accumulated impairment losses, and adjusted for any remeasurement of the lease liability. It is depreciated in accordance with the Company’s accounting policy for plant and equipment, from the commencement date to the earlier of the end of its useful life or the end of the lease term. 
Each lease payment is allocated between the lease liability and finance cost. The finance cost is charged to net earnings over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
On the consolidated balance sheet, right-of-use assets and lease liabilities are reported in mineral properties, plant and equipment and debt and lease liabilities, respectively.
Financial instruments
The Company recognizes all financial assets initially at fair value and classifies them into one of the following measurement categories: fair value through profit or loss (“FVTPL”), fair value through other comprehensive income (“FVOCI”) or amortized cost, as appropriate.
The Company recognizes all financial liabilities initially at fair value and classifies them as either FVTPL or loans and borrowings, as appropriate. The Company has not classified any of its derivatives as hedging instruments in an effective hedge.
Derivatives
From time to time the Company may utilize foreign exchange and commodity price derivatives to manage exposure to fluctuations in foreign currency exchange rates and gold prices, respectively. The Company does not employ derivative financial instruments for trading purposes or for speculative purposes. Derivative instruments are recorded on the balance sheet at fair value with changes in fair value recorded in the consolidated statement of operations. The Company did not have any foreign exchange derivatives outstanding at December 31, 2019.
7% Convertible Debentures embedded derivative
The Company's 7% Convertible Debentures embedded derivative is considered a financial instrument at FVTPL. The embedded derivative was recorded at fair value on the date of debt issuance. It is subsequently remeasured at fair value at each reporting date, and the changes in the fair value are recorded in the consolidated statement of operations. The fair value of the embedded derivative is determined using a convertible note valuation model, using assumptions based on market conditions existing at the reporting date.
Non-hedge derivative contracts
During the year ended December 31, 2019, the Company entered into costless collars consisting of puts and calls, on 50,000 ounces of gold with a floor price of $1,400 per ounce and a ceiling price of $1,750 per ounce with maturity dates ranging from October 2019 to September 2020. The non-hedge accounted collar contracts are considered fair value through profit or loss financial instruments with fair value determined using pricing models that utilize a variety of observable inputs that are a combination of quoted prices, applicable yield curves and credit spreads. The non-hedge derivative contracts are included with prepaids and other or accounts payable and accrued liabilities on the balance sheet.
Share capital
Common shares are classified as equity. Costs directly attributable to the issue of new shares or share options are shown in equity as a deduction, net of tax, from the gross proceeds.
Changes in accounting policies
The Company has adopted the following new and revised standards, effective January 1, 2019. These changes were made in accordance with the applicable transitional provisions.
IFRS 16 Leases specifies how an IFRS reporter will recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16's approach to lessor accounting substantially unchanged from its predecessor, IAS 17. IFRS 16 was issued in January 2016 and applies to annual reporting periods beginning on or after January 1, 2019. On adoption of this standard the Company elected to use the modified retrospective approach to initially adopt IFRS 16 which resulted in recognizing the cumulative effect of prior period amounts as an adjustment to the opening balance sheet through opening deficit on January 1, 2019. Under IFRS 16, the Company recognized lease liabilities in relation to leases which had previously been classified as "operating leases" under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of January 1, 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 7.5%. The associated right-of-use assets for property leases were measured on a retrospective basis as if the new rules had always been applied. The change in accounting policy resulted in an increase to mining interests (plant and equipment) of $0.7 million and an increase to long term debt (finance leases) of $0.5 million. The net impact on retained earnings on January 1, 2019 was a decrease of $0.1 million.
IFRIC 23 Uncertainty over income tax treatments clarifies how the recognition and measurement requirements of IAS 12, Income Taxes, are applied where there is uncertainty over income tax treatments effective for years beginning on or after January 1, 2019. There was no accounting impact to the financial statements on adoption of this standard.
v3.20.1
CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
12 Months Ended
Dec. 31, 2019
Accounting Policies, Changes In Accounting Estimates And Errors [Abstract]  
CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
4. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
Preparation of our consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that can affect reported amounts of assets, liabilities, revenues and expenses and the accompanying disclosures. Estimates and assumptions are continuously evaluated and are based on management's historical experience and on other assumptions we believe to be reasonable under the circumstances. However, uncertainty about these judgments, estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Mineral reserves and resources
Determining mineral reserves and resources is a complex process involving numerous variables and is based on a professional evaluation using accepted international standards for the assessment of mineral reserves. Estimation is a subjective process, and the accuracy of such estimates is a function of the quantity and quality of available data, the assumptions made and judgments used in engineering and geological interpretation. Mineral reserve estimation may vary as a result of changes in the price of gold, production costs, and with additional knowledge of the ore deposits and mining conditions.
Differences between management's assumptions including economic assumptions such as metal prices and market conditions could have a material effect in the future on the Company's results and financial position, particularly a change in the rate of depreciation and amortization of the related mining assets and the recognition of deferred revenue.
Units of production depreciation
The mineral properties and a large portion of the property, plant and equipment is depreciated/amortized using the units of production method over the expected operating life of the mine based on estimated recoverable ounces of gold, which are the prime determinants of the life of a mine. Estimated recoverable ounces of gold include proven and probable mineral reserves. Changes in the estimated mineral reserves will result in changes to the depreciation charges over the remaining life of the operation. A decrease in the mineral reserves would increase depreciation and amortization expense and this could have a material impact on the operating results. The amortization base is updated on an annual basis based on the new mineral reserve and resource estimates.
Carrying value of assets and impairment charges
The Company undertakes a review of its assets at each reporting period to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount of the asset or cash-generating unit ("CGU") is made, which is considered to be the higher of its FVLCD and VIU. An impairment loss is recognized when the carrying value of the asset or CGU is higher than the recoverable amount. In undertaking this review, management of the Company is required to make significant estimates of, amongst other things, discount rates, future production and sale volumes, metal prices, reserves and resource quantities, future operating and capital costs and reclamation costs to the end of the mine's life. These estimates are subject to various risks and uncertainties, which may ultimately have an effect on the expected recoverability of the carrying values of the asset or CGU. In determining a CGU, management has examined the smallest identifiable group of assets that generates cash inflows that are largely independent of cash inflows from other assets or group of assets.
Assessment of impairment and reverse impairment indicators
Management applies significant judgment in assessing whether indicators of impairment or reverse impairment exist for an asset or group of assets which would necessitate impairment testing. Internal and external factors such as significant changes in the use of the asset, commodity prices and production costs are used by Management in determining whether there are any indicators.
Rehabilitation provisions
Environmental reclamation and closure liabilities are recognized at the time of environmental disturbance, in amounts equal to the discounted value of expected future reclamation and closure costs. The estimated future cash costs of such liabilities are based primarily upon environmental and regulatory requirements of the various jurisdictions in which we operate as well as any other constructive obligations that exist. The liability represents management's best estimates of cash required to settle the liability, inflation, assumptions of risks associated with future cash flows and the applicable risk-free interest rates for discounting the future cash outflow. The liability is reassessed and remeasured at each reporting date.
Fair value of financial instruments, including embedded derivatives
Where the fair value of financial assets and financial liabilities recorded in the financial statements cannot be derived from active markets, their fair value is determined using valuation techniques including the discounted cash flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
When measuring the fair value of an asset or liability, the Company uses observable market data to the greatest extent possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
Income taxes
We deal with uncertainties and judgments in the application of complex tax regulations in the various jurisdictions where our properties are located. The amount of taxes paid is dependent upon many factors, including negotiations with taxing authorities in the various jurisdictions and resolution of disputes arising from our international tax audits. We recognize potential liabilities and record tax liabilities for anticipated tax audit issues in our various tax jurisdictions based on our best estimate of additional taxes payable. We adjust these tax estimates in light of changing facts and circumstances, however, due to the complexity of some of these uncertainties, the ultimate resolution may result in payment that is materially different from our estimates of our tax liabilities. If our estimate of tax liability proves to be less than the ultimate assessment, an additional charge to expense would result. If the estimate of tax liabilities proves to be greater that the ultimate assessment, a tax benefit is recognized.
A deferred tax asset is recognized to the extent that it is probable that taxable earnings will be available against which deductible temporary differences can be utilized.
Deferred revenue
Significant judgment is required in determining the appropriate accounting for the Streaming Agreement that has been entered into. Management has determined that based on the agreements reached that it assumes significant business risk associated with the timing and amount of ounces of gold being delivered. As such, the deposits received have been recorded as deferred revenue liabilities in the consolidated balance sheet.
The amount by which the deferred revenue balance is reduced and recognized into revenue is based on a rate per ounce of gold delivered under the stream. This rate per ounce of gold delivered relating to the payments received by the Company is based on the remaining deferred revenue balance divided by the ounces that are expected to be delivered over the term of the Stream Agreement.
As the Company’s Streaming Agreement contains a variable component, IFRS 15 requires that the transaction price be updated and re-allocated on an ongoing basis. As a result, the deferred revenue recognized per ounce of gold delivered under the Streaming Agreement will require an adjustment each time there is a significant change in the underlying gold production profile of a mine. Should a change in the transaction price be necessary, a retroactive adjustment to revenue will be made in the period in which the change occurs, to reflect the updated production profile expected to be delivered under the Streaming Agreement.
v3.20.1
FINANCIAL INSTRUMENTS
12 Months Ended
Dec. 31, 2019
Financial Instruments [Abstract]  
FINANCIAL INSTRUMENTS
5. FINANCIAL INSTRUMENTS
The following tables illustrate the classification of the Company's recurring fair value measurements for financial instruments within the fair value hierarchy and their carrying values and fair values as at December 31, 2019 and December 31, 2018:
 
 
 
December 31, 2019
 
December 31, 2018
 
Level
 
Carrying value
 
Fair value
 
Carrying value
 
Fair value
Financial Liabilities
 
 
 
 
 
 
 
 
 
Fair value through profit or loss
 
 
 
 
 
 
 
 
 
7% Convertible Debentures embedded derivative
3
 
5,608

 
5,608

 
4,177

 
4,177

Non-hedge derivative contracts
2
 
211

 
211

 

 


There were no non-recurring fair value measurements of financial instruments as at December 31, 2019.
The three levels of the fair value hierarchy are:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
Level 3 - Inputs that are not based on observable market data.
The Company's policy is to recognize transfers into and transfers out of the fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer. During the year ended December 31, 2019, there were no transfers between the levels of the fair value hierarchy.
Loss/(gain) on fair value of financial instruments in the Statements of Operations and Comprehensive Loss consists of the following:
 
For the Years Ended
December 31,
 
2019
 
2018
Loss/(gain) on fair value of 7% Convertible Debentures embedded derivative
$
1,431

 
$
(6,786
)
Unrealized loss on non-hedge derivative contracts
211

 

 
$
1,642

 
$
(6,786
)

The valuation technique that is used to measure fair value is as follows:
7% Convertible Debentures embedded derivative
The debt component of the 7% Convertible Debentures is recorded at amortized cost using the effective interest rate method, and the conversion feature is classified as an embedded derivative measured at fair value through profit or loss.
The embedded derivative was valued at December 31, 2019 and December 31, 2018 using a convertible note valuation model. The significant inputs used in the convertible note valuation are as follows:
 
December 31, 2019
 
December 31, 2018
Embedded derivative
 
 
 
Risk premium
5.3
%
 
5.0
%
Borrowing costs
7.5
%
 
10.0
%
Expected volatility
45.0
%
 
45.0
%
Remaining life (years)
1.6

 
2.6


The following table presents the changes in the 7% Convertible Debentures embedded derivative for the year ended December 31, 2019:
 
Fair value
Balance at December 31, 2018
$
4,177

Loss on fair value of 7% Convertible Debentures embedded derivative
1,431

Balance at December 31, 2019
$
5,608


If the risk premium increases by 10%, the fair value of the 7% Convertible Debentures embedded derivative would decrease and the related loss in the Statement of Operations would decrease by $0.1 million at December 31, 2019.
If the borrowing costs increases by 10%, the fair value of the 7% Convertible Debentures embedded derivative would decrease and the related loss in the Statement of Operations would decrease by $0.1 million at December 31, 2019.
If the expected volatility increases by 10%, the fair value of the 7% Convertible Debentures embedded derivative would increase and the related loss in the Statement of Operations would increase by $0.7 million at December 31, 2019.
Non-hedge derivative contracts
During the year ended December 31, 2019, the Company entered into costless collars consisting of puts and calls, on 50,000 ounces of gold with a floor price of $1,400 per ounce and a ceiling price of $1,750 per ounce with maturity dates ranging from October 2019 to September 2020.
The non-hedge accounted collar contracts are considered fair value through profit or loss financial instruments with fair value determined using pricing models that utilize a variety of observable inputs that are a combination of quoted prices, applicable yield curves and credit spreads. The non-hedge derivative contracts are included with accounts payable and accrued liabilities on the balance sheet.
During the year ended December 31, 2019, the Company recognized an unrealized loss of $0.2 million on the non-hedge accounted collar contracts.
v3.20.1
INVENTORIES
12 Months Ended
Dec. 31, 2019
Classes of current inventories [abstract]  
INVENTORIES
6. INVENTORIES
Inventories include the following components:
 
As of
 
As of
 
December 31,
2019
 
December 31,
2018
Stockpiled ore
$
7,578

 
$
6,613

In-process ore
2,721

 
4,188

Materials and supplies
28,167

 
23,659

Finished goods
394

 
736

Total
$
38,860

 
$
35,196


The cost of inventories expensed for the year ended December 31, 2019 and 2018 was $171.4 million and $209.4 million, respectively.
Net realizable value adjustments of $1.2 million were recorded for stockpiled ore in the year ended December 31, 2019 (year ended December 31, 2018 - $2.8 million).
v3.20.1
MINING INTERESTS
12 Months Ended
Dec. 31, 2019
Property, plant and equipment [abstract]  
MINING INTERESTS
7. MINING INTERESTS
The following table shows the breakdown of the cost, accumulated depreciation and net book value of plant and equipment, mining properties and construction in progress:
 
Plant and equipment
 
Mining properties
 
Construction in progress
 
Total
Cost
 
 
 
 
 
 
 
As of December 31, 2017
479,214

 
798,433

 
126,923

 
1,404,570

Additions
95

 
677

 
45,485

 
46,257

Transfers
16,516

 
127,902

 
(144,418
)
 

Capitalized interest

 

 
579

 
579

Change in rehabilitation provision estimate

 
3,218

 

 
3,218

Disposals and other
(17,065
)
 

 

 
(17,065
)
Balance at December 31, 2018
$
478,760

 
$
930,230

 
$
28,569

 
$
1,437,559

Additions
2,869

 
288

 
72,615

 
75,772

Transfers
11,586

 
71,337

 
(82,923
)
 

Change in rehabilitation provision estimate

 
4,830

 

 
4,830

Disposals and other
(621
)
 

 

 
(621
)
Balance at December 31, 2019
$
492,594

 
$
1,006,685

 
$
18,261

 
$
1,517,540

 
 
 
 
 
 
 
 
Accumulated depreciation
 
 
 
 
 
 
 
As of December 31, 2017
437,292

 
713,220

 

 
1,150,512

Depreciation and amortization
12,349

 
20,900

 

 
33,249

Disposals and other
(16,842
)
 

 

 
(16,842
)
Balance at December 31, 2018
$
432,799

 
$
734,120

 
$

 
$
1,166,919

Depreciation and amortization
10,582

 
19,044

 

 
29,626

Disposals and other
(456
)
 

 

 
(456
)
Impairment charges (see Note 19)
7,338

 
49,424

 

 
56,762

Balance at December 31, 2019
$
450,263

 
$
802,588

 
$

 
$
1,252,851

 
 
 
 
 
 
 
 
Carrying amount
 
 
 
 
 
 
 
Balance at December 31, 2018
$
45,961

 
$
196,110

 
$
28,569

 
$
270,640

Balance at December 31, 2019
$
42,331

 
$
204,097

 
$
18,261

 
$
264,689


Additions to plant and equipment include right-of-use assets related to the Company's corporate office space. As at December 31, 2019, the right-of-use assets had net carrying amounts of $3.3 million (December 31, 2018 - $3.0 million). The total minimum lease payments are disclosed in Note 12 - Debt.
v3.20.1
INCOME TAXES
12 Months Ended
Dec. 31, 2019
Incomes Taxes [Abstract]  
INCOME TAXES
8. INCOME TAXES
We recognize deferred tax assets and liabilities based on the difference between the financial reporting and tax basis of assets and liabilities using the tax rates enacted or substantively enacted when the temporary differences are expected to reverse. Deferred tax assets are fully recognized when we conclude sufficient positive evidence exists to demonstrate that it is probable that a deferred tax asset will be realized. These factors included, but are not limited to, (a) historic and expected future levels of taxable income; (b) tax plans that affect whether tax assets can be realized; and (c) the nature, amount and expected timing of reversal of taxable temporary differences. Levels of future income are affected by market price of gold, forecasted future costs of production and quantities of proven and probable gold reserves.  If these factors or other circumstances changes, the Company records an adjustment to the recognition of deferred tax asset to reflect the Company’s latest assessment of the amount of deferred tax asset that is probable to be realized.
Our net deferred tax (liabilities)/assets at December 31, 2019 and 2018 include the following components:
 
 
December 31,
2019
 
December 31,
2018
Deferred tax assets
 
 
 
 
Tax losses carried forward
 
$

 
$
10,322

Deductible temporary differences relating to provisions
 
4,672

 
5,995

Deferred tax liabilities
 
 
 
 
Mine property costs
 
25,226

 
15,723

Net deferred tax (liabilities)/assets
 
$
(20,554
)
 
$
594


The composition of our unrecognized deferred tax assets by tax jurisdiction is summarized as follows:
 
 
December 31,
2019
 
December 31,
2018
Deductible temporary differences
 
 
 
 
Canada
 
$
7,006

 
$
8,844

Ghana
 
49,869

 
31,509

 
 
$
56,875

 
$
40,353

 
 
 
 
 
Tax losses
 
 
 
 
Canada
 
$
60,195

 
$
50,718

U.S.
 
138

 
175

Ghana
 
305,261

 
287,545

 
 
$
365,594

 
$
338,438

 
 
 
 
 
Total unrecognized deferred tax assets
 
 
 
 
Canada
 
$
67,201

 
$
59,562

U.S.
 
138

 
175

Ghana
 
355,130

 
319,054

 
 
$
422,469

 
$
378,791


The income tax expense includes the following components:
 
 
For the years ended
December 31,
 
 
2019
 
2018
Current tax expense
 
 
 
 
Current tax on net earnings
 
$
6,291

 
$

Deferred tax expense
 
 
 
 
Originating and reversal of temporary differences in the current year
 
21,148

 
12,350

Income tax expense
 
$
27,439

 
$
12,350


A reconciliation of expected income tax on net loss before minority interest at statutory rates with the actual income tax expense is as follows:  
 
 
For the years ended
December 31,
 
 
2019
 
2018
Net loss before tax
 
$
(50,534
)
 
$
(11,721
)
Statutory tax rate
 
26.5
%
 
26.5
%
Tax benefit at statutory rate
 
$
(13,392
)
 
$
(3,106
)
 
 
 
 
 
Foreign tax rates
 
(21,367
)
 
(15,562
)
Other
 

 
132

Non taxable/deductible items
 
1,914

 
(676
)
Change in unrecognized deferred tax assets due to exchange rates
 
(2,424
)
 
3,427

Change in unrecognized deferred tax assets due to impairment
 
19,867

 

Change in unrecognized deferred tax assets
 
42,841

 
28,135

Deferred income tax expense
 
$
27,439

 
$
12,350


 At December 31, 2019, the Company had a tax pool and loss carryovers expiring as follows:
 
 
Canada
 
Ghana
 
Other
2020
 
$

 
$
63,099

 
$

2021
 

 
12,822

 

2022
 

 

 

2023
 

 
80,486

 

2024
 

 
130,324

 

2026
 
8,519

 

 

2027
 
12,918

 

 

2028
 
11,659

 

 

2029
 
17,679

 

 

2030
 
15,802

 

 

2031
 
29,646

 

 

2032
 
14,351

 

 

2033
 
6,177

 

 
174

2034
 

 

 
364

2035
 
8,450

 

 
1

2036
 
13,777

 

 
120

2037
 
15,565

 

 

2038
 
27,439

 

 

2039
 
24,997

 

 

Indefinite
 
40,347

 
585,443

 

Total
 
$
247,326

 
$
872,174

 
$
659


The total of $872.2 million of the Ghana tax pool is usable against taxable income generated at Prestea.
The Ghana Revenue Authority (“GRA”) has issued a tax assessment to the company’s subsidiary (Golden Star (Wassa) Limited) related to 2014-2016. The assessment claimed a reduction in the tax losses attributable by $29 million. The company believes that the majority of the matters noted in the assessment are incorrect and has filed an appeal in an attempt to resolve these matters. Overall, it is the company’s current assessment that the relevant assessments and claims by the GRA are without merit. No amounts have been recorded for any potential liability and the company intends to defend any follow up in relation to this matter should it arise. The amount of loss, if any, cannot be determined at the current time.
v3.20.1
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
12 Months Ended
Dec. 31, 2019
Trade and other current payables [abstract]  
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities include the following components:
 
As of
 
As of
 
December 31,
2019
 
December 31,
2018
Trade and other payables
$
44,494

 
$
42,947

Accrued liabilities
38,567

 
25,522

Payroll related liabilities
7,781

 
10,015

Total
$
90,842

 
$
78,484

v3.20.1
REHABILITATION PROVISIONS
12 Months Ended
Dec. 31, 2019
Disclosure of other provisions [abstract]  
REHABILITATION PROVISIONS
At December 31, 2019, the total undiscounted amount of future cash needs for rehabilitation was estimated to be $73.8 million. A discount rate assumption of 2%, inflation rate assumption of 2% and a risk premium of 5% were used in both 2019 and 2018 to value the rehabilitation provisions. The changes in the carrying amount of the rehabilitation provisions are as follows:
 
For the Years Ended December 31,
 
2019
 
2018
Beginning balance
$
66,225

 
$
70,712

Accretion of rehabilitation provisions
730

 
691

Changes in estimates
4,651

 
138

Cost of reclamation work performed
(3,171
)
 
(5,316
)
Balance at the end of the period
$
68,435

 
$
66,225

 
 
 
 
Current portion
$
5,826

 
$
7,665

Long term portion
62,609

 
58,560

Total
$
68,435

 
$
66,225


During the year ended December 31, 2019, the Company recorded an increase in estimate for Wassa of $1.6 million due to a revision in the timing of payments. At December 31, 2019, the rehabilitation provision for Wassa was $17.8 million (2018- $17.2 million). The Company expects the payments for reclamation to be incurred between 2020 and 2027.
During the year ended December 31, 2019, the Company recorded an increase in estimate for Prestea of $3.1 million. The increase is due to a $3.3 million increase in the expected reclamation costs relating to the non-refractory operation, slightly offset by a $0.2 million reduction in expected reclamation costs relating to the refractory liability. The $0.2 million (2018 - $3.1 million) reduction in refractory obligation was recorded as other expense/(income) since the carrying value of the underlying refractory assets were $nil after suspension of its operation in 2015. At December 31, 2019, the rehabilitation provision for Prestea was $50.6 million (2018 - $49.0 million). The Company expects the payments for reclamation to be incurred between 2020 and 2029.
v3.20.1
DEFERRED REVENUE
12 Months Ended
Dec. 31, 2019
Disclosure Of Deferred Revenue [Abstract]  
DEFERRED REVENUE
11. DEFERRED REVENUE
The Company through its subsidiary Caystar Finance Co. completed a $145 million gold purchase and sale agreement (“Streaming Agreement”) with RGLD Gold AG ("RGLD"), a wholly-owned subsidiary of Royal Gold, Inc. Golden Star will deliver 10.5% of gold production from Wassa and Prestea at a cash purchase price of 20% of spot gold until 240,000 ounces have been delivered. Thereafter, 5.5% of gold production will be delivered from Wassa and Prestea at a cash purchase price of 30% of spot gold price. As at December 31, 2019 the Company had delivered a total of 100,181 ounces of gold to RGLD since the inception of the Streaming Agreement.
During the year ended December 31, 2019, the Company sold 21,720 ounces of gold to RGLD. Revenue recognized on the ounces sold to RGLD during the year ended December 31, 2019 consisted of $6.0 million of cash payment proceeds and $13.3 million of deferred revenue recognized in the period (see Note 17).
 
For the Years Ended December 31,
 
2019
 
2018
Beginning balance
$
119,948

 
$
109,956

Impact of adopting IFRS 15 on January 1, 2018

 
18,980

Deferred revenue recognized before cumulative catch-up adjustment
(13,334
)
 
(13,738
)
Variable consideration adjustment
3,073

 

Interest on financing component of deferred revenue
4,288

 
4,750

Balance at the end of the period
$
113,975

 
$
119,948

 
 
 
 
Current portion
$
11,191

 
$
14,316

Long term portion
102,784

 
105,632

Total
$
113,975

 
$
119,948


As the Company’s Streaming Agreement contains a variable component, each time there is a significant change in the underlying gold production of the Company’s mines a cumulative catch-up adjustment to revenue is required. In 2019, the Company realized an adjustment to revenue and finance costs due to an increase in the Company’s resource and reserve estimates related primarily to the Wassa mine. The result of the adjustment was to reduce revenue by $(9.3) million, reduce finance expense by $(6.2) million and increase deferred revenue by $3.1 million.
v3.20.1
DEBT
12 Months Ended
Dec. 31, 2019
Disclosure of detailed information about borrowings [abstract]  
DEBT
12. DEBT
The following table displays the components of our current and long term debt instruments:
 
As of
 
As of
 
December 31, 2019
 
December 31, 2018
Current debt:
 
 
 
Lease liabilities
$
987

 
$
1,151

Ecobank Loan III

 
5,555

Ecobank Loan IV

 
4,000

Vendor agreement

 
16,776

Macquarie Credit Facility
15,000

 

Total current debt
$
15,987

 
$
27,482

Long term debt:
 
 
 
Leases liabilities
$
1,394

 
$
532

Ecobank Loan III

 
14,380

Ecobank Loan IV

 
13,700

7% Convertible Debentures
47,002

 
44,612

Macquarie Credit Facility
42,386

 

Total long term debt
$
90,782

 
$
73,224

 
 
 
 
Current portion
$
15,987

 
$
27,482

Long term portion
90,782

 
73,224

Total
$
106,769

 
$
100,706


Macquarie Credit Facility
On October 17, 2019, the Company closed a $60 million senior secured credit facility with Macquarie Bank Limited (the "Credit Facility"). The Credit Facility is repayable in equal quarterly installments of $5 million of principal, commencing on June 30, 2020. The final maturity date is March 31, 2023. The interest rate is 4.5% plus the applicable USD LIBOR rate. The Credit Facility is subject to normal course financial covenants including a Debt Service Coverage Ratio of greater than 1.20:1 and a Net Debt to EBITDA ratio of less than 3:1. The Company is in compliance with all financial covenants of the Credit Facility as at December 31, 2019. Certain subsidiaries of the Company are guarantors under the Credit Facility, namely, Caystar Holdings, Bogoso Holdings, Wasford Holdings, Golden Star (Bogoso/Prestea) Limited, Golden Star (Wassa) Limited, and Caystar Finance Co.
Golden Star used a portion of the proceeds of the Credit Facility to repay Ecobank Loan III, Ecobank Loan IV, and the Vendor Agreement (as defined below) with Volta River Authority.
Lease liabilities
Lease liabilities include equipment lease agreements that the Company entered into during the year ended December 31, 2018 for a period of 24 months, totaling $1.6 million as at December 31, 2019. Additionally, leases liabilities include $1.7 million lease agreements related to the Company's corporate office space which have remaining lease terms of up to 6 years and interest rates of 6.5% - 7.5% over the terms of the lease.
Short-term lease payments for the period ended December 31, 2019 were $6.8 million.
Ecobank Loan III
On February 22, 2017, the Company through its subsidiary Golden Star (Wassa) Limited closed a $25 million secured Medium Term Loan Facility ("Ecobank Loan III") with Ecobank Ghana Limited. Ecobank Loan III had a term of 60 months from the date of initial drawdown and was secured by, among other things, Wassa's existing plant, and certain machinery and equipment having a specified value. The interest rate on the loan was three month LIBOR plus 8%, per annum, payable monthly in arrears beginning a month following the initial drawdown. Repayment of principal commenced six months following the initial drawdown and was thereafter payable quarterly in arrears. The Company had twelve months to drawdown the loan.
On January 24, 2018, the Company drew down $15.0 million of the Ecobank Loan III. The full $25.0 million had been drawn as at December 31, 2018.
As at December 31, 2019, the Ecobank III Loan had been fully repaid using the proceeds from the Credit Facility.
Ecobank Loan IV
On June 28, 2018, the Company through its subsidiary Golden Star (Wassa) Limited closed a $20.0 million secured loan facility ("Ecobank Loan IV") with Ecobank Ghana Limited and used the facility to repay in full the $20.0 million Royal Gold loan the Company had outstanding. The loan was secured by, among other things, Wassa's existing plant, and certain machinery and equipment having a specified value. There were no prepayment penalties associated with Ecobank Loan IV and the loan was repayable within 60 months of initial drawdown. Repayment of principal commenced September 2018 and was thereafter payable quarterly in arrears. Interest was payable monthly in arrears at an interest rate equal to three month LIBOR plus a spread of 7.5% per annum.
As at December 31, 2019, the Ecobank Loan IV had been fully repaid using the proceeds from the Credit Facility.
7% Convertible Debentures
The 7% Convertible Debentures were issued on August 3, 2016, in the amount of $65.0 million due August 15, 2021. The Company entered into exchange and purchase agreements with two holders of its 5% Convertible Debentures due June 1, 2017 to exchange $42.0 million principal amount of the outstanding 5% Convertible Debentures for an equal principal amount of 7% Convertible Debentures (the "Exchange"), with such principal amount being included in the issuance of the $65.0 million total aggregate principal amount of the 7% Convertible Debentures. The Company did not receive any cash proceeds from the Exchange. The 7% Convertible Debentures are governed by the terms of an indenture dated August 3, 2016, by and between the Company and The Bank of New York Mellon, as indenture trustee.
The 7% Convertible Debentures are senior unsecured obligations of the Company, bear interest at a rate of 7.0% per annum, payable semi-annually on February 1 and August 1 of each year, beginning on February 1, 2017, and will mature on August 15, 2021, unless earlier repurchased, redeemed or converted. Subject to earlier redemption or purchase, the 7% Convertible Debentures are convertible at any time until the close of business on the third business day immediately preceding August 15, 2021 at the option of the holder, and may be settled, at the Company's election, in cash, common shares of the Company, or a combination of cash and common shares based on an initial conversion rate. The initial conversion rate of the 7% Convertible Debentures, subject to adjustment, is approximately 222 common shares of the Company per $1,000 principal amount of 7% Convertible Debentures being converted, which is equivalent to an initial conversion price of approximately $4.50 per common share. The initial conversion rate is subject to adjustment upon the occurrence of certain events. If the 7% Convertible Debentures are converted before August 1, 2019, the Company will, in addition to the consideration payable with the conversion, be required to make a conversion make-whole payment in cash, common shares of the Company or a combination thereof, at the Company's election, equal to the present value of the remaining scheduled payments of interest that would have been made on the 7% Convertible Debentures converted had such debentures remained outstanding from the conversion date to August 1, 2019, subject to certain restrictions. The present value of the remaining scheduled interest payments will be computed using a discount rate equal to 2.0%.
Prior to August 15, 2019, the Company could not redeem the 7% Convertible Debentures except in the event of certain changes in applicable tax law. On or after August 15, 2019, the Company may redeem all or part of the outstanding 7% Convertible Debentures at the redemption price, only if the last reported sales price of the Company's common shares for 20 or more trading days in a period of 30 consecutive trading days ending on the trading day prior to the date the Company provides the notice of redemption to holders exceeds 130% of the conversion price in effect on each such trading day. The redemption price is equal to the sum of (1) 100% of the principal amount of the 7% Convertible Debentures to be redeemed, (2) any accrued and unpaid interest to, but excluding, the redemption date, and (3) a redemption make-whole payment, payable in cash, common shares of the Company or a combination thereof, at the Company's election, equal to the present value of the remaining scheduled payments of interest that would have been made on the 7% Convertible Debentures to be redeemed had such debentures remained outstanding from the redemption date to August 15, 2021 (excluding interest accrued to, but excluding, the redemption date, which is otherwise paid pursuant to the preceding clause (2)).
The conversion feature referred to above is an embedded derivative. The Company selected to bifurcate the conversion feature from the host instrument, thereby separating it from the debt component. The debt component is recorded at amortized cost, and the embedded derivative is accounted for at fair value. At August 3, 2016, the date of the debt issuance, the fair value of the embedded derivative was $12.3 million. At December 31, 2019, the fair value of the embedded derivative was $5.6 million (December 31, 2018 - $4.2 million). The revaluation loss of $1.4 million is recorded in the Statement of Operations (year ended December 31, 2018 - revaluation gain of $6.8 million).
There were no conversions of the 7% Convertible Debentures during 2019, therefore, as at December 31, 2019, $51.5 million principal amount of 7% Convertible Debentures remains outstanding.
The changes in the carrying amount of the 7% Convertible Debentures are as follows:
 
For the Years Ended December 31,
 
2019
 
2018
Beginning balance
$
44,612

 
$
42,515

Accretion of 7% Convertible Debentures discount
2,390

 
2,097

Balance at the end of the period
$
47,002

 
$
44,612


Vendor Agreement
On May 4, 2016, the Company entered into an agreement with Volta River Authority, a significant account creditor to settle $36.5 million of current liabilities. Under this agreement, the Company paid $12.0 million and deferred the payment of the remaining $24.5 million until January 2018, after which the outstanding balance was repaid in equal installments over 24 months commencing on January 31, 2018. Interest of 7.5% accrued and was payable beginning in January 2017 (the "Vendor Agreement").
As at December 31, 2019, the Vendor Agreement had been fully repaid using the proceeds from the Credit Facility.
Debt Repayment Schedule
Schedule of payments on outstanding debt as of December 31, 2019:
 
 
Year ending December 31, 2020
 
Year ending December 31, 2021
 
Year ending December 31, 2022
 
Year ending December 31, 2023
 
Year ending December 31, 2024
 
Year ending December 31, 2025
 
Maturity
Lease liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal
 
$
987

 
$
258

 
$
275

 
$
294

 
$
313

 
$
254

 
2025
Interest
 
106

 
81

 
64

 
45

 
25

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7% Convertible Debentures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal
 

 
51,498

 

 

 

 

 
2021
Interest
 
3,605

 
3,605

 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Macquarie Credit Facility
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal
 
15,000

 
20,000

 
20,000

 
5,000

 

 

 
2023
Interest
 
3,667

 
2,436

 
1,135

 
80

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total principal
 
$
15,987

 
$
71,756

 
$
20,275

 
$
5,294

 
$
313

 
$
254

 
 
Total interest
 
7,378

 
6,122

 
1,199

 
125

 
25

 
5

 
 
 
 
$
23,365

 
$
77,878

 
$
21,474

 
$
5,419

 
$
338

 
$
259

 
 
v3.20.1
SHARE CAPITAL
12 Months Ended
Dec. 31, 2019
Share Capital, Reserves And Other Equity Interest [Abstract]  
SHARE CAPITAL
13. SHARE CAPITAL
During the year ended December 31, 2018, the Company consolidated the common shares of the Company on the basis of one post-consolidation common share for every five pre-consolidation common shares. The common shares of the Company began trading on a consolidation-adjusted basis on the TSX and the NYSE American when the markets opened on October 30, 2018.
All share data and equity-based compensation plans have been retroactively adjusted to give effect to the consolidation.
 
Note
 
Number of Common Shares
 
Share Capital
Balance at December 31, 2017
 
 
76,116,215

 
$
783,167

Private placement
a
 
32,642,100

 
125,672

Shares issued under DSUs
 
 
36,194

 
20

Shares issued under options
 
 
24,500

 
77

Share issue costs
 
 

 
(901
)
Balance at December 31, 2018
 
 
108,819,009

 
$
908,035

Shares issued under options
 
 
437,772

 
2,054

Shares issued under PRSUs, net of tax
 
 
128,282

 
116

Balance at December 31, 2019
 
 
109,385,063

 
$
910,205

a.
On October 1, 2018, the Company completed a $125.7million strategic investment with La Mancha Holding S.à r.l. ("La Mancha"), a Luxembourg-incorporated private gold investment company through a private placement. La Mancha was issued 32,642,100 Golden Star common shares, representing approximately 30% of the outstanding share capital (on a non-diluted basis) after giving effect to La Mancha's investment.
v3.20.1
COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2019
Commitments And Contingencies [Abstract]  
COMMITMENTS AND CONTINGENCIES
14. COMMITMENTS AND CONTINGENCIES
Our commitments and contingencies include the following items:
Environmental bonding in Ghana
The Ghana Environmental Protection Agency ("EPA") requires environmental compliance bonds that provide assurance for environmental remediation at our Bogoso/Prestea and Wassa mining operations. To meet this requirement the Company has environmental bonds totaling $9.6 million and $8.1 million for Wassa and Bogoso/Prestea respectively, with a commercial bank in Ghana. These bonds are guaranteed by Golden Star Resources Ltd. There is also a cross guarantee between Wassa and Bogoso/Prestea. The Company also held cash deposits of $1.1 million and $1.0 million for each operation, which are recorded as restricted cash on the consolidated balance sheets.
Government of Ghana's rights to increase its participation
Under Act 703, the Government of Ghana has the right to acquire a special share in our Ghanaian subsidiaries at any time for no consideration or such consideration as the Government of Ghana and such subsidiaries might agree, and a pre-emptive right to purchase all gold and other minerals produced by such subsidiaries. A special share carries no voting rights and does not participate in dividends, profits or assets. If the Government of Ghana acquires a special share, it may require the Company to redeem the special share at any time for no consideration or for consideration determined by the Company. To date, the Government of Ghana has not sought to exercise any of these rights at our properties.
Royalties
Government of Ghana
The Government of Ghana receives a royalty equal to 5% of mineral revenues earned by Bogoso/Prestea and Wassa.
Asikuma Properties
As part of the acquisition of the Asikuma properties in 2003, the Company agreed to pay the seller a net smelter return royalty on future gold production from Mampon mineral property which is located on the Asikuma property. As per the acquisition agreement, there will be no royalty due on the first 200,000 ounces produced from Mampon. The amount of the royalty is based on a sliding scale which ranges from 2% of net smelter return at gold prices at or below $300 per ounce and progressively increases to 3.5% for gold prices in excess of $400 per ounce. Since the ounces mined at Mampon were below the 200,000 ounces threshold, we are not required to pay a royalty on this property.
Mansiso Properties
Bogoso Gold Limited agreed to grant, transfer and convey to Birim Goldfields (Ghana) Limited a net smelter return royalty of 3.5% for any average gold price above $400 per ounce in respect of all mineral products that may be produced from the land pertaining to the Ghanaian Mansiso mineral property. During the year ended December 31, 2019, the Company accrued $0.7 million (year ended December 31, 2018 - $nil) in royalty payments related to the Mansiso mineral property.
Legal proceedings
The Company is involved in legal proceedings, from time to time, arising in the ordinary course of its business. It is not expected that any material liability will arise from current legal proceedings or have a material adverse effect on the Company’s future business, operations or financial condition.
v3.20.1
SHARE-BASED COMPENSATION
12 Months Ended
Dec. 31, 2019
Share-Based Payment Arrangements [Abstract]  
SHARE-BASED COMPENSATION
15. SHARE-BASED COMPENSATION
Share-based compensation expenses recognized in general and administrative expense in the Statements of Operations and Comprehensive Loss, are as follows:
 
For the Years Ended December 31,
 
2019
 
2018
Share options
$
1,890

 
$
1,248

Deferred share units
689

 
565

Share appreciation rights
(52
)
 
(502
)
Performance share units
592

 
(33
)
 
$
3,119

 
$
1,278


Share options
On May 5, 2016, the Fourth Amended and Restated 1997 Stock Option Plan (the "Stock Option Plan") was approved by shareholders to (i) reserve an additional 2,000,000 common shares for the Stock Option Plan, thereby increasing the total number of common shares issuable from 5,000,000 common shares to 7,000,000 common shares under the Stock Option Plan; (ii) provide for the grant of "incentive stock options" (being stock options designated as "incentive stock options" in an option agreement and that are granted in accordance with the requirements of, and that conforms to the applicable provisions of, Section 422 of the Internal Revenue Code); and (iii) to make such other changes to update the provisions of the Stock Option Plan in light of current best practices. Options granted are non-assignable and are exercisable for a period of ten years or such other period as is stipulated in a stock option agreement between Golden Star and the optionee.
Under the Plan, we may grant options to employees, consultants and directors of the Company or its subsidiaries of up to 7,000,000 shares, of which 1,202,583 are available for grant as of December 31, 2019 (December 31, 2018 - 1,917,767). The exercise price of each option is not less than the closing price of our shares on the Toronto Stock Exchange on the day prior to the date of grant. Options typically vest over periods ranging from immediately to four years from the date of grant. Vesting periods are determined at the discretion of the Compensation Committee.
The fair value of option grants is estimated at the grant dates using the Black-Scholes option-pricing model. Fair values of options granted during the years ended December 31, 2019 and 2018 were based on the weighted average assumptions noted in the following table:
 
For the Years Ended December 31,
 
2019
 
2018
Expected volatility
51.20%
 
70.06%
Risk-free interest rate
1.73%
 
2.39%
Expected lives
5.74 years
 
5.68 years

The weighted average fair value per option granted during the year ended December 31, 2019 was $2.54 CAD (year ended December 31, 2018 - $2.82 CAD). As at December 31, 2019, there was $0.5 million of share-based compensation expense (December 31, 2018 - $0.6 million) relating to the Company's share options to be recorded in future periods. For the year ended December 31, 2019, the Company recognized an expense of $1.9 million (year ended December 31, 2018 - $1.2 million). 
A summary of option activity under the Company's Stock Option Plan during the years ended December 31, 2019 and 2018 is as follows: 
 
Options
('000)
 
Weighted–
Average
Exercise
price ($CAD)
 
Weighted–
Average
Remaining
Contractual
Term (Years)
Outstanding as of December 31, 2017
3,326
 
5.93

 
5.9
Granted
642
 
4.61

 
9.2
Exercised
(25)
 
3.24

 
1.6
Forfeited
(116)
 
8.96

 
3.6
Expired
(329)
 
9.35

 
0
Outstanding as of December 31, 2018
3,498
 
5.28

 
6.3
Granted
806

 
5.21

 
9.2
Exercised
(438
)
 
3.82

 
7.3
Forfeited
(35
)
 
5.49

 
7.7
Expired
(55
)
 
8.50

 
0
Outstanding as of December 31, 2019
3,776

 
5.39

 
4.7
 
 
 
 
 
 
Exercisable as of December 31, 2018
2,664

 
5.42

 
5.5
Exercisable as of December 31, 2019
3,320

 
5.41

 
4.1

The number of options outstanding by strike price as of December 31, 2019 is shown in the following table:
 
 
Options outstanding
 
Options exercisable
 
 
Number outstanding at December 31, 2019
Weighted-average remaining contractual life
Weighted-average exercise price
 
Number outstanding at December 31, 2019
Weighted-average exercise price
Range of exercise price (Cdn$)
 
('000)
(years)
(Cdn$)
 
('000)
(Cdn$)
1.50 to 2.50
 
581

3.7
1.90

 
581

1.90

2.51 to 3.50
 
373

5.7
2.82

 
373

2.82

3.51 to 4.50
 
605

3.0
4.34

 
588

4.35

4.51 to 5.50
 
1,187

7.3
5.03

 
782

4.96

5.51 to 7.50
 
482

4.6
6.46

 
448

6.47

7.51 to 10.50
 
322

2.0
9.67

 
322

9.67

10.51 to 17.65
 
226

0.6
14.92

 
226

14.92

 
 
3,776

4.7
5.39

 
3,320

5.41

The number of options outstanding by strike price as of December 31, 2018 is shown in the following table:
 
 
Options outstanding
 
Options exercisable
 
 
Number outstanding at December 31, 2018
Weighted-average remaining contractual life
Weighted-average exercise price
 
Number outstanding at December 31, 2018
Weighted-average exercise price
Range of exercise price (Cdn$)
 
('000)
(years)
(Cdn$)
 
('000)
(Cdn$)
1.50 to 2.50
 
604

6.1
1.90

 
604

1.90

2.51 to 3.50
 
534

7.1
2.81

 
405

2.82

3.51 to 4.50