EX-99.2 3 fsq22019.htm EXHIBIT 99.2 Exhibit
















goldenstarlargea02a01a01a25.jpg
Condensed Interim Consolidated Financial Statements
For the Three and Six Months Ended June 30, 2019 and June 30, 2018





TABLE OF CONTENTS

FINANCIAL STATEMENTS
 
 
 
 
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
 
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
 
 
 
 
 
1. NATURE OF OPERATIONS
 
2. BASIS OF PRESENTATION
 
3. CHANGES IN ACCOUNTING POLICIES
 
4. FINANCIAL INSTRUMENTS
 
5. INVENTORIES
 
6. MINING INTERESTS
 
7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
 
8. REHABILITATION PROVISIONS
 
9. DEFERRED REVENUE
 
10. DEBT
 
11. COMMITMENTS AND CONTINGENCIES
 
12. REVENUE
 
13. COST OF SALES EXCLUDING DEPRECIATION AND AMORTIZATION
 
14. SHARE-BASED COMPENSATION
 
15. FINANCE EXPENSE, NET
 
16. INCOME TAXES
 
17. LOSS PER COMMON SHARE
 
18. RELATED PARTY TRANSACTIONS
 
19. SEGMENTED INFORMATION
 
20. SUPPLEMENTAL CASH FLOW INFORMATION
 
21. SUBSEQUENT EVENT
 





GOLDEN STAR RESOURCES LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(Stated in thousands of U.S. dollars except shares and per share data)
(unaudited)


Notes
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
12
 
$
61,915

 
$
77,121

 
$
129,172

 
$
147,940

Cost of sales excluding depreciation and amortization
13
 
46,506

 
57,717

 
90,310

 
117,291

Depreciation and amortization
 
 
6,749

 
9,235

 
13,611

 
17,456

Mine operating margin
 
 
8,660

 
10,169

 
25,251

 
13,193

 
 
 
 
 
 
 
 
 
 
Other expenses/(income)
 
 
 
 
 
 
 
 
 
Exploration expense
 
 
801

 
760

 
1,645

 
1,466

General and administrative
 
 
9,505

 
6,909

 
13,610

 
8,018

Finance expense, net
15
 
3,602

 
5,391

 
7,149

 
10,174

Other expense/(income)
 
 
780

 
(415
)
 
459

 
(1,043
)
(Gain)/loss on fair value of financial instruments, net
4
 
(424
)
 
1,301

 
3,449

 
(4,141
)
Loss before tax
 
 
(5,604
)
 
(3,777
)
 
(1,061
)
 
(1,281
)
Income tax expense
16
 
5,278

 
3,783

 
12,480

 
6,674

Net loss and comprehensive loss
 
 
$
(10,882
)
 
$
(7,560
)
 
$
(13,541
)
 
$
(7,955
)
Net loss attributable to non-controlling interest
 
 
(1,846
)
 
(918
)
 
(2,581
)
 
(2,328
)
Net loss attributable to Golden Star shareholders
 
 
$
(9,036
)
 
$
(6,642
)
 
$
(10,960
)
 
$
(5,627
)
 
 
 
 
 
 
 
 
 
 
Net loss per share attributable to Golden Star shareholders
 
 
 
 
 
 
 
 
 
Basic
17
 
$
(0.08
)
 
$
(0.09
)
 
$
(0.10
)
 
$
(0.07
)
Diluted
17
 
$
(0.08
)
 
$
(0.09
)
 
$
(0.10
)
 
$
(0.07
)
Weighted average shares outstanding-basic (millions)
 
 
108.9

 
76.2

 
108.8

 
76.2

Weighted average shares outstanding-diluted (millions)
 
 
108.9

 
76.2

 
108.8

 
76.2

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

3


GOLDEN STAR RESOURCES LTD.
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(Stated in thousands of U.S. dollars)
(unaudited)

 
 
 
As of
 
As of
 
Notes
 
June 30,
2019
 
December 31,
2018
 
 
 
 
 
 
ASSETS
 
 
 
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and cash equivalents
 
 
$
66,154

 
$
96,507

Accounts receivable
 
 
5,327

 
3,213

Inventories
5
 
36,940

 
35,196

Prepaids and other
 
 
4,943

 
5,291

Total Current Assets
 
 
113,364

 
140,207

RESTRICTED CASH
 
 
6,545

 
6,545

MINING INTERESTS
6
 
287,900

 
270,640

DEFERRED TAX ASSETS
 
 
—

 
595

Total Assets
 
 
$
407,809

 
$
417,987

 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
Accounts payable and accrued liabilities
7
 
$
80,462

 
$
78,484

Current portion of rehabilitation provisions
8
 
10,416

 
7,665

Current portion of deferred revenue
9
 
14,145

 
14,316

Current portion of long term debt
10
 
27,387

 
27,482

Other liability
14
 
—

 
6,410

Total Current Liabilities
 
 
132,410

 
134,357

REHABILITATION PROVISIONS
8
 
55,638

 
58,560

DEFERRED REVENUE
9
 
101,093

 
105,632

LONG TERM DEBT
10
 
69,810

 
73,224

DERIVATIVE LIABILITY
4
 
7,626

 
4,177

DEFERRED TAX LIABILITY
16
 
10,531

 
—

Total Liabilities
 
 
377,108

 
375,950

 
 
 
 
 
 
SHAREHOLDERS' EQUITY
 
 
 
 
 
SHARE CAPITAL
 
 
 
 
 
First preferred shares, without par value, unlimited shares authorized. No shares issued and outstanding
 
 
—

 
—

Common shares, without par value, unlimited shares authorized
 
 
908,987

 
908,035

CONTRIBUTED SURPLUS
 
 
38,573

 
37,258

DEFICIT
 
 
(842,305
)
 
(831,283
)
Shareholders' equity attributable to Golden Star shareholders
 
 
105,255

 
114,010

NON-CONTROLLING INTEREST
 
 
(74,554
)
 
(71,973
)
Total Equity
 
 
30,701

 
42,037

Total Liabilities and Shareholders' Equity
 
 
$
407,809

 
$
417,987

The accompanying notes are an integral part of the condensed interim consolidated financial statements.


Signed on behalf of the Board,

"Timothy C. Baker"                            "Robert E. Doyle"
Timothy C. Baker, Director                        Robert E. Doyle, Director


4


GOLDEN STAR RESOURCES LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in thousands of U.S. dollars)
(unaudited)


 
 
Three Months Ended
 June 30,
 
Six Months Ended
June 30,
 
Notes
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
 
OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Net loss
 
 
$
(10,882
)
 
$
(7,560
)
 
$
(13,541
)
 
$
(7,955
)
Reconciliation of net loss to net cash provided by operating activities:
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
6,880

 
9,245

 
13,875

 
17,473

Share-based compensation
14
 
1,058

 
3,220

 
2,004

 
582

Income tax expense
16
 
5,278

 
3,783

 
12,480

 
6,674

(Gain)/loss on fair value of 7% Convertible Debentures embedded derivative
4
 
(424
)
 
1,301

 
3,449

 
(4,141
)
Recognition of deferred revenue
9
 
(3,306
)
 
(3,959
)
 
(6,853
)
 
(7,198
)
Reclamation expenditures
8
 
(681
)
 
(1,934
)
 
(1,370
)
 
(3,277
)
Other
20
 
2,668

 
6,180

 
5,455

 
8,928

Changes in working capital
20
 
1,592

 
45

 
(13,906
)
 
(4,736
)
Net cash provided by operating activities
 
 
2,183

 
10,321

 
1,593

 
6,350

INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Additions to mining properties
 
 
—

 
(73
)
 
(288
)
 
(382
)
Additions to plant and equipment
 
 
—

 
—

 
—

 
(245
)
Additions to construction in progress
 
 
(16,993
)
 
(8,214
)
 
(29,847
)
 
(19,242
)
Change in accounts payable and deposits on mine equipment and material
 
 
1,353

 
(739
)
 
3,207

 
(810
)
Increase in restricted cash
 
 
—

 
(6
)
 
—

 
(6
)
Net cash used in investing activities
 
 
(15,640
)
 
(9,032
)
 
(26,928
)
 
(20,685
)
FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Principal payments on debt
10
 
(2,824
)
 
(5,679
)
 
(5,603
)
 
(6,618
)
Proceeds from debt agreements
 
 
—

 
20,000

 
—

 
35,000

Royal Gold loan repayment
 
 
—

 
(20,000
)
 
—

 
(20,000
)
Exercise of options
 
 
567

 
38

 
585

 
38

Net cash (used in)/provided by financing activities
 
 
(2,257
)
 
(5,641
)
 
(5,018
)
 
8,420

Decrease in cash and cash equivalents
 
 
(15,714
)
 
(4,352
)
 
(30,353
)
 
(5,915
)
Cash and cash equivalents, beginning of period
 
 
81,868

 
26,224

 
96,507

 
27,787

Cash and cash equivalents, end of period
 
 
$
66,154

 
$
21,872

 
$
66,154

 
$
21,872

See Note 20 for supplemental cash flow information.

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

5


GOLDEN STAR RESOURCES LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Stated in thousands of U.S. dollars except share data)
(unaudited)
 
 
Number of
Common
Shares
 
Share
Capital  
 
Contributed
Surplus
 
Deficit
 
Non-Controlling Interest
 
Total
Shareholders'
Equity 
Balance at December 31, 2017
 
76,116,215

 
$
783,167

 
$
35,284

 
$
(794,180
)
 
$
(66,025
)
 
$
(41,754
)
Impact of adopting IFRS 15 on January 1, 2018
 
—

 
—

 
—

 
(18,980
)
 
—

 
(18,980
)
Balance at January 1, 2018 (restated)
 
76,116,215

 
783,167

 
35,284

 
(813,160
)
 
(66,025
)
 
(60,734
)
Shares issued under DSUs
 
36,196

 
20

 
(165
)
 
—

 
—

 
(145
)
Shares issued under options
 
12,500

 
43

 
(5
)
 
—

 
—

 
38

Options granted net of forfeitures
 
—

 
—

 
849

 
—

 
—

 
849

Deferred share units granted
 
—

 
—

 
275

 
—

 
—

 
275

Performance and restricted share units granted
 
—

 
—

 
132

 
—

 
—

 
132

Net loss
 
—

 
—

 
—

 
(5,627
)
 
(2,328
)
 
(7,955
)
Balance at June 30, 2018
 
76,164,911

 
$
783,230

 
$
36,370

 
$
(818,787
)
 
$
(68,353
)
 
$
(67,540
)
 
 
 
 
 
 
 
 


 
 
 


Balance at December 31, 2018
 
108,819,009

 
$
908,035

 
$
37,258

 
$
(831,283
)
 
$
(71,973
)
 
$
42,037

Impact of adopting IFRS 16 on January 1, 2019 (see Note 3A)
 
—

 
—

 
—

 
(62
)
 
—

 
(62
)
Balance at January 1, 2019 (restated)
 
108,819,009

 
908,035

 
37,258

 
(831,345
)
 
(71,973
)
 
41,975

Shares issued under options
 
168,949

 
952

 
(367
)
 
—

 
—

 
585

Options granted net of forfeitures
 
—

 
—

 
1,263

 
—

 
—

 
1,263

Deferred share units granted
 
—

 
—

 
397

 
—

 
—

 
397

Performance and restricted share units granted
 
—

 
—

 
328

 
—

 
—

 
328

PRSU settlement, net of tax
 
65,839

 
—

 
(306
)
 
—

 
—

 
(306
)
Net loss
 
—

 
—

 
—

 
(10,960
)
 
(2,581
)
 
(13,541
)
Balance at June 30, 2019
 
109,053,797

 
$
908,987

 
$
38,573

 
$
(842,305
)
 
$
(74,554
)
 
$
30,701



The accompanying notes are an integral part of the condensed interim consolidated financial statements.


6


GOLDEN STAR RESOURCES LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018
(All currency amounts in tables are in thousands of U.S. dollars unless noted otherwise)
(unaudited)
1. NATURE OF OPERATIONS
Golden Star Resources Ltd. ("Golden Star" or "the Company" or "we" or "our") is a Canadian federally-incorporated, international gold mining and exploration company 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 ("Prestea") located near the town of Prestea, Ghana. We hold and manage interests in several gold exploration projects in Ghana and in Brazil.
2. BASIS OF PRESENTATION
Statement of compliance
These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB") including International Accounting Standards ("IAS") 34 Interim financial reporting. These condensed interim consolidated financial statements should be read in conjunction with the Company's annual consolidated financial statements for the year ended December 31, 2018, which have been prepared in accordance with IFRS as issued by the IASB. The accounting policies and methods of application adopted are consistent with those disclosed in Note 3 of the Company's consolidated financial statements for the year ended December 31, 2018, except for the changes in accounting policies described below.
These condensed interim consolidated financial statements were approved by the Audit Committee of the Company on July 30, 2019.
Basis of presentation
These condensed interim 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 condensed interim 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 condensed interim 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.
3. CHANGES IN ACCOUNTING POLICIES
A) New Accounting Standards Effective 2019
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.

7


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.
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 affected the following items in the balance sheet on January 1, 2019:
•
Mining interests (plant and equipment) - increase of $0.7 million
•
Long term debt (finance leases) - increase 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.
4. 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 June 30, 2019 and December 31, 2018:
 
 
 
June 30, 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
 
7,626

 
7,626

 
4,177

 
4,177

There were no non-recurring fair value measurements of financial instruments as at June 30, 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 six months ended June 30, 2019, there were no transfers between the levels of the fair value hierarchy.
(Gain)/loss on fair value of financial instruments in the Statements of Operations and Comprehensive Loss consists of the following:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
(Gain)/loss on fair value of 7% Convertible Debentures embedded derivative
(424
)
 
1,301

 
3,449

 
(4,141
)
 
$
(424
)
 
$
1,301

 
$
3,449

 
$
(4,141
)

8


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 June 30, 2019 and December 31, 2018 using a convertible note valuation model. The significant inputs used in the convertible note valuation are as follows:
 
June 30, 2019
 
December 31, 2018
Embedded derivative
 
 
 
Risk premium
5.9
%
 
5.0
%
Borrowing costs
7.5
%
 
10.0
%
Expected volatility
45.0
%
 
45.0
%
Remaining life (years)
2.1

 
2.6

The following table presents the changes in the 7% Convertible Debentures embedded derivative for the six months ended June 30, 2019:
 
Fair value
Balance at December 31, 2018
$
4,177

Loss on fair value of 7% Convertible Debentures embedded derivative
3,449

Balance at June 30, 2019
$
7,626

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 June 30, 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 $0.2 million at June 30, 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 $1.0 million at June 30, 2019.
5. INVENTORIES
Inventories include the following components:
 
As of
 
As of
 
June 30,
2019
 
December 31,
2018
Stockpiled ore
$
6,670

 
$
6,613

In-process ore
3,846

 
4,188

Materials and supplies
26,073

 
23,659

Finished goods
351

 
736

Total
$
36,940

 
$
35,196

The cost of inventories expensed for the six months ended June 30, 2019 and 2018 was $83.7 million and $109.5 million, respectively.
Net realizable value adjustments of $0.1 million and $1.1 million were recorded for stockpiled ore in the three and six months ended June 30, 2019, respectively (three and six months ended June 30, 2018 - $0.7 million and $1.9 million, respectively).

9


6. 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
 
 
 
 
 
 
 
Balance at December 31, 2018
$
478,760

 
$
930,230

 
$
28,569

 
$
1,437,559

Additions
761

 
288

 
29,847

 
30,896

Transfers
(1,192
)
 
13,311

 
(12,119
)
 
—

Change in rehabilitation provision estimate
—

 
247

 
—

 
247

Disposals and other
(594
)
 
—

 
—

 
(594
)
Balance at June 30, 2019
$
477,735

 
$
944,076

 
$
46,297

 
$
1,468,108

 
 
 
 
 
 
 
 
Accumulated depreciation
 
 
 
 
 
 
 
Balance at December 31, 2018
$
432,799

 
$
734,120

 
$
—

 
$
1,166,919

Depreciation and amortization
5,276

 
8,607

 
—

 
13,883

Disposals and other
(594
)
 
—

 
—

 
(594
)
Balance at June 30, 2019
$
437,481

 
$
742,727

 
$
—

 
$
1,180,208

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

 
$
196,110

 
$
28,569

 
$
270,640

Balance at June 30, 2019
$
40,254

 
$
201,349

 
$
46,297

 
$
287,900

As at June 30, 2019, equipment under finance leases had net carrying amounts of $2.9 million (December 31, 2018 - $3.0 million). The total minimum lease payments are disclosed in Note 10 - Debt.
7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities include the following components:
 
As of
 
As of
 
June 30,
2019
 
December 31,
2018
Trade and other payables
$
45,875

 
$
42,947

Accrued liabilities
27,256

 
25,522

Payroll related liabilities
7,331

 
10,015

Total
$
80,462

 
$
78,484


10


8. REHABILITATION PROVISIONS
At June 30, 2019, the total undiscounted amount of future cash needs for rehabilitation was estimated to be $71.7 million. A discount rate assumption of 2% and an inflation rate assumption of 2% were used to value the rehabilitation provisions. The changes in the carrying amount of the rehabilitation provisions are as follows:
 
For the Six Months Ended June 30,
2019

 
For the Year Ended December 31, 2018
Beginning balance
$
66,225

 
$
70,712

Accretion of rehabilitation provisions
365

 
691

Changes in estimates
834

 
138

Cost of reclamation work performed
(1,370
)
 
(5,316
)
Balance at the end of the period
$
66,054

 
$
66,225

 
 
 
 
Current portion
$
10,416

 
$
7,665

Long term portion
55,638

 
58,560

Total
$
66,054

 
$
66,225


9. 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 from Wassa and Prestea at a cash purchase price of 30% of spot gold price will be delivered. The Company has delivered a total of 89,624 ounces of gold to RGLD since the inception of the Streaming Agreement.
During the six months ended June 30, 2019, the Company sold 11,163 ounces of gold to RGLD. Revenue recognized on the ounces sold to RGLD during the six months ended June 30, 2019 consisted of $2.9 million of cash payment proceeds and $6.9 million of deferred revenue recognized in the period (see Note 12).
 
Six Months Ended June 30,
 
Year 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
(6,853
)
 
(13,738
)
Interest on financing component of deferred revenue
2,143

 
4,750

Balance at the end of the period
$
115,238

 
$
119,948

 
 
 
 
Current portion
$
14,145

 
$
14,316

Long term portion
101,093

 
105,632

Total
$
115,238

 
$
119,948



11


10. DEBT
The following table displays the components of our current and long term debt instruments:
 
As of
 
As of
 
June 30,
2019
 
December 31, 2018
Current debt:
 
 
 
Finance leases
$
690

 
$
1,151

Ecobank Loan III
5,555

 
5,555

Ecobank Loan IV
4,000

 
4,000

Vendor agreement
17,142

 
16,776

Total current debt
$
27,387

 
$
27,482

Long term debt:
 
 
 
Finance leases
$
666

 
$
532

Ecobank Loan III
11,653

 
14,380

Ecobank Loan IV
11,733

 
13,700

7% Convertible Debentures
45,758

 
44,612

Total long term debt
$
69,810

 
$
73,224

 
 
 
 
Current portion
$
27,387

 
$
27,482

Long term portion
69,810

 
73,224

Total
$
97,197

 
$
100,706


7% Convertible Debentures
As at June 30, 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:
 
Six Months Ended
June 30, 2019
 
Year Ended December 31, 2018
Beginning balance
$
44,612

 
$
42,515

Accretion of 7% Convertible Debentures discount
1,146

 
2,097

Balance at the end of the period
$
45,758

 
$
44,612



12


Schedule of payments on outstanding debt as of June 30, 2019:
 
 
Six months ending December 31, 2019
 
Year ending December 31, 2020
 
Year ending December 31, 2021
 
Year ending December 31, 2022
 
Year ending December 31, 2023
 
Maturity
Finance leases
 
 
 
 
 
 
 
 
 
 
 
 
Principal
 
$
658

 
$
698

 
$
—

 
$
—

 
$
—

 
2020
Interest
 
39

 
12

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ecobank Loan III
 
 
 
 
 
 
 
 
 
 
 
 
Principal
 
2,778

 
5,555

 
5,555

 
3,611

 
—

 
2022
Interest
 
806

 
1,189

 
632

 
101

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ecobank Loan IV
 
 
 
 
 
 
 
 
 
 
 
 
Principal
 
2,000

 
4,000

 
4,000

 
4,000

 
2,000

 
2023
Interest
 
775

 
1,250

 
847

 
448

 
74

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7% Convertible Debentures
 
 
 
 
 
 
 
 
 
 
 
 
Principal
 
—

 
—

 
51,498

 
—

 
—

 
2021
Interest
 
1,803

 
3,605

 
3,605

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vendor agreement
 
 
 
 
 
 
 
 
 
 
 
 
Principal
 
17,510

 
—

 
—

 
—

 
—

 
2019
Interest
 
937

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total principal
 
$
22,946

 
$
10,253

 
$
61,053

 
$
7,611

 
$
2,000

 
 
Total interest
 
4,360

 
6,056

 
5,084

 
549

 
74

 
 
 
 
$
27,306

 
$
16,309

 
$
66,137

 
$
8,160

 
$
2,074

 
 

11. COMMITMENTS AND CONTINGENCIES
The Company has capital commitments of $18.2 million, all of which are expected to be incurred within the next year.
Due to the nature of the Company’s operations, various legal matters from time to time arise in the ordinary course of business. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated. In the opinion of management, these matters will not have a material effect on the condensed interim consolidated financial statements of the Company.
12. REVENUE
Revenue includes the following components:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Revenue - Streaming Agreement
 
 
 
 
 
 
 
Cash payment proceeds
$
1,407

 
$
1,502

 
$
2,913

 
$
3,305

Deferred revenue recognized
3,306

 
3,959

 
6,853

 
7,198

 
4,713

 
5,461

 
9,766

 
10,503

Revenue - Spot sales
57,202

 
71,660

 
119,406

 
137,437

Total revenue
$
61,915

 
$
77,121

 
$
129,172

 
$
147,940


13


13. COST OF SALES EXCLUDING DEPRECIATION AND AMORTIZATION
Cost of sales excluding depreciation and amortization include the following components:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Mine operating expenses
$
42,773

 
$
45,456

 
$
82,669

 
$
89,602

Severance charges
30

 
1,576

 
324

 
4,970

Operating costs from/(to) metal inventory
407

 
3,508

 
(373
)
 
10,549

Inventory net realizable value adjustment and write-off
131

 
3,177

 
1,051

 
4,340

Royalties
3,165

 
4,000

 
6,639

 
7,830

 
$
46,506

 
$
57,717

 
$
90,310

 
$
117,291

14. SHARE-BASED COMPENSATION
Share-based compensation expenses recognized in general and administrative expense in the Statements of Operations and Comprehensive Loss, are as follows:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Share options
$
678

 
$
217

 
$
1,263

 
$
849

Deferred share units
189

 
141

 
397

 
274

Share appreciation rights
50

 
255

 
16

 
(300
)
Performance share units
141

 
2,607

 
328

 
(241
)
 
$
1,058

 
$
3,220

 
$
2,004

 
$
582

Share options
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 six months ended June 30, 2019 and 2018 were based on the weighted average assumptions noted in the following table:
 
Six Months Ended
June 30,
 
2019
 
2018
Expected volatility
51.02%
 
72.16%
Risk-free interest rate
1.75%
 
2.38%
Expected lives
5.7 years
 
5.7 years
The weighted average fair value per option granted during the six months ended June 30, 2019 was $2.55 CAD (six months ended June 30, 2018 - $2.89 CAD). As at June 30, 2019, there was $0.9 million of share-based compensation expense (June 30, 2018 - $1.0 million) relating to the Company's share options to be recorded in future periods. For the six months ended June 30, 2019, the Company recognized an expense of $1.3 million (six months ended June 30, 2018 - $0.8 million). 

14


A summary of option activity under the Company's Stock Option Plan during the six months ended June 30, 2019 is as follows: 
 
Options
('000)
 
Weighted–
Average
Exercise
price ($CAD)
 
Weighted–
Average
Remaining
Contractual
Term (Years)
Outstanding as of December 31, 2018
3,498

 
5.28

 
6.3

Granted
740

 
5.24

 
9.7

Exercised
(169
)
 
4.57

 
8.6

Forfeited
(33
)
 
5.52

 
8.2

Expired
(55
)
 
8.50

 
—

Outstanding as of June 30, 2019
3,981

 
5.26

 
5.2

 
 
 
 
 
 
Exercisable as of December 31, 2018
2,664

 
5.42

 
5.5

Exercisable as of June 30, 2019
3,286

 
5.27

 
4.4

As of June 30, 2019, there were 1,266,610 common shares available for grant under the Stock Option Plan (December 31, 2018 - 1,917,767).

Deferred share units ("DSUs")
For the six months ended June 30, 2019, the DSUs that were granted vested immediately and a compensation expense of $0.4 million was recognized for these grants (six months ended June 30, 2018 - $0.3 million). As of June 30, 2019, there was no unrecognized compensation expense related to DSUs granted under the Company's DSU Plan.
A summary of DSU activity during the six months ended June 30, 2019 and 2018:
 
 
Six Months Ended
June 30,
 
 
2019
 
2018
Number of DSUs, beginning of period ('000)
 
1,086

 
1,018

Granted
 
105

 
78

Exercised
 
—

 
(82
)
Number of DSUs, end of period ('000)
 
1,191

 
1,014

Share appreciation rights ("SARs")
As of June 30, 2019, there was approximately $0.3 million of total unrecognized compensation cost related to unvested SARs (June 30, 2018 - $0.6 million). For the six months ended June 30, 2019, the Company recognized $nil expense related to these cash settled awards (six months ended June 30, 2018 - $0.3 million recovery).
A summary of the SARs activity during the six months ended June 30, 2019 and 2018:
 
 
Six Months Ended
June 30,
 
 
2019
 
2018
Number of SARs, beginning of period ('000)
 
674

 
533

Granted
 
270

 
304

Exercised
 
(129
)
 
(14
)
Forfeited
 
(113
)
 
(50
)
Expired
 
(3
)
 
—

Number of SARs, end of period ('000)
 
699

 
773

Performance share units ("PSUs")
The final PSU grant vested on December 31, 2018 and, as a result, the Company did not recognize a PSU expense in 2019. For the six months ended June 30, 2018 the Company recognized a recovery of $0.4 million. The Company paid out the final amount owing of $6.4 million in April 2019 and as at June 30, 2019 there is no longer a PSU liability recognized on the Balance Sheet.

15


A summary of the PSU activity during the six months ended June 30, 2019 and 2018:
 
 
Six Months Ended
June 30,
 
 
2019
 
2018
Number of PSUs, beginning of period ('000)
 
1,172

 
2,720

Settled
 
(1,172
)
 
(1,548
)
Number of PSUs, end of period ('000)
 
—

 
1,172

2017 Performance and restricted share units ("PRSUs")
PRSUs are accounted for as equity awards with a corresponding compensation expense recognized. For the six months ended June 30, 2019, the Company recognized $0.3 million expense (six months ended June 30, 2018 - $0.1 million).
A summary of the PRSU activity during the six months ended June 30, 2019 and 2018:
 
 
Six Months Ended
June 30,
 
 
2019
 
2018
Number of PRSUs, beginning of period ('000)
 
791

 
338

Granted
 
529

 
479

Settled
 
(142
)
 
—

Forfeited
 
(239
)
 
—

Number of PRSUs, end of period ('000)
 
939

 
817


15. FINANCE EXPENSE, NET
Finance income and expense includes the following components:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Interest income
$
(387
)
 
$
(11
)
 
$
(921
)
 
$
(15
)
Interest expense, net of capitalized interest
2,922

 
4,239

 
5,964

 
6,974

Interest on financing component of deferred revenue (see Note 9)
990

 
1,188

 
2,143

 
2,375

Net foreign exchange (gain)/loss
(89
)
 
(156
)
 
(402
)
 
495

Accretion of rehabilitation provision
166

 
131

 
365

 
345

 
$
3,602

 
$
5,391

 
$
7,149

 
$
10,174

On February 1, 2018, Prestea Underground mine achieved commercial production, therefore no capitalized interest was recorded since.
16. INCOME TAXES
Income tax expense is recognized based on management's estimate of the weighted average annual income tax rate expected for the full financial year. The provision for income taxes includes the following components:

16


 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Current expense:
 
 
 
 
 
 
 
Canada
$
—

 
$
—

 
$
—

 
$
—

Foreign
429

 
—

 
1,355

 
—

Deferred tax expense:
 
 
 
 
 
 
 
Canada
—

 
—

 
—

 
—

Foreign
4,849

 
3,783

 
11,125

 
6,674

Tax expense
$
5,278

 
$
3,783

 
$
12,480

 
$
6,674

The deferred tax expense results from the expected utilization of tax losses at Wassa.
17. LOSS PER COMMON SHARE
The following table provides a reconciliation between basic and diluted loss per common share:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Net loss attributable to Golden Star shareholders
$
(9,036
)
 
$
(6,642
)
 
$
(10,960
)
 
$
(5,627
)
 
 
 
 
 
 
 
 
Weighted average number of basic shares (millions)
108.9

 
76.2

 
108.8

 
76.2

 
 
 
 
 
 
 
 
Loss per share attributable to Golden Star shareholders:
 
 
 
 
 
 
 
Basic
$
(0.08
)
 
$
(0.09
)
 
$
(0.10
)
 
$
(0.07
)
Diluted
$
(0.08
)
 
$
(0.09
)
 
$
(0.10
)
 
$
(0.07
)
18. RELATED PARTY TRANSACTIONS
There were no material related party transactions for the six months ended June 30, 2019 and 2018 other than the items disclosed below.
Key management personnel
Key management personnel is defined as members of the Board of Directors and certain senior officers. Compensation of key management personnel are as follows, with such compensation made on terms equivalent to those prevailing in an arm's length transaction:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Salaries, wages, and other benefits
$
2,840

 
$
715

 
$
3,541

 
$
1,507

Bonuses
1,404

 
333

 
1,732

 
666

Share-based compensation
887

 
2,520

 
1,619

 
782

 
$
5,131


$
3,568


$
6,892


$
2,955


17


19. SEGMENTED INFORMATION
Segmented revenue and results
The Company has reportable segments as identified by the individual mining operations. Segments are operations reviewed by the executive management. Each segment is identified based on quantitative and qualitative factors.
Three Months Ended June 30,
 
Wassa
 
Prestea
 
Other
 
Corporate
 
Total
2019
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
47,893

 
$
14,022

 
—

 
—

 
$
61,915

Mine operating expenses
 
24,067

 
18,706

 
—

 
—

 
42,773

Severance charges
 
—

 
30

 
—

 
—

 
30

Operating costs from/(to) metal inventory
 
636

 
(229
)
 
—

 
—

 
407

Inventory net realizable value adjustment and write-off
 
—

 
131

 
—

 
—

 
131

Royalties
 
2,439

 
726

 
—

 
—

 
3,165

Cost of sales excluding depreciation and amortization
 
27,142

 
19,364

 
—

 
—

 
46,506

Depreciation and amortization
 
4,226

 
2,523

 
—

 
—

 
6,749

Mine operating margin/(loss)
 
16,525

 
(7,865
)
 
—

 
—

 
8,660

Income tax expense
 
5,278

 
—

 
—

 
—

 
5,278

Net income/(loss) attributable to non-controlling interest
 
881

 
(2,727
)
 
—

 
—

 
(1,846
)
Net income/(loss) attributable to Golden Star
 
$
8,449

 
$
(6,593
)
 
$
(1,254
)
 
$
(9,638
)
 
$
(9,036
)
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
13,622

 
$
3,371

 
—

 
—

 
$
16,993

 
 
 
 
 
 
 
 
 
 
 
2018
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
48,588

 
$
28,533

 
$
—

 
$
—

 
$
77,121

Mine operating expenses
 
21,952

 
23,504

 
—

 
—

 
45,456

Severance charges
 
1,576

 
—

 
—

 
—

 
1,576

Operating costs from metal inventory
 
1,374

 
2,134

 
—

 
—

 
3,508

Inventory net realizable value adjustment and write-off
 
3,103

 
74

 
—

 
—

 
3,177

Royalties
 
2,517

 
1,483

 
—

 
—

 
4,000

Cost of sales excluding depreciation and amortization
 
30,522

 
27,195

 
—

 
—

 
57,717

Depreciation and amortization
 
5,581

 
3,654

 
—

 
—

 
9,235

Mine operating margin/(loss)
 
12,485

 
(2,316
)
 
—

 
—

 
10,169

Income tax expense
 
3,783

 
—

 
—

 
—

 
3,783

Net income/(loss) attributable to non-controlling interest
 
703

 
(1,621
)
 
—

 
—

 
(918
)
Net income/(loss) attributable to Golden Star
 
$
6,921

 
$
(1,164
)
 
$
(3,189
)
 
$
(9,210
)
 
$
(6,642
)
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
7,881

 
$
2,305

 
$
—

 
$
—

 
$
10,186



18


Six Months Ended June 30,
 
Wassa
 
Prestea
 
Other
 
Corporate
 
Total
2019
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
101,885

 
$
27,287

 
—

 
—

 
$
129,172

Mine operating expenses
 
47,500

 
35,169

 
—

 
—

 
82,669

Severance charges
 
225

 
99

 
—

 
—

 
324

Operating costs from/(to) metal inventory
 
959

 
(1,332
)
 
—

 
—

 
(373
)
Inventory net realizable value adjustment and write-off
 
—

 
1,051

 
—

 
—

 
1,051

Royalties
 
5,238

 
1,401

 
—

 
—

 
6,639

Cost of sales excluding depreciation and amortization
 
53,922

 
36,388

 
—

 
—

 
90,310

Depreciation and amortization
 
8,598

 
5,013

 
—

 
—

 
13,611

Mine operating margin/(loss)
 
39,365

 
(14,114
)
 
—

 
—

 
25,251

Income tax expense
 
12,480

 
—

 
—

 
—

 
12,480

Net income/(loss) attributable to non-controlling interest
 
2,319

 
(4,900
)
 
—

 
—

 
(2,581
)
Net income/(loss) attributable to Golden Star
 
$
20,859

 
$
(11,113
)
 
$
(2,747
)
 
$
(17,959
)
 
$
(10,960
)
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
24,688

 
$
5,447

 
—

 
—

 
$
30,135

 
 
 
 
 
 
 
 
 
 
 
2018
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
93,940

 
$
54,000

 
$
—

 
$
—

 
$
147,940

Mine operating expenses
 
43,178

 
46,424

 
—

 
—

 
89,602

Severance charges
 
4,970

 
—

 
—

 
—

 
4,970

Operating costs from metal inventory
 
4,625

 
5,924

 
—

 
—

 
10,549

Inventory net realizable value adjustment and write-off
 
3,103

 
1,237

 
—

 
—

 
4,340

Royalties
 
4,883

 
2,947

 
—

 
—

 
7,830

Cost of sales excluding depreciation and amortization
 
60,759

 
56,532

 
—

 
—

 
117,291

Depreciation and amortization
 
11,189

 
6,267

 
—

 
—

 
17,456

Mine operating margin/(loss)
 
21,992

 
(8,799
)
 
—

 
—

 
13,193

Income tax expense
 
6,674

 
—

 
—

 
—

 
6,674

Net income/(loss) attributable to non-controlling interest
 
1,240

 
(3,568
)
 
—

 
—

 
(2,328
)
Net income/(loss) attributable to Golden Star
 
$
11,588

 
$
(6,450
)
 
$
(5,272
)
 
$
(5,493
)
 
$
(5,627
)
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
14,487

 
$
7,281

 
$
—

 
$
—

 
$
21,768

Segmented Assets
The following table presents the segmented assets:
 
 
Wassa
 
Prestea
 
Other
 
Corporate
 
Total
June 30, 2019
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
200,259

 
$
151,950

 
$
1,765

 
$
53,835

 
$
407,809

 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
181,446

 
$
147,815

 
$
898

 
$
87,828

 
$
417,987

Information about major customers
Currently, approximately 90% of our gold production is sold through a South African gold refinery. Except for the sales to RGLD as part of the Streaming Agreement, the refinery arranges for the sale of gold on the day it is shipped from the mine sites and we receive payment for gold sold two working days after the gold leaves the mine site. The global gold market is competitive with numerous banks and refineries willing to buy gold on short notice. Therefore, we believe that the loss of our current customer would not materially delay or disrupt revenue.

19


20. SUPPLEMENTAL CASH FLOW INFORMATION
During the three and six months ended June 30, 2019, the Company paid interest of $1.0 million and $3.8 million, respectively (three and six months ended June 30, 2018 - $1.1 million and $3.9 million, respectively). During the three and six months ended June 30, 2019, the Company paid income taxes of $nil and $1.8 million, respectively (three and six months ended June 30, 2018 - $nil).
Changes in working capital for the six months ended June 30, 2019 and 2018 are as follows:
 
Notes
Three Months Ended June 30,
 
Six Months Ended
June 30,
 
 
2019
 
2018
 
2019
 
2018
Increase in accounts receivable
 
$
(70
)
 
$
(2,052
)
 
$
(2,114
)
 
$
(1,044
)
Decrease/(increase) in inventories
 
706

 
2,751

 
(2,787
)
 
7,704

Decrease/(increase) in prepaids and other
 
81

 
(192
)
 
132

 
501

Increase/(decrease) in accounts payable and accrued liabilities
 
7,285

 
(462
)
 
(2,727
)
 
(11,897
)
Decrease in other liability
14

(6,410
)
 
—

 
(6,410
)
 
—

Total changes in working capital
 
$
1,592

 
$
45

 
$
(13,906
)
 
$
(4,736
)
Other includes the following components:
 
 
Three Months Ended June 30,
 
Six Months Ended
June 30,
 
 
2019
 
2018
 
2019
 
2018
Loss on disposal of assets
 
$
—

 
$
153

 
$
—

 
$
220

Inventory net realizable value adjustment and write-off
 
131

 
3,177

 
1,051

 
4,340

Loss on fair value of marketable securities
 
8

 
27

 
5

 
159

Accretion of vendor agreement
 
183

 
183

 
366

 
366

Accretion of rehabilitation provisions (see Note 8)
 
166

 
131

 
365

 
345

Amortization of financing fees
 
42

 
1,134

 
84

 
1,238

Accretion of 7% Convertible Debentures discount
 
586

 
514

 
1,146

 
1,006

Interest on lease obligation (see Note 3A)
 
6

 
—

 
14

 
—

Loss/(gain) on change in rehabilitation provisions
 
862

 
(327
)
 
587

 
(1,121
)
Interest on financing component of deferred revenue (see Note 9)
 
990

 
1,188

 
2,143

 
2,375

PRSU settlement
 
(306
)
 
—

 
(306
)
 
—

 
 
$
2,668


$
6,180


$
5,455


$
8,928

Non-cash changes of liabilities arising from financing activities
During the three and six months ended June 30, 2019 and 2018, the non-cash change related to the changes in liabilities arising from financing activities is as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended
June 30,
 
 
2019
 
2018
 
2019
 
2018
Accretion of debt
 
$
811

 
$
1,831

 
$
1,596

 
$
2,610

21. SUBSEQUENT EVENT
On July 18, 2019, the Company signed a commitment letter for a senior secured credit facility in the principal amount of $60 million (the "Credit Facility") with Macquarie Bank. The Credit Facility is available by way of a single drawdown with repayments of $5 million quarterly, 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.

20