Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Golden Star Resources Ltd.'s Stock Is Sinking Today

By Matthew DiLallo - Jan 2, 2018 at 11:28AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The gold miner tragically lost two miners over the weekend due to an accident at its Prestea mine in Ghana.

What happened

Shares of Gold Star Resources (GSS) crumbled on Tuesday and were down more than 10% at 10:30 a.m. EST. Driving the sell-off was the announcement that the company lost two employees from a tragic accident at one of its mines.

So what

Gold Star Resources put out a press release today stating that two employees died from smoke inhalation sickness after being exposed to blasting gasses at its Prestea Underground Gold Mine in Ghana last Friday. Because of that accident, the company had to suspend operations at the mine temporarily so that it could investigate the incident. While the company resumed full operations yesterday, the mine's management, as well as the Inspector of Mines, are conducting further investigations to understand why this accident occurred as well as to make sure they could prevent it from happening again.

An underground gold mine.

Image source: Getty Images.

The mine's suspension, while brief, will likely impact the company's production and financial results for the fourth-quarter, which is why the stock is down today. In addition to that, investors seem concerned that the company might need to suspend production again in the future if it finds an issue that needs to be addressed to ensure the safety of its workers.

Now what

Gold Star Resources is a small gold company that only operates two mines in Ghana, which makes it a very risky stock. And while today's sell-off does make it cheaper, and there are reasons to be optimistic about its future, Gold Star's stock can be quite volatile, which is why investors might want to consider a larger and more diversified gold stock instead. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Golden Star Resources Ltd. Stock Quote
Golden Star Resources Ltd.
GSS

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
349%
 
S&P 500 Returns
122%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.