Shares of Gold Star Resources (NYSEMKT: 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.
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.
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.
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.
10 stocks we like better than Golden Star ResourcesWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Golden Star Resources wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of January 2, 2018