Acacia Mining staff layoff begins

 

Trading at the NSE floor. 

The news comes a month after the company’s chief operating officer resigned, following poorer-than expected production in the third quarter. The largest proportion of the cuts were at its Bulyanhulu mine in Tanzania, the company said in a statement.

Acacia, which has been attempting to turn its finances around since 2013, said it would save about $25 million per year, prior to restructuring charge of about $11 million predominantly in 2015.

The moves “will help to ensure that we are able to generate sustainable positive free cash flow in 2016 and beyond, and do not experience a recurrence of the unacceptable cash outflow we saw in Q3,” Chief Executive, Brad Gordon said in a statement. “The largest proportion of the role reductions are at Bulyanhulu, but all of our mines and offices will be affected.

As part of this process Acacia has fulfilled all local legislative requirements and is committed to minimising any employee hardship; as such we have put in place support services to assist those affected,” it said in a statement.

The latest job cuts follow on from the miner’s plan to change its mine plans to make the operations more economic, including moving Gokona to an underground mining operation from an open put operation in seek of higher grades.

Chief Executive, Brad Gordon said: “These, and the other planned changes, will help to ensure that we are able to generate sustainable positive free cash flow in 2016 beyond and do not experience recurrence of the unacceptable cash outflow we saw in the third quarter.

The majority of those employees affected have already left Acacia, with operational performance continuing to be in line with plan for the quarter.”