Acacia Mining forecasts higher gold output

DAILY NEWS Reporter and Agencies

 

ACACIA Mining, the country’s largest gold miner, said yesterday it generated cash in the fourth quarter following a pick up in gold output, with production set to increase at a lower cost as it develops its flagship Bulyanhulu mine.

The UK-listed miner, formerly known as African Barrick Gold PLC, said it produced 200,723 ounces of gold in the three months ended December 31, 2015, up 11 per cent from the same quarter a year ago on increased output from Bulyanhulu and higher grades mined at its North Mara mine.

This contributed to a 1.8 per cent rise in full-year gold output to 731,912 ounces, slightly ahead of its lowered guidance for gold output to be on par with the previous year.

“We continue to focus on reducing our cost base to ensure our assets are able to generate free cash flow in the current gold price environment,” said Acacia’s Chief Executive Brad Gordon.

Acacia Mining managed to boost output amid a broader cost-cutting effort that included 1,050 job losses, equivalent to about 27 per cent of its workforce, as it seeks to improve cash flow amid a protracted slump in the gold price.

The company has focused on mechanizing its flagship Bulyanhulu mine and improving the operational performance of its North Mara and Buzwagi mines as it grapples with a gold price hovering at around $1,103 a troy ounce as of yesterday, far below peaks of recent years including an intraday high of $1,907 an ounce in 2011.

The company’s cost-cutting efforts are bearing fruit with its all-in sustaining cash cost dropping 7.7 per cent in year to $1,004 an ounces in the fourth quarter, Acacia said.

Full-year all-in sustaining costs rose 0.6 per cent to $1,112 an ounce, but the miner expects this to fall to around $950 to $980 an ounce this year with an increase in gold production to 750,000 to 780,000 ounces.

Acacia Mining is the largest foreign direct investor in Tanzania having invested over US$2.5 billion into the country over the past 15 years.

It made a direct economic contribution of over US$920 million to the Tanzanian economy in 2014, which represented around 3 per cent of total economic output. Tanzania is Africa’s fourth-biggest gold producer after South Africa, Ghana and Mali and gold exports are a key source of foreign exchange.