12 Feb 2018

'We delivered resilient operational performance during a challenging 2017, with full year gold production of 767,883 ounces at all-in sustaining costs ('AISC') of US$875 per ounce', said Peter Geleta, Interim CEO of Acacia. 'Whilst we were impacted by events beyond our control, we took decisive action to stabilise our business and believe our operations are now well placed to deliver in 2018. The challenges in our operating environment led to our production guidance being revised during 2017, whilst the ongoing ban on the export of gold/copper concentrate meant that we were unable to export and sell 185,800 ounces of produced gold which led to a substantial cash outflow. As expected, we will see a step-down in production in 2018 to 435,000-475,000 ounces as Buzwagi transitions to processing stockpiles and Bulyanhulu, whilst in reduced operations, solely re-processes tailings. Our continued cost discipline means that AISC will remain competitive at US$935-985 per ounce. Our focus remains on delivering optimal performance from all aspects of the business within our control in the current operating environment, returning the business to free cash generation and delivering value for all of our stakeholders. We are supporting efforts towards achieving a negotiated resolution with the Tanzanian Government.'

Operational Highlights

  • Total Recordable Injury Frequency Rate (TRIFR) of 0.45, 39% lower than 2016
  • 2017 gold production of 767,883 ounces, 7% lower than 2016 as a result of lower production at Bulyanhulu primarily due to the transition to reduced operations in Q4 2017
  • Gold sales of 592,861 ounces, 22% lower than production, comprised 19,720 ounces of gold in concentrate, 10% of total concentrate production due to the concentrate export ban imposed in March 2017 and 573,141 ounces of gold in doré, in line with doré production
  • 2017 AISC1 of US$875 per ounce sold, below full year guidance range and our lowest ever achieved
  • Successful drilling programme at North Mara has more than doubled the Mineral Reserve at the Gokona Underground to 1.3Moz
  • New management leading stabilisation of company and post year-end appointed a senior Tanzanian to lead Tanzanian business

Financial Highlights

  • Financial performance was significantly impacted by a post-tax non-cash impairment charge of US$644 million resulting from uncertainty in the operating environment and the ban on exporting concentrate, resulting in US$264 million of lost revenue in the year
  • Revenue of US$752 million, 29% lower than 2016, with Adjusted EBITDA1 of US$311 million, 24% down from 2016
  • Net loss of US$707 million includes a post-tax impairment charge of US$644 million, equating to a loss of US173 cents per share
  • Adjusted net earnings of US$146 million and Adjusted EPS of US35.7 cents were 9% below 2016
  • Cash balance fell from US$318 million to US$81 million at year-end, due to lost revenue resulting from the concentrate ban and a gross build-up of VAT receivables of US$91 million, but was boosted post year-end by the sale of a non-core royalty for US$45 million
  • Entered into option agreements to provide a floor price of at least US$1,300 per ounce for majority of H1 2018 production
  • Contributed US$143 million of taxes and royalties to Tanzania and implemented projects benefiting over 60,000 Tanzanians in 2017

Results Conference Call

Acacia Mining plc will host a presentation for analysts and investors on Monday 12th February 2018 at Noon GMT

1These are non-IFRS measures.

Acacia Mining plc published this content on 12 February 2018 and is solely responsible for the information contained herein.
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