The government halted the export of unprocessed ore on March 3, following President John Magufuli's call for the construction of more gold smelters in the country, Africa's fourth-largest gold producer.

Gold output for the quarter was 219,670 ounces but sales were lower by 34,926 ounces due to the ban, Acacia said in a statement.

However, Tanzania's biggest gold producer stuck to its full-year production targets, as its mines continue to operate normally while negotiations continue with the government.

The export ban reduced cashflow by about $33 million (£25.84 million) for the quarter and affects sales from two of its three mines, the company said.

Acacia said in February it expects production this year to be between 850,000-900,000 ounces, up from about 830,000 ounces last year.

(Reporting by Zandi Shabalala; Editing by Greg Mahlich)