ACACIA MINING PLC
19 January 2017
Fourth Quarter Production Report for the three months ended 31 December 2016
Based on IFRS and expressed in US Dollars (US$)
Acacia Mining plc ("ACA'') reports fourth quarter production results
"We are pleased to report strong fourth quarter production of 212,954 ounces,
which resulted in record full year production of 829,705 ounces, almost 100,000
ounces ahead of 2015 and above already increased guidance", said Brad Gordon,
Chief Executive Officer of Acacia. "2016 was the fourth consecutive year of
production growth at Acacia, which was driven by a record production year at
North Mara and the highest production year at Bulyanhulu since 2006. The strong
operational performance during the quarter led to a further build-up in cash of
US$16 million, representing an increase of US$114 million in net cash during
2016. We are also pleased to confirm we will extend mining at Buzwagi by six
months, and it will now continue until the end of 2017 before at least a
further two years of processing stockpiles. As a result we look forward to
another strong year and will provide guidance for the year with our preliminary
results on 14 February."
Highlights
* Q4 2016 gold production of 212,954 ounces and gold sales of 209,292 ounces
* Preliminary Q4 2016 AISC1 of US$952 per ounce sold, after a US$47 per ounce
credit in respect of share based payments, 5% lower than Q4 2015
* Full year 2016 gold production of 829,705 ounces, 13% above 2015, and ahead
of revised full year guidance of up to 5% above original guidance of
750,000-780,000 ounces
* Full year sales of 816,743 ounces, 13% above 2015
* Preliminary full year 2016 AISC1 of US$958 per ounce sold, 14% lower than
2015 and towards the bottom of the full year guidance range of US$950-980
per ounce
* Cash balance increased by US$16 million to US$318 million, post negative
indirect tax movements of US$19 million and US$15 million for share based
incentive costs during the quarter
* Net cash1 position increased to US$219 million, an increase of US$114
million during 2016
* Six month extension of mining at Buzwagi until the end of 2017, which will
lead to an increase in production compared to 2016 at the operation.
Key Statistics Three months ended Year ended
31 December 31 December
(Unaudited) 2016 2015 2016 2015
Tonnes mined (thousands of 9,644 10,128 38,491 41,390
tonnes)
Ore tonnes mined (thousands of 2,584 2,822 9,419 10,311
tonnes)
Ore tonnes processed (thousands 2,567 2,413 9,818 9,268
of tonnes)
Process recovery rate (percent)* 88.9% 87.5% 88.5% 87.4%
Head grade (grams per tonne)* 2.9 3.0 3.0 2.8
Gold production (ounces) 212,954 200,723 829,705 731,912
Gold sold (ounces) 209,292 198,617 816,743 721,203
Copper production (thousands of 4,255 4,496 16,239 14,981
pounds)
Cash cost (US$/ounce)1 679 728 640 772
AISC (US$/ounce)1 952 1,004 958 1,112
Net average realised gold price 1,211 1,107 1,240 1,154
(US$/ounce)1
Capital expenditure (US$'000) 2 57,826 42,931 195,898 183,617
1 These are non-IFRS measures. Refer to page 7 for definitions
2 Excludes non-cash capital adjustments (reclamation asset adjustments),
includes finance lease purchases and land purchases treated as long term
prepayments
*Reported process recovery rates and head grade for the Group includes the
impact of tailings retreatment at Bulyanhulu
Conference call
A conference call will be held for analysts and investors on 19 January 2017 at
09:00 London time. The access details for the conference call are as follows:
Participant dial in: +44 (0) 203 003 2666 / +1 866 966 5335
Password: Acacia
A recording of the conference call will be made available on the Company's
website, www.acaciamining.com, after the call. For further information, please
visit our website: www.acaciamining.com or contact:
Acacia Mining plc +44 (0) 207 129 7150
Brad Gordon, Chief Executive Offic
Andrew Wray, Chief Financial Officer
Giles Blackham, Investor Relations
Manager
Bell Pottinger +44 (0) 203 772 2500
Lorna Cobbett
About Acacia Mining plc
Acacia Mining plc (LSE:ACA), is Tanzania's largest gold miner and one of the
largest producers of gold in Africa. We have three producing mines, all located
in north-west Tanzania: Bulyanhulu, Buzwagi, and North Mara and a portfolio of
exploration projects in Tanzania, Kenya, Burkina Faso and Mali.
Our approach is focused on strengthening our core pillars; our business, our
people and our relationships, whilst continuing to invest in our future.
Acacia is a UK public company headquartered in London. We are listed on the
Main Market of the London Stock Exchange with a secondary listing on the Dar es
Salaam Stock Exchange. Barrick Gold Corporation is our majority shareholder.
Acacia reports in US dollars and in accordance with IFRS as adopted by the
European Union, unless otherwise stated in this report.
FORWARD- LOOKING STATEMENTS
This report includes "forward-looking statements" that express or imply
expectations of future events or results. Forward-looking statements are
statements that are not historical facts. These statements include, without
limitation, financial projections and estimates and their underlying
assumptions, statements regarding plans, objectives and expectations with
respect to future production, operations, costs, projects, and statements
regarding future performance. Forward-looking statements are generally
identified by the words "plans," "expects," "anticipates," "believes,"
"intends," "estimates" and other similar expressions.
All forward-looking statements involve a number of risks, uncertainties and
other factors, many of which are beyond the control of Acacia, which could
cause actual results and developments to differ materially from those expressed
in, or implied by, the forward-looking statements contained in this report.
Factors that could cause or contribute to differences between the actual
results, performance and achievements of Acacia include, but are not limited
to, changes or developments in political, economic or business conditions or
national or local legislation or regulation in countries in which Acacia
conducts - or may in the future conduct - business, industry trends,
competition, fluctuations in the spot and forward price of gold or certain
other commodity prices (such as copper and diesel), currency fluctuations
(including the US dollar, South African rand, Kenyan shilling and Tanzanian
shilling exchange rates), Acacia's ability to successfully integrate
acquisitions, Acacia's ability to recover its reserves or develop new reserves,
including its ability to convert its resources into reserves and its mineral
potential into resources or reserves, and to process its mineral reserves
successfully and in a timely manner, Acacia's ability to complete land
acquisitions required to support its mining activities, operational or
technical difficulties which may occur in the context of mining activities,
delays and technical challenges associated with the completion of projects,
risk of trespass, theft and vandalism, changes in Acacia's business strategy
including, the ongoing implementation of operational reviews, as well as risks
and hazards associated with the business of mineral exploration, development,
mining and production and risks and factors affecting the gold mining industry
in general. Although Acacia's management believes that the expectations
reflected in such forward-looking statements are reasonable, Acacia cannot give
assurances that such statements will prove to be correct. Accordingly,
investors should not place reliance on forward-looking statements contained in
this report.
Any forward-looking statements in this report only reflect information
available at the time of preparation. Subject to the requirements of the Market
Abuse Regulation or applicable law, Acacia explicitly disclaims any obligation
or undertaking publicly to update or revise any forward-looking statements in
this report, whether as a result of new information, future events or
otherwise. Nothing in this report should be construed as a profit forecast or
estimate and no statement made should be interpreted to mean that Acacia's
profits or earnings per share for any future period will necessarily match or
exceed the historical published profits or earnings per share of Acacia.
Operating update for the three months ended 31 December 2016
Gold production for the quarter amounted to 212,954 ounces, a 6% increase on
the corresponding quarter of 2015 and a 4% increase on Q3 2016. The increase in
production was predominantly driven by higher grades and recoveries at North
Mara and increased run-of-mine processing at Bulyanhulu.
Gold ounces sold for the quarter of 209,292 ounces was 5% higher than Q4 2015.
Gold ounces sold were 2% lower than gold produced as a result of logistical
delays related to Bulyanhulu concentrate shipments.
North Mara gold production of 91,183 ounces was 18% higher than the prior year
period as head grade increased by 16% compared to Q4 2015 due to the higher
grade contribution from the Gokona underground mine as well as an increase in
the open pit mine grade at Nyabirama combined with a resultant 3% higher
recovery.
At Bulyanhulu, total production amounted to 79,859 ounces, 2% above Q4 2015.
Production from run-of-mine processing of 70,808 ounces was 6% ahead of Q4 2015
as head grade increased by 5% due to an improvement in underground mined
grades, in combination with a 3% increase in recovery. The increase in
run-of-mine production was partly offset by a 20% (2,298 ounces) decrease in
production attributable to reprocessed tailings due to lower head grade and
resultant lower recovery, partly offset by higher throughput.
Gold production at Buzwagi of 41,912 ounces was 7% lower than in Q4 2015,
driven by a 14% lower head grade as a result of ore tonnes being sourced
predominantly from the lower grade splay areas due to a change in mine
sequencing, partly offset by higher throughput as a result of improved plant
performance.
Total tonnes mined for the quarter were 9.6 million compared to 10.1 million in
Q4 2015 primarily due to lower waste tonnes mined at Buzwagi. Ore tonnes mined
of 2.6 million were 8% lower than Q4 2015 mainly due to lower ore tonnes from
the Nyabirama open pit at North Mara as mining focused on waste stripping of
the next stage of the pit, partly offset by higher ore tonnes mined at Buzwagi
as mentioned above. Tonnes processed in the fourth quarter of 2.6 million
tonnes were 6% higher than the prior year due to improved throughput at Buzwagi
as a result of good mill performance and improved throughput for reprocessed
tailings at Bulyanhulu.
The average grade processed for the quarter was 2.9 grams per tonne which was
3% lower than the prior year period mainly due to a lower head grade at
Buzwagi, partly offset by higher head grades at North Mara and Bulyanhulu.
Copper production for the quarter was 4.3 million pounds, 5% lower than the
prior year period, mainly driven by lower copper grades at Bulyanhulu and
Buzwagi combined with lower copper recoveries at Bulyanhulu.
The cash balance as at 31 December 2016 amounted to approximately US$318
million, increasing by US$16 million during the quarter. The outstanding
balance of the debt facility was US$99 million at year end.
Mine Site Review
Bulyanhulu
Key Statistics
Three months ended Year ended
31 December 31 December
(Unaudited) 2016 2015 2016 2015
Key operational
information:
Ounces produced oz 79,859 78,223 289,432 273,552
Ounces sold oz 74,803 79,233 279,286 265,341
Cash cost per ounce sold1 US$/oz 784 653 722 797
AISC per ounce sold1 US$/oz 1,061 999 1,058 1,253
Copper production Klbs 1,707 1,774 6,391 6,308
Copper sold Klbs 1,309 1,559 5,570 5,424
Capital expenditure2 US$'000 20,017 21,982 84,575 101,292
Run-of-mine:
Underground ore tonnes Kt 244 292 909 993
hoisted
Ore milled Kt 263 268 933 983
Head grade g/t 9.1 8.7 9.3 8.6
Mill recovery % 91.8% 88.8% 91.4% 88.5%
Ounces produced oz 70,808 66,874 254,552 240,044
Reprocessed tailings:
Ore milled Kt 451 380 1,650 1,368
Head grade g/t 1.3 1.6 1.4 1.3
Mill recovery % 47.2% 56.6% 45.8% 56.6%
Ounces produced oz 9,051 11,349 34,880 33,508
1 These are non-IFRS measures. Refer to page 7 for definitions
2 Excludes non-cash capital adjustments (reclamation asset adjustments),
includes finance lease purchases and land purchases treated as long term
prepayments
Gold production at Bulyanhulu for the quarter was 79,859 ounces, 2% higher than
the prior year period. This was driven by a 5% increase in run-of-mine
processing head grade and a 3% increase in recoveries. The increase in
production attributable to run-of-mine processing was partly offset by a
decrease in production attributable to reprocessed tailings of 20% due to a 19%
lower head grade and resultant 17% lower recovery rate, partly offset by higher
throughput.
Gold sold for the quarter was 74,803 ounces, 6% lower than the prior year
quarter and 6% lower than production as a result of logistical delays in
relation to year-end concentrate shipments.
For the full year, gold production of 289,432 ounces was 6% above 2015, mainly
driven by an 8% increase in run-of-mine head grade as underground mining grades
improved, and a 3% increase in recovery, partly offset by 5% lower throughput
due to the plant shutdown in Q3 2016. This was in combination with a 4%
increase in production from reprocessed tailings as a result of increased
throughput combined with an 8% increase in grade recovered.
Copper production for the quarter of 1.7 million pounds was 4% lower than 2015
due to lower copper grades and recovery rates. On a full year basis, total
copper production of 6.4 million pounds was in line with the prior year.
Buzwagi
Key statistics
Three months ended Year ended
31 December 31 December
(Unaudited) 2016 2015 2016 2015
Key operational
information:
Ounces produced oz 41,912 45,196 161,830 171,172
Ounces sold oz 41,514 41,879 161,202 166,957
Cash cost per ounce sold1 US$/oz 1,035 1,101 1,031 1,046
AISC per ounce sold1 US$/oz 1,056 1,236 1,095 1,187
Copper production Klbs 2,547 2,721 9,847 8,672
Copper sold Klbs 2,075 2,160 9,175 7,894
Capital expenditure2 US$'000 264 2,741 3,582 12,335
Mining information:
Tonnes mined Kt 5,090 5,573 21,585 24,989
Ore tonnes mined Kt 1,509 1,432 5,317 5,658
Processing information:
Ore milled Kt 1,159 1,060 4,404 4,085
Head grade g/t 1.2 1.4 1.2 1.4
Mill recovery % 94.5% 94.8% 94.5% 94.1%
1 These are non-IFRS measures. Refer to page 7 for definitions
2 Excludes non-cash capital adjustments (reclamation asset adjustments),
includes finance lease purchases and land purchases treated as long term
prepayments
Gold production for the quarter at Buzwagi of 41,912 ounces was 7% below Q4
2015, driven by a 14% lower head grade as a result of lower mined grades due to
a change in pit sequencing in order to enhance operational efficiencies in
2017, partly offset by higher throughput as a result of improved plant
performance. Gold sold for the quarter amounted to 41,514 ounces, in line with
the prior year and in line with production.
Gold production for the full year of 161,830 ounces was 5% lower than in 2015
due to a 14% decrease in grade as a result of mining the cut back with ore
primarily sourced from lower grade splay material. This was partly offset by an
8% increase in throughput due to improved mill availability and improved
milling rates.
Copper production of 2.6 million pounds for the quarter was 6% lower than in Q4
2015 driven by the lower copper grades.
As previously disclosed, during 2016 we assessed the potential to extend mining
of the open pit at Buzwagi and as a result now expect this to continue until
the end of 2017, followed by at least two years of processing stockpiles. We
will provide more details with our preliminary results in February as part of
our annual guidance update, but as a result of this extension and focus on the
higher grade main zone within the pit we expect 2017 production at the mine to
be in excess of 2016 levels.
North Mara
Key statistics
Three months ended 31 Year ended 31
December December
(Unaudited) 2016 2015 2016 2015
Key operational
information:
Ounces produced oz 91,183 77,304 378,443 287,188
Ounces sold oz 92,975 77,505 376,255 288,905
Cash cost per ounce US$/oz 436 604 410 590
sold1
AISC per ounce sold1 US$/oz 850 932 733 915
Capital expenditure2 US$ 37,144 17,756 106,326 69,016
('000)
Open pit:
Tonnes mined Kt 4,182 4,133 15,556 15,110
Ore tonnes mined Kt 702 967 2,752 3,361
Mine grade g/t 2.1 1.9 1.9 2.4
Underground:
Ore tonnes trammed Kt 127 130 440 298
Mine grade g/t 11.0 8.7 15.6 7.1
Processing information:
Ore milled Kt 693 705 2,830 2,833
Head grade g/t 4.4 3.8 4.5 3.6
Mill recovery % 92.1% 89.5% 92.0% 88.2%
1 These are non-IFRS measures. Refer to page 7 for definitions
2 Excludes non-cash capital adjustments (reclamation asset adjustments),
includes finance lease purchases and land purchases treated as long term
prepayments
Gold production for the quarter at North Mara of 91,183 ounces was 18% higher
than in Q4 2015, as head grade increased by 16% compared to Q4 2015 due to the
contribution from the high grade Gokona underground mine as well as an increase
in the open pit mine grade at Nyabirama, combined with a resultant 3% higher
recovery. Gold ounces sold for the quarter of 92,975 ounces were 2% above
production due to the sale of gold ounces on hand at the end of September.
Gold production for the full year of 378,443 ounces was 32% higher than in
2015, and a record for the mine. This was as a result of 25% higher head grade
driven by the higher contribution from the Gokona underground mine and a 4%
improvement in recoveries. Gold ounces sold for the full year of 376,255 ounces
were 30% higher than the prior year and broadly in line with production.
Non-IFRS Measures
Acacia has identified certain measures in this report that are not measures
defined under IFRS. Non-IFRS financial measures disclosed by management are
provided as additional information to investors in order to provide them with
an alternative method for assessing Acacia's financial condition and operating
results. These measures are not in accordance with, or a substitute for, IFRS,
and may be different from or inconsistent with non-IFRS financial measures used
by other companies. These measures are explained further below.
Net average realised gold price per ounce sold is a non-IFRS financial measure
which excludes from gold revenue:
- Unrealised gains and losses on non-hedge derivative contracts; and
- Export duties
It also includes realised gains and losses on gold hedge contracts reported as
part of cost of sales.
Cash cost per ounce sold is a non-IFRS financial measure. Cash costs include
all costs absorbed into inventory, as well as royalties, and production taxes,
and exclude capitalised production stripping costs, inventory purchase
accounting adjustments, unrealised gains/losses from non-hedge currency and
commodity contracts, depreciation and amortisation and corporate social
responsibility charges. Cash cost is calculated net of co-product revenue.
The presentation of these statistics in this manner allows Acacia to monitor
and manage those factors that impact production costs on a monthly basis. Cash
cost per ounce sold is calculated by dividing the aggregate of these costs by
gold ounces sold. Cash costs and cash cost per ounce sold are calculated on a
consistent basis for the periods presented.
All-in sustaining cost (AISC) is a non-IFRS financial measure. The measure is
in accordance with the World Gold Council's guidance issued in June 2013. It is
calculated by taking cash cost per ounce sold and adding corporate
administration costs, reclamation and remediation costs for operating mines,
corporate social responsibility expenses, mine exploration and study costs,
capitalised stripping and underground development costs and sustaining capital
expenditure. This is then divided by the total ounces sold. AISC is intended to
provide additional information on the total sustaining cost for each ounce
sold, taking into account expenditure incurred in addition to direct mining
costs, depreciation and selling costs.
Net cash is a non-IFRS measure. It is calculated by deducting total borrowings
from cash and cash equivalents.
Mining statistical information
The following describes certain line items used in the Acacia Group's
discussion of key performance indicators:
* Open pit material mined - measures in tonnes the total amount of open pit
ore and waste mined.
* Underground ore tonnes hoisted / trammed - measures in tonnes the total
amount of underground ore mined and hoisted / trammed.
* Total tonnes mined includes open pit material plus underground ore tonnes
hoisted.
* Strip ratio - measures the ratio of waste-to-ore for open pit material
mined.
* Ore milled - measures in tonnes the amount of ore material processed
through the mill.
* Head grade - measures the metal content of mined ore going into a mill for
processing.
* Milled recovery - measures the proportion of valuable metal physically
recovered in the processing of ore. It is generally stated as a percentage
of the metal recovered compared to the total metal originally present.
ACACIA MINING : Q4 Production Results
January 19, 2017 at 02:01 am EST
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