Acacia Mining, a gold quarrying business operating in Tanzania with exploration properties in Kenya, Burkina Faso and Mali, is confident of a strong production performance despite challenges experienced in 2018.
The exploration company published its full Third Quarter Results this week, posting a revenue of $165.6 million, which was 3% lower than Quarter 3 of 2017 due to lower realised gold prices and lower production.
The company, however, expects to exceed the upper end of its full year production range.
“During the third quarter Acacia is pleased to have delivered a strong operational performance, producing 136,640 ounces of gold at an all-in sustaining cost (AISC) of $880 per ounce sold. This is a testament to the resilience and dedication of all of our people who continue to do their very best in the face of what is now an increasingly challenging operating environment in Tanzania,” said Peter Geleta, Interim CEO of Acacia.
“Having returned the Group to free cash generation during the second quarter of this year, I am also pleased to note that we have maintained this trend, remaining cash flow positive this quarter, with a net cash position of $74 million,” he added.
“As a result of our consistently strong production performance in the year to date, we are now targeting production to be marginally in excess of 500,000 ounces for the full year. In line with our on-going cost reduction strategy, we have also steadily reduced our costs throughout the year and are now tracking towards the lower end of our AISC guidance range of $935 to $985 per ounce. The company is pleased to have delivered a strong operational performance, producing 136,640 ounces of gold at an all-in sustaining cost (AISC) of $880 per ounce sold,” Gelata continued.
During the period under review, Acacia posted net earnings of $11.9 million (US2.9 cents per share), 26% down from $16.0 million (US3.9 cents per share) in Q3 of 2017.
“We are proud to mark the signing of an agreement between our Bulyanhulu mine and Tanzania’s Ministry of Water, together with four other partners, for the construction of a 55-kilometre water pipeline in Geita and Shinyanga,” Acacia Mining said in a statement.
Bulyanhulu Gold Mine Limited is investing TZS4 billion (almost US$2 million) in the pipeline that will transport water from Lake Victoria and contribute to a vital water supply and sanitation services for more than 100,000 people.
Mr Geleta stated, however, that he is “deeply concerned” about increasing risks to the safety and security of the company’s staff and the increasingly challenging operating environment in Tanzania, which he said could impact the outlook for the business.
He was referring to recent legal wrangles that the gold mining firm has had with Tanzania’s government.
Acacia is currently locked in a long-running dispute with the government, which has accused the company of tax evasion. Acacia has vehemently denied the allegations.
“I am particularly concerned with the criminal charges now being brought against several current or former employees over the past week, in connection with matters which are being raised in the arbitrations with the Government of Tanzania relating to Bulyanhulu and Buzwagi,” Mr. Gelata elaborated, referring to two famous mines in the country.
“We will…be reaching out to the Government to seek the opportunity for direct dialogue regarding the ongoing disputes between the Government, the Company and the broader Acacia Group, and also to inform the Government that failing a negotiated resolution the Company may need to pursue claims under the relevant bilateral investment treaty,” he assured.