[miningmx.com] – ACACIA Mining, the UK-listed gold producer which operates mines in Tanzania, unveiled a 40% increase in the total dividend for its 2014 financial year, and said it aimed to lift the payout in the current year.
Acacia Mining today announced full-year share earnings of 22.1 cents per share which compares to a negative 190.1c/share in the previous financial year. Cost-cutting, strong production at its North Mara mine, and commissioning of a carbon-in-leach circuit at its flagship Bulyanhulu contributed towards the performance.
The outcome for shareholders was a proposed final dividend of 2.8c/share, taking the total dividend for 2014 to 4.2c/share, 40% higher than 2013. “We returned to cash generation for the first time in three years during 2014, adding $11m to the balance sheet,” said Brad Gordon, CEO of Acacia Mining, in a commentary to the firm’s figures.
“It should be noted that the average realised gold price of $1,258 per ounce was over $100/oz lower than 2013 and over $400/oz lower than 2012, years in which we did not generate positive free cash flow,” he added.
Commenting on prospects for 2015, Gordon said the intention was to pay out between 15% to 30% of cash flow in dividends. This compares to a payout of 19% of cash flows generated in the 2014 financial year.
“A good result, largely in line with expectations, with the 40% year-on-year lift in dividend a good discipline,” said Investec Securities in a note.
“After several years of year-on-year cash decline, it is encouraging to see the (modest) cash growth and our analyst expects this trend to continue in forward years,” it said. Acacia’s cash balance stood at $294m as of December 31.
In addition to its strong turnaround story, Acacia Mining has attracted attention for its bold expansionary plans with Gordon saying on several occasions the company wanted to conduct a transformatory deal, possibly in West Africa.
Merger and acquisition activity was alluded to briefly in the results, with Gordon saying the best route to growing the company was through exploration.
“We believe that exploration is a significant driver of value for the business over the long term and now is the time to invest, which is a contrarian view to many in the market,” he said.
As stated in the group’s production report in January, gold output of between 750,000 to 800,000 ounces has been targeted for 2015. This would compare to production of 718,651 oz in 2014 which was 13% higher than in 2013. Gold sales totalled 703,680 oz in the 2014 financial year.
Said Numis Securities: “Another solid result – not without its risks in this build-up phase but plenty of value to be had”.
