ACACIA Resources turned in a resilient performance for its 2018 financial year, producing higher-than-forecast gold production and taking net cash to $88m as of December 31.
Full year gold production came in at 521,980 ounces after it ended the fourth quarter with output of 130,581 oz. The improvement was largely down to its North Mara mine where fourth quarter output ended on a strong note at 72,018 oz, some 17% higher year-on-year.
Mining was reorganised at the company’s other two assets Bulyanhulu and Buzwagi. The latter has transitioned to a low grade stockpile processing operation whilst Bulyanhulu has been scaled back to a standard tailings re-treatment business in order to counter the effects of a government embargo on its gold-in-concentrate exports.
A dispute developed in 2017 between Acacia and the Government of Tanzania which claims the company owes $190bn in unpaid tax, including penalties and interest. A lot of water has flowed under the bridge since the dispute first blew up, but in essence the parties are locked in their current positions and are waiting on the outcome of a much-anticipated negotiation process led by Barrick CEO, Mark Bristow.
Barrick owns about 64% of Acacia Resources.
Commenting on the numbers, Acacia interim CEO Peter Geleta, said: “This is substantially ahead of our initial production guidance for the year of 435,000 to 475,000 oz. I am proud of the resilience, hard work and dedication shown by our people in realising this achievement despite a challenging operating environment.
“Over the last 12 months we have focused on successfully stabilising the business, including a return to free cash flow generation in Q2, and I am pleased to report that we end the year with a net cash balance of $88m”.
The cash balance as of December 31 was $130m, an increase of approximately $13m in the quarter and $50m for the year, the company said. The company’s full-year results will be published on February 11.
Acacia announced last week that its North Mara mine – which had previously escaped flak from the Tanzanian government – had been ordered to pay $130,000 for alleged breaches of environmental regulations in the East African country.
The company said it had received an Environmental Protection Order for 300 million Tanzanian shillings. It added that it had not yet received any supporting reports, findings or testing data related to the order. Acacia said it was assessing the technical basis for the alleged non-compliances.
Shares in the company are largely flat year-on-year, but this doesn’t tell the whole story considering the buffeting the company has had to absorb. Employees have been jailed without recourse to bail and the operating environment has been tense. At one point during the year, shares in the company were less than £1/share.
The company is currently trading at £1.95/share.
