Search

Our investment proposition

A leading asset portfolio in Africa

Acacia has a high quality portfolio of mines which stand out as one of the leading asset portfolios in Africa, with Bulyanhulu and North Mara both being seen as world class deposits. Our three mines have an average reserve grade of 4.7 grams per tonne which is the highest amongst our peers and will allow the company to deliver industry first quartile costs when the turnaround of the assets is complete. Our overall reserve and resource base of 28.5 million ounces is one of the largest asset bases in continental Africa.

Focused on free cash flow

Over the past three years, Management have made significant changes to the structures and mine plans of each of our three mines in order to set business up to generate free cash flow for the benefit of all of our stakeholders. In the fourth quarter 2015 we added US$7 million to the balance sheet, at a time when the gold price hit a six year low and we believe with the expected reduction in costs in 2016 that we will add cash to the balance sheet in 2016 at levels well below the current gold price.

Track Record of Delivery

Our Management team have made significant changes to our business over the past three years which led to production increases in 2013, 2014 and 2015 from our portfolio, in spite of the closure of one of our mines. In 2016 we expect to see our fourth consecutive year of production increases. Over the same period we have taken around US$500 per ounce out of our all-in sustaining costs, and expect a further sustainable reduction of over US$100 per ounce in 2016.

Disciplined capital allocation

Our business is expected to generate significant cash flows in the coming years due to the high quality nature of our asset base and we remain disciplined in how we allocate this capital. A key element of our capital allocation is our dividend, which we have consistently paid since our IPO in 2010. In 2014, in order to better align the dividend with our focus on free cash flow, we amended how we calculated the dividend from an earnings based metric to a cash flow based metric. Our policy is now to pay out 15-30% of free cash flow, pre growth capital and financing costs, which means our shareholders are prioritised ahead of any other use of proceeds. We will then look to allocate the remaining capital to where it adds most value to our stakeholders.

Growing our footprint

A key element of our strategy is to invest in our future. 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. As a result, we are focused on building a significant land package across Africa in the most geologically prospective belts to provide our exploration group the best opportunity to discover our next mines, as well as other opportunities to drive shareholder value over the long term. We now have extensive land packages in both Kenya, Burkina Faso and Mali and are continuing to look to further expand this portfolio.

Becoming the partner of choice

We have focused on improving our relationships with the communities around our mines and with the Government. We have engaged more actively with the community, the media and our broader stakeholders. We have also worked hard to strengthen our relationships with local and national authorities to ensure that we receive the appropriate support for our business in order for us to continue to be a key economic development driver for our host countries. Our ambition is to become the partner of choice across Africa.

Delivered by Investis – link to website (opens in a new window)