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14 February 2017

Latest Results

2016 Preliminary Results

Acacia Mining plc announced its 2016 Preliminary Results at 0700 on Tuesday 14th February 2017

Financial Highlights

  • Revenue of US$1,054 million, 21% higher than 2015, due to a 13% increase in gold sales and a 7% higher gold price
  • EBITDA1 of US$415 million, more than doubled from 2015, mainly due to higher revenues and lower operating costs
  • Net earnings of US$95 million (US23.2 cents per share), with adjusted net earnings1 of US$161 million (US39.2 cents per share), is up from US$7 million in 2015
  • Operational cash flow of US$318 million, 103% up on 2015, driven primarily by higher EBITDA
  • Proposed final dividend of US8.4 cents per share, total 2016 dividend of US10.4 cents per share, more than double 2015
  • Net cash of US$218 million, an increase of 107% during 2016
  • Cash on hand of US$318 million as at 31 December 2016, an increase of US$85 million during the year

Operational Highlights

  • Gold production of 829,705 ounces, 13% higher than 2015, with gold sales of 816,743 ounces
  • Cash costs1 of US$640 per ounce sold,17% lower than 2015
  • AISC1 of US$958 per ounce sold, 14% below 2015, including a US$37 per ounce share-based payment charge
  • North Mara achieved record annual production of 378,443 ounces at AISC of US$733 per ounce sold
  • Bulyanhulu overcame significant downtime in Q3 2016 and delivered production of 289,432 ounces, 6% higher than 2015
  • Six month extension of mining at Buzwagi, which will lead to a 40% increase in production compared to 2016

1These are non-IFRS measures

Key statistics

 (Unaudited) Three months ended
31 December
Year ended
31 December
2016 2015 2016 2015
Gold production (ounces) 212,954 200,723 829,705 731,912
Gold sold (ounces) 209,292 198,617 816,743 721,203
Cash cost (US$/ounce)1 679 728 640 772
AISC (US$/ounce)1 952 1,004 958 1,112
Net average realised gold price (US$/ounce)1 1,211 1,107 1,240 1,154
(in US$'000)
Revenue 263,890 228,668 1,053,532 868,131
EBITDA1 105,681 57,630 415,388 174,971
Adjusted EBITDA1 103,010 59,166 409,903 180,916
Net earnings/(loss) 48,285 (198,860) 94,944 (197,148)
Basic earnings/(loss) per share (EPS) (cents) 11.8 (48.5) 23.2 (48.1)
Adjusted net earnings1 46,415 2,040 161,021 6,838
Adjusted net earnings per share (AEPS) (cents)1 11.3 0.5 39.2 1.7
Cash generated from operating activities 60,933 45,110 317,976 156,465
Capital expenditure2 57,826 42,931 195,898 183,617
Cash balance 317,791 233,268 317,791 233,268
Long term borrowings 99,400 127,800 99,400 127,800

1These are non-IFRS measures
2Excludes non-cash capital adjustments (reclamation asset adjustments) and include finance lease purchases and land purchases recognised as long term prepayments

Outlook

The group delivered another year of strong performance in 2016 and we expect that we will further improve on this in 2017 with production increasing to between 850,000-900,000 ounces at a lower all-in sustaining cost of between US$880-920 per ounce. Cash costs per ounce are also expected to decline from US$640 per ounce to between US$580-620 per ounce in 2017. We expect production to increase through the year and as such we expect a production ratio of 45:55 in terms of the first half versus the second half of the year, which will have a commensurate impact on our cost profile and our cash generation.

The further improvement in operating metrics is primarily driven by the revision to the mine plan at Buzwagi, where mining has been extended by approximately six months. This will lead to the mining of approximately 2 million tonnes more of higher grade ore during 2017 than previously planned and will drive a step up of approximately 40% in production over 2016 and a reduction in AISC of up to 30%.

At Bulyanhulu, we expect production to be in line with the previous year and AISC to reduce by up to 5%. We expect to see a reduction in cash costs, but will see an increase in sustaining capital as we invest to enhance the operation of the process plant and undertake a targeted fleet renewal programme to improve operating efficiencies amongst the older equipment within the underground fleet. We also continue to invest in underground development and in support of this will be upgrading ventilation and paste line infrastructure as we focus on creating greater flexibility underground. This investment in core infrastructure is a critical element in optimising the value delivery from this long-life, high grade asset in combination with continuing to drive cost savings and improve mining efficiencies.

North Mara performed ahead of expectations during 2016 and as a result we expect production to reduce by up to 10% during 2017 as an increased proportion of underground ore is sourced from the lower grade West Zone which will offset the impact of the increase in underground tonnes mined. The reduction in production, together with an increase in capital as we invest in the delivery of increased underground mining rates, together with open pit waste stripping will mean that AISC will increase by up to 10%.

As a result of the investments into both Bulyanhulu and North Mara outlined above we expect to see capital expenditure in 2017 of between US$210-230 million. This is comprised of approximately US$75-85 million of sustaining capital, US$120-130 million of capitalised development / stripping and US$15 million of expansion capital, made up predominantly of capitalised drilling at North Mara as we look to delineate additional resources to support a 10 year life of mine producing in excess of 300,000 ounces per annum.

As previously indicated we plan to increase our greenfield exploration spend to approximately US$25 million, as we look to build on the excellent progress made in Kenya during 2016 and we step up our exploration activity in Burkina Faso and Mali on our expanded land packages there.

Conference call

To join the 2016 Preliminary Results conference call on Tuesday 14 February 2016 at Noon, please dial the number below and enter the password

The presentation will also be webcast on the website or can be accessed directly via the following link. View the webcast.

An on-demand version of the webcast will be made available in the reports section of this website after the presentation.