First Quarter Results 2017

20 Apr 2017

Results for the 3 months ended 31 March 2017 (Unaudited)

Based on IFRS and expressed in US Dollars (US$)

Acacia Mining plc (“Acacia’’) reports first quarter results

“At an operational level Acacia had a very strong start to the year, with production of 219,670 ounces delivered from our mines and the declaration of a 1.3Moz maiden high grade resource in Kenya”, said Brad Gordon, Chief Executive Officer. ”North Mara delivered strong production of 96,468 ounces, and it was pleasing to see the significant step up at Buzwagi to 59,856 ounces in the quarter whilst, as expected, Bulyanhulu had a slower start to the year with production of 63,346 ounces. All-in Sustaining Cost per ounce sold (AISC) was impacted by sales being almost 35,000 ounces lower than production primarily due to the restriction on the export of metallic mineral concentrates, but still amounted to US$934 per ounce sold (US$877 per ounce prior to the impact of share-based payment valuations), 3% lower than Q1 2016. As announced previously, we continue to engage with the Tanzanian Government in order to be able to resume the export of gold/copper concentrate which has been halted since 3rd March and accounts for approximately 30% of group revenues. Whilst these engagements are ongoing our mines continue to operate as normal and are stockpiling the gold/copper concentrate that has been produced. As a result, at this stage there is no change to guidance for the year.”

Operational Highlights

  • Gold production of 219,670 ounces, 15% higher than Q1 2016
  • Gold sales of 184,744 ounces, in line with Q1 2016, but 34,926 ounces lower than production primarily as a result of the Tanzanian Government’s directive stopping the export of metallic mineral concentrate
  • Cash cost1 of US$577 per ounce sold,17% lower than Q1 2016
  • AISC1 of US$934 per ounce sold, 3% below Q1 2016, after a US$56 per ounce share-based payment valuation impact in Q1 2017
    • For reference purposes, if Q1 sales ounces equalled Q1 production, AISC would have been approximately US$852 per ounce
  • Buzwagi delivered production of 59,856 ounces, up 61% compared to Q1 2016 with AISC decreasing to US$773 per ounce sold
  • Maiden NI43-101 compliant Inferred Mineral Resource Estimate of 1.31 million ounces of gold at 12.1 grams per tonne declared on the Liranda Corridor within the West Kenya Project

Financial Highlights

  • Revenue of US$234 million, 6% higher than Q1 2016, as increased production from North Mara and a 6% increase in gold price has offset the impact of lower revenue from gold/copper concentrate sales
  • EBITDA1 of US$82 million, 25% higher than Q1 2016, mainly due to slightly higher revenues and lower direct mining costs
  • Net earnings1 of US$27 million (US6.5 cents per share), up from a US$52 million loss in Q1 2016 and up 48% from Q1 2016 on an adjusted basis
  • Declared first provisional corporate tax payment of US$8.7 million for Q1 2017 due to strong performance at North Mara
  • Net cash decreased by US$22 million during Q1 2017 to US$196 million, due to sales lagging production and indirect tax outflows
Three months ended
31 March
Year ended
31 December
(Unaudited) 2017 2016 2016
Gold production (ounces) 219,670 190,210 829,705
Gold sold (ounces) 184,744 184,181 816,743
Cash cost (US$/ounce)1 577 693 640
AISC (US$/ounce)1 934 959 958
Net average realised gold price (US$/ounce)1 1,221 1,150 1,240
(in US$'000)
Revenue 233,901 220,909 1,053,532
EBITDA1 82,193 65,550 415,388
Adjusted EBITDA1 82,193 66,411 409,903
Net earnings/(loss) 26,827 (52,410) 94,944
Basic earnings/(loss) per share (EPS) (cents) 6.5 (12.8) 23.2
Adjusted net earnings1 26,827 18,109 161,021
Adjusted net earnings per share (AEPS) (cents)1 6.5 4.4 39.2
Cash generated from operating activities 25,224 52,232 317,976
Capital expenditure2 46,828 36,030 195,898
Cash balance 281,442 237,429 317,791
Total borrowings 85,200 113,600 99,400

1 These are non-IFRS measures. Refer to page 15 for definitions
2 Excludes non-cash capital adjustments (reclamation asset adjustments) and include land purchases recognised as long term prepayments

Following the release of Acacia Mining’s first quarter 2017 results on Thursday 20th April at 07:00 UK time, there will be a conference call for investors and analysts at 08:45 BST on the same day.