Search

Market Update

02 Jun 2017

Acacia would like to provide an update on the current situation in Tanzania with respect to the export of our gold/copper concentrates. As we have previously communicated, the findings of the first Presidential Committee’s investigation into the export of gold/copper concentrates were announced on 24 May and we provided detailed comments on these on 26 May. Since then, Acacia has continued to co-operate with the second Presidential Committee, which was set up to examine economic and legal issues associated with historic exports of gold/copper concentrates. We have provided extensive information to this committee and have provided access to each of our mine sites.

We believe that the second Committee is close to completing its work, following which we would welcome the opportunity to discuss the findings directly with the Government. We remain hopeful that we will be able to reach a resolution to the current situation with the Government so that we can continue to deliver strong performance from our mines for the benefit of all stakeholders.

Our mines continue to operate as normal, producing and selling gold doré whilst stockpiling gold/copper concentrate. As of 31 May, we have approximately 85,000 ounces of gold, 4 million pounds of copper and 50,000 ounces of silver contained within unsold concentrate. In light of the increased levels of uncertainty, we have seen some impact on productivity levels, but at this stage we are not making any changes to full year guidance and continue to take steps to minimise further cash outflows from the business.

Over the past two months, Acacia has paid the final dividend of US$34 million to shareholders, declared prior to the introduction of the concentrate ban in early March. We have also refunded US$22 million of advanced payments for concentrate produced prior to the export ban, which is held up in the Dar es Salaam port. This amount is now being recognised as a receivable. As a result of these payments, together with the deferral of sales, a US$10 million North Mara tax payment related to historic corporate tax assessments, and a continuing lack of VAT refunds, our cash balance at the end of May was approximately US$165 million, with approximately 15,000 ounces of unsold doré on hand. In the absence of the resumption of the sale of concentrates, the combined operating cash outflow going forward at the affected assets is in the region of US$15 million per month, while North Mara remains unaffected.

Acacia will host a conference call today at 13:00 UK time for investors and analysts with access details below. A recording will be made available on the Company’s website, after the call.

Participant dial in:            +44 20 3059 8125                             

Password:                           Acacia Mining