ACACIA MINING PLC 1st Quarter Results

 
TIDMACA 
 
20 April 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      Year ended 31 
                                                      March                   Dec 
 
(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 
 
EBITDA 1                                           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)                 6.5      (12.8)             23.2 
(cents) 
 
Adjusted net earnings1                             26,827      18,109          161,021 
 
Adjusted net earnings per share (AEPS)                6.5         4.4             39.2 
(cents)1 
 
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 
 
Other Developments 
 
Export of metallic mineral concentrates 
 
As previously announced, on 3 March 2017, the Ministry of Energy and Minerals 
of the Tanzanian Government announced a general ban on the export of metallic 
mineral concentrates following a directive made by the President of the United 
Republic of Tanzania in order to promote the creation of a domestic smelting 
industry. Following the directive we ceased all exports of our gold/copper 
concentrate ("concentrate") including the 277 containers that had been approved 
for export prior to the ban which are located in Dar es Salaam at both the port 
and a staging warehouse. 
 
The prevention of exports impacts Bulyanhulu and Buzwagi which produce gold in 
both doré and in concentrate form due to the mineralogy of the ore. North Mara 
is unaffected due to 100% of its production being doré. In 2016, the 
concentrate accounted for approximately 45% of Bulyanhulu's revenues and 55% of 
Buzwagi's revenues and at the group level accounted for approximately 30% of 
revenues. Acacia has been exporting concentrate from Bulyanhulu since 2001 and 
from Buzwagi since 2010 with all associated gold, copper and silver revenue 
declared. Whilst the proportion of gold in the concentrate is less than 0.02% 
it represents approximately 90% of the value of the concentrate, with copper 
representing approximately 10% of the value and silver less than 1%. Bulyanhulu 
and Buzwagi are permitted under Tanzanian law to sell their concentrate 
products to overseas customers and to export the concentrate in containers, and 
have been in full compliance with these laws and their export permits. 
 
Since the directive we have engaged extensively with key Government officials 
in order to come to a resolution that allows for exports to resume. As a long 
term investor in Tanzania we are fully committed to supporting local business 
and the Government's goal of economic growth, wealth creation and increased tax 
collection. To this end, we have offered to support the Government in a new 
study by third party experts to assess the economic potential of building a 
smelter in Tanzania capable of processing our concentrate as well as looking 
for a solution that addresses related issues. 
 
In early April, a Presidential Committee was formed, made up of academics and 
industry professionals, to investigate the contents of the concentrate 
containers in various locations in Tanzania. This team is due to report back to 
the President before the end of April and has visited both Bulyanhulu and 
Buzwagi as part of the process. Subsequent to quarter end, the President has 
formed a second committee to consider economic and regulatory issues relating 
to the export of metallic mineral concentrates from Tanzania. 
 
Since the directive we have continued to operate at Bulyanhulu and Buzwagi as 
normal and continue to stockpile concentrate at each of the sites. We have done 
this whilst taking a range of actions to help manage the significant financial 
impact of the deferral of sales, whilst ensuring we continue to safely operate 
the mines. We will re-assess the ongoing operation of Bulyanhulu and Buzwagi 
over the coming weeks due to the importance of concentrate as revenue for the 
two mines. 
 
The impact of the ban during the quarter has meant that we have approximately 
30,000 ounces of gold in concentrate on hand, which was produced but not yet 
sold. This has negatively impacted cashflow by approximately US$33 million for 
the quarter. In addition we received approximately US$22 million in advanced 
payments for concentrate produced in January and February which is currently 
held up in the Dar es Salaam port and was awaiting export prior to the ban 
being announced. The advanced payments may need to be refunded during the 
second quarter if the export ban is not lifted. AISC was impacted on a unit 
cost basis, and had we sold all of the ounces produced, AISC for the quarter 
would have been approximately US$852 per ounce. 
 
Declaration of maiden high-grade Resource at West Kenya Project 
 
During Q1 2017 we announced the maiden NI 43-101 compliant Inferred Mineral 
Resource Estimate (MRE) on the Liranda Corridor, within our West Kenya Project. 
The Inferred MRE of 3.46 million tonnes at 12.1 grams per tonne for 1.31 
million ounces is primarily located on three main zones of mineralisation at 
the Acacia prospect. The gold mineralisation at Acacia is associated with shear 
zones ranging in width from 0.5 metres to 10 metres (averaging 3 metres true 
width dependent on the zone), hosted by a mafic volcanic sequence. The strike 
lengths of the explored sections of the main mineralised zones at Acacia vary 
between 200 metres and 600 metres and the resource is currently defined down to 
a vertical depth of 750 metres with the structures open down plunge. 
 
An initial programme of approximately 45,000 metres of diamond core drilling is 

being undertaken during Q1-Q3 2017, with the objective of significantly 
increasing the Acacia prospect Inferred Resource, and at the same time 
producing an initial Inferred Resource on the Bushiangala prospect.  We are 
targeting a significant increase in the Liranda Corridor Resource to over 2 
million ounces prior to the end of 2017. We also plan to commence a scoping 
study in H2 2017 to consider the potential for an underground mining 
operation. To increase the testing of the five main prospects in the Liranda 
Corridor we plan to increase the number of drill rigs operating from six to 
eight. 
 
Gokona Underground (North Mara) technical review update 
 
Due to the strong performance to date from the Gokona Underground at North Mara 
we commenced a technical review in late 2016 to better understand the near term 
grade profile as well as the longer term potential of the operation. This 
review is helping to guide the extensive drilling programmes that are underway 
to increase the life of the mine to at least 10 years. During the first quarter 
this drilling was limited to drilling adjacent to the defined stoping blocks at 
Gokona East Zone to test for continuity of higher grade mineralisation to 
 
the Gokona Fault. Several significant high grade intercepts were returned 
including 9.0m @ 59.9g/t Au from 46.0m incl. 3m @ 204g/t Au from 49m and 19.4m 
@ 64.7g/t Au from 37.0m incl. 2m @ 453g/t Au from 45m. 
 
During the quarter we updated the Mineral Resource model using multiple 
indicator kriging (MIK) estimation methods to better represent the higher grade 
zones. The long term planning team are now evaluating this updated model, and 
reviewing the life of mine designs and infrastructure requirements. This 
process will be completed during the second quarter of 2017 and together with 
the results from the drilling programmes will form part of the full year 
reserve update process. 
 
For 2017, we have re-assessed the current reserve model in the East Zone and 
have applied a positive reconciliation factor of 26% to the stopes in this 
year's plan. This has therefore increased the full year mined grade in Gokona 
East from 9.6g/t to 11.8g/t, which includes ore development tonnes, and the 
overall mined grade (including Gokona West) for 2017 is therefore expected to 
be 8.4g/t. Notwithstanding this, our expectations for production for the year 
remain unchanged as we have also applied more conservative mining rate and 
productivity assumptions based on our experience to date and the rate of ramp 
up in both Gokona West and East. 
 
Minimum local shareholding and listing requirements for mining companies 
 
On 7 October 2016, the Mining (Minimum Shareholding and Public Offering) 
Regulations, 2016, made by the Minister for Energy and Minerals, were 
published. The Regulations impose two main obligations on holders of Special 
Mining Licences (SMLs), namely a 30% minimum local shareholding obligation and 
an obligation for SML holders to list on the Dar es Salaam Stock Exchange 
(DSE). In their current form, these Regulations require each of our operating 
entities that own Bulyanhulu, Buzwagi and North Mara to individually list on 
the DSE and offer 30% of their shares to Tanzanians for purchase. The original 
deadline stipulated for such offers was within 2 years of the date of the 
Regulations. However, we have been informed that this deadline has now been 
accelerated to 23 August 2017.  This follows similar legislation introduced in 
Tanzania that required all Telecommunications companies operating in the 
country to be listed by 31 December 2016, although none has yet completed this 
process. 
 
In 2011, in an attempt to promote Tanzanian ownership, Acacia Mining plc 
obtained a cross-listing (being a form of secondary listing for foreign 
companies) on the DSE, further to commitments made at the time of Acacia's IPO 
in 2010.  Whilst Acacia supports the attempt to build capital markets in 
Tanzania and the promotion of local ownership, we will be engaging with the 
Capital Markets and Security Authority (CMSA), the DSE, the Ministry of Energy 
and Minerals and all other relevant authorities in Tanzania during the second 
quarter with a view to finding a route forward that is both beneficial and 
practical for all stakeholders. 
 
Taxation update 
 
We have declared the first provisional corporate tax payment for 2017 relating 
to North Mara amounting to US$8.7 million. This has been offset against the 
indirect tax receivable under the Memorandum of Settlement entered into with 
the Tanzanian Government. During the quarter, we incurred approximately US$25 
million in VAT outflows and received no VAT refunds. This was a result of the 
Tanzanian Revenue Authority and the Ministry of Finance undertaking audits of 
all VAT claims dating back to 2014. We believe that all VAT claiming businesses 
are subject to this audit, which remains ongoing. As a result, our total 
indirect tax receivables increased from US$136 million to approximately US$152 
million during the quarter, of which approximately US$32 million is covered by 
the MOS, following the offset of North Mara corporate tax mentioned above. 
 
Resignation of Non-executive Director 
 
Peter Tomsett has informed the Company that he plans to step down from the 
Acacia Board of Directors following the Annual General Meeting later today due 
to personal circumstances. Following this change, the Acacia Board will 
comprise eight members, including 5 Independent Non-Executive Directors, two 
Non-Executive Directors and one Executive Director. Acacia will announce a 
replacement Senior Independent Director in due course. Acacia would like to 
thank Peter for his valuable commitment and support to the Company during his 
time on the Board and wish him all the best for the future. 
 
Key Statistics                                 Three months ended 31      Year ended 31 
                                                       March                December 
 
(Unaudited)                                         2017         2016              2016 
 
Tonnes mined                           Kt          9,481        9,407            38,491 
 
Ore tonnes mined                       Kt          3,216        2,445             9,419 
 
Ore tonnes processed                   Kt          2,420        2,488             9,818 
 
Process recovery rate exc. Tailings    %           93.4%        89.6%             92.3% 
reclaim 
 
Head grade exc. tailings reclaim       g/t           3.5          3.0               3.3 
 
Process recovery rate inc. tailings    %           89.8%        88.9%             88.5% 
reclaim 
 
Head grade inc. tailings reclaim       g/t           3.1          2.8               3.0 
 
Gold production                        oz        219,670      190,210           829,705 
 
Gold sold                              oz        184,744      184,181           816,743 
 
Copper production                      Klbs        4,656        3,803            16,239 
 
Copper sold                            Klbs        2,487        3,681            14,745 
 
Cash cost per tonne milled exc.        US$/t          51           59                62 
tailings reclaim1 
 
Cash cost per tonne milled inc.        US$/t          44           51                53 
tailings reclaim1 
 
Per ounce data 
 
     Average spot gold price2          US$/oz      1,219        1,183             1,251 
 
     Net average realised gold price1  US$/oz      1,221        1,150             1,240 
 
     Total cash cost1                  US$/oz        577          693               640 
 
     All-in sustaining cost1           US$/oz        934          959               958 
 
Average realised copper price          US$/lbs      2.79         2.10              2.21 
 
Financial results 
 
                                            Three months ended 31 March      Year ended 
                                                                             31 December 
 
(Unaudited, in US$'000 unless otherwise             2017             2016           2016 
stated) 
 
Revenue                                          233,901          220,909      1,053,532 
 
Cost of sales                                  (149,396)        (171,900)      (727,080) 
 
Gross profit                                      84,505           49,009        326,452 
 
Corporate administration                         (6,642)          (5,302)       (21,895) 
 
Share based payments                            (10,424)          (3,938)       (29,929) 
 
Exploration and evaluation costs                 (6,778)          (5,951)       (24,020) 
 
Corporate social responsibility expenses         (2,195)          (2,870)       (10,665) 
 
Other income (charges)                          (10,815)            (608)         11,649 
 
Profit/(loss) before net finance expense          47,651           30,340        251,592 
and taxation 
 
Finance income                                       597              293          1,512 
 
Finance expense                                  (2,238)          (2,866)       (11,047) 
 
Profit/(loss) before taxation                     46,010           27,767        242,057 
 
Tax credit/(expense)                            (19,183)         (80,177)      (147,113) 
 
Net profit/(loss) for the year                    26,827         (52,410)         94,944 
 
1 These are non-IFRS financial performance measures with no standard meaning 
under IFRS. Refer to "Non IFRS measures" on page 15 for definitions. 
 
2 Reflect the London PM fix price. 
 
For further information, please visit our website: http://www.acaciamining.com/ 
or contact: 
 
Acacia Mining plc                             [phone] 
 
Brad Gordon, Chief Executive Officer 
 
Andrew Wray, Chief Financial Officer 
 
Giles Blackham, Investor Relations Manager 
 
Bell Pottinger                                [phone] 
 
Lorna Cobbett 
 
About Acacia Mining plc 
 
Acacia Mining plc (LSE:ACA) is Tanzania's largest gold miner and one of the 
largest producers of gold in Africa. We have three producing mines, all located 

in north-west Tanzania: Bulyanhulu, Buzwagi, and North Mara and a portfolio of 
exploration projects in Tanzania, Kenya, Burkina Faso and Mali. 
 
Our approach is focused on strengthening our core pillars; our business, our 
people and our relationships, whilst continuing to invest in our future. Our 
ambition is to create a leading African Company. 
 
Acacia is a UK public company headquartered in London. We are listed on the 
Main Market of the London Stock Exchange with a secondary listing on the Dar es 
Salaam Stock Exchange. Barrick Gold Corporation is our majority shareholder. 
Acacia reports in US dollars and in accordance with IFRS as adopted by the 
European Union, unless otherwise stated in this report. 
 
Conference call 
 
A conference call will be held for analysts and investors on 20 April 2017 at 
08:45 AM London time. 
 
The access details for the conference call are as follows: 
 
      Participant dial in:           [phone] 
 
      Password:                       Acacia Mining 
 
A recording of the conference call will be made available on the Company's 
website, www.acaciamining.com, after the call. 
 
FORWARD- LOOKING STATEMENTS 
 
This report includes "forward-looking statements" that express or imply 
expectations of future events or results. Forward-looking statements are 
statements that are not historical facts. These statements include, without 
limitation, financial projections and estimates and their underlying 
assumptions, statements regarding plans, objectives and expectations with 
respect to future production, operations, costs, projects, and statements 
regarding future performance. Forward-looking statements are generally 
identified by the words "plans," "expects," "anticipates," "believes," 
"intends," "estimates" and other similar expressions. 
 
All forward-looking statements involve a number of risks, uncertainties and 
other factors, many of which are beyond the control of Acacia, which could 
cause actual results and developments to differ materially from those expressed 
in, or implied by, the forward-looking statements contained in this report. 
Factors that could cause or contribute to differences between the actual 
results, performance and achievements of Acacia include, but are not limited 
to, changes or developments in political, economic or business conditions or 
national or local legislation or regulation in countries in which Acacia 
conducts - or may in the future conduct - business, industry trends, 
competition, fluctuations in the spot and forward price of gold or certain 
other commodity prices (such as copper and diesel), currency fluctuations 
(including the US dollar, South African rand, Kenyan shilling and Tanzanian 
shilling exchange rates), Acacia's ability to successfully integrate 
acquisitions, Acacia's ability to recover its reserves or develop new reserves, 
including its ability to convert its resources into reserves and its mineral 
potential into resources or reserves, and to process its mineral reserves 
successfully and in a timely manner, Acacia's ability to complete land 
acquisitions required to support its mining activities, operational or 
technical difficulties which may occur in the context of mining activities, 
delays and technical challenges associated with the completion of projects, 
risk of trespass, theft and vandalism, changes in Acacia's business strategy 
including, the ongoing implementation of operational reviews, as well as risks 
and hazards associated with the business of mineral exploration, development, 
mining and production and risks and factors affecting the gold mining industry 
in general. Although Acacia's management believes that the expectations 
reflected in such forward-looking statements are reasonable, Acacia cannot give 
assurances that such statements will prove to be correct. Accordingly, 
investors should not place reliance on forward-looking statements contained in 
this report. 
 
Any forward-looking statements in this report only reflect information 
available at the time of preparation. Save as required under the Market Abuse 
Regulation or otherwise under applicable law, Acacia explicitly disclaims any 
obligation or undertaking publicly to update or revise any forward-looking 
statements in this report, whether as a result of new information, future 
events or otherwise. Nothing in this report should be construed as a profit 
forecast or estimate and no statement made should be interpreted to mean that 
Acacia's profits or earnings per share for any future period will necessarily 
match or exceed the historical published profits or earnings per share of 
Acacia. 
 
Operating Review 
 
Acacia delivered production of 219,670 in Q1 2017, an increase of 15% compared 
to the prior year quarter, while AISC of US$934 per ounce sold and cash cost of 
US$577 per ounce sold were 3% and 17% respectively lower than Q1 2016. For 
reference purposes, if Q1 sales ounces equalled Q1 production, AISC would have 
been approximately US$852 per ounce and cash costs would have been 
approximately US$551 per ounce. 
 
North Mara achieved gold production of 96,468 ounces for the quarter, 29% 
higher than in Q1 2016. This was a result of a 31% higher head grade driven by 
the higher contribution from the Gokona underground mine and a resultant 3% 
improvement in recoveries. Gold ounces sold for the quarter of 93,740 ounces 
were 26% higher than the comparative quarter and broadly in line with 
production. AISC for the quarter saw a slight decrease to US$717 per ounce sold 
(Q1 2016: US$737/oz) as a result of the impact of increased sales volumes, 
partly offset by increased capitalised development costs, higher sustaining 
capital expenditure and a higher drawdown of ore inventory. 
 
Bulyanhulu produced 63,346 gold ounces, 19% lower than the comparative period 
but in line with plan. This was due to ounces produced from underground mining 
decreasing by 22% over Q1 2016, driven by a reduction in both ore tonnes and 
head grade. Lower underground mined grades were expected due to mine sequencing 
with reduced access to higher grade stopes. AISC per ounce sold for the quarter 
of US$1,229 was 25% higher than Q1 2016 (US$983) mainly driven by the impact of 
lower sales ounces due to the lower production levels and the inability to 
export metallic mineral concentrates and higher cash costs mainly driven by 
increased external services. 
 
At Buzwagi, gold production of 59,856 ounces was 62% higher than Q1 2016 due to 
a 64% increase in head grade as a result of higher grade delivered from the 
main ore zone at the bottom of the pit, compared to a generally lower mine 
grade in Q1 2016 given focus on waste movement in the first half of 2016. AISC 
for the quarter of US$773 per ounce sold decreased by 38% compared to Q1 2016, 
mainly driven by the higher production base combined with lower sustaining 
capital expenditure, despite the significant lag in sales against production. 
 
Total tonnes mined during the quarter amounted to 9.5 million tonnes, in line 
with Q1 2016, as a result of a 24% increase in total tonnes mined at North 
Mara, offset by lower tonnes from Bulyanhulu and Buzwagi. Ore tonnes mined of 
3.2 million tonnes were 32% higher than Q1 2016 mainly due to higher ore tonnes 
from Buzwagi as a result of increased access to ore zones in the open pit in Q1 
2017. 
 
Ore tonnes processed amounted to 2.4 million tonnes, a decrease of 3% on Q1 
2016, resulting from marginally lower throughput at all three sites. This was 
offset by a 11% increase in head grade primarily driven by a 31% higher head 
grade at North Mara driven by the higher contribution from the Gokona 
underground mine and a 64% increase in head grade at Buzwagi as a result of 
higher grade ore mined, driving production 15% higher compared to Q1 2016. 
 
Cash costs of US$577 per ounce sold for the quarter were 17% lower than in Q1 
2016, primarily due to: 
 
  * Higher production base (US$93/oz); and 
  * Higher capitalisation of development costs mainly at North Mara due to 
    higher waste stripping at Nyabirama Stage 4 and at Bulyanhulu due to 
    increased underground waste development activity (US$49/oz); offset by 
  * Higher contracted services costs at Bulyanhulu due to increased geology and 
    contracted maintenance costs (US$40/oz). 
 
Included in cash cost, and ultimately cost of sales, is a credit of 
approximately US$15 million (US$81/oz) relating to the build-up in finished 
gold inventory due to concentrate sales delays which largely offsets the impact 
of the reduction in sales ounces in the cash cost per ounce sold calculation. 
 
All-in sustaining cost of US$934 per ounce sold for the quarter was 3% lower 
than Q1 2016, despite the lag in sales against production. This was driven by 
the lower cash costs (US$116/oz) (refer to above) partly offset by higher 
capitalised development costs at both North Mara and Bulyanhulu (US$49/oz) and 
the impact of a higher revaluation charge relating to future share-based 
payments compared to Q1 2016 (US$35/oz). 
 
If our sales ounces equalled production, AISC for the quarter would have been 
approximately US$852 per ounce sold, compared to US$924 per ounce sold on the 
same basis in Q1 2016, a decrease of 8%. 
 
Cash generated from operating activities of US$25.2 million decreased by 52% 
from Q1 2016. The inability to export our concentrate has had a negative impact 
on operating cash flow of approximately US$33 million. Working capital outflows 
mainly relating to increases in supplies inventory and indirect tax receivables 
further impacted cash generated from operating activities. 
 
Capital expenditure amounted to US$46.8 million compared to US$36.0 million in 
Q1 2016. Capital expenditure primarily comprised of capitalised development and 
stripping (US$33.9 million), investment in fixed equipment and mining 
infrastructure mainly at Bulyanhulu (US$2.7 million), investment in mobile 
equipment and component change-outs mainly at North Mara (US$1.7 million) and 
land purchases at North Mara (US$1.2 million). 
 
Mine Site Review 
 
Bulyanhulu 
 
Key statistics 
 

                                              Three months ended 31           Year ended 
                                                      March                       31 
                                                                               December 
 
(Unaudited)                                           2017        2016              2016 
 
Key operational information: 
 
Ounces produced                    oz               63,346      78,426           289,432 
 
Ounces sold                        oz               53,805      72,448           279,286 
 
Cash cost per ounce sold1          US$/oz              786         661               722 
 
AISC per ounce sold1               US$/oz            1,229         983             1,058 
 
Copper production                  Klbs              1,498       1,817             6,391 
 
Copper sold                        Klbs                956       1,580             5,570 
 
Run-of-mine: 
 
Underground ore tonnes hoisted     Kt                  205         243               909 
 
Ore milled                         Kt                  221         252               933 
 
Head grade                         g/t                 8.4         9.8               9.3 
 
Mill recovery                      %                 91.4%       87.9%             91.4% 
 
Ounces produced                    oz               54,256      69,776           254,552 
 
Cash cost per tonne milled1        US$/t               171         174               197 
 
Reprocessed tailings: 
 
Ore milled                         Kt                  413         378             1,650 
 
Head grade                         g/t                 1.4         1.5               1.4 
 
Mill recovery                      %                 47.5%       46.1%             45.8% 
 
Ounces produced                    oz                9,089       8,650            34,880 
 
Capital Expenditure 
 
 - Sustaining capital              US$               4,212       7,085            20,231 
                                   ('000) 
 
 - Capitalised development         US$              16,070      13,168            63,082 
                                   ('000) 
 
 - Expansionary capital            US$                 478         194             1,262 
                                   ('000) 
 
                                                    20,760      20,447            84,575 
 
 - Non-cash reclamation asset      US$               1,042       4,214            10,728 
adjustments                        ('000) 
 
Total capital expenditure          US$              21,802      24,661            95,303 
                                   ('000) 
 
1These are non-IFRS financial performance measures with no standard meaning 
under IFRS. Refer to 'Non-IFRS measures" on page 15 for definitions. 
 
Operating performance 
 
Gold production amounted to 63,346 ounces, which was 19% lower than Q1 2016, 
but in line with plan. As guided, Q1 is expected to be the weakest quarter in 
2017 at Bulyanhulu due to the impact of mine sequencing and lack of access to 
high grade stopes during the quarter. Production during the quarter was 
comprised of 30,787 ounces of gold in concentrate and 32,559 ounces of gold in 
doré. 
 
Gold sold for the quarter of 53,805 ounces, was 15% lower than production and 
26% lower than Q1 2016 mainly as a result of the lower production and the 
inability to export concentrate from early March. 
 
Copper production of 1.5 million pounds for the quarter was 18% lower than Q1 
2016 mainly driven by lower copper grades. Copper sold was 40% lower than Q1 
2016, primarily due to the lack of exports of concentrate combined with lower 
copper production. 
 
Cash costs of US$786 per ounce sold were 19% higher than Q1 2016 (US$661), 
mainly due to the impact of lower sales ounces on individual cost items 
combined with the lower production base (US$137/oz) and higher contracted 
services cost (US$90/oz), partly offset by higher capitalised development costs 
driven by higher waste development activity (US$43/oz) and lower sales related 
costs due to lower sales volumes (US$34/oz). Included in cash costs is a credit 
of approximately US$5.6 million (US$104/oz) relating to the build-up of 
finished gold inventory as a result of concentrate sales delays. 
 
AISC per ounce sold for the quarter of US$1,229 was 25% higher than Q1 2016 
(US$983) driven by the impact of lower sales ounces on individual cost items 
($112/oz), higher cash costs ($125/oz) and higher capitalised development costs 
(US$54/oz), partly offset by lower sustaining capital expenditure ($53/oz). 
 
Capital expenditure for the quarter before reclamation adjustments amounted to 
US$20.8 million, in line with Q1 2016 (US$20.4 million), as a decrease in 
sustaining capital expenditure (US$2.9 million) was offset by an increase in 
capitalised development (US$2.9 million). 
 
Capital expenditure mainly consisted of capitalised underground development 
costs (US$16.1 million) and investment in fixed equipment and mining 
infrastructure including the West fan upgrade and underground ventilation raise 
boring (US$2.3 million). 
 
Buzwagi 
 
Key statistics 
 
                                              Three months ended 31           Year ended 
                                                      March                       31 
                                                                               December 
 
(Unaudited)                                           2017        2016              2016 
 
Key operational information: 
 
Ounces produced                    oz               59,856      37,063           161,830 
 
Ounces sold                        oz               37,199      37,433           161,202 
 
Cash cost per ounce sold1          US$/oz              694       1,171             1,031 
 
AISC per ounce sold1               US$/oz              773       1,246             1,095 
 
Copper production                  Klbs              3,158       1,985             9,847 
 
Copper sold                        Klbs              1,531       2,100             9,175 
 
Mining information: 
 
Tonnes mined                       Kt                5,267       5,926            21,585 
 
Ore tonnes mined                   Kt                2,053       1,303             5,317 
 
Processing information: 
 
Ore milled                         Kt                1,076       1,128             4,404 
 
Head grade                         g/t                 1.8         1.1               1.2 
 
Mill recovery                      %                 96.7%       94.3%             94.5% 
 
Cash cost per tonne milled1        US$/t                24          39                38 
 
Capital Expenditure 
 
 - Sustaining capital              US$                 141       1,150             3,582 
                                   ('000) 
 
 - Capitalised development         US$                   -           -                 - 
                                   ('000) 
 
                                                       141       1,150             3,582 
 
 - Non-cash reclamation asset      US$                (78)       1,421             4,524 
adjustments                        ('000) 
 
Total capital expenditure          US$                  63       2,571             8,106 
                                   ('000) 
 
1These are non-IFRS financial performance measures with no standard meaning 
under IFRS. Refer to "Non-IFRS measures" on page 15 for definitions. 
 
Operating performance 
 
Gold production for the quarter of 59,856 ounces was 62% higher than in Q1 2016 
due to a 64% increase in head grade as a result of higher grade ore mined from 
the main ore zone at the bottom of the pit in Q1 2017 as a result of the focus 
on waste movement in the first half of 2016. Production during the quarter was 
comprised of 40,002 ounces of gold in concentrate and 19,854 ounces of gold in 
doré. 
 
Gold sold for the quarter of 37,199 ounces, was 38% lower than production and 
in line with Q1 2016, primarily due to the inability to export concentrate from 
the beginning of March. 
 
Copper production of 3.2 million pounds for the quarter was 59% higher than the 
prior quarter period mainly due to increased copper grades.  Copper sales 
decreased by 27% mainly due to the restrictions placed on the export of 
concentrate during the quarter. 
 
Cash costs for the year of US$694 per ounce sold were significantly lower than 
Q1 2016 (US$1,171/oz), primarily driven by the higher production base (US$437/ 
oz) and lower realised gold hedge losses (US$52/oz). Included in cash costs is 
a credit of approximately US$9.5 million (US$255/oz) relating to the build-up 
of finished gold inventory as a result of concentrate sales delays. 
 
AISC per ounce sold of US$773 was 38% lower than the Q1 2016 (US$1,246/oz). 
This was mainly driven by the lower cash costs (US$477/oz) (refer to above) 
combined with lower sustaining capital expenditure ($27/oz). 
 
Capital expenditure before reclamation adjustments amounted to US$0.1 million, 
88% lower than Q1 2016 (US$1.2 million). Capital expenditure for the quarter 
consisted of the corrosion treatment of the process plant with the planned 
expansion of the tailings storage facility not yet started. 
 
North Mara 
 
Key statistics 
 
                                              Three months ended 31           Year ended 
                                                      March                       31 
                                                                               December 
 
(Unaudited)                                           2017        2016              2016 
 
Key operational information: 
 
Ounces produced                    oz               96,468      74,721           378,443 
 
Ounces sold                        oz               93,740      74,300           376,255 
 
Cash cost per ounce sold1          US$/oz              410         484               410 
 
AISC per ounce sold1               US$/oz              717         737               733 
 
Open pit: 
 

Tonnes mined                       Kt                3,854       3,114            15,556 
 
Ore tonnes mined                   Kt                  803         775             2,752 
 
Mine grade                         g/t                 2.8         1.6               1.9 
 
Underground: 
 
Ore tonnes trammed                 Kt                  154         125               440 
 
Mine grade                         g/t                11.3        10.6              15.6 
 
Processing information: 
 
Ore milled                         Kt                  710         731             2,830 
 
Head grade                         g/t                 4.6         3.5               4.5 
 
Mill recovery                      %                 92.6%       90.2%             92.0% 
 
Cash cost per tonne milled1        US$/t                54          49                55 
 
Capital Expenditure 
 
 - Sustaining capital2             US$               6,256       2,378            28,317 
                                   ('000) 
 
 - Capitalised development         US$              17,797      11,655            75,609 
                                   ('000) 
 
 - Expansionary capital            US$               1,536          86             2,399 
                                   ('000) 
 
                                                    25,589      14,119           106,325 
 
 - Non-cash reclamation asset      US$                 124       3,177             6,703 
adjustments                        ('000) 
 
Total capital expenditure          US$              25,713      17,296           113,028 
                                   ('000) 
 
1These are non-IFRS financial performance measures with no standard meaning 
under IFRS. Refer to 'Non-IFRS measures" on page 15 for definitions. 
 
2 Includes land purchases recognised as long term prepayments. 
 
Operating performance 
 
North Mara achieved gold production of 96,468 ounces for the quarter, 29% 
higher than in Q1 2016. This was primarily a result of 31% higher head grade 
driven by the higher contribution from the Gokona underground mine and a 
resultant 3% improvement in recoveries. Gold ounces sold for the quarter of 
93,740 ounces were 26% higher than the prior year quarter and broadly in line 
with production. 
 
Cash costs of US$410 per ounce sold were 15% lower than Q1 2016 (US$484), 
mainly driven by the higher production base (US$58/oz) and higher 
capitalisation of development costs due to higher waste stripping at Nyabirama 
Stage 4 (US$76/oz), partly offset by an increased drawdown of ore inventory 
compared to Q1 2016 (US$35/oz). 
 
AISC of US$717 per ounce sold was 3% lower than Q1 2016 (US$737/oz) as a result 
of lower cash costs (US$74/oz) (refer above) and the impact of increased sales 
volumes (US$52/oz), partly offset by higher capitalised development costs 
(US$66/oz) and higher sustaining capital expenditure (US$41/oz). 
 
Capital expenditure for the quarter before reclamation adjustments of US$25.6 
million was 81% higher than in Q1 2016 (US$14.1 million). Key capital 
expenditure include capitalised stripping costs (US$13.4 million), capitalised 
underground development costs (US$4.4 million), capitalised drilling at 
Nyabirama underground (US$1.5 million) and investment in mobile equipment and 
component change-outs (US$1.2 million). In addition, US$1.2 million was spent 
on land acquisitions primarily around the Nyabirama open pit. Land acquisition 
costs are included in capital expenditure above as they are included in AISC 
but are treated as long term prepayments in the balance sheet. 
 
Exploration Review 
 
Brownfield Exploration 
 
Significant brownfield programmes and budgets were approved for 2017 for North 
Mara to undertake surface and underground drilling activities at Gokona, 
Nyabirama, and Nyabigena. During the quarter there was limited underground 
drilling at Bulyanhulu but there will be a step up in drilling activity on the 
Reef 2 series through the rest of the year. 
 
North Mara 
 
Nyabirama 
 
The second stage of the surface diamond core drilling programme adjacent to the 
Nyabirama pit was completed during the quarter, and a subsequent programme of 
infill drilling was commenced. This drilling has been successful in showing the 
down-dip and down-plunge extension of higher grade quartz-vein lode structures 
to a vertical depth of approximately 950 metres below surface and approximately 
800 metres down-plunge to the south-west of the current open pit. 
 
Results received during the quarter include: 
 
  * NBD0147              3m @ 5.1 g/t Au from 397.0m 
 
4m @ 9.1 g/t Au from 428.0m 
 
  * NBD0149A           3m @ 66.6 g/t Au from 873.0m incl. 1m @ 198g/t Au from 
    874m 
 
5m @ 4.8 g/t Au from 890.0m 
 
  * NBD0152              6m @ 51.9 g/t Au from 592.0m incl. 1m @ 280g/t Au from 
    594m 
  * NBD0153              3m @ 6.9 g/t Au from 997.0m, 
  * NBD0154              5m @ 4.5 g/t Au from 511.0m 
 
4m @ 4.6g/t Au from 537.0m 
 
3m @ 6.5g/t Au from 546.0m 
 
An initial block model is currently being developed incorporating the drilling 
completed to date to allow an assessment of the potential for an underground 
operation; whilst a programme of approximately 12,000 metres of diamond core 
drilling has commenced to infill the previous drilling to approximately 50 
metre spacing. 
 
If the results of the infill programme are successful, they will be 
incorporated into a Mineral Resource model to form the basis for further 
studies on a potential underground exploration decline to further test the 
system and enable a smooth transition to underground production by the time of 
the completion of the open pit in 2021. 
 
Gokona Underground 
 
With underground development activity focused on delivering production stopes 
in Gokona West Zone, most of the drilling activity for the quarter was grade 
control diamond drilling to support those activities. 
 
The key drilling platform on the 1030mRL elevation continued to be developed 
during the quarter, with commencement of exploration drilling scheduled for the 
second quarter of 2017. Exploration activity during the first quarter was 
limited to some additional drilling adjacent to the defined stoping blocks at 
Gokona East Zone to test for continuity of higher grade mineralisation to the 
Gokona Fault. 
 
Several significant high grade intercepts were returned adjacent to the Gokona 
Fault extending the previously modelled mineralisation, including: 
 
  * UKGC_00262      19.4m @ 64.7g/t Au from 37.0m incl. 2m @ 453g/t Au from 45m 
  * UKGC_00260      9.0m @ 59.9g/t Au from 46.0m incl. 3m @ 204g/t Au from 49m 
  * UGKD_00107      24.0m @ 12.5g/t Au from 31.0m 
  * UKGC_00251      25.0m @ 7.0g/t Au from 36.0m 
  * UGKD_00113      10.0m @ 10.4 g/t Au from 32.0m 
 
In the second quarter, underground diamond core drilling will test for the 
deeper fault offset extension of the Gokona East Zone mineralisation, test 
continuity of higher grade mineralisation beneath the existing open pit and 
immediately west of the Gokona Fault, commence drilling of the Gokona Central 
area below the open pit, and continue grade control drilling of Gokona West. 
The programme will comprise of approximately 75,000 metres of drilling over the 
next two years, with approximately 45,000 metres to be drilled in 2017. The aim 
of these programmes is to be able to increase the underground life of mine to 
at least 10 years. 
 
Nyabigena 
 
An initial programme of approximately 10,000 metres of surface diamond core 
drilling commenced at the end of the first quarter at Nyabigena, with results 
pending on the first hole. This programme is designed to test the continuity of 
mineralisation below the existing open pit, better define offsetting fault 
structures, and enable more detailed metallurgical domaining of the deposit. 
Subject to the success of this programme and initial desktop study in 2017, 
further drilling is planned for 2018; after which a detailed study on the 
potential for development of an underground operation could be undertaken. 
 
Greenfield Exploration 
 
Kenya 
 
West Kenya Project 
 
During Q1 2017 we announced the maiden NI 43-101 compliant Inferred Mineral 
Resource Estimate (MRE) on the Liranda Corridor, within our West Kenya Project. 
The Inferred MRE of 3.46 million tonnes at 12.1 grams per tonne for 1.31 
million ounces is primarily located on three main zones of mineralisation at 
the Acacia prospect. The gold mineralisation at Acacia is associated with shear 
zones ranging in width from 0.5 metres to 10 metres (averaging 3 metres true 
width; dependent on the zone), hosted by a mafic volcanic sequence. The strike 
lengths of the explored sections of the main mineralised zones at Acacia vary 
between 200 metres and 600 metres and the resource is currently defined down to 
a vertical depth of 750 metres with the structures open down plunge. 
 
In addition, we have identified mineralised zones on the Bushiangala prospect, 
approximately one kilometre away from the Acacia prospect.  At this stage this 
material remains unclassified due to drill density and the need to further 
understand the controls on the mineralisation and its continuity. Recent 
results from the Bushiangala prospect include, 7m @ 17.6g/t Au, 3m @ 6.88g/t Au 
and 4m @ 9.99g/t from step-out holes. Based on the work undertaken to date, the 
current scale of the mineralisation is between 0.60Mt and 1.50Mt at a grade 
between 6.0g/t Au and 10.0g/t Au, for a metal target of between 190,000 ounces 
and 290,000 ounces of contained gold. A key element of the 2017 drilling 
programmes at Bushiangala is to establish an Inferred Resource and to expand 
the scale of the targeted mineralisation. 
 
Since 2014 through to the time of the maiden resource announcement, the total 
drilling on Liranda Corridor targets amounted to 44 Reverse Circulation holes 
for 4,438 metres and 132 diamond core holes for 64,700 metres.  During Q1 2017, 
a total of 29 diamond holes were completed or are underway for 16,708 metres, 
with three diamond core rigs drilling on Acacia and three drilling on 
Bushiangala. 
 

Current drilling on the Acacia prospect is targeting a significant expansion to 
the resource through testing up and down plunge extensions, as well as 
extensions along strike to the west. Drilling during the quarter continued to 
intersect significant high grade results from this drilling including results 
of: 
 
  * LCD0128* - 4.0m @ 33.9g/t Au from 302m, 4.2m @ 19.0g/t Au from 552m, and 
    2.5m @ 76.7g/t Au from 577m. 
 
  * LCD0130* - 3.1m @ 14.1 g/t Au from 197m, 
  * LCD0132* - 1.3m @ 65.6g/t Au from 301m and 4.7m @ 14.0g/t Au 
    from              446.5m. 
  * LCD0133 - 0.5m @ 97.2g/t Au from 585.5m and 3.3m @ 10.9g/t Au from 753.7m. 
  * LCD0135 - 3.3m @ 33.0g/t Au from 664.9m and 0.5m @ 25.0g/t Au from 687m 
  * LCD0138 - 1.0m @ 26.0g/t Au from 200m and 2m @ 22.6g/t Au from 214m, 
  * LCD0140 - 2.1m @ 11.7g/t Au from 441.6m and 2.3m @ 15.1g/t Au from 482m. 
  * LCD0141 - 3.1m @ 16.1g/t Au from 708m, 
  * LCD0145 - 3.2m @ 14.5g/t Au from 561m. 
  * LCD0146 - 2.5m @ 28.5g/t Au from 270.7m. 
  * LCD0147 - 1.3m @ 12.5g/t Au from 132.9m and  0.6m @ 39.1g/t Au from 251.4m. 
  * LCD0150 - 1.8m @ 7.56g/t Au from 457.2m and 6.0m @ 6.40g/t Au from 558m 
  * LCD0152 - 6.8m @ 12.7g/t Au from 211.7m, 
  * LCD0153 - 1.0m @ 10.6g/t Au from 384m and 2m @ 14.2g/t Au from 576.8m 
 
Note: * - holes included in maiden Inferred resource received during the 
quarter 
 
An initial programme of approximately 45,000 metres of diamond core drilling is 
being undertaken during Q1-Q3 2017; with the objective of significantly 
increasing the Inferred Resource on the Liranda Corridor to more than 2 million 
ounces. We also plan to commence a scoping study in H2 2017 to consider the 
potential for an underground mining operation.  In order to increase the 
testing of the five main prospects in the Liranda Corridor we also plan to 
increase the number of drill rigs operating from six to eight. 
 
Burkina Faso 
 
During Q1 2017 we continued to explore our properties in the highly prospective 
Houndé Belt in southwest Burkina Faso. Acacia currently has four joint ventures 
and an interest in over 2,700km2 of prospective greenstone belt. Acacia manages 
all of the joint ventures. A major component of Q1 2017 work programmes was to 
review the structural architecture of our land holdings and complete a target 
generation exercise using airborne aeromagnetic and radiometric data and ground 
IP geophysical data where available.  These target generation layers are now 
being synthesised with our surface geochemical data layers to develop priority 
drilling targets. To date we have delineated more than 65 targets warranting 
follow-up by either mapping or reconnaissance drilling. 
 
South Houndé Joint Venture (Sarama Resources Limited) 
 
At the South Houndé JV project we continued field-based exploration activities 
focused both on resource extensions to the Tankoro Resource and regional 
exploration programmes searching for new discoveries. Acacia has taken over 
management of the South Houndé JV as of 1st January. During the quarter a total 
of 11,490 metres of Aircore drilling was completed on the Ouangoro prospect 
anomaly, 981 metres of RC pre-collars and 2,330 metres of diamond core tails 
were drilled into the Chewbacca and Yoda shoots on the MM Zone and into the 
Jabba shoot on the MC Zone structures at Tankoro. Mapping and surface sampling 
was conducted on the regional prospects. 
 
Tankoro - MM and MC Zones 
 
During the quarter we continued a programme of drilling to test the down-plunge 
extensions of higher grade gold mineralisation related interpreted cross 
structures at the MM and MC Zones within the Tankoro resource. A "results 
based" phased strategy has been adopted, "cycling" the rig between the 
Chewbacca, Yoda, Anakine and Jabba zones within the MM and MC parallel 
mineralised zones.  All holes drill to date have intersected the targeted 
porphyries and cross structures, however, the high-grade shoots are either 
lower grade than expected, or of shorter strike extend that expected. 
 
The current phase of drilling continues to target interpreted high grade 
domains associated with cross-structures and is applying the learnings from the 
initial holes.  Results for MM Zone drilling are pending and expected to be 
received during Q2 2017, with visually encouraging zones observed in drilling 
to date.  RC and diamond core drilling elsewhere on the Tankoro Corridor will 
be focused on additional drilling on the northeast extension of the mineralised 
system at the Phantom East prospect.  Additionally, we plan to undertake 
diamond core drilling at the Guy prospect, which is a multi-kilometre gold soil 
anomaly occurring at the intersection of the Tankoro Corridor (NE strike) and 
the Guy Corridor (north-south structure) 
 
Ouangoro Anomaly 
 
Aircore drilling commenced at the beginning of February on the Ouagoro Anomaly 
with the plan to drill 19 regional 1 kilometre spaced traverses across a 15 
kilometre x 4 kilometre zone of semi-continuous gold-in-soil geochemical 
anomalism along an interpreted NNE-trending linear geophysical anomaly. To date 
10 traverses have been drilled for 11,490 metres advance, with results for 
first four traverses received at quarter-end.  Positive results have been 
returned from all four traverses including better results of  8m @ 0.51g/t Au 
from 46m, 20m @ 0.67g/t Au from 28m (including 2m @ 3.09g/t Au), 8m @ 0.86g/t 
from surface (including 2m @ 2.32g/t Au), 21m @ 0.26g/t Au from 8m and 18m @ 
0.61g/t Au from 6m (including 4m @ 1.69g/t Au). Mineralisation in drilling and 
observed in artisanal workings is typically associated with quartz veins in 
weathered greywacke, siltstone and sandstone lithologies.  It is anticipated 
that infill Aircore drilling (400m spaced) will be completed as Phase 2 of the 
programme once all results are received and interpreted. 
 
Central Houndé Joint Venture (Thor Explorations Limited) 
 
Surface geochemical sampling undertaken over the past 18 months has identified 
several very encouraging zones of gold anomalism coincident with the 
interpreted Legue-Bongui structural corridor, including an 8km x 2km anomalous 
gold zone. During the quarter we completed a structural targeting exercise, 
reviewed the surface gold anomalies from soil sampling, and undertook 
multi-element geochemical analysis of all samples, using a portable XRF, from 
the regional soil sampling programmes.  As a result of this targeting exercise 
we delineated 35 targets across the Central Houndé project area, and we 
commenced field validation, geological mapping and further surface sampling 
programmes on priority target areas. 
 
During Q2 2017, we plan to continue review of our current targets and commence 
RC drilling in early May of a number of regional targets already reviewed with 
programmes designed. 
 
Pinarello & Konkolikan Joint Venture (Canyon Resources Limited) 
 
Surface geochemical sampling undertaken over the past two years has identified 
several very encouraging zones of gold anomalism coincident with the 
interpreted structural corridors, magnetic features and surface IP geophysical 
anomalies.  During the quarter we completed a structural targeting exercise, 
reviewed the surface gold anomalies from soil sampling, and undertook 
multi-element geochemical analysis, using a portable XRF, of all samples from 
the regional soil sampling programmes.  As a result of this targeting exercise 
we delineated 28 targets across the Pinarello project area, and we commenced 
field validation, geological mapping and further surface sampling programmes on 
priority target areas. 
 
Throughout the quarter we continued Aircore drilling with 227 Aircore holes 
drilled for 11,549 metres on three wide spaced traverses over a strike distance 
of 2km of the 8km x 3km Tangalobe prospect.  The objective of the drilling 
programme is to test gold-in-soil anomalies that are coincident with anomalous 
termite mound results and interpreted structural/magnetic targets. The geology 
of the area is characterised by sedimentary sequences. There is a prominent 
shear zone striking at 040° and moderately-steeply dipping towards southeast. 
Quartz float is ubiquitous in the area of drilling. Potential mineralised zones 
in the holes drilled so far are associated with oxidized quartz veins and 
haematite alteration. Partial assay results have been received to date with 
better results including: 4m @ 1.64g/t Au from 49m, 2m @ 6.0g/t Au from 57m, 3m 
@ 0.77g/t from 29m, 3m @ 0.72g/t Au from 5m, 1m @ 1.02g/t Au from 44m, 2m @ 
0.60g/t Au from 31m and 1m @ 1.33g/t Au from 44m. 
 
Acacia has now earned 75% equity in the project and we have therefore entered 
the contributory/dilution phase of the JV agreement. 
 
Programmes for Q2 2017 include field RC drilling, Aircore drilling, geological 
mapping, prospect reviews, further infill soil sampling and trenching. 
 
Frontier JV 
 
Regional regolith and geological mapping has been completed for both licences 
that make up the JV. A regional 800m x 400m reconnaissance soil sampling 
programme and termite mound, rock chip and quartz lag sampling programmes have 
been completed. A total of 7,195 samples were collected. Approximately two 
third of assay results had been received by the end of the quarter. 
Interpretation of preliminary gold assays and litho-structural information from 
regolith mapping and aeromagnetic surveys has resulted in an initial 12 
regional targets being defined for follow-up work. 
 
The Q2 2017 programme includes field validation of delineated soil anomalies, 
infill soil sampling and regolith / geological mapping.  It is anticipated 
several traverses of Aircore drilling will be completed across high priority 
target areas from the structural targeting combined with gold-in-soil 
anomalies. 
 
Tanzania 
 
Nyanzaga 
 
During the quarter OreCorp Limited published the results of the Pre-Feasibility 
Study ("PFS") on the Nyanzaga Project. The PFS, led by Lycopodium Minerals Pty 
Ltd of Perth, Western Australia, delivered an optimal development scenario of a 

4Mtpa concurrent open pit ("OP") and underground ("UG") operation for 
pre-production capital costs estimate of US$287M, which includes a US$33M 
contingency. The concurrent mining schedule significantly reduced the low grade 
stockpiling scenario considered in the Scoping Study and increased the OP 
contained ounces and life of mine ("LOM") average mineralised material grade 
processed from 1.9 g/t gold in the Scoping Study to 2.0 g/t (+5%). 
 
Based on the PFS, the Project is expected to deliver an average gold production 
of 213koz per annum over a 12 year LOM, peaking at 249koz in Year 3 and 
totalling approximately 2.56Moz of gold produced over the LOM. The AISC and AIC 
are estimated to be US$838/oz and US$858/oz respectively over the LOM. Acacia 
and OreCorp have agreed the scope of the Definitive Feasibility Study ("DFS") 
and this has commenced early in the second quarter. The DFS will focus on 
optimising the OP and UG schedules; metallurgy and comminution aimed at 
maximising metallurgical recoveries, reagent and power consumption; and 
confirming detailed plant design. 
 
Mali 
 
In Mali we continued to define and drill test surface gold anomalies identified 
in late 2016.  At the same time, we continued to build our land position in the 
Senegal-Mali Shear Zone (SMSZ) with a the grant of a further two land packages, 
one under joint venture (Bou Bou) and the other 100% Acacia (Gourbassi). Acacia 
now holds five exploration permits covering 191 square kilometres on the SMSZ. 
 
Tintinba - Bane Project 
 
The Tintinba-Bane Project consists of three permits covering approximately 
150km2. These properties are located within the Kenieba Inlier region of 
Western Mali, along the world class Senegal-Mali-Shear-Zone (SMSZ), which hosts 
more than 50 million ounces of gold endowment. During the quarter, a 
ground-based gradient array induced polarisation geophysical survey was 
completed (31 line km) and interpreted. Results from IP, soils, drilling and 
mapped and interpreted geology have been used to refine existing and define new 
targets for drill testing.  At least 12 targets with co-incident IP 
chargeability, resistivity, and surface gold anomalism have been identified for 
RC drill testing during H1 2017. 
 
RC drilling commenced in mid-March 2017 with 14 RC holes drilled for 1,856 
metres. Assay results have only been received for the first hole at quarter end 
with best assay being 15m @ 0.5g/t Au from 60m. 
 
Bourdala JV 
 
The Boudala JV is a joint venture with a local company over the Bou Bou licence 
located some 15km from the centroid of the Tintinba JV further to the south. 
The property is located within the central portion of the Kedougou-Kenieba 
Inlier and just to the east of the highly prospective Senegal-Mali Shear Zone. 
Acacia can earn up to 100% through a series of staged payments over a period of 
36 months. 
 
During the quarter Acacia undertook mapping and rock chip sampling as well as 
backfilling and clearing of artisanal pits in the main target area ahead of 
planned RC drilling. An RC drill traverse designed to test a broad zone of 
mapped mineralisation 300m x 500m is expected to commence in April. 
 
Gourbassi Est 
 
During Q1 2017, the Gourbassi Est licence was received. The licence is located 
immediately west of the Tintinba JV in the Central Senegal Mali Shear Zone area 
of the Kedougou-Kenieba Inlier. The property is located to the west of the SMSZ 
in an area dominated by footway splays to the Central SMSZ. The programme for 
Q2 2017 is to review the historic data and completed mapping and surface 
sampling programmes.  Dependent on results of this first pass work we will 
commence RC and/or diamond core drilling during Q2. 
 
Non-IFRS Measures 
 
Acacia has identified certain measures in this report that are not measures 
defined under IFRS. Non-IFRS financial measures disclosed by management are 
provided as additional information to investors in order to provide them with 
an alternative method for assessing Acacia's financial condition and operating 
results, and reflects more relevant measures for the industry in which Acacia 
operates. These measures are not in accordance with, or a substitute for, IFRS, 
and may be different from or inconsistent with non-IFRS financial measures used 
by other companies. These measures are explained further below. 
 
Net average realised gold price per ounce sold is a non-IFRS financial measure 
which excludes from gold revenue: 
 
- Unrealised gains and losses on non-hedge derivative contracts; and 
 
- Export duties 
 
It also includes realised gains and losses on gold hedge contracts reported as 
part of cost of sales. 
 
Net average realised gold price per ounce sold have been calculated as follow: 
 
(US$000)                                   Three months ended 31 March      Year ended 
                                                                            31 December 
 
(Unaudited)                                             2017        2016           2016 
 
Gold revenue                                         225,628     211,885      1,014,468 
 
Less: Realised gold hedge losses                           -           -        (1,818) 
 
Net gold revenue                                     225,628     211,885      1,012,651 
 
Gold sold (ounces)                                   184,744     184,181        816,743 
 
Net average realised gold price (US$/                  1,221       1,150          1,240 
ounce) 
 
Cash cost per ounce sold is a non-IFRS financial measure. Cash costs include 
all costs absorbed into inventory, as well as royalties, and production taxes, 
and exclude capitalised production stripping costs, inventory purchase 
accounting adjustments, unrealised gains/losses from non-hedge currency and 
commodity contracts, depreciation and amortisation and corporate social 
responsibility charges. Cash cost is calculated net of co-product revenue. Cash 
cost per ounce sold is calculated by dividing the aggregate of these costs by 
total ounces sold. 
 
The presentation of these statistics in this manner allows Acacia to monitor 
and manage those factors that impact production costs on a monthly basis. Cash 
costs and cash cost per ounce sold are calculated on a consistent basis for the 
periods presented. 
 
The table below provides a reconciliation between cost of sales and total cash 
cost to calculate the cash cost per ounce sold. 
 
                                       Three months ended 31 March       Year ended 31 
(US$'000)                                                                   December 
 
(Unaudited)                                       2017         2016                2016 
 
Cost of Sales 
 
Direct mining costs                             98,783      115,901             479,022 
 
Third party smelting and refining                5,321        6,857              25,588 
fees 
 
Realised losses on economic hedges                 108        3,915               9,619 
 
Realised losses on gold hedges                       -            -               1,818 
 
Royalty expense                                 10,642       10,017              47,237 
 
Depreciation and amortisation*                  34,542       35,210             163,796 
 
Total                                          149,396      171,900             727,080 
 
Total cost of sales                            149,396      171,900             727,080 
 
Deduct: depreciation and amortisation         (34,542)     (35,210)           (163,796) 
* 
 
Deduct: realised losses on gold                      -            -             (1,818) 
hedges 
 
Deduct: Co-product revenue                     (8,273)      (9,024)            (39,063) 
 
Total cash cost                                106,581      127,666             522,403 
 
Total ounces sold                              184,744      184,181             816,743 
 
Total cash cost per ounce sold                     577          693                 640 
 
*Depreciation and amortisation includes the depreciation component of the cost 
of inventory sold 
 
All-in sustaining cost (AISC) is a non-IFRS financial measure. The measure is 
in accordance with the World Gold Council's guidance issued in June 2013. It is 
calculated by taking cash cost per ounce sold and adding corporate 
administration costs, share-based payments, reclamation and remediation costs 
for operating mines, corporate social responsibility expenses, mine exploration 
and study costs, realised gains and/or losses on operating hedges, capitalised 
stripping and underground development costs and sustaining capital expenditure. 
This is then divided by the total ounces sold. A reconciliation between cash 
cost per ounce sold and AISC for the key business segments is presented below: 
 
(Unaudited)        Three months ended 31 March 2017       Three months ended 31 March 2016 
 
(US$/oz sold)    Bulyanhulu  North   Buzwagi   Group     Bulyanhulu  North  Buzwagi  Group 
                              Mara                                   Mara 
 
Cash cost per           786      410     694       577          661     484   1,171     693 
ounce sold 
 
Corporate                32       26      34        36           26      34      27      29 
administration 
 
Share based              13        8      25        56            7       5       7      21 
payments 
 
Rehabilitation           12       10       5        10            6       8       4       6 
 
CSR expenses              8        6      12        12            4      17       7      16 
 
Capitalised             299      190       -       183          182     157       0     135 
development 
 
Sustaining               79       67       3        60           97      32      30      59 
capital 
 
Total AISC            1,229      717     773       934          983     737   1,246     959 
 
AISC is intended to provide additional information on the total sustaining cost 
for each ounce sold, taking into account expenditure incurred in addition to 
direct mining costs and selling costs. 
 

Where reference is made to AISC per ounce produced, this is calculated in a 
similar manner as set out above, but adjusted for the impact of the change in 
inventory charge/ credit relating to finished gold inventory. This recalculated 
number is then divided by ounces produced. 
 
Cash cost per tonne milled is a non-IFRS financial measure. Cash costs include 
all costs absorbed into inventory, as well as royalties, co-product credits, 
and production taxes, and exclude capitalised production stripping costs, 
inventory purchase accounting adjustments, unrealised gains/losses from 
non-hedge currency and commodity contracts, depreciation and amortisation and 
corporate social responsibility charges. Cash cost is calculated net of 
co-product revenue. Cash cost per tonne milled is calculated by dividing the 
aggregate of these costs by total tonnes milled. 
 
EBITDA is a non-IFRS financial measure. Acacia calculates EBITDA as net profit 
or loss for the period excluding: 
 
  * Income tax expense; 
  * Finance expense; 
  * Finance income; 
  * Depreciation and amortisation; and 
  * Impairment charges of goodwill and other long-lived assets. 
 
EBITDA is intended to provide additional information to investors and analysts. 
It does not have any standardised meaning prescribed by IFRS and should not be 
considered in isolation or as a substitute for measures of performance prepared 
in accordance with IFRS. EBITDA excludes the impact of cash costs of financing 
activities and taxes, and the effects of changes in operating working capital 
balances, and therefore is not necessarily indicative of operating profit or 
cash flow from operations as determined under IFRS. Other companies may 
calculate EBITDA differently. 
 
A reconciliation between net profit for the period and EBITDA is presented 
below: 
 
(US$000)                                  Three months ended 31 March     Year ended 31 
                                                                             December 
 
(Unaudited)                                        2017           2016              2016 
 
Net profit/ (loss) for the period                26,827       (52,410)            94,944 
 
Plus income tax (credit)/ expense                19,183         80,177           147,113 
 
Plus depreciation and amortisation*              34,542         35,210           163,796 
 
Plus finance expense                              2,238          2,866            11,047 
 
Less finance income                               (597)          (293)           (1,512) 
 
EBITDA                                           82,193         65,550           415,388 
 
*Depreciation and amortisation includes the depreciation component of the cost 
of inventory sold. 
 
Adjusted EBITDA is a non-IFRS financial measure. It is calculated by excluding 
one-off costs or credits relating to non-routine transactions from EBITDA. It 
excludes other credits and charges that, individually or in aggregate, if of a 
similar type, are of a nature or size that requires explanation in order to 
provide additional insight into the underlying business performance. EBITDA is 
adjusted for items (a) to (c) as contained in the reconciliation to adjusted 
net earnings below. 
 
EBIT is a non-IFRS financial measure and reflects EBITDA adjusted for 
depreciation and amortisation and goodwill impairment charges. 
 
Adjusted net earnings is a non-IFRS financial measure. It is calculated by 
excluding certain costs or credits relating to non-routine transactions from 
net profit attributed to owners of the parent. It includes other credit and 
charges that, individually or in aggregate, if of a similar type, are of a 
nature or size that requires explanation in order to provide additional insight 
into the underlying business performance. 
 
Adjusted net earnings and adjusted earnings per share have been calculated as 
follows: 
 
(US$000)                                  Three months ended 31 March     Year ended 31 
                                                                             December 
 
 
(Unaudited)                                        2017           2016              2016 
 
Net earnings/(loss)                              26,827       (52,410)            94,944 
 
Adjusted for: 
 
Restructuring cost (a)                                -            861             7,689 
 
One off legal settlements/recoveries (b)              -              -           (3,455) 
 
Discounting of indirect taxes (c)                     -              -           (9,719) 
 
Prior year tax positions recognised 1                 -         69,916            69,916 
 
Tax impact of the above                               -          (258)             1,646 
 
Adjusted net earnings                            26,827         18,109           161,021 
 
1 For the year ended 31 December 2016, US$69.9 million represents a provision 
raised for the implied impact of an adverse tax ruling made by the Tanzanian 
Court of Appeal with respect to historical tax assessments of Bulyanhulu. As 
reported in Q1 2016, the impact of the ruling was calculated for Bulyanhulu and 
extrapolated to North Mara and Tulawaka as well and covers results up to the 
end of 2015. On a site basis, US$35.1 million was raised for Bulyanhulu, 
US$30.4 million for North Mara and US$4.4 million for Tulawaka. 
 
Adjusted net earnings per share is a non-IFRS financial measure and is 
calculated by dividing adjusted net earnings by the weighted average number of 
Ordinary Shares in issue. 
 
Free cash flow is a non-IFRS measure and represents the change in cash and cash 
equivalents in a given period. 
 
Net cash is a non-IFRS measure. It is calculated by deducting total borrowings 
from cash and cash equivalents. 
 
Mining statistical information 
 
The following describes certain line items used in the Acacia Group's 
discussion of key performance indicators: 
 
  * Open pit material mined - measures in tonnes the total amount of open pit 
    ore and waste mined. 
  * Underground ore tonnes hoisted - measures in tonnes the total amount of 
    underground ore mined and hoisted. 
  * Underground ore tonnes trammed - measures in tonnes the total amount of 
    underground ore mined and trammed. 
  * Total tonnes mined includes open pit material plus underground ore tonnes 
    hoisted. 
  * Strip ratio - measures the ratio of waste?to?ore for open pit material 
    mined. 
  * Ore milled - measures in tonnes the amount of ore material processed 
    through the mill. 
  * Head grade - measures the metal content of mined ore going into a mill for 
    processing. 
  * Milled recovery - measures the proportion of valuable metal physically 
    recovered in the processing of ore. It is generally stated as a percentage 
    of the metal recovered compared to the total metal originally present. 
 
 
 
END 
 

(END) Dow Jones Newswires

April 20, 2017 02:00 ET (06:00 GMT)