Acacia Mining 2014 Gold Output Rises as Costs Continue to Fall

By Alex MacDonald

LONDON--Acacia Mining PLC (ACA.LN) said Friday that gold output rose last year, buoyed by a strong fourth quarter and progress with the company's turnaround strategy.

The U.K.-listed company, which is Tanzania's largest gold miner, said output rose 13% to 718,651 troy ounces in 2014, in line with its previous guidance of more than 700,000 ounces. The comparative figures have been adjusted to remove the contribution from the Tulawaka mine, which was transferred to Tanzania's state-owned mining company STAMICO in the first quarter.

Acacia Mining--previously known as African Barrick Gold--operates three mines in Tanzania and exploration assets in Kenya and Burkina Faso. Fourth-quarter gold output rose 9.5% on year to 181,084 ounces, boosted by higher production from its North Mara mine and the contribution of reprocessed material from its new circuit plant at its Bulyanhulu mine. This was partially offset by a planned reduction in the average gold grade at its Buzwagi mine, which led to lower production there.

The higher gold output contributed to an 18% drop in the company's all-in sustaining cost, to $1,105 per ounce sold in 2014, marking the bottom of its previous cost-guidance range.

"We have delivered our ninth successive quarterly reduction in all-in sustaining costs and generated net cash flow of $7 million in the quarter", said Chief Executive Brad Gordon.

Mr. Gordon has been executing a turnaround strategy at the company, which is majority owned by Canada-based gold producer Barrick Gold Corp (ABX), to reduce costs and increase production of more profitable gold ounces in light of the lower prices.

Write to Alex MacDonald at [e-mail]

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