By TZ Business News Staff.
Tanzania’s major gold miner Acacia Mining PLC, produced gold 24% above expectations in 2017 according to a report the company published on Monday, January 15, 2018.
“We are pleased to report fourth quarter production of 148,477 ounces driven by strong operational performance at Buzwagi, whilst we successfully transitioned Bulyanhulu into a reduced operational state.” said Peter Geleta, Interim CEO of Acacia.
The company report then adds: The 2017 [overall] gold production of 767,883 ounces was 7% lower than 2016 as a result of lower production mainly from Bulyanhulu, but this production was ahead of revised full year guidance of 750,000 ounces.
Disciplined cost management, combined with the operational performance, led to Q4 2017 all-in sustaining costs (“AISC”) of US$779 per ounce, which helped to significantly reduce the cash outflow in the quarter, despite the cost of transitioning Bulyanhulu to reduced operations.
The Interim CEO said at the end of the quarter, as previously announced, “we also agreed to sell a non-core royalty for US$45 million which will increase the strength of our balance sheet. Our focus remains on delivering optimal performance in the current operating environment and delivering value for all of our stakeholders.
“We are also continuing to support efforts towards achieving a negotiated resolution with the Tanzanian Government. We look forward to providing guidance for the year in our preliminary results in February.”
Q4 2017 gold production was slightly ahead of expectations at 148,477 ounces, although 30% lower than Q4 2016 which was a direct result of Bulyanhulu transitioning to reduced operations, the report states. Gold sales of 147,636 ounces were in line with production with all gold produced being in doré form.
Preliminary Q4 2017 AISC1 of US$779 per ounce sold, 18% lower than Q4 2016 and preliminary cash costs1 of US$581 per ounce sold, 14% lower than Q4 2016Q4 2017 preliminary AISC1, assuming sales ounces equalled Q4 production, would have been approximately US$764 per ounce.
Full year sales of 592,861 ounces, 27% lower than 2016, driven by the impact of the concentrate export ban. Preliminary 2017 AISC1 of US$875 per ounce sold, 9% lower than 2016 and below full year guidance range. 2017 preliminary AISC1, assuming sales ounces equalled full year production, would have been approximately US$798 per ounce.
Cash balance was US$81 million at 31 December 2017 (net cash position of US$10 million), a decrease of US$15 million during the quarter as a result of the cost of transitioning Bulyanhulu to reduced operations.
Operating update for the three months ended 31 December 2017:
Gold production for the quarter amounted to 148,477 ounces, a 30% decrease on the corresponding quarter of 2016 and a 22% decrease on Q3 2017. The decrease was predominantly driven by the decision taken in September 2017 to reduce operational activity at Bulyanhulu which resulted in no production activities for the quarter, except for the production from reprocessing tailings that resumed in December and which delivered 2,856 ounces.
Gold ounces sold for the quarter of 147,636 ounces were broadly in line with gold produced for the quarter and 29% lower than Q4 2016.
At Buzwagi, gold production of 73,603 ounces for Q4 2017 was 76% higher than in Q4 2016, driven by an increase in grade due to ore tonnes solely being mined from the main ore zone as the mine accessed the final stages of the open pit before it moves to becoming a stockpile processing operation in 2018.
At North Mara, gold production for the quarter of 72,018 ounces was in line with plan but 21% lower than Q4 2016 mainly due to lower head grade driven by the underground mine grade of 7.7 grams per tonne being 30% lower than the prior year period. This was a result of mining taking place in the lower grade west zone of the Gokona Underground. Lower grades were also received from the Nyabirama pit due to increased mining from the Stage 4 open pit.
At Bulyanhulu, gold production for the quarter amounted to 2,856 ounces, 96% below Q4 2016, as a result of the decision taken in September to reduce operational activity at Bulyanhulu. During the quarter there were no production activities from the underground mine and all production came from the retreatment of tailings which re-commenced in December 2017 following sufficient rainfall being received at the mine.
Total tonnes mined for the quarter were 5.3 million, compared to 9.6 million in Q4 2016, primarily due to lower waste tonnes mined at Buzwagi as the mine accessed the final stages of the open pit and saw restricted access in December due to excessive rainfall.
Tonnes processed in the fourth quarter were 1.9 million, 28% lower than Q4 2016, predominantly driven by the reduced operational activity and temporary suspension of tailings retreatment at Bulyanhulu, and lower mill availability at Buzwagi.
The average grade processed for the quarter was 2.8 grams per tonne which was 3% lower than the prior year period, mainly due to no underground material being processed at Bulyanhulu, a lower head grade at North Mara driven by lower mined grades, partly offset by higher head grades at Buzwagi due to higher mined grades.
There was no copper production for the quarter as a result of the reduced operational activity at Bulyanhulu and at Buzwagi as a result of the flotation circuit bypass.
The cash balance as at 31 December 2017 amounted to approximately US$81 million and decreased by US$15 million during the quarter. The sale of a non-core royalty in December 2017 for US$45 million, with proceeds due to be received later in January 2018, will strengthen current cash balances. The outstanding balance of the CIL debt facility amounted to approximately US$71 million at year end.