Announces subscriber dividend increase by over 50%.
By TZ Business News Staff.
The year 2016 was a remarkably successful year for the Tanzania-based ACACIA Gold Mining corporation, the miner’s Chief Executive Officer has announced in his results report for the 12 months ended 31 December 2016. The report was made public February 14, 2017.
The ACACIA Chief Executive Officer Brad Gordon has said in his report “2016 was another successful year for Acacia as we delivered record production,[reduced] costs by 14% and more than doubled our net cash position.” The excellent operational performance translated into strong financial performance in which profits more than doubled to US$415 million with adjusted net earnings increasing to US$161 million.
As a result of this strong underlying performance in 2016, the Board of Directors has proposed a full year dividend of 10.4 cents (final dividend of 8.4 cents) which is at the top end of our policy and more than twice the total dividend announced for 2015 (4.2 cents), Gordon has said.
“We expect 2017, driven by the mine life extension at Buzwagi, to see further production growth and cost reductions, with production expected to be between 850,000-900,000 ounces at an AISC of between US$880-920 per ounce,” he says. [The AISC is a gold production costing measure]
Gordon also disclosed in his report ACACIA had acquired a Gold resource in neighboring Kenya.
“We continued to invest into our exploration portfolio and are poised to announce a maiden resource on the West Kenya project, in which we strategically increased our interest to 100% in 2016,” the CEO has said.
ACACIA operates three Gold mines in Tanzania after closing the forth mine at Tulawaka in Northern Tanzania. The mines still operational include the Underground Bulyanhulu Gold Mine, the open-pit Buzwagi Gold Mine and the open-pit North Mara Gold-mine where an underground operation has also been initiated. Both gold mines are in northern Tanzania.
Gordon’s report released on February 14, 2017 says “2016 was a very strong operational year as we saw the benefit of the first full year of operations at the Gokona Underground at North Mara.
“This deposit was previously mined as a high grade open pit and commenced underground mining in mid-2015 after we made the strategic decision to go underground in 2014.
“The mine delivered ahead of expectations in 2016, partly due to a 61% increase in mined grade compared to the resource model. This drove additional ounces and the overall mine achieved a record production year of 378,443 ounces, a 32% increase over 2015,” Gordon has said.
He adds: “At Bulyanhulu we overcame an extended process plant shutdown in the third quarter which led to a loss of approximately one month of milling capacity to deliver 289,432 ounces, a 6% increase on 2015.
“This demonstrates the increased operational resilience as part of our ongoing programme to unlock the geological and operational potential of the asset. At Buzwagi, production was behind expectations at 161,830 ounces, 5% below 2015 as a result of lower mined grades due to a change in pit sequencing in order to enhance operational efficiencies as part of the extension of mining in 2017.
“North Mara was again the standout performer, with an AISC of US$733 per ounce, which was 20% lower than 2015 driven by the increased production base. At Bulyanhulu, AISC fell by a further 16% to US$1,058 per ounce as a result of the restructuring that took place in Q4 2015. At Buzwagi we saw AISC above plan at US$1,095 per ounce due to the lower ounce profile, though this was still 8% lower than 2015. Together, this led to a 14% fall in the headline AISC to US$958 per ounce, over US$150 per ounce lower than 2015. On an annual basis this now represents a 43% reduction in AISC from its peak in 2012.
“The strong performance meant that we ended the year with US$318 million of cash on our balance sheet, an increase of US$85 million over the previous year. This includes the US$20 million corporate tax cash pre-payment, US$28 million on debt repayments, US$20 million on dividends and US$36 million on share based payments as a result of the vesting of awards during the year. As a result, net cash on the balance sheet more doubled from US$106 million, ending the year at US$218 million.
“Total revenue for the year amounted to US$1,054 million which was 21% ahead of 2015 as a result of the increased production profile and the US$96 per ounce higher average realised gold price. EBITDA was similarly strong at US$415 million, up from US$175 million in 2015. We had net earnings of US$95 million, which were primary impacted by a US$72 million provision as a result of historic tax cases, but were still significantly ahead of 2015’s loss of US$197 million. Adjusted net earnings amounted to US$161 million, which was US$154 million above 2015,” the CEO has said.