Dar es Salaam. Acacia has surpassed its gold production target by recording 521,980 ounces last year.
That was substantially ahead of its initial 2018 production guidance of 435,000 to 475,000 ounces.
According to 2018 preliminary results published yesterday, the company said it maintained a strong cost discipline achieving an all-in sustaining cost of $905 per ounce sold, well below the full year guidance range of $935 to $985 per ounce.
Acacia interim CEO Peter Geleta said: “This would not have been possible without the sheer resilience, hard work and determination of all of our people. I would like to thank each and every one of them for their contributions to the Acacia Group, particularly given the continued challenging operating environment this year.”
He said: “We were able to return the company to free cash flow generation in the second quarter of the year, a trend which was sustained during the second half, ending the year with a net cash position of $88 million.” According to him, the company continued to demonstrate its long-term commitment to Tanzania and its mining industry, contributing over $127 million in taxes and royalties as well as spending over $273 million with local suppliers in Tanzania.
That enabled the company to achieve a rate of 97 per cent local employees and investing $8.8 million in sustainable communities’ strategy to improve the lives of those living near mine sites. “Looking ahead to 2019 we expect production of 500,000-550,000 ounces at an all-in sustaining cost of $860-920 per ounce with cash costs of $665-710 per ounce.”
Acacia is also highly encouraged by the provisional outcomes of the Bulyanhulu optimisation study, with a focus on achieving higher margin ounces in line with the company’s focus on free cash generation.
Mr Geleta also noted that the company would continue to provide support to Barrick in its discussions with the government. It believes that a negotiated resolution is in the best interests of all stakeholders.
Revenue of $664 million was 12 per cent lower than 2017, with the higher average realised gold price offset by the lower sales base.
Net earnings were $59 million compared with a net loss of $707 million in 2017, with adjusted net earnings of $44 million ($10.8 cents per share) compared with $146 million in 2017 ($35.7 cents per share) mainly due to lower revenue.
Cash balance increased by $50 million during 2018 to $130 million due to the sale of a non-core royalty combined with strong operational performance, with net cash balance of $88 million at the end of 2018.