Acacia Mining Plc (LON:ACA), today released 1st quarter production results.
“We achieved gold production of 104,899 ounces for the first quarter of the year. While historically our production is typically stronger in the second half of the year, production this quarter was impacted by unanticipated production issues at our North Mara mine. We have taken immediate steps to address these, introducing a revised mining plan in mid-March for both the underground and open pit mines, and we remain confident of delivering against our full year production guidance of 500,000 to 550,000 ounces. I would also like to thank our people for their commitment during these times of uncertainty,” said Peter Geleta, Interim Chief Executive Officer.
Gold production for the quarter of 104,899 ounces was 13% below the prior year period mainly due to lower production at North Mara and Buzwagi. Gold ounces sold for the quarter of 104,985 ounces were in line with production.
At North Mara, gold production for the quarter of 66,324 ounces was 14% lower than the prior year of 76,769 ounces, mainly driven by the consequences of a fall of ground in the Gokona underground mine at the end of December 2018 as well as an excavator breakdown in the Nyabirama open pit. The fall of ground at Gokona prevented access in the quarter to two higher grade stopes in the East, impacting mine sequencing and ultimately head grade which, at 3g/t, was 19% lower than the first quarter of last year and below expectations for the quarter.
In order to address these issues, North Mara began working to a revised mining plan from mid-March 2019, with new mine sequencing for both the open pit and underground mines targeting higher grades and increased volumes supported by additional equipment, as well as initiatives to improve recovery rates in the process plant and asset reliability. In particular, the focus on increased volumes from the open pit should allow faster access to the main higher-grade ore body, while the revised mine sequencing in the underground mine is designed to ensure smoother transitioning between stopes and improved productivity. With these initiatives already underway, we remain on track to achieve our Group production guidance for the year of 500,000 to 550,000 ounces.
Buzwagi gold production of 28,577 ounces for the quarter was 20% lower than the prior year of 35,685 ounces but in line with expectations as a result of the mine having fully transitioned to a lower grade stockpile processing operation.
Bulyanhulu produced 9,999 gold ounces for the quarter, 17% above the prior year of 8,527 ounces and in line with expectations, due to the higher grades recovered from the retreatment of tailings as well as improvements in plant throughput. All production continued to be produced from the retreatment of tailings as a result of the mine being placed on reduced operations in late 2017.
The cash balance as at 31 March 2019 amounted to approximately US$99 million, representing a decrease of net cash of approximately US$17 million during the quarter, primarily as a result of the lower production.
Through the quarter, Acacia has continued to engage with and provide support to Barrick in its direct negotiations with the Government of Tanzania. Acacia is looking forward to receiving a detailed proposal for a comprehensive resolution of Acacia’s disputes with the Government, once Barrick’s negotiations have been successfully concluded. Acacia continues to favour a negotiated resolution on a timely basis that will benefit all stakeholders.
Acacia will be releasing its 2019 first quarter results at 07:00 BST on 25 April 2019 and a conference call will be held for analysts and investors at 09.00 BST on the same day. The access details for the conference call are as follows: