Modern Mining August 2016

MINING News

Acacia’s Tanzanian gold mines performing strongly

Bulyanhulu produced 78 643 ounces, 10 % higher than for the same period in Q2 2015 and in line with Q1 2016. Ounces produced from underground mining amounted to 70 307 ounces, a 17 % improvement on Q2 2015 due to an increase in throughput and grade, while production from the reprocessing of tail- ings amounted to 8 336 ounces. During the quarter, 236 000 tonnes of ore were hoisted while 251 000 tonnes of run-of- mine ore were processed, 10 % higher than in Q2 2015 while grade increased by 5 % to 9,6 g/t. At Buzwagi, gold production for the quarter of 43 156 ounces was 10 % lower than Q2 2015, but 16 % ahead of Q1 2016. Total tonnes mined decreased by 18 % from Q2 2015 while ore tonnes mined were in line with the prior year. Cash cost per ounce sold of US$948 was 2 % higher than Q2 2015. This was mainly due to the lower production base, partly offset by a fall in energy and fuel costs driven by lower global fuel prices and reduced diesel usage, lower general and administrative expenses as a result of lower freight costs and lower labour costs driven by head- count reductions. 

In its interim results for the six months (H1 2016) and three months (Q2 2016) ended 30 June 2016, LSE-listed Acacia Mining, Tanzania’s largest gold producer, has reported gold production of 412 025 ounces, 12 % higher than in H1 2015. The AISC for the six-month period was US$941 per ounce sold, which was 17 % lower than in the equivalent period last year. Q2 gold production was 221 815 ounces, 19 % higher than in Q2 2015. “We are pleased that, through continu- ing optimisation, our assets are starting to deliver performance which reflects their potential and as a result increased our net cash position by US$47 million in the second quarter,” comments Brad Gordon, Acacia’s CEO. “Strong production of 221 815 ounces aided a further reduction in All-in Sustaining Cost (AISC) to US$926 per ounce, even after US$72 per ounce of cost due to the impact of the strong share price on the valuation of future share- based payments to employees. “The transition to underground min- ing at North Mara continues to deliver ahead of expectations with high grades at Gokona supporting production of 100 016 ounces in the quarter. Bulyanhulu again

produced above plan, delivering 78 643 ounces, although a planned two-week shaft closure for maintenance in August and a move back towards reserve grade will reduce output in Q3.” Looking ahead, Gordon says Acacia is now expecting to deliver at or above the upper end of full year production guidance of 750-780 000 ounces, and at the lower end of AISC guidance of US$950-980 per ounce. The North Mara mine produced 100 016 ounces in Q2 2016, 50 % higher than in Q2 2015 and 34 % higher than Q1 2016, driven by higher grade ore than plan from the Gokona Underground resulting from positive grade reconciliations and the processing of higher grade open-pit material. Total open-pit tonnes mined increased by 23 % fromQ2 2015, driven by waste stripping in the Nyabirama pit. Cash cost per ounce sold of US$382 was 37 % lower than in Q2 2015, mainly driven by the higher production base, higher capi- talised development costs due to waste stripping at the Nyabirama pit and lower labour costs due to reductions in head count, partly offset by higher sales related costs as a result of higher sales volumes.

Acacia’s Buzwagi mine is an open-pit operation commissioned in 2009. It produced 43 156 ounces in Q2 2016 (photo: Acacia Mining).

6  MODERN MINING  August 2016