While Acacia Mining’s gold production for the fourth quarter of 2017 was slightly ahead of expectations at 148 477 oz, it was 30% lower quarter-on-quarter as a result of its flagship Bulyanhulu gold mine, in Tanzania, having downscaled operations.

The miner’s decision to curtail operations was driven by “unsustainable cash outflows at the mine as a result of the copper and gold concentrate ban and the operating environment”.

Acacia remains caught up in a dispute with the Tanzania government, which banned the export of unprocessed minerals in March and enacted new laws to raise State ownership of the nation’s mines.

“Our focus remains on delivering optimal performance in the current operating environment and delivering value for all our stakeholders. We are also continuing to support efforts towards achieving a negotiated resolution with the Tanzania government,” Acacia interim CEO Peter Geleta stated earlier this month.

Acacia’s gold production for the quarter also saw a 22% decrease from the third quarter of 2017.

The curtailment of operational activity at Bulyanhulu, which started in September, resulted in no production activities for the quarter, except for production from reprocessing tailings, which resumed in December and delivered 2 856 oz. This was 96% below financial year 2016’s fourth quarter production.

However, at the company’s Buzwagi operation, gold production of 73 603 oz for the period was 76% higher than for the same period in the previous financial year, driven by an increase in grade as a result of ore tonnes solely being mined from the main ore zone as the mine accessed the final stages of the openpit before it moves to become a stockpile processing operation this year, the company reports.

At North Mara, 72 018 oz in gold production for the quarter was in line with planned output, but 21% lower than production for the previous year’s quarter, mainly as a result of lower head grade, driven by the underground mine grade of 7.7 g/t being 30% lower than the prior year’s.

This amounted to gold production of 767 883 oz in 2017 – 7% lower than 2016’s output, as a result of lower production mainly from Bulyanhulu, but ahead of the revised full year guidance of 750 000 oz.

Gold ounces sold for the quarter amounting to 147 636 oz were, however, broadly in line with gold production for the quarter, yet 29% lower than sales achieved in the fourth quarter of 2016.

Acacia’s preliminary all-in sustaining costs (AISCs) of $779/oz sold in the period under review were 18% lower than in the fourth quarter of 2016 and preliminary cash costs of $581/oz sold were 14% lower than the AISC achieved in the fourth quarter 2016.

The fourth quarter’s preliminary AISC’s, assuming sales ounces equalled the period’s production, would have been about $764/oz.

Full-year sales of 592 861 oz were 27% lower than in 2016, driven by the impact of the export ban.

A preliminary 2017 AISC of $875/oz of gold sold was 9% lower than in 2016 and below the company’s full-year guidance range; the 2017 preliminary AISCs, assuming sales ounces equalled full-year production, would have been about $798/oz.

Geleta noted in the company’s results statement that “disciplined cost management, combined with the operational performance, led to fourth quarter 2017 AISCs of $779/oz, which helped to significantly reduce the cash outflow in the quarter, despite the cost of transitioning Bulyanhulu to reduced operations”.
Acacia’s cash balance as at December 31 amounted to about $81-million and decreased by $15-million during the quarter, also as a result of the cost of transitioning Bulyanhulu to curtailed operations.

Meanwhile, Acacia has completed the previously announced sale of an existing 2% net smelter royalty over Houndé Mine, in Burkina Faso, to Canadian gold streaming and royalty company Sandstorm Gold for $45-million.

The royalty covers the Kari North and Kari South tenements and represents about
500 km2 of the Houndé property package.

The proceeds are due to be received this month.