By Alex MacDonald
LONDON--Acacia Mining PLC (ACA.LN) is setting its sights on
acquiring gold-producing assets as it starts to reap the rewards
from its turnaround strategy, said the company's chief executive
Friday.
"2015 is the year where we start looking at growth
opportunities," said Brad Gordon in an interview with The Wall
Street Journal. "We are interested in production assets,
particularly in Africa."
Mr. Gordon joined Acacia Mining about a year and a half ago with
a view to accelerating the company's turnaround strategy by cutting
costs and ramping up production from more profitable gold ounces in
a lower gold price environment. The turnaround strategy is
paying-off with all-in sustaining costs dropping for a ninth
consecutive quarter, last quarter, and output rising for a second
year in a row after years of decline. These two factors resulted in
the company's first annual free cash flow since 2011, Mr. Gordon
said.
As the company's cashpile continues to grow, Acacia plans to
take advantage of the recent gold price slump to buy gold assets at
attractive valuations.
The company, formerly known as African Barrick Gold, is
interested in assets that are able to produce at least 270,000oz of
gold. Geographically the company is interested in Senegal, Ghana
and Mali, areas where the company is already considering investing
in exploration acreage, Mr. Gordon said.
Acacia produced 718,651 troy ounces last year based on an all-in
sustaining cash cost of $1,105/oz. Gold output rose 13% on year
while the cash cost dropped 18%, in line with the company's
guidance.
Acacia, which is majority owned by Canada-based gold producer
Barrick Gold Corp. (ABX), plans to ramp up production to around
800,000 oz of gold at a cash cost below $900/oz in 2016, according
to a November investor day presentation.
Operationally, the key focus will be to ramp up the Bulyanhulu
mine to full production capacity by year-end. Mr. Gordon said he
was comfortable with North Mara and Buzwagi's operational
performance but thought Bulyanhulu could do better.
Acacia's shares were down 1.5% at 295 pence a share as of 1031
GMT.
The company had $294 million in cash as of the end of 2014 up
$12 million from a year before.
Write to Alex MacDonald at alex.macdonald@wsj.com
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