19 April 2018
Results for the 3 months ended
31 March 2018 (Unaudited)
Based on IFRS and expressed in US
Dollars (US$)
Acacia Mining plc (“Acacia’’) reports
first quarter results
“Acacia continued to demonstrate resilience during the first
quarter, delivering solid production of 120,981 ounces at all-in
sustaining costs (“AISC”) of US$976
per ounce sold,” said Peter
Geleta, Interim Chief Executive Officer. “Production at
all three of our assets was in line with our mine plans and puts us
in a good position to deliver against our full year guidance of
435,000-475,000 ounces at an AISC of US$935-985 per ounce. The switch to stockpile
processing at Buzwagi and the move to reduced operations at
Bulyanhulu in late-2017 were effectively executed and we are
pleased to report an increase in our cash balance to US$107 million. This was driven by the delivery
of our operational plans and the sale of a non-core royalty that
completed in January 2018. We
continue to take measures to further stabilise our balance sheet
and continue to provide support to Barrick in its on-going
discussions with the Government of Tanzania.”
Operational Highlights
- Production tracked full-year guidance whilst all three
operations delivered in line with their respective mine plans
- Gold production of 120,981 ounces, 45% lower than Q1 2017,
primarily due to Bulyanhulu being transitioned to reduced
operations in September 2017, and
Buzwagi’s production being sourced primarily from lower grade ore
stockpiles
- Gold sales of 116,955 ounces, 37% lower than Q1 2017, slightly
below gold produced for the quarter due to the timing of
shipments
- AISC1 of US$976 per
ounce sold, 4% above Q1 2017 and cash costs1 of
US$715 per ounce sold, 24% higher
than Q1 2017
Financial Highlights
- Q1 revenue of US$157 million, 33%
lower than Q1 2017 due to lower sales, offset slightly by higher
realised gold prices
- Q1 EBITDA1 of US$86
million, 4% higher than Q1 2017, primarily due to the sale
of a non-core royalty asset for US$45
million which completed in January
2018. Q1 2018 Adjusted EBITDA of US$44 million
- Net earnings of US$50 million
(US12.2 cents per share), up from US$27
million in Q1 2017, with adjusted net earnings1
of US$7 million (US1.7 cents per
share), 73% lower than Q1 2017
- Cash on hand of US$107 million as
of 31 March, an increase of US$26
million from 2017 year end with net cash of US$50 million
- Entered into option agreements to provide a floor price of at
least US$1,320 per ounce for majority
of H1 2018 production
- In response to a number of expressions of potential interest,
commenced a process during the quarter with a small number of
Chinese investors to explore the value to the Company of selling a
stake in its Tanzanian operations.
|
Three months ended 31 March |
|
Year ended 31 December |
(Unaudited) |
2018 |
2017 |
|
2017 |
|
Gold
production (ounces) |
120,981 |
219,670 |
|
767,883 |
|
Gold
sold (ounces) |
116,955 |
184,744 |
|
592,861 |
|
Cash
cost (US$/ounce)1 |
715 |
577 |
|
587 |
|
AISC
(US$/ounce)1 |
976 |
934 |
|
875 |
|
Net
average realised gold price (US$/ounce)1 |
1,332 |
1,221 |
|
1,260 |
|
(in
US$'000) |
|
|
|
|
|
Revenue |
156,517 |
233,901 |
|
751,515 |
|
EBITDA
1 |
85,774 |
82,193 |
|
257,180 |
|
Adjusted EBITDA1 |
43,804 |
82,193 |
|
310,527 |
|
Net
earnings/(loss) |
49,995 |
26,827 |
|
(707,394) |
|
Basic
earnings/(loss) per share (EPS) (cents) |
12.2 |
6.5 |
|
(172.5) |
|
Adjusted net earnings1 |
7,116 |
26,827 |
|
146,218 |
|
Adjusted net earnings per share (AEPS) (cents)1 |
1.7 |
6.5 |
|
35.7 |
|
Cash
generated from/(used in) operating activities |
23,954 |
25,224 |
|
(22,972) |
|
Capital expenditure2 |
25,779 |
46,828 |
|
149,376 |
|
Cash
balance |
106,557 |
281,442 |
|
80,513 |
|
Total
borrowings |
56,800 |
85,200 |
|
71,000 |
|
1 These are non-IFRS measures. Refer to page 14 for
definitions
2 Excludes non-cash capital adjustments (reclamation
asset adjustments) and include land purchases recognised as long
term prepayments
Other Developments
Update on Discussions between Barrick
Gold Corporation (“Barrick”) and the Government of Tanzania
Barrick and the Tanzanian Government continued their discussions
during the quarter, aimed at agreeing and documenting in H1 2018
the details of the framework announced in 2017. Acacia continues to
support Barrick in its discussions with the Government as the two
parties work towards identifying a possible negotiated resolution.
Acacia is not directly involved in the on-going discussions and
awaits a detailed agreed proposal and documented final agreements
for a comprehensive settlement in the coming months. This will then
be reviewed by an Independent Committee formed of the Company’s
Directors.
Asset Level Discussions with
Interested Parties
As previously announced, in response to a number of expressions
of potential interest from Chinese counterparties, the Company is
engaging with a small number of potential investors to explore the
value to the Company of the sale of a stake in one or more of
its Tanzanian assets. There is currently no certainty as to whether
any agreement will be reached with any of the potential investors.
Acacia remains committed to shareholder value and evaluates all
opportunities against strict strategic and financial criteria. Any
transaction will be pursued only if it is determined by Acacia’s
Board to be in the best interests of all shareholders.
Buzwagi Flotation Circuit
In September 2017 Buzwagi took the
decision to cease operating the flotation circuit which had
previously been planned to run into the first part of 2018. The
mine continues to operate the existing gravity and CIL circuits
which means that all gold production is now in doré form. Buzwagi
engaged extensively with relevant government agencies prior to and
at the time of the implementation of this decision, although it did
not require prior regulatory approvals and did not involve
additional or new process plant or processing technology. During
the first quarter and subsequent to the shutdown of the flotation
circuit, Buzwagi received correspondence from the Ministry of
Minerals requiring the restoration of operation of the flotation
circuit and seeking further explanations from Buzwagi on the
Government’s position regarding potentially applicable regulatory
approvals. Buzwagi continues to engage closely with Government
agencies on this matter.
Indirect Taxation
During the first quarter, Acacia incurred a further US$14 million of VAT outflows and received no
cash VAT refunds. We have also declared our first provisional
corporate tax payment for 2018 relating to North Mara, amounting to
approximately US$10 million. This
payment has been offset against indirect tax receivables in line
with an existing agreement with the Tanzanian Revenue Authority. As
a result, the net increase in our indirect tax receivable amounted
to approximately US$4 million, with
our total indirect tax receivables increasing to approximately
US$174 million as at 31 March 2018.
As previously disclosed, Tanzania’s new mining legislation
includes an Amendment to the VAT Act 2015 to the effect that no
input tax credit can be claimed for the exportation of “raw
minerals”, with effect from 20 July
2017. Bulyanhulu, Buzwagi and North Mara have each now
received notices from the Tanzania Revenue Authority that they are
not eligible for any VAT relief from July
2017 onwards on the basis that all production (both doré and
concentrate) constitutes “raw minerals”. The total VAT claims
submitted since July 2017 amount to
approximately US$50 million. We have
disputed this interpretation of the legislation as a matter of
Tanzanian law, while this is also a matter that is in contravention
of the relevant terms of our MDAs with the Government of
Tanzania.
Entry into Gold Price Protection
Measures
As previously reported, in January
2018, as part of on-going measures to mitigate cash
outflows, Acacia bought put options covering 120,000 ounces of gold
at a strike price of US$1,320 per
ounce. The total cost of the options was US$2.0 million and they provide a minimum price
for the majority of Acacia’s planned doré production until
June 2018 above our budgeted gold
price of US$1,200 per ounce, with
full upside exposure should the gold price trade above US$1,320 per ounce. The options will expire in
equal instalments of 30,000 ounces per month over the period.
Contribution to Tanzania
Since the inception of its businesses, over 15 years ago, the
Acacia Group, and its predecessors, have invested over US$4 billion into Tanzania and paid over US$1 billion of taxes and royalties and we remain
committed to supporting efforts towards Tanzania’s socio-economic
advancement and, in particular, the realisation of the Government’s
Development Vision 2025. In the first quarter of 2018, Acacia has
incurred a total of US$30.3 million
to the Tanzanian Government in taxes and royalties. This includes
royalties and clearing taxes of US$12.2
million, corporate tax of US$9.6
million, payroll taxes of US$7.6
million, and US$0.9 million in
import duties. We have also paid US$1.1 million in local service levies due on H2
2017 revenues.
During the first quarter Acacia continued to implement its
strategy to develop local talent within its workforce, furthering
its commitment to localisation. In March
2018, 105 of our first line leaders graduated from the
Acacia Rainbow Leadership Development Programme which is aimed at
developing our future leaders.
Through its Sustainable Communities programme Acacia has
completed projects during Q1 2018 which increase the accessibility
of clean and safe water in rural areas and contribute to resolving
challenges identified in Tanzania’s education sector. In February,
Acacia completed a water infrastructure project in Msalala District
near Bulyanhulu where we invested US$84,000 in the installation of an electric
water pump and water tower. The facility, which has been linked to
the national grid, channels clean water to the local Kakola village
and provides safe drinking water to 3,000 residents.
Further to the above investment Acacia is currently
collaborating with the Ministry of Water and Irrigation, three
local District Councils, the Kahama Shinyanga Water Supply and
Sanitation Authority (KASHWASA) to tackle water scarcity on behalf
of residents around Bulyanhulu. The Company has committed
almost US$2 million to fund an
extension of a transmission pipeline from Lake Victoria to 14
villages spanning four districts. Once complete, the pipeline will
deliver clean water to approximately 100,000 people living around
the mine.
We have also continued our library refurbishment project in
partnership with the NGO, Read International Tanzania. During the
quarter we officially opened four new libraries in Tarime,
Shinyanga and Kahama districts.
Local Content Rules
Post period-end Acacia submitted preliminary local content plans
to the Tanzanian Government in line with the new local content
regulations that came into force on April
10, 2018. These preliminary plans build on the work
undertaken by Acacia over the past years to enhance and develop our
local supply chain and increase local employment in the workforce.
Under Acacia’s existing Mineral Development Agreements, Acacia is
protected from changes to laws that govern our operations including
the introduction of the local content regulations, but as part of
our commitment to development in the country, the Company intends
to work with the Government to clarify the requirements of the new
local content regulations and to practically meet these
requirements where possible. We continue to seek advice on
clarification of specific points around these regulations and the
practical implications thereof.
Key
Statistics |
|
Three months ended 31 March |
|
Year
ended 31 December |
|
(Unaudited) |
|
2018 |
2017 |
|
2017 |
Tonnes
mined |
Kt |
4,027 |
9,481 |
|
31,917 |
Ore
tonnes mined |
Kt |
838 |
3,216 |
|
13,707 |
Ore
tonnes processed |
Kt |
2,159 |
2,420 |
|
8,719 |
Process recovery rate exc. tailings reclaim |
% |
91.0% |
93.4% |
|
92.4% |
Head
grade exc. tailings reclaim |
g/t |
2.2 |
3.5 |
|
3.3 |
Process recovery rate inc. tailings reclaim |
% |
86.5% |
89.8% |
|
90.0% |
Head
grade inc. tailings reclaim |
g/t |
2.0 |
3.1 |
|
3.0 |
Gold
production |
oz |
120,981 |
219,670 |
|
767,883 |
Gold
sold |
oz |
116,955 |
184,744 |
|
592,861 |
Copper
production |
Klbs |
- |
4,656 |
|
12,897 |
Copper
sold |
Klbs |
- |
2,487 |
|
1,341 |
Cash
cost per tonne milled exc. tailings reclaim1 |
US$/t |
47 |
51 |
|
43 |
Cash
cost per tonne milled inc. tailings reclaim1 |
US$/t |
39 |
44 |
|
40 |
Per
ounce data |
|
|
|
|
|
Average spot gold price2 |
US$/oz |
1,329 |
1,219 |
|
1,257 |
Net average realised gold
price1 |
US$/oz |
1,332 |
1,221 |
|
1,260 |
Total cash cost1 |
US$/oz |
715 |
577 |
|
587 |
All-in sustaining cost1 |
US$/oz |
976 |
934 |
|
875 |
Average realised copper price |
US$/lbs |
- |
2.79 |
|
2.98 |
Financial results
|
Three months ended 31 March |
|
Year
ended 31 December |
(Unaudited, in US$'000 unless otherwise stated) |
2018 |
2017 |
|
2017 |
Revenue |
156,517 |
233,901 |
|
751,515 |
Cost
of sales |
(108,400) |
(149,396) |
|
(458,447) |
Gross profit |
48,117 |
84,505 |
|
293,068 |
Corporate administration |
(5,458) |
(6,642) |
|
(26,913) |
Share
based payments |
1,527 |
(10,424) |
|
8,236 |
Exploration and evaluation costs |
(3,623) |
(6,778) |
|
(24,829) |
Corporate social responsibility expenses |
(1,546) |
(2,195) |
|
(8,213) |
Impairment charge |
- |
- |
|
(850,182) |
Other
income/(charges) |
22,767 |
(10,815) |
|
(90,370) |
Profit before net finance expense and taxation |
61,784 |
47,651 |
|
(699,203) |
Finance income |
132 |
597 |
|
1,944 |
Finance expense |
(3,836) |
(2,238) |
|
(12,407) |
Profit before taxation |
58,080 |
46,010 |
|
(709,666) |
Tax
expense |
(8,085) |
(19,183) |
|
2,272 |
Net
profit for the period |
49,995 |
26,827 |
|
(707,394) |
1 These are non-IFRS financial performance measures
with no standard meaning under IFRS. Refer to “Non IFRS measures”
on page 14 for definitions.
2 Reflect the London PM fix price.
For further information, please visit our website:
http://www.acaciamining.com/ or contact:
Acacia Mining plc |
+44 (0) 207 129 7150 |
Peter Geleta, Interim Chief
Executive Officer
Jaco Maritz, Chief Financial
Officer
Giles Blackham, Head of Investor
Relations and Corporate Development
Camarco |
+44 (0) 20 3757 4980 |
Gordon Poole / Nick Hennis
About Acacia Mining plc
Acacia Mining plc (LSE: ACA) is Tanzania’s largest gold miner
and one of the largest producers of gold in Africa. We have three mines, all located in
north-west Tanzania: Bulyanhulu,
Buzwagi, and North Mara, and a portfolio of exploration projects in
Kenya, Burkina Faso and Mali.
Acacia is a UK public company headquartered in London. We are listed on the Main Market of
the London Stock Exchange with a secondary listing on the Dar es
Salaam Stock Exchange. Barrick Gold Corporation is our majority
shareholder. Acacia reports in US dollars and in accordance with
IFRS as adopted by the European Union, unless otherwise stated in
this report.
Conference call
A conference call will be held for analysts and investors on
19 April 2018 at 08:30 BST.
The access details for the conference call are as follows:
Participant dial
in: +44
020 3936 2999
Password:
88 94 64
A recording of the conference call will be made available on the
Company’s website, http://www.acaciamining.com/, after the
call.
FORWARD- LOOKING STATEMENTS
This report includes “forward-looking
statements” that express or imply expectations of future events or
results. Forward-looking statements are statements that are not
historical facts. These statements include, without limitation,
financial projections and estimates and their underlying
assumptions, statements regarding plans, objectives and
expectations with respect to future production, operations, costs,
projects, and statements regarding future performance.
Forward-looking statements are generally identified by the words
“plans,” “expects,” “anticipates,” “believes,” “intends,”
“estimates” and other similar expressions.
All forward-looking statements involve a number of risks,
uncertainties and other factors, many of which are beyond the
control of Acacia, which could cause actual results and
developments to differ materially from those expressed in, or
implied by, the forward-looking statements contained in this
report. Factors that could cause or contribute to differences
between the actual results, performance and achievements of
Acacia include, but are not limited to, changes or developments
in political, economic or business conditions or national or local
legislation or regulation in countries in which Acacia
conducts - or may in the future conduct - business, industry
trends, competition, fluctuations in the spot and forward price of
gold or certain other commodity prices (such as copper and diesel),
currency fluctuations (including the US dollar, South African rand,
Kenyan shilling and Tanzanian shilling exchange rates),
Acacia’s ability to successfully integrate acquisitions,
Acacia’s ability to recover its reserves or develop new
reserves, including its ability to convert its resources into
reserves and its mineral potential into resources or reserves, and
to process its mineral reserves successfully and in a timely
manner, Acacia‘s ability to complete land acquisitions
required to support its mining activities, operational or technical
difficulties which may occur in the context of mining activities,
delays and technical challenges associated with the completion of
projects, risk of trespass, theft and vandalism, changes in
Acacia‘s business strategy including, the ongoing implementation
of operational reviews, as well as risks and hazards associated
with the business of mineral exploration, development, mining and
production and risks and factors affecting the gold mining industry
in general. Although Acacia‘s management believes that the
expectations reflected in such forward-looking statements are
reasonable, Acacia cannot give assurances that such
statements will prove to be correct. Accordingly, investors should
not place reliance on forward-looking statements contained in this
report.
Any forward-looking statements in this report only reflect
information available at the time of preparation. Save as required
under the Market Abuse Regulation or otherwise under applicable
law, Acacia explicitly disclaims any obligation or
undertaking publicly to update or revise any forward-looking
statements in this report, whether as a result of new information,
future events or otherwise. Nothing in this report should be
construed as a profit forecast or estimate and no statement made
should be interpreted to mean that Acacia‘s profits or
earnings per share for any future period will necessarily match or
exceed the historical published profits or earnings per share of
Acacia.
Operating Review
Acacia delivered production of 120,981 ounces in Q1 2018, a
decrease of 45% compared to the prior year quarter, whilst AISC of
US$976 per ounce sold was 4% higher
than Q1 2017. Cash costs of US$715
per ounce sold were 24% higher than the prior year period.
North Mara achieved gold production of 76,769 ounces for
the quarter, 20% lower than in Q1 2017. This was a result of lower
average grades at the Gokona underground mine on account of a
higher proportion of mining taking place in the lower-grade West
Zone. The grade was also negatively impacted by lower grades
received from the Nyabirama pit. Gold sold of 74,955 ounces for the
quarter was 20% lower than the prior year quarter due to the lower
production base but broadly in line with production. AISC of
US$950 per ounce sold was 32% higher
than Q1 2017 (US$717/oz) as a result
of higher cash costs and lower sales volumes.
Buzwagi produced 35,685 ounces of gold in the quarter,
40% lower than in Q1 2017 due to the mine transitioning to the
processing of lower grade stockpiles compared to run-of-mine ore
from open pit. Gold sold for the quarter of 32,460 ounces was 9%
lower than production and 13% behind Q1 2017, due to the timing of
shipments at quarter end and the lower production base,
respectively. Buzwagi will continue to solely produce
doré until the end of its life of mine. AISC per ounce sold of
US$1,052 was 36% higher than Q1 2017
(US$773/oz), mainly driven by the
transition to processing lower grade stockpiles which drove higher
cash costs.
At Bulyanhulu, gold production of 8,527 ounces was 87%
lower than Q1 2017 as a result of the decision to place the
underground mine on reduced operations. All production resulted
from the reprocessing of tailings which was 6% lower compared to
the prior year quarter due to lower feed grades. Gold sold for the
quarter of 9,540 ounces was 12% higher than production due to the
selling of gold ounces on hand at the end of 2017 and 87% lower
than Q1 2017 mainly as a result of the lower production base. AISC
per ounce sold for the quarter of US$923 was 25% lower than Q1 2017 (US$1,229/oz) driven by reduced operating and
capital spend.
Total tonnes mined during the quarter amounted to 4.0 million
tonnes, 58% lower than Q1 2017, mainly as a result of the
transition to a stockpile processing operation at Buzwagi and the
halting of all underground mining at Bulyanhulu. Total tonnes mined
at North Mara were in line with Q1 2017.
Total ore tonnes mined of 0.8 million tonnes were 74% lower than
Q1 2017 mainly due to the cessation of mining at Buzwagi and
Bulyanhulu. Ore tonnes mined at North Mara were 12% lower than Q1
2017, mainly due to higher rainfall towards the end of the quarter
which resulted in mining delays at the Nyabirama open pit.
Ore tonnes processed amounted to 2.2 million tonnes, a decrease
of 11% on Q1 2017, mainly driven by the halting of run-of mine
processing at Bulyanhulu and a 7% reduction in ore tonnes processed
at Buzwagi due to an extended planned plant shutdown during the
quarter. North Mara ore tonnes processed were in line with Q1
2017.
Cash costs of US$715 per ounce
sold for the quarter were 24% higher than in Q1 2017, primarily due
to:
- A decreased build-up in finished gold inventory compared to Q1
2017 (US$103/oz), given Q1 2017 was
impacted by the imposition of the concentrate export ban,
resulting in a build- up of finished gold inventory in Q1 2017 of
approximately 35,000 ounces;
- Increased drawdown of ore stockpiles at Buzwagi (US$133/oz) partially offset by stockpile
increases at North Mara (US$37/oz);
and
- Lower co-product revenue compared to Q1 2017 as a result of the
concentrate export ban (US$64/oz).
This was offset by:
- Savings in direct mining costs at Buzwagi and Bulyanhulu as a
result of ceased mining activities partly offset by higher direct
mining costs at North Mara mainly driven by increased maintenance
costs, offset in part to the impact of the lower production base on
unit costs (US$105/oz); and
- Lower selling related costs driven by lower sales volumes
(US$22/oz).
All-in sustaining cost of US$976 per
ounce sold for the quarter was 4% higher than Q1 2017, mainly due
to the impact of lower sales volumes on individual cost items
(US$207/oz) and higher cash costs
(refer to above) (US$207/oz).
This was partly offset by lower capitalised expenditure relating to
North Mara and Bulyanhulu (US$154/oz), lower shared based payment charges
(US$102/oz) and lower sustaining
capital spend mainly driven by Bulyanhulu being on reduced
operations (US$24/oz).
Cash generated from operating activities was an inflow of
US$24.0 million which was a decrease
of US$1.2 million from Q1 2017
(US$25.2 million). Adjusted EBITDA of
US$44 million was offset by working
capital outflows of US$7 million,
provisional corporate tax payments of US$10
million, finance costs of US$3
million and other non-cash items of US$7 million. Working capital outflows mainly
relate to an increase in indirect tax receivables of US$5 million.
Capital expenditure amounted to US$25.8
million compared to US$46.8
million in Q1 2017. The decrease was mainly driven by lower
capitalised development costs. Capital expenditure primarily
comprised capitalised development and stripping (US$15.6 million), investment in
mobile equipment and component change-outs mainly relating to North
Mara (US$3.9 million), capitalised
drilling for resource and reserve development at North Mara’s
Gokona underground (US$1.5
million).
Mine Site Review
Bulyanhulu
Key statistics
|
|
Three months ended 31 March |
|
Year
ended 31 December |
(Unaudited) |
|
2018 |
2017 |
|
2017 |
Key operational
information: |
|
|
|
|
|
Ounces
produced |
oz |
8,527 |
63,346 |
|
175,491 |
Ounces
sold |
oz |
9,540 |
53,805 |
|
107,855 |
Cash
cost per ounce sold1 |
US$/oz |
713 |
786 |
|
840 |
AISC
per ounce sold1 |
US$/oz |
923 |
1,229 |
|
1,373 |
Copper
production |
Klbs |
- |
1,498 |
|
3,906 |
Copper
sold |
Klbs |
- |
956 |
|
588 |
Run-of-mine: |
|
|
|
|
|
Underground ore tonnes hoisted |
Kt |
- |
205 |
|
596 |
Ore
milled |
Kt |
- |
221 |
|
612 |
Head
grade |
g/t |
- |
8.4 |
|
8.6 |
Mill
recovery |
% |
- |
91.4% |
|
90.1% |
Ounces
produced |
oz |
- |
54,256 |
|
153,279 |
Cash
cost per tonne milled1 |
US$/t |
- |
171 |
|
126 |
Reprocessed
tailings: |
|
|
|
|
|
Ore
milled |
Kt |
450 |
413 |
|
1,010 |
Head
grade |
g/t |
1.1 |
1.4 |
|
1.4 |
Mill
recovery |
% |
52.6% |
47.5% |
|
48.0% |
Ounces
produced |
oz |
8,527 |
9,089 |
|
22,212 |
Capital
Expenditure |
|
|
|
|
|
- Sustaining capital |
US$('000) |
1,355 |
4,212 |
|
9,033 |
- Capitalised development |
US$('000) |
- |
16,070 |
|
39,543 |
- Expansionary capital |
US$('000) |
274 |
478 |
|
1,190 |
|
|
1,629 |
20,760 |
|
49,766 |
- Non-cash
reclamation asset adjustments |
US$('000) |
(1,732) |
1,042 |
|
(4,158) |
Total capital
expenditure |
US$('000) |
(103) |
21,802 |
|
45,608 |
1These are non-IFRS financial performance measures
with no standard meaning under IFRS. Refer to ‘Non-IFRS measures”
on page 14 for definitions.
Operating performance
Gold production amounted to 8,527 ounces, which was 87% lower
than Q1 2017 as a result of the decision taken in September 2017 to transition to reduced
operations at Bulyanhulu. Production consisted of the reprocessing
of tailings which was 6% lower compared to the prior year quarter
due to lower feed grades. Gold sold for the quarter of 9,540 ounces
was 12% higher than production due to the selling of gold ounces on
hand at the end of 2017 and 87% lower than Q1 2017 mainly as a
result of the lower production base. AISC per ounce sold for the
quarter of US$923 was 25% lower than
Q1 2017 (US$1,229/oz) driven by
reduced operating and capital spend, partly offset by lower
sales.
No copper production or sales for the quarter as a result of
Bulyanhulu being on reduced operations since the end of Q3 2017,
resulting in no concentrate production.
No underground ore tonnes hoisted during the quarter due to the
mine’s reduced operational state and cessation of all underground
mining activity.
Cash costs of US$713 per ounce
sold were 9% lower than Q1 2017 (US$786/oz), mainly due to lower direct mining
costs compared to the prior year period as a result of Bulyanhulu
being on reduced operations and lower sales related costs driven by
lower sales volumes. This was partly offset by the lower production
base and lower co-product revenue.
AISC per ounce sold for the quarter of US$923 was 25% lower than Q1 2017 (US$1,229/oz) driven by the impact of lower
capitalised development due to the ceased underground development
activities and lower corporate administration charges. This was
partly offset by the impact of lower sales ounces on individual
cost items.
Capital expenditure for the quarter before reclamation
adjustments amounted to US$1.6
million, significantly lower than Q1 2017 (US$20.8 million), mainly driven by lower
capitalised development due to Bulyanhulu being on reduced
operations, resulting in lower sustaining capital spend due to
projects being deferred or cancelled.
Capital expenditure consisted primarily of investment in mobile
equipment and component change-outs (US$0.8
million), costs relating to the completion of underground
ventilation raise borings (US$0.3
million), expansionary capital relating to the Bulyanhulu
feasibility studies (US$0.3 million)
and TSF wall raise (US$0.1
million).
During the quarter, reduced operating costs amounted to
US$8.2 million and mainly consisted
of site overhead costs including labour, power and camp related
costs, security costs associated with protecting the site and
surrounding infrastructure and ongoing maintenance related
work.
Buzwagi
Key statistics
|
|
Three months ended 31 March |
|
Year
ended 31 December |
(Unaudited) |
|
2018 |
2017 |
|
2017 |
Key operational
information: |
|
|
|
|
|
Ounces
produced |
oz |
35,685 |
59,856 |
|
268,785 |
Ounces
sold |
oz |
32,460 |
37,199 |
|
160,552 |
Cash
cost per ounce sold1 |
US$/oz |
964 |
694 |
|
594 |
AISC
per ounce sold1 |
US$/oz |
1,052 |
773 |
|
667 |
Copper
production |
Klbs |
- |
3,158 |
|
8,991 |
Copper
sold |
Klbs |
- |
1,531 |
|
752 |
Mining
information: |
|
|
|
|
|
Tonnes
mined |
Kt |
- |
5,267 |
|
15,368 |
Ore
tonnes mined |
Kt |
- |
2,053 |
|
9,309 |
Processing
information: |
|
|
|
|
|
Ore
milled |
Kt |
1,001 |
1,076 |
|
4,256 |
Head
grade |
g/t |
1.3 |
1.8 |
|
2.1 |
Mill
recovery |
% |
88.3% |
96.7% |
|
94.3% |
Cash
cost per tonne milled1 |
US$/t |
31 |
24 |
|
22 |
Capital
Expenditure |
|
|
|
|
|
- Sustaining capital |
US$('000) |
1,300 |
141 |
|
4,338 |
- Capitalised development |
US$('000) |
- |
- |
|
- |
|
|
1,300 |
141 |
|
4,338 |
- Non-cash
reclamation asset adjustments |
US$('000) |
133 |
(78) |
|
(1,978) |
Total capital
expenditure |
US$('000) |
1,433 |
63 |
|
2,360 |
1These are non-IFRS
financial performance measures with no standard meaning under IFRS.
Refer to “Non-IFRS measures” on page 14 for definitions.
Operating performance
Gold production for the quarter of 35,685 ounces was 40% lower
than in Q1 2017 due to Buzwagi transitioning to a low-grade
stockpile processing operation compared to the processing of
run-of-mine ore in the previous period. Gold sold for the quarter
of 32,460 ounces was 9% lower than production due to the timing of
shipments at quarter end. Sales were 13% lower than the prior
year period due to the lower production base. Buzwagi will
continue to solely produce doré until the end of its life of mine.
AISC per ounce sold of US$1,052 was
36% higher than Q1 2017 (US$773/oz),
mainly driven by the impact of the processing of lower grade
stockpiles.
Following Buzwagi’s transition to a stockpile processing
operation there was no copper production and therefore no copper
sales during the quarter. Recoveries of 88.3% were lower than the
previous year period due to lower grades and the bypassing of the
flotation circuit due to the low copper content of the
stockpiles.
There were no tonnes mined for the quarter, but we plan to mine
the last ore blocks from the main zone in the open pit in late Q2
2018 once the wet season has concluded. These tonnes have been
deferred from Q4 2017 due to flooding of the bottom of the pit.
Cash costs for the quarter of US$964 per ounce sold were 39% higher than Q1
2017 (US$694/oz) mainly due to a
drawdown in ore inventory as a result of ceased mining activities
(US$133/oz), lower co-product revenue
(US$134/oz) and the lower production
base, offset by lower direct mining costs as a result of Buzwagi
transitioning to a stockpile processing operation (US$34/oz).
AISC per ounce sold of US$1,052
was 36% higher than Q1 2017 (US$773/oz). This was driven by the higher cash
costs as discussed above (US$270/oz)
and higher sustaining capital spend relating to the expansion of
the tailings storage facility (US$36/oz).
Capital expenditure before reclamation adjustments amounted to
US$1.3 million, significantly higher
than in Q1 2017 (US$0.1 million),
mainly consisting of the expansion of the tailings storage facility
(US$1.0 million) which started in
late 2017.
North Mara
Key statistics
|
|
Three months ended 31 March |
|
Year
ended 31 December |
(Unaudited) |
|
2018 |
2017 |
|
2017 |
Key operational
information: |
|
|
|
|
|
Ounces
produced |
oz |
76,769 |
96,468 |
|
323,607 |
Ounces
sold |
oz |
74,955 |
93,740 |
|
324,455 |
Cash
cost per ounce sold1 |
US$/oz |
607 |
410 |
|
498 |
AISC
per ounce sold1 |
US$/oz |
950 |
717 |
|
803 |
Open pit: |
|
|
|
|
|
Tonnes
mined |
Kt |
3,840 |
3,854 |
|
15,299 |
Ore
tonnes mined |
Kt |
651 |
803 |
|
3,147 |
Mine
grade |
g/t |
1.7 |
2.8 |
|
1.7 |
Underground: |
|
|
|
|
|
Ore
tonnes trammed |
Kt |
187 |
154 |
|
654 |
Mine
grade |
g/t |
7.8 |
11.3 |
|
8.7 |
Processing
information: |
|
|
|
|
|
Ore
milled |
Kt |
709 |
710 |
|
2,841 |
Head
grade |
g/t |
3.7 |
4.6 |
|
3.9 |
Mill
recovery |
% |
92.3% |
92.6% |
|
92.0% |
Cash
cost per tonne milled1 |
US$/t |
64 |
54 |
|
57 |
Capital
Expenditure |
|
|
|
|
|
- Sustaining capital2 |
US$('000) |
5,688 |
6,256 |
|
22,563 |
- Capitalised development |
US$('000) |
15,568 |
17,797 |
|
61,066 |
- Expansionary capital |
US$('000) |
1,525 |
1,536 |
|
10,270 |
|
|
22,781 |
25,589 |
|
93,899 |
- Non-cash
reclamation asset adjustments |
US$('000) |
(491) |
124 |
|
(2,951) |
Total capital
expenditure |
US$('000) |
22,290 |
25,713 |
|
90,948 |
1These are non-IFRS financial performance measures
with no standard meaning under IFRS. Refer to ‘Non-IFRS measures”
on page 17 for definitions.
2 Includes land purchases recognised as long term
prepayments.
Operating performance
Gold production for the quarter of 76,769 ounces was 20% lower
than in Q1 2017. The reduction stemmed from lower average grades at
the Gokona underground mine on account of a higher proportion of
mining taking place in the lower-grade West Zone, with the
reconciled grade of 7.8g/t (declared ore mined of 7.0g/t), compared
to 11.3g/t in the previous period. The grade was also negatively
impacted by lower grades received from the Nyabirama pit. Gold
ounces sold for the quarter of 74,955 ounces were 20% lower than
the prior year quarter due to the lower production base but were
broadly in line with production.
Cash costs of US$607 per ounce
sold were 48% higher than Q1 2017 (US$410), mainly driven by increased direct
operating costs (US$117/oz) mainly
relating to increased maintenance costs and a lower proportion of
mining costs being capitalised as a result of a lower stripping
ratio, the lower production base (US$51/oz) and higher sales related costs driven
by the increase in royalties and clearance fees (US$31/oz).
AISC of US$950 per ounce sold was
32% higher than Q1 2017 (US$717/oz)
as a result of higher cash costs discussed above (US$197/oz) and the impact of lower sales volumes
on individual cost items (US$77/oz),
partly offset by lower capitalised development costs (US$30/oz).
Capital expenditure for the quarter before reclamation
adjustments amounted to US$22.8
million, 11% lower than in Q1 2017 (US$25.6 million). Key capital expenditure
included capitalised stripping costs (US$10.6 million), capitalised underground
development costs (US$5.0 million),
capitalised drilling mainly for resource and reserve development at
Gokona underground (US$1.5 million),
investment in mobile equipment and component change-outs
(US$3.9 million).
Exploration Review
Brownfield Exploration
North Mara
Gokona Underground
A total of 9,215 metres of extension and infill drilling were
completed by four rigs at Gokona Underground during Q1 2018, with a
further 76 holes for 8,851 metres of grade control drilling also
undertaken. Drilling continued to define the Upper Central zone
beneath the open pit; with further significant intercepts returned
during the quarter including:
UGKD453 |
15.0m @
13.2 g/t Au from 176m |
UGKD457 |
7.0m @
53.1 g/t Au from 193m; and 17.0m @ 6.3 g/t Au from 225m |
UGKD458 |
14.6m @
8.1 g/t Au from 190m and 26.0m @ 4.1 g/t Au from 222m
|
UGKD463 |
10.0m @ 7.7 g/t Au
from 174m |
UGKD472 |
10.0m @ 14.3 g/t Au
from 174m |
UGKD448 |
20.0m @ 8.7 g/t Au
from 157m |
Drilling of the Central zone between the base of the open pit
and the 1,000mRL elevation has now been completed, and results will
be incorporated into an updated Mineral Resource model during the
year. The mine development design and schedule will then be revised
in accordance with the defined economic mineralisation. The
drilling activity in the Central zone is currently restricted to
two drill rigs that will now test the mineralisation below
1,000m RL down to the projected
position of the Banana Fault.
The drilling programme testing the base of the second and top of
the third panels of mineralisation in the West zone continued.
Drilling has confirmed a low grade zone between the 1,000mRL and
970mRL elevations; which can be left as a pillar between the second
and third West mining panels. Planned drilling for the third mining
panel of the West zone is scheduled for the next six months, with
the Mineral Resource model due to be updated subsequent to
this.
Greenfield Exploration
Kenya
West Kenya Project
During Q1 2018 the focus of the exploration was on testing for
structures within the Liranda Corridor, parallel to Isulu, within
five kilometres of the existing inferred resources in order to
expand the current inferred resource of 1.17Moz at 12.6g/t. We are
also progressing a scoping study, which commenced in Q4 2017, with
results expected in H2 2018. We continue to believe that 2Moz is a
resource target for the Liranda Corridor Project.
During Q1 2018 two diamond rigs were active across the West
Kenya Project with 11 holes drilled for 3,590 metres. In addition,
prospect focused geological mapping and multi-element soil
geochemical surveys were underway.
In the Liranda Corridor, nine diamond holes for 3,400 metres
were completed on the Isulu South East Prospect. These holes
intersected multiple shear zones with disseminated sulfides, quartz
veining, carbonate and sericite alteration. Results for two holes
were received during Q1 2018 with low grade mineralisation within
shears of similar orientation and composition to the Isulu
prospect. Detailed structural analysis is presently underway to
assist with defining high grade shoots along these shears.
In the Lake Zone Camp geological mapping and soil geochemical
surveys were undertaken across the historic colonial mine workings
at Ramba Lumba and Rambi Aila to assist with drill targeting. This
has confirmed gold bearing quartz veins within several kilometre
zones of altered and sheared mafic to intermediate volcanics.
Drilling commenced in Q1 2018 with six holes totalling 2,000 metres
to be finalised in Q2 2018. The first hole drilled at Rumba Lumba
intersected a wide, strongly altered shear zone hosting visible
gold.
Burkina
Faso
During Q1 2018 exploration work on the Houndé Belt in southwest
Burkina Faso, where Acacia
currently manages four joint ventures covering approximately
2,700km² of prospective greenstone belt, comprised air-core
drilling on the Tankoro corridor and field mapping, geochemistry
sampling and IP surveys on the regional targets.
South Houndé JV (Sarama Resources Limited)
Tankoro Corridor
Air-core drilling was conducted at the Djimbaké zone
(south-western extension of the Tankoro Corridor) to test the
continuity of mineralisation along strike. 3,668 metres were
drilled during the quarter out of a programme total of 4,900
metres. First results include 6m @
2.63g/t Au from surface (including 2m
@ 7.25g/t Au) in AC3664 and 6m @
4.01g/t Au from 36m (including
4m @ 5.6g/t Au) in AC3665.
An IP geophysical survey, comprising 38 line kilometres, was
conducted on the Ben target (West of the resource area). Infill
soil geochemistry sampling and detailed field mapping was also done
at Ben.
SRK Consulting (UK) Limited has been contracted to update the
mineral resource estimation, based on the new 3D geology model.
Preliminary results are expected in Q2 2018. The programme for the
year on the Tankoro Corridor includes 7,000 metres of diamond
drilling to test high-grade shoots at depth and 22,000 metres of
combined air-core and reverse circulation drilling to outline
additional high grade mineralisation. This programme may be revised
depending on the results of the new mineral resource
estimation.
Ouangoro Corridor
An IP survey comprising 120 line kilometres, was conducted over
the five kilometre-long Yankadi zone. Detailed geology and regolith
mapping, associated with rock-chip and termite mound sampling,
continued at Yankadi. The programme for the year on the Ouangoro
Corridor comprises 7,400 metres of air-core drilling and 2,250
metres of reverse circulation drilling to test the continuity of
the gold mineralisation along strike and at depth.
Central Houndé JV (Thor Explorations Limited)
Detailed field geological mapping and rock-chip sampling
continued on the Légué-Bongui Corridor and on the Ouéré gold soil
anomaly. An IP geophysical survey, comprising 40 line kilometres,
was conducted on the Legué South-West target. The programme for the
year on the Central Houndé project comprises 11,500 metres of
air-core drilling to test the continuity of the gold mineralisation
along strike and to test soil anomalies. The drilling will be
converted to RC where ground conditions are not suitable.
Pinarello & Konkolikan JV (Canyon Resources Limited)
An IP geophysical survey, comprising 53 line kilometres, was
conducted on the Tangolobé target. The programme for the year on
the Pinarello & Konkolikan project comprises 30,000 metres of
air-core drilling to test the continuity of the gold mineralisation
along strike on the priority targets (Tankoro Corridor South,
Tangolobé and Gagnhy). The drilling will start in Q2 2018.
Frontier JV (Metallor SA)
No field work was conducted on the Frontier project in Q1 2018.
The programme for the year comprises 6,000 metres of air-core.
Mali
Acacia currently manages two joint ventures and holds one permit
covering 191km².
Tintinba-Bané Project JV (Demba
Camara and Cadem Gold)
The last results from the Q4 2017 reverse circulation drilling
programme were disappointing. At Tribala, only one significant
result was returned: 2m @ 3.01g/t Au
from 19m in TIRC0136. The original
drilling programme planned for Q1 2018 has been put on hold until a
more detailed interpretation of the targets has been finalised.
Boubou JV (Mande Empire) & Gourbassi Est – 100% Acacia (ABG
Exploration Mali SARL)
No field work was conducted on either the Boubou JV or Gourbassi
Est in Q1 2018. A soil geochemistry survey will be conducted on
both projects in Q2 2018 before running a reconnaissance drilling
programme.
Non-IFRS Measures
Acacia has identified certain measures in this report that are
not measures defined under IFRS. Non-IFRS financial measures
disclosed by management are provided as additional information to
investors in order to provide them with an alternative method for
assessing Acacia’s financial condition and operating results, and
reflects more relevant measures for the industry in which Acacia
operates. These measures are not in accordance with, or a
substitute for, IFRS, and may be different from or inconsistent
with non-IFRS financial measures used by other companies. These
measures are explained further below.
Net average realised gold price per ounce sold is a
non-IFRS financial measure which excludes from gold revenue:
- Unrealised gains and losses on non-hedge derivative contracts;
and
- Export duties
It also includes realised gains and losses on gold hedge
contracts reported as part of cost of sales.
Net average realised gold price per ounce sold have been
calculated as follow:
(US$000) |
Three months ended 31 March |
|
Year
ended 31 December |
|
(Unaudited) |
2018 |
2017 |
|
2017 |
Gold
revenue |
155,746 |
225,628 |
|
744,294 |
Less:
Realised gold hedge losses |
- |
- |
|
2,693 |
Net
gold revenue |
155,746 |
225,628 |
|
746,987 |
Gold
sold (ounces) |
116,955 |
184,744 |
|
592,861 |
Net
average realised gold price (US$/ounce) |
1,332 |
1,221 |
|
1,260 |
Cash cost per ounce sold is a non-IFRS financial measure.
Cash costs include all costs absorbed into inventory, as well as
royalties, and production taxes, and exclude capitalised production
stripping costs, inventory purchase accounting adjustments,
unrealised gains/losses from non-hedge currency and commodity
contracts, depreciation and amortisation, reduced operation costs
and corporate social responsibility charges. Cash cost is
calculated net of co-product revenue. Cash cost per ounce sold is
calculated by dividing the aggregate of these costs by total ounces
sold.
The presentation of these statistics in this manner allows
Acacia to monitor and manage those factors that impact production
costs on a monthly basis. Cash costs and cash cost per ounce sold
are calculated on a consistent basis for the periods presented.
The table below provides a reconciliation between cost of sales
and total cash cost to calculate the cash cost per ounce sold.
(US$'000) |
Three months ended 31 March |
|
Year
ended 31 December |
(Unaudited) |
2018 |
2017 |
|
2017 |
Cost of Sales |
|
|
|
|
Direct
mining costs |
70,990 |
98,783 |
|
299,591 |
Third
party smelting and refining fees |
1,269 |
5,321 |
|
9,675 |
Realised losses on economic hedges |
- |
108 |
|
743 |
Realised losses on gold hedges |
- |
- |
|
(2,693) |
Royalty expense |
12,151 |
10,642 |
|
44,930 |
Depreciation and amortisation* |
23,990 |
34,542 |
|
106,201 |
Total |
108,400 |
149,396 |
|
458,447 |
|
|
|
|
|
Total cost of sales |
108,400 |
149,396 |
|
458,447 |
Deduct: Depreciation and amortisation* |
(23,990) |
(34,542) |
|
(106,201) |
Deduct: Realised losses on gold hedges |
- |
- |
|
2,693 |
Deduct: Co-product revenue |
(771) |
(8,273) |
|
(7,221) |
Total cash cost |
83,639 |
106,581 |
|
347,718 |
|
|
|
|
|
Total
ounces sold |
116,955 |
184,744 |
|
592,861 |
Total
cash cost per ounce sold |
715 |
577 |
|
587 |
|
|
|
|
*Depreciation and amortisation includes the depreciation
component of the cost of inventory sold
All-in sustaining cost (AISC) is a non-IFRS financial
measure. The measure is in accordance with the World Gold Council’s
guidance issued in June 2013. It is
calculated by taking cash cost per ounce sold and adding corporate
administration costs, share-based payments, reclamation and
remediation costs for operating mines, corporate social
responsibility expenses, mine exploration and study costs, realised
gains and/or losses on operating hedges, capitalised stripping and
underground development costs and sustaining capital expenditure.
This is then divided by the total ounces sold. A reconciliation
between cash cost per ounce sold and AISC for the key business
segments is presented below:
(Unaudited) |
Three months ended 31 March 2018 |
|
Three months ended 31 March 2017 |
(US$/oz sold) |
Bulyanhulu |
North
Mara |
Buzwagi |
Group |
|
Bulyanhulu |
North
Mara |
Buzwagi |
Group* |
Cash
cost per ounce sold |
713 |
607 |
964 |
715 |
|
786 |
410 |
694 |
577 |
Corporate administration |
51 |
43 |
42 |
47 |
|
32 |
26 |
34 |
36 |
Share
based payments |
(43) |
(3) |
(7) |
(13) |
|
13 |
8 |
25 |
56 |
Rehabilitation |
29 |
8 |
6 |
9 |
|
12 |
10 |
5 |
10 |
CSR
expenses |
32 |
11 |
6 |
13 |
|
8 |
6 |
12 |
12 |
Capitalised development |
27 |
208 |
- |
135 |
|
299 |
190 |
- |
183 |
Sustaining capital |
114 |
76 |
41 |
70 |
|
79 |
67 |
3 |
60 |
Total
AISC |
923 |
950 |
1,052 |
976 |
|
1,229 |
717 |
773 |
934 |
* The group total includes a cost of
US$56/oz in Q1 2017 mainly related to
corporate costs incurred.
AISC is intended to provide additional information on the total
sustaining cost for each ounce sold, taking into account
expenditure incurred in addition to direct mining costs and selling
costs.
Where reference is made to AISC per ounce produced, this is
calculated in a similar manner as set out above, but adjusted for
the impact of the change in inventory charge/credit relating to
finished gold inventory. This recalculated number is then divided
by ounces produced.
Cash cost per tonne milled is a non-IFRS financial
measure. Cash costs include all costs absorbed into inventory, as
well as royalties, co-product credits, and production taxes, and
exclude capitalised production stripping costs, inventory purchase
accounting adjustments, unrealised gains/losses from non-hedge
currency and commodity contracts, depreciation and amortisation and
corporate social responsibility charges. Cash cost is calculated
net of co-product revenue. Cash cost per tonne milled is calculated
by dividing the aggregate of these costs by total tonnes
milled.
EBITDA is a non-IFRS financial measure. Acacia calculates
EBITDA as net profit or loss for the period excluding:
- Income tax expense;
- Finance expense;
- Finance income;
- Depreciation and amortisation; and
- Impairment charges of goodwill and other long-lived
assets.
EBITDA is intended to provide additional information to
investors and analysts. It does not have any standardised meaning
prescribed by IFRS and should not be considered in isolation or as
a substitute for measures of performance prepared in accordance
with IFRS. EBITDA excludes the impact of cash costs of financing
activities and taxes, and the effects of changes in operating
working capital balances, and therefore is not necessarily
indicative of operating profit or cash flow from operations as
determined under IFRS. Other companies may calculate EBITDA
differently.
Adjusted EBITDA is a non-IFRS financial measure. It is
calculated by excluding one-off costs or credits relating to
non-routine transactions from EBITDA. It excludes other credits and
charges that, individually or in aggregate, if of a similar type,
are of a nature or size that requires explanation in order to
provide additional insight into the underlying business
performance.
A reconciliation between net profit for the period and EBITDA,
and between EBITDA and adjusted EBITDA is presented below:
(US$000) |
Three months ended 31 March |
|
Year
ended 31 December |
(Unaudited) |
2018 |
2017 |
|
2017 |
Net
profit for the period |
49,995 |
26,827 |
|
(707,394) |
Plus
income tax expense |
8,085 |
19,183 |
|
(2,272) |
Plus
depreciation and amortisation* |
23,990 |
34,542 |
|
106,201 |
Plus:
impairment charges1 |
- |
- |
|
850,182 |
Plus
finance expense |
3,836 |
2,238 |
|
12,407 |
Less
finance income |
(132) |
(597) |
|
(1,944) |
EBITDA |
85,774 |
82,193 |
|
257,180 |
Adjusted for: |
|
|
|
|
Restructuring costs |
- |
- |
|
23,577 |
Profit
on sale of non-core mineral royalty |
(45,000) |
- |
|
- |
One
off legal settlements |
3,030 |
- |
|
5,083 |
Reduced operational costs |
- |
- |
|
11,411 |
Discounting of indirect taxes |
- |
- |
|
13,276 |
Adjusted EBITDA |
43,804 |
82,193 |
|
310,527 |
1 For the year ended 31
December 2017, US$850.2
million represents the gross impairment charge (net
US$644.3 million) following the
carrying review conducted in light of changes in the operating
environment in Tanzania, and by
reference to the terms of the Framework announcements by Barrick
and the GoT, US$838 million relating
to Bulyanhulu and US$12.2 million
relating to Nyanzaga.
*Depreciation and amortisation
includes the depreciation component of the cost of inventory
sold.
EBIT is a non-IFRS financial measure and reflects EBITDA
adjusted for depreciation and amortisation and goodwill impairment
charges.
Adjusted net earnings is a non-IFRS financial measure. It
is calculated by excluding certain costs or credits relating to
non-routine transactions from net profit attributed to owners of
the parent. It includes other credit and charges that, individually
or in aggregate, if of a similar type, are of a nature or size that
requires explanation in order to provide additional insight into
the underlying business performance. Adjusted net earnings and
adjusted earnings per share have been calculated as follows:
(US$000) |
Three months ended 31 March |
|
Year ended 31 December |
|
|
|
(Unaudited) |
2018 |
2017 |
|
2017 |
|
Net
earnings |
49,995 |
26,827 |
|
(707,394) |
|
Adjusted for: |
|
|
|
|
|
Restructuring costs1 |
- |
- |
|
23,577 |
|
Profit
on sale of non-core mineral royalty |
(45,000) |
- |
|
- |
|
One off legal
settlements2 |
3,030 |
- |
|
5,083 |
|
Reduced operational costs3 |
- |
- |
|
11,411 |
|
Discounting of indirect taxes |
- |
- |
|
13,276 |
|
Impairment charges/write-offs4 |
- |
- |
|
850,182 |
- |
Provision for uncertain tax positions5 |
- |
- |
|
172,000 |
|
Tax
impact of the above |
(909) |
- |
|
(221,917) |
|
Adjusted net earnings |
7,116 |
26,827 |
|
146,218 |
|
1 Restructuring costs for the year ending
31 December 2017 mainly relate to
Bulyanhulu (US$16.9 million) as a
result of the transitioning to reduced operations and other sites
(US$8.2 million).
2 One off legal settlements relates to the North Mara
royalty settlement.
3 Reduced operations costs not part of Bulyanhulu’s
AISC cost and includes stock obsolescence costs (US$6 million) and contractor exit costs
(US$4.9 million) for 2017.
4 For the year ended 31
December 2017, US$850.2
million represents the gross impairment charge (net
US$644.3 million) following the
carrying review conducted in light of changes in the operating
environment in Tanzania, and by
reference to the terms of the Framework announcements by Barrick
and the GoT, US$838 million relating
to Bulyanhulu and US$12.2 million
relating to Nyanzaga.
5 Includes a tax provision raised in 2017 of
US$172.0 million for uncertain tax
positions, based on an estimate of the impact of a comprehensive
settlement reflecting the key terms of the Framework announcements
made by Barrick and the GoT in October
2017.
Adjusted net earnings per share is a non-IFRS financial
measure and is calculated by dividing adjusted net earnings by the
weighted average number of Ordinary Shares in issue.
Free cash flow is a non-IFRS measure and represents the
change in cash and cash equivalents in a given period.
Net cash is a non-IFRS measure and is calculated by
deducting total borrowings from cash and cash equivalents.
Mining statistical information - the following describes
certain line items used in Acacia’s discussion of key performance
indicators:
- Open pit material mined – measures in tonnes the total amount
of open pit ore and waste mined.
- Underground ore tonnes hoisted – measures in tonnes the total
amount of underground ore mined and hoisted.
- Underground ore tonnes trammed – measures in tonnes the total
amount of underground ore mined and trammed.
- Total tonnes mined includes open pit material plus underground
ore tonnes hoisted.
- Strip ratio – measures the ratio of waste?to?ore for open pit
material mined.
- Ore milled – measures in tonnes the amount of ore material
processed through the mill.
- Head grade – measures the metal content of mined ore going into
a mill for processing.
- Milled recovery – measures the proportion of valuable metal
physically recovered in the processing of ore. It is generally
stated as a percentage of the metal recovered compared to the total
metal originally present.