Acacia Mining has announced gold production drop by almost 35,000 ounces in this year's quarter one.
The company has associated the drop with the government directive to stop export of metallic mineral concentrate. The largest gold firm in the country said the ban, which was imposed early last month, has affected its revenue by 30 per cent.
However, gold sales of 184,744 ounces, was in line with Q1 2016. Its share price at Dar es Salaam Stock Exchange on Wednesday gained by 1.32 per cent to 13, 030/-.
Acacia CEO, Brad Gordon, said the impact of the ban in Q1meant that they have approximately 30,000 ounces of gold in concentrate on hand, which was produced but not yet sold.
"All-in Sustaining Cost per ounce sold (AISC) was impacted by sales being lower than production primarily due to the restriction," Mr Gordon said in a statement yesterday.
The AISC still amounted to 934 US dollars per ounce sold-- 877 US dollar per ounce prior to the impact of share-based payment valuations--3.0 per cent lower than Q1 2016. "AISC was impacted on a unit cost basis, and had we sold all of the ounces produced, AISC for the quarter would have been approximately 852 US dollars per ounce," he said.
This has negatively impacted cash flow by approximately 33 million US dollars for the quarter. In addition, Acacia received approximately 22 million US dollars in advanced payments for concentrate produced in January and February and currently held up in the Dar es Salaam port waiting export ban lifting.
"The advanced payments may need to be refunded during the second quarter if the export ban is not lifted," Mr Gordon warned. North Mara is unaffected due to 100 per cent of its production being dore. In 2016, the concentrate accounted for approximately 45 per cent of Bulyanhulu's revenues and 55 per cent of Buzwagi's revenues.
However, Acacia gold production increased by 15 per cent to 219,670 ounces compared to similar quarter last year. "At an operational level Acacia had a very strong start to the year, with production of 219,670 ounces delivered from our mines," Mr Gordon said.
The CEO, however, said while talks with the government continue their three mines continue to operate as normal while sand stocks is piling up, at this stage there were no change to guidance for the year.