11 April 2018

Tanzania: Acacia Mining Posts Strong First Quarter Performance

ACACIA Mining has posted strong operating performance after delivering solid production of 120,981 ounces of gold in the first quarter across the Group.

The Interim Chief Executive Officer, Peter Geleta said in a statement that the positive performance sets the company in good stead to deliver against its full year guidance of 435,000-475,000 ounces.

"All three of our operations delivered in line with their respective mine plans and we were pleased to record an increase in our cash balance to 107 million US dollars driven by the sale of a non-core royalty that completed in January 2018, which helped to further stabilise our balance sheet," he said.

Group gold production for the quarter was in line with expectations at 120,981 ounces, a 55 per cent decrease on Q1 2017 (219,620 ounces), primarily driven by the move to reduce operations at Bulyanhulu and to stockpile processing at Buzwagi.

Gold ounces sold for the quarter of 116,955 ounces were slightly below gold produced for the quarter as a result of the timing of shipments. At North Mara, gold production for the quarter of 76,769 ounces were, as expected, 20 per cent lower than Q1 2017's strong, grade-driven performance of 96,468 ounces.

This was primarily due to lower head grade, driven by the underground mine grade of 7.0 grammes per tonne being 28 per cent lower than the prior year period as a result of mining taking place in the lower-grade west zone of the Gokona Underground.

At Buzwagi, gold production of 35,685 ounces for Q1 2018 was 41 per cent lower than in Q1 2017 (59,856 ounces) as a result of production now being derived from lower grade ore stockpiles due to the effective completion of the open pit.

At Bulyanhulu, gold production for the quarter amounted to 8,527 ounces, 87 per cent below Q1 2017 (63,346 ounces).

During the quarter all production came from the retreatment of tailings as a result of the underground mine being placed on reduced operations in late 2017.

The cash balance as at 31 March 2018 amounted to approximately 107 million US dollars and increased by 26 million US dollars during the quarter, with net cash increasing by 40 million US dollars to approximately 50 million US dollars at period end.

During the quarter we repaid a further 14 million US dollars of the CIL debt facility and received 45 million US dollars from the sale of a non-core royalty, announced in December 2017.

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