ACACIA Mining said it was confident in delivering its production forecast for the full year despite reporting a worse-than-expected decline in first quarter production due to issues at its North Mara mine.
The company, which is targeting total production of 500,000 ounces to 550,000 ounces, said it produced 104,899 ounces of gold in the first quarter - 13 percent lower than last year.
The Interim Chief Executive Officer, Peter Geleta said in a statement historically their production is typically stronger in the second half of the year, but production this quarter was impacted by unanticipated production issues at North Mara mine.
"We have taken immediate steps to address these, introducing a revised mining plan in mid-March for both the underground and open pit mines.
"We remain confident of delivering against our full year production guidance of 500,000 to 550,000 ounces," Mr Geleta said in a statement. The miner said the gold ounces sold for the quarter of 104,985 ounces were in line with production.
At North Mara gold production for the quarter of 66,324 ounces was 14 per cent lower than the prior year of 76,769 ounces, mainly driven by the consequences of a fall of ground in the Gokona underground mine at last December as well as an excavator breakdown in the Nyabirama open pit.
The fall of ground at Gokona prevented access in the quarter to two higher grade stopes in the East, impacting mine sequencing and ultimately head grade which, at 3gram/tonne, was 19per cent lower than the first quarter of last year and below expectations for the quarter.
"In order to address these issues, North Mara began working to a revised mining plan from mid-March, with new mine sequencing for both the open pit and underground mines targeting higher grades and increased volumes... " .
On Buzwagi gold production of 28,577 ounces for the quarter was 20 per cent lower than the prior year of 35,685 ounces but in line with expectations as a result of the mine having fully transitioned to a lower grade stockpile processing operation.
Bulyanhulu produced 9,999 gold ounces for the quarter, 17per cent above the prior year of 8,527 ounces and in line with expectations, due to the higher grades recovered from the retreatment of tailings as well as improvements in plant throughput.
"All production continued to be produced from the retreatment of tailings as a result of the mine being placed on reduced operations in late 2017," the statement said in regards of Bulyanhulu.
The cash balance as at end of March amounted to approximately 99 million US dollars, representing a decrease of net cash of approximately 17 million US dollars during the quarter, primarily as a result of the lower production.
"Through the quarter, Acacia has continued to engage with and provide support to Barrick in its direct negotiations with the government of Tanzania," the statement said.