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By Alex MacDonald
LONDON--Tanzania's largest gold miner Acacia Mining PLC (ACA.LN)
said Thursday that net profit fell 60% in the first quarter due to
delayed gold sales and higher costs but reaffirmed that it remains
on track to produce more gold this year.
The U.K.-listed miner, previously known as African Barrick Gold,
posted a net profit of $9.2 million for the three months ended
March 31, compared with $22.4 million in the corresponding period a
year earlier.
Revenue slipped 0.6% to $215 million during the period as a 7%
rise in gold sales volume to 171,415 ounces was more than offset by
a 7% drop in the achieved gold price in the first quarter compared
with the corresponding period a year earlier.
Acacia embarked on a restructuring plan roughly two years ago
that was aimed at slashing costs and boosting productivity in a
lower gold price environment. Those efforts bore fruit last year
when the company returned to positive cash-flow generation for the
first time since 2011.
Its performance, however, ebbed in the first quarter due to
delayed concentrate sales and higher maintenance and contract
service-related costs at its Bulyanhulu mine. This prompted the
company's all-in sustaining cash cost to rise to $1,117 a troy
ounce in the first quarter after nine consecutive quarters of
decline.
"We are going to have these plateaus as we change the business,"
said Chief Executive Officer Brad Gordon.
He added that Bulyanhulu's issues have been addressed and the
company's performance will pick up in quarters ahead as the company
reaffirmed its plan to produce 750,000 to 800,000 ounces of gold
this year at a reduced all-in sustaining cash cost of $1,050/oz to
$1,100/oz. This compares with 718,651 ounces of gold last year, up
13% on year, at an all-in sustaining cash cost of $1,105 an ounce
of gold.
Looking ahead, Mr. Gordon said the company remains focused on
completing Bulyanhulu's turnaround plan by the end of this year. It
will also continue to use its strong balance sheet to invest in
exploration acreage in both East and West Africa, including Burkina
Faso as of late.
"We're setting the company up so that we have a pipeline of
projects 10 to 15 years out," he said. "Now is the time to swim
against the tide and put our foot" in new exploration, he
noted.
Acacia Mining's shares were up 0.7% at 275.8 pence a share as of
0903 GMT while the FTSE 350 mining index was down 1.2%.
Write to Alex MacDonald at alex.macdonald@wsj.com