21 October 2016
Results for the three months ended
30 September 2016 (Unaudited)
Based on IFRS and expressed in US Dollars (US$)
Acacia Mining plc (“Acacia’’) reports
third quarter results
“Our strong third quarter operational and financial results
represent another significant step forward for Acacia, particularly
considering some of the headwinds experienced during the
quarter”, said Brad Gordon, Chief
Executive Officer. “I am particularly pleased with North Mara’s
performance this quarter, delivering 112,523 ounces at an all-in
sustaining cost (“AISC”) of US$655
per ounce sold. This more than offset the impact of operational
stoppages at Bulyanhulu and the deferred access to higher grades at
Buzwagi. Group all-in sustaining cost for the quarter of
US$998 per ounce, including a
US$97 per ounce of share based
valuation charges, was 16% lower than Q3 2015. We have also
increased our net cash position by a further US$32 million to US$203 million, which means we
have close to doubled our net cash already in 2016. Due to
continued strong performance year to date, we now expect full year
group production to be around 5% higher than the top of our initial
guidance range of 750 – 780,000 ounces of gold.”
Operational Highlights
- Gold production of 204,726 ounces, 25% higher than Q3 2015
- Gold sales of 206,488 ounces, 24% higher than Q3 2015, and 1%
above production
- AISC1 of US$998 per
ounce sold (US$901 per ounce before
the impact of the share based payment valuation charge), 16% below
Q3 2015
- Cash costs1 of US$598
per ounce sold, 26% lower than Q3 2015
- Secured 100% ownership of the highly prospective West Kenya
Project, which continues to deliver positive drill results
Financial Highlights
- Revenue of US$285 million, 48%
higher than Q3 2015, driven by increased gold sales and higher net
realised gold price1
- EBITDA1 of US$125
million, US$104 million higher
than Q3 2015, despite share based valuation charges of US$20 million
- Net earnings of US$53 million,
(US12.9 cents per share), despite US$20
million of share based valuation charges
- Adjusted net earnings1 of US$51 million (US12.4 cents per share),
US$64 million higher than Q3
2015
- Operational cash flow of US$100
million, US$96 million higher
than Q3 2015
- Capital expenditure2 of US$53
million, 2% higher than Q3 2015 due to a focus on
capitalised development at Bulyanhulu and North Mara
- Net cash1 position increased by US$32 million during the quarter to US$203 million, almost doubling year to date,
with the cash balance increasing to US$302
million
|
Three months ended 30 September |
Nine months ended 30 September |
(Unaudited) |
2016 |
2015 |
2016 |
2015 |
Gold production
(ounces) |
204,726 |
163,888 |
616,751 |
531,189 |
Gold sold
(ounces) |
206,488 |
167,116 |
607,451 |
522,586 |
Cash cost
(US$/ounce)1 |
598 |
807 |
626 |
789 |
AISC
(US$/ounce)1 |
998 |
1,195 |
961 |
1,153 |
Net average realised
gold price (US$/ounce)1 |
1,330 |
1,113 |
1,250 |
1,172 |
(in US$'000) |
|
|
|
|
Revenue |
284,695 |
192,682 |
789,642 |
639,463 |
EBITDA
1 |
124,825 |
20,453 |
309,707 |
117,341 |
Adjusted
EBITDA1 |
122,125 |
20,438 |
302,624 |
121,750 |
Net
earnings/(loss) |
52,787 |
(13,053) |
46,659 |
1,712 |
Basic earnings/(loss)
per share (EPS) (cents) |
12.9 |
(3.2) |
11.4 |
0.4 |
Adjusted net
earnings/(loss)1 |
50,898 |
(13,063) |
109,665 |
4,798 |
Adjusted
earnings/(loss) per share (AEPS) (cents)1 |
12.4 |
(3.2) |
26.8 |
1.2 |
Cash generated from
operating activities |
99,947 |
4,262 |
257,043 |
111,355 |
Capital
expenditure2 |
52,900 |
51,646 |
138,072 |
140,686 |
Cash balance |
302,061 |
226,373 |
302,061 |
226,373 |
Total borrowings |
99,400 |
127,800 |
99,400 |
127,800 |
1 These are non-IFRS measures. Refer to page
13 for definitions
2 Excludes non-cash capital adjustments
(reclamation asset adjustments) and includes finance lease
purchases and land purchases recognised as long term
prepayments
Other Developments
Outlook
Due to continued strong performance year to date, we now expect
full year group production to be around 5% higher than the top of
our initial guidance range of 750-780,000 ounces of gold. We
expect our reported AISC to be towards the bottom of our original
guidance range of US$950 –
US$980 per ounce, although this
includes an estimated US$50 per ounce
in share based payment costs as a result of the strength of our
share price so far this year. In the fourth quarter we expect
production at Bulyanhulu and Buzwagi to increase over Q3 2016 with
North Mara expected to deliver a material, albeit lower
contribution in Q4 2016 due to a reduction in underground mine
grade as we move through some lower grade stopes.
Consolidation of ownership of Lonmin
Joint Venture in West Kenya
As previously reported, Acacia has increased its ownership from
51% to 100% in the two licences covering the majority of the
West Kenya project area for
consideration of US$5 million. Acacia
now has full exposure to a highly prospective land package in
Kenya, including our most advanced
project, the Liranda Corridor. Acacia continues to intersect high
grade gold zones at the Bushiangala and Acacia prospects along the
Liranda Corridor where drilling is indicating the potential for a
new gold camp. As a result we opted to increase our position in the
project at this stage to ensure our shareholders will be able to
fully benefit if the project continues to progress.
Dividend Withholding Tax Appeal
As previously reported, the Tanzanian Revenue Authority (TRA)
has raised claims to the value of US$41.3
million for withholding tax on historic offshore dividend
payments paid by Acacia Mining plc to its shareholders. Acacia does
not believe that this claim has any merit. On 31 March 2016, the Tax Revenue Appeals Tribunal
found in favour of the TRA and Acacia appealed the judgement to the
Court of Appeal. On 3 October 2016 local news reports
incorrectly stated that the Court of Appeal had upheld the ruling
of the Tanzania Revenue Appeals Tribunal.
At this stage, the Court of Appeal has made no findings with
respect to the claim for withholding tax, and rather dismissed
Acacia’s initial appeal on procedural matters. Acacia has obtained
leave to lodge a corrected appeal against the claim, which will be
heard at the Court of Appeal in due course.
Corporate Taxation update
Following the Memorandum of Understanding (“MOU”) entered into
with the TRA in Q1 2016 to prepay corporate tax up to US$20 million for the year, we have made another
payment of US$5.2 million during Q3
2016, bringing the year to date pre-payment to US$15.2 million. All of the pre-payments to date
have been fully offset against current indirect tax
receivables.
In addition, we have also made our first provisional corporate
tax payment for 2016. This payment amounted to US$10.2 million and was calculated on three
quarters of the expected income tax payable for North Mara for
2016, in excess of the US$20 million
prepayment. The US$10.2 million was
offset against the long term indirect tax receivable, in line with
the Memorandum of Settlement (“MOS”) reached with the TRA in 2011,
and as such there was no cash impact. Together with the prepayment
of corporate tax, this brings our total year-to-date corporate tax
payment to US$25.4 million.
Indirect taxes
During the third quarter, the total indirect tax receivables
increased from US$109.1 million at
30 June 2016 to US$124.1 million at 30
September 2016. This increase was made up of a net increase
in short term indirect tax receivables of US$25.0 million, offset by a decrease in long
term receivables of US$10.0
million.
The net increase in the short term receivable of US$25.0 million is mainly driven by indirect tax
payments of US$30.7 million during
the quarter, partially offset by the corporate tax prepayment of
US$5.2 million and refunds received
of US$1.4 million. The net decrease
in the long term receivable of US$10.0
million relates mainly to the offsetting of the provisional
corporate tax payment of US$10.2
million, in line with the MOS.
Share based payments
As previously communicated, in order to align employee
remuneration with long term value creation for shareholders,
certain employees are granted long term incentives as part of their
annual pay package. Due to the level of free float, these awards
are primarily in the form of restricted share units (RSUs) which
vest after a three year period and are cash settled. As the awards
are cash settled they are marked to market each quarter against the
share price. There are approximately 9 million units in issue, with
around two thirds of these linked to performance of the share price
against a peer group of gold companies (PRSUs) and as such can vest
between zero and 200% of the initial grant amount depending on
share price performance compared to those peers.
These units are generally awarded and consequently vest in the
first quarter of the year, but are also occasionally awarded on the
appointment of senior employees out of this timeline. In Q3 2016,
approximately 935,000 performance units vested and due to the very
strong absolute and relative performance of the share price over
the past three years, vested at 200% of the original grant,
resulting in a vesting amount paid of US$17.7 million. A further 1.0 million PRSUs and
0.8 million RSUs are due to vest in Q4 2016, with the PRSUs also
currently at 200% performance. During the quarter, we have incurred
a non-cash charge of US$20.1 million
relating to the revaluation of the future share based payments.
Key statistics
|
Three months ended 30 September |
|
Nine months ended 30 September |
(Unaudited) |
2016 |
2015 |
|
2016 |
2015 |
Tonnes mined
(thousands of tonnes) |
9,501 |
10,787 |
|
28,847 |
31,262 |
Ore tonnes mined
(thousands of tonnes) |
2,146 |
2,584 |
|
6,835 |
7,489 |
Ore tonnes processed
(thousands of tonnes) |
2,351 |
2,296 |
|
7,251 |
6,855 |
Process recovery rate
(percent)4 |
87.5% |
85.7% |
|
88.4% |
87.3% |
Head grade (grams per
tonne)4 |
3.1 |
2.6 |
|
3.0 |
2.8 |
Gold production
(ounces) |
204,726 |
163,888 |
|
616,751 |
531,189 |
Gold sold
(ounces) |
206,488 |
167,116 |
|
607,451 |
522,586 |
Copper production
(thousands of pounds) |
3,557 |
2,993 |
|
11,984 |
10,485 |
Copper sold (thousands
of pounds) |
3,277 |
2,770 |
|
11,361 |
9,598 |
Cash cost per tonne
milled (US$/t)1,3 |
53 |
59 |
|
52 |
60 |
Per ounce data |
|
|
|
|
|
Average spot gold price2 |
1,335 |
1,124 |
|
1,260 |
1,178 |
Net average realised gold
price1 |
1,330 |
1,113 |
|
1,250 |
1,172 |
Total cash cost1 |
598 |
807 |
|
626 |
789 |
All-in sustaining cost1 |
998 |
1,195 |
|
961 |
1,153 |
Average realised
copper price (US$/lb) |
2.17 |
2.04 |
|
2.14 |
2.45 |
Financial results
|
Three months ended 30 September |
|
Nine months ended 30 September |
(Unaudited, in US$'000
unless otherwise stated) |
2016 |
2015 |
|
2016 |
2015 |
Revenue |
284,695 |
192,682 |
|
789,642 |
639,463 |
Cost of sales |
(175,327) |
(173,711) |
|
(530,766) |
(537,293) |
Gross profit |
109,368 |
18,971 |
|
258,876 |
102,170 |
Corporate
administration |
(5,906) |
(8,857) |
|
(15,677) |
(27,147) |
Share-based
payments |
(20,089) |
2,469 |
|
(39,724) |
(5,821) |
Exploration and
evaluation costs |
(5,540) |
(6,017) |
|
(16,690) |
(14,753) |
Corporate social
responsibility expenses |
(2,983) |
(4,230) |
|
(7,597) |
(9,534) |
Other income/
(charges) |
8,273 |
(14,102) |
|
10,441 |
(25,907) |
Profit/(loss) before
net finance expense and taxation |
83,123 |
(11,766) |
|
189,629 |
19,008 |
Finance income |
657 |
426 |
|
1,147 |
1,126 |
Finance expense |
(3,023) |
(3,253) |
|
(8,403) |
(9,729) |
Profit/(loss) before
taxation |
80,757 |
(14,593) |
|
182,373 |
10,405 |
Tax
(expense)/credit |
(27,970) |
1,540 |
|
(135,714) |
(8,693) |
Net profit/(loss) for
the period |
52,787 |
(13,053) |
|
46,659 |
1,712 |
1 These are non-IFRS financial performance measures
with no standard meaning under IFRS. Refer to “Non IFRS measures”
on page 13 for definitions.
2 Reflect the London PM fix price.
3 Cash cost per tonne milled excluding the
reprocessing of tailings at Bulyanhulu amounted to US$61 per tonne for the quarter ended
30 September 2016, US$69 per tonne for the quarter ended
30 September 2015, US$60 per tonne for the nine months ended
30 September 2016 and US$68 per tonne for the nine months ended
30 September 2015.
4 Reported process recovery rates and head grade
include tailings retreatment at Bulyanhulu. Excluding the impact of
the tailings retreatment Q3 2016 process recovery would be 91.5%
with head grade being 3.4g/t, in Q3 2015 process recovery would be
89.4% with head grade being 2.9g/t, nine months ended 30 September 2016 process recovery would be 92.2%
with head grade being 3.3g/t and nine months ended 30 September 2015 process recovery would be 89.4%
with head grade being 3.0g/t.
For further information, please visit our website:
http://www.acaciamining.com/ or contact:
Acacia Mining plc |
+44 (0) 207 129 7150 |
Brad Gordon, Chief Executive
Officer
Andrew Wray, Chief Financial
Officer
Giles Blackham, Investor
Relations Manager
Bell Pottinger |
+44 (0) 203 772 2500 |
Daniel Thöle
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 producing mines, all
located in north-west Tanzania:
Bulyanhulu, Buzwagi, and North Mara and a portfolio of exploration
projects in Tanzania, Kenya, Burkina
Faso and Mali.
Our approach is focused on strengthening our core pillars; our
business, our people and our relationships, whilst continuing to
invest in our future.
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
21 October 2016 at 09:00 London time.
The access details for the conference call are as follows:
Participant dial in: |
+44 20 3003 2666 / +1 212 999
6659 |
Password: |
Acacia |
A recording of the conference call will be available on our
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. Subject to the
requirements of the Market Abuse Regulation or 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.
Third Quarter Review
Third quarter production of 204,726 ounces was an increase of
25% on Q3 2015. AISC of US$998 per
ounce sold was 16% lower than the prior year period of US$1,195, and included a US$97 per ounce impact from the revaluation of
future share based payments. Cash costs reduced by 26% to
US$598 per ounce sold. Increased
production drove a 24% increase in sales volumes to 206,488
ounces.
North Mara’s production of 112,523 ounces was 66% higher than
the prior year driven by a 64% increase in head grade and a 5%
improvement in recovery rates. The increase in head grade was
driven by higher mine grades in the Gokona underground, primarily
due to continued positive grade reconciliations. AISC fell by 30%
to US$655 per ounce sold
predominantly due to lower cash costs in combination with the
higher production base.
Bulyanhulu saw a 16% decrease in production to 52,504 ounces. As
previously reported, this was mainly due to inconsistent process
plant operations resulting from the overheating of the ball mill
trunnion bearing after a planned two week shut down for scheduled
maintenance, which resulted in a further 14 days of mill downtime.
Ounces produced from reprocessed tailings increased by 20% from Q3
2015 due to a 25% increase in head grade. AISC was elevated at
US$1,300 per ounce due to the lower
than planned production base, but this still represented a 5%
improvement on Q3 2015.
At Buzwagi, gold production for the quarter of 39,699 ounces was
below plan, but 17% higher than Q3 2015, due to a 13% improvement
in mill throughput as a result of improved mill availabilities. The
higher production base and lower cash costs drove a 23% decrease in
AISC to US$1,076 per ounce sold in Q3
2015.
Total tonnes mined in Q3 2016 amounted to 9.5 million tonnes,
12% lower than Q3 2015 primarily due to lower open pit tonnes mined
at Buzwagi as a result of lower equipment availabilities and
productivities. Ore tonnes mined were 2.1 million tonnes, 17% below
Q3 2015, as the slower than planned movement of waste at Buzwagi
impacted on the timing of exposure of ore blocks.
Ore tonnes processed amounted to 2.4 million tonnes, in line
with Q3 2015 of 2.3 million tonnes. Lower ore tonnes milled at
Bulyanhulu due to the plant shut down were offset by higher ore
tonnes processed at Buzwagi as a result of good mill
performance.
Head grade for the quarter of 3.1 g/t was 19% higher than Q3
2015 of 2.6 g/t. This was due to a 64% increase in head grade at
North Mara driven by higher grade underground Gokona ore processed,
a 13% increase at Bulyanhulu due to increased underground grades
and a 25% increase in head grade for reprocessed tailings at
Bulyanhulu.
Cash costs for the quarter were 26% lower than in Q3 2015, and
amounted to US$598 per ounce sold.
The decrease was primarily due to:
- Higher production base (US$140/oz);
- Increased capitalisation of operating costs at North Mara and
Bulyanhulu (US$50/oz);
- Lower labour costs at all sites primarily due to a reduction in
employees (US$19/oz);
- Higher co-product revenue due to increased copper sales volumes
and a higher realised copper price (US$11/oz).
This was partially offset by:
- Higher sales related costs due to higher sales volumes and the
impact of the increased gold price on royalties (US$25/oz).
The all-in sustaining cost of US$998 per ounce sold for the quarter was 16%
lower than Q3 2015 mainly due to the lower cash costs, the impact
of the higher production base, lower corporate administration
expenditure and lower sustaining capital expenditure. This was
partly offset by the non-cash charge relating to the revaluation of
future share based payments amounting to US$20.1 million following the increase in
Acacia’s share price over the quarter and the impact of units
vesting the quarter, as well as an increase in performance against
peers (US$97/oz).
Cash generated from operating activities amounted to
US$99.9 million for the quarter,
driven mainly by the higher EBITDA as higher sales volumes and the
higher realised gold prices aided revenue, combined with lower cash
costs.
Net average realised gold price, being the average realised gold
price achieved by the Group and adjusted for realised losses
relating to zero-cost collar gold contracts, of US$1,330 per ounce was US$5 per ounce below the average market price of
US$1,335 per ounce, driven by the
impact of realised losses on zero cost collar contracts relating to
gold at Buzwagi.
Capital expenditure amounted to US$52.9
million in Q3 2016 compared to US$51.6 million in Q3 2015. Capital expenditure
primarily comprised capitalised development expenditure
(US$41.3 million), investment in
underground infrastructure at Bulyanhulu (US$3.2 million), investments in tailings and
infrastructure (US$3.1 million),
investment in mobile equipment and component change-outs
(US$2.3 million) and land purchases
at North Mara (US$0.2 million).
Mine Site Review
Bulyanhulu
Key statistics
|
|
Three months ended 30 September |
|
Nine months ended 30 September |
(Unaudited) |
|
2016 |
2015 |
|
2016 |
2015 |
Key operational
information: |
|
|
|
|
|
|
Ounces produced |
oz |
52,504 |
62,188 |
|
209,573 |
195,329 |
Ounces sold |
oz |
53,764 |
64,132 |
|
204,483 |
186,108 |
Cash cost per ounce
sold1 |
US$/oz |
808 |
836 |
|
700 |
859 |
AISC per ounce
sold1 |
US$/oz |
1,300 |
1,373 |
|
1,057 |
1,362 |
Copper production |
Klbs |
1,157 |
1,465 |
|
4,684 |
4,534 |
Copper sold |
Klbs |
1,107 |
1,327 |
|
4,261 |
3,865 |
Run-of-mine: |
|
|
|
|
|
|
Underground ore tonnes
hoisted |
Kt |
186 |
237 |
|
665 |
701 |
Ore milled |
Kt |
168 |
236 |
|
670 |
715 |
Head grade |
g/t |
9.4 |
8.3 |
|
9.3 |
8.5 |
Mill recovery |
% |
85.9% |
87.8% |
|
91.3% |
88.4% |
Ounces produced |
oz |
43,661 |
54,804 |
|
183,744 |
173,170 |
Cash cost per tonne
milled1,2 |
US$/t |
228 |
208 |
|
192 |
205 |
Reprocessed
tailings: |
|
|
|
|
|
|
Ore milled |
Kt |
419 |
408 |
|
1,199 |
988 |
Head grade |
g/t |
1.5 |
1.2 |
|
1.5 |
1.2 |
Mill recovery |
% |
44.3% |
45.4% |
|
45.3% |
56.6% |
Ounces produced |
oz |
8,843 |
7,384 |
|
25,829 |
22,159 |
Capital
Expenditure |
|
|
|
|
|
|
- Sustaining
capital |
US$('000) |
4,892 |
15,779 |
|
16,398 |
32,234 |
- Capitalised
development |
US$('000) |
18,648 |
14,227 |
|
47,086 |
48,267 |
- Expansionary
capital |
US$('000) |
321 |
(282) |
|
1,074 |
(1,191) |
|
|
23,861 |
29,724 |
|
64,558 |
79,310 |
- Non-cash
reclamation asset adjustments |
US$('000) |
(3,062) |
(1,381) |
|
6,875 |
(1,788) |
Total capital
expenditure |
US$('000) |
20,799 |
28,343 |
|
71,433 |
77,522 |
1These are non-IFRS financial performance measures with no
standard meaning under IFRS. Refer to ‘Non-IFRS measures” on page
13 for definitions.
2 Cash cost per tonne milled is calculated for
Bulyanhulu excluding the impact, and associated cash costs, of
reprocessed tailings tonnes.
Operating performance
Gold production for the quarter of 52,504 ounces was 16% lower
than Q3 2015. This was due to ounces produced from underground
mining decreasing by 20% compared to Q3 2015. During the quarter we
undertook a planned two-week shutdown of the vertical shaft to
refurbish and modernise the production and service winders. In
parallel with this, we undertook a programme of works on the
process plant over a similar time frame. The planned shaft
maintenance was concluded successfully and we recommenced full
scale hoisting in early September. However, due to repeated
overheating of the ball mill trunnion bearing the plant was unable
to run consistently until the final week of the quarter which
impacted on both throughput and recoveries. The overheating was due
to flex in the trunnion footplate, which led to increased friction
on the bearing. The issue was resolved by stabilising and
reinforcing the base of the footplate and the plant has been
operating normally since restarting. Further work will be carried
out during a planned plant shutdown in Q4 2016 with a full bearing
housing replacement to be installed during 2017 to provide a life
of mine solution.
As a result of the shutdown there was a 29% decrease in
throughput and a 2.2% reduction in recovery rates compared to Q3
2015 which was partly offset by a 13% increase in head grade as
underground mined grades improved. Ounces produced from
reprocessing of tailings increased by 20% from Q3 2015 due to a 25%
increase in head grade. Gold sold for the quarter amounted to
53,764 ounces, 16% lower than Q3 2015, in line with production.
Copper production of 1.2 million pounds for the quarter was 21%
lower than in Q3 2015 due to the plant shut down.
Cash costs for the quarter of US$808 per ounce sold were 3% lower than Q3 2015
(US$836). This was despite the lower
production base and mainly due to lower labour costs driven by
lower employee headcount, higher capitalised mining costs as a
result of higher waste capitalisation ratios, and lower general and
administrative expenditure, partly offset by higher energy and fuel
costs as a result of increased self-generation to provide stable
power to the plant.
AISC per ounce sold for the quarter of US$1,300 was 5% lower than Q3 2015 (US$1,373) driven by the lower cash costs, lower
sustaining capital expenditure and lower corporate administration
expenditure, predominantly offset by the impact of the lower
production base and higher capitalised underground development.
Capital expenditure for the quarter before reclamation
adjustments amounted to US$23.9
million, 20% lower than the Q3 2015 expenditure of
US$29.7 million, mainly driven by
lower sustaining capital spend, partly offset by higher capitalised
underground development costs. Capital expenditure consisted mainly
of capitalised underground development costs (US$18.6 million), underground mine infrastructure
(US$3.2 million), investments in
tailings and infrastructure (US$1.4
million) and investment in mobile equipment and component
change-outs (US$0.4 million).
Buzwagi
Key statistics
|
|
Three months ended 30 September |
|
Nine months ended 30 September |
(Unaudited) |
|
2016 |
2015 |
|
2016 |
2015 |
Key operational
information: |
|
|
|
|
|
|
Ounces produced |
oz |
39,699 |
33,961 |
|
119,918 |
125,976 |
Ounces sold |
oz |
39,284 |
33,590 |
|
119,688 |
125,078 |
Cash cost per ounce
sold1 |
US$/oz |
986 |
1,197 |
|
1,030 |
1,028 |
AISC per ounce
sold1 |
US$/oz |
1,076 |
1,394 |
|
1,108 |
1,171 |
Copper production |
Klbs |
2,400 |
1,528 |
|
7,300 |
5,951 |
Copper sold |
Klbs |
2,171 |
1,444 |
|
7,100 |
5,734 |
Mining
information: |
|
|
|
|
|
|
Tonnes mined |
Kt |
5,072 |
6,523 |
|
16,495 |
19,416 |
Ore tonnes mined |
Kt |
1,203 |
1,518 |
|
3,808 |
4,226 |
Processing
information: |
|
|
|
|
|
|
Ore milled |
Kt |
1,063 |
938 |
|
3,245 |
3,025 |
Head grade |
g/t |
1.2 |
1.2 |
|
1.2 |
1.4 |
Mill recovery |
% |
94.4% |
93.6% |
|
94.5% |
93.8% |
Cash cost per tonne
milled1 |
US$/t |
36 |
43 |
|
38 |
42 |
Capital
Expenditure |
|
|
|
|
|
|
- Sustaining
capital |
US$('000) |
1,087 |
2,980 |
|
3,318 |
8,114 |
- Capitalised
development |
US$('000) |
- |
1,137 |
|
- |
1,480 |
|
|
1,087 |
4,117 |
|
3,318 |
9,594 |
- Non-cash
reclamation asset adjustments |
US$('000) |
(1,795) |
1,577 |
|
1,212 |
1,493 |
Total capital
expenditure |
US$('000) |
(708) |
5,694 |
|
4,530 |
11,087 |
|
|
|
|
|
|
|
|
1These are non-IFRS
financial performance measures with no standard meaning under IFRS.
Refer to “Non-IFRS measures” on page 13 for definitions.
Operating performance
Gold production for the quarter of 39,699 ounces was 17% higher
than Q3 2015, as a result of a 13% increase in plant throughput due
to improved mill availability leading to improved milling rates
driven, but behind plan as a result of delayed access to the high
grades zones due to slower than planned movement of waste material.
Gold sold for the quarter amounted to 39,284 ounces, in line with
production. Copper production of 2.4 million pounds for the quarter
was 57% higher than Q3 2015 due to higher throughput and higher
copper grades.
Total tonnes mined for the quarter of 5.1 million tonnes were
22% lower than Q3 2015 and ore tonnes mined of 1.2 million tonnes
were 21% lower than Q3 2015 as a result of lower equipment
availabilities due to fleet reliability issues and lower fleet
productivities due to increased rill material encountered as the
mine moved below the Stage 2 final depth. The slower mining rates
meant that the accessing of the higher grade central zone will be
deferred into the middle of the fourth quarter and led to grades
being in line with previous quarters.
Cash costs for the quarter of US$986 per ounce sold were 18% lower than in Q3
2015 (US$1,197). Cash costs were
primarily impacted by the higher production base, lower general and
administrative costs, lower energy and fuel costs due to improved
reliance on the national electricity gridand lower labour costs
driven by a decrease in employees, partly offset by higher sales
related costs given higher sales volumes.
AISC per ounce sold for the quarter of US$1,076 was 23% lower than Q3 2015 (US$1,394). This was mainly driven by the lower
cash costs as discussed above, lower capital expenditures and a
higher production base.
Capital expenditure for the quarter before reclamation
adjustments of US$1.1 million was 74%
lower than Q3 2015 (US$4.1 million).
Sustaining capital expenditure relates mainly to investments in
tailings and infrastructure of US$0.9
million.
We continue to assess options for the future of the mine and are
assessing the viability of extending the stage 3 operation by
optimising the final pit shell in order to extract additional
ounces. This process is ongoing and once this is completed and is
Board approved we will provide a further update.
North Mara
Key statistics
|
|
Three months ended 30 September |
|
Nine months ended 30 September |
(Unaudited) |
|
2016 |
2015 |
|
2016 |
2015 |
Key operational
information: |
|
|
|
|
|
|
Ounces produced |
oz |
112,523 |
67,738 |
|
287,260 |
209,884 |
Ounces sold |
oz |
113,440 |
69,395 |
|
283,280 |
211,400 |
Cash cost per ounce
sold1 |
US$/oz |
364 |
591 |
|
402 |
585 |
AISC per ounce
sold1 |
US$/oz |
655 |
939 |
|
694 |
908 |
Open pit: |
|
|
|
|
|
|
Tonnes mined |
Kt |
4,140 |
3,922 |
|
11,374 |
10,977 |
Ore tonnes mined |
Kt |
655 |
787 |
|
2,050 |
2,394 |
Mine grade |
g/t |
2.0 |
2.3 |
|
1.9 |
2.6 |
Underground: |
|
|
|
|
|
|
Ore tonnes
trammed |
Kt |
103 |
105 |
|
313 |
168 |
Mine grade |
g/t |
23.1 |
6.7 |
|
15.6 |
5.8 |
Processing
information: |
|
|
|
|
|
|
Ore milled |
Kt |
701 |
716 |
|
2,137 |
2,128 |
Head grade |
g/t |
5.4 |
3.3 |
|
4.5 |
3.5 |
Mill recovery |
% |
92.8% |
88.7% |
|
91.9% |
87.8% |
Cash cost per tonne
milled1 |
US$/t |
59 |
57 |
|
53 |
58 |
Capital
Expenditure |
|
|
|
|
|
|
- Sustaining
capital2 |
US$('000) |
4,497 |
4,707 |
|
14,578 |
13,727 |
- Capitalised
development |
US$('000) |
22,629 |
12,638 |
|
53,680 |
36,571 |
- Expansionary
capital |
US$('000) |
466 |
33 |
|
924 |
962 |
|
|
27,592 |
17,378 |
|
69,182 |
51,260 |
- Non-cash
reclamation asset adjustments |
US$('000) |
(2,868) |
2,476 |
|
3,384 |
2,270 |
Total capital
expenditure |
US$('000) |
24,724 |
19,854 |
|
72,566 |
53,530 |
1These are non-IFRS financial performance measures
with no standard meaning under IFRS. Refer to ‘Non-IFRS measures”
on page 13 for definitions.
2 Includes land purchases recognised as long term
prepayments
Operating performance
North Mara’s production of 112,523 ounces was 66% higher than Q3
2015, as a result of a 64% increase in head grade due to the higher
contribution from the Gokona underground mine and a resultant 5%
higher recovery rate. Underground mining continued to be solely
from the East Zone of the underground, where positive grade
reconciliations continued leading to mined grade during the quarter
averaging 23.1g/t. During the quarter, the opening of the West
Portal progressed well which will enable stoping to commence from
the lower grade West Zone in Q4.
Open pit mined grade decreased as a result of ore being solely
sourced from the lower grade Nyabirama pit following the end of
mining in the Gokona open pit in Q3 2015. Gold ounces sold for the
quarter of 113,440 ounces were in line with production.
Cash costs of US$364 per ounce
sold were 38% lower than Q3 2015 (US$591) driven primarily by the higher
production base and higher capitalisation of operating expenditure,
partly offset by higher sales related costs given higher sales
volumes in combination with the impact of the higher gold price on
royalties.
AISC per ounce sold for the quarter of US$655 was 30% lower than Q3 2015 (US$939) primarily due to the lower cash costs
and the higher production base, partly offset by higher capitalised
development expenditure.
Capital expenditure for the quarter before reclamation
adjustments of US$27.6 million was
59% higher than in Q3 2015 (US$17.4
million). Key capital expenditure included capitalised
stripping costs (US$16.9 million),
capitalised underground development costs (US$5.8 million), investment in mobile equipment
and component change-outs (US$1.9
million) and investment in tailings and infrastructure
(US$0.9 million). In addition,
US$0.2 million was spent on land
acquisitions primarily around the Nyabirama open pit. Land
acquisition costs are included in capital expenditure above as they
are included in AISC but are treated as long term prepayments in
the balance sheet.
Exploration Review
During the third quarter we continued to progress greenfield and
brownfield exploration programmes across nine projects in four
countries. We have expensed US$5.5
million on greenfield programmes in Kenya, Burkina
Faso and Mali and
capitalised US$0.5 million of
drilling on brownfield projects at North Mara and Bulyanhulu in
Tanzania during the quarter.
Tanzania
North Mara
Nyabirama Deeps
During Q3 2016, a total of five holes for 2,757 metres of
diamond core (DD) drilling were completed in order to test for high
grade mineralisation below the final Stage 4 Nyabirama open pit
design. An additional three holes were added into the initial eight
hole programme based on positive results from holes drilled during
the quarter. A total of nine DD holes have been completed to date
totalling 5,300 metres.
The improved geological model developed over the past six to
twelve months has enabled better targeting of high grade
mineralisation, with the current drilling testing interpreted
southwest plunging shoot controls. Assay results received during
the quarter included very encouraging results, consistent with the
interpreted geological model that there are three to four high
grade zones each 3m to 8m wide in the hanging wall and footwall
positions. With the better understanding of the plunge control to
mineralisation, an additional ten DD holes have been planned to
further scope out the potential down plunge extensions.
Bulyanhulu
Underground exploration and resource/reserve definition drilling
at Bulyanhulu has focused on the Reef 2 series of veins, targeting
the Western Extensions and Central Zone. Definition drilling on the
Central Zone is being completed on Reef 2m using a 50m x 50m
staggered grid pattern and is showing good continuity of widths and
grades comparable to the original broader spaced surface
exploration holes, and may result in the zone being brought forward
in the mine plan. We are now stepping out the definition drilling
in order to expand the reserve in this area further.
The initial exploration drilling into the Western Extensions is
being completed on a 200m x 200m spaced grid pattern and is
targeting the plunge and strike extensions of the Central Zone
approximately 1-2km west of current resources. Results
returned to date show that Reef 2i has the better grades and
continuity although results have been mixed. We have therefore
commenced infill drilling around some of the better intercepts to
investigate the continuity of widths and grades on both Reef 2i and
2m. In total 21,961 metres of underground drilling have been
completed on the extension drilling programme to date.
Nyanzaga
In September 2015, Acacia entered
into an earn-in joint venture with OreCorp Limited (ASX:ORR) to
progress the Nyanzaga Project, whereby OreCorp took over management
of the project for a three year period. This structure allows the
project to be progressed whilst giving Acacia the optionality to
maintain a 75% stake in the project once it gets to a development
decision.
OreCorp have continued to progress the project and during the
quarter released the positive results of a scoping study which
outlined a combined open pit and underground project that produces
2.4Moz Au over a 13 year life at an AISC of US$798/oz and requires pre-production capital of
US$248 million (inclusive of
contingency). The full study can be found on OreCorp’s website,
http://www.orecorp.com.au/. Due to the positive results in the
scoping study, OreCorp have now commenced a pre-feasibility study
into the project.
Kenya
West Kenya Project
During Q3 2016 we continued a diamond core drilling programme
designed to follow up on the positive results from the initial
drilling programme on the Liranda Corridor within the Kakamega Dome
gold camp. We are more than 50% through the planned programme of
approximately 38,000 - 40,000 metres of drilling to test the
structural orientation and continuity of high grade gold
mineralisation encountered on the Acacia and Bushiangala Prospects.
Six diamond core rigs are now currently operating in order to
complete the next stage of drilling with positive results from
drilling continuing and results during the quarter including: 4m @
15.6 g/t Au (Acacia), 2m @ 12.3 g/t (Acacia), 4m @ 10.3 g/t
(Bushiangala). The programme, if successful, aims to allow for the
calculation of an initial inferred resource by end of Q1 2017.
In addition to the drilling, a 2,400 line kilometre helicopter
electromagnetic (HTEM) geophysical survey on 50 metre line spacing
was completed across the Liranda Corridor to assist with our
geological and structural understanding of the Camp and to enhance
drill targeting.
Year to date, 36 diamond holes for 22,383 metres and 32 reverse
circulation (“RC”) holes for 4,359 metres have been completed.
Diamond holes are being drilled in 80m and 160m spaced grids across
each structural zone. At the Acacia Prospect drilling continues to
intersect shear zone gold mineralisation hosted associated with
narrow quartz veins, sulphides (pyrite +/- pyrrhotite +/-
arsenopyrite, sphalerite +/- chalcopyrite +/- molybdenite) and
sericite +/- green mica +/- carbonate alteration. The main
targets are interpreted to be two northeast striking structural
zones, AZ1 and AZ2. These structural zones extend to 500 metres
vertical and potentially much deeper. Drilling is continuing to
delineate the strike extent of each structural zone, with initial
indications that the shoots extend over 300-500 metres.
At the Bushiangala Prospect closer spaced drilling has confirmed
high grade zones of gold mineralisation within the BZ1 zone,
although further drilling is required to definitively tie down the
geometry of this zone.
During the quarter, Acacia agreed to increase its ownership from
51% to 100% in the two licences covering the majority of
West Kenya project area by
acquiring the remaining stake held by a subsidiary of Lonmin plc
(“Lonmin”) for a consideration of US$5
million.
Burkina
Faso
Acacia continues to identify significant gold potential in the
Houndé Belt through on-going soil sampling programmes, airborne and
ground based magnetic and radiometric surveys, and first-pass
reconnaissance Aircore and RC drilling programmes. Multiple
extensive (multi-kilometre) gold-in-soil anomalies have been
identified on all projects sampled to date. Additionally, we have
intersected early positive results from Aircore drilling on the
Pinarello Project and RC/DD drilling on the Central Houndé JV
project. We continue to be encouraged by prospecting and drilling
on the South Houndé JV and have notified our joint venture partner
of our intent to take on management of this project in January 2017 once we earn 50% equity in the
project at the end of 2016. Acacia now holds approximately 2,700
square kilometres of licences and applications under joint ventures
in the Houndé Belt. Drilling activities during the quarter were
limited by seasonal rains, however a detailed airborne magnetic and
radiometric survey comprising 17,560 line kilometres and covering
the Central Houndé, Pinarello, Konkolikan and Frontier joint
venture project areas was completed during the quarter to assist in
targeting, prospect evaluation and prioritisation.
South Houndé Joint Venture (Sarama Resources Limited) – earning
70%
At the South Houndé JV project we continued field-based
exploration activities focused both on resource extensions to the
Tankoro Resource and regional exploration programmes searching for
new discoveries. During the quarter, a total of 12 RC holes for
1,286 metres and 10 core holes for 3,800m metres were completed on
prospects along the Tankoro Corridor before the weather and access
issues due to seasonal rains suspended field based activities.
Drilling has returned a number of positive results across both
the MC, MM and the Phantom Est zones including 4.4m @ 4.54g/t Au in
DDH044 (MM Zone) and 13.7m @ 5.67g/t Au in DDH086 (MM Zone) from
holes drilled to test for high grade cross structures. These
results are considered positive and support validity of a
predictive model for control to high grade mineralisation in cross
structures. Field work will recommence around mid-October after the
cessation of the wet season.
Central Houndé Joint Venture (Thor Explorations Limited) –
earning 80%
At Central Houndé reconnaissance RC and DD drilling continued to
evaluate the Legue-Bongui structural corridor, coincident with an
8km x 3km long gold-in-soil anomaly. The gold-in-soil anomaly is
interpreted to be associated with a volcano-sedimentary sequence
that wraps around an internal granite intrusion (the Legue Granite)
creating a favourable litho-structural setting.
During Q3 2016, a total of 21 RC holes for 3,210 metres and 7 DD
holes for 15,590 metres were drilled to test a small portion of the
Legue-Bondi Corridor before the commencement of the wet season.
Results of this reconnaissance drilling are considered encouraging,
with 16 of the 21 RC holes drilled to-date having returned gold
anomalism. Results include: 6m @ 3.75g/t Au from 31m, 5m @ 2.57g/t
Au from 60m, 2m @ 28.17g/t Au from 155m, 12.0m @ 1.40g/t Au from
129m, 19m @ 1.02g/t Au from 156m, and 30m @ 0.45g/t Au from 93m.
Although, DD holes drilled to test the Legue artisanal workings
returned only anomalous gold values, they did identify a 20-30
metre wide carbonate-sericite-pyrite alteration zone with
quartz-carbonate stockwork veining associated with broad low grade
intercepts in a volcano-sedimentary sequence. Better results from
the DD drilling at Legue included 31.1m @ 0.48g/t Au from 82.4m and
15m @ 0.89g/t Au from 84m. Both RC and core drilling will
recommence as soon as access is possible after the wet
season.
Pinarello & Konkolikan Joint Venture (Canyon Resources
Limited) – earning 75%
Regional reconnaissance surface soil sampling programmes have
defined a number of significant gold-in-soil anomalies on the
property. Coincident chargeability/resistivity/auger and soil
geochemical targets along the corridor have been targeted for
follow up. A total of 78 AC holes for 5,286 metres were completed
primarily on the Tankoro South Structural Corridor (8km strike)
before the weather and access issues due to seasonal rains
suspended field based activities. Results are considered
encouraging with in excess of 30% of holes returning anomalous
intercepts. Field programmes, including continuation of AC drill
programs, will commence as soon as access is possible after the wet
season.
Frontier Joint Venture (Metalor SARL) – option to earn 100%
In June 2016, Acacia entered into
an agreement with a local Burkinabe company, Metalor SA, the
“Frontier Joint Venture”, which includes two licences immediately
south of, and contiguous to, the Pinarello Project where soil
sampling has identified multiple kilometre scale gold-in-soil
anomalies. Historic reconnaissance soil sampling has already
identified gold anomalism on the Frontier JV properties associated
with interpreted regional shear zones along the contacts between
granite intrusions and volcano-sedimentary lithologies. We expect
to commence regolith mapping and more detailed soil sampling
programmes in Q4 2016 following the wet season in order to fully
understand the regional potential of this project area.
Mali
Tintinba - Bane Project
The Tintinba-Bane Project consists of three permits covering
approximately 150km2. These properties are located
within the Kenieba Inlier region of Western Mali, along the world- class
Senegal-Mali-Shear-Zone (SMSZ),
which hosts more than 50 million ounces of gold endowment. We have
defined five high quality coincident structural-magnetic and
surface geochemical gold targets that are being tested by
reconnaissance reverse circulation drilling. During the quarter a
total of four reverse circulation holes for 578m were drilled
before weather and access issues suspended drilling for the wet
season.
Results are considered encouraging with mineralisation
encountered in a number of holes and are interpreted to be
associated with veining and alteration close to the contract
between sediments and felsic intrusive units. 19 of the 28 holes
drilled to date on two prospects returned anomalous intercepts.
Results include 23m @ 0.45g/t from 6m (including 7m @ 1.01g/t Au
from 21m) and 13m @ 1.11g/t Au from 29m. Field programmes including
induced polarisation and RC drilling will commence as soon as
access is possible after the wet season.
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. 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$000) |
Three months ended 30 September |
|
Nine months ended 30 September |
(Unaudited) |
2016 |
2015 |
|
2016 |
2015 |
Gold revenue |
275,897 |
186,075 |
|
760,511 |
612,624 |
Less: Realised gold
hedge losses |
(1,331) |
- |
|
(1,331) |
- |
Net gold revenue |
274,566 |
186,075 |
|
759,180 |
612,624 |
Gold sold
(ounces) |
206,488 |
167,116 |
|
607,451 |
522,586 |
Net average realised
gold price (US$/ounce) |
1,330 |
1,113 |
|
1,250 |
1,172 |
Cash cost per ounce sold is a non-IFRS financial measure.
Cash costs include all costs absorbed into inventory, as well as
royalties, by-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.
The presentation of these statistics in this manner allows
Acacia to monitor and manage those factors that impact production
costs on a monthly basis. Acacia calculates cash costs based on its
equity interest in production from its mines. Cash costs per ounce
sold are calculated by dividing the aggregate of these costs by
gold ounces sold. 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$'000) |
Three months ended 30 September |
|
Nine months ended 30 September |
(Unaudited) |
2016 |
2015 |
|
2016 |
2015 |
Cost of
Sales |
|
|
|
|
|
Direct mining
costs |
111,649 |
124,879 |
|
346,085 |
388,558 |
Third party smelting
and refining fees |
5,589 |
4,906 |
|
19,228 |
14,394 |
Realised losses on
economic hedges |
2,161 |
3,339 |
|
8,615 |
8,018 |
Realised losses on
gold hedges |
1,331 |
- |
|
1,331 |
- |
Royalty expense |
12,895 |
8,368 |
|
35,429 |
27,990 |
Depreciation and
amortisation* |
41,702 |
32,219 |
|
120,078 |
98,333 |
Total cost of
sales |
175,327 |
173,711 |
|
530,766 |
537,293 |
|
|
|
|
|
|
Total cost of
sales |
175,327 |
173,711 |
|
530,766 |
537,293 |
Deduct: depreciation
and amortisation* |
(41,702) |
(32,219) |
|
(120,078) |
(98,333) |
Deduct: realised
losses on gold hedges |
(1,331) |
- |
|
(1,331) |
- |
Deduct: co-product
revenue |
(8,798) |
(6,607) |
|
(29,131) |
(26,839) |
Total cash
cost |
123,496 |
134,885 |
|
380,226 |
412,121 |
|
|
|
|
|
|
Total ounces sold |
206,488 |
167,116 |
|
607,451 |
522,586 |
Cash cost per
ounce |
598 |
807 |
|
626 |
789 |
* Depreciation and amortisation includes the depreciation
component of the cost of inventory sold
All-in sustaining cost (AISC) is a non-IFRS financial
measure. The measure is in accordance with the World Gold Council’s
guidance issued in June 2013. It is
calculated by taking the aggregate of cash costs, corporate
administration costs, reclamation and remediation costs for
operating mines, corporate social responsibility expenses, mine
exploration and study costs, capitalised stripping and underground
development costs and sustaining capital expenditure. This is then
divided by the total ounces sold. A reconciliation between cash
cost per ounce sold and AISC is presented below:
(Unaudited) |
Three months ended 30 September 2016 |
|
Three months ended 30 September 2015 |
(US$/oz sold) |
Bulyanhulu |
North
Mara |
Buzwagi |
Group* |
|
Bulyanhulu |
North
Mara |
Buzwagi |
Group* |
Cash cost per ounce
sold |
808 |
364 |
986 |
598 |
|
836 |
591 |
1,197 |
807 |
Corporate
administration |
30 |
20 |
29 |
29 |
|
52 |
49 |
53 |
53 |
Share-based
payments |
8 |
7 |
11 |
97 |
|
(3) |
(2) |
(3) |
(15) |
Rehabilitation |
8 |
8 |
2 |
7 |
|
6 |
23 |
8 |
14 |
Mine exploration |
- |
- |
- |
- |
|
- |
- |
- |
- |
CSR expenses |
8 |
17 |
20 |
14 |
|
14 |
27 |
16 |
25 |
Capitalised
development |
347 |
199 |
- |
200 |
|
222 |
182 |
34 |
168 |
Sustaining
capital |
91 |
40 |
28 |
53 |
|
246 |
69 |
89 |
143 |
Total |
1,300 |
655 |
1,076 |
998 |
|
1,373 |
939 |
1,394 |
1,195 |
* The group total includes US$95/oz of unallocated corporate related costs
in Q3 2016, and a credit of US$2/oz
in Q3 2015.
(Unaudited) |
Nine months ended 30 September 2016 |
|
Nine months ended 30 September 2015 |
(US$/oz sold) |
Bulyanhulu |
North
Mara |
Buzwagi |
Group* |
|
Bulyanhulu |
North
Mara |
Buzwagi |
Group* |
Cash cost per ounce
sold |
700 |
402 |
1,030 |
626 |
|
859 |
585 |
1,028 |
789 |
Corporate
administration |
23 |
22 |
26 |
26 |
|
49 |
44 |
46 |
52 |
Share-based
payments |
10 |
7 |
11 |
65 |
|
3 |
1 |
- |
11 |
Rehabilitation |
7 |
9 |
3 |
7 |
|
6 |
24 |
7 |
14 |
Mine exploration |
- |
- |
- |
- |
|
- |
- |
- |
- |
CSR expenses |
6 |
14 |
11 |
13 |
|
12 |
16 |
14 |
18 |
Capitalised
development |
230 |
189 |
- |
166 |
|
259 |
173 |
12 |
165 |
Sustaining
capital |
81 |
51 |
27 |
58 |
|
174 |
65 |
64 |
104 |
Total |
1,057 |
694 |
1,108 |
961 |
|
1,362 |
908 |
1,171 |
1,153 |
* The group total includes US$63/oz of unallocated corporate related costs
in the nine months ended September
2016 (2015: US$20/oz).
AISC is intended to provide additional information for what the
total sustaining cost for each ounce sold is, taking into account
expenditure incurred in addition to direct mining costs,
depreciation and selling costs.
Cash cost per tonne milled is a non-IFRS financial
measure. Cash costs include all costs absorbed into inventory, as
well as royalties, by-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 costs per tonne milled are
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. EBITDA is adjusted for items (a) to (d) as contained
in the reconciliation to adjusted net earnings below.
EBIT is a non-IFRS financial measure and it 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 by excluding the following:
(US$000) |
Three months ended 30 September |
|
Nine months ended 30 September |
|
(Unaudited) |
2016 |
2015 |
|
2016 |
2015 |
Net (loss)/
earnings |
52,787 |
(13,053) |
|
46,659 |
1,712 |
Adjusted for: |
|
|
|
|
|
Operational review
costs (including restructuring costs)(a) |
800 |
(15) |
|
2,925 |
1,480 |
Once off legal
settlements(b) |
- |
- |
|
- |
2,929 |
Insurance
settlements(c) |
(3,500) |
- |
|
(3,500) |
- |
Discounting of long
term indirect tax receivables(d) |
- |
- |
|
(6,508) |
- |
Prior year tax
positions recognised1 |
- |
- |
|
69,916 |
- |
Tax impact of the
above |
811 |
5 |
|
173 |
(1,323) |
Adjusted net
earnings |
50,898 |
(13,063) |
|
109,665 |
4,798 |
1 For the nine months ended 30 September
2016, US$69.9 million
represents a provision raised for the implied impact of an adverse
tax ruling made by the Tanzanian Court of Appeal with respect to
historical tax assessments of Bulyanhulu. As reported in Q1 2016,
the impact of the ruling was calculated for Bulyanhulu and
extrapolated to North Mara and Tulawaka as well and covers results
up to the end of 2015. On a site basis, US$35.1 million was raised for Bulyanhulu,
US$30.4 million for North Mara and
US$4.4 million for Tulawaka.
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. It is calculated by
deducting total borrowings from cash and cash equivalents.
Cash from sustaining operations is a non-IFRS financial
measure and represents the cash flow generated post the spend
required to sustain the Group and its operations. It is calculated
as free cash flow adjusted for expansionary capital expenditure,
exploration, the cash flow associated with one-off type items and
other charges, and dividends.
Mining statistical information
The following describes certain line items used in the Acacia
Group’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.