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MODERN MINING
March 2016
MINING News
Reporting on its results for the 12 months
ended 31 December 2015, LSE-listed
Acacia – which operates the Bulyanhulu,
North Mara and Buzwagi mines in
Tanzania – says that gold production for
the reporting period was 731 912 ounces,
2 % higher than 2014, with gold sales of
721 203 ounces. The all-in sustaining cost
(AISC) was US$1 112 per ounce, in line with
2014, and the cash cost US$772 per ounce.
Revenue was US$868 million, 7 % lower
than 2014, due to the 8 % lower average
gold price.
“I ampleased with the progress we have
made across the business over the past
12 months as we continued to transform
Acacia into a leading company in Africa,
although the speed of the turnaround is
slower than I had hoped to achieve,” says
Brad Gordon, Acacia’s CEO. “While we did
not realise our primary aim of generating
free cash flow in 2015 as a result of the
challenges we faced, primarily in the third
quarter, we did see an increase in pro-
duction over 2014. This production was,
however, lower than planned, which had a
knock-on effect on costs.”
Gordon says that gold production in
2015 was up for the third consecutive
year but was marginally below the initial
guidance range for the year. “Production
increased by 5 % at North Mara to
Acacia’s gold production
up for third year in a row
287 188 ounces driven by the contribu-
tion of the newly commissioned Gokona
Underground and by 17 % at Bulyanhulu
to 273 552 ounces as we saw a full year
of operations of the re-claimed tailings
project,” Gordon states. “At Buzwagi,
production fell by 19 % as a result of opera-
tions being focused on low grade areas in
the open pit.”
Looking ahead, Gordon notes that
Acacia has fundamentally re-engineered
the operation at Bulyanhulu over the past
two years and delivered a 40 % production
increase in that time.
“We have made significant progress in
the mechanisation of the mine, increasing
workforce productivities and improving
underground operating metrics,” he says.
“Our focus is on free cash flow and accord-
ingly we have reviewed reserves based
on the lower gold price assumption and a
more detailed mine design approach.
“Following this review, and our experi-
ence in 2015, it was determined that within
the Upper East Zone, which was expected
to ramp up significantly in 2016, further
definition drilling on the Reef 2 series is
required in order to better define the geo-
logical complexity and as a result have
deferred the planned increase in mining
rates. As a result, we expect production in
2016 to be broadly in line with 2015 and
The Bulyanhulu gold mine. Acacia has fundamentally re-engineered the operation at Bulyanhulu over the past two years and delivered a 40 % production
increase in that time (photo: Acacia).
with our focus on cost reduction measures
we expect AISC to fall by more than 15 %
year on year.
“We are still confident that Bulyanhulu
will produce 350 000 ounces per annum
over the medium term and are assessing
the potential above this production rate
through an ongoing three-year drilling
programme, primarily on the Reef 2 series.
“North Mara is expected to con-
tinue to perform strongly as the Gokona
Underground is fully ramped up and a sec-
ond access portal is developed to provide
additional flexibility,” Gordon continues.
“As a result of the increased proportion of
mill feed being sourced from the under-
ground, we expect to see a 5 % increase
in production, with a similar reduction in
AISC in 2016 over 2015.
“At Buzwagi, we expect the mine to
generate solid cash flows over 2016, with
production expected to be 10 % higher
than 2015 with AISC down by approxi-
mately 15 %. As a result of delays in waste
movement in 2015, there will be a focus
on waste stripping in Q1 2016 to reduce
the backlog. This will result in the deferral
of some of the high grade material previ-
ously planned to be mined in the year into
Q1 2017 and will mean that approximately
35 % of the mill feed in the first quarter will
come from lower grade stockpiles.”