ACA.L Regulatory News (ACA)

16 January 2015 Fourth Quarter Production Report for the three months ended 31 December 2014 Based on IFRS and expressed in US Dollars (US$) Acacia Mining plc ("ACA'') reports fourth quarter production results "We are pleased to report further progress in the fourth quarter resulting infull year production of 718,651 ounces, ahead of our original 2014 guidance anda 13% improvement on 2013. As a result of our continued cost discipline we havedelivered our ninth successive quarterly reduction in all-in sustaining costs(AISC) and generated net cash flow of US$7 million in the quarter", said BradGordon, Chief Executive Officer of Acacia Mining. "During Q4 2014 we produced181,084 ounces of gold, an improvement of 10% on the same period in 2013,driven by strong production at North Mara and the contribution of the new CILcircuit at Bulyanhulu. Bulyanhulu started to step up in the quarter and weremain focused on accelerating this as we move through 2015." Highlights * Q4 2014 gold production of 181,084 ounces and gold sales of 194,243 ounces * Preliminary Q4 2014 AISC1,2 of US$1,088 per ounce sold, 6% lower than Q4 2013 and 1% down on Q3 2014 * Preliminary Q4 2014 cash cost of US$744 per ounce sold, 4% lower than Q4 2013 * Full year 2014 production of 718,651 with full year sales of 703,680, 4% above the upper end of our initial production guidance of 650,000-690,000 ounces * Preliminary full year 2014 AISC1,2 of US$1,105 per ounce sold, at the bottom of our guidance range, and 18% down on 2013 * Preliminary full year cash cost of US$732 per ounce sold, 10% down on 2013, and below our guidance range * Cash balance increased by US$7 million during the quarter to end the year at approximately US$294 million Three months ended 31 Year ended 31 December December (Unaudited) 2014 20132 2014 20132 Tonnes mined (thousands of 10,776 11,570 41,684 54,076tonnes) Ore tonnes mined (thousands 2,281 2,151 8,170 7,225of tonnes) Ore tonnes processed 2,405 1,817 8,413 7,914(thousands of tonnes) Process recovery rate 85.5% 88.5% 88.0% 88.4%(percent) 3 Head grade (grams per tonne)3 2.7 3.2 3.0 2.8 Gold production (ounces) 181,084 165,375 718,651 637,002 Gold sold (ounces) 194,243 168,167 703,680 643,597 Copper production 3,107 3,548 14,068 11,970(thousands of pounds) Cash cost (US$/ounce)1 744 774 732 812 AISC (US$/ounce)1 1,088 1,163 1,105 1,346 Average realised gold price 1,194 1,251 1,258 1,379(US$/ounce)1 1 These are non-IFRS measures. Refer to page 6 for definitions 2 2013 comparative amounts have been restated to exclude Tulawaka 3 Reported process recovery rates and head grade include tailings retreatmentat Bulyanhulu. Excluding the impact of the tailings retreatment Q4 and FY14process recovery would be 87.4% and 88.9% respectively, with Q4 and FY14 headgrade being 3.1g/t and 3.2g/t respectively Conference call A conference call will be held for analysts and investors on 16 January 2015 at09:30 London time. The access details for the conference call are as follows: Participant dial in: +44 (0) 203 003 2666 / +1 866 966 5335 Password: Acacia A recording of the conference call will be made available on the Company'swebsite, www.acaciamining.com, after the call. For further information, please visit our website: www.acaciamining.com orcontact: 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), formerly African Barrick Gold, is Tanzania'slargest gold miner and one of the largest producers of gold in Africa. We havethree producing mines, all located in Northwest Tanzania: Bulyanhulu, Buzwagi,and North Mara and a portfolio of exploration projects in Tanzania, Kenya andBurkina Faso. Our approach is focused on strengthening our three core pillars; our business,our people and our relationships. Our name change from African Barrick Gold toAcacia Mining reflects a new approach to mining, and an ambition to create aleading African Company. Acacia Mining is a UK public company headquartered in London. We are listed onthe Main Market of the London Stock Exchange with a secondary listing on theDar es Salaam Stock Exchange. Barrick Gold Corporation remains our majorityshareholder. Acacia Mining reports in US dollars and in accordance with IFRS asadopted by the European Union, unless otherwise stated in this announcement. FORWARD- LOOKING STATEMENTS This report includes "forward-looking statements" that express or implyexpectations of future events or results. Forward-looking statements arestatements that are not historical facts. These statements include, withoutlimitation, financial projections and estimates and their underlyingassumptions, statements regarding plans, objectives and expectations withrespect to future production, operations, costs, projects, and statementsregarding future performance. Forward-looking statements are generallyidentified by the words "plans," "expects," "anticipates," "believes,""intends," "estimates" and other similar expressions. All forward-looking statements involve a number of risks, uncertainties andother factors, many of which are beyond the control of Acacia, which couldcause actual results and developments to differ materially from those expressedin, or implied by, the forward-looking statements contained in this report.Factors that could cause or contribute to differences between the actualresults, performance and achievements of Acacia include, but are not limitedto, changes or developments in political, economic or business conditions ornational or local legislation or regulation in countries in which Acaciaconducts - or may in the future conduct - business, industry trends,competition, fluctuations in the spot and forward price of gold or certainother commodity prices (such as copper and diesel), currency fluctuations(including the US dollar, South African rand, Kenyan shilling and Tanzanianshilling exchange rates), Acacia's ability to successfully integrateacquisitions, Acacia's ability to recover its reserves or develop new reserves,including its ability to convert its resources into reserves and its mineralpotential into resources or reserves, and to process its mineral reservessuccessfully and in a timely manner, Acacia`s ability to complete landacquisitions required to support its mining activities, operational ortechnical 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 strategyincluding, the ongoing implementation of Operational Reviews, as well as risksand hazards associated with the business of mineral exploration, development,mining and production and risks and factors affecting the gold mining industryin general. Although Acacia`s management believes that the expectationsreflected in such forward-looking statements are reasonable, Acacia cannot giveassurances that such statements will prove to be correct. Accordingly,investors should not place reliance on forward-looking statements contained inthis report. Any forward-looking statements in this report only reflectinformation available at the time of preparation. Subject to the requirementsof the Disclosure and Transparency Rules and the Listing Rules or applicablelaw, Acacia explicitly disclaims any obligation or undertaking publicly toupdate or revise any forward-looking statements in this report, whether as aresult of new information, future events or otherwise. Nothing in this reportshould be construed as a profit forecast or estimate and no statement madeshould be interpreted to mean that Acacia`s profits or earnings per share forany future period will necessarily match or exceed the historical publishedprofits or earnings per share of Acacia. Operating update for the three months and year ended 31 December 2014 Gold production for the quarter totalled 181,084 ounces, a 10% increase on thecorresponding quarter of 2013. The increase in production was predominantlydriven by increased throughput at North Mara and the contribution of thereprocessed tailings through the new CIL circuit at Bulyanhulu. This waspartially offset by a planned reduction in grade at Buzwagi impactingproduction at the mine. Gold ounces sold for the quarter were 194,243, a 16% increase from thecorresponding quarter of 2013. Gold ounces sold were 7% higher than goldproduced as a result of gold on hand from Q3 2014 being sold during thequarter. At Bulyanhulu, total production amounted to 66,033 ounces, including 7,035ounces from reprocessed tailings. Production from run-of-mine processing was11% ahead of Q4 2013, with a 7% increase in throughput and 14% increase ingrade to 9.0 g/t partially offset by lower recoveries. Recoveries werepredominantly impacted by instability issues in the reagent mix in the elutioncircuit whilst the expanded CIL circuit was brought on stream, which led tohigher tailings losses than planned. The ramp up of the mine during the quarterwas also slower than planned, with low grade alimak stopes mined during thequarter and access to high grade stopes delayed due to lower loaderavailabilities. These issues are in the process of being resolved and wecontinue to expect the step up in grade and production to take place as we movethrough 2015. At Buzwagi, gold production of 44,398 ounces was 14% lower than in Q4 2013, asa result of the planned reversion to around reserve grade during the quarterwhich led to a 26% reduction in head grade against Q4 2013. A key area of thebusiness improvement focus at Buzwagi has been centred on improvement of theprocess plant and circuit performance. As a result, the stability of the plantand circuit performance has been improved, which in turn resulted in a recoveryof 94.2% for the quarter, 6% higher than the same period in 2013, whichtogether with improved throughput partially offset the expected reduction ingrade. At North Mara, total production for the quarter amounted to 70,655 ounces withmining continuing to focus on the main ore body in the Gokona pit, supplementedby mining in the Nyabirama pit. The feasibility study into mining Gokona via anunderground operation was completed successfully during the quarter and portaldevelopment of the underground continued to progress in line with expectations.Mill throughput for the quarter of 718,000 tonnes was 12% higher than the sameperiod in 2013. The higher milled tonnes were due to improved mill efficienciesand less maintenance downtime compared to the same period in 2013. Total tonnes mined for the quarter were 10.8 million compared to 11.6 millionin the corresponding quarter of 2013. The decrease was primarily driven bylower tonnes mined at North Mara as a result of the reduced mining areas in theGokona pit and at Buzwagi as planned equipment maintenance impacted on miningrates. Tonnes processed in the fourth quarter of 2.4 million tonnes were 32% higherthan the corresponding quarter of 2013 aided by the impact of tailingsreprocessing. In Q4 2013, total tonnes processed were also impacted by plantdowntime for scheduled maintenance at North Mara and Buzwagi. The average grade processed for the quarter was 2.7 grams per tonne which was16% lower than the prior year period. The decrease in grade was predominantlydue to Buzwagi and the impact of the tailings reprocessing at Bulyanhulu, andwas in part offset by a higher run-of-mine grade at Bulyanhulu. Copper production for the quarter was 3.1 million pounds, 12% lower than theprior year period, mainly driven by lower copper grades at Buzwagi whencompared to Q4 2013. This was offset by a slight increase in copper grades atBulyanhulu. For the full year, production of 718,651 ounces represented a 13% increase onthe prior year period. Gold sales for the full year were slightly belowproduction at 703,680 ounces. The cash balance as at 31 December 2014 amounted to approximately US$294million, US$12 million up on 2013. The US$142 million CIL debt facility remainsfully drawn. The average realised price amounted to US$1,194 per ounce for the quarter andUS$1,258 per ounce for the full year. This was 5% and 9% respectively lowerthan the prior year comparisons and reflects the decrease in the market price. Mine Site Review Bulyanhulu Key Statistics Three months ended Year ended 31 31 December December (Unaudited) 2014 2013 2014 2013 Key operational information: Ounces produced oz 66,033 53,186 234,786 198,286 Ounces sold oz 63,166 56,735 215,740 195,304 Copper production Klbs 1,370 1,348 5,289 4,855 Copper sold Klbs 1,425 1,304 4,925 4,508 Underground ore tonnes Kt 245 222 909 872hoisted Run-of-mine processing: Ore milled Kt 245 229 906 871 Head grade g/t 9.0 7.9 8.7 7.8 Mill recovery % 83.8% 91.2% 88.0% 90.9% Ounces produced oz 58,998 53,186 222,381 198,286 Reprocessed tailings: Ore milled Kt 390 - 617 - Head grade g/t 1.0 - 1.1 - Mill recovery % 59.4% - 56.9% - Ounces produced oz 7,035 - 12,405 - Gold production at Bulyanhulu for the quarter was 66,033 ounces, including7,035 ounces from reprocessed tailings. This was 24% higher than the prior yearperiod. The increase in production was mainly driven by ounces attributed tothe reprocessing of tailings, a 7% increase in run-of-mine throughput and a 14%step up in run-of-mine grade. This was in turn offset by an 8% reduction inrun-of-mine recoveries, largely driven by underperformance of the elutioncircuit which increased tailings losses. During Q4 there has been an increasein ounces locked up in the CIL circuit with the commissioning of the new CILplant compared to previous quarters. Gold-in-circuit (GIC) ounces are currentlyincluded within Acacia's definition for production. From the beginning of 2015Acacia has moved to using gold poured as our definition for production whichwill mitigate the impact of any future fluctuations in GIC. This will have noimpact on expected production levels in 2015. For the full year, gold production of 234,786 ounces was 18% higher than in2013, mainly driven by a 4% increase in throughput, a 12% increase in headgrade due to increased mine grades received from higher grade stopes, and12,405 ounces of production from reprocessed tailings. Copper production for the quarter of 1.4 million pounds was 9% higher than 2013due to an increased copper grade combined with higher throughput. On a fullyear basis, total copper production of 5.3 million pounds was 9% higher than2013, driven by a higher copper grade. Buzwagi Key statistics Three months ended 31 Year ended 31 December December (Unaudited) 2014 2013 2014 2013 Tonnes mined Kt 6,878 7,244 24,510 32,177 Ore tonnes mined Kt 1,248 1,250 4,692 3,753 Ore milled Kt 1,052 945 4,086 4,400 Head grade g/t 1.4 1.9 1.7 1.5 Mill recovery % 94.2% 88.8% 92.4% 88.2% Ounces produced oz 44,398 51,830 210,063 181,984 Ounces sold oz 55,316 50,382 213,399 187,348 Copper production Klbs 1,738 2,200 8,780 7,115 Copper sold Klbs 2,390 1,706 8,523 7,062 Gold production for the quarter at Buzwagi of 44,398 ounces was 14% lower thanin Q4 2013, driven by the expected 24% decrease in head grade. The lower headgrade is a result of mining close to the reserve grade. Throughput increased by11%, with Q4 2013 impacted by maintenance issues in the plant. Recoveries of94.2% were 6% higher than in Q4 2013, in spite of the reduction in grade,driven by operational improvements to the plant and circuit performance. Gold sold for the quarter amounted to 55,316 ounces, 10% above that of Q4 2013and 25% higher than production due to the sale of concentrate inventory on handat the beginning of the quarter. Gold production for the full year of 210,063 ounces was 15% higher than in 2013due to a 13% increase in grade and 5% higher recovery, offsetting the lowerthroughput. Copper production of 1.7 million pounds for the quarter was 21% lower than inQ4 2013 driven by the lower copper grades. North Mara Key statistics Three months ended 31 Year ended 31 December December (Unaudited) 2014 2013 2014 2013 Tonnes mined Kt 3,653 4,104 16,265 21,027 Ore tonnes mined Kt 788 678 2,569 2,601 Ore milled Kt 718 643 2,804 2,643 Head grade g/t 3.5 3.4 3.5 3.5 Mill recovery % 86.9% 86.0% 87.2% 86.8% Ounces produced oz 70,655 60,358 273,803 256,732 Ounces sold oz 75,760 61,050 274,540 260,945 Gold production for the quarter at North Mara of 70,655 ounces was 17% higherthan in Q4 2013 as throughput rates exceeded the prior year period by 12%. Thehigher milled tonnes were due to improved mill efficiencies and lessmaintenance downtime. Gold ounces sold for the quarter of 75,760 ounces were 7%higher than production due to the sale of inventory on hand at the beginning ofthe quarter. Gold production for the full year of 273,803 ounces was 7% higher than in 2013.This was as a result of a 6% increase in throughput and a marginally higherrecovery rate. Gold ounces sold for the full year of 274,540 ounces was 5%higher than 2013 and broadly in line with production. Date of Preliminary Results Announcement Acacia will be reporting our Preliminary Results for the 12 months ended 31December 2014 on the 16th February 2015 at 07:00 GMT. A presentation andconference call will take place at Noon on the same day. Further details willbe announced in due course. Non-IFRS Measures Acacia has identified certain measures in this report that are not measuresdefined under IFRS. Non-IFRS financial measures disclosed by management areprovided as additional information to investors in order to provide them withan alternative method for assessing Acacia's financial condition and operatingresults. These measures are not in accordance with, or a substitute for, IFRS,and may be different from or inconsistent with non-IFRS financial measures usedby other companies. These measures are explained further below. Average realised gold price per ounce sold is a non-IFRS financial measurewhich excludes from gold revenue: * Unrealised mark-to-market gains and losses on provisional pricing from copper and gold sales contracts; and * Export duties. Cash cost per ounce sold is a non-IFRS financial measure. Cash costs includeall costs absorbed into inventory, as well as royalties, and production taxes,and exclude capitalised production stripping costs, inventory purchaseaccounting adjustments, unrealised gains/losses from non-hedge currency andcommodity contracts, depreciation and amortisation and corporate socialresponsibility charges. Cash cost is calculated net of co-product revenue. The presentation of these statistics in this manner allows Acacia to monitorand manage those factors that impact production costs on a monthly basis. Cashcost per ounce sold is calculated by dividing the aggregate of these costs bygold ounces sold. Cash costs and cash cost per ounce sold are calculated on aconsistent basis for the periods presented. All-in sustaining cost (AISC) is a non-IFRS financial measure. The measure isin accordance with the World Gold Council's guidance issued in June 2013. It iscalculated by taking cash cost per ounce sold and adding corporateadministration 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 capitalexpenditure. This is then divided by the total ounces sold. AISC is intended toprovide additional information on the total sustaining cost for each ouncesold, taking into account expenditure incurred in addition to direct miningcosts, depreciation and selling costs. Mining statistical information The following describes certain line items used in the Acacia Group'sdiscussion 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. * 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. LSE:ACA www.acaciamining.com