ACA.L Regulatory News (ACA)

16 February 2015 Results for the 12 months ended 31 December 2014 (Unaudited)Based on IFRS and expressed in US Dollars (US$) Acacia Mining plc ("Acacia'') reports full year 2014 results "2014 was a watershed year for Acacia as we returned to free cash generationfor the first time since 2011, exceeding our initial production guidance andreducing all-in sustaining costs (AISC) year-on-year by 18%. Coupled with thiswe completed our rebranding to reflect our new approach to running thebusiness, set out our five year plan for the Company and expanded ourfootprint into West Africa," said Brad Gordon, Chief Executive Officer ofAcacia Mining. "We have continued to deliver operationally and demonstratedconsistent cost control which has meant that we have now exceeded the plannedsavings set out by the Operational Review 18 months ago. For 2015 we expect afurther increase in production to 750,000 to 800,000 ounces of gold,predominantly in the second half, at reduced AISC of US$1,050 to US$1,100 perounce sold driven by further operational improvements and the planned ramp upat Bulyanhulu." Full Year Financial Highlights - Revenue of US$930 million in line with 2013, as increased ounces sold offsetthe lower gold price - EBITDA1,3 of US$253 million, 5% higher than 2013, impacted by non-cashcharges of US$27 million - Net earnings3 of US$90 million (US22.1 cents per share) - Operational cash flow increased to US$290 million, a 55% increaseon 2013 - Cash position increased by US$11 million to stand at US$294million as at 31 December 2014 - Capital expenditure of US$254 million, 34% lower than 2013 due torevised mine plans and stringent capital controls - Proposed final dividend of US2.8 cents per share, total dividendfor 2014 of US4.2 cents per share, up 40% on 2013 Full Year Operational Highlights - Gold production of 718,651 ounces, 13% higher than 2013, withgold sales of 703,680 ounces - AISC1,2 of US$1,105 per ounce sold, 18% lower than 2013 - Cash costs1,2 of US$732 per ounce sold, 10% lower than 2013 - Operational Review cost reductions of US$185 million delivered asplanned - Bulyanhulu CIL Expansion project fully commissioned in the fourthquarter - Gokona Underground project approved by the Board and moving aheadinto execution phase - 2.3Moz of resources added at Bulyanhulu as a result of drillingprogrammes - Greenfield exploration progressed well with continued positiveresults in West Kenya and entry into Burkina Faso Three months ended 31 December Year ended 31 December(Unaudited) 2014 20132 2014 20132Gold production (ounces) 181,084 165,375 718,651 637,002Gold sold (ounces) 194,243 168,167 703,680 643,597Cash cost (US$/ounce)1 744 774 732 812AISC (US$/ounce)1 1,088 1,163 1,105 1,346Average realised gold price (US$/ounce)1 1,194 1,251 1,258 1,379(in US$'000)Revenue 243,861 221,603 930,248 929,004EBITDA1,3 45,260 44,866 252,716 240,407Net earnings/(loss)3 21,136 (97,700) 90,402 (781,101)Basic earnings/(loss) per share (EPS) (cents)3 5.2 (23.8) 22.1 (190.4)Cash generated from operating activities3 60,993 48,193 289,528 187,115Capital expenditure3,4 57,807 91,190 253,802 385,068 1 These are non-IFRS measures. Refer to page 25 for definitions 2 2013 comparative amounts have been restated to exclude Tulawaka 3 EBITDA, net earnings, earnings per share, cash generated fromoperating activities and capital expenditure include continuing anddiscontinued operations 4 Excludes non-cash capital adjustments (reclamation asset adjustments) andincludes finance lease purchases CEO Statement I am delighted with the progress we have made across the business over thelast twelve months. We continued to deliver operationally, with each quartershowing lower all-in sustaining costs. This discipline enabled us to return tofree cash generation, for the first time since 2011, which was one of our keyobjectives for the year. Our continued operational improvement was driven by afresh approach to running the Company focused on three key pillars: OurBusiness, Our People and Our Relationships. In order to further embed andreflect this approach, our shareholders voted to change the Company's name toAcacia Mining plc from African Barrick Gold plc on 26 November. Our ambitionis that, through the adoption of this new name, all of our people and externalstakeholders become aligned with our new approach and goal of becoming aleading African mining company. We have already seen evidence that this ishappening as the new approach is put into action. During 2014 we continued to enhance our mines and approved the development ofan underground operation at North Mara which will significantly improve boththe economics of the mine and the social situation in the area. We arecontinuing to turn Bulyanhulu into a world class mine and during the yearengaged contractors to accelerate underground development to provide futureflexibility as well as pouring the first gold from the CIL Plant Expansion atthe mine. With a contrarian approach we took advantage of the dislocation inthe market to expand our exploration footprint, and in November expanded intoWest Africa through an exciting and highly prospective exploration project inBurkina Faso. Year in Review 2014 was a successful year for Acacia, with production increasing again to718,651 ounces, 13% higher than 2013 and 4% above the upper end of our initialguidance range for the year. Production increased at all three mines withBulyanhulu up 18% on 2013, Buzwagi up 15% on 2013 and delivering its highestever year of gold production and North Mara remaining the standout performer,producing 273,803 ounces as the grade from the Gokona pit continued to bestrong. On the cost side, we demonstrated consistent cost control and have now takenUS$600 per ounce out of our quarterly all-in sustaining costs ("AISC") sinceQ3 2012. This translated into full year AISC of US$1,105 per ounce sold, down18% on 2013 and at the bottom of our guidance range. We delivered on ourtargeted cost savings of US$185 million set out in the Operational Review in2013 and our continued focus is on removing further costs from the miningcycle. As a result of the cost savings, cash costs per ounce continued to comedown and for 2014 we delivered cash cost per ounce sold of US$732, below ourguidance range and 10% lower than 2013. We returned to cash generation for the first time in three years during 2014,adding US$11 million to the balance sheet. Whilst this is positive, it doesnot reflect the scale of change that took place during the year, with positivecash flows of more than US$100 million before growth capital, dividends andTulawaka sale costs. It should be noted that the average realised gold priceof US$1,258 per ounce was over US$100 per ounce lower than 2013 and overUS$400 per ounce lower than 2012, years in which we did not generate positivefree cash flow. Total revenue for the year amounted to US$930.2 million which was in line with2013 despite the lower average realised gold price as sale ounces for 2014exceeded prior year sales by 9%. EBITDA increased by 5% to US$252.7 million in2014 mainly due to a US$26.1 million reduction in gross direct mining costs,reflected in the 10% reduction of cash costs to US$732 per ounce sold.Earnings for the year were US$90 million, or US 22.1 cents per share. Thesewere impacted by significant revaluations of our indirect tax balance held inTanzanian shillings and out of the money oil hedges partially offset bydeferred taxation changes at Buzwagi. Our Approach Our new approach to operating our assets has focused on three key pillars: OurBusiness, Our People and Our Relationships. We have made significant technicalchanges to Our Business, to ensure that each of our mines are correctlyengineered and set up to deliver free cash flow: â€' At Bulyanhulu, we have changed to a mechanised mining method,with long hole stoping becoming the prime mining method replacing labourintensive conventional hand-held mining. This is both safer and more costeffective than previous hand-held methods. We have also brought in contractorsto accelerate development of the Upper East and Lower West Zones in the minewhich will improve our mining flexibility and allow us to mine at our reservegrade. During the year we also commissioned the CIL Plant Expansion at themine which will provide incremental low cost ounces from the reprocessing oftailings. â€' At North Mara, we are moving forward with the creation of anunderground operation at one of the mine's open pits, having had the projectapproved by the Board in Q4 2014. The Gokona Underground project is expectedto produce 450,000 ounces of gold over a 5 year life of mine, with an AISC ofless than US$750 per ounce sold. We believe that this will be more profitablethan open pit mining and will have a much lower impact on the surroundingcommunities. â€' At Buzwagi, we shortened the life of the mine so that we aremining only profitable ounces. Our mine plan now produces positive cash flowover each year of its remaining life. Our second pillar is Our People, who are our core asset. We have significantlyreduced the levels of management, restructured our corporate offices,commenced a new cultural transformation programme (Tufanikiwe Pamoja /Together We Succeed) and introduced a behavioural safety programme (Tunajali /We Care). We are focused on creating a high performance culture where ourpeople are held accountable, but are given the tools to succeed. As part ofthis process we have already uncovered real talent within the workforce aswell as seeing talented people returning to Acacia. The final pillar is Our Relationships, which we have been focused on improvingwith the communities around our mines and with the Government. We have engagedmore actively in the community, the media and our broader stakeholders. Wehave also worked hard to build our relationships with local and nationalGovernment officials to ensure that we receive the appropriate support for ourbusiness to continue to be a key economic development driver for our hostcountries. Expanding our Footprint We continue to look to enhance our portfolio of assets, and during 2014 madeour first entry into West Africa by entering into an earn-in agreement overthe South Houndé Project in Burkina Faso. We believe that exploration is asignificant driver of value for the business over the long term and now is thetime to invest, which is a contrarian view to many in the market. The earn-inallows us to earn an interest of up to 75% over a four year period in thehighly prospective project which already includes a 1.5Moz Au Inferredresource. We also had a successful year within our existing exploration portfolio, withthe drilling programmes at Bulyanhulu leading to the addition of 2.3Moz ofgold into resources at very competitive costs. This is approximately half ofour three year target to add 5Moz of gold resources at the mine as we look toensure that production matches the geological endowment at Bulyanhulu. We alsomade good progress in Kenya with an extensive and successful aircore drillingprogramme across the land package which is now being followed up with deeperdrilling. We will continue to look for further exploration acreage in West Africa aswell as other opportunities to drive shareholder value. Safety It is with sadness that I report that we experienced a fatality during theyear, with Emmanuel Mrutu, an underground miner at Bulyanhulu, passing awayafter having been fatally injured in a fall of ground incident at the mine inMarch. We fully investigated the incident and have implemented a number ofrecommendations to prevent re-occurrence. Safety is something I am passionateabout and having been involved in underground mining for over 20 years, I amwell aware of the risks. One of the key projects we started during the yearwas "Tunajali" or "We Care", a behavioural safety programme designed to embedthe culture of safety, rather than just relying on checks and processes. Thisprogramme has now been rolled out across all of our operations and we arebeginning to see the benefits in our on-going safety statistics. We continueto target zero injuries and having every person going home safely every day. Indirect Taxes Further progress has been made with respect to the build-up of VAT, and theCompany received net refunds of US$2.6 million during the fourth quarter,bringing total net refunds for 2014 to approximately US$41 million. Totalgross refunds received in 2014 amounted to US$132.8 million. We have alsocontinued discussions with the Tanzanian Government on the establishment of anappropriate mechanism to safeguard the recoverability of VAT payments over thelong term. These are centred around the establishment of an escrow account forVAT paid on domestic goods, similar to that currently used to provide for therefunding of VAT paid on imports and our discussions are on-going. As at 31December 2014, the outstanding amount relating to the total indirect taxreceivable, not covered by the 2011 Memorandum of Settlement, stood at US$46million, roughly US$49 million lower than 31 December 2013. Barrick Gold shareholding In March 2014, our majority shareholder Barrick Gold sold 10% of Acacia'soutstanding share capital to institutional shareholders. The placing waspriced at 275 pence and reduced Barrick's shareholding to 63.9%. This was apositive step by Barrick and increased our free float by around 40% which ledto a subsequent increase in trading liquidity. Final dividend The Board of Directors is pleased to announce the approval of a final dividendfor 2014 of US2.8 cents per share, an increase of 40% when compared to 2013.Subject to shareholders approving this recommendation at the AGM on 23 April2015, the final dividend will be paid on 29 May 2015 to shareholders on theregister as of 8 May 2015. The ex-dividend date is 7 May 2015. Together withour interim dividend of US1.4 cents per share, this represents a payout levelof 19% of cash flow as defined by our dividend policy. Outlook The focus for 2015 is to continue to deliver free cash flow fromour high quality portfolio of mines as we work to enable them to deliver totheir full geological potential. We have implemented changes across ourbusiness in order to continue to drive cost reductions and production growth.We are focused on continued delivery operationally in order to drive free cashflow, of which 15-30% is expected to be returned to shareholders viadividends, with the remainder appropriately allocated across further capitalreturns, organic growth or acquisition opportunities. We successfully overcame challenges to the business in 2014 andexpect that 2015 will present similar challenges as we seek to successfullydeliver on the turnaround at Bulyanhulu, move into commercial ore productionfrom the Gokona Underground at North Mara and ensure that we maintain ourstrengthened relationships with all stakeholders and the Government. For 2015 we expect to see increased production of between 750,000to 800,000 ounces of gold. Production at each of the mines is expected toremain in line with Q4 2014 during the first quarter, with the bulk of theincrease in production expected to be realised in the second half of the year. At the mine level, we expect a significant ramp up at Bulyanhulu aswe move through the year driven by an improvement in head grade, incrementalproduction from the Upper East Zone and an increased contribution from theexpanded CIL circuit. At Buzwagi, production is expected to be broadly in linewith 2014 as we continue to operate around the reserve grade of the asset. AtNorth Mara, head grade is expected to decline marginally as the Gokona pittransitions from an open pit to underground operation, leading to an increasedproportion of ore being sourced from the lower grade Nyabirama pit during theyear. This will be partially offset by the higher grade ore from underground.As a result we expect to see a corresponding reduction in production at themine. We are targeting further reductions to our unit costs in 2015,predominantly driven by the incremental production at Bulyanhulu, and estimatethe cash cost per ounce for the year, including royalties, will be betweenUS$695-725 per ounce sold, a reduction of up to 5% on 2014. For 2015 we expect overall capital expenditure of between U$220million - US$240 million, a further reduction on 2014 as we enforce stringentcapital controls and move closer to industry average per ounce spend. Weexpect sustaining capital of US$90 million - US$100 million as we scale upoperations at Bulyanhulu and set up the long term future at North Mara; withcapitalised development, inclusive of deferred stripping of US$125 million -US$135 million. This is driven by increased development activity at Bulyanhuluwhich commenced in 2014 focused on opening additional mining areas, and atNorth Mara as work accelerates on the Gokona Underground project. The increasein spend is partially offset by a reduction in capital requirements at Buzwagias it moves towards the end of mining activity. Expansionary capital of US$5million relates to additional underground drilling at Bulyanhulu aimed atincreasing the scale of the ore body as well as expansionary drilling at NorthMara, predominantly under the Nyabirama pit. As a result of the above, coupled with flat corporateadministration costs, we estimate all-in sustaining cost per ounce sold forthe year will be between US$1,050 - US$1,100, a reduction of up to 5% on 2014.The evolution of these costs during the year will be driven by our productionprofile and as a result we expect to see lower costs in the second half thanthe first. Finally, I would like to thank all of my colleagues for theircommitment, enthusiasm and hard work throughout what has been a transformativeyear for Acacia. I am delighted by our progress to date, and am driven by theopportunity to make this company a leader in Africa. I would also like tothank our Board for their support and guidance through the year and I am verymuch looking forward to 2015 and beyond. Brad Gordon Chief Executive Officer Key statistics - restated to reflect Tulawaka as a discontinued operation Three months ended 31 December Year ended 31 December(Unaudited) 2014 20133 2014 20133Tonnes mined (thousands of tonnes) 10,776 11,570 41,684 54,076Ore tonnes mined (thousands of tonnes) 2,281 2,151 8,170 7,225Ore tonnes processed (thousands of tonnes) 2,405 1,817 8,413 7,914Process recovery rate (percent)* 85.5% 88.5% 88.0% 88.4%Head grade (grams per tonne)* 2.7 3.2 3.0 2.8Gold production (ounces) 181,084 165,375 718,651 637,002Gold sold (ounces) 194,243 168,167 703,680 643,597Copper production (thousands of pounds) 3,107 3,548 14,068 11,970Copper sold (thousands of pounds) 3,815 3,010 13,448 11,570Cash cost per tonne milled (US$/t)1,4 60 72 61 66Per ounce dataAverage spot gold price2 1,201 1,276 1,266 1,411Average realised gold price1 1,194 1,251 1,258 1,379Total cash cost1 744 774 732 812All-in sustaining cost1 1,088 1,163 1,105 1,346Average realised copper price (US$/lb) 2.80 3.31 3.01 3.24 Financial results - restated to reflect Tulawaka as a discontinued operation Three months ended 31 December Year ended 31 December(Unaudited, in US$'000 unless otherwise stated) 2014 20133 2014 20133Revenue 243,861 221,603 930,248 929,004Cost of sales (191,732) (169,770) (688,278) (713,806)Gross profit 52,129 51,833 241,970 215,198Corporate administration (10,274) (8,273) (32,685) (33,970)Share based payments (2,416) (625) (8,388) 1,813Exploration and evaluation costs (4,331) (5,979) (18,284) (16,927)Corporate social responsibility expenses (3,412) (3,667) (10,787) (12,237)Impairment charges - (133,320) - (1,044,310)Other charges (21,509) (8,995) (47,921) (30,424)Profit/(loss) before net finance expense and taxation 10,187 (109,026) 123,905 (920,857)Finance income 385 598 1,324 1,670Finance expense (3,182) (2,462) (10,043) (9,552)Profit/(loss) before taxation 7,390 (110,890) 115,186 (928,739)Tax credit/(expense) 13,906 19,232 (25,977) 187,959Net profit/(loss) from continuing operations 21,296 (91,658) 89,209 (740,780)Discontinued operations:Net (loss)/gain from discontinued operations (160) (8,684) 726 (57,653)Net profit/(loss) for the year 21,136 (100,342) 89,935 (798,433) Attributed to:Owners of the parent (net earnings/(loss)) 21,136 (97,700) 90,402 (781,101)- Continuing operations 21,296 (91,658) 89,209 (740,780)- Discontinued operations (160) (6,042) 1,193 (40,321)Non-controlling interests - (2,642) (467) (17,332)- Discontinued operations - (2,642) (467) (17,332) 1 These are non-IFRS financial performance measures with nostandard meaning under IFRS. Refer to"Non IFRS measures"' on page 25 fordefinitions. 2 Reflect the London PM fix price. 3 Restated for the reclassification of Tulawaka as a discontinuedoperation. 4 Cash cost per tonne milled excluding the reprocessing of tailingsat Bulyanhulu amounted to US$69 per tonne for the quarter and US$65 for theyear ended 31 December 2014. *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 For further information, please visit our website:www.acaciamining.com or contact: Acacia Mining plc +44 (0) 207 129 7150Brad Gordon, Chief Executive Officer Andrew Wray, Chief Financial Officer Giles Blackham, Investor Relations Manager Bell Pottinger +44 (0) 203 772 2500Daniel 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. Weare listed on the Main Market of the London Stock Exchange with a secondarylisting on the Dar es Salaam Stock Exchange. Barrick Gold Corporation remainsour majority shareholder. Acacia Mining reports in US dollars and inaccordance with IFRS as adopted by the European Union, unless otherwise statedin this announcement. Conference call A presentation will be held for analysts and investors on 16February 2015 at Noon London time. For those unable to attend, an audio webcast of the presentationwill be available on our website www.acaciamining.com. For those who wish toask questions, the access details for the conference call are as follows: Participant dial in: +44 (0) 203 003 2666 / +1 866 966 5335Password: Acacia FORWARD- LOOKING STATEMENTS This report includes "forward-looking statements" that express orimply expectations 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 and other factors, many of which are beyond the control ofAcacia, which could cause actual results and developments to differ materiallyfrom those expressed in, or implied by, the forward-looking statementscontained in this report. Factors that could cause or contribute todifferences between the actual results, performance and achievements of Acaciainclude, but are not limited to, changes or developments in political,economic or business conditions or national or local legislation or regulationin countries in which Acacia conducts - or may in the future conduct -business, industry trends, competition, fluctuations in the spot and forwardprice of gold or certain other commodity prices (such as copper and diesel),currency fluctuations (including the US dollar, South African rand, Kenyanshilling and Tanzanian shilling exchange rates), Acacia's ability tosuccessfully integrate acquisitions, Acacia's ability to recover its reservesor develop new reserves, including its ability to convert its resources intoreserves and its mineral potential into resources or reserves, and to processits mineral reserves successfully and in a timely manner, Acacia`s ability tocomplete land acquisitions required to support its mining activities,operational or technical difficulties which may occur in the context of miningactivities, delays and technical challenges associated with the completion ofprojects, risk of trespass, theft and vandalism, changes in Acacia`s businessstrategy including, the ongoing implementation of operational reviews, as wellas risks and hazards associated with the business of mineral exploration,development, mining and production and risks and factors affecting the goldmining industry in general. Although Acacia`s management believes that theexpectations 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 statementscontained in this 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. LSE: ACA TABLE OF CONTENTS 2014 Operating Review 8 Exploration Review 12 Financial Review 15 Going Concern Statement 24 Non-IFRS measures 25 Risk Review 27 Condensed Financial Information: - Consolidated Income Statement and Consolidated Statement of Comprehensive Income 29/30 - Consolidated Balance Sheet 31 - Consolidated Statement of Changes in Equity 32 - Consolidated Statement of Cash Flows 33 - Notes to the Condensed Financial Information 34 2014 Operating Review We made good progress across our assets in 2014 deliveringproduction for the year of 718,651 ounces, an increase of 13% year on year,together with a 10% decrease in cash costs and an 18% decrease in AISC.Increased production drove a 9% increase in sales volumes to 703,680 ounces. Operationally, North Mara's production of 273,803 ounces was 7%higher than the prior year due to improved throughput rates. AISC fell by 23%to US$947 per ounce sold predominantly due to lower capitalised developmentand sustaining capital expenditure together with the impact of increased salesvolumes. During Q4 2014, our Board approved the Gokona Underground projectwhich is expected to produce 450,000 ounces of gold over a 5 year life ofmine, with an AISC of below US$750 per ounce sold. This project is now movinginto the execution phase and is expected to deliver first stoping ore in thefirst half of 2015. Bulyanhulu saw an 18% increase in production to 234,786 ounces dueto an improved run of mine grade (8.7g/t) as a result of access to highergrade stopes, coupled with higher throughput from the processing of reclaimedtailings which delivered 12,405 ounces of production. This was partiallyoffset by lower recoveries as a result of underperformance of the elutioncircuit which led to increased tailings losses. AISC was down by 6% toUS$1,266 per ounce sold as cost savings were partially offset by an investmentin underground development to drive the grade improvement. At Buzwagi, gold production for the year of 210,063 ounces was 15%higher than 2013, due to improved head grade as a result of mining in the mainore zone and increased recoveries due to business improvement projects. Thiswas partially offset by a 7% decrease in throughput due to plant downtime forplanned and unplanned maintenance. Changes to the mine plan in 2013 reducedwaste tonnes mined, delivering a 24% reduction in total tonnes mined againstthe prior year. The combination of these factors resulted in a reduction inAISC of 30% to US$1,055 per ounce sold. Total tonnes mined during the year amounted to 41.7 million tonnes,a decrease of 23% on 2013 as a result of the changes to mine plans at bothNorth Mara and Buzwagi. Ore tonnes mined were 8.2 million tonnes compared to7.2 million in 2013, also as a result of the changes to the mine plans in2013. Ore tonnes processed amounted to 8.4 million tonnes, an increase of6% on 2013 primarily driven by increased throughput at Bulyanhulu and NorthMara partially offset by reduced throughput at Buzwagi. Head grade for the year of 3.0 g/t was 7% higher than in 2013 (2.8g/t). This was due to a 13% increase in head grade at Buzwagi and a 12%increase in run of mine grade at Bulyanhulu, partially offset by thereprocessing of lower grade tailings at Bulyanhulu. Our cash costs for the year were 10% lower than in 2013, andamounted to US$732 per ounce sold. The decrease was primarily due to: - The impact of the increased production base (US$112/oz); - Reduction in the workforce (mainly a 28% decrease in theinternational workforce compared to the same period in 2013) (US$29/oz); and - Lower G&A costs driven by lower warehouse related costs andlower management fee charges given the overall lower corporate cost structure(US$22/oz). Partly offset by: - Lower capitalised development costs at Buzwagi and North Mara as a resultof the revised mine plans driving a lower strip ratio (US$72/oz); and - Higher maintenance costs at Bulyanhulu and Buzwagi due toincreased maintenance activity as a result of maintenance scheduling and theimpact of maintenance cycles (US$19/oz). The all-in sustaining cost of US$1,105 per ounce sold for the yearwas 18% lower than 2013, predominantly due to lower cash costs as describedabove and the impact of higher sales volumes on per unit costs, combined withan increased production base mainly driven by the improved head grade, lowersustaining capital expenditure at all sites and lower capitalised developmentcosts at North Mara and Buzwagi due to the revised mine plans. As a result of operational and working capital improvements, cashgenerated from operating activities in 2014 increased by 55% over the prioryear period to US$289.5 million despite the reduction in the average realisedsales price. Capital expenditure for the year ended 31 December 2014 amounted toUS$253.8 million compared to US$385.1 million in 2013. Capital expenditureprimarily comprised capitalised development expenditure (US$132.4 million),including US$21.2 million related to development costs for the BulyanhuluUpper East and Lower West projects, investment in the Bulyanhulu CIL Expansionproject (US$44.5 million), component and equipment costs (US$21.8 million) andinvestments in tailings and infrastructure (US$32.4 million). As previously announced, as of 1 January 2015 we have changed our definitionof gold produced. Going forward, we will record only gold poured as productionounces and will not include changes to our gold-in-circuit ("GIC") ounces.Whilst we expect GIC to remain relatively stable going forward, we will noweliminate any potential volatility from movement in GIC levels and wouldexpect our production ounces to more closely match our sales ounces. This newdefinition is included in our expected production levels for 2015. Mine Site Review Bulyanhulu Key statistics Three months ended 31 December Year ended 31 December(Unaudited) 2014 2013 2014 2013Key operational information:Ounces produced oz 66,033 53,186 234,786 198,286Ounces sold oz 63,166 56,735 215,740 195,304Cash cost per ounce sold1 US$/oz 772 776 812 890AISC per ounce sold1 US$/oz 1,225 1,118 1,266 1,344Copper production Klbs 1,370 1,348 5,289 4,855Copper sold Klbs 1,425 1,304 4,925 4,508Underground ore tonnes hoisted Kt 245 222 909 872Run-of-mine processing:Ore milled Kt 245 229 906 871Head grade g/t 9.0 7.9 8.7 7.8Mill recovery % 83.8% 91.2% 88.0% 90.9%Ounces produced oz 58,998 53,186 222,381 198,286Cash cost per tonne milled1 US$/t 199 193 193 200Reprocessed 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 -Capital Expenditure- Sustaining capital US$('000) 9,936 4,333 23,388 25,193- Capitalised development US$('000) 14,210 10,750 60,151 45,428- Expansionary capital US$('000) 6,272 41,581 48,010 114,912 30,418 56,664 131,549 185,533- Non-cash reclamation asset adjustments US$('000) (181) (5) 6,141 (10,044)Total capital expenditure US$('000) 30,237 56,659 137,690 175,489 - These are non-IFRS financial performance measures with no standard meaningunder IFRS. Refer to"Non IFRS measures"' on page 24 for definitions. Operating performance Full year gold production of 234,786 ounces was 18% higher than theprior year due to improved run of mine grade. This was driven by increasedaccess to higher grade stopes coupled with higher throughput as a result ofthe processing of tailings. This was partially offset by lower recoveries as aresult of underperformance of the elution circuit which led to increasedtailings losses. Gold ounces sold of 215,740 ounces were 10% higher than 2013primarily due to the higher production base, but were lower than productionfor the year due to strong production late in Q4 impacting on the timing ofsales and a build-up in gold in circuit as the new CIL circuit wascommissioned. Copper production of 5.3 million pounds for the year was 9% higherthan in 2013 due to higher copper grades combined with higher run of minethroughput. Cash costs for the year of US$812 per ounce sold were 9% lower thanthe prior year of US$890, driven by the higher production base, combined withsavings in labour costs mainly due to a reduction in the internationalworkforce, lower general administration costs primarily resulting from lowermanagement fees and increased capitalised development costs driven bydevelopment acceleration projects. This was partially offset by highercontractor costs incurred for ore development and higher energy costs mainlyas a result of the increased processing activity with the new CIL circuit nowfully commissioned. AISC per ounce sold for the year of US$1,266 was 6% lower than in2013 (US$1,344), as lower cash costs and sustaining capital expenditure werepartially offset by the investment in capitalised development. The new CIL circuit was commissioned during the second half of 2014with the first gold pour taking place in August 2014. Production for the yearfrom reprocessed tailings amounted to 12,405 ounces, lower than planned as aresult of delays in construction completion, issues experienced in the elutioncircuit performance and the detoxification of the tailings. The project toaccelerate the retreatment of the historic higher grade tailings in preferenceto the rougher tailings was completed and commissioning trials have commenced. In 2014 a key focus was on the accelerated development of the UpperEast and Lower West zones to provide increased mining flexibility and toensure the mine is able to deliver to its geological potential. In order toachieve this, a specialist development contractor was engaged in April. Duringthe year total development costs incurred for the two initiatives (expensedand capitalised) were US$21.2 million, and this is included in the Bulyanhuluand Group AISC figures. During the fourth quarter initial development ore fromboth zones was delivered to the mill. Capital expenditure for the year before reclamation adjustmentsamounted to US$131.5 million, 29% lower than the 2013 expenditure of US$185.5million, mainly driven by lower expansionary capital spend as the new CILcircuit was completed in 2014. Capital expenditure for 2014 consisted mainlyof capitalised underground development costs (US$60.2 million includingUS$21.2 million related to development costs for the Bulyanhulu Upper EastLower West projects) and expansionary capital investment relating to the newCIL circuit (US$44.5 million). Buzwagi Key statistics Three months ended 31 December Year ended 31 December(Unaudited) 2014 2013 2014 2013Key operational information:Ounces produced oz 44,398 51,830 210,063 181,984Ounces sold oz 55,316 50,382 213,399 187,348Cash cost per ounce sold1 US$/oz 818 941 791 945AISC per ounce sold1 US$/oz 990 1,300 1,055 1,506Copper production Klbs 1,738 2,200 8,780 7,115Copper sold Klbs 2,390 1,706 8,523 7,062Mining information:Tonnes mined Kt 6,878 7,244 24,510 32,177Ore tonnes mined Kt 1,248 1,250 4,692 3,753Processing information:Ore milled Kt 1,052 945 4,086 4,400Head grade g/t 1.4 1.9 1.7 1.5Mill recovery % 94.2% 88.8% 92.4% 88.2%Cash cost per tonne milled1 US$/t 43 50 41 40Capital Expenditure- Sustaining capital US$('000) 4,225 4,309 12,817 31,589- Capitalised development US$('000) 2,759 10,812 31,357 60,136 6,984 15,121 44,174 91,725- Non-cash reclamation asset adjustments US$('000) (1,318) (2,318) (1,131) (9,230)Total capital expenditure US$('000) 5,666 12,803 43,043 82,4951These are non-IFRS financial performance measures with no standard meaningunder IFRS. Refer to"Non IFRS measures"' on page 24 for definitions. Operating performance Gold production for the year of 210,063 ounces was 15% higher than2013, driven by improved head grade as a result of mining in the main ore zoneand increased recoveries due to business improvement projects. This waspartially offset by a 7% decrease in throughput due to plant downtime for bothplanned and unplanned maintenance. Gold sold for the year amounted to 213,399ounces, 14% above that of 2013 due to the higher production and 2% aboveproduction due to the sale of ounces on hand at the start of the year. Recoveries increased by 5% over 2013 as a result of businessimprovement initiatives in the second half of the year providing improvedblending and management of the CIL plant's performance, coupled with theincreased head grade. Total tonnes mined for the year of 24.5 million tonnes were 24%lower than in 2013 due to changes in the mine plan compared to 2013, asalready reported. Copper production of 8.8 million pounds for the year was 23% higherthan in 2013 driven by the higher concentrate production and higher coppergrades. Cash costs for the year of US$791 per ounce sold were 16% lowerthan in 2013 (US$945). Cash costs were positively impacted by a higherproduction base and savings driven by lower contracted services costs due tolower rates, lower energy costs which in turn were affected by lowerself-generation as a result of improved TANESCO reliability, lower labourcosts as a result of the reduction in the international workforce and lowercorporate costs incurred and allocated to site. This was partially offset bylower capitalised development costs as a result of the change in the mineplans and increased maintenance costs driven by equipment breakdowns and plantmaintenance. AISC per ounce sold for the year of US$1,055 was 30% lower than in2013 (US$1,506). This was driven by the lower cash cost base and lowercapitalised development and sustaining capital expenditure. Capital expenditure for the year before reclamation adjustments, ofUS$44.2 million was 52% lower than in 2013 (US$91.7 million). The significantchange to the mine plan communicated in 2013 reduced required investment inwaste movement and sustaining capital. Key capital expenditure for the yearincluded capitalised stripping costs (US$31.4 million), investment in tailingsand infrastructure (US$7.0 million) and component change out costs (US$5.4million). North Mara Key statistics Three months ended 31 December Year ended 31 December(Unaudited) 2014 2013 2014 2013Key operational information:Ounces produced oz 70,655 60,358 273,803 256,732Ounces sold oz 75,760 61,050 274,540 260,945Cash cost per ounce sold1 US$/oz 668 636 623 659AISC per ounce sold1 US$/oz 912 1,075 947 1,227Mining information:Tonnes mined Kt 3,653 4,104 16,265 21,027Ore tonnes mined Kt 788 678 2,569 2,601Processing information:Ore milled Kt 718 643 2,804 2,643Head grade g/t 3.5 3.4 3.5 3.5Mill recovery % 86.9% 86.0% 87.2% 86.8%Cash cost per tonne milled1 US$/t 70 60 61 65Capital Expenditure- Sustaining capital US$('000) 4,967 3,562 18,049 38,386- Capitalised development US$('000) 4,674 13,651 40,900 65,594- Expansionary capital US$('000) 5,604 445 13,126 949 15,245 17,658 72,075 104,929- Non-cash reclamation asset adjustments US$('000) 12,219 (4,506) 16,003 (11,271)Total capital expenditure US$('000) 27,464 13,152 88,078 93,658 -These are non-IFRS financial performance measures with no standard meaningunder IFRS. Refer to"Non IFRS measures"' on page 24 for definitions. Operating performance Production for the year of 273,803 ounces was 7% higher than theprior year primarily as a result of higher throughput rates, which exceededthe prior year period by 6%. The higher milled tonnes were due to businessimprovement initiatives in both the mining and milling areas. Gold ounces soldfor the year of 274,540 ounces were in line with production, and 5% higherthan the prior year due to the higher production base. Cash costs for the year of US$623 per ounce sold were 5% lower thanin 2013 (US$659). Cash costs were positively impacted by the higher productionbase, lower labour costs as a result of the reduction in the internationalworkforce and lower management fees, partially offset by lower capitalisedmining costs due to changes in the mine plan compared to 2013. AISC per ounce sold for the year of US$947 was 23% lower than in2013 (US$1,227) predominantly due to lower cash costs, capitalised developmentand sustaining capital expenditure in combination with the impact of increasedsales volumes. During Q4 2014, the Acacia Board approved the Gokona Undergroundproject which is expected to produce 450,000 ounces of gold over a 5 year lifeof mine, with an AISC of below US$750 per ounce sold. This project is nowmoving into the execution phase with the underground exploration portal, whichwill help to develop a better understanding of the ore body. As at 31 December2014 the portal was 301 metres advanced and it is expected to encounterdevelopment ore in the first quarter of 2015. Following the Board approvalfuture capital expenditure will be classified as either sustaining capital orcapitalised development and is expected to amount to US$30 million in 2015.The total expansionary capital spend on the project in 2014 amounted toUS$13.1 million. Capital expenditure for the year before reclamation adjustments ofUS$72.1 million was 31% lower than in 2013 (US$104.9 million), due to lowercapitalised development and lower sustaining capital expenditure, partiallyoffset by higher expansionary expenditure. Key capital expenditure includedcapitalised stripping costs (US$40.9 million), investments in component costs(US$10.2 million) and tailings and infrastructure ($7.1 million). Exploration Review Introduction Overall, 2014 was a successful year of execution and deliveryacross our greenfield and brownfield exploration projects. During the year,US$18.3 million of exploration activities were expensed, with a further amountof US$2.2 million relating to exploration and evaluation activities beingcapitalised. Key highlights included our entry into highly prospective acreagein Burkina Faso, successful drilling at our greenfield joint venture projectsin Kenya, and further successful drilling results from our brownfieldexploration projects at Bulyanhulu from both surface and underground drilling. Brownfield Exploration In 2014, near-mine brownfield exploration successfully identifiedextensions to known resources. The brownfield exploration programme wasentirely focused on the Bulyanhulu ore body where surface and undergrounddiamond core drilling returned excellent results from step-out resourcedrilling on both Reef 1 and Reef 2 mineralised systems. This work has led tothe inclusion of a total of 2.3Moz to Indicated and Inferred resources and hasextended the resource envelope by 1.5 kilometres to the West. Bulyanhulu During 2014, Bulyanhulu undertook two diamond core exploration programmes, onefrom surface targeting Western extensions of both the Reef 1 and Reef 2 veinsseries, and the second from underground, targeting depth extensions of Reef 2in the East of the mine. Lower West Programme - Surface The programme was designed to test the extensions of the Reef 1 structure from400 metres to 1,200 metres west of the current Bulyanhulu resource wherehistoric drilling had shown indications of further gold mineralisation.Additionally, holes were also drilled to intersect the Reef 2 vein series, andprovide support that the Reef 2 system is mineralised up to 2 kilometres westof the currently delineated underground resources. A total of 9,721 metres of diamond core was drilled from surface holes during2014, bringing the total for the programme to 14,373 metres in a total of 16holes. Results from the drilling successfully showed the continuation ofhigh-grade gold mineralisation in the narrow reef-style structures in thewestern areas of both the Reef 1 and Reef 2 series. Better results from theprogramme, which have all previously been reported, included significantintersections of: Reef 1 - BGMDD0054W1: 0.70m @ 18.7g/t Au from 1,435m - Reef 1 - BGMDD0054W2: 1.0m @ 23.8g/t Au from 1,640m - Reef 1 - BGMDD0055W3: 0.79m @ 7.00g/t Au from 1,059m - Reef 1 - BGMDD0056W2: 1.25m @ 16.5g/t Au from 1,550m - Reef 1 Reef 2 Series - BGMDD0054: 2.0m @10.7g/t Au from 1,174m - Reef 2 series - BGMDD0054: 0.5m @ 37.9g/t Au from 1,335m - Reef 2 series - BGMDD0054W2: 1.02m @ 24.2g/t Au from 1,034m - Reef 2 series - BGMDD0054W6: 0.50m @ 31.1g/t Au from 681m - Reef 2 series - BGMDD0056W1: 0.50m @ 94.6g/t Au from 805m - Reef 2 series - BGMDD0056W2: 2.25m @ 26.6g/t Au from 906m - Reef 2 series The results from 2013/2014 surface drilling programme have beenvery positive and demonstrated that gold mineralisation, particularly on theReef 2 vein system, continues west of the mine, which opens the potential fora significant resource expansion on the Reef 2 series at relatively shallowlevels (0.1g/t Au) of which 87 holes intersected zones of >0.50g/tAu. Better results from the 2014 activity included: - KDAC0312: 3m @ 15.2 g/t Au from 41m and 9m @ 1.71 g/t Au from 62m - KDAC0617: 6m @ 7.7 g/t Au, including 3m @ 13.7 g/t Au - KDAC0832: 12m @ 2.77 g/t Au - KDAC0841: 15m @ 1.94 g/t Au and 6m @ 4.35 g/t Au - KDAC0858: 6m @ 22.3 g/t Au, including 3m @ 44 g/t Au - KDAC0877: 12m @ 12.6g/t Au, including 3m @ 46.3 g/t Au - KDAC 0998: 6m @ 3.20 g/t Au from 105m The gold mineralisation has been intersected in a variety of rocktypes along the Liranda Corridor, which indicates opportunities to test fordifferent types and styles of gold deposits in this area. The majority of goldmineralisation intersected to date has been within weathered (oxidised)bedrock, often associated with quartz veining. The aircore results are very encouraging given the current linespacing of the aircore traverses varies between 200 metres and 400 metres andthe average depth of drilling to date is a relatively shallow at approximately50 metres. In late 2014 we commenced a diamond core drill programme toinvestigate the orientation and continuity of gold mineralisation intersectedin the aircore drilling to date. By year end a total of 20 holes had beencompleted for 3,709 metres of diamond core. Delays in the transport andprocessing of drill core samples over the end-of-year period resulted in alimited number of results being received and processed through QA/QCprocedures by the period end. Initial interpretation of diamond core drill results and structuraldata indicates that in a number of areas drilling has not intersected themineralised interval and subsequently follow-up drill holes have beenre-oriented to assess the geology and mineralised structures at theappropriate drill angle. A number of scissor holes have now been drilled tocomplete this task. Lake Zone Camp In tandem with the aircore drilling, we are undertaking gradientand pole-dipole IP and Resistivity across selected gold-in-soil anomaliesthroughout the Lake Zone Camp in the central and western areas of the project.A total of 190 line kilometres of surveys were completed in 2014. Ten targetsshowing distinct resistivity and/or chargeability zones coincident with thegold-in-soil anomalies have been delineated and should be considered aspriority targets for future drilling programmes. The Abimbo target in the farwest of the West Kenya project area is expected to be the first target testedin 2015; this target is a Gold-Copper-Molybdenum-Arsenic soil geochemicalanomaly that extends over 6km2 and is co-incident with a large IP anomaly. Burkina Faso South Houndé Joint Venture In November, Acacia entered into an earn-in agreement with SaramaResources Ltd ("Sarama") whereby Acacia can earn an interest of up to 70% withthe expenditure of up to US$14 million over a number of staged payments, atSarama's highly prospective South Houndé Project in Burkina Faso (the"Project"). Acacia may increase its interest in the Project to 75% onsatisfaction of certain conditions relating to resource delineation. The Project comprises seven contiguous exploration licences covering a totalarea of 814km2 in South-West Burkina Faso approximately 300km south-west ofOuagadougou and 90km southeast of Bobo-Dioulasso, the second largest city inBurkina Faso. Access to the area is via a major sealed bitumen road fromOuagadougou to Bobo-Dioulasso and then via a network of secondary and tertiaryroads. The Project area is sparsely populated. Sarama has identified a number of high-quality exploration targets includingthe 1.5Moz Au Tankoro Resource. The Tankoro Resource extends over 5.5km strikewithin a 25km long mineralised corridor, one of three such mineralisedcorridors on the property. Previous exploration including surfacegeochemistry, geophysics (IP), aircore and reverse circulation drilling havedefined a number of high quality exploration targets along strike from theTankoro resource and on multiple sub-parallel north-northeast trendingcorridors within the South Houndé Project. Going forward, exploration programmes will target high grade extensions to theexisting Tankoro resource base, both along strike and at depth. Regionalprogrammes will target new high-value discoveries across the Project throughthe use of geophysics (IP and aeromagnetic surveys) and extensive drillingprogrammes. The South Houndé JV agreement was signed in November 2014 with an initial3-month work programme commencing shortly thereafter. By the end of 2014, soilsampling had commenced on the Tyikoro licence and an induced polarisation (IP)survey extending the Tankoro IP grid had been completed. Additionally, a totalof 59 aircore holes (3,377 metres), seven reverse circulation holes (944metres) and two diamond core holes (624 metres) had been completed acrossseveral targets; we expect to release initial results during Q1 2015. It is anticipated that two diamond rigs and one reverse circulationrig will be in operation for most of Q1 2015 following up positive aircoreresults and IP targets, as well as testing for high-grade plunge extensions tothe MC and MM zones. Financial Review The continued strong operational performance during the year waspartially offset by the continuing weak gold price environment in 2014, withthe average realised gold price US$121 per ounce lower than the prior year.This is reflected in the Acacia Group's financial results for the year ended31 December 2014: - Revenue of US$930.2 million was US$1.2 million higher than 2013 driven by anincrease in sales volumes of 60,083 ounces (9%), which offset a 9% decrease inthe average realised gold price to US$1,258 per ounce sold (US$1,379 per ouncesold in the prior year). - Cash costs decreased to US$732 per ounce sold from US$812 in 2013, driven bythe higher production base, lower labour costs, lower warehouse costs andlower corporate costs incurred and allocated to site. - All-in sustaining costs decreased to US$1,105 per ounce sold from US$1,346in 2013 due to lower cash costs, lower sustaining capital expenditures andcapitalised development costs combined with the impact of increased salesvolumes on per unit costs. - EBITDA increased by 5% to US$252.7 million, mainly driven by lower directmining costs. - Operational cash flow of US$289.5 million was 55% higher than 2013,primarily as a result of reduced operating costs and decreased working capitalinvestment due to a decrease in other current assets, mainly driven by VATrefunds received from the Tanzanian Government, an increase in trade payablesdue to the timing of payments, partially offset by an investment in goldinventory and an increase in dore and concentrate receivables. The following review provides a detailed analysis of ourconsolidated results for the year ended 31 December 2014 and the main factorsaffecting financial performance. It should be read in conjunction with theunaudited consolidated financial information and accompanying notes on pages28 to 46, which have been prepared in accordance with International FinancialReporting Standards as adopted for use in the European Union ("IFRS"). Market overview Our financial results are impacted by external drivers in the formof commodity prices, exchange rates and the cost of energy. Their impact in2014 and our positioning going into 2015 are set out below. The market price of gold has a significant impact on Acacia'soperating earnings and its ability to generate cash flows. Gold pricevolatility continued to be elevated during 2014 with the gold price rangingfrom a high of US$1,385 per ounce to a low of US$1,142 per ounce and closingthe year at US$1,206 per ounce. Market gold prices averaged US$1,266 per ouncein 2014, a 10% decline from the prior year average of US$1,411. The price of gold has been influenced by US Dollar strength, lowinterest rates worldwide, investment demand and the monetary policiesimplemented by major world central banks. Exchange traded fund ("ETF")outflows were in part met by strong physical demand in Asia with jewellerydemand in China accounting for one third of the world market. Gold is stillviewed as a portfolio diversifier by central banks, which now hold asignificant portion of global bullion reserves and continue to increaseholdings. As the US economy improved during 2014, the US Federal Reservestarted to taper its bond purchase programme which culminated in September2014. Equities performed well and the dollar appreciated which together withdivergence in major central bank policies, caused gold prices to be extremelyvolatile during 2014. We continued our policy of no gold hedging during 2014. Copper Acacia also produces copper as a co-product which is recognised asa part of revenue. Copper traded between US$2.86 and US$3.37 per pound in2014. The average market copper price for 2014 was US$3.11 compared withUS$3.32 per pound in 2013. Key external drivers of the copper prices includeChinese demand, the world's largest consumer, the US growth outlook, existingstock levels and supply growth. During 2014 we utilised an option collar strategy whereby 75% ofour estimated copper production was hedged at an average floor price ofUS$3.12 per pound and an average ceiling price of US$3.41 per pound, resultingin a realised gain of US$408 thousand for the year. In 2015 we have continuedthis strategy and put in place floor protection on 24% of our expected copperproduction at an average floor price of US$3.08 per pound and an averageceiling price of US$3.35 per pound. Fuel Brent Crude oil traded between US$57 and US$115 per barrel and averaged US$100per barrel (2013: US$109 per barrel) while trading at around US$58 per barrelat the end of the year. We consumed approximately 496,000 barrels of diesel in2014 (2013: 610,000). Diesel fuel is refined from crude oil and is thereforesubject to the same price volatility affecting crude oil prices and has asignificant impact on our production costs. Crude oil has been impacted by thestrength of the US dollar and increased supplies from North America thatresulted in an oversupply. Our overall oil exposure is heavily impacted bygrid power reliability across all three operations and mining activity at ouropen pit mines. During 2014 we utilised an option collar strategy to hedge 75%of our estimated diesel consumption at an average floor price of US$88 perbarrel and average capped price of US$105 per barrel. In 2015 we havecontinued this strategy and put in place protection on approximately 75% and64% of our expected 2015 and 2016 consumption respectively with average floorsof US$97 and US$69 and a capped price of US$110 and US$90 per barrelrespectively. Currency Exchange rates A portion of Acacia's expenditure is incurred in currencies otherthan US dollars. The exposure relating to other currencies is approximately26% of the Company's total expenditure, of which the main contributingcurrencies are the Tanzanian shilling and the South African rand. In 2014, therand declined significantly against the US dollar as the US dollarstrengthened, domestic factors persisted and investors shunned riskierrand-denominated assets. The Tanzanian shilling remained relatively stable asthe Bank of Tanzania imposed exchange controls throughout the year. We haveput in place floor protection on approximately 75% of our expected randoperating expenditures for 2015 with average floors of ZAR10.43. In light ofpotential rand weakness we have average ceilings of ZAR12.80 for 2015. Discontinued operation - Tulawaka Following the acquisition of Tulawaka by STAMICO in February 2014, thefinancial results of Tulawaka have been presented as discontinued operationsin the consolidated financial information. The comparative results in theconsolidated income statement have been presented as if Tulawaka had beendiscontinued from the start of the comparative period, effectively excludingthe net result relating to Tulawaka from individual income statement lines andaggregating it in one line called "Net profit/(loss) from discontinuedoperations". A reconciliation to group results is set out on page 20. The financial performance below is stated for continuing operations. Revenue Revenue for 2014 of US$930.2 million was in line with 2013. The 9%increase in sales volumes (60,083 ounces) was more than offset by a 9%decrease in the realised gold prices from US$1,379 per ounce sold in 2013 toUS$1,258 in 2014 as a result of lower market prices. The increase in salesounces was due to the higher production base. Included in total revenue is co-product revenue of US$45.3 millionfor 2014, which increased by 5% from the prior year period (US$43.0 million)due to higher copper sales volumes, partly offset by a lower realised copperprice. The 2014 average realised copper price of US$3.01 per pound comparedunfavourably to that of 2013 (US$3.24 per pound), and was driven by globalmarket factors regarding supply and demand. Cost of sales Cost of sales was US$688.3 million for 2014, representing adecrease of 4% on the prior year (US$713.8 million). The key aspects impactingthe cost of sales for the year were: - Lower depreciation and amortisation charges driven by the lower capital baseemployed for the year slightly offset by the higher production base; and - Cost savings across labour, energy and fuel and generaladministration costs, combined with an increased investment in gold inventoryrelating to ore stockpiles at Buzwagi and gold in circuit. This was partially offset by: - A lower proportion of mining costs being capitalised at Buzwagi and NorthMara due to the change in mine plans; - Higher maintenance costs at Buzwagi and Bulyanhulu due toincreased maintenance activity as a result of a focus on implementing improvedmaintenance practices and the impact of maintenance cycles; and - Higher refining charges due to increased sales ounces. The table below provides a breakdown of cost of sales: (US$'000) Three months ended 31 December Year ended 31 December(Unaudited) 2014 2013 2014 2013Cost of SalesDirect mining costs 138,446 126,826 493,933 508,166Third party smelting and refining fees 7,228 5,160 24,937 16,790Royalty expense 10,830 9,396 41,284 40,871Depreciation and amortisation 35,228 28,388 128,124 147,979Total 191,732 169,770 688,278 713,806A detailed breakdown of direct mining expenses is shown in the table below: (US$'000) Three months ended 31 December Year ended 31 December(Unaudited) 2014 2013 2014 2013Direct mining costsLabour 32,003 36,757 132,656 152,870Energy and fuel 29,974 30,565 130,486 133,797Consumables 27,988 24,612 103,770 104,188Maintenance 29,977 21,970 104,452 90,926Contracted services 28,695 24,723 96,785 96,957General administration costs 17,786 27,842 77,360 92,902Gross direct mining costs 166,423 166,469 645,509 671,640Capitalised mining costs (27,977) (39,643) (151,576) (163,474)Total direct mining costs 138,446 126,826 493,933 508,166 Gross direct mining costs of US$645.5 million for 2014 were 4%lower than 2013 (US$671.6 million). Individual cost components comprised: - A 13% reduction in labour costs, mainly as a result a 28% reduction ininternational employees across the sites, driven by localisation efforts. - A 2% reduction in energy and fuel expenses, driven primarily bylower diesel usage at Buzwagi as a result of reduced mining and processingactivity and less self-generation due to increased reliance on supply fromTANESCO, partially offset by higher costs at Bulyanhulu due to the highermining and processing activity coupled with higher TANESCO pricing. - A 15% increase in maintenance costs, driven by increasedmaintenance investment, specifically relating to mining equipment repairs atBuzwagi and Bulyanhulu, and to improve group maintenance practices. - A 17% decrease in general administration costs, across all sitesdriven by lower warehouse costs combined with lower corporate costs incurredand allocated to sites. Capitalised direct mining costs, consisting of capitaliseddevelopment costs and the change in inventory charge, is made up as follows: (US$'000) Three months ended 31 December Year ended 31 December(Unaudited) 2014 2013 2014 2013Capitalised direct mining costsCapitalised development costs (20,248) (35,254) (122,782) (173,245)(Investment in)/ drawdown of inventory (7,729) (4,389) (28,794) 9,771Total capitalised direct mining costs (27,977) (39,643) (151,576) (163,474) Capitalised development costs were 29% lower than 2013, driven bythe decrease in waste tonnes mined at Buzwagi and North Mara due to therevised mine plans previously announced. This was in part offset by anincrease in capitalised development costs at Bulyanhulu. The investment ininventory was US$28.8 million, higher than in 2013 due to a build-up of oreinventory at Buzwagi due to lower throughput rates and increased gold incircuit inventory at Bulyanhulu. This was slightly offset by a drawdown of orestockpiles at North Mara as a result of the improved throughput rate and plantperformance. Central costs Corporate administration expenses totalled US$32.7 million for2014, a 4% decrease on 2013 (US$34.0 million) driven by further savings inlabour costs as a result of the continued restructuring of the corporatefunction and savings in travel costs, partially offset by increased legalfees. The increase in the share based payment expense was a result of thestronger share price performance, specifically when compared to our peers,impacting on the valuation. Three months ended 31 December Year ended 31 December(US$'000) 2014 2013 2014 2013(Unaudited)Corporate administration 10,274 8,273 32,685 33,970Stock based payments 2,416 625 8,388 (1,813)Total central costs 12,690 8,898 41,073 32,157 Exploration and evaluation costs Exploration and evaluation costs of US$18.3 million were incurredin 2014, 8% higher than the US$16.9 million spent in 2013. The key focus areasfor 2014 were extension drilling on both Reef 1 and 2 at Bulyanhulu (US$7.2million), and exploration programmes at the West Kenya Joint Venture projectamounting to US$5.6 million. Also included in exploration costs is US$1.5million relating to our investment and share of expenses of the South Houndéproject in Burkina Faso. Corporate social responsibility expenses Corporate social responsibility costs incurred amounted to US$10.8 million forthe year compared to the prior year of US$12.2 million. The main projects for2014 related to Village Benefit Implementation Agreements ("VBIAs") at NorthMara and larger contributions to general community projects funded from theAcacia Maendeleo Fund; of the total spend for 2014, US$8.5 million was spenton Acacia Maendeleo Fund projects and VBIA's. Other charges Other charges amounted to US$47.9 million, 58% higher than 2013(US$30.4 million). The main contributors were: (i) Acacia's ongoing programmeof zero cost collar contracts as part of a programme to mitigate the negativeimpact of copper, rand and fuel cost market volatility. The entry into thesearrangements resulted in a combined mark-to-market revaluation loss of US$13.6million, due to the fact that these arrangements do not qualify for hedgeaccounting combined with a significant decline in the market price of oil,(ii) non-cash foreign exchange losses mainly related to the indirect taxreceivables due to the weakening of the Tanzanian shilling (US$13.5 million),(iii) Operational Review costs, including external services and retrenchmentcosts of US$13.7 million and (iv) legal costs of US$6.7 million. Refer to note8 of the condensed financial information for further details. Finance expense and income Finance expense of US$10.0 million for 2014 was 5% higher than 2013(US$9.6 million). The key drivers were accretion expenses relating to thediscounting of the environmental reclamation liability (US$4.7 million) andUS$2.4 million (US$3.1 million in 2013) relating to the servicing of theUS$150 million undrawn revolving credit facility. Other costs include bankcharges and interest on finance leases. Interest costs relating to the projectfinancing on the Bulyanhulu CIL Plant Expansion project were capitalised tothe cost of the asset up to 30 September 2014 due to the facility beingdirectly attributable to the asset. For the year ended 31 December 2014 US$2.9million of borrowing costs have been capitalised to the project. From 1October 2014, borrowing costs relating to the CIL Bulyanhulu Expansion projectwere expensed as the new CIL circuit was fully commissioned. The firstprincipal repayment for this facility will be made in July 2015. Finance income relates predominantly to interest charged onnon-current receivables and interest received on money market funds. Refer tonote 9 of the condensed financial information for details. Taxation matters The taxation charge was US$26.0 million for 2014, compared to acredit of US$188.0 million in 2013. The tax charge was made up solely ofdeferred tax charges and reflects the impact of the profitability on ayear-to-date basis. The effective tax rate in 2014 amounted to 23% compared to20% in 2013. The increase is mainly driven by the increase in taxable incomeand the utilisation of previously unrecognised tax losses at Buzwagi (US$21.1million) all recorded in Q4 2014, driven by the mine's anticipated futureprofitability as per the revised mine plan. Net earnings from continuing operations As a result of the factors discussed above, net profit fromcontinuing operations for 2014 was US$89.2 million, against the prior yearloss of US$740.8 million. Lower costs of sales and no impairment chargesincurred in 2014 contributed to the variance. This was partially offset by thehigher tax charge and other charges. Earnings per share The earnings per share for 2014 amounted to US22.1 cents, an increase ofUS212.5 cents from the prior year loss of US190.4 cents. The increase wasdriven by increased net profit with no change in the underlying issued shares.Earnings per share from continuing operations amounted to US21.8 cents. Discontinued operations Below is a reconciliation showing Group financial performance on aline by line basis, with Tulawaka being classified as a discontinuedoperations for 2013 and 2014. Year ended 31 December 2014(US$'000) Continuing Discontinued(Unaudited) operations operations TotalRevenue 930,248 - 930,248Cost of sales (688,278) - (688,278)Gross profit/ (loss) 241,970 - 241,970Corporate administration (32,685) - (32,685)Share based payments (8,388) - (8,388)Exploration and evaluation costs (18,284) - (18,284)Corporate social responsibility expenses (10,787) (118) (10,905)Impairment charges - - -Other charges (47,921) 805 (47,116)Profit/(loss) before net finance expense andtaxation 123,905 687 124,592Finance income 1,324 77 1,401Finance expense (10,043) (38) (10,081)Profit/(loss) before taxation 115,186 726 115,912Tax (expense)/ credit (25,977) - (25,977)Net profit/ (loss) 89,209 726 89,935 Year ended 31 December 2013(US$'000) Continuing Discontinued(Unaudited) operations operations TotalRevenue 929,004 13,514 942,518Cost of sales (713,806) (30,368) (744,174)Gross profit/ (loss) 215,198 (16,854) 198,344Corporate administration (33,970) (1,351) (35,321)Share based payments 1,813 40 1,853Exploration and evaluation costs (16,927) - (16,927)Corporate social responsibility expenses (12,237) (3,259) (15,496)Impairment charges (1,044,310) (16,701) (1,061,011)Other charges (30,424) (19,442) (49,866)Profit/(loss) before net finance expense andtaxation (920,857) (57,567) (978,424)Finance income 1,670 30 1,700Finance expense (9,552) (116) (9,668)Profit/(loss) before taxation (928,739) (57,653) (986,392)Tax (expense)/ credit 187,959 - 187,959Net profit/ (loss) (740,780) (57,653) (798,433) Financial position Acacia had cash and cash equivalents on hand of US$293.9 million asat 31 December 2014 (US$282.4 million as at 31 December 2013). The Group'scash and cash equivalents are with counterparties whom the Group considers tohave an appropriate credit rating. Location of credit risk is determined byphysical location of the bank branch or counterparty. Investments are heldmainly in United States dollars, with cash and cash equivalents in otherforeign currencies maintained for operational requirements. During 2013, a US$142 million facility was put in place to fund thebulk of the costs of the construction of the Bulyanhulu CIL Plant Expansionproject ("Project"). The Facility is collateralised by the Project, and has aterm of seven years with a spread over Libor of 250 basis points. The sevenyear Facility is repayable in equal instalments (bi-annual) over the term ofthe Facility, after a two year repayment holiday period. The interest rate hasbeen fixed at 3.6% through the use of an interest rate swap. The full facilityof US$142 million was drawn in 2013 with the first repayment due in H2 2015. The above complements the existing undrawn revolving creditfacility of US$150 million which runs until November 2017. The net book value of property, plant and equipment increased fromUS$1.28 billion in December 2013 to US$1.43 billion in December 2014. The maincapital expenditure drivers have been explained in the cash flow used in theinvesting activities section below, and have been offset by depreciationcharges of US$124.1 million. Refer to note 12 to the condensed financialinformation for further details. Total indirect tax receivables, net of a discount provision appliedto the non-current portion, decreased from US$159.8 million as at 31 December2013 to US$108.1 million as at 31 December 2014. The decrease was mainly dueto refunds of US$132.8 million received during 2014, which was partiallyoffset by a net increase in current VAT receivables of approximately US$81million. The net deferred tax position decreased from an asset of US$14.9million as at 31 December 2013 to a liability of US$11.1 million as at 31December 2014. This was mainly as a result of taxable income in 2014, theimpact of timing differences and the utilisation of previously unrecognisedtax losses at Buzwagi (US$21.1 million), driven by the mine's anticipatedfuture profitability as per the revised mine plan. Net assets attributable to owners of the parent increased fromUS$1.93 billion in December 2013 to US$2.0 billion in December 2014. Theincrease reflects the current year profit attributable to owners of the parentof US$90.4 million and the payment of the final 2013 dividend of US$8.2million and the 2014 interim dividend of US$5.7 million. Cash flow generation and capital management Cash flow - continuing and discontinued operations (US$'000) For the three months ended 31 December Year ended 31 December (Unaudited) 2014 2013 2014 2013Cash generated from operating activities 60,993 48,193 289,528 187,115Cash used in investing activities (50,305) (84,865) (256,992) (386,850)Cash (used in)/ provided by financing activities (2,616) 30,487 (19,016) 82,322Increase/ (decrease) in cash 8,072 (6,185) 13,520 (117,413)Foreign exchange difference on cash (950) (69) (2,079) (1,526)Opening cash balance 286,728 288,663 282,409 401,348Closing cash balance 293,850 282,409 293,850 282,409 Cash flow from operating activities was US$289.5 million for 2014,an increase of US$102.4 million, when compared to 2013 (US$187.1 million). Theincrease relates to the increased gold production and improved costperformance as well as an increase in inflows associated with working capitalof US$61.3 million when compared to 2013. The working capital inflow relatesto a decrease in other current assets of US$28.0 million, mainly driven by VATrefunds received from the Tanzanian Government and an increase in tradepayables of US$22.7 million due to the timing of payments compared to theprior year. This was partially offset by an investment in gold inventory ofUS$29.2 million and an increase in doré and concentrate receivables of US$10.0million. Cash flow used in investing activities was US$257.0 million for2014, a decrease of 34% when compared to 2013 (US$386.9 million), driven bylower sustaining capital expenditure at Buzwagi and North Mara, lowerexpansionary capital expenditure due to higher spending on the Bulyanhulu CILExpansion project in 2013 and lower capitalised development expenditure atBuzwagi and North Mara. A breakdown of total capital and other investing capital activitiesfor the year ended 31 December is provided below: (US$'000) Year ended 31 December(Unaudited) 2014 2013 Sustaining capital 53,138 84,474Expansionary capital 61,136 117,469Capitalised development 132,408 171,158Total cash capital 246,682 373,101Non-cash rehabilitation asset adjustment 21,013 (30,740)Non-cash sustaining capital1 1,244 11,967Total capital expenditure 268,939 354,328Other investing capital- Non-current asset movement2 (1,323) 13,749- Cash flow related to the sale of Tulawaka (11,633) - 1 Total non-cash sustaining capital includes the impact of capitalaccruals excluded from cash sustaining capital of US$6.9 million as well as FXadjustments on revaluation of assets. 2 Non-current asset movements relates to the investment in the landacquisitions reflected as prepaid operating leases and Tanzania governmentreceivables. Sustaining capital Sustaining capital expenditure includes the investment in mineequipment of US$21.8 million, mainly relating to component change outs atNorth Mara and Bulyanhulu and investment in tailings and infrastructure atBulyanhulu (US$18.3 million), North Mara (US$7.1 million) and Buzwagi (US$7.0million). Expansionary capital Expansionary capital expenditure consisted mainly of the BulyanhuluCIL Expansion project (US$44.5 million) and the Gokona Underground project atNorth Mara ($13.1 million). Capitalised development Capitalised development capital includes capitalised stripping forNorth Mara (US$40.9 million) and Buzwagi (US$31.4 million) and Bulyanhulucapitalised underground development (US$60.2 million). Non-cash capital Non-cash capital was US$22.3 million and consisted mainly ofreclamation asset adjustments (US$21.0 million) and the full year increase incapital accruals (US$6.9 million), partially offset by the revaluation of Randbased assets. The reclamation adjustments were driven by changes in estimatesof future reclamation cash flows combined with lower US risk free ratesdriving lower discount rates. Other investing capital The sale of Tulawaka to STAMICO resulted in a cash payment of thebalance of the rehabilitation fund, less the transaction consideration oncompletion and amounted to US$11.6 million. During 2014 North Mara incurredland purchases totalling US$9.0 million. This was offset by a reduction inother non-current assets of US$7.4 million. Cash flow used in financing activities for the year ended 31December 2014 was an outflow of US$19.0 million, a decrease of US$101.3million on an inflow of US$82.3 million in 2013. The outflow relates topayment of the final 2013 dividend of US$8.2 million, payment of the 2014interim dividend of US$5.7 million and finance lease payments of US$5.1million. Dividend An interim dividend of US1.4 cents per share was paid toshareholders on 22 September 2014. The Board of Directors have recommended afinal dividend for 2014 of US2.8 cents per share, subject to the shareholdersapproving this recommendation at the AGM. Significant judgements in applying accounting policies and keysources of estimation uncertainty Many of the amounts included in the consolidated financialinformation require management to make judgements and/or estimates. Thesejudgements and estimates are continuously evaluated and are based onmanagement's experience and best knowledge of the relevant facts andcircumstances, but actual results may differ from the amounts included in theconsolidated financial information included in this release. Information aboutsuch judgements and estimation is included in the accounting policies and/ornotes to the consolidated financial statements, and the key areas aresummarised below. Areas of judgement and key sources of estimation uncertainty thathave the most significant effect on the amounts recognised in the consolidatedfinancial statements include: - Estimates of the quantities of proven and probable gold reserves; - The capitalisation of production stripping costs; - The capitalisation of exploration and evaluation expenditures; - Review of goodwill, tangible and intangible assets' carryingvalue, the determination of whether these assets are impaired and themeasurement of impairment charges or reversals; - The estimated fair values of cash generating units for impairmenttests, including estimates of future costs to produce proven and probablereserves, future commodity prices, foreign exchange rates and discount rates; - The estimated useful lives of tangible and long-lived assets andthe measurement of depreciation expense; - Property, plant and equipment held under finance leases; - Recognition of a provision for environmental rehabilitation andthe estimation of the rehabilitation costs and timing of expenditure; - Whether to recognise a liability for loss contingencies and theamount of any such provision; - Whether to recognise a provision for accounts receivable, aprovision for obsolescence on consumables inventory and the impact ofdiscounting the non-current element of the indirect tax receivable; - Recognition of deferred income tax assets, amounts recorded foruncertain tax positions, the measurement of income tax expense and indirecttaxes; - Determination of the cost incurred in the productive process ofore stockpiles, gold in process, gold doré/bullion and concentrate, as well asthe associated net realisable value and the split between the long term andshort term portions; - Determination of fair value of derivative instruments; and - Determination of fair value of stock options and cash-settledshare based payments. Going concern statement Acacia Group's business activities, together with factors likely toaffect its future development, performance and position are set out in theoperational and financial review sections of this report. The financialposition of Acacia Group, its cash flows, liquidity position and borrowingfacilities are described in the preceding paragraphs of this financial review. At 31 December 2014, the Group had cash and cash equivalents ofUS$293.9 million with a further US$150 million available under the undrawnrevolving credit facility which remains in place until November 2017. Totalborrowings at the end of the year amounted to US$142 million, of which thefirst repayment is only repayable in H2 2015. Included in other current assets are amounts due to the Grouprelating to indirect taxes of US$45.9 million which are expected to bereceived within 12 months, but these will be offset to an extent by new claimssubmitted for input taxes incurred during 2015. The refunds remain dependenton processing and payments of refunds by the Government of Tanzania. We expect that the above, in combination with the expectedoperational cash flow generated during 2015, will be sufficient to cover thecapital requirements and other commitments for the foreseeable future. In assessing Acacia Group's going concern status the Directors havetaken into account the above factors, including the financial position ofAcacia Group and in particular its significant cash position, the current goldand copper price and market expectations for the same in the medium term, andAcacia Group's capital expenditure and financing plans. After makingappropriate enquiries, the Directors consider that Acacia and Acacia Group asa whole has adequate resources to continue in operational existence for theforeseeable future and that it is appropriate to adopt the going concern basisin preparing the financial statements. Non-IFRS Measures Acacia has identified certain measures in this report that are notmeasures defined under IFRS. Non-IFRS financial measures disclosed bymanagement are provided as additional information to investors in order toprovide them with an alternative method for assessing Acacia's financialcondition and operating results. These measures are not in accordance with, ora substitute for, IFRS, and may be different from or inconsistent withnon-IFRS financial measures used by other companies. These measures areexplained further below. Average realised gold price per ounce sold is a non-IFRS financialmeasure which excludes from gold revenue: - Unrealised mark-to-market gains and losses on provisional pricingfrom copper and gold sales contracts; and - Export duties. Cash cost per ounce sold is a non-IFRS financial measure. Cashcosts include all costs absorbed into inventory, as well as royalties, andproduction taxes, and exclude capitalised production stripping costs,inventory purchase accounting adjustments, unrealised gains/losses fromnon-hedge currency and commodity contracts, depreciation and amortisation andcorporate social responsibility charges. Cash cost is calculated net ofco-product revenue. The table below provides a reconciliation between cost of sales andtotal cash cost to calculate the cash cost per ounce sold. (US$'000) Three months ended 31 December Year ended 31 December(Unaudited) 2014 2013 2014 2013Total cost of sales 191,732 169,770 688,278 713,806Deduct: depreciation and amortisation (35,228) (28,388) (128,124) (147,979)Deduct: Co-product revenue (11,910) (11,181) (45,253) (43,012)Total cash cost 144,594 130,201 514,901 522,815 Total ounces sold 194,243 168,167 703,680 643,597Cash cost per ounce 744 774 732 812Discontinued operations - - - 15Attributable cash cost per ounce 744 774 732 827 Refer to note 5 to the condensed financial information for areconciliation to all-in sustaining cost per ounce sold. The presentation of these statistics in this manner allows Acaciato monitor and manage those factors that impact production costs on a monthlybasis. Cash cost per ounce sold is calculated by dividing the aggregate ofthese costs by gold ounces sold. Cash costs and cash cost per ounce sold arecalculated on a consistent basis for the periods presented. All-in sustaining cost (AISC) is a non-IFRS financial measure. Themeasure is in accordance with the World Gold Council's guidance issued in June2013. It is calculated 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,realised gains and/or losses on operating hedges, capitalised stripping andunderground development costs and sustaining capital expenditure. This is thendivided by the total ounces sold. A reconciliation between cash cost per ouncesold and AISC for the key business segments is presented below: (Unaudited) Three months ended 31 December 2014 Three months ended 31 December 2013 ACA Group ACA Group ongoing ongoing(US$/oz sold) Bulyanhulu North Mara Buzwagi operations Bulyanhulu North Mara Buzwagi operationsCash cost per ounce sold 772 668 818 744 776 636 941 774Corporate administration 49 39 39 53 69 42 47 49Share based payments 7 - (8) 12 (1) (1) (1) 4Rehabilitation 6 16 4 9 4 24 8 12Mine exploration (2) 1 - - 2 8 1 4CSR expenses 11 22 10 18 2 46 4 22Capitalised development 225 62 50 111 189 224 215 209Sustaining capital 157 104 77 141 77 96 85 89Total continuing operations 1,225 912 990 1,088 1,118 1,075 1,300 1,163Discontinued operations - 8Total 1,088 1,171 (Unaudited) Year ended 31 December 2014 Year ended 31 December 2013 ACA Group ACA Group ongoing North ongoing(US$/oz sold) Bulyanhulu North Mara Buzwagi operations Bulyanhulu Mara Buzwagi operationsCash cost per ounce sold 812 623 791 732 890 659 945 812Corporate administration 49 37 38 46 72 39 52 53Share based payments 3 1 1 12 - (1) (1) (3)Rehabilitation 7 18 5 11 7 29 15 18Mine exploration 2 2 1 1 3 12 2 6CSR expenses 7 18 12 15 6 31 4 19Capitalised development 279 149 147 188 233 251 321 266Sustaining capital 107 99 60 100 133 207 168 175Total continuing operations 1,266 947 1,055 1,105 1,344 1,227 1,506 1,346Discontinued operations - 16Total 1,105 1,362 AISC is intended to provide additional information on the totalsustaining cost for each ounce sold, taking into account expenditure incurredin addition to direct mining costs, depreciation and selling costs. Cash cost per tonne milled is a non-IFRS financial measure. Cash costs includeall 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 fromnon-hedge currency and commodity contracts, depreciation and amortisation andcorporate social responsibility charges. Cash cost is calculated net ofco-product revenue. Cash costs per tonne milled are calculated by dividing theaggregate of these costs by total tonnes milled. EBITDA is a non-IFRS financial measure. Acacia calculates EBITDA asnet 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 investorsand analysts. It does not have any standardised meaning prescribed by IFRS andshould not be considered in isolation or as a substitute for measures ofperformance prepared in accordance with IFRS. EBITDA excludes the impact ofcash costs of financing activities and taxes, and the effects of changes inoperating working capital balances, and therefore is not necessarilyindicative of operating profit or cash flow from operations as determinedunder IFRS. Other companies may calculate EBITDA differently. A reconciliation between net profit for the period and EBITDA ispresented below: (US$'000) Three months ended 31 December Year ended 31 December(Unaudited) 2014 2013 2014 2013Net profit/ (loss) for the period 21,136 (100,342) 89,935 (798,433)Plus income tax (credit)/ expense (13,906) (19,232) 25,977 (187,959)Plus depreciation and amortization* 35,228 29,258 128,124 157,820Plus: impairment charges/ write-offs - 133,320 - 1,061,011Plus finance expense 3,194 2,476 10,081 9,668Less finance income (392) (614) (1,401) (1,700)EBITDA 45,260 44,866 252,716 240,407 *Depreciation and amortisation includes the depreciation componentof the cost of inventory sold. EBIT is a non-IFRS financial measure and reflects EBITDA adjustedfor depreciation and amortisation and goodwill impairment charges. 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 pitore and waste mined. - Underground ore tonnes hoisted - measures in tonnes the total amount ofunderground ore mined and hoisted. - Total tonnes mined includes open pit material plus underground ore tonneshoisted. - Strip ratio - measures the ratio of wasteâ€'toâ€'ore for open pit materialmined. - Ore milled - measures in tonnes the amount of ore material processed throughthe mill. - Head grade - measures the metal content of mined ore going into a mill forprocessing. - Milled recovery - measures the proportion of valuable metal physicallyrecovered in the processing of ore. It is generally stated as a percentage ofthe metal recovered compared to the total metal originally present. Risk Review During the year we have made significant changes to the way that we run ourbusiness, which has resulted in a number of changes to our principal risksprofile. Whilst our principal risks continue to fall within four broadcategories: strategic risks, financial risks, external risks and operationalrisks, as a result of a range of cost control and revised operating andplanning initiatives implemented during the year, the following risks are nolonger viewed as principal risks to the management and operation of ourbusiness: (i) costs and capital expenditure; (ii) utilities supply; (iii) landacquisitions; and (iv) organisational restructuring. In addition to this andagain due to enhancements made to business practices throughout the year, wehave allocated a medium risk rating to the following risks, previously viewedas high-level risks in 2013: - Community relations: we have continued to enhance communityrelations practices this year, having seen noticeable benefits through theinvestments made by the Acacia Maendeleo Fund and other community relationsinitiatives, in addition to the continued successful implementation of ourstakeholder engagement model and social management plans. In addition, wecontinue to work on enhancements to our corporate social responsibilitystrategy, particularly with a view to enhancing economic empowermentinitiatives, and other measures that enhance relationships with our localstakeholders, such that we believe we have adequate initiatives in place tomanage and mitigate material risks to such relationships. - Employee, contractor and industrial relations: we have continuedto strengthen employee relations and practices during the year, noticeablythrough our implementation of our new accountable management system andenhanced practices for industrial relations management. We also successfullyimplemented core elements of organisational restructuring at Bulyanhuluthroughout the year and continue to advance our targets for workforcenationalisation across the Group, such that risks relating to employees andcontractors are now viewed as having a medium impact to our business. - Reserves and resources estimates: whilst it will never bepossible to give assurances or certainty as regards reserves and resourcesestimates due to the varying nature and various factors which can impact suchestimates, as a result of the improvements we have introduced, and willcontinue to implement as regards mine planning and cost controls this year, webelieve that we have reduced certain exposures in this context, such thatrisks in this regard are now viewed as having a medium impact to our business. - Taxation reviews: as noted in the financial review of the year,we have made significant progress in the management and recoverability ofAcacia's indirect tax receivables, particularly in the context of VAT, suchthat whilst any significant change to the taxation regime in Tanzania couldhave a material adverse effect on our financial position, our 2014 risk ratingreflects the positive progress made to achieve resolutions to existingdisputes. In conjunction with the re-assessment of certain risks, we have also looked atthe impact of emerging risks to our business, and believe it is appropriate toadd the following as new principal risks, given their importance to ongoingoperations: - Safety risks relating to mining operations: despite the significant health,safety and risk management systems that Acacia has in place for itsunderground and surface mining operations, mining and in particularunderground mining is subject to a number of hazards and risks in theworkplace, such as fall of ground relating to underlying geotechnical risks,potential fires and mobile equipment incidents, such that safety incidents inthe workplace may unfortunately occur and did occur in 2014. - Implementation of enhanced operational systems: throughout 2014 we have madea number of enhancements to mine planning and financial modelling practices aspart of continuing reviews of existing operational systems and models,required to support increased productivity and ongoing reductions in operatingcost profiles. Given the ongoing nature of systems reviews and the importanceof this to the achievement of future business objectives, we believe itappropriate to monitor the implementation of enhanced operational systems as aprincipal risk going forward. - Equipment effectiveness: previously we have reviewed risks relating toequipment effectiveness in the context of availability of critical processes.However, as part of ongoing reviews we have decided to separate this into astandalone risk in order to chart equipment availability, utilisation andproductivity as required to meet increasing output levels. - Occupational health and life threatening diseases: in prior years we haveviewed occupational health and disease risks as medium, given the range ofhealth and safety controls across our business. However, given the impact ofcertain epidemics this year across the African region, notably the impact ofEbola in West Africa, we have heightened monitoring of risks relating tooccupational health and life threatening diseases this year. Further details as regards our Principal Risks and Uncertaintieswill be provided as part of the 2014 Annual Report and Accounts. Directors The Directors serving on the Board during the year will be listedin Acacia's annual report. A list of current Directors is maintained onAcacia's website: www.acaciamining.com Condensed Financial Information Consolidated income statement For the year For the year ended ended(Unaudited) 31 December 31 December(in thousands of United States dollars, except per share amounts) Notes 2014 2013CONTINUING OPERATIONSRevenue 6 930,248 929,004Cost of sales (688,278) (713,806)Gross profit 241,970 215,198Corporate administration (32,685) (33,970)Share based payments (8,388) 1,813Exploration and evaluation costs 7 (18,284) (16,927)Corporate social responsibility expenses (10,787) (12,237)Impairment charges - (1,044,310)Other charges 8 (47,921) (30,424)Profit/(loss) before net finance expense and taxation 123,905 (920,857)Finance income 9 1,324 1,670Finance expense 9 (10,043) (9,552)Profit/(loss) before taxation 115,186 (928,739)Tax (expense)/credit 10 (25,977) 187,959Net profit/(loss) from continuing operations 89,209 (740,780) DISCONTINUED OPERATIONSNet profit/(loss) from discontinued operations 4 726 (57,653) Net profit/(loss) for the year 89,935 (798,433) Net profit/(loss) attributable to:Owners of the parent (net earnings/(loss))- Continuing operations 89,209 (740,780)- Discontinued operations 1,193 (40,321)Non-controlling interests- Discontinued operations (467) (17,332) Earnings/(loss) per share:- Basic and dilutive earnings/(loss) pershare (cents) from continuing operations 11 21.8 (180.6)- Basic and dilutive earnings/(loss) pershare (cents) from discontinued operations 11 0.3 (9.8) The notes on pages 33 to 47 are an integral part of this financialinformation. Consolidated statement of comprehensive income For the year For the year ended ended(Unaudited) 31 December 31 December(in thousands of United States dollars) 2014 2013Net profit/(loss) for the year 89,935 (798,433)Other comprehensive (expense)/income:Items that may be subsequently reclassified to profit or loss:Changes in fair value of cash flow hedges (922) 1,570Total comprehensive income/(loss) for the year 89,013 (796,863)Attributed to:- Owners of the parent 89,480 (779,531)- Non-controlling interests (467) (17,332)The notes on pages 33 to 47 are an integral part of this financialinformation. Consolidated balance sheet As at As at(Unaudited) 31 December 31 December(in thousands of United States dollars) Notes 2014 2013ASSETSNon-current assetsGoodwill and intangible assets 211,190 211,190Property, plant and equipment 12 1,425,315 1,280,671Deferred tax assets 13 50,852 50,787Non-current portion of inventory 90,006 72,689Derivative financial instruments 14 1,806 3,253Other assets 133,020 137,191 1,912,189 1,755,781Current assetsInventories 265,526 253,676Trade and other receivables 15 34,989 24,210Derivative financial instruments 14 1,040 1,366Other current assets 15 75,822 113,945Cash and cash equivalents 293,850 282,409 671,227 675,606Assets of disposal group classified as held for sale - 596Total assets 2,583,416 2,431,983EQUITY AND LIABILITIESShare capital and share premium 929,199 929,199Other reserves 1,068,168 992,915Total owners' equity 1,997,367 1,922,114Non-controlling interests 4,781 5,248Total equity 2,002,148 1,927,362 Non-current liabilitiesBorrowings 16 127,800 142,000Deferred tax liabilities 13 61,904 35,862Derivative financial instruments 14 4,079 1,207Provisions 17 155,601 132,237Other non-current liabilities 17,365 10,101 366,749 321,407Current liabilitiesTrade and other payables 174,254 147,896Borrowings 16 14,200 -Derivative financial instruments 14 13,729 5,074Provisions 17 4,617 1,028Other current liabilities 7,719 12,456 214,519 166,454Liabilities of disposal group classified as held for sale - 16,760Total liabilities 581,268 504,621 Total equity and liabilities 2,583,416 2,431,983The notes on pages 33 to 47 are an integral part of this financialinformation. Consolidated statement of changes in equity Contributed Cash flow Share Share surplus/Other hedging(Unaudited) Notes capital premium reserve reserve(in thousands of United States dollars)Balance at 1 January 2013 62,097 867,102 1,368,713 363Total comprehensive income/(loss) for the year - - - 1,570Dividends to equity holders of the Company - - - -Stock option grants - - - -Balance at 31 December 2013 62,097 867,102 1,368,713 1,933Total comprehensive (loss)/income for the year - - - (922)Dividends to equity holders of the Company - - - -Stock option grants - - - -Balance at 31 December 2014 62,097 867,102 1,368,713 1,011 Retained Stock earnings/ Total Total non- option (Accumulated owners' controlling Total(Unaudited) Notes reserve losses) equity interests equity(in thousands of United States dollars)Balance at 1 January 2013 3,502 453,933 2,755,710 22,580 2,778,290Total comprehensive income/(loss) for the year - (781,101) (779,531) (17,332) (796,863)Dividends to equity holders of the Company - (54,541) (54,541) - (54,541)Stock option grants 476 - 476 - 476Balance at 31 December 2013 3,978 (381,709) 1,922,114 5,248 1,927,362Total comprehensive (loss)/income for the year - 90,402 89,480 (467) 89,013Dividends to equity holders of the Company - (13,943) (13,943) - (13,943)Stock option grants (284) - (284) - (284)Balance at 31 December 2014 3,694 (305,250) 1,997,367 4,781 2,002,148The notes on pages 33 to 47 are an integral part of this financialinformation. Consolidated statement of cash flows For the For the year year ended ended(Unaudited) 31 December 31 December(in thousands of United States dollars) 2014 2013Cash flows from operating activitiesNet profit/(loss) for the year 89,935 (798,433)Adjustments for:Tax expense/(credit) 25,977 (187,959)Depreciation and amortisation 124,113 141,159Finance items 8,680 7,968Impairment charges - 1,061,011Profit on disposal of property, plant and equipment (4,332) (175)Working capital adjustments 20,150 (41,165)Other non-cash items 28,988 8,181Cash generated from operations before interest and tax 293,511 190,587Finance income 1,401 1,700Finance expenses (5,384) (5,172)Income tax paid - -Net cash generated by operating activities 289,528 187,115 Cash flows from investing activitiesPurchase of property, plant and equipment (246,682) (373,101)Investments in other assets 1,388 (8,289)Cash flow related to the sale of Tulawaka (11,633) -Acquisition of subsidiary, net of cash acquired - (588)Other investing activities (65) (4,872)Net cash used in investing activities (256,992) (386,850) Cash flows from financing activitiesLoans received - 142,000Dividends paid (13,943) (54,541)Finance lease instalments (5,073) (5,137)Net cash (used in)/generated by financing activities (19,016) 82,322 Net increase/(decrease) in cash and cash equivalents 13,520 (117,413)Net foreign exchange difference (2,079) (1,526)Cash and cash equivalents at 1 January 282,409 401,348Cash and cash equivalents at 31 December 293,850 282,409The notes on pages 34 to 47 are an integral part of this financialinformation. Notes to the condensed financial information 1. General Information Acacia Mining plc, formerly African Barrick Gold plc (the"Company", "Acacia" or collectively with its subsidiaries the "Group") wasincorporated on 12 January 2010 and re-registered as a public limited companyon 12 March 2010 under the Companies Act 2006. It is registered in England andWales with registered number 7123187. On 24 March 2010 the Company's shares were admitted to the OfficialList of the United Kingdom Listing Authority ("UKLA") and to trading on theMain Market of the London Stock Exchange, hereafter referred to as the InitialPublic Offering ("IPO"). The address of its registered office is No.1Cavendish Place, London, W1G 0QF. Barrick Gold Corporation ("Barrick") currently owns approximately63.9% of the shares of the Company and is the ultimate parent and controllingparty of the Group. The financial statements of Barrick can be obtained fromwww.barrick.com. The condensed consolidated financial information for the year ended31 December 2014 was approved for issue by the Board of Directors of theCompany on 13 February 2015. The condensed consolidated financial informationdoes not comprise statutory accounts within the meaning of section 434 of theCompanies Act 2006. The condensed consolidated financial information isunaudited. The Group's primary business is the mining, processing and sale ofgold. The Group has three operating mines located in Tanzania. The Group alsohas a portfolio of exploration projects located across Africa. 2. Basis of Preparation of the condensed financial information The financial information set out above does not constitute theGroup's statutory accounts for the year ended 31 December 2014, but is derivedfrom the Group's full financial accounts, which are in the process of beingaudited. The Group's full financial accounts will be prepared underInternational Financial Reporting Standards as adopted by the European Union.The financial statements are prepared on a going concern basis. The condensed consolidated financial information has been preparedunder the historical cost convention basis, as modified by the revaluation offinancial assets and financial liabilities (including derivative instruments)at fair value through profit and loss. The financial statements are presentedin US dollars (US$) and all monetary results are rounded to the nearestthousand dollars (US) except when otherwise indicated. Where a change in the presentational format between the prior yearand current year condensed consolidated financial information has been madeduring the period, comparative figures have been restated accordingly. Nopresentational changes were made in the current year. 3. Accounting Policies Accounting policies have remained consistent with the prior year except forthe adoption of new standards. a) New and amended standards adopted by the Group The following new standards and amendments to standards are applicable andwere adopted by the Group for the first time for the financial year beginning1 January 2014: - Amendment to IAS 32, `Financial instruments: Presentation' on offsettingfinancial assets and financial liabilities. This amendment clarifies that theright of set-off must not be contingent on a future event. It must also belegally enforceable for all counterparties in the normal course of business,as well as in the event of default, insolvency or bankruptcy. The amendmentalso considers settlement mechanisms. The amendment did not have a significanteffect on the group financial statements. - Amendments to IAS 36, `Impairment of assets', on the recoverableamount disclosures for non-financial assets. This amendment removed certaindisclosures of the recoverable amount of CGUs which had been included in IAS36 by the issue of IFRS 13. - Amendment to IAS 39, `Financial instruments: Recognition andmeasurement' on the novation of derivatives and the continuation of hedgeaccounting. This amendment considers legislative changes to `over-the-counter'derivatives and the establishment of central counterparties. Under IAS 39novation of derivatives to central counterparties would result indiscontinuance of hedge accounting. The amendment provides relief fromdiscontinuing hedge accounting when novation of a hedging instrument meetsspecified criteria. The group has applied the amendment and there has been nosignificant impact on the group financial statements as a result. - IFRIC 21, `Levies', sets out the accounting for an obligation topay a levy if that liability is within the scope of IAS 37 `Provisions'. Theinterpretation addresses what the obligating event is that gives rise to pay alevy and when a liability should be recognised. The Group is not currentlysubjected to significant levies so the impact on the Group is not material. - IFRS 10, `Consolidated financial statements' builds on existingprinciples by identifying the concept of control as the determining factor inwhether an entity should be included within the consolidated financialstatements of the parent company. The standard provides additional guidance toassist in the determination of control where this is difficult to assess. Theamendment did not have a significant effect on the assessment of control. - IFRS 11, `Joint arrangements' focuses on rights and obligationsof the parties to the arrangement rather than its legal form. Proportionalconsolidation of joint arrangements is no longer permitted. The amendment didnot have a significant effect on the group financial statements. - IFRS 12, `Disclosures of interests in other entities' includesthe disclosure requirements for all forms of interests in other entitiesincluding joint arrangements, associates, structured entities and otheroff-balance sheet vehicles. The amendment did not have a significant effect onthe group financial statements. b) New and amended standards, and interpretations not yet adopted A number of new standards and amendments to standards and interpretations areeffective for annual periods beginning after 1 January 2014, and have not beenapplied in preparing these condensed consolidated financial statements. - IFRS 9, `Financial instruments', addresses the classification, measurementand recognition of financial assets and financial liabilities. The completeversion of IFRS 9 was issued in July 2014. It replaces the guidance in IAS 39that relates to the classification and measurement of financial instruments.IFRS 9 retains but simplifies the mixed measurement model and establishesthree primary measurement categories for financial assets: amortised cost,fair value through OCI and fair value through P&L. The basis of classificationdepends on the entity's business model and the contractual cash flowcharacteristics of the financial asset. Investments in equity instruments arerequired to be measured at fair value through profit or loss with theirrevocable option at inception to present changes in fair value in OCI notrecycling. There is now a new expected credit losses model that replaces theincurred loss impairment model used in IAS 39. For financial liabilities therewere no changes to classification and measurement except for the recognitionof changes in own credit risk in other comprehensive income, for liabilitiesdesignated at fair value through profit or loss. IFRS 9 relaxes therequirements for hedge effectiveness by replacing the bright line hedgeeffectiveness tests. It requires an economic relationship between the hedgeditem and hedging instrument and for the `hedged ratio' to be the same as theone management actually use for risk management purposes. Contemporaneousdocumentation is still required but is different to that currently preparedunder IAS 39. The standard is effective for accounting periods beginning on orafter 1 January 2018. Early adoption is permitted subject to EU endorsement.The group is yet to assess IFRS 9's full impact. - IFRS 15, `Revenue from contracts with customers' deals withrevenue recognition and establishes principles for reporting usefulinformation to users of financial statements about the nature, amount, timingand uncertainty of revenue and cash flows arising from an entity's contractswith customers. Revenue is recognised when a customer obtains control of agood or service and thus has the ability to direct the use and obtain thebenefits from the good or service. The standard replaces IAS 18 `Revenue' andIAS 11 `Construction contracts' and related interpretations. The standard iseffective for annual periods beginning on or after 1 January 2017 and earlierapplication is permitted. The standard is not expected to have a significantimpact on the Group. 4. Discontinued Operations and disposal group assets and liabilities held forsale On 15 November 2013, Acacia announced that an agreement was reachedwith STAMICO, the Tanzanian State Mining Corporation, whereby STAMICO wouldacquire the Tulawaka Gold Mine ("Tulawaka") and certain exploration licencessurrounding Tulawaka for consideration of US$4.5 million and the grant of a 2%net smelter royalty on future production in excess of 500,000 ounces, cappedat US$500,000. On 4 February 2014, Acacia announced the completion of the sale.STAMICO has taken ownership and management of the rehabilitation fundestablished as part of the closure plan for the mine, in return for theassumption of all remaining past and future closure and rehabilitationliabilities for Tulawaka, and has indemnified the other parties to theagreement in relation to these liabilities. The transfer was completed with anet cash payment of US$11.6 million by Acacia to STAMICO for the balance ofthe rehabilitation fund, less the transaction consideration. This resulted ina gain of US$4.1 million. The financial results of Tulawaka have been presented as discontinuedoperations in the consolidated financial statements. The comparative resultsin the consolidated income statement have been presented as if Tulawaka hadbeen discontinued from the start of the comparative period. Below is a summary of the results of Tulawaka for the year ended 31 December: (in thousands of United States dollars) 2014 2013Results of discontinued operationsRevenue - 13,514Cost of sales - (30,368)Gross loss - (16,854)Corporate administration - (1,311)Corporate social responsibility expenses1 (118) (3,259)Impairment charges - (16,701)Other charges2 805 (19,442)Loss before net finance expense and taxation 687 (57,567)Finance income 77 30Finance expense (38) (116)Loss before taxation 726 (57,653)Tax credit - -Net loss for the year 726 (57,653)1 Corporate social responsibility expenses relate to projects supported fromthe Acacia Maendeleo Fund. 2 Included in other charges are non-operational costs incurred since thecessation of operations of US$1.9 million. Below is a summary of the cash flows from discontinued operations for the yearended 31 December: (in thousands of United States dollars) 2014 2013Operating cash flows 6,300 (31,811)Investing cash flows (11,612) (8,702)Financing cash flows - -Total cash flows (5,312) (40,513)Below is a summary of Tulawaka's assets and liabilities at 31 Decemberclassified as disposal group held for sale: (in thousands of United States dollars) 2014 2013Property, plant and equipment - 239Inventories - 357Disposal group assets held for sale - 596Provisions - 16,760Disposal group liabilities held for sale - 16,760Net assets and liabilities of disposal group held for sale - (16,164)5. Segment Reporting The Group has only one primary product produced in a singlegeographic location, being gold produced in Tanzania. In addition the Groupproduces copper and silver as a co-product. Reportable operating segments arebased on the internal reports provided to the Chief Operating Decision Maker("CODM") to evaluate segment performance, decide how to allocate resources andmake other operating decisions. After applying the aggregation criteria andquantitative thresholds contained in IFRS 8, the Group's reportable operatingsegments were determined to be: North Mara gold mine; Bulyanhulu gold mine;Buzwagi gold mine; a separate Corporate and Exploration segment, whichprimarily consists of costs related to other charges and corporate socialresponsibility expenses, as well as discontinued operations (Tulawaka goldmine). Segment results and carrying values include items directlyattributable to the segment as well as those that can be allocated on areasonable basis. Segment carrying values are disclosed and calculated asshareholders equity after adding back debt and intercompany liabilities, andsubtracting cash and intercompany assets. Capital expenditures comprise ofadditions to property, plant and equipment. The Group has also includedsegment cash costs and all-in sustaining cost per ounce sold. Segment information for the reportable operating segments of theGroup for the periods ended 31 December 2014 and 31 December 2013 is set outbelow. For the year ended 31 December 2014 North Continuing Discontinued(in thousands of United States dollars) Mara Bulyanhulu Buzwagi Other operations operations6 TotalGold revenue 346,790 269,390 268,815 - 884,995 - 884,995Co-product revenue 546 17,287 27,420 - 45,253 - 45,253Total segment revenue 347,336 286,677 296,235 - 930,248 - 930,248Segment cash operating cost1 (171,535) (192,363) (196,256) - (560,154) - (560,154)Corporate administration and exploration (10,967) (11,570) (8,533) (28,287) (59,357) - (59,357)Other charges and corporate socialresponsibility expenses (8,519) (13,811) (11,188) (25,190) (58,708) 687 (58,021)EBITDA2 156,315 68,933 80,258 (53,477) 252,029 687 252,716Depreciation and amortisation7 (74,893) (38,444) (11,763) (3,024) (128,124) - (128,124)EBIT2 81,422 30,489 68,495 (56,501) 123,905 687 124,592Finance income 257 164 403 500 1,324 77 1,401Finance expense (2,389) (2,721) (2,398) (2,535) (10,043) (38) (10,081)Profit before taxation 75,640 27,932 66,501 (58,537) 115,186 726 115,912Tax expense (23,043) (7,345) (20,175) 1,408 (25,977) - (25,977)Net profit for the year 52,597 20,588 46,326 (57,128) 89,209 726 89,935 Capital expenditure:Sustaining 18,049 23,388 12,817 6,004 60,258 - 60,258Expansionary 13,126 48,010 - - 61,136 - 61,136Capitalised development 40,900 60,151 31,357 132,408 - 132,408 72,075 131,549 44,174 6,004 253,802 - 253,802Non-cash capital expenditure adjustmentsReclamation asset addition/(reduction) 16,003 6,141 (1,131) - 21,013 - 21,013Other non-cash capital expenditure - - - (5,876) (5,876) - (5,876)Total capital expenditure8 88,078 137,690 43,043 128 268,939 - 268,939 Segmental cash operating cost 171,535 192,363 196,256 - 560,154 - 560,154Deduct: co-product revenue (546) (17,287) (27,420) - (45,253) - (45,253)Total cash costs 170,989 175,076 168,836 - 514,901 - 514,901Sold ounces3 274,540 215,740 213,399 - 703,680 - 703,680Attributable cash cost per ounce sold2 623 812 791 732 732 Total cash costs2 623 812 791 732 732Corporate administration charges 38 52 39 58 58Rehabilitation - accretion and depreciation 18 7 5 11 11Mine site exploration costs 2 2 1 1 1Corporate social responsibility expenses 18 7 12 15 15Capitalised stripping/ UG development 149 279 147 188 188Sustaining capital expenditure 99 107 60 100 100All-in sustaining cost per ounce sold2 947 1,266 1,055 1,105 1,105 Segment carrying value5 326,760 1,212,004 261,993 70,547 1,871,304 - 1,871,304 For the year ended 31 December 2013 North Continuing Discontinued(in thousands of United States dollars) Mara Bulyanhulu Buzwagi Other operations operations6 TotalGold revenue 364,574 262,539 258,879 - 885,992 13,483 899,475Co-product revenue 819 16,882 25,311 - 43,012 31 43,043Total segment revenue 365,393 279,421 284,190 - 929,004 13,514 942,518Segment cash operating cost1 (172,894) (190,647) (202,286) - (565,827) (20,527) (586,354)Corporate administration and exploration (13,026) (14,661) (20,976) (421) (49,084) (1,311) (50,395)Other charges and corporate socialresponsibility expenses (11,961) (5,827) (4,730) (20,143) (42,661) (22,701) (65,362)EBITDA2 167,512 68,286 56,198 (20,564) 271,432 (31,025) 240,407Impairment charges (307,259) - (690,478) (46,573) (1,044,310) (16,701) (1,061,011)Depreciation and amortisation7 (68,565) (35,867) (39,906) (3,641) (147,979) (9,841) (157,820)EBIT2 (208,312) 32,419 (674,186) (70,778) (920,857) (57,567) (978,424)Finance income 327 662 406 275 1,670 30 1,700Finance expense (2,501) (1,482) (2,446) (3,123) (9,552) (116) (9,668)Loss before taxation (210,486) 31,599 (676,226) (73,626) (928,739) (57,653) (986,392)Tax credit 44,283 (13,977) 146,990 10,663 187,959 - 187,959Net loss for the year (166,203) 17,622 (529,236) (62,963) (740,780) (57,653) (798,433) Capital expenditure:Sustaining 38,386 25,193 31,589 690 95,858 583 96,441Expansionary 949 114,912 - 1,608 117,469 - 117,469Capitalised development 65,594 45,428 60,136 171,158 - 171,158 104,929 185,533 91,725 2,298 384,485 583 385,068Non-cash capital expenditure adjustmentsReclamation asset addition/(reduction) (11,271) (10,044) (9,230) - (30,545) (195) (30,740)Total capital expenditure 93,658 175,489 82,495 2,298 353,940 388 354,328 Segmental cash operating cost 172,894 190,647 202,286 - 565,827 20,527 586,354Deduct: co-product revenue (819) (16,882) (25,311) - (43,012) (31) (43,043)Total cash costs 172,075 173,765 176,975 - 522,815 20,496 543,311Sold ounces3 260,945 195,304 187,348 - 643,597 8,778 652,375Cash cost per ounce sold2 659 890 945 - 812 2,335 833Attributable to outside interests4 (6)Total attributable cash cost per ouncesold2 827 Cash costs per ounce sold2 659 890 945 812 2,335 833Corporate administration charges 38 72 51 50 149 51Rehabilitation - accretion and depreciation 29 7 15 18 86 19Mine site exploration costs 12 3 2 6 6 6Corporate social responsibility expenses 31 6 4 19 371 24Capitalised stripping/ UG development 251 233 321 266 - 262Sustaining capital expenditure 207 133 168 175 66 173Attributable to outside interests4 (6)All-in sustaining cost per ounce sold2 1,227 1,344 1,506 1,346 3,013 1,362 Segment carrying value5 367,326 1,116,142 253,344 81,005 1,817,817 10,489 1,828,306 1 The CODM reviews cash operating costs for the three operatingmine sites separately from corporate administration costs and explorationcosts. Consequently, the Group has reported these costs in this manner. 2 These are non-IFRS financial performance measures with nostandard meaning under IFRS. Refer to `Non IFRS measures' on page 25 fordefinitions. 3 Reflects 100% of ounces sold. 4 Reflects the adjustment for non-controlling interest at Tulawaka. 5 Segment carrying values are calculated as shareholders equityafter adding back debt and intercompany liabilities, and subtracting cash andintercompany assets and include outside shareholders' interests. 6 Represents Tulawaka, which has been discontinued. 7 Depreciation and amortisation includes the depreciation componentof the cost of inventory sold. 8 Capital expenditure for the segment note and all-in sustainingcost calculations excludes foreign exchange movements on property, plant andequipment balances which are included in note 12 Property, plant andequipment. 6. Revenue For the year For the year ended 31 ended 31 December December(in thousands of United States dollars) 2014 2013Gold doré sales 602,173 659,760Gold concentrate sales¹ 282,822 226,231Copper concentrate sales¹ 40,507 37,539Silver sales 4,746 5,474Total 930,248 929,004 1 Concentrate sales includes negative provisional price adjustments to theaccounts receivable balance due to changes in market gold, silver and copperprices prior to final settlement as follows: US$5.4 million for the year ended31 December 2014 (US$12.2 million for the year ended 31 December 2013). For the year For the year ended 31 ended 31(in thousands of United States dollars) December DecemberRevenue by Location of Customer2 2014 2013EuropeSwitzerland - 257,914Germany 104,981 73,126AsiaIndia 603,807 403,956China 134,844 117,099Japan 86,616 76,909Total revenue 930,248 929,004 2 Revenue by location of customer is determined based on thecountry to which the gold is delivered. Included in revenues for the year ended 31 December 2014 are salesto seven major customers. Revenues of approximately US$625 million (2013:US$681 million) arose from sales to four of the Group's largest customers. 7. Exploration and Evaluation costs The following represents a summary of exploration and evaluation expendituresincurred at each mine site and significant exploration targets (ifapplicable). For the year For the year ended 31 ended 31 December December(in thousands of United States dollars) 2014 2013Expensed during the year:North Mara 478 3,099Buzwagi 148 366Bulyanhulu 7,595 656Kenya 5,554 4,407Other1 4,509 8,399Total expensed 18,284 16,927Capitalised during the year:North Mara 1,957 410Bulyanhulu 204 1,945Nyanzaga - 1,608Total capitalised 2,161 3,963Total 20,445 20,890 1 - Included in "other" are the exploration activities conducted throughAcacia Exploration Africa Limited and in West Africa for the South HoundéProject. All primary greenfield exploration and evaluation activities areconducted in these companies. 8. Other Charges For the year For the year ended ended 31 December 31 December(in thousands of United States dollars) 2014 2013Other expensesOperational Review costs (including restructuring cost) 13,689 13,305Discounting of indirect tax receivables - 1,375Unrealised non-hedge derivative losses 13,621 7,203Foreign exchange losses 13,516 -Bad debt expense 326 1,369Disallowed indirect taxes 710 1,463Legal costs 6,710 3,138CNG related costs (residual) - 3,246Government levies and charges 1,626 2,387Project development costs 1,196 -Loss on disposal of property, plant and equipment 89 -Other 86 3,617Total 51,569 37,103 Other incomeDiscounting of indirect tax receivables (3,648) -Profit on disposal of property, plant and equipment - (99)Foreign exchange gains - (3,622)Insurance theft claim - (2,958)Total (3,648) (6,679) Total other charges 47,921 30,424 9. Finance Income and Expenses a) Finance income For the year For the year ended ended 31 December 31 December(in thousands of United States dollars) 2014 2013Interest on time deposits 868 937Other 456 733Total 1,324 1,670 b) Finance expense For the year For the year ended ended 31 December 31 December(in thousands of United States dollars) 2014 2013Unwinding of discount1 4,697 4,468Revolving credit facility charges2 2,447 3,050Interest on CIL facility 3,925 2,413Interest on finance leases 439 658Bank charges 606 756Other 862 620 12,976 11,965Capitalised during the year (2,933) (2,413)Total 10,043 9,552 1 The unwinding of discount is calculated on the environmentalrehabilitation provision. 2 Included in credit facility charges are the amortisation of thefees related to the revolving credit facility as well as the monthly interestand facility fees. 10. Tax Expense/(Credit) For the year For the year ended ended 31 December 31 December(in thousands of United States dollars) 2014 2013Current tax:Current tax on profits for the year - -Adjustments in respect of prior years - 40Total current tax - 40Deferred tax:Origination and reversal of temporary differences 25,977 (187,999)Total deferred tax 25,977 (187,999)Income tax expense/(credit) 25,977 (187,959) The tax on the Group's profit before tax differs from the theoretical amountthat would arise using the weighted average tax rate applicable to the profitsof the consolidated entities as follows: For the For the year year ended 31 ended 31 December December(in thousands of United States dollars) 2014 2013Profit/(loss) before tax 115,186 (928,739)Tax calculated at domestic tax rates applicable to profits in therespective countries 41,544 (291,546)Tax effects of:Expenses not deductible for tax purposes 438 13,111Utilisation of previously unrecognised tax losses (21,140) -Tax losses for which no deferred income tax asset was recognised 8,039 84,904Prior year adjustments (2,904) 5,572Tax charge/(credit) 25,977 (187,959) Tax periods remain open to review by the Tanzanian Revenue Authority (TRA) inrespect of income taxes for five years following the date of the filing of thecorporate tax return, during which time the authorities have the right toraise additional tax assessments including penalties and interest. Undercertain circumstances the reviews may cover longer periods. Because a numberof tax periods remain open to review by tax authorities, there is a risk thattransactions that have not been challenged in the past by the authorities maybe challenged by them in the future, and this may result in the raising ofadditional tax assessments plus penalties and interest. 11. Earnings/(loss) Per Share (EPS) Basic EPS is calculated by dividing the net profit for the yearattributable to owners of the Company by the weighted average number ofOrdinary Shares in issue during the year. Diluted earnings per share is calculated by adjusting the weightedaverage number of Ordinary Shares outstanding to assume conversion of alldilutive potential Ordinary Shares. The Company has dilutive potentialOrdinary Shares in the form of stock options. The weighted average number ofshares is adjusted for the number of shares granted assuming the exercise ofstock options. At 31 December 2014 and 31 December 2013, earnings per share have beencalculated as follows: For the year For the year ended ended 31 December 31 December(in thousands of United States dollars except per share amounts) 2014 2013Earnings/(loss)Net profit/(loss) from continuing operations attributable to owners of theparent 89,209 (740,780)Net profit/(loss) from discontinued operations attributable to owners of theparent 1,193 (40,321) Weighted average number of Ordinary Shares in issue 410,085,499 410,085,499Adjusted for dilutive effect of stock options 218,126 -Weighted average number of Ordinary Shares for diluted earnings per share 410,303,625 410,085,499 Earnings/(loss) per shareBasic and dilutive earnings/(loss) per share from continuing operations(cents) 21.8 (180.6)Basic and dilutive earnings/(loss) per share from discontinued operations(cents) 0.3 (9.8)Group basic and dilutive earnings/ (loss) per share 22.1 (190.4)12. Property, Plant and Equipment Mineral propertiesFor the year ended 31 December 2014 and mine Assets under(in thousands of United States dollars) Plant and equipment development costs construction¹ TotalAt 1 January 2014, net of accumulated depreciation 392,644 651,763 236,264 1,280,671Additions - - 268,939 268,939Disposals/write-downs (182) - - (182)Depreciation (55,411) (68,702) - (124,113)Transfers between categories 233,518 127,751 (361,269) -At 31 December 2014 570,569 710,812 143,934 1,425,315 At 1 January 2014Cost 1,518,500 1,383,693 236,264 3,138,457Accumulated depreciation (1,125,856) (731,930) - (1,857,786)Net carrying amount 392,644 651,763 236,264 1,280,671 At 31 December 2014Cost 1,750,743 1,511,444 143,934 3,406,121Accumulated depreciation and impairment (1,180,174) (800,632) - (1,980,806)Net carrying amount 570,569 710,812 143,934 1,425,315 Mineral propertiesFor the year ended 31 December 2013 and mine Assets under(in thousands of United States dollars) Plant and equipment development costs construction¹ TotalAt 1 January 2013, net of accumulateddepreciation 945,118 819,063 210,859 1,975,040Additions - - 354,328 354,328Disposals/write-downs (477) - - (477)Impairments2,3 (607,368) (299,454) - (906,822)Depreciation (84,350) (56,809) - (141,159)Transfers between categories3 139,721 189,202 (328,923) -Reclassification to disposal group assets heldfor sale - (239) - (239)At 31 December 20133 392,644 651,763 236,264 1,280,671 At 1 January 2013Cost 1,475,374 1,250,088 210,859 2,936,321Accumulated depreciation (530,256) (431,025) - (961,281)Net carrying amount 945,118 819,063 210,859 1,975,040 At 31 December 2013Cost3 1,518,500 1,383,693 236,264 3,138,457Accumulated depreciation and impairment3 (1,125,856) (731,930) - (1,857,786)Net carrying amount 392,644 651,763 236,264 1,280,671 1 Assets under construction represents (a) sustaining capitalexpenditures incurred constructing property, plant and equipment related tooperating mines and advance deposits made towards the purchase of property,plant and equipment; and (b) expansionary expenditure allocated to a projecton a business combination or asset acquisition, and the subsequent costsincurred to develop the mine. Once these assets are ready for their intendeduse, the balance is transferred to plant and equipment and/or mineralproperties and mine development costs. 2 The impairment in 2013 relates to long lived assets at Buzwagi, North Maraand Tulawaka. 3 2013 carrying values have been restated to correct the allocation ofmovements between asset categories. This has not resulted in a change in thetotal carrying value. Leases Property, plant and equipment includes assets relating to the design andconstruction costs of power transmission lines and related infrastructure. Atcompletion, ownership was transferred to TANESCO in exchange for amortisedrepayment in the form of reduced electricity supply charges. No future leasepayment obligations are payable under these finance leases. Property, plant and equipment also includes emergency back-up and spinningpower generators leased at the Buzwagi mine under a three-year leaseagreement, with an option to purchase the equipment at the end of the leaseterm. These leases have been classified as finance leases. Property, plant and equipment also includes five drill rigs purchased undershort-term finance leases. The following amounts were included in property, plant and equipment where theGroup is a lessee under a finance lease: As at As at 31 December 31 December(in thousands of United States dollars) 2014 2013Cost - capitalised finance leases 70,764 70,764Accumulated depreciation and impairment (53,246) (50,091)Net carrying amount 17,518 20,673 13. Deferred Tax Assets and Liabilities Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the followingitems: As at As at 31 December 31 December(in thousands of United States dollars) 2014 2013Tax losses 397,153 418,263Total 397,153 418,263The above tax losses, which translate into deferred tax assets ofapproximately US$111 million (2013: US$126 million), have not been recognisedin respect of these items due to uncertainties regarding availability of taxlosses, or there being uncertainty regarding future taxable income againstwhich these assets can be utilised. Recognised deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following: Balance sheet classifications Balance sheet classification Assets Liabilities Net(in thousands of United 2014 2013 2014 2013 2014 2013States dollars)Property, plant andequipment - - 357,071 297,421 357,071 297,421Provisions (10,663) (11,756) - - (10,663) (11,756)Interest deferrals (23,129) (22,960) 341 286 (22,788) (22,674)Tusker acquisition - - 6,668 7,340 6,668 7,340Kenya acquisition - - 2,880 4,565 2,880 4,565Tax loss carry-forwards (322,116) (289,821) - - (322,116) (289,821)Net deferred tax(assets)/liabilities (355,908) (324,537) 366,960 309,612 11,052 (14,925) Legal entities Legal entities Assets Liabilities Net(in thousands of United States 2014 2013 2014 2013 2014 2013dollars)North Mara Gold Mine Ltd - - 30,897 10,098 30,897 10,098Bulyanhulu Gold Mine Ltd - - 21,323 13,594 21,323 13,594Pangea Minerals Ltd (48,066) (48,066) - - (48,066) (48,066)Other (2,786) (2,721) 9,684 12,170 6,898 9,449Net deferred tax(assets)/liabilities (50,852) (50,787) 61,904 35,862 11,052 (14,925) Uncertainties regarding availability of tax losses in respect of enquiriesraised and additional tax assessments issued by the TRA, have been measuredusing the single best estimate of likely outcome approach resulting in therecognition of substantially all the related deferred tax assets andliabilities. Alternative acceptable measurement policies (e.g. on a weightedaverage expected outcome basis) could result in a change to deferred taxassets and liabilities being recognised, and the deferred tax charge in theincome statement. No deferred tax has been recognised in respect of temporary differencesassociated with investments in subsidiaries where the Group is in a positionto control the timing of the reversal of the temporary differences, and it isprobable that such differences will not reverse in the foreseeable future. Theaggregate amount of temporary differences associated with such investments insubsidiaries is represented by the contribution of those investments to theGroup's retained earnings and amounted to US$325 million (2013: US$327million). 14. Derivative financial instruments The table below analyses financial instruments carried at fairvalue, by valuation method. The Group has derivative financial instruments inthe form of economic and cash flow hedging contracts which are all defined aslevel two instruments as they are valued using inputs other than quoted pricesthat are observable for the assets or liabilities. The following tablespresent the group's assets and liabilities that are measured at fair value at31 December 2014 and 31 December 2013. Assets Liabilities (in thousands of United States dollars) Current Non-current Current Non-current Net fair valueFor the year ended 31 December 2014Interest contracts: Designated as cash flow hedges - 1,806 1,054 - 752Currency contracts: Not designated as hedges - - 819 - (819)Commodity contracts: Not designated as hedges 1,040 - 11,856 4,079 (14,895)Total 1,040 1,806 13,729 4,079 (14,962) Assets Liabilities (in thousands of United States dollars) Current Non-current Current Non-current Net fair valueFor the year ended 31 December 2013Currency contracts: Designated as cash flow hedges - - - 353 (353)Interest contracts: Designated as cash flow hedges - 3,191 1,168 449 1,574Currency contracts: Not designated as hedges 158 3 3,666 387 (3,892)Commodity contracts: Not designated as hedges 1,208 59 240 18 1,009Total 1,366 3,253 5,074 1,207 (1,662) 15. Trade Receivables and other Current Assets As at As at 31 December 31 December(in thousands of United States dollars) 2014 2013Trade and other receivables:Amounts due from doré and concentrate sales 26,202 16,204Other receivables¹ 10,270 10,102Due from related parties 38 37Less: Provision for doubtful debt on other receivables (1,521) (2,133)Total trade receivables 34,989 24,2101 Other receivables relates to employee and supplier backcharge-relatedreceivables and refundable deposits. Trade receivables other than concentrate receivables are non-interest bearingand are generally on 30-90 day terms. Concentrate receivables are generally on60-120 day terms depending on the terms per contract. Trade receivables areamounts due from customers in the ordinary course of business. If collectionis expected in one year or less, they are classified as current assets; ifnot, they are presented as non-current assets. The carrying value of tradereceivables recorded in the financial statements represents the maximumexposure to credit risk. The Group does not hold any collateral as security. Trade receivables are recognised initially at fair value and subsequentlymeasured at amortised cost using the effective interest method, less anyprovisions for impairment. A provision for impairment of trade receivables isestablished when there is objective evidence that the Group will not be ableto collect all amounts due according to the original terms of the receivables. As at As at 31 December 31 December(in thousands of United States dollars) 2014 2013Indirect taxes receivable2 108,143 159,824Other receivables and advance payments³ 29,926 18,912 138,069 178,736Less: Indirect taxes receivable classified as non-current (62,247) (64,791)Other current assets 75,822 113,9452 To reflect the time value of money the long-term portion of this receivablehas been discounted at a rate of 5% (2013: 5%). 3 Other receivables and advance payments relate to prepayments forinsurance and income taxes offset against outstanding refunds for VAT and fuellevies and current amounts receivable from the NSSF of US$5.5 million (2013:US$7.0 million). 16. Borrowings During 2013, a US$142 million facility was put in place to fund thebulk of the costs of the construction of one of Acacia's key growth projects,the Bulyanhulu CIL Expansion project ("Project"). The Facility iscollateralised by the Project, has a term of seven years with a spread overLibor of 250 basis points. The interest rate has been fixed at 3.6% throughthe use of an interest rate swap. The 7 year Facility is repayable in equalbi-annual instalments over the term of the Facility, after a two yearrepayments holiday period. The first principal payment is due in H2 2015. Thefull facility of US$142 million was drawn at the end of 2013. Interest accruedto the value of US$0.7 million was included in accounts payable at year end.Interest incurred on the borrowings as well as hedging losses on the interestrate swap were capitalised as an asset until the CIL plant was commissioned atthe beginning of Q4 and have since been expensed. An amount of US$1.0 millionhas been expensed. 17. Provisions Rehabilitation¹ Other² Total(in thousands of United Statesdollars) 2014 2013 2014 2013 2014 2013At 1 January 131,701 180,548 1,564 1,040 133,265 181,588Change in estimate 21,013 (30,740) (86) 524 20,927 (30,216)Utilised during the year (399) (5,843) (531) - (930) (5,843)Unwinding of discount 4,697 4,496 - - 4,697 4,496Additions during the year - - 2,259 - 2,259 -Reclassification to disposal groupliabilities held for sale - (16,760) - - - (16,760)At 31 December 157,012 131,701 3,206 1,564 160,218 133,265Current portion (1,411) - (3,206) (1,028) (4,617) (1,028)Non-current portion 155,601 131,701 - 536 155,601 132,237 1 Rehabilitation provisions relate to the decommissioning costsexpected to be incurred for the operating mines. This expenditure arises atdifferent times over the LOM for the different mine sites and is expected tobe utilised in terms of cash outflows between years 2015 and 2050 and beyond,varying from mine site to mine site. 2 Other provisions relate to provisions for legal and tax-relatedliabilities where the outcome is not yet certain but it is expected that itwill lead to a probable outflow of economic benefits in future. Rehabilitation obligations arise from the acquisition, development,construction and normal operation of mining property, plant and equipment, dueto government controls and regulations that protect the environment on theclosure and reclamation of mining properties. The major parts of the carryingamount of the obligation relate to tailings and waste rock dumpsclosure/rehabilitation and surface contouring; demolition of buildings/minefacilities; ongoing water treatment; and ongoing care and maintenance ofclosed mines. The fair values of rehabilitation provisions are measured bydiscounting the expected cash flows using a discount factor that reflects thecredit-adjusted risk-free rate of interest. Acacia prepares estimates of thetiming and amount of expected cash flows when an obligation is incurred andupdates expected cash flows to reflect changes in facts and circumstances. Theprincipal factors that can cause expected cash flows to change are: theconstruction of new processing facilities; changes in the quantities ofmaterial in reserves and a corresponding change in the LOM plan; changing orecharacteristics that impact required environmental protection measures andrelated costs; changes in water quality that impact the extent of watertreatment required; and changes in laws and regulations governing theprotection of the environment. Each year Acacia assesses cost estimates and other assumptions used in thevaluation of the rehabilitation provision at each mineral property to reflectevents, changes in circumstances and new information available. Changes inthese cost estimates and assumptions are recorded as an adjustment to thecarrying amount of the corresponding asset. Rehabilitation provisions areadjusted to reflect the passage of time (accretion) calculated by applying thediscount factor implicit in the initial fair-value measurement to thebeginning-of-period carrying amount of the provision. Settlement gains/losseswill be recorded in other (income) expense. Other environmental remediation costs that are not rehabilitation provisionsare expensed as incurred. 18. Commitments and Contingencies The Group is subject to various laws and regulations which, if not observed,could give rise to penalties. As at 31 December 2014, the Group has thefollowing commitments and/ or contingencies a) Legal contingencies As at 31 December 2014, the Group was a defendant in approximately 289lawsuits. The plaintiffs are claiming damages and interest thereon for theloss caused by the Group due to one or more of the following: unlawfuleviction, termination of services, wrongful termination of contracts ofservice, non-payment for services, defamation, negligence by act or omissionin failing to provide a safe working environment, unpaid overtime and publicholiday compensation. The total amounts claimed from lawsuits in which specific monetary damages aresought amounted to US$184.7 million. The Group's Legal Counsel is defendingthe Group's current position, and the outcome of the lawsuits cannot presentlybe determined. However, in the opinion of the Directors and Group's LegalCounsel, no material liabilities are expected to materialise from theselawsuits that have not already been provided for. Included in the total amounts claimed is an appeal by the TRA intended for atax assessment of US$21.3 million in respect of the acquisition of Tusker GoldLimited. The case was awarded in favour of Acacia however the TRA has served anotice of appeal. The calculated tax assessment is based on the sales price ofthe Nyanzaga property of US$71 million multiplied by the tax rate of 30%.Management is of the opinion that the assessment is invalid due to the factthat the acquisition was for Tusker Gold Limited, a company incorporated inAustralia. The shareholding of the Tanzanian related entities did not changeand the Tusker Gold Limited group structure remains the same as prior to theacquisition. Also included in the total amounts claimed are TRA claims to the value ofUS$41.3 million for withholding tax on historic offshore dividend paymentspaid by Acacia Mining plc to its shareholders. In addition to the claim, thereare six other withholding tax claims which have not been quantified. Theseclaims are made on the basis that Acacia is resident in Tanzania for taxpurposes. Management are of the opinion that the claims do not have substanceand that it will be successfully defended. In 2013, a number of Tanzanian claimants represented by Leigh Day initiatedproceedings against African Barrick Gold plc (now Acacia Mining plc) and itssubsidiary, North Mara Gold Mine Limited ("NMGML"), in the English Courts inrelation to injuries and fatalities at the North Mara mine. The claims weredenied by Acacia Mining and NMGML and the litigation and further claims havebeen settled out of court. NMGML and Diamond Motors Ltd (DML) have entered into arbitration over theinterpretation of drilling contracts entered into by the parties, relating toperiodic rate review and other provisions of the contracts. The claim by DMLagainst NMGML is quantified as US$17.2 million, together with interest andunspecified damages. NMGML has counterclaimed against this amount and raised aprovision of US$4.2 million reflecting the view of NMGML as to the properinterpretation and application of the rate review clauses of the Contracts. A claim has been made for US$15 million by the contractor responsible for theengineering, procurement and construction of a carbon in leach circuit atBulyanhulu Gold Mine ("BGML"). BGML has made claims in relation to delaydamages and other breaches of the contract totalling US$22 million. Theseclaims were referred to adjudication, with the initial decision finding infavour of the contractor. The claims have now been referred to arbitration andmanagement is of the opinion that it will be successful in respect of bothclaims. b) Tax-related contingencies The TRA has issued a number of tax assessments to the Grouprelating to past taxation years from 2002 onwards. The Group believes thatthese assessments are incorrect and has filed objections to each of them. TheGroup is attempting to resolve these matters by means of discussions with theTRA or through the Tanzanian Appeals process. During 2013, the Board ruled infavour of BGML in relation to 7 of 10 issues raised by the TRA in finalassessments for 2000 - 2006 years under review. The TRA filed a notice ofintention to appeal against the ruling of the Board and Acacia filed a counterappeal in respect of BGML to the Appeals Tribunal for all 3 items that werelost. The Tribunal delivered its judgement in 2014 and confirmed the Board'sdecision on the three items that Acacia lost. Following the Tribunalsdecision, two notices of intention to appeal were filed.The positions thatwere ruled against BGML were sufficiently provided for in prior year resultsand management is of the opinion that open issues will not result in anymaterial liabilities to the Group. c) Exploration and development agreements - Mining Licences Pursuant to agreements with the Government of the United Republicof Tanzania, the Group was issued special mining licences for Bulyanhulu,Buzwagi, and North Mara mines and mining licences for building materials atBulyanhulu and Buzwagi Mines. The agreement requires the Group to pay to thegovernment of Tanzania annual rents of US$5,000 per annum per square kilometrefor as long as the Group holds the special mining licences and US$2,000 perannum per square kilometre for so long as the Group holds the mining licencesfor building materials. The total commitment for 2015 for the remainingspecial mining licences and mining licences for building materials amount toUS$0.66 million (2014: US$0.65 million).. d) Purchase commitments At 31 December 2014, the Group had purchase obligations forsupplies and consumables of approximately US$64 million (2013: US$48 million). e) Capital commitments In addition to entering into various operational commitments in thenormal course of business, the Group entered into contracts for capitalexpenditure of approximately US$20 million in 2014 (2013: US$6 million). 19. Post Balance Sheet Events A final dividend of US2.8 cents per share has been proposed, which will resultin a total dividend of US4.2 cents per share for 2014. The final dividend isto be proposed at the Annual General Meeting on 23 April 2015 and paid on 29May 2015 to shareholders on the register on 8 May 2015. The ex-dividend dateis 7 May 2015. These financial statements do not reflect this dividendpayable. Reserves and Resources Mineral reserves and mineral resources estimates contained in thisreport have been calculated as at 31 December 2014 in accordance with NationalInstrument 43-101 as required by Canadian securities regulatory authorities,unless otherwise stated. Canadian Institute of Mining, Metallurgy andPetroleum (CIM) definitions were followed for mineral reserves and resources.Calculations have been reviewed, verified (including estimation methodology,sampling, analytical and test data) and compiled by Acacia personnel under thesupervision of Acacia Qualified Persons: Nic Schoeman, General ManagerTechnical Services, Haydn Hadlow, Chief Mineral Resources Manager, and SamuelEshun, Technical Services Manager. However, the figures stated are estimatesand no assurances can be given that the indicated quantities of metal will beproduced. In addition, totals stated may not add up due to rounding. Mineral reserves have been calculated using an assumed long-termaverage gold price of US$1,300.00 per ounce, a silver price of US$20.00 perounce and a copper price of US$3.00 per pound. Reserve calculationsincorporate current and/or expected mine plans and cost levels at eachproperty and reflect contained ounces. Mineral resources at Acacia mines have been calculated using anassumed long-term average gold price of US$1,500.00 per ounce, a silver priceof US$20.00 per ounce and a copper price of US$3.00 per pound and reflectcontained ounces. Resources have been estimated using varying cut-off grades,depending on the type of mine or project, its maturity and ore types at eachproperty. Reserve estimates are dynamic and are influenced by changingeconomic conditions, technical issues, environmental regulations and any otherrelevant new information and therefore these can vary from year to year.Resource estimates can also change and tend to be influenced mostly by newinformation pertaining to the understanding of the deposit and secondly theconversion to ore reserves. In addition, estimates of inferred mineralresources may not form the basis of an economic analysis and it cannot beassumed that all or any part of an inferred mineral resource will ever beupgraded to a higher category. Therefore, investors are cautioned not toassume that all or any part of an inferred mineral resource exists, that itcan be economically or legally mined, or that it will ever be upgraded to ahigher category. Likewise, investors are cautioned not to assume that all orany part of measured or indicated mineral resources will ever be upgraded tomineral reserves.

For mine gold reserves and resources table see www.acaciamining.com