JOHANNESBURG (miningweekly.com) – The share price of LSE-listed Acacia Mining fell by 18.6% on Monday as it reported a net loss of $707-million for 2017 and said it would not pay a dividend for the financial year.
The company continues to be negatively affected by a general ban on the export of metallic mineral concentrates in Tanzania, which resulted in about $264-million of lost revenue for the year ended December 31 and drove a cash outflow of $237-million.
Given the negative cash flow, the company said it would not recommend a final dividend.
Acacia also incurred a net loss of $707-million, compared with a net profit of $94.94-million in 2016, as a result of a $644-million impairment charge associated with the Bulyanhulu mine and an increase in its tax provision to $300-million, compared with the previous provision of $128-million.
Adjusted net earnings were $146-million, down 9% on the $161-million recorded in 2016.
Its earnings before interest, taxes, depreciation and amortisation (Ebitda) for the year ended December 31, fell by 38% year-on-year to $257-million.
Revenue decreased to $751.52-million, compared with $1.05-billion in 2016, as gold production decreased to 767 883 oz, compared with 829 705 oz in 2016. Gold sold decreased to 592 861 oz for 2017, compared with 816 743 oz in the prior year.
Acacia, which is 63.9%-owned by Canadian mining major Barrick Gold, was prevented from exporting and selling 185 800 oz of gold, 12.1-million pounds of copper and 158 900 oz of silver contained in concentrate as a result of the concentrate export ban.
This includes 10 678 oz of gold in concentrate produced late in 2016 but not yet sold.
“This heavily impacted our Bulyanhulu and Buzwagi mines, which produced gold in both doré and in concentrate form, while North Mara sales were unaffected by the ban owing to 100% of its production being doré,” interim CEO Peter Galeta said.
Meanwhile, as a result of Bulyanhulu’s transition to reduced operations and the planned transition of Buzwagi to a stockpile processing operation, Acacia expects its production to decrease to 435 000 oz to 475 000 oz at an increased all-in sustaining cost of $935/oz this year.
Cash costs are expected to increase to between $690/oz and $720/oz this year.
Acacia stated that it was committed to strong cost discipline and it is continuing to take steps to ensure the long-term viability of its business while it awaits the outcome of discussions between its parent company Barrick Gold and the Tanzanian government.
“Our focus remains on delivering optimal performance from all aspects of the business within our control in the current operating environment, returning the business to free cash generation and delivering value for all of our stakeholders. We are supporting efforts towards achieving a negotiated resolution with the Tanzanian government.
“We continue to take steps to protect the balance sheet, including a reduction in planned greenfield exploration spend in 2018 and we are targeting reducing spend during the year,” Galeta said.