Tanzania's gold miner, Acacia Mining annual profit for 2015, fell by 31 per cent as gold prices continued their drop. The gold mining company, which operates three mines in Tanzania, said in a report that earnings before interest, tax, depreciation and amortisation for 2015 fell to $175 million from $252.7 million a year earlier.
Total revenue for the year amounted to US$868 million which was seven per cent below 2014, as a result of the US$104 per ounce lower average realised gold price, despite the 2 per cent increase in sales.
The UK-listed miner, previously known as African Barrick Gold, reported a net loss of $197 million for the last year December 31, 2015, compared with a net profit of $89 million the year before.
Gold prices fell by about 10 per cent in 2015. Acacia declared a final dividend of $0.028 a share, bringing its total dividend for 2015 to $0.042 cents a share, in line with 2014.
“We continue to have one of the strongest balance sheets in the sector and as a result of this and expected improvements in production, costs and cash flow generation in 2016, the Board have recommended maintaining the final dividend in line with 2014,” said Brad Gordon, Chief Executive Officer (CEO), of Acacia Mining.
The company had a net cash position of $233 million as of end-December. However, despite the profit decline, the mining company described 2015 as another year of continuing with cost cutting measures.
“2015 was another year of transformation for Acacia as we continued to transition our company into a low cost producer,” he said. “During the year we delivered gold production of 731,912 ounces, a third consecutive annual increase, with our continued investment into the turnaround of Bulyanhulu and the successful transition to underground operations at North Mara, leading to all-in sustaining costs (AISC), remaining flat year on year at US$1,112 per ounce. “
The CEO said the gold mining firm had successfully transitioned North Mara into a combined open pit and underground operation and as a result production increased for the third consecutive year to 731,912 ounces, 2 per cent higher than 2014, but marginally below the initial guidance range for the year.
Production increased by 5 per cent at North Mara to 287,188 ounces driven by the contribution of the newly commissioned Gokona Underground and by 17 per cent at Bulyanhulu to 273,552 ounces, he said. At Buzwagi, production fell by 19 per cent as a result of operations being focused on low grade areas in the open pit.
The mining company forecast higher gold output this year with an increase in production to 750,000-780,000 ounces, a 5 per cent increase over 2015 at the mid-point of the range.
Gold exports, which dominate non-traditional exports in Tanzania, is a key source of foreign exchange in the East African country. Tanzania is Africa’s fourth-biggest gold producer after South Africa, Ghana and Mali.
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