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Alberto Abaterusso
Alberto Abaterusso
Articles (1663) 

Acacia Mining Tops Guidance on Gold Production

The outcome was boosted by a strong performance at the Buzwagi mine

January 16, 2018 | About:

Acacia Mining PLC (ACA) was up 1.54 percent on the London Stock Exchange, as of late this morning. It reached 197.8-pound sterling on the London exchange after having informed the market that it surpassed expectations on gold production for the fourth-quarter and entire year of 2017. The results were supported by strong performance at the Buzwagi mine.

Acacia Mining produced gold doré at 148,477 ounces in the fourth quarter, a 30% decline from the prior-year quarter, and at 767,883 ounces for the full year. That was 7% lower compared to 2016. As a result, Acacia Mining also reported a 27% year-over-year decline to 592,861 ounces of doré sold in 2017.

The declines were the result of cuts to the company's personnel and contractor numbers at its Bulyanhulu’s operations. 

The cuts helped Acacia Mining keep its cash outflow under control and lower the preliminary all-in sustaining costs (AISC) to $779 per ounce of metal sold in the last quarter of 2017. The AISC declined 18% from the same quarter of 2016.

These operating changes at Bulyanhulu followed the ban on the export of gold and copper concentrate imposed by the government of Tanzania.

In addition, Acacia Mining reports that the company had $81 million in cash on hand as of Dec. 31, 2017, and that the net cash position of the company decreased by 60% to $10 million from the previous quarter due to “the cost of transitioning Bulyanhulu to reduced operations," the company said. The balance sheet of the miner will be strengthened by the sale of $45 million non-core royalty that it closed in December.

Acacia Mining has a market capitalization of 811.15 pounds, a price-book (P/B) ratio of 0.55 and a price-earnings (P/E) ratio of 8.20.

The stock lost more than 50% over the 52 weeks through Jan. 16 and is trading far below the 200 SMA line but above the 100 and the 50 SMA lines.

Source: Yahoo Finance

The recommendation rating is 3.1 out of 5 and ranges between 1.0 (strong buy) and 5.0 (sell).

Peter Geleta, Acacia Mining’s interim Chief Executive Officer, commented:

“Our focus remains on delivering optimal performance in the current operating environment and delivering value for all of our stakeholders. We are also continuing to support efforts towards achieving a negotiated resolution with the Tanzanian Government.”

Acacia Mining will provide shareholders with a guidance on 2018 production and costs in February.

(Disclosure: I have no positions in Acacia Mining.)

About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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