As previously communicated by Acacia Mining the findings of the first presidential committee’s investigation into the export of gold/copper concentrates were announced on 24 May and the company provided detailed comments on these on 26 May.
Since then, Acacia Mining has continued to co-operate with the second presidential committee, which was set up to examine economic and legal issues associated with historic exports of gold/copper concentrates.
Acacia Mining has provided extensive information to this committee and has provided access to each of its mine sites.
Acacia Mining believes that the second committee is close to completing its work, following which it would welcome the opportunity to discuss the findings directly with the government.
The company remains hopeful that it will be able to reach a resolution to the current situation with the government so that it can continue to deliver strong performance from its mines for the benefit of all stakeholders.
Its mines continue to operate as normal, producing and selling gold doré whilst stockpiling gold/copper concentrate. As of 31 May 2017, Acacia Mining has approximately 85 000 oz of gold, 4 million pounds of copper and 50 000 oz of silver contained within unsold concentrate.
In light of the increased levels of uncertainty, Acacia Mining has seen some impact on productivity levels, but at this stage it is not making any changes to full year guidance and continues to take steps to minimise further cash outflows from the business.
Over the past two months, Acacia Mining has paid the final dividend of US$34 million to shareholders, declared prior to the introduction of the concentrate ban in early March.
Acacia Mining has also refunded US$22 million of advanced payments for concentrate produced prior to the export ban, which is held up in the Dar es Salaam port.
This amount is now being recognised as a receivable. As a result of these payments, together with the deferral of sales, a US$10 million North Mara tax payment related to historic corporate tax assessments, and a continuing lack of VAT refunds, Acacia Mining’s cash balance at the end of May was approximately US$165 million, with approximately 15 000 oz of unsold doré on hand.
In the absence of the resumption of the sale of concentrates, the combined operating cash outflow going forward at the affected assets is in the region of US$15 million per month, while North Mara remains unaffected.
Feature image credit: Acacia Mining
(Activities at the Bulyanhulu gold mine in Tanzania owned by Acacia Mining)