Underground at Acacia Mining's Bulyanhulu mine

LSE-listed, African gold miner Acacia Mining, has spent the first six months of 2015 working to ensure its Bulyanhulu and North Mara mines in Tanzania generate strong cash flow for the company by the end of 2015.

This statement was made by CEO Brad Gordon during his outline of the company’s financial results for the six months to June 2015. These two mines are expected to help alleviate the company’s financial difficulties by year end as gold prices remain low and costs remain high.

“Over the first half of 2015 we made further progress at each of our mines, with a particular focus on laying the foundations for the future at Bulyanhulu and North Mara which will ensure that we are in a position by the end of 2015 to generate strong cash flow at and below the current gold price,” says Gordon.

“Production at Bulyanhulu increased by 26% over H1, 2014, as well as by 16% in Q2, 2015 compared to Q1, 2015; and we expect further production increases in the second half as we benefit from our investment in the mine. At North Mara we delivered first stoping ore from the Gokona Underground project ahead of schedule in Q2, 2015.”

As a group Acacia delivered production of 367 301 oz in the first half, an increase of 6% on H1, 2014. Its all-in sustaining costs of USD$1 133/oz sold was 1% higher than H1, 2014, principally as a result of investing in the growth of Bulyanhulu and North Mara.

“As this production is delivered and we continue to drive cost efficiencies; we anticipate that unit costs will decline over the remainder of the year. As a result, we continue to expect our production and costs to be within our guidance range as communicated earlier this year.”

Financial highlights

Although H1, 2015 revenue of $447 million was in line with H1, 2014, thanks to increased ounces sold which offset the lower gold price, H1 EBITDA of $97 million was 26% below H1, 2014. This was due to non-cash net foreign exchange revaluation charges of $15 million, non-cash share-based payment costs of $8 million and increased cash costs.

Operational cash flow of $107 million is 16% below the same period for H1, 2014.

Top Stories:

Lonmin to close Hossy and Newman shafts

Anglo American half year profits affected by price decreases

Randgold Resources steps up exploration in Côte d’Ivoire