Acacia achieves record gold production at Tanzania mine

Acacia Mining delivered strong fourth quarter gold production, which resulted in forecast-beating full year production at its Tanzania mine with costs towards the bottom of expectations.

For the three months ended 31 December, gold production increased 6% to 212,954 ounces, which lifted full year production to a record 829,705 oz, a 13% rise from the previous year and ahead of revised full year guidance of up to 5% above 750,000-780,000 ounces.

Chief executive Brad Gordon, said the fourth consecutive year of production growth was driven by a record production year at North Mara and the highest production year at Bulyanhulu since 2006.

“We are also pleased to confirm we will extend mining at Buzwagi by six months, and it will now continue until the end of 2017 before at least a further two years of processing stockpiles. As a result we look forward to another strong year.”

Preliminary fourth quarter all-in sustaining costs of $952 per ounce was sold, after a $47 per ounce credit regarding share based payments, this was 5% lower than the same period in 2015.

The FTSE 250 company's full year sales rose 13% to 816,743 ounces.

Preliminary all-in sustaining costs of $958 per ounce was achieved during the year, which was 14% lower than 2015 and towards the bottom of the full year guidance range of $950-980 per ounce.

The cash balance increased by $16m to $318m, after negative indirect tax movements of $19m and $15m for share based incentive costs during the final quarter. While net cash rose by $114m to $219m, during the year.

Acacia stated that 2017 guidance will be given with the 2016 financial results, due on 14 February.

Analysts at Canaccord said: "Perhaps given the recent announcement of preliminary discussions with Endeavour Mining over a business combination, Acacia is keen to ensure that it maximises its near-term production and cost outlook."

Shares in Acacia Mining were down 2.55% to 421.10p at 0856 GMT.