Acacia Mining reiterates output guidance despite setback at Bulyanhulu

Acacia Mining reiterated its full-year production guidance for its Bulyanhulu mine and for the group as a whole, despite setbacks in resuming production at its processing plant at the former site following planned maintenance.

Thanks to the strong performance to date at North Mara, one of its three mines in operation in Tanzania, the outfit still expected its total third quarter output to be in line with that of the first quarter.

The gold miner carried out a two-week shutdown of its vertical shaft at Bulyanhulu to modernise the production and service winders. In parallel, a programme of works was undertaken on the process plant.

FTSE 250-listed Acacia said the maintenance programme was successfully concluded, with hoisting restarting in early September.

However, the plant had not run consistently since the shutdown due to repeated overheating of the ball mill trunnion bearing, the Africa-focused company said in a statement.

Despite the plant being down, a surface stockpile of 11,300 ounces existed, together with another 7,400 ounces underground.

Stoping operations, as the extraction of ores from beneath the ground is known, were on hold until the plant was back up and running, but the treatment of reclaimed tailings would continue as would development and drilling activities.

"In July 2016, Acacia was guiding “at or above” the upper end of its 750-780koz target range. We estimate that Q4 2016 will require production of 157-187koz to achieve the range, so it would seem to us that “at” the upper end is still achievable, but “above” may not be," ShoreCap´s Yuen Low pointed out in a research note sent to clients.