22 July 2016
Results for the 6 months ended 30 June 2016 (Unaudited)
Based on IFRS and expressed in US Dollars (US$)
Acacia Mining plc (“Acacia’’) reports 2016 interim results
“We are pleased that, through continuing optimisation, our assets are starting to deliver performance which reflects their
potential and as a result increased our net cash position by US$47 million in the second quarter”, said Brad Gordon, Chief
Executive Officer of Acacia Mining. “Strong production of 221,815 ounces aided a further reduction in All-in Sustaining Cost
(“AISC”) to US$926 per ounce, even after US$72 per ounce of cost due to the impact of the strong share price on the valuation
of future share-based payments to employees. The transition to underground mining at North Mara continues to deliver ahead
of expectations with high grades at Gokona supporting production of 100,016 ounces in the quarter. Bulyanhulu again
produced above plan, delivering 78,643 ounces, although a planned two week shaft closure for maintenance in August and a
move back towards reserve grade will reduce output in Q3. As a result of the strong operational performance, coupled with the
improved gold price outlook, the Board have declared an interim dividend of US2.0 cents per share, a 43% increase over the
prior year. We are pleased with performance in the first half, and are now expecting to deliver at or above the upper end of full
year production guidance of 750-780,000 ounces, and at the lower end of AISC guidance of US$950-980 per ounce.”
Operational Highlights

Q2 gold production of 221,815 ounces, 19% higher than Q2 2015, with gold sales of 216,782 ounces
1

Q2 AISC of US$926 per ounce sold, 19% below Q2 2015, after a US$72 per ounce share-based payment valuation impact
1

Q2 cash costs of US$595 per ounce sold, 23% lower than Q2 2015

H1 gold production of 412,025 ounces, 12% higher than H1 2015, with gold sales of 400,963 ounces
1

H1 AISC of US$941 per ounce sold, after a US$49 per ounce share-based payment valuation impact, and cash costs of
US$640, respectively 17% and 18% lower than H1 2015

Continued low cost expansion of exploration activity, with 10 rigs active across Africa, delivering positive results
Financial Highlights
 H1 revenue of US$505 million, 13% higher than H1 2015, due to a 13% increase in gold sales
1
 H1 EBITDA of US$185 million, 91% higher than H1 2015, due to higher revenues and lower operating costs
 H1 net loss of US$6 million (US1.5 cents per share) as a result of US$70 million of additional tax provisions made in Q1
1
2016, with H1 Adjusted net earnings of US$59 million (US14.3 cents per share), up from US$18 million in H1 2015
 Operational cash flow of US$157 million, 47% up on H1 2015, driven primarily by higher sales volumes
 Cash position of US$284 million as at 30 June 2016, an increase of US$47 million during the second quarter
 Net cash of US$171 million, an increase of 38% during Q2 2016
 Interim dividend of US2.0 cents per share declared, an increase of 43% over the 2015 interim dividend
(Unaudited)
Gold production (ounces)
Gold sold (ounces)
1
Cash cost (US$/ounce)
1
AISC (US$/ounce)
1
Average realised gold price (US$/ounce)
(in US$'000)
Revenue
1
EBITDA
1
Adjusted EBITDA
Net earnings/(loss)
Basic and diluted earnings/(loss) per share (EPS)
1
(cents)
Adjusted net earnings
1
Adjusted earnings per share (AEPS) (cents)
Cash generated from operating activities
2
Capital expenditure
Cash balance
Total borrowings
Three months ended 30 June
2016
2015
221,815
185,641
216,782
184,055
595
777
926
1,149
1,258
1,194
284,038
119,332
114,088
46,282
11.3
40,659
9.9
104,864
49,142
284,357
113,600
231,887
43,935
46,343
5,558
1.4
7,244
1.8
59,964
46,461
286,932
142,000
Six months ended 30 June
2016
2015
412,025
367,301
400,963
355,470
640
780
941
1,133
1,209
1,200
504,947
184,882
180,499
(6,128)
(1.5)
58,767
14.3
157,096
85,172
284,357
113,600
446,781
96,888
101,941
14,765
3.6
18,302
4.5
107,093
89,040
286,932
142,000
1
2
These are non-IFRS measures. Refer to page 24 for definitions
Excludes non-cash capital adjustments (reclamation asset adjustments) and includes finance lease purchases and land purchases recognised as long term prepayments
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Other Developments
Expansion of Exploration Portfolio in Burkina Faso
In June 2016, Acacia entered into an agreement with Metalor SA, a local Burkinabe company (the “Frontier Joint Venture”),
which includes two licences immediately south of, and contiguous to, the Pinarello Project where soil sampling has identified
multiple kilometre scale gold-in-soil anomalies. This joint venture adds a further 500 square kilometres to Acacia’s land
package on the Houndé Belt, increasing the overall project area to approximately 2,700 square kilometres. The joint venture
allows Acacia to earn 100% of the project through certain staged option payments totalling US$300,000 over 30 months.
Metalor will hold a 1% net smelter royalty (NSR) on production from the project should Acacia identify and exploit an economic
gold deposit, and Acacia has the right to acquire the NSR from Metalor for US$1 million at any future point in time.
Tax Provision from Historic Tax Assessments
As disclosed at our Q1 2016 results, we received a judgement from the Court of Appeal in favour of the Tanzanian Revenue
Authority regarding a long-standing dispute over tax calculations at Bulyanhulu from 2000-2006. The legal route in Tanzania
has now been exhausted; however we are considering our options with regards to next steps. Acacia is yet to receive a revised
tax assessment following the judgement, but raised tax provisions of US$69.9 million in Q1 2016 in order to address the direct
impact of the ruling on Bulyanhulu’s tax loss carry forwards and the potential impact this may have on the applicability of
certain deductions for other years and our other mines. The judgement does not have a short term cash flow impact but means
that Bulyanhulu will be in a tax payable situation approximately one year earlier than previously expected, whilst the amounts
for North Mara and Tulawaka will be offset against the long term indirect tax receivable and prepaid corporate taxes.
Indirect taxes
During the second quarter, the total indirect tax receivables increased from US$97.8 million at 31 March 2016 to US$109.1
million at 30 June 2016. The increase is mainly driven by indirect tax payments of US$23.2 million during the quarter, being
partially offset by refunds received of US$17.0 million, and is further impacted by a Q2 2016 reduction of US$6.5 million in the
discounting provision relating to indirect tax receivables covered by the 2011 Memorandum of Settlement (“MOS”). At the end
of the second quarter, the outstanding amount relating to the total current indirect tax receivable, not covered by the MOS,
stood at US$50.8 million, compared to US$46.1 million at the end of the previous quarter. The overall indirect tax receivable
remained in line with December 2015, as the payment of US$10 million in prepaid corporate taxes, in line with the
Memorandum of Understanding agreed in March 2016, was offset by the impact of the reduction of the discounting provision.
North Mara Commission
In February 2016, the Tanzanian Minister of Mines formed a commission to look at the root causes of historic disputes between
North Mara and the communities surrounding the mine. The commission was formed of local elders, Acacia employees,
government officials and politicians from outside the local area, and conducted interviews and assessments into issues
pertaining to land acquisition and compensation, artisanal mining, water and environment. The Minister of Mines has now
published the recommendations made by the commission which are in line with company expectations, provide a fair outcome
for all stakeholders and will provide a good platform to continue to enhance our relationships with the local communities.
Interim dividend
In line with our policy of declaring 15% – 30% of cash flow before expansion capital, dividends and financing costs as a
dividend to our shareholders, we are pleased to announce that the Board of Directors have approved the payment of an interim
dividend of US2.0 cents per share, a 43% increase from the 2015 interim dividend. This increase reflects the improved cash
generation in the business and our prospects for the remainder of the year. The dividend will be paid on 30 September 2016 to
shareholders on the register on 2 September 2016. Acacia will declare the interim dividend in US dollars. Unless a shareholder
elects to receive dividends in US dollars, they will be paid in pounds sterling with the US dollar amount being converted into
pounds sterling at the exchange rate prevailing at the time. The last date for receipt of currency elections will be 5 September
2016. The exchange rate for the conversion of the interim dividend will be elected on or around 7 September 2016.
Share-based payments
In order to align employee remuneration with long term valuation creation for shareholders, senior employees can be granted
long term incentives as a part of their annual pay package. Due to the level of free float, these awards are primarily in the form
of restricted share units (RSUs) which vest after a three year period and are cash settled. As the awards are cash settled they
are marked to market each quarter against the share price. There are approximately 9 million units in issue, with approximately
two thirds of these further linked to performance of the share price (PRSUs) and as such can vest between zero and 200% of
the initial grant amount depending on share price performance compared to peers. These units are generally awarded and
consequently vest in the first quarter of the year, but are also awarded on the appointment of senior employees out of this
timeline. In Q3 2016, approximately 935,000 performance units are due to vest and due to the near trebling of the share price
over the past three years are currently due to vest at 200% of the original grant. A further 1.0 million PRSUs and 1.6 million
RSUs are due to vest in Q4 2016, with the PRSUs also currently at 200% performance.
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Outlook
We are pleased with performance over the first half of 2016 and as a result are now expecting to deliver at or above the upper
end of the full year production guidance of 750-780,000 ounces, and at the lower end of AISC guidance of US$950-980 per
ounce. As we move into H2 2016, we expect a step up in production at Buzwagi with grade increasing each quarter until the
end of the year as mining is re-established in the main zone of the orebody. At North Mara and Bulyanhulu we expect smaller
contributions in the second half with North Mara quarterly production normalising below the Q2 2016 level. At Bulyanhulu we
will see a lowering of the average grade mined to in line with the reserve grade. This, together with a planned two week
shutdown of the hoisting shaft for refurbishment in August, will lead to Q3 2016 being in line with Q3 2015 before increasing
again in Q4.
Looking further forward we continue to look to optimise our portfolio and are focused on value enhancing brownfields
extensions at Bulyanhulu and North Mara, as well as assessing our options at Buzwagi. We continue to invest in our high
quality exploration portfolio and believe it holds the potential to host our next mine.
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Key statistics
(Unaudited)
Tonnes mined (thousands of tonnes)
Ore tonnes mined (thousands of tonnes)
Ore tonnes processed (thousands of tonnes)
Process recovery rate (percent)
Head grade (grams per tonne)
Gold production (ounces)
Gold sold (ounces)
Copper production (thousands of pounds)
Copper sold (thousands of pounds)
1,3
Cash cost per tonne milled (US$/t)
Per ounce data (US$/ounce)
2
Average spot gold price
Average realised gold price
1
Total cash cost
1
1
All-in sustaining cost
Average realised copper price (US$/lb)
Three months ended 30 June
2016
2015
9,939
10,322
2,244
2,398
2,412
2,484
88.9%
88.1%
3.2
2.6
221,815
185,641
216,782
184,055
4,624
3,993
4,403
4,001
Six months ended 30 June
2016
2015
19,346
20,475
4,689
4,905
4,900
4,559
87.7%
88.0%
3.0
2.8
412,025
367,301
400,963
355,470
8,427
7,492
8,084
6,828
54
58
52
61
1,260
1,258
1,192
1,194
1,221
1,209
1,206
1,200
595
926
2.16
777
1,149
2.71
640
941
2.13
780
1,133
2.61
Financial results
(Unaudited, in US$'000 unless otherwise stated)
Revenue
Cost of sales
Gross profit
Corporate administration
Share-based payments
Exploration and evaluation costs
Corporate social responsibility expenses
Other charges
Profit before net finance expense and taxation
Finance income
Finance expense
Profit before taxation
Tax expense
Net earnings/(loss) for the period
1
Adjusted net earnings/(loss)
Three months ended 30 June
2016
2015
284,038
231,887
(183,539)
(188,641)
100,499
43,246
(4,469)
(8,900)
(15,697)
(6,772)
(5,199)
(4,042)
(1,744)
(3,224)
2,776
(9,845)
76,166
10,463
197
354
(2,514)
(3,237)
73,849
7,580
(27,567)
(2,022)
46,282
5,558
40,659
7,244
Six months ended 30 June
2016
2015
504,947
446,781
(355,439)
(363,582)
149,508
83,199
(9,771)
(18,290)
(19,635)
(8,290)
(11,150)
(8,736)
(4,614)
(5,304)
2,168
(11,805)
106,506
30,774
490
700
(5,380)
(6,476)
101,616
24,998
(107,744)
(10,233)
(6,128)
14,765
58,767
18,302
1
These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to “Non IFRS measures” on page 24 for definitions.
Reflect the London PM fix price.
Cash cost per tonne milled excluding the reprocessing of tailings at Bulyanhulu amounted to US$62 per tonne for the quarter and US$60 per tonne for the six
months ended 30 June 2016, (US$66 per tonne for the quarter and US$67 per tonne for the six months ended 30 June 2015).
*Reported process recovery rates and head grade include tailings retreatment at Bulyanhulu. Excluding the impact of the tailings retreatment in Q2 2016 and year
to date 2016 process recovery would be 92.3% and 90.7% respectively (2015: 89.9% and 89.4% respectively), with Q2 2016 and year to date H1 2016 head grade
being 3.6g/t and 3.3g/t respectively (H1 2015: 2.9g/t and 3.1g/t respectively).
2
3
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For further information, please visit our website: www.acaciamining.com or contact:
Acacia Mining plc
+44 (0) 207 129 7150
Brad Gordon, Chief Executive Officer
Andrew Wray, Chief Financial Officer
Giles Blackham, Investor Relations Manager
Bell Pottinger
Daniel Thöle
+44 (0) 203 772 2500
About Acacia Mining plc
Acacia Mining plc (LSE:ACA) is Tanzania’s largest gold miner and one of the largest producers of gold in Africa. We have three
producing mines, all located in north-west Tanzania: Bulyanhulu, Buzwagi, and North Mara and a portfolio of exploration
projects in Tanzania, Kenya, Burkina Faso and Mali.
Our approach is focused on strengthening our core pillars; our business, our people and our relationships, whilst continuing to
invest in our future. Our ambition is to create a leading African Company.
Acacia is a UK public company headquartered in London. We are listed on the Main Market of the London Stock Exchange with
a secondary listing on the Dar es Salaam Stock Exchange. Barrick Gold Corporation is our majority shareholder. Acacia reports
in US dollars and in accordance with IFRS as adopted by the European Union, unless otherwise stated in this report.
Conference call
A presentation will be held for analysts and investors on 22 July 2016 at Noon London time.
For those unable to attend, an audio webcast of the presentation will be available on our website www.acaciamining.com. For
those who wish to ask questions, the access details for the conference call are as follows:
Participant dial in:
+44 (0) 203 003 2666 / +1 212 999 6659
Password:
Acacia
FORWARD- LOOKING STATEMENTS
This report includes “forward-looking statements” that express or imply expectations of future events or results. Forward-looking statements are
statements that are not historical facts. These statements include, without limitation, financial projections and estimates and their underlying
assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, projects, and
statements regarding future performance. Forward-looking statements are generally identified by the words “plans,” “expects,” “anticipates,”
“believes,” “intends,” “estimates” and other similar expressions.
All forward-looking statements involve a number of risks, uncertainties and other factors, many of which are beyond the control of Acacia,
which could cause actual results and developments to differ materially from those expressed in, or implied by, the forward-looking statements
contained in this report. Factors that could cause or contribute to differences between the actual results, performance and achievements of
Acacia include, but are not limited to, changes or developments in political, economic or business conditions or national or local legislation or
regulation in countries in which Acacia conducts - or may in the future conduct - business, industry trends, competition, fluctuations in the spot
and forward price of gold or certain other commodity prices (such as copper and diesel), currency fluctuations (including the US dollar, South
African rand, Kenyan shilling and Tanzanian shilling exchange rates), Acacia’s ability to successfully integrate acquisitions, Acacia’s ability to
recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources
or reserves, and to process its mineral reserves successfully and in a timely manner, Acacia‘s ability to complete land acquisitions required to
support its mining activities, operational or technical difficulties which may occur in the context of mining activities, delays and technical
challenges associated with the completion of projects, risk of trespass, theft and vandalism, changes in Acacia‘s business strategy including,
the ongoing implementation of operational reviews, as well as risks and hazards associated with the business of mineral exploration,
development, mining and production and risks and factors affecting the gold mining industry in general. Although Acacia‘s management
believes that the expectations reflected in such forward-looking statements are reasonable, Acacia cannot give assurances that such
statements will prove to be correct. Accordingly, investors should not place reliance on forward-looking statements contained in this report.
Any forward-looking statements in this report only reflect information available at the time of preparation. Save as required under the Market
Abuse Regulation or otherwise under applicable law, Acacia explicitly disclaims any obligation or undertaking publicly to update or revise any
forward-looking statements in this report, whether as a result of new information, future events or otherwise. Nothing in this report should be
construed as a profit forecast or estimate and no statement made should be interpreted to mean that Acacia‘s profits or earnings per share for
any future period will necessarily match or exceed the historical published profits or earnings per share of Acacia.
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LSE: ACA
TABLE OF CONTENTS
Interim Operating Review
7
Exploration Review
13
Financial Review
17
Significant judgements in applying accounting policies and key sources of estimation uncertainty
23
Non-IFRS measures
24
Risk Review
27
Condensed Financial Information:
- Consolidated Income Statement and Consolidated Statement of Comprehensive Income
30/31
- Consolidated Balance Sheet
32
- Consolidated Statement of Changes in Equity
33
- Consolidated Statement of Cash Flows
34
- Notes to the Condensed Financial Information
35
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Interim Operating Review
Half Year Review
Acacia delivered first half production of 412,025, an increase of 12% year on year. AISC of US$941 per ounce sold and cash
cost of US$640 per ounce sold were 17% and 18% respectively lower than the prior year period.
Operationally, North Mara’s production of 174,737 ounces was 23% higher than the prior year mainly due to a 14% increase
in grade, driven by the higher grade underground Gokona ore which also drove a 5% increase in recovery. AISC fell by 19% to
US$720 per ounce sold predominantly due to the higher production base and lower cash costs.
Bulyanhulu saw an 18% increase in production to 157,069 ounces. This was due to ounces produced from underground
mining increasing by 18% from H1 2015, as a result of an 11% increase in grade, a 5% increase in throughput due to
improved plant availability and underground delivery and a 15% increase in ounces produced from tailings retreatment. AISC
decreased by 28% to US$970 per ounce sold due to the higher production base, lower direct mining costs and lower
sustaining capital expenditure.
At Buzwagi, gold production for the first half of 80,219 ounces was in line with expectations and 13% lower than H1 2015 due to
a planned 20% reduction in grade as a result of the focus on waste stripping in the early part of the period. The lower production
base drove a 3% increase in AISC to US$1,124 per ounce sold from US$1,089 per ounce sold in H1 2015.
Total tonnes mined during the year amounted to 19.3 million tonnes, 6% lower than H1 2015 due to lower tonnes mined at
Buzwagi as a result of the increased haulage distances given the increased pit size. Ore tonnes mined were 4.7 million tonnes
compared to 4.9 million in H1 2015 as a result of lower ore tonnes mined at Nyabirama pit at North Mara due to a focus on
waste stripping, and the cessation of mining from the Gokona pit in H1 2016.
Ore tonnes processed amounted to 4.9 million tonnes, an increase of 7% on H1 2015 primarily driven by increased throughput
at Bulyanhulu as reprocessed tailings increased from 0.6 million tonnes in H1 2015 to 0.8 million tonnes in H1 2016.
Head grade for the year to date of 3.0 g/t was 7% higher than in H1 2015 (2.8 g/t). This was due to a 14% increase in head
grade at North Mara due to the contribution of the higher grade Gokona underground ore and an 11% increase in run-of-mine
head grade at Bulyanhulu as underground mined grades improved, partly offset by a 20% decrease in head grade at Buzwagi.
Our cash costs for the period were 18% lower than in H1 2015, and amounted to US$640 per ounce sold. The decrease was
primarily due to:
‒ Higher production base (US$80/oz);
‒ Lower labour costs due to a reduction in employees, together with favourable currency impact on Tanzanian shilling
based wages when compared to H1 2015 (US$32/oz);
‒ Lower energy and fuel costs due to lower hedge pricing and lower oil prices realised (US$23/oz); and
‒ Higher capitalisation of development costs at North Mara due to the Gokona underground development, partly offset by
lower capitalisation of development costs at Bulyanhulu (US$21/oz).
These were partly offset by higher sales related costs as a result of higher sales volumes (US$18/oz) and increased contracted
services, mainly related to contracted mining at North Mara and increased maintenance and repair contractors (“MARC”) costs
at Buzwagi.
The all-in sustaining cost of US$941 per ounce sold for the half year was 17% lower than H1 2015, driven by the higher
production base, lower cash costs, lower corporate administration costs and lower sustaining capital expenditure. This was
however impacted by a revaluation of future share-based payments amounting to US$19.6 million (US$49/oz) following the
150% increase in Acacia’s share price over the first half of the year.
As a result of the higher gold sales, partly offset by a working capital outflow, cash generated from operating activities increased
by 47% over the prior year period to US$157.0 million.
Capital expenditure amounted to US$85.2 million in H1 2016 compared to US$89.0 million in H1 2015. Capital expenditure
primarily comprised capitalised development (US$59.5 million), investments in tailings and infrastructure (US$9.6 million),
investment in mobile equipment and component change-outs (US$5.0 million), investment in the Bulyanhulu winder upgrade
(US$1.7 million) and land purchases at North Mara (US$2.8 million).
Second Quarter Review
Production for Q2 2016 amounted to 221,815 ounces, an increase of 19% on the same period in 2015 and 17% higher than Q1
2016.
North Mara produced 100,016 ounces in Q2 2016, 50% higher than in Q2 2015 and 34% higher than Q1 2016, driven by
higher grade ore than plan from the Gokona Underground resulting from positive grade reconciliations and the processing of
higher grade open pit material. Total open pit tonnes mined increased by 23% from Q2 2015 driven by waste stripping in the
Nyabirama pit. Cash cost per ounce sold of US$382 was 37% lower than in Q2 2015 mainly driven by the higher production
base, higher capitalised development costs due to waste stripping at the Nyabirama pit and lower labour costs due to
reductions in head count, partly offset by higher sales related costs as a result of higher sales volumes. AISC of US$707 per
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7
ounce sold was 27% lower than in Q2 2015 due to higher production base, lower cash costs and lower corporate
administration expenditure, partly offset by increased capitalised development costs and higher sustaining capital expenditure
mainly as a result of land acquired.
Bulyanhulu produced 78,643 ounces, 10% higher than for the same period in Q2 2015 and in line with Q1 2016. Ounces
produced from underground mining amounted to 70,307 ounces, a 17% improvement on Q2 2015 due to an increase in
throughput and grade, while ounces produced from the reprocessing of tailings amounted to 8,336 ounces. During the quarter,
236,000 tonnes of ore were hoisted while 251,000 tonnes of run-of-mine ore were processed, 10% higher than in Q2 2015 while
grade increased by 5% to 9.6 g/t. AISC amounted to US$958 per ounce sold for the quarter, 25% lower than in Q2 2015 and
3% lower than Q1 2016, mainly driven by the lower cash costs, increased production base, lower sustaining capital and
capitalised development expenditures and lower corporate administration expenses.
At Buzwagi, gold production for the quarter of 43,156 ounces was 10% lower than Q2 2015, but 16% ahead of Q1 2016. Total
tonnes mined decreased by 18% from Q2 2015 while ore tonnes mined were in line with the prior year. Cash cost per ounce
sold of US$948 was 2% higher than Q2 2015 mainly due to the lower production base, partly offset by lower energy and fuel
costs driven by lower global fuel prices and lower diesel usage, lower general and administrative expenses as a result of lower
freight costs and lower labour costs driven by headcount reductions. AISC of US$1,019 per ounce sold was 4% lower than Q2
2015 with lower production and higher cash costs offset by lower corporate administration expenditure and lower sustaining
capital expenditure.
Total tonnes mined during the quarter amounted to 9.9 million tonnes, 4% lower than Q2 2015. Ore tonnes mined were 2.2
million tonnes compared to 2.4 million in Q2 2015.
Ore tonnes processed amounted to 2.4 million tonnes, in line with Q2 2015.
Head grade for the quarter of 3.2 g/t was 23% higher than in Q2 2015 (2.6 g/t) as a result of the higher head grade at North
Mara given the contribution of the higher grade ore from Gokona Underground.
Capital expenditure for the quarter amounted to US$49.1 million compared to US$46.5 million in Q2 2015. Capital expenditure
primarily comprised capitalised development (US$34.7 million), investment in tailings and infrastructure of US$4.2 million,
investment in mobile equipment and component change out costs of US$2.8 million and investment in the Bulyanhulu winder
upgrade of US$0.9 million.
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Mine Site Review
Bulyanhulu
Key statistics
Three months ended 30 June
(Unaudited)
Key operational information:
Ounces produced
Ounces sold
Cash cost per ounce sold
oz
oz
1
1
AISC per ounce sold
Copper production
Copper sold
Run-of-mine:
Underground ore tonnes hoisted
Ore milled
Head grade
Mill recovery
Ounces produced
Cash cost per ROM tonne milled
Reprocessed tailings:
Ore milled
Head grade
Mill recovery
Ounces produced
Capital Expenditure
- Sustaining capital
- Capitalised development
- Expansionary capital
- Non-cash reclamation asset
adjustments
Total capital expenditure
2016
2015
2016
2015
78,643
78,271
71,423
67,490
157,069
150,719
133,141
121,976
US$/oz
662
830
661
871
US$/oz
Klbs
Klbs
958
1,710
1,574
1,278
1,489
1,377
970
3,527
3,154
1,356
3,069
2,538
236
250
9.6
90.8%
70,307
222
229
9.0
90.3%
60,132
479
502
9.7
89.3%
140,083
464
479
8.7
88.7%
118,366
185
220
180
203
Kt
g/t
%
oz
402
1.4
45.6%
8,336
407
1.3
67.8%
11,291
780
1.5
45.9%
16,986
580
1.2
64.5%
14,775
US$('000)
US$('000)
US$('000)
4,421
15,270
559
20,250
7,473
17,920
(1,693)
23,700
11,506
28,438
753
40,697
16,455
34,040
(909)
49,586
US$('000)
US$('000)
5,723
25,973
(3,565)
20,135
9,937
50,634
(407)
49,179
Kt
Kt
g/t
%
oz
1
Six months ended 30
June
US$/t
1
These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to ‘Non-IFRS measures” on page 24 for definitions.
Operating performance
Gold production for the first half of 157,069 ounces was 18% higher than the same period in 2015. This was due to an 18%
increase in ounces produced from underground mining over H1 2015, driven by an 11% increase in head grade, combined with
a 5% increase in throughput due to improved plant availability. Production from the reprocessing of tailings increased by 15%
against H1 2015 due to a significant increase in throughput and grade, which was partially offset by lower recoveries. Gold sold
for the year amounted to 150,719 ounces, 24% higher than H1 2015 but 4% lower than production due to the timing of
production at quarter end impacting the shipment of ounces and the impact of the refinery payable.
Copper production of 3.5 million pounds for the current year period was 15% higher than in H1 2015 due to higher throughput
and copper recovery rates, partly offset by lower copper grades.
Cash costs for the first half of US$661 per ounce sold were 24% lower than H1 2015 (US$871) mainly due to the higher
production base, lower labour costs driven by lower employee headcount and lower maintenance costs as a result of changes in
the maintenance schedules, partly offset by lower capitalised development costs and higher sales related costs as a result of
higher sales volumes.
AISC per ounce sold for the first half of US$970 was 28% lower than H1 2015 (US$1,356) driven by the impact of the higher
production base, lower cash costs, lower capitalised development costs, lower sustaining capital expenditure and lower
corporate administration expenditure.
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Capital expenditure for the year to date before reclamation adjustments amounted to US$40.7 million, 18% lower than the 2015
expenditure of US$49.6 million, mainly driven by lower capitalised development and lower sustaining capital expenditure.
Capital expenditure consisted mainly of capitalised underground development costs (US$28.4 million), investments in tailings
and infrastructure (US$6.7 million), investments in the winder upgrade (US$1.7 million) and investment in mobile equipment and
component change-outs (US$1.3 million).
Full year expectations for Bulyanhulu remain unchanged, with output in the second half of the year expected to be lower than in
the first half as a result of a decrease in the average grade mined due to location of the various ore sources and increased
contribution of lower grade Alimak stopes. In the third quarter, there will also be a major shutdown of the vertical shaft to
undertake refurbishment and modernisation of the production winder. The shutdown, which was factored into annual guidance
at the beginning of the year, will last for approximately two weeks in August and will result in lower hoisted and mined tonnes
compared to Q2 2016. During the shaft upgrade, the plant will also have an extended shut down as we co-ordinate planned
maintenance of the process plant with the shaft work which will lead to Q3 2016 production being in line with Q3 2015, before
increasing again in Q4 2016.
Over the second half of the year the planning team will also be focused on updating the mine plan to incorporate a number of
the initiatives that have we have been progressing in order for the mine to perform to its geological potential over the medium
term. These initiatives include the mechanised mining method mix, adding in new work areas and processing improvements.
Buzwagi
Key statistics
(Unaudited)
Key operational information:
Ounces produced
Ounces sold
1
Cash cost per ounce sold
1
AISC per ounce sold
Copper production
Copper sold
Mining information:
Tonnes mined
Ore tonnes mined
Processing information:
Ore milled
Head grade
Mill recovery
Cash cost per tonne milled
Capital Expenditure
- Sustaining capital
- Capitalised development
Three months ended 30 June
2016
2015
43,156
42,971
948
47,687
50,093
933
80,219
80,404
1,052
92,015
91,488
965
1,019
2,915
2,829
1,065
2,503
2,624
1,124
4,900
4,929
1,089
4,423
4,290
Kt
Kt
5,497
1,302
6,682
1,333
11,423
2,605
12,893
2,708
Kt
g/t
%
1,054
1.3
94.8%
39
1,125
1.4
93.8%
42
2,182
1.2
94.6%
39
2,087
1.5
93.9%
42
1,081
1,081
1,586
2,667
3,107
321
3,428
(704)
2,724
2,231
2,231
3,007
5,238
5,134
343
5,477
(84)
5,393
oz
oz
US$/oz
US$/oz
Klbs
Klbs
1
- Non-cash reclamation asset adjustments
Total capital expenditure
Year ended 30 June
2016
2015
US$/t
US$('000)
US$('000)
US$('000)
US$('000)
1
These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to “Non-IFRS measures” on page 24 for definitions.
Operating performance
Gold production for the first half of 80,219 ounces was 13% lower than H1 2015, primarily due to a 20% lower head grade as a
result of the focus on waste movement. This was partially offset by a 5% increase in throughput and continued recovery
improvements. Gold sold for the period amounted to 80,404 ounces, in line with production. As previously guided, grade is
expected to increase quarter on quarter through the rest of the year, with approximately 55% of full year production expected to
occur in the second half of the year.
Total tonnes mined for the first half of 11.4 million tonnes were 11% lower than H1 2015 due to increased haulage distances as
the pit continued to deepen.
Copper production of 4.9 million pounds for the year to date was 11% higher than the prior year period due to increased
throughput and copper recovery rates, partly offset by lower copper grades.
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Cash costs for the first half of US$1,052 per ounce sold were 9% higher than in H1 2015 (US$965). Cash costs were primarily
impacted by the lower production base, partly offset by lower energy and fuel costs due to lower global fuel prices, lower labour
costs as a result of a reduction in headcount, lower consumables costs as a result of lower cyanide and grinding media costs and
lower general and administration costs as a result of lower warehousing and logistics expenditure.
AISC per ounce sold for the first half of US$1,124 was 3% higher than H1 2015 (US$1,089). This was mainly driven by the higher
cash costs and lower production base as discussed above, partly offset by the lower sustaining capital expenditure and lower
corporate administration expenditure.
Capital expenditure for the first half before reclamation adjustments of US$2.2 million was 59% lower than H1 2015 (US$5.5
million). Key capital expenditure for the year to date consists of investments in tailings wall raises and infrastructure of US$1.5
million and mobile equipment and component change out costs (US$0.3 million).
In the first half of the year we entered into zero cost collars in relation to the majority of our gold production from Buzwagi in 2016
and Q1 2017. In 2016, the agreements provide a guaranteed floor price of US$1,150 per ounce and provide exposure to the gold
price up to an average of US$1,290 per ounce. These agreements cover 81,000 ounces of production in H2 2016. In Q1 2017,
the agreements cover 43,000 ounces, with an average floor price of US$1,150 per ounce and a cap of US$1,421 per ounce.
Over the second half of the year we will continue to assess the future options for the mine post the expected end of mining
operations in the first half of 2017.
North Mara
Key statistics
(Unaudited)
Key operational information:
Ounces produced
Ounces sold
1
Cash cost per ounce sold
1
AISC per ounce sold
Open pit:
Tonnes mined
Ore tonnes mined
Mine grade
Underground:
Ore tonnes trammed
Mine grade
Processing information:
Ore milled
Head grade
Mill recovery
Cash cost per tonne milled
Capital Expenditure
2
- Sustaining capital
- Capitalised development
- Expansionary capital
Three months ended 30 June
2016
2015
100,016
95,540
66,532
66,470
174,737
169,840
142,146
142,005
382
707
605
968
427
720
583
893
Kt
Kt
g/t
4,120
620
2.1
3,363
733
2.6
7,234
1,395
1.8
7,055
1,607
2.7
Kt
g/t
85
13.8
55
3.9
210
11.9
63
4.4
Kt
g/t
%
705
4.8
92.3%
721
3.3
86.8%
1,436
4.1
91.4%
1,412
3.6
87.3%
52
56
50
59
7,703
19,396
372
27,471
3,075
30,546
6,142
12,612
717
19,471
(2,212)
17,259
10,081
31,051
458
41,590
6,252
47,842
9,020
23,933
929
33,882
(206)
33,676
oz
oz
US$/oz
US$/oz
1
- Non-cash reclamation asset adjustments
Total capital expenditure
Year ended 30 June
2016
2015
US$/t
US$('000)
US$('000)
US$('000)
US$('000)
US$('000)
1
These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to ‘Non-IFRS measures” on page 24 for definitions.
Includes land purchases recognised as long term prepayments
2
Operating performance
Production for the first half of 174,737 ounces was 23% higher than the prior year period as a result of higher head grades and
recovery rates. Production was driven by an increased contribution from the Gokona Underground, which delivered higher
grade ore than plan as a result of positive grade reconciliations, coupled with the processing of high grade open pit material.
Underground mined tonnes were below plan due to the installation of second egress ladder ways, which delayed the mining of
certain stopes, however the grade of 13.8 g/t was well in excess of plan. Open pit mined grade decreased as a result of ore
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being solely sourced from the lower grade Nyabirama pit following the end of mining in the Gokona open pit, which was still in
production in H1 2015.
The impact of the higher grade underground ounces combined with preferentially treating high grade open pit ounces drove
head grade of 4.1g/t, up 14% over H1 2015. Gold ounces sold for the year of 169,840 ounces were 3% lower than production
due to the timing of dore produced, but 20% higher than the prior year due to the higher production base.
Cash costs of US$427 per ounce sold were 27% lower than H1 2015 (US$583) driven by the higher production base, higher
capitalised development costs and lower fuel costs, partly offset by increased contracted services costs as a result of the
development of the Gokona Underground.
AISC per ounce sold for the first half of US$720 was 19% lower than H1 2015 (US$893) primarily due to the impact of increased
sales volumes, lower cash costs and corporate administration expenditure, partly offset by higher capitalised development costs.
Capital expenditure for the first half before reclamation adjustments of US$41.6 million was 23% higher than in H1 2015
(US$33.9 million). Key capital expenditure included capitalised stripping costs (US$22.6 million), capitalised underground
development costs (US$8.4 million), investment in mobile equipment and component change-outs (US$3.5 million) and
investment in tailings and infrastructure (US$1.3 million). In addition, US$2.8 million was spent on land acquisitions primarily
around the Nyabirama open pit. Land acquisition costs are included in capital expenditure above as they are included in AISC
but are treated as long term prepayments in the balance sheet.
Due to the positive grade reconciliations in the Gokona Underground, performance at North Mara was ahead of plan for the first
half of the year. The mining schedule for the year remains on track, and will see an increased proportion of underground ore
sourced through the western portion of the mine which is expected to be lower grade than the current mining areas in the east
mine. As a result, we expect the quarterly production levels in the second half to be below Q2 2016, at a higher AISC due to the
lower production and introduction of cemented aggregate fill into the underground mining process.
Over the second half of the year, we will continue to assess the optimal longer term production potential of the Gokona
Underground. As part of this review we are conducting diamond drilling into high potential areas where little drilling was
previously possible from the surface to identify potential resource additions. A deeper drilling programme will also be undertaken
in 2017 targeted at both increasing the existing Resources and converting Resources to Reserves. A drilling programme is
underway to extend the existing Resource beneath the Nyabirama open pit in order to ascertain the potential for underground
mining once the open pit activity concludes.
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Exploration Review
Tanzania
Gokona Underground
The successful transition to underground mining at Gokona has led us to review the reserve and resource drilling requirements
moving forward as we look to optimise the future production profile. Historic exploration drilling at Gokona shows that gold
mineralisation extends to at least 900 metres below surface. The future drilling will focus on extending the life of mine by
identifying new reserves and resources in “gap” areas within the current underground resource as well as upgrading existing
resources into mineable reserves.
In H2 2016, we expect to drill 26 holes for a total of 4,000m from newly established drill platforms in the Gokona underground.
This infill drilling programme targets the gaps in the reserve model below the active mining area but above the current reserve
depth (990m RL). The results of this programme will feed into the annual reserve and resource statement in early 2017 and will
provide further information before we commence further drilling in 2017 beneath the 990m RL designed to begin to upgrade
approximately 930,000 ounces of existing resource (measured, indicated and inferred).
Nyabirama Deeps
During Q2 2016 we started a drilling programme to test for depth extensions of gold mineralisation beneath the Nyabirama pit.
The programme will consist of 7 holes for a total of 5,000 metres and is targeting the underground potential of high grade
mineralisation between 300m and 600m vertical depth beyond existing resources.
To date three holes have been completed for a total of 1,920 metres with the fourth hole currently in progress. The initial drilling
has intersected the predicted structures and alteration returning mixed results in terms grade and thickness.
The results confirm the presence of a mineralised system to a vertical depth of 500m; however we need to complete the
programme of step-out drilling to confirm the structural and mineralisation continuity. A structural study aimed at improving our
understanding of the geometry of the high grade lodes at depth and the continuity of mineralisation is scheduled to be
completed in Q3 and will be based on new information from the deep drilling programme.
Bulyanhulu
Underground exploration and resource/reserve definition drilling at Bulyanhulu has focused on the Reef 2 series of veins,
targeting the Western Extensions and Central Zone. Definition drilling on the Central Zone is being completed on Reef 2m
using a 50m x 50m staggered grid pattern and is showing good continuity of widths and grades comparable to the original
broader spaced surface exploration holes. This is increasing the confidence in the reserve model for this area, and may result
in the zone being brought forward in the mine plan. We are now stepping out the definition drilling in order to expand the
reserve in this area further.
The initial exploration drilling into the Western Extensions is being completed on a 200m x 200m spaced grid pattern and is
targeting the plunge and strike extensions of the Central Zone approximately 1-2km west of current resources. Results
returned to date show that Reef 2i has the better grades and continuity although results have been mixed. We have therefore
commenced infill drilling around some of the better intercepts to investigate the continuity of widths and grades on both Reef 2i
and 2m. In total 21,961 metres of underground drilling have been completed on the extension drilling, and the current phases
of exploration drilling are expected to continue until Q4 2016 before we review the success of the programme and future
programmes.
Nyanzaga
In September 2015, Acacia entered into an earn-in joint venture with OreCorp Limited (ASX:ORR) to progress the Nyanzaga
Project, whereby OreCorp took over management of the project for a 3 year period. This structure allows the project to be
progressed whilst giving Acacia the optionality to maintain a 75% stake in the project once it gets to a development decision. In
March 2016, OreCorp announced an updated JORC compliant resource of 2.78Moz at 4.1g/t using a cut-off grade of 1.5g/t
following re-interpretation of existing data focusing on high grade zones and unconstrained by a pit shell. This has led to the
project being progressed into a scoping study to assess the technical and economic viability of open pit and/or underground
development scenarios. The scoping study is expected to be completed by the end of 2016.
Kenya
West Kenya Project
During H1 2016 we continued a reverse circulation (RC) and diamond core (DD) drilling programme designed to follow up on
the positive results from the initial drilling programme on the Liranda Corridor within the Kakamega Dome gold camp. The
planned programme consists of approximately 38,000 - 40,000 metres of drilling to test the structural orientation and continuity
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of high grade gold mineralisation encountered on the Acacia and Bushiangala Prospects. The programme, if successful, aims
to allow for the calculation of an initial inferred resource by early 2017.
Year to date, 18 diamond holes for 12,253 metres and 32 RC holes for 4,359 metres have been completed. Ongoing geological
and structural work suggests that the controls of the high grade zones are oblique to the main east west shear fabric and may
also dip in the direction of drilling. As a result of these new structural understandings, the drilling programme was revised and
drill hole orientations were changed to better test the new orientations. Following this, holes were drilled at 40m and 80m
spacing around better mineralised intersections to confirm the 3D geometry.
At the Acacia Prospect drilling intersected mineralised zones consisting of narrow quartz veins, sulphides (pyrite +/- pyrrhotite
+/- sphalerite +/- chalcopyrite +/- molybdenite) and alteration zones (sericite +/- green mica +/- carbonate) associated with two
interpreted northeast striking zones, AZ1 and AZ2. At the Bushiangala Prospect the closer spaced drilling intersected high
grade zones of gold mineralisation, but further drilling is required to definitively tie down the controls on the high grade
structures, as it appears there may be multiple mineralised structures. Drilling is ongoing with three diamond core rigs currently
operating and a further 2-3 rigs planned to be utilised during Q3 and at the start of Q4 2016 in order to complete the next stage
of drilling.
Better results from the Acacia and Bushiangala prospects included:







LCD0073 (Acacia) 6m @ 3.41 g/t Au from 273m incl. 1m @ 7.46 g/t Au.
LCD0074 (Acacia) 1.4m @ 5.40 g/t Au from 327m.
LCD0076 (Acacia) 5.8m @ 24.9 g/t Au from 334m.
LCD0077 (Acacia) 2.5m @ 25.0 g/t Au from 412m.
LCD0079 (Acacia) 1.5m @ 13.3 g/t Au from 31m, 3m @ 125 g/t Au from 37m, 4m @ 55.5 g/t Au from 349m.
LCD0075 (Bushiangala) 2.8m @ 11.1 g/t Au from 253m, 12.8m @ 15.3 g/t Au from 274m.
LCD0078 (Bushiangala) 4.3m @ 6.48 g/t Au from 105m, 2.3 @ 17.3 g/t Au from 226m.
Additionally, Acacia has earned an 85% interest in the Advance Joint Venture, which covers three small Special Licences that
lie within the boundaries of the larger Lonmin Joint Venture area. Advance Gold elected not to contribute to current exploration
programmes and is subsequently diluting below 15% during the current programme as Acacia completes exploration
programmes on the licences.
Burkina Faso
Acacia continues to identify significant gold potential in the Houndé Belt through on-going soil sampling programmes and firstpass reconnaissance drilling programmes, with surface gold anomalies up to 5g/t identified on the Central Houndé JV, early
positive results from Aircore drilling on the Pinarello project, and continued high grade intercepts along the Tankoro Trend on
the South Houndé JV project. Furthermore, Acacia has continued to consolidate its land holding in the prospective Houndé Belt
with the signing of a fourth joint venture, the “Frontier JV” with Metalor SA, a Burkina Faso registered local company. Acacia
now holds approximately 2,700 square kilometres of licences and applications under joint ventures.
Frontier Joint Venture
In June 2016, Acacia entered into an agreement with a local Burkinabe company, Metalor SA, the “Frontier Joint Venture”,
which includes two licences immediately south of, and contiguous to, the Pinarello Project where soil sampling has identified
multiple kilometre scale gold-in-soil anomalies. This JV added a further 500 square kilometres to Acacia’s land package on the
Houndé Belt, increasing the overall project area to approximately 2,700 square kilometres.
The JV allows Acacia to earn 100% of the project through certain staged option payments totaling US$300,000 over 30
months. Metalor will hold a 1% NSR on production from the project should Acacia identify and exploit an economic gold
deposit, and Acacia has the right to acquire the NSR from Metalor for US$1 million at any future point in time.
Historic reconnaissance soil sampling has already identified gold anomalism on the Frontier JV properties associated with
interpreted regional shear zones along the contacts between granite intrusions and volcano-sedimentary lithologies. We expect
to commence regolith mapping and more detailed soil sampling programmes in Q4 2016 following the wet season in order to
fully understand the regional potential of this project area. In the meantime, detailed aeromagnetic and radiometric surveys will
be flown across these properties during July 2016 as part of a larger geophysical programme.
Pinarello Project
Following an extensive regional programme of soil sampling across the Pinarello project, the current work plan for 2016
consists of approximately 21,000 metres of Aircore drilling across several high priority target corridors, each extending over
multiple kilometres. The initial Aircore holes have targeted the southern extensions of the Tankoro Structural Corridor within the
northern part of the Pinarello project. A number of encouraging intersections have been returned from holes testing both IP
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geophysical and soil/auger geochemical anomalies. To date 218 holes have been drilled for 11,666 metres, with assay results
received for 165 holes and the remainder of assays pending. A review of the assay results shows that 65 of the 165 holes
(39%) have returned anomalous gold intersections (>1m @ 0.1g/t Au).
Better intersections received and verified include:

PIAC00045: 7m @ 0.36g/t Au from surface and 2m @ 1.58g/t Au from 21m,

PIAC00055: 1m @ 1.56g/t Au from 60m,

PIAC00056: 8m @ 1.66g/t Au from 55m,

PIAC00057: 25m @ 0.44g/t Au from 38m and 2m @ 1.08g/t Au from 72m,

PIAC00060: 2m @ 0.84g/t Au from 57m,

PIAC00061: 8m @ 0.59g/t Au from 48m and 12m @ 0.80g/t Au from 61m,

PIAC00109: 1m @ 1.59g/t Au from 28m,

PIAC00113: 1m @ 1.00g/t Au from 70m,

PIAC00126: 13m @ 0.89g/t Au from 64m,

PIAC00131: 4m @ 0.69g/t Au from 50m,

PIAC00140: 6m @ 0.47g/t Au from 31m, and

PIAC00141: 9m @ 0.85g/t Au from 28m.
This initial phase of reconnaissance Aircore drill programme is scheduled for completion during July, with compilation of results
and planning for a second phase of reconnaissance drilling to be completed during the Q3 2016 wet season. The second
phase of drilling is scheduled for Q4 2016 and will consist of further Aircore drilling and initial RC drilling at several prospects.
Additionally, infill soil sampling of large areas of gold anomalism on the eastern areas of the Pinarello project continues to
better delineate gold trends, and these target areas will form part of future phases of reconnaissance Aircore drilling.
A detailed, 100 metre line-spaced, aeromagnetic and radiometric survey is expected to commence during July. This survey will
extend onto the Frontier JV properties and will be used to assist in the regional structural and geological interpretation in
combination with surface geochemical surveys in order to better target future reconnaissance drill programmes.
Central Houndé JV and Konkolikan Projects
The Central Houndé JV properties and the Konkolikan JV properties are contiguous with each other and cover part of a large
north-south shear zone, the Ouango-Fitiri Shear Zone (OFSZ), that extends from Ivory Coast in the south to the Houndé
township in the north, more than 200km.
Extensive surface gold anomalies up to 5g/t have been identified across the projects from soil sampling, including the 10km
long, northeast-trending, Legue-Bongui “corridor” in the southeast of the Central Houndé JV project. Infill soil sampling has
been completed across the Legue-Bongui corridor, and we will complete the infill soil sampling of the remainder of the targets
including regional anomalies on the Konkolikan project in Q4 2016.
The current work programme includes target delineation reverse circulation (RC) drilling of approximately 70 holes for 10,000
metres across several targets within the Legue-Bongui “corridor” and approximately 12-15 diamond core holes for 3,000
metres across four priority geochemical and structural targets around the Ouere Ouest and Legue prospects, the site of current
artisanal activity. Drilling of RC and diamond core commenced in late June 2016 with one diamond core hole and five RC holes
completed to date. Assay results from all holes were pending at the end of the quarter.
In addition to the first phase of drilling, we are conducting a detailed aeromagnetic and radiometric survey across the Central
Houndé and Konkolikan properties with the aim of completing the survey before the end of July 2016.
South Houndé JV Project
We continue to actively explore the South Houndé JV properties with Sarama Resources. Exploration to date has defined a
resource of 2.1Moz @ 1.5g/t Au (0.5g/t cut-off) that includes a higher grade resource of 1.5Moz @ 2.1g/t Au (at a 1g/t cut-off).
The aim of 2016 drill programmes is to further expand the Tankoro global resource through the addition of higher grade
resource ounces and new discoveries across the project.
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Results from RC and diamond core drilling on the MM and MC zones continue to highlight significant potential higher grade
mineralisation at depth and related to cross cutting structures. Drilling in 2016 consists of 1,826 auger holes for 11,000 metres,
243 aircore holes for 11,034 metres, 80 RC holes for 7,421 metres, and 11 diamond core holes for 1,963 metres. Better results
reported to date (previously released by Sarama Resources – dated 16 May 2016; www.saramaresources.com) from the
Tankoro Corridor prospects include:
MC

15m @ 7.44 g/t Au from 47m

14m @ 4.12g/t Au from 41m

6m @ 3.91g/t Au from 85m
Phantom East

8m @ 4.45g/t Au from 20m

12m @ 5.78g/t Au from 12m
Kenobi

23m @ 1.73 g/t Au from 40m

16m @ 1.19 g/t Au from 38m
Acacia will earn 50% in the South Houndé JV at the end of 2016 on completion of Phase 1 expenditure commitments, and will
have the option to take over management of Phase 2 of the joint venture from January 1, 2017. Assuming Acacia moves into
Phase 2 of the joint venture agreement, Acacia will have the option to earn a further 20% in the project by completing further
exploration expenditure of US$7.0 million before 31 December 2018, and an additional 5% interest in the project, to 75%, by
taking a resource to completion of a pre-feasibility study.
The current drill programme going forward consists of RC and diamond core drilling with the focus of drilling on:

delineation of cross structures on MM and MC trends that are interpreted to control zones of higher-grade
mineralisation

pole-dipole IP geophysical targets at depth interpreted to represent sulphide accumulations associated with gold
mineralisation within porphyries and sediments

deeper follow-up of previously untested gold mineralisation from shallow Aircore, RC and diamond core drilling
anomalous intercepts
Mali
Bane-Tintinba Properties
In June 2015, Acacia commenced exploration in Mali when it acquired interests in the Tintinba project. The project comprises
three exploration permits (Bane, Bane Est and Tintinba) covering over 150 square kilometres along the world class SenegalMali Shear Zone.
Initial soil sampling programmes have defined eight large multi-kilometre scale gold anomalies across the three permits. These
gold anomalies are interpreted to be associated with second-order, northwest and northeast oriented, splay structures within
the highly prospective Senegal-Mali Shear Zone (a several kilometre wide structural domain). Acacia geologists have already
mapped prospective geology, structure, alteration and veining, and a number of the targets have associated artisanal workings.
A programme of RC drilling consisting of approximately 70 holes for 8,500 metres commenced in late May. This programme is
designed to test several of the priority gold-in-soil anomalies. To date, 29 holes have been completed for 3,209 metres with
assay results currently pending for 21 holes. Results received to date are encouraging for first pass reconnaissance holes, with
highly anomalous results including 19m @ 0.55 g/t Au from 74m and 17m @ 0.71 g/t Au from 13m. The onset of the wet
season in Mali has resulted in the likely early suspension of the RC drilling programme, with the remainder of the programme
now scheduled for Q4 2016.
LSE:ACA
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16
Financial Review
The continued cost discipline during the period combined with an increased gold price in Q2 2016 was reflected in strong cash
generation, with net cash increasing by US$66 million over the first six months of the year. At the same time, reported earnings
were impacted by an increase in tax provisions related to court rulings regarding prior year tax assessments. This is reflected in
the Acacia Group’s financial results for the six months ended 30 June 2016:








Revenue of US$504.9 million was US$58.2 million higher than H1 2015 driven by the 13% higher sales volumes
(45,493 ounces).
Cash costs decreased to US$640 per ounce sold from US$780 in H1 2015, driven by the higher production
base, lower labour costs, lower energy and fuel costs and higher capitalisation of development costs, partly
offset by higher sales related costs.
AISC was 17% lower than H1 2015 at US$941 per ounce sold (H1 2015: US$1,133 per ounce sold) as the
higher production base, lower cash costs, lower corporate administration expenditure and lower sustaining
capital expenditure were partly offset by higher share-based payment expenditure.
EBITDA increased by 91% to US$184.9 million, mainly driven by the higher sales volume, lower corporate
administration costs, and lower other charges costs.
Tax expense of US$107.7 million compared to the prior year period expense of US$10.2 million was driven by
provisions for uncertain tax positions raised in Q1 2016 of approximately US$70 million in response to an
adverse court ruling relating to Bulyanhulu historical tax assessments, in combination with tax on higher profit
before tax.
As a result of the above, we incurred a loss of US$6.1 million, compared to a profit of US$14.8 million in H1
2015.
Adjusted net earnings of US$58.8 million were 221% higher than H1 2015. Adjusted earnings per share, mainly
excluding prior year tax provisions and restructuring costs, amounted to US14.3 cents, up from US4.5 cents in
H1 2015.
Operational cash flow of US$157.1 million was 47% higher than H1 2015, primarily as a result of higher gold
sales volumes driving higher revenue, partly offset by unfavourable working capital outflows due to a reduction in
accounts payable as a result of timing of payments and an increase in accounts receivable, and a US$10 million
prepayment of corporate tax as agreed with the Tanzanian Government and reported in Q1 2016.
The following review provides a detailed analysis of our consolidated results for the six months ended 30 June 2016 and the
main factors affecting financial performance. It should be read in conjunction with the unaudited consolidated financial
information and accompanying notes on pages 35 to 48, which have been prepared in accordance with International Financial
Reporting Standards as adopted for use in the European Union (“IFRS”).
Revenue
Revenue for H1 2016 of US$504.9 million was US$58.2 million higher than H1 2015 due to a 13% increase in gold sales
volumes (45,493 ounces) combined with a 1% increase in the average realised gold price from US$1,200 per ounce sold in H1
2015 to US$1,209 in H1 2016. The increase in sales ounces was due to the higher production base.
Included in total revenue is co-product revenue of US$20.3 million for H1 2016, in line with the prior year period (US$20.2
million). The H1 2016 average realised copper price of US$2.13 per pound compared unfavourably to that of H1 2015 (US$2.61
per pound), and was driven by the lower market price for copper. This was offset by an 18% increase in copper sales volumes
mainly at Bulyanhulu.
Cost of sales
Cost of sales was US$355.4 million for H1 2016, representing a decrease of 2% on the prior year period (US$363.6 million). The
key aspects impacting the cost of sales for the year were an 11% reduction in direct mining costs, partly offset by higher
depreciation and amortisation costs as a result of the higher production base.
LSE:ACA
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17
The table below provides a breakdown of cost of sales:
(US$'000)
(Unaudited)
Cost of Sales
Direct mining costs
Third party smelting and refining fees
Royalty expense
Realised losses on economic hedges
Depreciation and amortisation*
Total
Three months ended 30 June
2016
2015
118,535
6,782
12,517
2,539
43,166
183,539
137,258
5,279
10,061
2,571
33,472
188,641
Six months ended 30 June
2016
2015
234,436
13,639
22,534
6,454
78,376
355,439
263,679
9,488
19,622
4,679
66,114
363,582
*Depreciation and amortisation includes the depreciation component of the cost of inventory sold.
A detailed breakdown of direct mining expenses is shown in the table below:
(US$'000)
(Unaudited)
Direct mining costs
Labour
Energy and fuel
Consumables
Maintenance
Contracted services
General administration costs
Gross direct mining costs
Capitalised mining costs
Total direct mining costs
Three months ended 30 June
2016
2015
21,728
21,387
26,482
27,494
33,829
22,362
153,282
(34,747)
118,535
27,620
26,697
27,434
28,852
31,383
23,010
164,996
(27,738)
137,258
Six months ended 30 June
2016
2015
43,789
41,875
52,939
53,735
62,383
43,085
297,806
(63,370)
234,436
56,423
52,801
54,689
56,127
59,020
42,974
322,034
(58,355)
263,679
Gross direct mining costs of US$298 million for H1 2016 were 8% lower than H1 2015 (US$322 million). Individual cost
components comprised:






A 22% reduction in labour costs, mainly as a result of a 33% reduction in international employees and a 25% reduction
in national employees across the sites, driven by localisation efforts and restructuring and the savings associated with
the local labour costs given the devaluation of the Tanzanian shilling.
A 21% reduction in energy and fuel expenses across all sites due to lower global fuel prices, and the impact of a
favourable exchange rate on locally purchased power.
A 4% decrease in maintenance costs mainly at Bulyanhulu driven by reduced maintenance activity and changes to the
maintenance schedules benefitting from planned maintenance activities last year.
A 3% decrease in consumables costs mainly at Buzwagi due to lower reagents and chemicals costs as a result of lower
cyanide usage, lower grinding media costs driven by the use of recycled grinding balls and lower explosives costs
driven by increased spacing whilst blasting waste material, and the overall impact of negotiating more favourable prices
on key consumables.
A 6% increase in contracted services mainly as a result of increased contracted development at North Mara as a result
of the ramp up in underground production combined with increased MARC charges at Buzwagi.
General administration costs were in line with the prior year.
Capitalised direct mining costs, consisting of capitalised development costs and investment in inventory is made up as follows:
(US$'000)
(Unaudited)
Capitalised direct mining costs
Capitalised development costs
Investment in inventory
Total capitalised direct mining costs
Three months ended 30 June
2016
2015
(30,210)
(4,537)
(34,747)
LSE:ACA
(24,916)
(2,822)
(27,738)
Six months ended 30 June
2016
2015
(51,369)
(12,001)
(63,370)
(42,911)
(15,444)
(58,355)
www.acaciamining.com
18
Capitalised development costs were 20% higher than H1 2015, driven by increased capitalised waste stripping costs related to
the Nyabirama pit at North Mara, partly offset by lower underground development costs at Bulyanhulu. The investment in
inventory was US$12.0 million, 22% lower than in H1 2015 due to the impact of lower average inventory valuations as a result
of lower direct mining costs in combination with an increased drawdown of ore stock.
Central costs
Corporate administration expenses totalled US$9.8 million for H1 2016, a 47% decrease on 2015 (US$18.3 million) driven
mainly by the impact of the corporate office restructuring and cost saving initiatives mainly around lower personnel, lower
consulting fees and professional services and lower general administration costs. The increase in the share-based payment
expense was a result of the stronger share price performance compared to H1 2015, specifically when compared to our peers
and the global mining index, impacting on the valuation of share-based payment liabilities to employees. Over the first half of the
year the Acacia share price increased by more than 150%.
(US$'000)
(Unaudited)
Corporate administration
Share-based payments
Total central costs
Three months ended 30 June
2016
2015
(4,469)
(15,697)
(20,166)
(8,900)
(6,772)
(15,672)
Six months ended 30 June
2016
2015
(9,771)
(19,635)
(29,406)
(18,290)
(8,290)
(26,580)
Exploration and evaluation costs
Exploration and evaluation costs of US$11.2 million were incurred in H1 2016, 28% higher than the US$8.7 million spent in H1
2015. The key focus areas for the six months ended 30 June 2016 were exploration programmes at the West Kenya Joint
Venture projects amounting to US$4.3 million and exploration programmes in Burkina Faso amounting to US$4.8 million.
Corporate social responsibility expenses
Corporate social responsibility costs incurred for H1 2016 amounted to US$4.6 million compared to the prior year period of
US$5.3 million. The main projects for H1 2016 related to Village Benefit Implementation Agreements (“VBIAs”) at North Mara
and contributions to general community projects funded from the Acacia Maendeleo Fund amounting to US$2.6 million.
Other income
Other income in H1 2016 amounted to US$2.2 million, compared to an expense of US$11.8 million in H1 2015. The main
contributors were: discounting of indirect tax credit of US$6.5 million as a result of increased profitability which positively
impacts the recoverability of the MOS indirect tax receivable and Acacia’s ongoing programme of zero cost collar contracts to
mitigate the negative impact of copper, rand and fuel market volatility, in combination with zero cost collars relating to Buzwagi
gold production, which resulted in a combined mark-to-market revaluation gain of US$1.4 million (as these arrangements do
not qualify for hedge accounting these unrealised gains are recorded through profit and loss). The income was partly offset by
(i) retrenchment costs of US$2.1 million, (ii) disallowed indirect taxes of US$0.9 million, and (iii) legal costs of US$0.7 million
mainly relating to prior year legal fees.
Finance expense and income
Finance expense of US$5.4 million for H1 2016 was 17% lower than H1 2015 (US$6.5 million). The key components were
borrowing costs relating to the Bulyanhulu tailings retreatment project (US$1.9 million) which are lower than the prior year due to
a lower outstanding facility, accretion expenses relating to the discounting of the environmental reclamation liability (US$1.2
million) and US$1.1 million relating to the servicing of the US$150 million undrawn revolving credit facility. Other costs include
bank charges and interest on finance leases.
Finance income relates predominantly to interest charged on non-current receivables and interest received on money market
funds. Refer to note 7 of the condensed financial information for details.
Taxation matters
The taxation charge was US$107.7 million for H1 2016, compared to a charge of US$10.2 million in H1 2015. The tax charge
was made up of current income tax for North Mara driven by year to date profitability, US$70 million provisions for uncertain tax
positions raised for Bulyanhulu (US$35.0 million), North Mara (US$30.4 million) and Tulawaka (US$4.4 million) as a result of
adverse tax rulings in Q1 2016, and deferred tax charges which reflects mainly the impact of the profitability on a year to date
LSE:ACA
www.acaciamining.com
19
basis and the tax impact relating to the additional tax provisions raised. The effective tax rate in H1 2016 amounted to 106%
compared to 41% in H1 2015. On an adjusted earnings basis, the effective tax rate in H1 2016 amounts to 37%.
Net loss and loss per share
As a result of the factors discussed above, the net loss for H1 2016 was US$6.1 million, against the prior year period profit of
US$14.8 million. Higher gold sales volumes, lower cost of sales, corporate administration costs, other charges and finance costs,
were offset by higher shared based payment costs and a higher tax expense.
The loss per share for H1 2016 amounted to US1.5 cents, a decrease of US5.1 cents from the prior year period earnings per
share of US3.6 cents. The decrease was driven by the lower net profit, with no change in the underlying issued shares.
Adjusted net earnings
Adjusted net earnings of US$58.8 million compared to US$18.3 million in H1 2015. The factors impacting the net earnings in the
year as described above has been adjusted for the impact of items such as prior year tax provisions and restructuring costs, as
well as legal settlements recognised in the prior year. Refer to page 26 for a reconciliation between net loss and adjusted net
earnings.
Financial position
Acacia had cash and cash equivalents on hand of US$284.4 million as at 30 June 2016 (US$233.3 million as at 31 December
2015). The Group’s cash and cash equivalents are with counterparties whom the Group considers to have an appropriate credit
rating. Location of credit risk is determined by physical location of the bank branch or counterparty. Investments are held mainly
in United States dollars, with cash and cash equivalents in other foreign currencies maintained for operational requirements.
During 2013, a US$142 million facility (“Facility”) was put in place to fund the bulk of the costs of the construction of the
Bulyanhulu tailings retreatment project (“Project”). The Facility is collateralised by the Project, and has a term of seven years with
a spread over Libor of 250 basis points. The seven year Facility is repayable in equal instalments (bi-annual) over the term of the
Facility, after a two year repayment holiday period. The interest rate has been fixed at 3.6% through the use of an interest rate
swap. The full facility of US$142 million was drawn in 2013 and the second repayment of US$14.2 million was made in H1 2016.
At 30 June 2016, the outstanding capital balance is US$113.6 million (31 December 2015: US$127.8 million).
The above complements the existing undrawn revolving credit facility of US$150 million, which runs until November 2018.
The net book value of property, plant and equipment increased from US$1.39 billion as at 31 December 2015 to US$1.41 billion
as at 30 June 2016. The main capital expenditure drivers have been explained in the cash flow used in the investing activities
section below, and have been offset by depreciation charges of US$79.4 million. Refer to note 11 to the condensed financial
information for further details.
Total indirect tax receivables, net of the impact of discounting applied to the non-current portion, decreased from US$110.2
million as at 31 December 2015 to US$109.1 million as at 30 June 2016. The decrease was mainly due to refunds received of
US$37.4 million and the application of the first instalment of corporate tax prepayments of US$10.0 million against indirect tax
receivables, which was offset by net indirect taxes paid of US$46.2 million and a reduction in the discounting provision for MOS
indirect tax receivables of US$6.5 million.
The net deferred tax position increased from a liability of US$84.0 million as at 31 December 2015 to a liability of US$159.3
million as at 30 June 2016. This was mainly as a result of the tax provisions raised in Q1 2016 as discussed above which utilised
some of the carry forward losses.
Net assets decreased from US$1.79 billion as at 31 December 2015 to US$1.77 billion as at 30 June 2016. The decrease
reflects the current year loss of US$6.1 million and the payment of the final 2015 dividend of US$11.5 million.
Cash flow generation and capital management
Cash flow – continuing and discontinued operations
(US$000)
Three months ended 30 June
(Unaudited)
2016
2015
104,864
59,964
Cash generated from operating activities
(46,347)
(46,533)
Cash used in investing activities
(11,490)
(10,777)
Cash used in financing activities
47,027
2,654
Increase/ (decrease) in cash
(99)
(1,291)
Foreign exchange difference on cash
237,429
285,569
Opening cash balance
Closing cash balance
284,357
286,932
LSE:ACA
Six months ended 30 June
2016
2015
157,096
107,093
(80,272)
(99,542)
(25,690)
(12,328)
51,134
(4,777)
(45)
(2,141)
233,268
293,850
284,357
286,932
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20
Cash flow from operating activities was US$157.1 million for H1 2016, an increase of US$50.0 million from H1 2015
(US$107.1 million). The increase relates to a higher operating profit due to higher gold sales volumes and lower operating
costs, partly offset by unfavourable working capital outflows of US$6.3 million compared to inflows of US$15.3 million in 2015.
The working capital outflow relates to a decrease in accounts payable due to the timing of payments and an increase in
accounts receivable due to the timing of settlement of concentrate receivables. Also included is the impact of the first
instalment of prepaid corporate tax of US$10.0 million as agreed with the Tanzanian Government and reported in Q1 2016,
which have been offset against short term indirect tax receivables due for refund.
Cash flow used in investing activities was US$80.3 million for H1 2016, a decrease of 19% when compared to H1 2015
(US$99.5 million), driven by lower sustaining capital expenditure at Bulyanhulu and Buzwagi.
A breakdown of total capital and other investing capital activities for H1 2016 is provided below:
(US$’000)
(Unaudited)
Six months ended 30 June
2016
2015
Sustaining capital
Expansionary capital
Capitalised development
Total cash capital
Land purchases
1
Non-current asset movement
Cash used in investing activities
Capital expenditure reconciliation:
Total cash capital
Land purchases
Non-cash sustaining capital: Movement in capital accruals
Capital expenditure
Land purchases
Non-cash rehabilitation asset adjustment
Total capital expenditure per segment note
1
(21,906)
(1,211)
(59,489)
(82,606)
(2,824)
5,158
(80,272)
(47,133)
(20)
(58,316)
(105,469)
(5,983)
11,910
(99,542)
82,606
2,824
(258)
85,172
(2,824)
105,469
5,983
(22,412)
89,040
(5,983)
19,196
101,544
(697)
82,360
Non-current asset movements relates to the movement in Tanzania government receivables and other long term assets.
Sustaining capital
Sustaining capital expenditure includes investments in tailings and infrastructure (US$9.6 million), investment in mobile
equipment and component change-outs (US$5.0 million), investment in the Bulyanhulu winder upgrade (US$1.7 million) and
other sustaining capital expenditure across sites of US$5.6 million. During the year, capital accruals from December 2015 of
US$0.3 million were paid.
Expansionary capital
Expansionary capital expenditure consisted mainly of capitalised drilling at North Mara (US$0.5 million), combined with
expansion drilling at Bulyanhulu (US$0.9 million).
Capitalised development
Capitalised development includes Bulyanhulu capitalised underground development (US$28.4 million) and capitalised stripping
(US$22.6 million) and underground development (US$8.4 million) at North Mara.
Non-cash capital
Non-cash capital was US$20.4 million and consisted mainly of reclamation asset adjustments (US$19.2 million) and a decrease
in capital accruals (US$0.3 million). The reclamation adjustments were driven by changes in US risk free rates driving lower
discount rates.
Other investing capital
During H1 2016 North Mara incurred land purchases totalling US$2.8 million. This was offset by the amortisation of land
prepayment balances.
Cash flow used in financing activities for H1 2016 was an outflow of US$25.7 million, an increase of US$13.4 million on an
outflow of US$12.3 million in H1 2015. The outflow relates to payment of the final 2015 dividend of US$11.5 million and the
payment of the second capital instalment of the borrowings related to the Bulyanhulu tailings retreatment project of US$14.2
million.
LSE:ACA
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21
Dividend
The final 2015 dividend of US2.8 cents per share was paid to shareholders on 27 May 2016. The Board of Directors have
recommended an interim dividend for 2016 of US2.0 cents per share, payable to shareholders in September 2016.
LSE:ACA
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22
Significant judgements in applying accounting policies and key sources of estimation uncertainty
Many of the amounts included in the condensed consolidated financial information require management to make judgements
and/or estimates. These judgements and estimates are continuously evaluated and are based on management’s experience and
best knowledge of the relevant facts and circumstances, but actual results may differ from the amounts included in the
condensed consolidated financial information included in this release. Information about such judgements and estimation is
included in the accounting policies and/or notes to the consolidated financial statements, and the key areas are summarised
below.
Areas of judgement and key sources of estimation uncertainty that have the most significant effect on the amounts recognised in
the condensed consolidated financial statements include:















Estimates of the quantities of proven and probable gold and copper reserves;
Estimates included within the life-of-mine planning such as the timing and viability of processing of long term stockpiles
The capitalisation of production stripping costs;
The capitalisation of exploration and evaluation expenditures;
Review of goodwill, tangible and intangible assets’ carrying value, the determination of whether a trigger for an impairment
review exist, whether these assets are impaired and the measurement of impairment charges or reversals, and also
includes the judgement of reversal of any previously recorded impairment charges;
The estimated fair values of cash generating units for impairment tests, including estimates of future costs to produce
proven and probable reserves, future commodity prices, foreign exchange rates and discount rates;
The estimated useful lives of tangible and long-lived assets and the measurement of depreciation expense;
Property, plant and equipment held under finance leases;
Recognition of a provision for environmental rehabilitation and the estimation of the rehabilitation costs and timing of
expenditure;
Whether to recognise a liability for loss contingencies and the amount of any such provision;
Whether to recognise a provision for accounts receivable, and in particular the indirect tax receivables from the Tanzanian
Government, a provision for obsolescence on consumables inventory and the impact of discounting the non-current element
of the indirect tax receivable;
Recognition of deferred income tax assets, amounts recorded for uncertain tax positions, the measurement of income tax
expense and indirect taxes;
Determination of the cost incurred in the productive process of ore stockpiles, gold in process, gold doré/bullion and
concentrate, as well as the associated net realisable value and the split between the long term and short term portions;
Determination of fair value of derivative instruments; and
Determination of fair value of share options and cash-settled share-based payments.
LSE:ACA
www.acaciamining.com
23
Non-IFRS Measures
Acacia has identified certain measures in this report that are not measures defined under IFRS. Non-IFRS financial measures
disclosed by management are provided as additional information to investors in order to provide them with an alternative method
for assessing Acacia’s financial condition and operating results. These measures are not in accordance with, or a substitute for,
IFRS, and may be different from or inconsistent with non-IFRS financial measures used by other companies. These measures
are explained further below.
Average realised gold price per ounce sold is a non-IFRS financial measure which excludes from gold revenue:
- Unrealised mark-to-market gains and losses on provisional pricing from copper and gold sales contracts; and
- Export duties.
Average realised gold price per ounce sold is calculated by taking the above calculated revenue and dividing by ounces sold.
Cash cost per ounce sold is a non-IFRS financial measure. Cash costs include all costs absorbed into inventory, as well as
royalties, and production taxes, and exclude capitalised production stripping costs, inventory purchase accounting adjustments,
unrealised gains/losses from non-hedge currency and commodity contracts, depreciation and amortisation and corporate social
responsibility charges. Cash cost is calculated net of co-product revenue. Cash cost per ounce sold is calculated by dividing
the aggregate of these costs by total ounces sold.
The presentation of these statistics in this manner allows Acacia to monitor and manage those factors that impact production
costs on a monthly basis. Cash costs and cash cost per ounce sold are calculated on a consistent basis for the periods
presented.
The table below provides a reconciliation between cost of sales and total cash cost to calculate the cash cost per ounce sold.
(US$'000)
Three months ended 30 June
2016
2015
183,539
188,641
(43,166)
(33,472)
(11,309)
(12,175)
129,064
142,994
(Unaudited)
Total cost of sales
Deduct: depreciation and amortisation*
Deduct: co-product revenue
Total cash cost
216,782
595
Total ounces sold
Cash cost per ounce
Six months ended 30 June
2016
2015
355,439
363,582
(78,376)
(66,114)
(20,333)
(20,232)
256,730
277,236
184,055
777
400,963
640
355,470
780
* Depreciation and amortisation includes the depreciation component of the cost of inventory sold
All-in sustaining cost (AISC) is a non-IFRS financial measure. The measure is in accordance with the World Gold Council’s
guidance issued in June 2013. It is calculated by taking cash cost per ounce sold and adding corporate administration costs,
share-based payments, reclamation and remediation costs for operating mines, corporate social responsibility expenses, mine
exploration and study costs, realised gains and/or losses on operating hedges, capitalised stripping and underground
development costs and sustaining capital expenditure. This is then divided by the total ounces sold. A reconciliation between
cash cost per ounce sold and AISC for the key business segments is presented below:
(Unaudited)
(US$/oz sold)
Cash cost per ounce sold
Corporate administration
Share-based payments
Rehabilitation
Mine exploration
CSR expenses
Capitalised development
Sustaining capital
Total AISC
Three months ended 30 June 2016
Three months ended 30 June 2015
Bulyanhulu
662
16
15
8
0
7
195
55
North
Mara
382
17
8
9
0
7
203
81
Buzwagi
948
23
14
2
0
6
26
Group*
595
21
72
7
0
8
160
63
Bulyanhulu
830
46
6
7
0
14
266
109
North
Mara
605
43
3
25
0
11
190
91
Buzwagi
933
42
3
5
0
14
6
62
Group*
777
48
37
13
0
18
168
88
958
707
1,019
926
1,278
968
1,065
1,149
* The group total includes US$66/oz of unallocated costs for corporate related costs in Q2 2016 and a cost of US$41/oz in Q2 2015
LSE:ACA
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24
(Unaudited)
(US$/oz sold)
Cash cost per ounce sold
Corporate administration
Share-based payments
Rehabilitation
Mine exploration
CSR expenses
Capitalised development
Sustaining capital
Total AISC
Six months ended 30 June 2016
Six months ended 30 June 2015
Bulyanhulu
661
21
11
7
0
5
189
76
North
Mara
427
24
7
9
0
11
183
59
Buzwagi
1,052
25
11
3
0
7
0
26
Group
640
24
49
7
0
12
148
61
Bulyanhulu
871
48
6
6
0
11
279
135
North
Mara
583
42
2
24
0
11
169
62
Buzwagi
965
44
1
6
0
13
4
56
Group
780
51
23
13
0
15
164
87
970
720
1,124
941
1,356
893
1,089
1,133
* The group total includes US$46/oz of unallocated costs for corporate related costs in H1 2016 and US$31/oz in H1 2015
AISC is intended to provide additional information on the total sustaining cost for each ounce sold, taking into account
expenditure incurred in addition to direct mining costs and selling costs.
Cash cost per tonne milled is a non-IFRS financial measure. Cash costs include all costs absorbed into inventory, as well as
royalties, co-product credits, and production taxes, and exclude capitalised production stripping costs, inventory purchase
accounting adjustments, unrealised gains/losses from non-hedge currency and commodity contracts, depreciation and
amortisation and corporate social responsibility charges. Cash cost is calculated net of co-product revenue. Cash cost per
tonne milled are calculated by dividing the aggregate of these costs by total tonnes milled.
EBITDA is a non-IFRS financial measure. Acacia calculates EBITDA as net profit or loss for the period excluding:
-
Income tax expense;
Finance expense;
Finance income;
Depreciation and amortisation; and
Impairment charges of goodwill and other long-lived assets.
EBITDA is intended to provide additional information to investors and analysts. It does not have any standardised meaning
prescribed by IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in
accordance with IFRS. EBITDA excludes the impact of cash costs of financing activities and taxes, and the effects of changes in
operating working capital balances, and therefore is not necessarily indicative of operating profit or cash flow from operations as
determined under IFRS. Other companies may calculate EBITDA differently.
A reconciliation between net profit for the period and EBITDA is presented below:
(US$000)
Three months ended 30 June
(Unaudited)
2016
2015
46,282
5,558
Net profit/(loss) for the period
27,567
2,022
Plus income tax expense
43,166
33,472
Plus depreciation and amortisation*
2,514
3,237
Plus finance expense
(197)
(354)
Less finance income
EBITDA
119,332
43,935
Six months ended 30 June
2016
2015
(6,128)
14,765
107,744
10,233
78,376
66,114
5,380
6,476
(490)
(700)
184,882
96,888
*Depreciation and amortisation includes the depreciation component of the cost of inventory sold.
Adjusted EBITDA is a non-IFRS financial measure. It is calculated by excluding one-off costs or credits relating to non-routine
transactions from EBITDA. It excludes other credits and charges that, individually or in aggregate, if of a similar type, are of a
nature or size that requires explanation in order to provide additional insight into the underlying business performance. EBITDA
is adjusted for items (a) to (e) as contained in the reconciliation to adjusted net earnings below.
EBIT is a non-IFRS financial measure and reflects EBITDA adjusted for depreciation and amortisation and goodwill impairment
charges.
Adjusted net earnings is a non-IFRS financial measure. It is calculated by excluding certain costs or credits relating to nonroutine transactions from net profit attributed to owners of the parent. It includes other credit and charges that, individually or in
aggregate, if of a similar type, are of a nature or size that requires explanation in order to provide additional insight into the
underlying business performance.
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25
Adjusted net earnings and adjusted earnings per share have been calculated as follows:
(US$000)
(Unaudited)
Net earnings/ (loss)
Adjusted for:
Operational review costs (including
restructuring costs)
One off legal settlements
1
Prior year tax positions recognised
Discounting of indirect taxes
Tax impact of the above
Adjusted net earnings
Three months ended 30 June
2016
2015
46,282
5,558
Six months ended 30 June
2016
2015
(6,128)
14,765
1,264
(6,508)
(379)
915
1,493
(722)
2,125
69,916
(6,508)
(638)
1,495
3,558
(1,516)
40,659
7,244
58,767
18,302
1
For the six months ended 30 June 2016, US$69.9 million represents a provision raised for the implied impact of an adverse tax ruling made by the Tanzanian
Court of Appeal with respect to historical tax assessments of Bulyanhulu. As reported in Q1 2016, the impact of the ruling was calculated for Bulyanhulu and
extrapolated to North Mara and Tulawaka as well and covers results up to the end of 2015. On a site basis, US$35.1 million was raised for Bulyanhulu, US$30.4
million for North Mara and US$4.4 million for Tulawaka.
Adjusted net earnings per share is a non-IFRS financial measure and is calculated by dividing adjusted net earnings by the
weighted average number of Ordinary Shares in issue.
Free cash flow is a non-IFRS measure and represents the change in cash and cash equivalents in a given period.
Net cash is a non-IFRS measure. It is calculated by deducting total borrowings from cash and cash equivalents.
Mining statistical information
The following describes certain line items used in the Acacia Group’s discussion of key performance indicators:
- Open pit material mined – measures in tonnes the total amount of open pit ore and waste mined.
- Underground ore tonnes hoisted – measures in tonnes the total amount of underground ore mined and hoisted.
- Underground ore tonnes trammed – measures in tonnes the total amount of underground ore mined and trammed.
- Total tonnes mined includes open pit material plus underground ore tonnes hoisted.
- Strip ratio – measures the ratio of waste-to-ore for open pit material mined.
- Ore milled – measures in tonnes the amount of ore material processed through the mill.
- Head grade – measures the metal content of mined ore going into a mill for processing.
- Milled recovery – measures the proportion of valuable metal physically recovered in the processing of ore. It is generally
stated as a percentage of the metal recovered compared to the total metal originally present.
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Risk Review
We have made a number of further developments in the identification and management of our risk profile over the course of H1
2016. Where appropriate, risk ratings have been reviewed against risk management controls and other mitigating factors. Our
principal risks continue to be within four broad categories: strategic risks, financial risks, external risks and operational risks.
While the overall makeup of our principal risks has not significantly changed from that published in the 2015 Annual Report,
there have been changes in certain risk profiles as a result of developments in our operating environment and developments or
trends affecting the wider global economy and/or the mining industry. As a result of our mid-year assessment, at this stage we
believe it appropriate to combine occupational health risks and the monitoring of safety risks relating to mining operations and
have amended the relevant principal risk accordingly.
As a result of the risk review outlined above, for the remainder of 2016 we view our principal risks as relating to the following:









Political, legal and regulatory developments
Single country risk
Security, trespass and vandalism
Environmental hazards and rehabilitation
Implementation of enhanced operational systems
Significant changes to commodity prices
Continuity of power supply
Equipment effectiveness
Health & Safety risks relating to mining operations
Further details as regards Acacia principal risks are provided as part of the 2015 Annual Report.
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27
Directors’ Responsibility Statement
The Directors confirm that, to the best of their knowledge, the condensed consolidated interim financial information has been
prepared in accordance with IAS 34 as adopted by the European Union. The half-year management report includes a fair
review of the information required by Disclosure and Transparency Rule 4.2.7R and Disclosure and Transparency Rule
4.2.8R, namely:

an indication of important events that have occurred during the first six months of the financial year and their impact
on the condensed consolidated interim financial information, and a description of the principal risks and uncertainties
for the remaining six months of the financial year; and

material related-party transactions in the first six months of the financial year and any material changes in the related
party transactions described in the last Annual Report.
The Directors of Acacia Mining plc are listed in the Acacia Mining plc Annual Report for 31 December 2015, save for Mr
Graham Clow who stepped down as director at the 2016 AGM. A list of current Directors is maintained on the Acacia Mining
plc Group website: www.acaciamining.com.
On behalf of the Board
Brad Gordon, Chief Executive Officer
Kelvin Dushnisky, Chairman
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Auditor’s Review Report
Independent review report to Acacia Mining plc
Report on the condensed consolidated interim financial information
Our conclusion
We have reviewed Acacia Mining plc's condensed consolidated interim financial information (the "interim financial statements") in the halfyearly financial report of Acacia Mining plc for the 6 month period ended 30 June 2016. Based on our review, nothing has come to our attention
that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International
Accounting Standard 34, ‘Interim Financial Reporting’, as adopted by the European Union and the Disclosure Rules and Transparency Rules
of the United Kingdom’s Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:

the consolidated balance sheet as at 30 June 2016;

the consolidated income statement and consolidated statement of comprehensive income for the period then ended;

the consolidated statement of cash flows for the period then ended;

the consolidated statement of changes in equity for the period then ended; and

the explanatory notes to the interim financial statements.
The interim financial statements included in the half-yearly financial report have been prepared in accordance with International Accounting
Standard 34, ‘Interim Financial Reporting’, as adopted by the European Union and the Disclosure Rules and Transparency Rules of the United
Kingdom’s Financial Conduct Authority.
As disclosed in note 2 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full
annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the
European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The half-yearly financial report, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The
directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Rules and Transparency Rules of the
United Kingdom’s Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim financial statements in the half-yearly financial report based on our review. This
report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Rules and
Transparency Rules of the United Kingdom’s Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion,
accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ‘Review of Interim
Financial Information Performed by the Independent Auditor of the Entity’ issued by the Auditing Practices Board for use in the United
Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and,
consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
21 July 2016
a)
The maintenance and integrity of the Acacia Mining plc website is the responsibility of the directors; the work carried out by the
auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that
may have occurred to the interim financial statements since they were initially presented on the website.
b)
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in
other jurisdictions.
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Condensed Financial Information
Consolidated income statement
For the six months ended 30
June
(Unaudited)
(Unaudited)
(US$’000)
Notes
Revenue
2016
For the year ended
31 December
(Audited)
2015
2015
504,947
446,781
868,131
Cost of sales
(355,439)
(363,582)
(734,167)
Gross profit
149,508
83,199
133,964
Corporate administration
(9,771)
(18,290)
(34,455)
Share-based payments
(19,635)
(8,290)
(5,537)
Exploration and evaluation costs
(11,150)
(8,736)
(19,737)
(4,614)
(5,304)
(12,882)
Corporate social responsibility expenses
Impairment charges
Other income/(charges)
6
Profit/ (loss) before net finance expense and taxation
Finance income
7
Finance expense
7
Profit/ (loss) before taxation
Tax expense
8
Net (loss)/ profit for the period
-
-
(146,201)
2,168
(11,805)
(28,079)
106,506
30,774
(112,927)
490
700
1,384
(5,380)
(6,476)
(12,617)
101,616
24,998
(124,160)
(107,744)
(10,233)
(72,988)
(6,128)
14,765
(197,148)
(Loss)/ earnings per share (cents):
Basic (loss)/ earnings per share (cents)
9
(1.5)
3.6
(48.1)
Diluted (loss)/ earnings per share (cents)
9
(1.5)
3.6
(48.1)
The notes on pages 35 to 48 are an integral part of this financial information.
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Consolidated statement of comprehensive income
For the six months ended 30 June
(Unaudited)
(Unaudited)
(US$’000)
Net (loss)/ profit for the period
For the year
ended 31
December
(Audited)
2016
2015
2015
(6,128)
14,765
(197,148)
(1,226)
(502)
(459)
(7,354)
14,263
(197,607)
Other comprehensive income:
Items that may be subsequently reclassified to profit or loss:
Changes in fair value of cash flow hedges
Total comprehensive (loss)/ income for the period
The notes on pages 35 to 48 are an integral part of this financial information.
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Consolidated balance sheet
(US$’000)
ASSETS
Non-current assets
Goodwill and intangible assets
Property, plant and equipment
Deferred tax assets
Non-current portion of inventory
Derivative financial instruments
Other assets
Notes
11
12
Current assets
Inventories
Trade and other receivables
Derivative financial instruments
Other current assets
Cash and cash equivalents
12
Total assets
EQUITY AND LIABILITIES
Share capital and share premium
Other reserves
Total owners' equity
Non-controlling interests
Total equity
Non-current liabilities
Borrowings
Deferred tax liabilities
Derivative financial instruments
Provisions
Other non-current liabilities
13
12
Current liabilities
Trade and other payables
Borrowings
Derivative financial instruments
Provisions
Other current liabilities
13
12
Total liabilities
Total equity and liabilities
As at
30 June
(Unaudited)
2016
As at
30 June
(Unaudited)
2015
As at
31 December
(Audited)
2015
211,190
1,414,194
11,416
87,050
129
118,197
1,842,176
211,190
1,440,371
52,141
108,722
1,357
118,643
1,932,424
211,190
1,390,713
11,628
72,616
849
114,964
1,801,960
195,657
20,119
9
86,230
284,357
586,372
2,428,548
271,762
23,149
271
78,414
286,932
660,528
2,592,952
202,321
14,363
78,563
233,268
528,515
2,330,475
929,199
839,505
1,768,704
1,768,704
929,199
1,071,056
2,000,255
4,781
2,005,036
929,199
858,300
1,787,499
1,787,499
85,200
138,751
588
147,676
10,063
382,278
113,600
73,436
1,895
156,501
21,213
366,645
99,400
95,668
1,560
127,354
4,122
328,104
211,852
28,400
10,973
1,566
24,775
277,566
659,844
176,320
28,400
9,233
2,220
5,098
221,271
587,916
159,866
28,400
10,920
1,577
14,109
214,872
542,976
2,428,548
2,592,952
2,330,475
The notes on pages 35 to 48 are an integral part of this financial information.
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Consolidated statement of changes in equity
Notes
(US$’000)
Balance at 31 December 2014 (Audited)
Total comprehensive (loss)/income for the
period
Dividends to equity holders of the Company
Share option grants
Balance at 30 June 2015 (Unaudited)
Total comprehensive income/ (loss) for the
period
Dividends to equity holders of the Company
Share option grants
Transactions with non-controlling interest
holders
Balance at 31 December 2015 (Audited)
Total comprehensive loss for the period
Dividends to equity holders of the Company
Share option grants
Balance at 30 June 2016 (Unaudited)
10
Share
capital
Share
premium
Other
distributable
reserve
Cash flow
hedging
reserve
Share
option
reserve
Accumulated
losses
Total
owners'
equity
Total noncontrolling
interests
Total
equity
62,097
867,102
1,368,713
1,011
3,694
(305,250)
1,997,367
4,781
2,002,148
62,097
867,102
1,368,713
(502)
509
107
3,801
14,765
(11,482)
(301,967)
14,263
(11,482)
107
2,000,255
4,781
14,263
(11,482)
107
2,005,036
-
-
-
43
-
75
(211,913)
(5,742)
-
(211,870)
(5,742)
75
-
(211,870)
(5,742)
75
62,097
62,097
867,102
867,102
1,368,713
1,368,713
552
(1,226)
(674)
3,876
49
3,925
4,781
(514,841)
(6,128)
(11,490)
(532,459)
4,781
1,787,499
(7,354)
(11,490)
49
1,768,704
(4,781)
-
1,787,499
(7,354)
(11,490)
49
1,768,704
The notes on pages 35 to 48 are an integral part of this financial information.
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33
Consolidated statement of cash flows
For the six months ended
30 June
(Unaudited)
(Unaudited)
2016
2015
(US$’000)
Cash flows from operating activities
Net (loss)/ profit for the period
Adjustments for:
Tax expense
Depreciation and amortisation
Finance items
Impairment charges
Loss/ (profit) on disposal of property, plant and equipment
Prepayment of corporate tax
Working capital adjustments
Other non-cash items
Cash generated from operations before interest and tax
Finance income
Finance expenses
Income tax paid
Net cash generated by operating activities
For the year
ended
31 December
(Audited)
2015
(6,128)
14,765
(197,148)
107,744
79,367
4,890
136
(10,000)
(6,306)
(8,952)
160,751
490
(4,145)
157,096
10,233
63,357
5,776
(2,146)
15,316
3,617
110,918
700
(4,525)
107,093
72,988
133,365
11,233
146,201
(1,315)
(4,774)
3,497
164,047
1,384
(8,966)
156,465
Cash flows used in investing activities
Purchase of property, plant and equipment
Movement in other assets
Other investing activities
Net cash used in investing activities
(82,606)
2,529
(195)
(80,272)
(105,469)
2,786
3,141
(99,542)
(193,022)
8,330
3,256
(181,436)
Cash flows used in financing activities
Loans paid
Dividends paid
Finance lease instalments
Net cash used in financing activities
(14,200)
(11,490)
(25,690)
(11,482)
(846)
(12,328)
(14,200)
(17,224)
(846)
(32,270)
Net increase/ (decrease) in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents at 1 January
Cash and cash equivalents at period end
51,134
(45)
233,268
284,357
(4,777)
(2,141)
293,850
286,932
(57,241)
(3,341)
293,850
233,268
The notes on pages 35 to 48 are an integral part of this financial information.
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34
Notes to the condensed financial information
1. General Information
Acacia Mining plc, formerly African Barrick Gold plc (the “Company”, "Acacia” or collectively with its subsidiaries the “Group”) was
incorporated on 12 January 2010 and re-registered as a public limited company on 12 March 2010 under the Companies Act 2006. It is
registered in England and Wales with registered number 7123187.
On 24 March 2010 the Company’s shares were admitted to the Official List of the United Kingdom Listing Authority (“UKLA”) and to
trading on the Main Market of the London Stock Exchange, hereafter referred to as the Initial Public Offering (“IPO”). The address of its
registered office is No.1 Cavendish Place, London, W1G 0QF.
Barrick Gold Corporation (“Barrick”) currently owns approximately 63.9% of the shares of the Company and is the ultimate parent and
controlling party of the Group. The financial statements of Barrick can be obtained from www.barrick.com.
The condensed consolidated interim financial information for the six months ended 30 June 2016 was approved for issue by the Board
of Directors of the Company on 21 July 2016. Statutory accounts for the year ended 31 December 2015 were approved by the Board of
Directors on 8 March 2016 and delivered to the Registrar of Companies. The report of the auditors’ on those accounts was unqualified,
did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006. The
condensed consolidated interim financial information has been reviewed, not audited. The condensed consolidated interim financial
information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2008.
The Group’s primary business is the mining, processing and sale of gold. The Group has three operating mines located in Tanzania.
The Group also has a portfolio of exploration projects located across Africa.
2.
Basis of Preparation of the condensed financial information
The condensed consolidated interim financial information for the six months ended 30 June 2016 has been prepared in accordance
with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, ‘Interim Financial Reporting’ as
adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with th e
annual financial statements for the year ended 31 December 2015, which have been prepared in accordance with IFRS as adopted
by the European Union.
The condensed consolidated interim financial information has been prepared under the historical cost basis, as modified by the
revaluation of financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
The financial information is presented in US dollars (US$) and all monetary results are rounded to the nearest thousand (US$’000)
except when otherwise indicated.
Where a change in the presentational format between the prior period and the current period financial information has been made
during the period, comparative figures have been restated accordingly. No presentational changes were made in the current period.
The group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow
interest rate risk and price risk), credit risk and liquidity risk. The condensed interim financial statements do not include all financial risk
management information and disclosures required in the annual financial statements; they should be read in conjunction with the
group’s annual financial statements as at 31 December 2015. There have been no changes in the risk management department or in
any risk management policies since the year end.
The impact of the seasonality on operations is not considered as significant on the condensed consolidated interim financial
information.
After making the appropriate enquiries, the Directors confirm that they have a reasonable expectation that the Acacia Group will
continue to operate and meet its liabilities, as they fall due, for the next three years. The Directors’ assessment has been made with
reference to the Acacia Group’s current position and prospects, its strategy and the Acacia Group’s principal risks and how these are
managed, with particular regard to those which are viewed as having the most relevance to Acacia continuing in operation, when
assessed in terms of financial and operational planning and impact over a three-year period, being: environmental hazards and
rehabilitation; implementation of enhanced operational systems; significant change to commodity prices; political, legal and regulatory
developments; safety risks relating to mining operations and equipment effectiveness. On this basis this condensed consolidated
interim financial information is presented on a going concern basis.
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35
3.
Accounting Policies
The accounting policies adopted are consistent with those used in the Acacia Mining plc annual financial statements for the year ended
31 December 2015.
There are no new standards, interpretations or amendments to standards issued and effective for the period which materially
impacted on the Group.
The following exchange rates to the US dollar have been applied:
South African rand (US$:ZAR)
Tanzanian shilling (US$:TZS)
Australian dollars (US$:AUD)
UK pound (US$:GBP)
As at
30 June
2016
14.78
2,179
1.35
0.76
Average
six months
ended
30 June
2016
15.40
2,179
1.36
0.70
As at
30 June
2015
12.15
2,020
1.30
0.64
Average
six months
ended
30 June
2015
11.91
1,852
1.28
0.66
As at
31
December
2015
15.47
2,149
1.37
0.68
Average
year ended
31
December
2015
12.72
1,993
1.33
0.65
4. Estimates
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ
from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying
the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated
financial statements for the year ended 31 December 2015.
5.
Segment Reporting
The Group has only one primary product produced in a single geographic location, being gold produced in Tanzania. In addition the
Group produces copper and silver as a co-product. Reportable operating segments are based on the internal reports provided to the
Chief Operating Decision Maker (“CODM”) to evaluate segment performance, decide how to allocate resources and make other
operating decisions. After applying the aggregation criteria and quantitative thresholds contained in IFRS 8, the Group’s reportable
operating segments were determined to be: North Mara gold mine; Bulyanhulu gold mine; Buzwagi gold mine; a separate Corporate
and Exploration segment, which primarily consists of costs related to other charges and corporate social responsibility expenses.
Segment results and carrying values include items directly attributable to the segment as well as those that can be allocated on a
reasonable basis. Segment carrying values are disclosed and calculated as shareholders equity after adding back debt and
intercompany liabilities, and subtracting cash and intercompany assets. Capital expenditures comprise of additions to property, plant
and equipment. The Group has also included segment cash costs and all-in sustaining cost per ounce sold.
Segment information for the reportable operating segments of the Group for the periods ended 30 June 2016, 30 June 2015 and 31
December 2015 is set out below.
LSE:ACA
www.acaciamining.com
36
For the six months ended 30 June 2016
(Unaudited)
(US$’000,except per ounce amounts)
Gold revenue
Co-product revenue
Total segment revenue
Segment cash operating cost1
Corporate administration and exploration
North Mara
203,788
366
204,154
(72,895)
(5,443)
Bulyanhulu
182,872
8,188
191,060
(107,842)
(6,273)
Buzwagi
97,954
11,779
109,733
(96,326)
(2,847)
3,158
128,974
(29,346)
99,628
(2,651)
74,294
(41,107)
33,187
(1,725)
8,835
(6,869)
1,966
(1,228)
(27,221)
(1,054)
(28,275)
(2,446)
184,882
(78,376)
106,506
490
(5,380)
101,616
(107,744)
(6,128)
7,257
458
31,051
38,766
11,506
753
28,438
40,697
2,231
2,231
654
654
21,648
1,211
59,489
82,348
6,252
45,018
3,007
43,704
9,937
12,168
654
19,196
101,544
Segmental cash operating cost
Deduct: co-product revenue
Total cash costs
Sold ounces
Cash cost per ounce sold2
Corporate administration charges
Share-based payments
Rehabilitation - accretion and depreciation
Corporate social responsibility expenses
Capitalised stripping/ UG development
Sustaining capital expenditure
All-in sustaining cost per ounce sold2
72,895
(366)
72,529
169,840
427
24
7
9
11
183
59
720
107,842
(8,188)
99,654
150,719
661
21
11
7
5
189
76
970
96,326
(11,779)
84,547
80,404
1,052
25
11
3
7
26
1,124
Segment carrying value3
262,260
1,214,729
71,676
Other charges and corporate social responsibility
expenses
EBITDA2
Depreciation and amortisation4
EBIT2
Finance income
Finance expense
Profit before taxation
Tax expense
Net loss for the period
Capital expenditure:
Sustaining
Expansionary
Capitalised development
Non-cash capital expenditure adjustments
Reclamation asset adjustment
Total capital expenditure
LSE:ACA
Other
(25,993)
Total
484,614
20,333
504,947
(277,063)
(40,556)
277,063
(20,333)
256,730
400,963
640
24
49
7
12
148
61
941
62,764
www.acaciamining.com
37
1,611,429
For the six months ended 30 June 2015
(Unaudited)
(US$’000,except per ounce amounts)
Gold revenue
Co-product revenue
Total segment revenue
Segment cash operating cost1
Corporate administration and exploration
North Mara
170,953
279
171,232
(82,999)
(6,445)
Bulyanhulu
146,028
7,567
153,595
(113,768)
(7,184)
Buzwagi
109,568
12,386
121,954
(100,701)
(4,188)
(9,919)
71,869
(34,827)
37,042
(7,061)
25,582
(20,624)
4,958
(2,936)
14,129
(9,370)
4,759
2,807
(14,692)
(1,293)
(15,985)
(17,109)
96,888
(66,114)
30,774
700
(6,476)
24,998
(10,233)
14,765
3,037
929
23,933
27,899
16,455
(909)
34,040
49,586
5,134
343
5,477
95
95
24,721
20
58,316
83,057
(206)
27,693
(407)
49,179
(84)
5,393
95
(697)
82,360
Segmental cash operating cost
Deduct: co-product revenue
Total cash costs
Sold ounces
Cash cost per ounce sold2
Corporate administration charges
Share-based payments
Rehabilitation - accretion and depreciation
Corporate social responsibility expenses
Capitalised stripping/ UG development
Sustaining capital expenditure
All-in sustaining cost per ounce sold2
82,999
(279)
82,720
142,005
583
42
2
24
11
169
62
893
113,768
(7,567)
106,201
121,976
871
48
6
6
11
279
135
1,356
100,701
(12,386)
88,315
91,488
965
44
1
6
13
4
56
1,089
Segment carrying value3
312,273
1,232,489
251,283
Other charges and corporate social responsibility
expenses
EBITDA2
Depreciation and amortisation4
EBIT2
Finance income
Finance expense
Profit before taxation
Tax expense
Net profit for the period
Capital expenditure:
Sustaining
Expansionary
Capitalised development
Non-cash capital expenditure adjustments
Reclamation asset adjustment
Total capital expenditure
LSE:ACA
Other
(17,499)
Total
426,549
20,232
446,781
(297,468)
(35,316)
297,468
(20,232)
277,236
355,470
780
51
23
13
15
164
87
1,133
77,550
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38
1,873,595
For the year ended 31 December 2015
(Audited)
(US$’000,except per ounce amounts)
Gold revenue
Co-product revenue
Total segment revenue
Segment cash operating cost1
Corporate administration and exploration
North Mara
335,144
563
335,707
(171,133)
(14,317)
Bulyanhulu
304,559
14,556
319,115
(226,129)
(16,058)
Buzwagi
192,759
20,550
213,309
(195,208)
(8,434)
(20,920)
Total
832,462
35,669
868,131
(592,470)
(59,729)
(15,629)
134,628
(67,459)
67,169
257
(2,389)
75,640
(23,043)
52,597
(17,796)
59,132
(52,589)
6,543
164
(2,721)
27,932
(7,345)
20,588
(8,193)
1,474
(146,201)
(19,246)
(163,973)
403
(2,398)
66,501
(20,175)
46,326
657
(20,263)
(2,403)
(22,666)
500
(2,535)
(58,537)
1,408
(57,128)
(40,961)
174,971
(146,201)
(141,697)
(112,927)
1,384
(12,617)
(124,160)
(72,988)
(197,148)
13,229
962
48,376
62,567
42,419
(957)
59,830
101,292
10,855
1,480
12,335
974
974
67,477
5
109,686
177,168
Non-cash capital expenditure adjustments
Reclamation asset adjustment
Total capital expenditure
(18,909)
43,658
(5,664)
95,628
(7,363)
4,972
974
(31,936)
145,232
Segmental cash operating cost
Deduct: co-product revenue
Total cash costs
Sold ounces
Cash cost per ounce sold2
Corporate administration charges
Share-based payments
Rehabilitation - accretion and depreciation
Corporate social responsibility expenses
Capitalised stripping/ UG development
Sustaining capital expenditure
All-in sustaining cost per ounce sold2
171,133
(563)
170,570
288,905
590
48
22
19
167
69
915
226,129
(14,556)
211,573
265,341
797
52
2
6
11
225
160
1,253
195,208
(20,550)
174,658
166,957
1,046
50
6
11
9
65
1,187
-
592,470
(35,669)
556,801
721,203
772
48
8
12
18
152
102
1,112
Segment carrying value3
284,876
1,257,299
80,654
72,851
1,695,680
Other charges and corporate social responsibility
expenses
EBITDA2
Impairment charges
Depreciation and amortisation4
EBIT2
Finance income
Finance expense
Loss before taxation
Tax expense
Net loss for the year
Capital expenditure:
Sustaining
Expansionary
Capitalised development
Other
1 The CODM reviews cash operating costs for the three operating mine sites separately from corporate administration costs and exploration costs. Consequently, the Group has reported these costs in this
manner.
2 These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to ‘Non IFRS measures’ on page 24 for definitions.
3
Segment carrying values are calculated as shareholders equity after adding back debt and intercompany liabilities, and subtracting cash and intercompany assets and include outside shareholders’
interests.
4 Depreciation and amortisation includes the depreciation component of the cost of inventory sold.
LSE:ACA
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39
6.
Other Charges
For the six months ended 30 June
For the year
ended
31 December
(Unaudited)
2016
(Unaudited)
2015
(Audited)
2015
2,125
938
667
136
2,782
6,648
1,495
15,193
1,274
2,907
367
82
21,318
9,864
23,130
1,846
2,502
7,300
256
3,532
48,430
Other income
Discounting of indirect tax receivables
Profit on disposal of property, plant and equipment
Unrealised non-hedge derivative gains
De-recognition of finance lease liabilities
De-recognition of deferred consideration
Proceeds from earn-in agreement
Foreign exchange gains
Other
Total
(6,508)
(1,352)
(956)
(8,816)
(2,146)
(5,599)
(1,768)
(9,513)
(5,906)
(1,315)
(2,293)
(3,918)
(5,313)
(1,000)
(606)
(20,351)
Total other income/(charges)
(2,168)
11,805
28,079
(US$’000)
Other expenses
Operational Review costs (including restructuring cost)
Foreign exchange losses
Disallowed indirect taxes
Legal costs
One off legal settlements
Government levies and charges
Loss on disposal of property, plant and equipment
Other
Total
LSE:ACA
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40
7.
Finance Income and Expenses
a)
Finance income
For the six months ended 30 June
(Unaudited)
2016
(US$’000)
Interest on time deposits
Other
Total
b)
403
87
490
(Unaudited)
2015
518
182
700
For the year
ended
31 December
(Audited)
2015
910
474
1,384
Finance expense
For the six months ended 30 June
(Unaudited)
(Unaudited)
2016
2015
1,235
1,951
1,087
1,152
1,896
2,585
199
216
604
253
359
319
5,380
6,476
(US$’000)
1
Unwinding of discount
2
Revolving credit facility charges
Interest on CIL facility
Interest on finance leases
Bank charges
Other
Total
1
The unwinding of discount is calculated on the environmental rehabilitation provision.
2
Included in credit facility charges are the amortisation of the fees related to the revolving credit facility as well as the monthly interest and facility fees.
LSE:ACA
For the year
ended
31 December
(Audited)
2015
3,651
2,192
5,106
408
516
744
12,617
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41
8.
Tax Expense
For the year
ended
31 December
For the six months ended 30
June
(US$’000)
Current tax:
Current tax on profits for the period
Adjustments in respect of prior years
Total current tax
Deferred tax:
Origination and reversal of temporary differences
Total deferred tax
Income tax expense
(Unaudited)
2016
(Unaudited)
2015
(Audited)
2015
27,843
1
36,604
64,447
-
-
2
10,233
10,233
10,233
72,988
72,988
72,988
43,297
43,297
107,744
1
Included in this amount is a provision for uncertain tax positions of US$30.4 million relating to North Mara, and US$4.4 million relating to Tulawaka,
following an adverse tax ruling as reported in Q1 2016.
2
Included in this amount is a provision for uncertain tax positions of US$35.0 million relating to Bulyanhulu following an adverse tax ruling, as reported in
Q1 2016.
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate
applicable to the profits of the consolidated entities as follows:
For the six months ended 30
June
(US$’000)
Profit/(loss) before tax
Tax calculated at domestic tax rates applicable to profits in the
respective countries
Tax effects of:
Expenses not deductible for tax purposes
1
Tax losses for which no deferred income tax asset was recognised
2
Adjustments to unrecognised tax benefits carried forward
Prior year adjustments
Tax charge
For the year
ended 31
December
(Unaudited)
2016
101,616
(Unaudited)
2015
24,998
(Audited)
2015
(124,160)
28,481
6,397
(35,932)
463
7,100
69,916
1,784
107,744
255
3,581
10,233
676
88,702
12,740
6,802
72,988
1 Included in the December 2015 reconciliation is the tax impact of US$42.5 million of deferred tax assets derecognised at Buzwagi following the impairment review.
2 The reconciliation includes an amount of US$69.9 million relating to an increase in the amount of unrecognised tax liabilities carried forward. The adjustment reflects uncertainty regarding recoverability
of certain tax losses, and gives rise to an increased deferred tax charge.
Tax periods remain open to review by the Tanzanian Revenue Authority (TRA) in respect of income taxes for five years following the
date of the filing of the corporate tax return, during which time the authorities have the right to raise additional tax assessments
including penalties and interest. Under certain circumstances the reviews may cover longer periods. Because a number of tax periods
remain open to review by tax authorities, there is a risk that transactions that have not been challenged in the past by the authorities
may be challenged by them in the future, and this may result in the raising of additional tax assessments plus penalties and interest.
LSE:ACA
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42
9.
(Loss)/ earnings Per Share (EPS)
Basic EPS is calculated by dividing the net (loss)/ profit for the period attributable to owners of the Company by the weighted average
number of Ordinary Shares in issue during the year.
Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary Shares outstanding to assume
conversion of all dilutive potential Ordinary Shares. The Company has dilutive potential Ordinary Shares in the form of stock options.
The weighted average number of shares is adjusted for the number of shares granted assuming the exercise of stock options.
At 30 June 2016, 30 June 2015 and 31 December 2015, (loss)/ earnings per share have been calculated as follows:
For the six months ended
30 June
(Unaudited)
(Unaudited)
2016
2015
(US$’000)
(Loss)/ earnings
Net (loss)/ profit attributable to owners of the parent
For the year
ended
31 December
(Audited)
2015
(6,128)
14,765
(197,148)
Weighted average number of Ordinary Shares in issue
Adjusted for dilutive effect of stock options
410,085,499
277,889
410,085,499
265,541
410,085,499
258,139
Weighted average number of Ordinary Shares for diluted earnings per share
410,363,388
410,351,040
410,343,638
(1.5)
(1.5)
3.6
3.6
(48.1)
(48.1)
(Loss)/ earnings per share
Basic (loss)/ earnings per share (cents)
Dilutive (loss)/ earnings per share (cents)
10. Dividends
The final dividend declared in respect of the year ended 31 December 2015 of US$11.5 million (US2.8 cents per share) was paid during
2016.
LSE:ACA
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43
11. Property, Plant and Equipment
Plant and
equipment
Mineral
properties and
mine
development
costs
Assets under
construction¹
Total
572,877
1,441
(137)
(49,362)
41,169
565,988
761,592
(30,005)
60,801
792,388
56,244
82,348
19,196
(101,970)
55,818
1,390,713
82,348
19,196
1,441
(137)
(79,367)
1,414,194
At 1 January 2016
Cost
Accumulated depreciation and impairment
Net carrying amount
1,845,234
(1,272,357)
572,877
1,636,413
(874,821)
761,592
56,244
56,244
3,537,891
(2,147,178)
1,390,713
At 30 June 2016
Cost
Accumulated depreciation and impairment
Net carrying amount
1,887,676
(1,321,688)
565,988
1,697,214
(904,826)
792,388
55,818
55,818
3,640,708
(2,226,514)
1,414,194
Mineral properties
and mine
development costs
Assets under
construction¹
For the six months ended 30 June 2016 (Unaudited)
(US$’000)
At 1 January 2016, net of accumulated depreciation and
impairment
Additions
Non-cash reclamation asset adjustments
Foreign currency translation adjustments
Disposals/write-downs
Depreciation
Transfers between categories
At 30 June 2016
For the six months ended 30 June 2015 (Unaudited)
(US$’000)
At 1 January 2015, net of accumulated depreciation
and impairment
Additions
Non-cash reclamation asset adjustments
Foreign currency translation adjustments
Disposals/write-downs
Depreciation
Transfers between categories
At 30 June 2015
Plant and
equipment
570,569
-
710,812
-
(1,236)
(2,711)
(33,640)
49,145
582,127
At 1 January 2015
Cost
Accumulated depreciation and impairment
Net carrying amount
At 30 June 2015
Cost
Accumulated depreciation and impairment
Net carrying amount
Total
(29,717)
113,138
794,233
143,934
83,057
(697)
(162,283)
64,011
1,425,315
83,057
(697)
(1,236)
(2,711)
(63,357)
1,440,371
1,750,743
(1,180,174)
570,569
1,511,444
(800,632)
710,812
143,934
143,934
3,406,121
(1,980,806)
1,425,315
1,774,154
(1,192,027)
582,127
1,610,566
(816,333)
794,233
64,011
64,011
3,448,731
(2,008,360)
1,440,371
LSE:ACA
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44
Plant and
equipment
Mineral
properties and
mine
development
costs
Assets under
construction¹
Total
570,569
(4,149)
(4,820)
(18,571)
(78,105)
107,953
572,877
710,812
(18,929)
(55,260)
124,969
761,592
143,934
177,168
(31,936)
(232,922)
56,244
1,425,315
177,168
(31,936)
(4,149)
(4,820)
(37,500)
(133,365)
1,390,713
At 1 January 2015
Cost
Accumulated depreciation and impairment
Net carrying amount
1,750,743
(1,180,174)
570,569
1,511,444
(800,632)
710,812
143,934
143,934
3,406,121
(1,980,806)
1,425,315
At 31 December 2015
Cost
Accumulated depreciation and impairment
Net carrying amount
1,845,234
(1,272,357)
572,877
1,636,413
(874,821)
761,592
56,244
56,244
3,537,891
(2,147,178)
1,390,713
For the year ended 31 December 2015
(Audited)
(US$’000)
At 1 January 2015, net of accumulated depreciation and
impairment
Additions
Non-cash reclamation asset adjustments
Foreign currency translation adjustments
Disposals/write-downs
2
Impairments
Depreciation
Transfers between categories
At 31 December 2015
1 Assets under construction represents (a) sustaining capital expenditures incurred constructing property, plant and equipment related to operating mines and advance deposits made towards the
purchase of property, plant and equipment; and (b) expansionary expenditure allocated to a project on a business combination or asset acquisition, and the subsequent costs incurred to develop the mine.
Once these assets are ready for their intended use, the balance is transferred to plant and equipment and/or mineral properties and mine development costs.
2 The impairment in December 2015 relates to property, plant and equipment at Buzwagi.
Leases
Property, plant and equipment includes assets relating to the design and construction costs of power transmission lines and related
infrastructure. At completion, ownership was transferred to TANESCO in exchange for amortised repayment in the form of reduced
electricity supply charges. No future lease payment obligations are payable under these finance leases.
In 2014, property, plant and equipment included emergency back-up and spinning power generators leased at the Buzwagi mine under
a three-year lease agreement, with an option to purchase the equipment at the end of the lease term. These leases were classified as
finance leases. In 2015 the option to purchase was not exercised, but a new operating lease arrangement was entered into.
Property, plant and equipment also includes five drill rigs purchased under short-term finance leases.
The following amounts were included in property, plant and equipment where the Group is a lessee under a finance lease:
For the six months ended
30 June
(Unaudited)
(Unaudited)
2016
2015
51,617
51,617
(39,296)
(36,392)
12,321
15,225
(US$’000)
Cost - capitalised finance leases
Accumulated depreciation and impairment
Net carrying amount
LSE:ACA
For the year
ended
31 December
(Audited)
2015
51,617
(37,952)
13,665
www.acaciamining.com
45
12. Derivative Financial Instruments
The table below analyses financial instruments carried at fair value, by valuation method. The Group has derivative financial
instruments in the form of economic and cash flow hedging contracts which are all defined as level two instruments as they are valued
using inputs other than quoted prices that are observable for the assets or liabilities. The following tables present the group’s assets
and liabilities that are measured at fair value at 30 June 2016, 30 June 2015 and 31 December 2015.
Assets
(US$’000)
For the six months ended 30 June 2016 (Unaudited)
Interest contracts: Designated as cash flow hedges
Commodity contracts - Gold: Not designated as hedges
Commodity contracts - Fuel: Not designated as hedges
Total
Liabilities
Current
Non-current
Current
Non-current
9
9
129
129
434
6,761
3,778
10,973
320
268
588
Assets
(US$’000)
For the six months ended 30 June 2015 (Unaudited)
Interest contracts: Designated as cash flow hedges
Currency contracts: Not designated as hedges
Commodity contracts - Fuel: Not designated as hedges
Total
Liabilities
Current
Non-current
Current
Non-current
271
271
1,280
77
1,357
889
293
8,051
9,233
102
1,793
1,895
Assets
(US$’000)
For the year ended 31 December 2015 (Audited)
Interest contracts: Designated as cash flow hedges
Commodity contracts - Fuel: Not designated as hedges
Total
Liabilities
Current
Non-current
Current
Non-current
-
849
849
490
10,430
10,920
1,560
1,560
13. Borrowings
During 2013, a US$142 million facility was put in place to fund the bulk of the costs of the construction of one of Acacia’s key growth
projects, the Bulyanhulu CIL Expansion project (“Project”). The Facility is collateralised by the Project, has a term of seven years with a
spread over Libor of 250 basis points. The interest rate has been fixed at 3.6% through the use of an interest rate swap. The 7 year
Facility is repayable in equal bi-annual instalments over the term of the Facility, after a two year repayment holiday period. The full
facility of US$142 million was drawn at the end of 2013. The first principal payment of US$14.2 million was paid in H2 2015 and as at
30 June 2016 the balance owing was US$113.6 million. Interest accrued to the value of US$0.6 million was included in accounts
payable for the period end. Interest incurred on the borrowings as well as hedging losses on the interest rate swap for the six mon ths
ended 30 June 2016 was US$1.9 million.
LSE:ACA
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46
14. Commitments and Contingencies
The Group is subject to various laws and regulations which, if not observed, could give rise to penalties. As at 30 June 2016, the Group
has the following commitments and/ or contingencies.
a)
Legal contingencies
As at 30 June 2016, the Group was a defendant in approximately 255 lawsuits. The plaintiffs are claiming damages and interest
thereon for the loss caused by the Group due to one or more of the following: unlawful eviction, termination of services, wrongful
termination of contracts of service, non-payment for services, defamation, negligence by act or omission in failing to provide a safe
working environment, unpaid overtime and public holiday compensation.
The total amounts claimed from lawsuits in which specific monetary damages are sought amounted to US$234.9 million. The Group’s
Legal Counsel is defending the Group’s current position, and the outcome of the lawsuits cannot presently be determined. However, in
the opinion of the Directors and Group’s Legal Counsel, no material liabilities are expected to materialise from these lawsuits that have
not already been provided for.
Included in the total amounts claimed is a claim for US$115 million by Bismark Hotel Limited alleging breach of contract arising from an
Optional Agreement signed in 1995. The claim relates to an application for a prospecting licence with no attributable reserves,
resources or value. We are waiting for the adjudicators to fix a hearing date. Management are of the opinion that the claim does not
have substance and that it will be successfully defended.
NMGML and Diamond Motors Ltd (DML) have entered into arbitration over the interpretation of drilling contracts entered into by the
parties, relating to periodic rate review and other provisions of the contracts. The award was delivered on 10 August 2015, with the
Tribunal determining an award of US$4 million against the final claimed amount of US$25 million. This award was consistent with
NMGML's position in relation to the arbitration and the full amount has been provided for. DML on 31 December 2015 filed a Petition at
the High Court to challenge the award. On 23 March 2016 we filed a petition to stay proceedings pending arbitration. On 10 June 2016,
the court ruled that hearing of the winding up should proceed. We are challenging the ruling of the court and have already filed a notice
of appeal on 17 June 2016. As a consequence, we asked the court to stay the proceedings in winding up pending outcome of the
appeal. The court gave that on 23 June 2016.
Bulyanhulu Gold Mine Limited (BGML) and the contractor responsible for the engineering, procurement and construction of the CIL
plant have entered into arbitration in relation to delay damages and other alleged breaches of contract relating to project execution.
Management are of the opinion that the Contractor's claims are defensible and/or without merit.
b)
Tax-related contingencies
The TRA has issued a number of tax assessments to the Group related to past taxation years from 2002-onwards. The Group believes
that these assessments are incorrect and has filed objections to each of them. The Group is attempting to resolve these matters by
means of discussions with the TRA or through the Tanzanian appeals process. These include an appeal by the TRA against a tax
assessed of US$21.3 million in respect of Tusker Gold Limited. The tax assessment is based on the sales price of the Nyanzaga
property of US$71 million multiplied by the tax rate of 30%. Management is of the view that the assessment is invalid due to the fact
that the acquisition is for Tusker Gold Limited, a company incorporated in Australia. The shareholding of the Tanzanian related entities
did not change and the Tusker Gold Limited group structure remains the same as prior to the acquisition. The case was decided in
favour of Acacia however the TRA appealed that decision. The tax tribunal upheld the decision in favour of Acacia however the TRA
has appealed to the Court of Appeal. We are awaiting a hearing date to be set.
The TRA raised claims to the value of US$41.3 million for withholding tax on historic offshore dividend payments paid by Acacia Mining
plc to its shareholders. The TRA have also issued tax assessments to Acacia Mining to the value of US$500.7 million. These claims are
made on the basis that Acacia is resident in Tanzania for tax purposes. The corporate tax assessments have been levied on the Group
net profits before tax. On 31 March 2016, the appeal case in relating to the dividend payments was heard by the Tax Revenue Appeals
Tribunal and a judgment was delivered in favour of the TRA. An appeal to the Court of Appeal has been filed in this case. A stay of
execution has been applied for and granted by the Tax Revenue Appeals Board in relation to the corporate tax assessment.
Management are of the opinion that the claims do not have substance and that they will be successfully defended in the Court of
Appeal.
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15. Related party balances and transactions
The Group has related party relationships with entities owned or controlled by Barrick Gold Corporation, which is the ultimate
controlling party of the Group.
The Company and its subsidiaries, in the ordinary course of business, enter into various sales, purchase and service transactions and
other professional services arrangements with others in the Barrick Group. These transactions are under terms that are on normal
commercial terms and conditions. These transactions are not considered to be significant.
At 30 June 2016 the Group had no loans of a funding nature due to or from related parties (30 June 2016: zero; 30 June 2015: zero; 31
December 2015: zero).
16. Post Balance Sheet Events
The Board of the Company has approved an interim dividend of US2.0 cents per share for this financial year to be paid on 30
September 2016 to shareholders on the register on 2 September 2016.
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