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Acacia back to profit

Almost two years on from the still-unresolved export block in Tanzania, Acacia Mining (LSE:ACA) has returned to profit.
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North Mara has pulled Acacia into the black

The gold miner brought in US$664 million in revenue on production of 522,000 ounces in 2018.

This was well above high-end guidance of 475,000oz, and the year's all-in sustaining cost of $905 per ounce also beat expectations. 

Profit for the year was $59 million, compared to a $707 million loss in 2017, because of a $644 million write-down on the Tanzanian assets.

The 2018 adjusted profit of $44 million (10.8c per share) was well below 2017's adjusted total of $146 million, because of a 12% drop in revenue year-on-year.

Interim Acacia CEO Peter Geleta said the 2018 numbers showed the company was managing without a permanent solution to the tax bill and concentrate export ban.

"We were able to return the company to free cash flow generation in the second quarter of the year, a trend which was sustained during the second half, ending the year with a net cash position of $88 million," he said.

Acacia's position in the Barrick Gold portfolio has been questioned following the merger with Randgold Resources.

The company said it was supporting its 64%-shareholder as it keeps negotiating with John Magufuli's government.

"We continue to provide support to Barrick in its discussions with the Government of Tanzania and believe that a negotiated resolution is in the best interests of all stakeholders," Geleta said.

The company said a study in re-opening the Bulyanhulu underground operation had been positive but this cannot happen without an agreement that stops the concentrate export ban.

The Tanzania talks had been moving along but the government has recently gone on the attack again, fining Acacia $130,000 for alleged environmental rule breaches. 

The company said it not seen any proof it had broken environmental standards.