The London-based gold mining firm said that the gold and copper concentrate export ban imposed by Tanzania in March has impacted nearly 35% of its year-to-date group production. As a result, it said that ordinary course operations at the Bulyanhulu gold mine in the Shinyanga Region have become unsustainable.
Acacia has seen a build-up of about $265m of concentrate inventory in the African country.
It says that despite taking several actions to mitigate the lost revenue, there has been a considerable cash outflow of around $210m so far this year.
Acacia has now launched a programme to cut down operational activity and costs at the Bulyanhulu gold mine to preserve the viability of its business in the long run.
The objective of the programme is to preserve all the assets and equipment. This will be done to make them ready for resuming ordinary course operations as soon as the export ban is lifted by the Tanzanian government along with the stabilization of the operating environment.
Acacia stated: “It is envisaged that the process of moving to a reduced operational state will be completed in three months and will include one-off costs of US$20-25 million in addition to the natural unwinding of around two months’ worth of working capital (approximately US$35-40 million).”
The gold miner revealed that as of now, its Buzwagi gold mine also in the Shinyanga Region will continue to operate in the ordinary course despite being impacted by the concentrate ban. This, it says is because of the remaining short mine life and the low impact it has on the group’s cash outflows.
Image: Operations at Acacia’s Bulyanhulu gold mine in Tanzania. Photo: courtesy of Acacia Mining plc.
