Former African Barrick Gold to go underground at North Mara (updated)

Sarama Resources

27/11/2014 12:36

(Adds details, CEO comments, share movement) 
    By Roshni Menon 
    Nov 27 (Reuters) - Acacia Mining Ltd  ACAA.L , formerly 
African Barrick Gold Plc, said on Thursday it planned to start 
underground mining at its North Mara mine in Tanzania in the 
first half of 2015. 
    The open pit North Mara mine has a chequered past, with 
villagers illegally entering the site to scour tailings that may 
contain small quantities of gold, and some have been killed or 
injured by mine security guards and police. 
    "The North Mara decision to go underground ... minimises our 
impact on the community, reduces the opportunity for illegal 
miners to enter that operation, and reduces our footprint with 
respect to needing land to dump waste," Chief Executive Brad 
Gordon told Reuters on Thursday. 
    Acacia has been cutting mining costs, reducing its workforce 
and increasing output to counter the sharp drop in gold prices 
that has forced many gold and silver miners to shelve projects. 
    The company, unveiling its long-term strategy at an investor 
meeting in London, said the underground expansion was expected 
to produce 450,000 ounces of gold over a five-year mine life at 
an all-in sustaining cost (AISC) of under $750 per ounce. 
 ID:nPRrR462Ba  
    Acacia's AISC, which includes production and exploration 
expenses, was $961 per ounce sold from the North Mara mine in 
the nine months to Sept. 30. 
    Gordon said Acacia expected the underground operation to 
produce about 50,000 ounces next year and about 100,000 ounces 
per year over the following four years. 
    Acacia said it expected group production of more than 
750,000 ounces next year and more than 800,000 the year after, 
before easing off. 
    The average AISC would be about $900 per ounce for the next 
five years, Acacia said. The company said in October it expected 
full-year costs of about $1,100 per ounce sold. 
    "Drop in costs is a big positive and may compensate for a 
slightly weaker longer-term production profile than we had been 
expecting," Canaccord Genuity analysts wrote in a note. 
    The miner, which assumed its new name on Thursday, also said 
it had signed an exploration joint venture with Canada's Sarama 
Resources Ltd  SWA.V  to work on the South Hounde Project in 
Burkina Faso.  ID:nPRrR833Fa  
    Apart from North Mara, Acacia has two other producing mines 
in northwest Tanzania - Bulyanhulu and Buzwagi. It also has 
exploration projects in Tanzania, Kenya and Burkina Faso. 
    Acacia's shares were down about 1 percent at 233 pence at 
1225 GMT on the London Stock Exchange. 
 
 (Reporting by Roshni Menon in Bangalore; Editing by Ted Kerr) 
 ((roshni.menon@thomsonreuters.com; within UK +44 20 7542 1810, 
outside UK +91 80 6749 1136; Reuters Messaging: 
roshni.menon.thomsonreuters.com@reuters.net;)) 
 
Keywords: AFRICAN BARRICK STRATEGY/