Acacia Mining PLC (ACA) is a United Kingdom-based gold mining company and is the holding company of the Acacia Group. The group has three mines, all located in north-west Tanzania, and is one of the largest producers of gold in Africa and the largest gold miner in Tanzania.

In addition to gold, as a co-product, the group also produces silver and copper. In Burkina Faso, Mali and Kenya, the group has a portfolio of exploration projects. The group is listed on the London Stock Exchange, and Barrick Gold Corporation is the group's majority shareholder. On the Dar es Salaam Stock Exchange, the company has a secondary listing. The group's operations are differentiated in three operating segments which are based on its gold mine: North Mara; Bulyanhulu; Buzwagi.

The company is currently facing an issue with the production in Tanzania Africa based North Mara Mine. As a result of ongoing production problems, the company’s core earnings crashed. The company is building pressure on the government to intervene in the dispute and help the company to come up with a solution.

Barrick Gold Corporation majorly owns the Acacia Mining Plc. Barrick Gold Corporation and the Tanzanian Government are involved in a long-term tax disagreement. In the first quarter of FY19, gold production declined significantly by 13 per cent to 104,899 ounces as compared to the corresponding period of the last year.

The company was facing an issue with the access to high-quality ore at Tanzania’s Mara Gokona mine. However, the company is expecting its annual production target to be as forecasted earlier and trying hard to settle the disputes with the Tanzanian government which will turn the fortunes for the company for the remaining period of the financial year.

In Q1 FY19, the company’s reported revenue stood at $138 million, down by 12 per cent as compared to Q1 FY18 reported data. EBITDA stood at $24 million and was down by 72 per cent from the last year.

Share Price Performance

Daily Chart as at April-26-19, before the market close (Source: Thomson Reuters)

On 26th April 2019, at the time of writing (before the market close, GMT 2:53 PM), Acacia Mining Plc shares were trading at GBX 147.80, down by 0.14 per cent against its previous day closing price. Stock's 52 weeks High and Low is GBX 268.20/GBX 93.56. The outstanding market capitalisation was around £606.40 million.

As per the Peter Geleta, chief executive at Acacia Mining, both the government and the company are in pressure to solve this issue. In the third quarter, there will be an international arbitration hearing which is the critical factor of increasing the pressure.

The company had also appointed new board members who are having long-term experience in the mining sectors. With an immediate effect, Alan Ashworth, Adrian Reynolds and Deborah Gudgeon will be on board as an independent non-executive director.

The company is very much focussed on solving the disputes in Tanzania and is actively pressuring the government for the solution. Apart from that, the company is looking for many other projects in many other regions as well, for example, Kenya. The company is also looking for other strategic partners to expand its operations.


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