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Acacia’s gold-plated half year

Acacia's excellent production, an improved cash position and a decent cost profile could prompt majority owner Barrick to start selling its holding
July 22, 2016

A lot of expectation is riding on gold miners, which have risen to eye-watering valuations in the past month, but Acacia Mining (ACA) is one company that appears to be meeting that challenge. Figures for the six months to June smashed analyst expectations, thanks to a 12 per cent production increase to 412,025 ounces and a 19 per cent year-on-year drop in second-quarter all-in sustaining costs to $926 (£707) an ounce.

IC TIP: Hold at 556p

North Mara and Bulyanhulu, Acacia’s longer-life Tanzanian mines, both delivered ahead of expectations and contributed to a 23 per cent increase in average head grade of 3.2g per tonne in the second quarter and a slimmer jump to 3g over the half year. A planned two-week shaft closure at Bulyanhulu and a return to reserve grade means output in the current quarter is unlikely to be as strong, although the company still believes it can hit or beat full-year production guidance of 750,000-780,000 ounces while keeping all-in costs towards $950 an ounce.

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