The fact that the share price of Acacia Mining (ACA) has doubled in five months says two things. First, that investors are feeling more bullish about gold, which climbed by more than $100 (£77) an ounce over the period. Second, that investors believe a conclusion to the group’s long-running stand-off with Tanzania is imminent.
Full-year results for the group justified the former view, as a higher gold price helped to offset the 12 per cent dip in sales volumes. But there was little sign of the latter. Negotiations with the Tanzanian government continue to be exclusively led by majority shareholder Barrick Gold (US:GOLD), and failed to stop October’s filing of criminal charges against Acacia’s operating subsidiaries, and current and former employees.
What full-year results did include was an annual reminder of Acacia’s "long-term commitment" to the country, and the $400m the group spent on taxes, royalties and local supply contracts in 2018. An olive branch – in the shape of a plan to reboot the near-shuttered Bulyanhulu mine – was also offered, promising all stakeholders 18 years of steady-state production of up to 350,000 ounces a year at an all-in sustaining cost of between $700 and $750 an ounce.
On average, analysts expect earnings of 20¢ a share in 2019, up from an estimate of 14¢ last year.
| ACACIA MINING (ACA) | ||||
| ORD PRICE: | 192p | MARKET VALUE: | £789m | |
| TOUCH: | 192-194p | 12-MONTH HIGH: | 211p | LOW: 94p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 18 | |
| NET ASSET VALUE: | 288¢ | NET CASH: | $87.6m | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend share (¢) |
| 2014 | 0.93 | 115 | 21.8 | 4.2 |
| 2015 | 0.87 | -124 | -48.1 | 4.2 |
| 2016 | 1.05 | 242 | 23.2 | 10.4 |
| 2017 | 0.75 | -710 | -173 | nil |
| 2018 | 0.66 | 97 | 14 | nil |
| % change | -12 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1=$1.29 | ||||
