Acacia mining reported a record gold production at Buzwagi mine last year despite facing myriad challenges. The company, which is majority owned by Barrick Gold, has three mines in Tanzania.

The company’s unaudited financial statement for the 12 months that ended in December 2017 shows that Buzwagi produced a record gold production of 268,785 ounces, which was 66% higher than in 2016.

This was mainly due to a 75% higher head grade as a result of higher grade ore mined from the main ore zone at the bottom of pit.

The production for the year comprised 113,035 ounces of gold in concentrate and 155,749 ounces of gold in doré bars.

For their part, North Mara managed to mine a total of 323,607 ounces, which represents a 14% drop from 2016 while Bulyanhulu production was 175,491 ounces, 39% lower than the prior year.

The fall of production at Bulyanhulu was due to a 34% decrease in run-of-mine tonnes for the year primarily due to the decision to transition Bulyanhulu into reduced operations at the end of the third quarter of 2017.

“The company recorded a resilient performance in what turned to be a difficult year in terms of operating environment. We expect to return the business to free cash generation during the forthcoming year,” said Peter Gereta, interim Chief Executive Officer, Acacia.

In his statement, he said whilst operational performance was solid, financial performance was significantly impacted by Tanzania’s on-going ban on exporting gold/copper concentrate, which resulted in approximately $264 million of lost revenue in 2017 and drove a total cash outflow of $237 million.

“It was especially pleasing to see a record year of production at Buzwagi in spite of the uncertainty about the mine’s future as the mine effectively completed the final stage of the open pit ahead of moving to a stockpile processing operation for the next three years,” he said.

According to the statement, in 2017, gold production of 767,883 ounces was recorded, which was 7% lower than 2016 as a result of lower production at Bulyanhulu. It was down to the transition to reduced operations in the fourth quarter of 2017.

Gold sold last year was 107,855 ounces, which was 39% lower than production and 61% lower than 2016 mainly as a result of inability to export concentrates from early March combined with the lower production base.

In addition, cash balance fell from $318 million to $81 million at year-end due to lost revenue resulting from the concentrates ban and a gross build-up of VAT receivables of $91 million, but was boosted post year-end by the sale of a non-core royalty for $45 million.

Total revenue for the year amounted to $752 million, which was 29% lower than 2016 as a result of inability to sell gold, copper and silver contained in concentrate as set out above during the year.