London, November 29
30 November 2016
Acacia Mining plc
(“Acacia” or the “Company”)
Acacia will be hosting an exploration roundtable for investors and analysts at 08:00 today to provide an update on our progress across our exploration portfolio over the past year and our priority projects in 2017. The presentation will be made available on the company website ahead of the roundtable at the following link: www.acaciamining.com/investors/presentations; a summary of the presentation is provided below.
Over the last few years Acacia has systematically created a pan-African greenfield exploration footprint, whilst working to unlock the geological potential of our producing assets. This has led to the creation of a highly prospective land package of over 4,400 square kilometres across Kenya, Burkina Faso and Mali, in addition to around 1,000 square kilometres in Tanzania. During 2016 our exploration portfolio was further increased in Burkina Faso and Mali through the signing of new joint venture agreements.
Our systematic approach to exploring our greenfield projects has created an exploration pipeline with more than 60 targets ranging from grassroots to resource delineation. In addition to the greenfield targets, we continue to advance brownfield opportunities around our operations, with a focus on North Mara, as part of our policy to apply capital to the projects with the highest potential returns. During 2016 we expect to have drilled approximately 133,000 metres across our greenfield projects with up to 15 drill rigs in operation and a total spend of US$22 million. In 2017, we plan to increase the number of metres drilled to around 190,000 metres with a budget of US$25 million.
Key results from 2016’s activities are:
- Continued high grade results from the Liranda Corridor in West Kenya, which is expected to lead to the announcement of a maiden Inferred Resource of up to 1.0Moz at a grade of approximately 10g/t in Q1 2017
- Increase of 600kz in the declared Inferred Resource at the South Houndé project in Burkina Faso to 2.1Moz at 1.5g/t, with a further increase expected in during H1 2017
- Positive drilling at the Nyabirama Deeps programme at North Mara has continued to intersect high grade mineralisation 400m below the final pit depth as we look to delineate sufficient underground mineralisation to justify commencing underground technical studies.
- Evaluation of the prospectivity of the Gokona Underground at North Mara, establishment of underground drill platforms and the design of a planned 75,000 metre two year drilling programme across the 2.5km gold corridor that Gokona sits within in order to delineate sufficient resources to sustain at least a 10 year underground mine life
- Positive results from the scoping study on the Nyanzaga project in Tanzania by our joint venture partner, OreCorp Limited (ASX:ORR), which outlines production of 2.4Moz over a 13 year life at an average AISC of US$798/oz with pre-production capital of US$248 million (including contingency)
Kenya - West Kenya Project
During 2016 we plan to have spent US$10 million on exploration on the project. The primary focus for the year was to better delineate the three main shoots identified within the Liranda Corridor (AZ-1, AZ-2 and BZ-1) in order to have sufficient understanding and drill density to declare a maiden Inferred Resource on the project in Q1 2017. The 40,000 metre drilling programme has continued to be successful with the key intersects received in H2 2016 shown below. We expect to be able to declare an initial Inferred Resource of up to 1.0Moz at a grade of around 10g/t Au in Q1 2017.
- AZ-1 - 4.0m @ 55.5 g/t Au from 222m
- AZ-1 - 4.0m @ 15.6 g/t from 423m
- AZ-1 - 1.2m @ 42.6 g/t Au from 382m
- AZ-1 - 3.0m @ 11.2 g/t Au from 443m
- AZ-1 - 6.0m @ 7.35 g/t Au from 616m
- AZ-2 - 5.8m @ 24.9 g/t Au from 334m
- AZ-2 - 3.0m @ 125g/t Au from 37m
- AZ-2 - 6.8m @ 10.4 g/t Au from 617m
- AZ-2 - 4.7m @ 42.8g/t Au from 671m
- AZ-2 - 3.5m @ 12.4 g/t au from 706m
- AZ-2 - 2.2m @ 125 g/t Au from 538m
- BZ-1 - 12.8m @ 15.3 g/t Au from 274m
- BZ-1 - 2.3m @ 17.3 g/t Au from 226m
- BZ-1 - 7.0m @ 17.6 g/t Au from 366m
- BZ-1 - 4.0m @ 10.3 g/t Au from 280m
In Q3 2016, Acacia increased its ownership from 51% to 100% in the two licences covering the majority of the West Kenya project area for consideration of US$5 million.
In 2017, we have increased the budget for the project to US$12 million, which is primarily designed to scope out the size of the existing shoots (lateral and depth extensions), and to infill gaps between holes in order to increase the scale and confidence of the resource as we move through the year. We also plan to test further potential shoots within the Liranda Corridor along strike to the east. Further to this, we will undertake regional programmes across the broader 1,600 square kilometre licence area.
Burkina Faso - South Houndé Joint Venture
During 2016 we plan to spend US$3.5 million on exploration and by the end of the year we will have earned a 50% ownership in the project. We are now progressing into Phase 2 of the earn-in and have elected to exercise our right to act as Manager of the JV from the start of 2017. In February 2016, Sarama (our JV partner) declared an increase in the Inferred Resource of 600koz to 2.1Moz at 1.5g/t. The 50,000m drilling programme in 2016 was focused on the addition of higher grade resource ounces as well as on new discoveries across the project area. The drilling programmes have been successful in further identifying mineralisation and we expect will lead to an increase in the declared resource in early 2017. The following key intersects returned during H2 2016 or were released earlier in the year include:
- MM - DH086: 13.7m @ 5.67 g/t Au from 429m
- MM- DDH079: 17.4m @ 5.88 g/t Au from 195m
- MC - FRC1044A: 14m @ 2.37 g/t Au from 82m
- MC- FRC984: 15m @ 7.44 g/t Au from 47m
- MC - FRC1042: 16m @ 3.04 g/t Au from 80m
- MC - FRC982: 14m @ 4.12 g/t Au from 41.0m
- Phantom Est - AC2496: 12m @ 5.78 g/t Au from 14m
- Phantom Est - AC2431: 10m @ 7.15 g/t Au from 4m
- Phantom Est - AC2431: 12m @ 2.83 g/t Au from 38m
- Phantom Est - AC2434: 8m @ 4.45 g/t Au from 20m
- Kenobi - FRC1000: 23m @ 1.73 g/t Au from 40m
In 2017, US$4 million is planned to be spent, comprising 12,000 metres of diamond core drilling, 10,000 metres of reverse circulation drilling and 28,000 metres of aircore drilling. The primary aim of the programmes is to test a number of the high grade shoots associated with possible cross structures on the MM and MC Trends which are estimated to be 10-20m wide lodes, 50-80m minimum shoot length, and extend 300m down-dip below currently delineated mineralisation at grades potentially better than 5g/t of gold. The target is to add >1Moz of underground mineable resource on structures associated with the MM and MC zones at Tankoro. In addition we will test for new discoveries within 20-25km of the Tankoro resource area across more than 40km of poorly tested gold-soil anomalies.
Burkina Faso - Regional Exploration
During 2016, US$5 million is planned on exploration across the remainder of our greenfield projects in Burkina Faso. All of the earlier stage joint ventures have progressed well with grassroots programmes such as soil sampling, IP surveys and reconnaissance drilling being undertaken and identifying large scale gold-in-soil anomalies.
As a result of these programmes we identified the Legue – Bongui Corridor, a 10km x 3km gold-in-soil anomaly with up to 5g/t gold measured in the soil sampling located in the Central Houndé Joint Venture in Burkina Faso. In late 2016 we commenced drill testing the prospect with positive initial results from a small section of the anomaly, including:
- 2.0m @ 28.2g/t from 155m
- 6.0m @ 3.74g/t from 99m
- 22.0m @1.15g/t from 18m
- 12.0m @ 1.40g/t from 48m
- 17.0m @ 1.11g/t from 158m
The initial programmes are highly encouraging and in 2017 we will undertake a 10,000 metre reverse circulation and diamond core programme to assess several parts of this very large gold anomaly.
Across all of the regional licences in Burkina Faso we plan to spend US$5 million in 2017 to drill a total of 75,000 metres.
Tanzania - Nyanzaga
All spend on the Nyanzaga project during 2016 was funded by OreCorp Limited, our joint venture partner, under the terms of our agreement. During the year OreCorp undertook a scoping study and as a result updated their JORC compliant Resource. This now stands at 3.3Moz at 3.5g/t with approximately 80% of the resource sitting in Indicated or Measured categories. The Resource extends from surface to 800m vertical depth with mineralisation open at depth.
The scoping study was completed in August 2016 and indicated a combined open pit and underground operation producing 2.4Moz over a 13 year life at an average AISC of US$798/oz and requiring US$248 million of pre-production capital (including contingency). OreCorp is currently undertaking a pre-feasibility study based on the positive scoping study results.
OreCorp expect to complete the pre-feasibility study in Q1 2017 and if successful will move straight into a definitive feasibility study (DFS). The DFS is then expected to be completed by the end of 2017. On completion of the DFS, and a spend of US$14 million, OreCorp will have earned 25% in the project and depending on the results NPV Acacia will have the option to stay at a 75% ownership through a payment covering a multiple of OreCorp’s spend, can opt to dilute to 49% ownership in exchange for receiving a further US$15 million of staged payments from OreCorp, or we can assess other strategic alternatives for the stake.
North Mara - Nyabirama Deeps
During 2016 we plan to spend US$1 million on exploration. The primary programme of 10 holes was designed to extend the known mineralisation beneath the final open pit shape. Seven of the first ten holes returned one or more high-grade intersections confirming the opportunity for underground mineable resources to 400m beneath the open pit. Better results from the first 10 holes included:
- NBD01437 2.2m @ 19.8 g/t Au from 645.8m
- NBD0141 6m @ 14.7 g/t Au from 265.5m,
6m @ 7.39 g/t Au from 387m,
7m @ 197 g/t Au from 361m incl. 1.3m @ 870g/t Au
- NBD0142 4m @ 19.1 g/t Au from 345m,
9m @ 15.3 g/t Au from 370m,
1m @ 150 g/t Au from 396m,
3m @ 9.21 g/t Au from 462m
- NBD0143 5.5m @ 11.8 g/t Au from 223m,
2m @ 11.8 g/t Au from 283m
- NBD0144 15m @ 15.9 g/t Au from 347m incl. 1m @ 200 g/t from 347m
- NBD0145 1m @ 17 g/t Au from 522m
- NBD0146 7m @ 50.2 g/t Au from 533m incl. 1m @ 320 g/t Au from 536m
The drill results are very encouraging and have led to the design of a further 10 hole programme to extend the identified mineralisation to a depth of 700m. This programme has already commenced and consists of approximately 8,000 metres of diamond core drilling. It will cost US$2 million to drill and should be completed early in Q1 2017. We have budgeted a further 25,000 metres of resource definition drilling for 2017-2018 for US$5 million, of which 15,000 metres will be drilled in 2017. If the results of these programmes are successful, an underground drill access will be considered for development in 2018 to further test the system. The goal of this programme is to facilitate underground mining prior to the completion of the open pit in 2021.
North Mara - Gokona Underground
During 2016, exploration spending was limited to proximal areas around the existing underground resource blocks as the focus on the relatively new underground mine has been on production and drill platforms were only established late in the year. Work on the project this year has consisted of desktop reviews and evaluation of potential targets in and around the Gokona-Nyabigena mineralised system, which extends over 2.5km and to depths of 1km and contains three previously active open pits (Gokona, Nyabigena and Nyabigena East). During H2 2016 we designed a programme of around 75,000 metres of combined surface and underground drilling to be undertaken over a 2 year period (2017-2018) to scope out lateral extensions to the existing resource and to infill and upgrade the current resource. During 2017 we expect to spend US$6.5 million and complete over 45,000 metres of the programme. The aim of the drilling is to increase the scale of the resource in order to sustain underground mining operations for at least 10 years. This, in turn, will assist in the mine achieving its ambition of maintaining production levels above 300koz per annum for the next 10 years.
Bulyanhulu Reef 2 Series
During 2016 we undertook an underground diamond drill exploration programme focused on enhancing our understanding of the Reef 2 system across both the existing known mineralisation (Upper East (confirmation drilling) and Central (reserve definition) Zones) as well as looking to extend the strike of the ore body in the Lower West Zone as we look to unlock the geological potential of the series. The mixed results from the approximate 30,000 metres of drilling have advanced our understanding of the geology and have confirmed the need to increase the drill density across the Reef 2 Series. This work will be incorporated into our updated reserve and resource statement and also the design of future drill programmes.
For further information, please visit our website: http://www.acaciamining.com/ or contact:
|Acacia Mining plc||+44 (0) 20 7129 7150|
Giles Blackham, Investor Relations
|Bell Pottinger||+44 (0) 20 3772 2500|
About Acacia Mining plc
Acacia Mining plc (LSE:ACA) is Tanzania’s largest gold miner and one of the largest producers of gold in Africa. We have three producing mines, all located in north-west Tanzania: Bulyanhulu, Buzwagi, and North Mara and a portfolio of exploration projects in Tanzania, Kenya, Burkina Faso and Mali.
Our approach is focused on strengthening our three core pillars; our business, our people and our relationships, whilst continuing to invest in our future.
Acacia is a UK public company headquartered in London. We are listed on the Main Market of the London Stock Exchange with a secondary listing on the Dar es Salaam Stock Exchange. Barrick Gold Corporation is our majority shareholder. Acacia reports in US dollars and in accordance with IFRS as adopted by the European Union, unless otherwise stated in this announcement.
Disclaimer and forward-looking statements
This announcement is for information purposes only and does not constitute an invitation or offer to underwrite, subscribe for or otherwise acquire or dispose of any securities of Acacia in any jurisdiction.
This announcement includes “forward-looking statements” that express or imply expectations of future events or results as opposed to historical facts. These statements include, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, projects, and statements regarding future performance. Forward-looking statements are generally identified by the words “plans,” “expects,” “anticipates,” “believes,” “intends,” “estimates” and other similar expressions.
All forward-looking statements involve a number of risks, uncertainties and other factors, many of which are beyond the control of Acacia, which could cause actual results and developments to differ materially from those expressed in, or implied by, the forward-looking statements contained herein. Factors that could cause or contribute to differences between the actual results, performance and achievements of Acacia include, but are not limited to, changes or developments in political, economic or business conditions or national or local legislation or regulation in countries in which Acacia conducts - or may in the future conduct - business, industry trends, competition, fluctuations in the spot and forward price of gold or certain other commodity prices (such as copper and diesel), currency fluctuations (including the US dollar, South African rand, Kenyan shilling and Tanzanian shilling exchange rates), Acacia’s ability to successfully integrate acquisitions, Acacia’s ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, and to process its mineral reserves successfully and in a timely manner, Acacia’s ability to complete land acquisitions required to support its mining activities, operational or technical difficulties which may occur in the context of mining activities, delays and technical challenges associated with the completion of projects, risk of trespass, theft and vandalism, changes in Acacia’s business strategy and ongoing implementation of operational reviews, as well as risks and hazards associated with the business of mineral exploration, development, mining and production and risks and factors affecting the gold mining industry in general. Although Acacia’s management believes that the expectations reflected in such forward-looking statements are reasonable, Acacia cannot give assurances that such statements will prove to be correct. Accordingly, investors should not place reliance on forward-looking statements contained in this announcement.
Any forward-looking statements in this announcement only reflect information available at the time of preparation. Subject to the requirements of the Disclosure and Transparency Rules and the Listing Rules or applicable law, Acacia explicitly disclaims any obligation or undertaking publicly to update or revise any forward-looking statements in this announcement, whether as a result of new information, future events or otherwise. Nothing in this announcement should be construed as a profit forecast or estimate.