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Acacia Mining earnings hit by lower gold price

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Gold miner Acacia Mining (LON:ACA) saw earnings slip as a falling gold price outweighed improved production. 

The company, previously known as African Barrick, saw earnings slip 18% in the three months to 31 March despite improving production at its four mines in northern Tanzania.

The average price received per gold ounce by the company fell almost US$100, or 7%, to US$1,207 compared to US$1,303 the first quarter of 2014.

Gold production rose 8% and sales rose 7% but the drop in the gold price meant revenues and profits were both lower. 

Brad Gordon, Chief Executive Officer of Acacia Mining said: "We have delivered steady production over the first quarter, with 181,660 ounces of gold produced, in line with the previous quarter.”

Earnings before interest, tax, depreciation and amortisation however, fell 18% or US$12mln to just under US$53mln.

Cash costs of US$783 per ounce were also higher as a result of the impact of water balance issues costs at the Bulyanhulu mine led to its temporary closure for half of the period.

This meant cash generated from operating activities amounted to US$47.1 million, US$3.6 million lower than the first quarter of 2014.

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