The Tanzanian miner, which has been banned from exporting gold and copper concentrates from the country since 2017 in a bitter row with the government, said gold production fell by 13% to 104,899 ounces in the quarter. It missed consensus forecasts by 17%.
Production at the North Mara mine was hit by a fall of ground in the Gokona underground mine at the end of December as well as an excavator breakdown in the Nyabirama open pit.
READ: Acacia Mining resolves waste water spill at North Mara after Tanzania government threatens closure
In March, Acacia said wastewater pollution that leaked from a storage dam at North Mara had been stopped.
The group said sections of the pipe used to move wastewater were either vandalised or stolen, causing an overspill at the mine.
The Buzwagi mine saw gold production drop 20% to 28,577 ounces.
Gold production at the Bulyanhulu mine gained 17% to 9,999 ounces due to higher grades recovered from the retreatment of tailings and improvements in plant throughput.
In September 2017, Acacia scaled back operations at Bulyanhulu and transitioned Buzwagi to a lower grade stockpile processing operation.
The move was in response to the company’s export ban, which was imposed after Tanzania’s president John Magufuli accused the company of owing US$190bn in taxes from undeclared exports.
Talks with Tanzanian government continue
In Monday’s statement, Acacia said it has continued to engage with parent company Barrick Gold in its negotiations with the Tanzanian government.
"Acacia is looking forward to receiving a detailed proposal for a comprehensive resolution of Acacia’s disputes with the Government, once Barrick’s negotiations have been successfully concluded," it said.
"Acacia continues to favour a negotiated resolution on a timely basis that will benefit all stakeholders."
Acacia said it remains confident meeting its full-year production guidance of 500,000 to 550,000 ounces after making changes at North Mara to improve grades and volumes.
Shares fell 2.4% to 187.4p in morning trading.
North Mara disruptions to have negative impact on costs, says RBC
RBC Capital Markets thinks it is likely Acacia will only meet the low end of its full-year guidance.
“It was an extremely tough start to the year for Acacia with first quarter production -17% below consensus and -23% below our forecast,” the broker said.
RBC said the production disruptions at North Mara are likely to have a “significantly negative impact” on costs.
The broker said changes at North Mara may also mean Acacia reaches the upper end of its forecast range for full-year capital expenditure.
It also noted that net cash fell by US$17mln quarter-on-quarter to US$99mln.
RBC maintained a ‘sector perform’ rating and target price of 192p.