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Edited Transcript of ACA.L earnings conference call or presentation 20-Apr-17 7:45am GMT

Thomson Reuters StreetEvents

Q1 2017 Acacia Mining PLC Earnings Call

Apr 22, 2017 (Thomson StreetEvents) -- Edited Transcript of Acacia Mining PLC earnings conference call or presentation Thursday, April 20, 2017 at 7:45:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Andrew Wray

Acacia Mining plc - CFO

* Giles Blackham

Acacia Mining plc - IR Manager

* Mark Morcombe

Acacia Mining plc - COO

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Conference Call Participants

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* Adrian Hammond

SBG Securities (Proprietary) Limited, Research Division - Research Analyst

* Alan Spence

Jefferies LLC, Research Division - Equity Analyst

* Eily Ong

* James Andrew Keith Bell

BofA Merrill Lynch, Research Division - Associate

* Justin Chan

Numis Securities Ltd., Research Division - Analyst

* Luke Nelson

JP Morgan Chase & Co, Research Division - Research Analyst

* Michael Stoner

Peel Hunt LLP, Research Division - Mining Analyst

* Richard Hatch

RBC Capital Markets, LLC, Research Division - Associate

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Presentation

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Operator [1]

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Good morning, ladies and gentlemen. This is a conference call for Acacia Mining 2017 First Quarter Results.

I would like to hand you over to your host for today, Mr. Giles Blackham. Giles, please go ahead.

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Giles Blackham, Acacia Mining plc - IR Manager [2]

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Thanks very much, Molly, and welcome, everyone. Thanks for dialing into our Q1 results conference call. I hope you had a chance to digest the results sent out this morning and they are, obviously, on our website, if you haven't had a chance to look at those.

I'm joined this morning with Andrew Wray, our CFO; and Mark Morcombe, our COO. Brad currently is not with us today, but I'll hand over to Andrew to explain why. And to run through the results, he will lead the key messages and then the Q&A.

So with that, I will pass over to Andrew.

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Andrew Wray, Acacia Mining plc - CFO [3]

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Thanks very much, Giles, and good morning, everyone. As Giles said, Brad is not in London. He is, as we speak, on a plane on his way back down to Tanzania. He'll just come back to London for Board results and AGM. So the further meetings that he needs to go to attend. He send his apologies, and I'll take you through the highlights of the quarter and then we can go straight to Q&A after that.

As you've seen this morning, the results, I think, are particularly encouraging from an operational perspective and 220,000 ounces, well ahead of the corresponding quarter in 2016, and really a continuation of where we ended 2016 and as well as North Mara continuing to benefit from the higher-grade turn underground. We've seen that step-up that we've expected at Buzwagi, and they produced 60,000 ounces in the quarter and that's the sort of run rate we expect from them going forward.

So encouraging to see that now being delivered with the corresponding reduction in unit costs and then the cash generation going through from Buzwagi.

In terms of unit costs, the headline all-in number is $934 an ounce. And if you strip out the RSU costs that we have there, that's still a pretty good share price performance over quarter 1 and it could be $877 an ounce. And remember, that is on ounce you've sold, so that takes into account the close to 15% of that production was held up through the current concentrate ban. So if we took a headline number based on production, we'd be around $860 an ounce, which I think, compared to where the business was several years ago, is very encouraging.

So with the noise in the background from that ban I think importantly, the assets have kept their focus, the operations have continued to deliver, and that positions us well as we've said in the release guidance is unchanged, and you can see that we're tracking very nicely with respect to our guidance for the year.

The financials are impacted, as you would expect, by the concentrate ban that's just over $30 million net revenues, which are currently held up due for that. If you factor in as well that we have had no VAT refunds over the quarter, then that is just over another $25 million that is outstanding refund in cash. Two of those is the $60 million impact, so the operation's generating cash. But once you factor those 2 issues into the numbers, then you can see the cash burn for the quarter is around $36 million. And remember, that includes the $14 million debt repayment, the Bulyanhulu expansion facility that's in place.

And that now leaves us with the unsold concentrate for the quarter, if that had been sold, then we would be roughly breakeven, even with the VAT headwind. So that is disappointing in the sense, we want to generate free cash. But actually taking those factors into consideration shows that, operationally, a good performance, as I said.

On the ban itself and on the resolution of that ban, Brad is on his way back down to continue the dialogue that we've got underway with the authorities in Tanzania. In addition to that, there is a committee that is reporting to the President from a technical perspective on the process, and verifying the content of the concentrate in the next few days, and we've given that committee access to everything they require. They have access to site, and we would expect that to confirm the process as we know it. That goes directly to the President and then we continue our dialogue to try to get the issue resolved. In the meantime, production continues at all of our sites and we're stockpiling, in the meantime, that concentrate for the time being in containers that we've got the capacity if needs be to bulk store the concentrate for a period beyond the containment storage.

I think the other element, just to highlight before we get to Q&A, which we put out earlier in the quarter, was the initial resource in Kenya where we declared amazing result at 1.3 million ounces of over 12 grams a tonne. We've continued to aggressively drill out that project in the first quarter and into the second. The target remains that we want to get a resource of over 2 million ounces by the end of the year and initiate a study work on that project, but very good progression and it's starting to really prove out that [ the leads were ] -- that's a high-quality asset and we'll continue to invest in it.

So in summary, I think it's a positive operational quarter for the business. Good start for the year. Certainly most slowed down from the operations. We've got to resolve the concentrate ban issue. And once we've got that behind us, then I think the operation to continue to show the cash-generating capabilities that you saw through 2016.

So with that, we'll hand back for Q&A.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We have a question today from Justin Chan of Numis Securities.

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Justin Chan, Numis Securities Ltd., Research Division - Analyst [2]

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My first question is just -- what is your view on the potential of reaching a comprehensive agreement with the government on all the issues, the [ bet ], the local ownership, and of course, the concentrate ban?

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Andrew Wray, Acacia Mining plc - CFO [3]

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The first priority for us is to just get past the ban. That said, what we hope to do as part of that process and certainly what we've been suggesting in conversations is that we then need to sit down and put those issues that you alluded to on the table and find a way of resolving them and getting the focus back to what the business does contribute rather than speculating about what it doesn't. So that for us is a priority.

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Justin Chan, Numis Securities Ltd., Research Division - Analyst [4]

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Right. And just as a follow-up, what if any impact is there for not reaching the new August deadline on the local ownership, I guess?

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Andrew Wray, Acacia Mining plc - CFO [5]

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Yes, I think the local minimum shareholding that you're referring to. I think it is new territory as probably everybody is aware. The first sector that is looking to try to comply with these new regulations is the telco sector, and there is an offering light in the market at the moment with Vodacom. They announced yesterday they're extending the period for subscription for that, so they we haven't got to where they wanted to yet. But that will be helpful because it will give us a window as to some other structures being contemplated, some of the mechanisms, and actually, some of the capacity in the local market. So we'll be starting the dialogue with the market authorities and then that, in each sector, is overseen by the parent industry. So then, we'll also be talking to the mining industry about that. And as this progress, then we'll update the market on that.

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Justin Chan, Numis Securities Ltd., Research Division - Analyst [6]

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I see. And on the VAT refunds, it's -- have you received guidance on when the VAT audit will be completed and presumably then refunds will recommence?

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Andrew Wray, Acacia Mining plc - CFO [7]

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We don't know when the overall process -- it's not just an Acacia process, so it's across the whole system as the revenue authority. In terms of our own specific case then -- we've had a joint team from the finance ministry and the revenue authority in our offices going through our individual invoices one by one for a while now. They're almost complete, and we're not aware of any adverse findings coming out of that, but the process needs to complete across the tax-paying base. So it's been underway for a period of months. We hope that's not too much longer, but we don't know when they will complete that. So as yet, there isn't a definite timescale I can give you on resolutions there.

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Operator [8]

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Our next question today comes from James Bell of Bank of America Merrill Lynch.

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James Andrew Keith Bell, BofA Merrill Lynch, Research Division - Associate [9]

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Yes. Just 3 questions. On the meetings around the concentrate export ban, can you confirm if Brad had actually met with the President yet? And if not, if there is a sort of plan or a date at which time you're expecting to meet them? And then just secondly, on North Mara. In terms of what we're looking for in Q2, is that just going to be an updated reserve? Or are you planning to release the full mine plan with the -- as your production [ proof ] for forward years?

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Andrew Wray, Acacia Mining plc - CFO [10]

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James, so on the meetings, Brad has not yet met the President. There's been dialogue ongoing, as I said. So part of the objective is to have that face-to-face meeting. First, the President, quite rightly I think from his perspective, is trying to find out through the committee he's put in place exactly what the process is. So getting himself better educated so that when there is a meeting, then both parties come to it fully informed and that first process from a technical perspective is just about complete and the report's due on the President's desk in the next few days. So hopefully then that gives him the concept that there's a robust process and he's then fully informed for a face-to-face meeting. In terms of what's coming out of North Mara, Mark's here, so I'll let Mark update you on the North Mara reserve and plan for the year.

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Mark Morcombe, Acacia Mining plc - COO [11]

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So, James, the work at North Mara, we have got [ new mines ] on and scheduled at spring [ put together ] right now, which is showing the sort of the potential for system there. And what we'll do as we go through it all. We'll make an assessment because we had indicated that we do guidance early next year from a longer-term perspective. We'll just go through it and just make sure that we're happy, because a lot of the material that we bring into our [ loss of mine ] plan includes inferred materials and so forth, lower confidence, and because that informs central programs. I think potentially though -- we're very happy with the results that we're seeing so far, and it's just going to be a matter of determining whether this is something that we should share with at this point in time or just hold off until some of the additional drilling that we're doing can just increase the confidence.

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James Andrew Keith Bell, BofA Merrill Lynch, Research Division - Associate [12]

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Okay. And then just 1 more for you, Andrew. Is there a point where you guys start looking at capital allocation in terms of reviewing dividends or CapEx plans due to the fact that you can't get the exports? I mean, I know your cash balance is relatively healthy versus the cash you're not able to realize? Is there a point where you start to review your thoughts on those?

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Andrew Wray, Acacia Mining plc - CFO [13]

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Yes. That's the process we're already going through at the moment, James. In terms of capital, we're continuing with the potential capital if you don't want to have any impact on productive capability operations, so all of the major CapEx programs there are moving ahead, where we can push back any spend, where we can push back advanced payments through working with suppliers. We're already doing that and anything non-essential, we're holding off. So you see that in the sustaining capital number for the quarter -- it was probably about half of what we would expect as a quarterly run rate as we go through 2017. Partly that's just the natural slow start at the start of the year that you see every single year. That's partly also some of those payments and some of those nonessential spending pushback. On the dividend, we've got the -- we have dividends to be paid next month, that's going ahead. And then the interim that we would normally declare in July is, in any case, based on free cash flow and that's the way the metric works. So by that time, we'll have better visibility on where we are. And if the issue is not resolved, then clearly there is an impact on free cash that's factored into the dividend. If it is resolved, then we'll be working on a normalized basis.

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Operator [14]

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Our next question today comes from Adrian Hammond of Standard Bank.

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Adrian Hammond, SBG Securities (Proprietary) Limited, Research Division - Research Analyst [15]

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Just have a couple of questions, please. First on North Mara, looking at the tonnage and [ great performance ] this quarter. How sustainable that beyond the tonnage usage had a marked improvement? And then on the grade, the 11 grams of sand, sort of, the new -- what do you expect going forward? Because it's not much higher now than the reserve grades. What should be -- what is the new sort of baseline? I understand you're still working on those areas.

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Giles Blackham, Acacia Mining plc - IR Manager [16]

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Yes, so the -- if you look at the performance at North Mara, the processing production is pretty conclusive from a tonnage perspective. It's just the [ free trade ] and that's predominantly due to the underground. And then the higher grade portion comes from the stopes in the east and what we're doing now is we're transitioning a lot more to the stopes in the west. So we do expect that the grades will go down. So -- I mean, you could argue that North Mara's production will sort of hover between 90,000 and 100,000 ounces a quarter. And at this point in time, based on the -- and production mix from east and west, we're sort of getting to the point now where the primary steps in the east almost completed in that, in what we call the golden banana area and then there will be a position where we're still doing the backfilling and then getting into the secondary stopes in the east. So it's going to be really dependent on the production mix.

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Giles Blackham, Acacia Mining plc - IR Manager [17]

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Yes, [ so we put in the ] really sort of the [ about ] 8.5-gram mining grade out of the underground for the full year, so clearly below Q1. But you're going to see tonnages move up a little bit as we go through the year, slightly less than we originally anticipated, [ just a more conservative roundup ]. But that'll offset that -- largely offset that slight reduction in grade.

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Adrian Hammond, SBG Securities (Proprietary) Limited, Research Division - Research Analyst [18]

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Okay. And then just on Buly, on some -- it seems to be [ striding there ] a bit on the tonnages. I understand the grade was around with the plan. What's going on with your ability to keep those tonnages up to just what I think are reasonable levels? What you've [ been guarded ] before previously just, I'd say, about 250,000 tonnes per quarter? Is this just a once off? Or are there problems there?

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Mark Morcombe, Acacia Mining plc - COO [19]

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I think with Buly you -- it's all about placing that -- the focus on the development to ensure that we've got sufficient areas opened up. And what we're also looking at there is getting a few alimak stopes going which will help to get some of the tonnage back to where we want it to be. So quarter 1 was a little bit of a consolidation quarter, and we're confident that we can slowly but surely increase the tonnage through the remainder of the year.

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Adrian Hammond, SBG Securities (Proprietary) Limited, Research Division - Research Analyst [20]

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Is the alimak (inaudible) because of the whole body? Or because you're not getting the results you were hoping for using the longer stoping method?

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Mark Morcombe, Acacia Mining plc - COO [21]

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Oh no, not at all. The long haul stoping method, it's working fine. From time to time, you get some areas where it's a bit of a challenge opening up a stope, and the guys are getting better and better at that -- because we're trying to transition away from using handheld methods of putting in [ risers ] and so forth. Sorry, that was expected in Q1, but it's part of the reason we said we thought we'd see slightly higher second half versus first half, was the buildup to go through the year, and we get access to more states in Buly.

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Adrian Hammond, SBG Securities (Proprietary) Limited, Research Division - Research Analyst [22]

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Right. Great. And then just a bit of a strategic question for you, Andrew, on cash -- free cash. And you pointed out earlier, you have all-in sustaining costs well below $1,000, but you say even without the ban, you would still probably be free cash neutral. So struggling yet to recon everything with the investment case is because it just doesn't match and that you could [ answer all ] for what your exploration costs have been expected to be in corporate overhead space.

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Andrew Wray, Acacia Mining plc - CFO [23]

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Yes. And I think the other thing that, bear in mind, is the VAT headwind was $27.5 million in the quarter that should be refunded to us. So -- which (inaudible) concentrate alone, we would have been breakeven. With that being refunded, as it should be, it would have been close to $30 million positive. We spent about $7 million on exploration. We spent a couple of million on that drill-out on the North Mara to prove up the resource there. We've invested in supplies inventory in the quarter with some work that needed to be done on the fleet with component change-outs at Buzwagi, and there've been some stocking of consumables, which is acquiring things, so that was about $10 million in terms of supplies inventory. So you can quickly see there those factors play in to get you back through what would actually be pretty reasonable cash generation and normalized with that out. So the quarter is muddied, if you want, by [ settlements ] going on in the background. But once we've resolved them, we expect to be back to reasonable levels of cash generation.

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Adrian Hammond, SBG Securities (Proprietary) Limited, Research Division - Research Analyst [24]

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Yes. Could you put a probability on [ where exactly the funds ] that are returning back to you? Because that balance seems to be longing.

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Andrew Wray, Acacia Mining plc - CFO [25]

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Yes. If those -- if you look over the last few years, it went in cycles. So it rose right up to 2013 and we pulled it down again and it's rising again. I think the good thing is that the operations continue to make money, then they're going to start incurring corporate tax, which we can offset against that balance. So at the moment, we incur more VAT than we do corporate tax liability, but that tax liability will grow over time. So we'll get a natural offset even without those refunds resuming. But we're pretty confident that there's nothing in the process that is amiss. From our perspective, it's a case of getting the government to then be happy itself that it's all working and review those refunds.

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Operator [26]

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We have a question from Richard Hatch of RBC.

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Richard Hatch, RBC Capital Markets, LLC, Research Division - Associate [27]

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And firstly, just in terms of potential to close Buly, what is the risk in Buly [ and if it's what you get in place ]? And what is the -- do you have a long stop date in terms of your decision in making that call to close them as sort of like a message to the government?

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Mark Morcombe, Acacia Mining plc - COO [28]

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Richard, in terms of where the pre-operations start, I think realistically, given where Buzwagi is in its life, and as you know, it's in, last year of mining. And effectively now, the last year or concentrate production in terms of around about 12 months more. The question really comes down to Buly, and what's the viability of Buly? I think the fact that we're continuing with operations unchanged at the moment really reflects the fact that we see the process that's been put in place by the President to verify exactly how the concentrate production and sales process works. We've got a dialogue, which is, as I said, the reason that Brad's headed back down to country, and that dialogue continues. So that really tells you we do see a route for resolving this, in which case, it makes sense to continue producing. If we get through the next few weeks and we have first technical amendment financial committees reporting back to the President and we see no action following that, then we've got a reappraise the situation and really take stock if does it make sense to continue producing, given the cash burn really for Bulyanhulu that that's going to imply. So we're making contingency plans in the background just to what we would need to do if we can't resolve this. But to say the fact that we are continuing to produce is an indication, in fact, we do still see a route to resolution.

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Richard Hatch, RBC Capital Markets, LLC, Research Division - Associate [29]

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Am I right in saying mines will be breakeven to achieve [ 180 ] by the fact that you have sustained CapEx which was, as you pointed out, a bit lower. And, obviously, if you run part of your sustaining CapEx to a more sort of standard level and assuming the export ban continues, then you're losing money?

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Andrew Wray, Acacia Mining plc - CFO [30]

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Yes, Buly, you say, yes, Buly was -- on operating level, probably breakeven in the quarter. It will be at -- that's, obviously, with 2 months of concentrate sales of the ban [ hitting ] March. So with the full quarter and low concentrate sales, it's clearly loss-making irrespective of CapEx levels.

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Richard Hatch, RBC Capital Markets, LLC, Research Division - Associate [31]

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Okay. And the numbers?

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Andrew Wray, Acacia Mining plc - CFO [32]

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(inaudible) A much more breakeven proposition.

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Richard Hatch, RBC Capital Markets, LLC, Research Division - Associate [33]

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Then other 2, just on grades. Fully underground grades. Where should we see that going after the rest of the year? You kind of guided that it was in London plan. And then secondly, openly in [North Mara ], could you give a bit of guidance on that, and I'd note it was quite uptake versus Q4 and just wondering if you can give just a bit color on it.

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Mark Morcombe, Acacia Mining plc - COO [34]

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Yes. Buly will be sort of [ back to fine ] for the full year, so we do expect the [growth should be going back up really ]. For the North Mara, the open pit and the big thing there is just the balancing between the Stage 4 CapEx and the Stage 3 pit mining, and what we're doing is taking opportunity to mine the Stage 4 faster than Stage 3, so that by the time we get to the end of Stage 3, we don't have that sort of [ brushing gap ] of the higher grade ore. So the -- basically, what we're seeing with the underground is the underground's given a really good high-grade zone that gives us more confidence to push Stage 4 faster, so you're sort of balancing it that way.

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Andrew Wray, Acacia Mining plc - CFO [35]

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I think the other comment there, and Mark's alluded to it, in terms of what we're talking about would protect cash generation just now. If you look at what we're doing at North Mara, it's pretty heavy investment in [ strip ] of Stage 4, so that it sequences better with Stage 3. So that's in excess of $17 million of capitalized strip in Q1, which is certainly higher than the run rate that we see for the rest of the year, but an investment that means that we've got to maintain that more regular production profile coming out of the open pit. An important investment to make. But again, dollars being put into North Mara that you'll see come back later in 2017.

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Richard Hatch, RBC Capital Markets, LLC, Research Division - Associate [36]

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Fair enough. Just out of interest, what are the grades of the 3 stages in efforts?

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Mark Morcombe, Acacia Mining plc - COO [37]

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I don't have that information in front of me right now. So basically what happens is with Stage 4, we're not in the pipe after the pit. You're going through sort of the lower grade zones. And then, obviously, as you come down to the mine or Buly, it'll pick up towards the final Stage 3. And the other thing is we do -- we are overmining in terms of -- we do get a lot of low-grade material, so the average mine grade could -- this is what is fed into the processing plant if (inaudible) Because we stop (inaudible) anything that's below 1.6 grams on the process. Anything that's above that (inaudible)

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Operator [38]

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We have a question from Michael Stoner of Peel Hunt.

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Michael Stoner, Peel Hunt LLP, Research Division - Mining Analyst [39]

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Just looking at Bulyanhulu, are there any levers you can pull within the process plant that (inaudible) can push more to the lead from the float? I think something we've discussed in the past when you said you're looking at it. So is there any more detail emerging than that?

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Mark Morcombe, Acacia Mining plc - COO [40]

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Yes, we have looked at it, and I guess the challenge there is the more you do that, and the more you downgrade the concentrate, the lesser value the concentrate is. So know that the concentrate is more of a precious metal concentrate than a copper concentrate and we have to make sure that we don't downgrade the concentrate to a point where nobody wants it.

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Michael Stoner, Peel Hunt LLP, Research Division - Mining Analyst [41]

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Yes, but in a trade-off study, so it's kind of more recovered or it never gets there?

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Mark Morcombe, Acacia Mining plc - COO [42]

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It doesn't recover enough value to make it. It's not like you can get sort of 80% of the gold value or whatever. So it just doesn't make it worthwhile to go down that path.

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Michael Stoner, Peel Hunt LLP, Research Division - Mining Analyst [43]

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Okay. Perfect. And then, Andrew, you mentioned kind of nonessential CapEx being slowed down. Have you got a timeline on how long you think you can continue to do that? Or should we expect some of that kind of slightly less essential CapEx start coming back in Q2?

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Andrew Wray, Acacia Mining plc - CFO [44]

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You will see a pickup in Q2, and so partly that's just the fact that the year generally gets off to a slow start. Part is the fact that we push payments themselves back on some of the projects where we haven't closed the project balance, so you'll see that, and you'll get a more normalized run rate. So we should be looking at around $20-odd-million a quarter for sustaining capital. We may not be right there in Q2, but we're going to be up towards that sort of level.

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Operator [45]

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Our next question today comes from Luke Nelson of JPMorgan.

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Luke Nelson, JP Morgan Chase & Co, Research Division - Research Analyst [46]

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Just wondering if you can add a bit more color on how the 30% minimum local shareholding requirement will practically work, assuming, of course, there's no comprehensive agreement reached with the government in the next couple of weeks. First, specifically, it debts towards that listing. I mean, would you need the logic perspective, which, I assume, would have to be pretty imminent, given the August deadline? And then also, you mentioned the telco industry in Tanzania also undergoing a similar regulation. I'm just wondering to what extent we can use the set of precedents for what's likely to be facing the mining sector. And also, I think you mentioned the Vodacom IPO. If you have any indications on the sort of -- the value that they may be trying to realize for that IPO? That would be appreciated.

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Andrew Wray, Acacia Mining plc - CFO [47]

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Yes. I mean, as I said, this is really breaking new ground so we can provide color on what's in the regulation, but nobody has yet completed the listing. So I think it's going to be feeling out [indiscnernible] a little bit. But in terms of what the regulation asks for, it is for the license holders to be listed in Tanzania, and for 30% of those entities to be held by Tanzanians, either individually or at an institutional level. So that's the [ remit ] of the legislation, which in theory would mean then that the 3 separate operating entities would need to be listed. So to say, we've yet to really test that and have the [ battles ] enforced with the capital market's authority as to the practicality of that. It would require a perspective. We've done that before. We produced a perspective when we listed the PLC on the dollar exchange a few years back, so we know our way through that route. In terms of what the telcos are doing, broadly similar regulation. They have a requirement for 25% to be held locally. Ours is set at 30. Vodacom are [ up the mine ] and out in the market with a fixed price offering looking to raise USD 213 million. They asked yesterday for a 2-week extension to that process, so they're obviously not where they need to be yet, which, if you look at the kind of liquidity levels that there are in the market, isn't a surprise. So it does highlight the challenge in trying to achieve that. It will give us a sense of what's out there, what's available, what the structures are. Their deadline and their industry deadline was the end of last year, so I think everybody recognizes that these things do take a little bit of time. If there is a solution, there are 2 other telcos that would also need to list after Vodacom. So it is new territory that they're treading their way through. We're going to start with discussions and ascertain how we actually approach it, together with the market of authority and the ministry. But clearly, there are some practical hurdles to achieving it that we need to try to find a way around.

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Luke Nelson, JP Morgan Chase & Co, Research Division - Research Analyst [48]

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Yes. I asked both of the -- given what's happened to telcos that shows that it is a real threat to the sector. Is there -- given the capital constraints in Tanzania, is there -- you don't really want to be sort of the last to come to market. Is there sort of a reason to fast track this, I suppose, so you don't have to take discounts, if there is any, on a potential IPO? And also, I suppose, playing devil's advocate, would it be all that bad bringing in 30% local shareholding into the mine license? Would that, I suppose, potentially would that reduce the threat from government or adverse government legislation going forward, in your opinion?

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Mark Morcombe, Acacia Mining plc - COO [49]

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Yes. I think 2 things there, Luke. I guess, firstly, in terms of timing, practicality, market capacity, I think one thing to bear in mind is that the parent minister for each sector has the ability to grant a waiver. Now it would appear, from certainly what we understand and the experience with the telecom sector, that, that is unlikely to be granted up front. So there is a requirement to show that there has been a serious attempt to comply with the regulation. And potentially part of that compliance could be raising the funds, but not necessarily all in Tanzania, such that you don't get to the threshold required on Day 1 that there's been a bona fide attempt to comply with that, which then the minister can take as compliance with the regulation. So there is a bit of gray in there as well in terms of just the black and white with the regulations. In terms of local shareholding, I think it is clear that the government is trying to promote local shareholding. I think lots of places it's actually showing the benefits of that if it can be done in a sensible way. So not by any means is that a bad thing, it's just practically how you achieve it, and they're keen to develop a local market and local ownership. As we see from other markets, that sort of thing takes time. So we need to work out how we can work with the regulator and the ministry to help achieve that.

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Operator [50]

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(Operator Instructions) We have a question from Alan Spence of Jefferies.

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Alan Spence, Jefferies LLC, Research Division - Equity Analyst [51]

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Just the ability to bulk store versus container store the concentrate. How many more weeks roughly could you container store? And then you mentioned the ability to bulk store past that. How many weeks or (inaudible) months could that last you?

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Mark Morcombe, Acacia Mining plc - COO [52]

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From a container store perspective, it really comes down there to the balance of goods coming in. This is starting to get a little bit trickier, and we have a few weeks left there. In terms of bulk storing, Buzwagi's got quite a large amount of shape and storage, some of the old -- some old sheds. Bulyanhulu is bit more of challenge. But if it came to that, we would just try to create an appropriate space and set it up, so that it's not going to [ hit ] us in the long run. But we don't see it being an issue.

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Alan Spence, Jefferies LLC, Research Division - Equity Analyst [53]

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Okay. Just another one. I may have missed if you answered this earlier, but the financial committee that's expected to respond to the President. You had a date for when the technical committee was going to, but do you have one for when the financial community will?

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Andrew Wray, Acacia Mining plc - CFO [54]

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We don't have an official confirmed date. We think during May, if on the assumption they've given the same sort of time scale that the initial technical committee were given, it would be around the middle of May. But as far as we are aware, we haven't seen confirmation of that.

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Operator [55]

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Our next question today comes from Eily Ong of with Bloomberg Intelligence.

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Eily Ong, [56]

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Just a few questions, if I may. The first question, my question is -- probably has been answered, but please and can I confirm that there are really no limitation on stockpiling? The second question is that, if the ban in Tanzania continues, what really are the potential actions that could be available to Acacia Mining? And lastly, please could you give us an update on your goal such as prices and volumes?

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Andrew Wray, Acacia Mining plc - CFO [57]

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Eily, on the stockpile situation, that isn't a constraint. So we will be able to make storage capacity available. If the ban continues and, as I said, if we can't see a path to resolution, then we have contingency plans that we're pulling together. The most affected of our operations is Bulyanhulu. And if there is no resolution, we would not continue to simply produce and burn through cash at Bulyanhulu, so we'd have to look at options to stopping production. And in terms of gold hedges, we don't have any.

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Operator [58]

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(Operator Instructions) At this moment, we have no further questions registered from the participants. So I hand back to you gentlemen to continue.

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Giles Blackham, Acacia Mining plc - IR Manager [59]

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Thanks very much, everyone, for all your questions with the dialing in today. We look forward to catching up in the near future. I'm around if you have any follow-up questions, please just drop me a line. Other than that, thanks a lot and we'll speak to you soon.

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Andrew Wray, Acacia Mining plc - CFO [60]

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Thank you.

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Operator [61]

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Thank you for your participation today. That does conclude the presentation. You may now disconnect your phone lines, and enjoy the rest of your day.