Interim 2015 Results

ACACIA MINING PLC - Interim 2015 Results

PR Newswire

London, July 26

27 July 2015

Results for the 6 months ended 30 June 2015 (Unaudited)

Based on IFRS and expressed in US Dollars (US$)

Acacia Mining plc (“Acacia’’) reports interim 2015 results

“Over the first half of 2015 we made further progress at each of our mines, with a particular focus on laying the foundations for the future at Bulyanhulu and North Mara which will ensure that we are in a position by the end of 2015 to generate strong cashflow at and below the current gold price.” said Brad Gordon, Chief Executive Officer of Acacia. “Production at Bulyanhulu increased by 26% over H1 2014, as well as by 16% in Q2 2015 compared to Q1 2015, and we expect further production increases in the second half as we benefit from our investment in the mine; whilst at North Mara we delivered first stoping ore from the Gokona Underground project ahead of schedule in Q2 2015. As a group we delivered production of 367,301 ounces in the first half, an increase of 6% on H1 2014. Our all-in sustaining costs of US$1,133 per ounce sold were 1% higher than H1 2014, principally as a result of investing in the growth of Bulyanhulu and North Mara. As this production is delivered and we continue to drive cost efficiencies; we anticipate that unit costs will decline over the remainder of the year. As a result, we continue to expect our production and costs to be within our guidance range as communicated earlier this year.”

Operational Highlights

Financial Highlights

1 These are non-IFRS measures. Refer to page 22 for definitions

2 EBITDA, net earnings, earnings per share and cash generated from operating activities include continuing and discontinued operations in 2014

3 Excludes non-cash capital adjustments (reclamation asset adjustments) and includes finance lease purchases

Other Developments

Gold Price

Over the past two years we have put in place structural changes to our operations that have been successful in significantly reducing our AISC, which has seen us return to positive free cash generation. As set out in our five year plan, this is an ongoing process aimed at enhancing the long-term viability and attractiveness of our business and will ensure that we are in a position by the end of 2015 to generate strong cashflow at and below the current gold price. We remain on target to meet this objective as Bulyanhulu continues to expand its production levels and reduce its costs over the remainder of 2015 in line with our plans. Enhancements at North Mara and Buzwagi have already driven significant cost improvements to date with the full benefits of the changes still to be fully realised. As a result, whilst we will redouble our focus on driving cost out of the business and optimising our operations, we remain focused on delivering the plan we have previously set out which will enable us to drive returns to our shareholders without having to redesign our business in reaction to the gold price environment.

Gokona Underground

Following receipt of the required final approvals for the Gokona Underground project from the Tanzanian Vice President’s Office in May 2015, we delivered the first stoping ore from the project in early June, ahead of schedule. During the remainder of the quarter, operations progressed in line with expectations with the majority of the approximately 6,800 contained ounces mined during H1 2015 coming from development ore. We continue to expect the ramp up of the operation over the remainder of 2015.

The Gokona Underground project is expected to produce 450,000 ounces at an average grade of 8.2 g/t over a 5 year life of mine, with all-in sustaining costs of under US$750 per ounce sold. We are confident that the existing reserve will be extended as we increase our understanding of the ore body beneath the open pit.

Appointment of Chief Operating Officer

In June 2015, Michelle Ash was appointed as Chief Operating Officer (“COO”). Michelle joined Acacia in October 2013 as Executive General Manager, Business Improvement and Planning and has driven significant change across our operations in that time. Michelle has led the creation of our Business Improvement structures and strategy, playing an integral role in strengthening planning processes, enhancing operational performance and implementing our cultural change programme. Michelle has more than 20 years of experience in the mining and manufacturing industries, including senior roles as Head of Alliance Planning and Co-ordination for the BHP Mitsubishi Alliance and General Manager Strategy for MMG.

In addition to her primary responsibilities as COO, Michelle is currently Acting General Manager of Bulyanhulu. A new General Manager for Bulyanhulu has been recruited and will be starting in September 2015, at which point Michelle will re-locate from Bulyanhulu to Dar es Salaam.

Indirect taxes

As previously announced, the devaluation of the Tanzanian shilling has had a negative effect on our Shilling denominated indirect tax receivables. Over the first half of the year, the Tanzanian shilling has lost 17% of its value against the US dollar. This resulted in a foreign exchange revaluation loss of US$20 million, which is included in earnings.

During the second quarter, we received gross indirect tax refunds of US$21 million from the Government of Tanzania, but saw a net cash outflow of indirect tax of US$9 million, prior to currency adjustments. We will continue to engage with the Government on this matter over H2 2015. As at 30 June 2015, the outstanding amount relating to the total indirect tax receivable, not covered by the 2011 Memorandum of Settlement, stood at US$51 million.

Expansion of Exploration activities in West Africa

In late H1 2015, Acacia signed agreements with local Malian entities for the acquisition of equity interests in three exploration licences located within the “Keneiba Inlier” region in Western Mali. The properties cover over 150 square kilometres along the world class Senegal-Mali Shear Zone (“SMSZ”), which is host to more than 50 million ounces of gold. The properties are ideally located over regional geochemical soil anomalies with a lack of modern exploration. The agreements allow for Acacia to earn a 95% interest in each of the licences over a 30 month period.

Acacia’s exploration team have already commenced scout work and regolith mapping to determine areas suitable for soil sampling and those requiring auger or RAB/Aircore drilling. Planned field work for H2 2015 is scheduled to commence in October-November 2015, after the wet season, and will focus on surface geochemical programmes and reconnaissance RAB/Aircore/auger drilling.

Furthermore, we continued to expand our footprint in the prospective Houndé Belt in Burkina Faso through the signing of two further earn-in agreements with Canyon Resources and Thor Explorations Ltd. The Thor Explorations agreement allows Acacia to earn up to an 80% interest in the Central Houndé Project, with an initial earn-in of a 51% interest by the completion of agreed exploration expenditures over a three year period, with an additional 29% interest to be earned by the completion of a pre-feasibility study on a mineral resource on the project area. The Canyon Resources agreement allows Acacia to earn up to a 75% interest in the Pinarello and Konkolikan projects by the completion of an up-front cash payment and agreed exploration expenditure over a two year period. Planned exploration spend in West Africa in 2015 is expected to be US$7 million

Interim dividend

In line with our policy of declaring 15% – 30% of cash flow before expansion capital, dividends and financing costs as a dividend to our shareholders, we are pleased to announce that the Board of Directors have approved the payment of an interim dividend of US1.4 cents per share, in line with the 2014 interim dividend. This dividend is based on our expected full year cash generation as defined above, and is payable in line with our policy of paying one third of the dividend as an interim dividend. The dividend will be paid on 25 September 2015 to shareholders on the register on 28 August 2015.

Acacia will declare the interim dividend in US dollars. Unless a shareholder elects to receive dividends in US dollars, they will be paid in pounds sterling with the US dollar amount being converted into pounds sterling at the exchange rate prevailing at the time. The last date for receipt of currency elections will be 1 September 2015. The exchange rate for the conversion of the interim dividend will be elected on or around 3 September 2015.

Outlook

Over the first half of 2015 our mines showed continued progress as we laid the foundations for the second half of the year and beyond at Bulyanhulu and North Mara. As we move into H2 2015, we expect the contribution from Bulyanhulu to continue to increase quarter on quarter as we deliver improved grades and tonnage as a result of the investment in development, maintenance and improved mining practices. At North Mara, we expect the head grade to remain similar to Q2 2015 as the Gokona Underground ramps up to replace ounces previously sourced from the Gokona open pit within the mill feed. At Buzwagi, we expect the grade to remain around or slightly above reserve grade in the second half, with throughput levels anticipated to remain at nameplate capacity.

As a result of a continued financial discipline we now expect capital expenditure for the year to be between US$200-220 million. Sustaining capital (including land purchases) is expected to be US$80-90 million with capitalised development expected to total US$120-130 million. Capitalised development continues to be driven by increased development activity at Bulyanhulu which commenced in 2014, and is focused on opening additional mining areas, and at North Mara as the Gokona Underground is ramped up.

As a result, we maintain our full year production guidance of 750,000 – 800,000 ounces for 2015 at a cash cost per ounce, including royalties, of between US$695-725 per ounce sold. The planned reduction in capital expenditure is broadly offset by higher corporate administration and share-based payment costs which results in unchanged guidance for all-in sustaining costs of between US$1,050 – US$1,100 per ounce sold. Primarily as a result of the ramp up at Bulyanhulu, the fourth quarter is anticipated to be the strongest quarter for production and consequentially the lowest for cash costs and AISC.

Key statistics

Financial results

1 These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to “Non IFRS measures” on page 22 for definitions.

2 Reflect the London PM fix price.

3 Cash cost per tonne milled excluding the reprocessing of tailings at Bulyanhulu amounted to US$66 per tonne for the quarter and US$67 for the six months ended 30 June 2015.

*Reported process recovery rates and head grade include tailings retreatment at Bulyanhulu. Excluding the impact of the tailings retreatment Q2 and half year 2015 process recovery would be 89.9% and 89.4% respectively, with Q2 and half year 2015 head grade being 2.9g/t and 3.1g/t respectively.

For further information, please visit our website: http://www.acaciamining.com/ or contact:

Brad Gordon, Chief Executive Officer

Andrew Wray, Chief Financial Officer

Giles Blackham, Investor Relations Manager

Daniel Thöle

About Acacia Mining plc

Acacia Mining plc (LSE:ACA), formerly African Barrick Gold, is Tanzania’s largest gold miner and one of the largest producers of gold in Africa. We have three producing mines, all located in Northwest 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. Our name change from African Barrick Gold to Acacia reflects a new approach to mining, and an ambition to create a leading African Company.

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 remains our majority shareholder. Acacia reports in US dollars and in accordance with IFRS as adopted by the European Union, unless otherwise stated in this report.

Conference call

A presentation will be held for analysts and investors on 27 July 2015 at Noon London time.

For those unable to attend, an audio webcast of the presentation will be available on our website http://www.acaciamining.com/. For those who wish to ask questions, the access details for the conference call are as follows:

Participant dial in: +44 (0) 203 003 2666 / +1 866 966 5335

Password: Acacia

FORWARD- LOOKING STATEMENTS

This report includes “forward-looking statements” that express or imply expectations of future events or results. Forward-looking statements are statements that are not historical facts. These statements include, without limitation, 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 in this report. 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 including, the 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 report.

Any forward-looking statements in this report 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 report, whether as a result of new information, future events or otherwise. Nothing in this report should be construed as a profit forecast or estimate and no statement made should be interpreted to mean that Acacia‘s profits or earnings per share for any future period will necessarily match or exceed the historical published profits or earnings per share of Acacia.

LSE: ACA

TABLE OF CONTENTS

Interim Operating Review

Half Year Review

During the first half of 2015, we have seen solid performance from our assets and delivered production of 367,301 ounces, a 6% increase from the same period in 2014, with sales volumes increasing by 7% to 355,470 ounces. All-in sustaining costs per ounce sold (“AISC”) increased by 1% to US$1,133 per ounce sold, mainly as a result of increased operational spend in the areas of maintenance and contracted mine development to improve operational delivery over the remainder of the year.

At North Mara, we delivered the first stoping ore from the Gokona Underground operation, with approximately 6,800 contained ounces being mined after the approval of the mining licence in early Q2 2015. Overall, North Mara produced 142,146 ounces, a 2% increase from 2014 as a result of increased throughput, at AISC of US$893 per ounce sold, 5% lower than H1 2014.

Bulyanhulu saw a 26% increase in production to 133,141 ounces mainly due to the new CIL circuit producing 14,775 ounces over the six months. Production attributable to underground mining amounted to 118,366, 13% higher than in the same period in 2014. This was mainly due to an improved processing grade of 8.7 g/t, up from 8.4 g/t in 2014, which was slightly offset by a 3% decrease in recovery rate to 88.7% due to instability in the circuit in Q1 2015 resulting in increased tailings losses. AISC increased by 9% to US$1,356 per ounce sold driven by increased investment in capitalised development and infrastructure and increased maintenance spend in order to improve maintenance practices and improve underground equipment availabilities.

At Buzwagi, gold production for the six months of 92,015 ounces was 10% lower than 2014, driven by an expected 17% decrease in grade as mining was focused away from the main ore zone, which was partially offset by increased recoveries due to plant and circuit optimisation and increased throughput as a result of improved availability. AISC of US$1,089 per ounce sold was 7% lower than in 2014, mainly as a result of lower direct mining costs.

Total tonnes mined during the six month period amounted to 20.5 million tonnes, a 3% increase on H1 2014, while ore tonnes mined of 4.9 million tonnes were 26% higher than in H1 2014 due to changes in mine plans driving increased ore tonnes moved.

Our cash costs for the six month period were 4% higher than in H1 2014, and amounted to US$780 per ounce sold. The increase was primarily due to:

Partly offset by:

The AISC of US$1,133 per ounce sold for the six months was slightly higher than in H1 2014, predominantly due to higher cash costs as described above, increased corporate administration and share-based payment expenses, and increased sustaining capital expenditures which were in part offset by lower capitalised development expenses.

Cash generated from operating activities for the six month period amounted to US$107.1 million, US$20 million lower than in 2014 mainly due to the lower EBITDA.

Capital expenditure for the six month period ended 30 June 2015 amounted to US$83.1 million compared to US$114.7 million in 2014, with the decrease mainly driven by planned lower expansionary capital spend. Lower capitalised stripping at Buzwagi and North Mara was in part offset by increased capitalised development at Bulyanhulu and North Mara driven by the investment in underground development. Capital expenditure primarily comprised of capitalised development expenditure (US$58.3 million), investment in mobile equipment and component change-outs of US$7.6 million and investment in the Bulyanhulu refrigeration plant of US$5.1 million.

Second Quarter Review

Production for Q2 2015 amounted to 185,641, an increase of 2% on Q1 2015 and 4% higher than in the same period in 2014.

Bulyanhulu produced 71,423 ounces, 42% higher than for the same period in Q2 2014 and 17% higher than Q1 2015. Ounces produced from underground mining amounted to 60,132 ounces, a 20% improvement on Q2 2014, while ounces produced from the reprocessing of tailings amounted to 11,291 ounces. During the quarter, 222 thousand tonnes of ore were hoisted while 229 thousand tonnes of ore were processed from run-of-mine, 12% higher than in Q2 2014 while grade increased by 8% to 9.0 g/t. AISC amounted to US$1,278 per ounce sold for the quarter, 5% lower than in Q2 2014 and 12% lower than Q1 2015, mainly driven by the increased production base, slightly offset by increased sustaining capital expenditures.

North Mara produced 66,532 ounces, 5% lower than in Q2 2014 driven by an expected decrease in grade due to mining a greater proportion of tonnes from the Nyabirama pit. Total open pit tonnes mined decreased by 22% from Q2 2014 driven by the reduction of tonnes from the Gokona open pit as it approaches final design. During the quarter, we delivered the first stoping ore from the Gokona Underground, and have mined 55 thousand tonnes of ore from the underground, from both stoping and development operations, delivering approximately 6,800 contained ounces. Cash cost per ounce sold of US$605 was 8% higher than in Q2 2014 mainly driven by the lower production base, increased contracted services as a result of the underground development activity and lower capitalised mining costs due to the lower tonnes moved driving a lower strip ratio. AISC of US$968 per ounce sold was 8% higher than in 2014 due to increased cash costs, the impact of the sales base on per unit costs and increased sustaining capital expenditure.

At Buzwagi, gold production for the quarter of 47,687 ounces was 17% lower than Q2 2014, due to an expected 26% decrease in grade. This was partially offset by an 11% increase in throughput due to improved availability and an increase in recoveries to 94%. AISC of US$1,065 per ounce sold was marginally lower than Q2 2014.

Total tonnes mined during the quarter amounted to 10.3 million tonnes, in line with Q2 2014. Ore tonnes mined were 2.4 million tonnes compared to 2.1 million in Q2 2014.

Ore tonnes processed amounted to 2.5 million tonnes, an increase of 29% on Q2 2014 primarily driven by increased throughput attributable to reprocessed tailings at Bulyanhulu.

Head grade for the quarter of 2.6 g/t was 19% lower than in Q2 2014 (3.2 g/t) as a result of the reprocessing of lower grade tailings at Bulyanhulu. Excluding the impact of the tailings retreatment Q2 2015 head grade would have been 2.9 g/t with the decrease in head grade at Buzwagi more than offsetting the increase in run-of-mine grade at Bulyanhulu.

Capital expenditure for the quarter amounted to US$41.6 million compared to US$59.0 million in 2014. Capital expenditure primarily comprised capitalised development expenditure (US$30.9 million), investment in mobile equipment and component change out costs of US$4.8 million, investment in the Bulyanhulu refrigeration plant of US$2.3 million and investment in tailings and infrastructure of US$2.2 million.

Mine Site Review

Bulyanhulu

Key statistics

1These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to ‘Non-IFRS measures” on page 22 for definitions.

Operating performance

Gold production for the first half of 133,141 ounces was 26% higher than the same period in 2014. The increase was due to ounces produced from underground mining increasing by 13% over 2014, driven by a 4% increase in grade and a 13% increase in throughput; and the new CIL circuit being operational for the full six months, delivering 14,775 ounces, against negligible production in H1 2014. Gold sold for the six months amounted to 121,976 ounces, 8% lower than production due to the timing of production at quarter end impacting the shipment of ounces, as well as an increased refinery payable due to lower concentrate grades on shipments with assays still to be finalised.

Copper production of 3.1 million pounds for the six month period was 26% higher than in 2014 due to higher copper grades combined with higher run of mine throughput.

Cash costs for the six months of US$871 per ounce sold were in line with the same period in 2014 (US$867). Increased maintenance costs as a result of a focus on improving maintenance practices and equipment availabilities and increased contracted services driven by the expensed portion of development of the Upper East and Lower West areas performed by a contractor were predominantly offset by the increased production base, lower labour costs driven by a lower international employee headcount and the impact of a devaluation of the Tanzanian shilling on local labour costs.

AISC per ounce sold for the six months of US$1,356 was 9% higher than in H1 2014 (US$1,249) driven by increased sustaining capital expenditure mainly relating to investments in equipment, tailings infrastructure and underground ventilation, and increased capitalised development costs driven by investment in underground waste and ore development.

The key focus for the second half of the year at Bulyanhulu is to deliver the expected increase in production and consequential reduction in AISC. In order to achieve the required increase in tonnes mined from long hole stopes in H2 2015, we continued to invest in accelerating development to provide access to stopes in both the Upper East and Lower West zones of the mine during H1 2015. In line with expectations, stoping of the Lower West zone commenced in H1 2015 with stoping of the Upper East zone still expected to commence in Q3 2015. Over the first half of the year average monthly development metres per drilling jumbo have continued to improve and in June 2015 stood at 210 metres with average long hole stope widths continuing to reduce (Q2 2015: 2.7 metres, Q2 2014: 4.1 metres) which together will help to drive improvements in grade and therefore production in the second half of the year.

The underground diamond drilling programme designed to increase the reserve on Reef 2 commenced late in Q2 2015. The programme for 2015 is expected to consist of 25 holes for a total of 12,700 metres.

Capital expenditure for the six months before reclamation adjustments amounted to US$49.6 million, 16% lower than the 2014 expenditure of US$58.7 million, mainly driven by lower expansionary capital spend as the new CIL circuit was completed in Q3 2014, partially offset by increased sustaining and capitalised development spend. Capital expenditure consisted mainly of capitalised underground development costs (US$34.0 million), investments in equipment (US$2.3 million), investments in tailings and infrastructure (US$4.2 million) and investments in an underground refrigeration plant (US$5.1 million). The credit in expansionary capital expenditure relates to the reversal of amounts over accrued on 2014 expansionary capital projects.

Buzwagi

Key statistics

1These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to “Non-IFRS measures” on page 22 for definitions.

Operating performance

Gold production for the six months of 92,015 ounces was 10% lower than H1 2014, as head grade reverted towards reserve grade as expected, due to mining concentrating away from the main ore zone. This was partially offset by a 5% increase in throughput due to improved plant availabilities and a 4% increase in recoveries due to initiatives focused on managing the plant’s stability and performance. Gold sold for the six months amounted to 91,488 ounces, broadly in line with production.

Total tonnes mined for the six months of 12.9 million tonnes were 14% higher than in H1 2014 due to the focus on the accelerated mining of ore to maximise equipment utilisation and in order to supplement the low grade stockpile feed.

Copper production of 4.4 million pounds for the six months was 11% higher than in H1 2014 driven by increased throughput and higher copper grades and recoveries.

Cash costs for the six months of US$965 per ounce sold were 10% higher than in H1 2014 (US$879). Cash costs were primarily impacted by a lower capitalisation of mining costs given the lower strip ratio and increased contracted services costs for maintenance and repairs contractors. This was partially offset by lower energy and fuel costs due to lower oil prices, higher co-product revenue as a result of higher copper sales, lower sales related costs due to lower sales volumes and lower labour costs driven by a decrease in international employees and the impact of the devaluation of the Tanzanian shilling on local labour costs.

AISC per ounce sold for the six months of US$1,089 was 7% lower than in H1 2014 (US$1,169). This was mainly driven by the lower capitalised development expenditure as discussed above.

Capital expenditure for the year before reclamation adjustments of US$5.5 million was 74% lower than in H1 2014 (US$20.9 million). This was mainly due to mining taking place in the final stage of the open pit which reduces waste mining and resulting in lower capitalised stripping costs. Key capital expenditure for the six months consists of component change out costs (US$3.4 million) and investments in tailings and infrastructure of US$0.9 million.

North Mara

Key statistics

1These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to “Non-IFRS measures” on page 22 for definitions.

Operating performance

Production for the six months of 142,146 ounces was 2% higher than the prior year period as a result of higher throughput rates, which exceeded the prior year period by 3% following initiatives to increase plant utilisation. Gold ounces sold for the year of 142,005 ounces were in line with production, and 3% higher than the prior year due to the higher production base. Open pit mined grade decreased due to an increased proportion of ore being sourced from the lower grade Nyabirama pit.

Cash costs for the six months of US$583 per ounce sold were in line with H1 2014 (US$584). Increased contracted services costs as a result of the Gokona Underground project and lower capitalisation of mining costs given the lower strip ratio were offset by lower fuel costs, and lower labour costs driven by the impact of the devaluation of the Tanzanian shilling on local labour costs.

AISC per ounce sold for the six months of US$893 was 5% lower than in H1 2014 (US$936) primarily due to the impact of increased sales volumes and lower sustaining capital expenditures.

Following the approval of the mining licence of the Gokona Underground project, we have moved into commercial production, with the first stoping ore from the underground being delivered in Q2 2015. We have mined approximately 6,800 contained ounces from the underground during Q2 2015, predominantly sourced from lower grade development ore, and expect this to ramp up over the remainder of the year. Total capitalised underground development spend during the first six months amounted to US$11.2 million, while we expect total capital expenditure to be around US$30 million for the full year.

Capital expenditure for the six months before reclamation adjustments of US$27.9 million was 19% lower than in 2014 (US$34.5 million). Key capital expenditure included capitalised stripping costs (US$12.7 million), capitalised underground development costs (US$11.2 million), and component costs (US$2.0 million). In addition, US$6.0 million was spent on land acquisitions primarily around the Nyabirama open pit. Land acquisition costs are excluded from the capital expenditure above as they are recognised as long term prepayments, but are included in AISC.

Exploration Review

Tanzania

Bulyanhulu – District Extensions

In late H1 we commenced a programme of diamond drilling testing for new Bulyanhulu-style reef systems and extensions of existing known veins within 4 kilometres of the mine. The intention of the programme is to identify new ore sources within trucking distance of the Bulyanhulu processing plant in order to potentially provide additional mill feed and optionality at the mine to achieve increased production. The first target being tested is the Safari Zone, an interpreted parallel reef zone 400-500m into the footwall of the Bulyanhulu sequence and parallel to Reef 1. At the time of reporting four holes have been completed, on the first two of three drill fences, for a total of 664 metres, with a further five holes planned during Phase 1 of this programme.

To date, all holes intersected some narrow quartz veins and hole BGMDD0058 intersected smoky quartz veining in an argillite unit with moderate sulphide (pyrite-pyrrhotite) alteration. The current interpretation suggests that 3-4 narrow discrete reefs have been intersected. Results for all holes are expected during Q3 2015.

On completion of drilling at the Safari target, the diamond core rig will target extensions of previous high grade intersections approximately 2-3 kilometres along strike from Bulyanhulu Reef 2. Aircore reconnaissance drilling will also be completed during Q3 2015 to look for additional reef structures.

Kenya

West Kenya Joint Venture Projects

During H1 2015, diamond core drilling programmes continued to test the Liranda Corridor within the Kakamega Dome gold camp, with a total of 28 holes completed for 8,183 metres bringing the total for the programme to 48 holes for 12,309 metres since late 2014. Assay results have been received for 47 of the 48 holes drilled to date, with results indicating the presence of multiple narrow, higher grade gold zones associated with quartz veins within the Liranda shear corridor. 20 holes have returned significant intercepts greater than 2.00 g/t Au and nine of these holes included intercepts of greater than 8.00 g/t Au.

Gold mineralisation zones encountered to date occur with quartz veining and associated carbonate alteration with pyrite, pyrrhotite and chalcopyrite within mafic-intermediate volcanics, mudstone and sandstone units. The focus of the project at present is assessing if these intercepts have the required continuity of grade and width to delineate several mineralised and potentially mineable zones.

Better results included:

In the Lake Zone gold camp, seven diamond core holes were completed for 1,128 metres at the Kitson Prospect. The drilling encountered zones of sericite-sulphide alteration and quartz veins in holes drilled along a 1 kilometre section of the 4 kilometre long Kitson gold-in-soil anomaly. Results for the Kitson drilling programme are expected in early Q3 2015. Additionally, we expect to commence reverse circulation drilling at Masumbi-Barding, Yala and North Kitson areas during Q3 2015 to test gold-in-soil anomalies and co-incident IP chargeability anomalies.

Burkina Faso

During H1 2015, Acacia continued to expand its footprint in the prospective Houndé Belt in Burkina Faso through the signing of two further earn-in agreements with Canyon Resources (ASX:CAY, the “Canyon Agreement”) and Thor Explorations Ltd (TSX-V:THX, the “Thor Agreement”). The Canyon and Thor Agreements allow Acacia to earn up to 75% and 80%, respectively, in several licence areas through meeting certain exploration expenditure hurdles over a two-to-three year period. These new joint venture properties will be explored and managed by Acacia’s Exploration Group. The completion of these earn-in agreements complements the existing South Houndé JV in Burkina Faso (Sarama Resources/Acacia JV), with Acacia’s total land holding on the Houndé Belt now covering approximately 2,400 square kilometres.

South Houndé JV

At the Sarama Resources-managed South Houndé JV project, exploration drill programmes continued to focus on identifying oxide and sulphide resource extensions of the Tankoro trend (MM, MC and Phantom Zones), where Sarama have previously delineated a global resource of 1.5Moz @ 1.6g/t Au at a 0.5g/t Au cut-off, (1.1Moz @ 2.1g/t Au at a 1g/t cut-off) along a 5.5 kilometre section of two parallel soil anomalies that each extend for more than 10 kilometres. There are at least another three regional gold corridors already delineated on the project with >50 kilometres of soil anomalies that to date have seen little or no drill testing. At the same time, we have completed total coverage of all properties with surface geochemistry, and have undertaken surface (IP) and airborne (magnetic and radiometric) geophysical surveys.

A total of 370 aircore holes for 20,037 metres, 26 reverse circulation holes for 3,474 metres, and 27 diamond core holes for 5,130 metres were drilled during H1 2015. Drill programmes primarily targeted the Tankoro Corridor, including the MM Zone, MC Zone, Phantom, Obi, Dlarakoro and Guy prospects, and also on more regional targets at Tyikoro and Ouangoro. Results from deeper diamond drilling into the MM and MC zones have been mixed. Results from step-out reconnaissance and Aircore drilling of targets along the Tankoro Corridor (MC and MM extensions, Phantom and Obi Prospects) are considered encouraging with several wide zones of mineralisation intersected including:

Highlighted drill intersections from the MC and Obi Prospects:

Highlighted Aircore drill intersections from the Phantom West Prospect include:

Highlighted Aircore drill intersections from the Phantom Prospect include:

Two new zones of oxide mineralisation were delineated at the MC and Obi Prospects, measuring 800m and 1,900m along strike, respectively. Drilling shows potential for a 5 kilometre long mineralised horizon, parallel to the well-defined 10 kilometre long MM trend that lies approximately 800 metres to the west. Drilling continues to demonstrate the potential to add to the oxide mineral resource of the Project. Reverse circulation and diamond core drilling will likely be undertaken in the next phase of drilling to test the depth and strike continuity of new oxide and sulphide zones along the Tankoro Corridor from Q4 2015.

Following the successful completion of IP geophysical surveys and surface geochemical programmes, throughout 2014 and H1 2015, Aircore and RC drilling will commence to test regional targets from late 2015 once access is re-established after the wet season.

Pinarello and Konkolikan Projects

The Pinarello and Konkolikan Projects are grassroots exploration plays. The projects are located within the southern part of the prospective Houndé Belt and contiguous with other Acacia joint venture properties. Regional N-S and NE-SW shear zones are interpreted to pass through the project, and mineralised gold trends appear to correspond to several of these shears. During the first half of 2015, we completed regolith mapping and soil sampling programmes with a total of 4,211 surface geochemical samples collected across the Pinarello project. Initial results are being processed, and early indications suggest the expected gold trends are being confirmed by the surface geochemical programmes. A large proportion of assay results from the surface geochemical programmes are pending, and a full assessment of the results will be published once all data is received and interpreted.

Central Houndé Project

The Central Houndé Project is a grassroots exploration play. The project is located along the western granite-greenstone contact with interpreted regional NNE-SSW shear zones interpreted to pass through the project. Several of the regional shear zones that cross the property have been shown as being anomalous in gold and regional soil sampling programmes that commenced in late June 2015, are targeting extensions of the mineralised corridors. Since the commencement of the agreement, midway through H1 2015, we have commenced a regional mapping and soil geochemical sampling programmes. At the end of June, we had taken 731 samples (BLEG/multi-element, termite, lag and rock chip). Sampling was on-going at the end of H1 2015, with the timing of the completion of the soil sampling programme contingent on the wet season. Results for the first batch of samples are pending. Assuming the successful delineation of gold anomalies from the soil sampling programme work over the next 12 months will focus on ground IP geophysics and drilling of geochemical targets.

Mali

Tintinba Project

In late H1 2015, Acacia signed certain agreements with local Malian entities for the acquisition of equity interests in three exploration licences located within the “Kenieba Inlier” region in Western Mali. The properties lie along the world class Senegal-Mali Shear Zone (SMSZ), which is host to >50 Moz of gold endowment. The properties are ideally located over regional geochemical soil anomalies with a lack of modern exploration.

The agreements provide Acacia with the opportunity to earn a 95% interest in each of the exploration licences by making three staged payments, on a licence by licence basis, over a period of 30 months from 4 June 2015. The aggregate of the staged payments is US$165,000 per licence. The first staged payment has been paid for each licence. On delineation of a resource, and subsequent application and grant of a mining licence, Acacia would revert to 85.5% ownership and the local Malian partner would hold 4.5% of the equity of the exploitation permit so granted, with the government of Mali holding a 10% free-carried interest (under current legislation), at which point the local Malian partner would be required to contribute to development costs or dilute down to a 1% NSR on gold produced capped at US$2 million per the original exploration licence.

Acacia’s exploration team have already commenced scout work and regolith mapping to determine areas suitable for soil sampling and those requiring auger or RAB/Aircore drilling. Planned field based work for H2 is scheduled to commence in October-November 2015, after the wet season, and will focus on surface geochemical programmes and reconnaissance RAB/Aircore/auger drilling.

Financial Review

The solid operational performance during the year was partially offset by the continuing weak gold price environment in 2015, with the average realised gold price US$90 per ounce lower than the prior year period. This is reflected in the Acacia Group’s financial results for the six months ended 30 June 2015:

The following review provides a detailed analysis of our consolidated results for the six months ended 30 June 2015 and the main factors affecting financial performance. It should be read in conjunction with the unaudited consolidated financial information and accompanying notes on pages 33 to 44, which have been prepared in accordance with International Financial Reporting Standards as adopted for use in the European Union (“IFRS”).

Discontinued operation – Tulawaka

2014 results relating to Tulawaka have been aggregated in one line called “Net (loss)/profit from discontinued operations” following the sale of Tulawaka in February 2014.

The financial performance below is stated for continuing operations.

Revenue

Revenue for H1 2015 of US$446.8 million was US$1.3 million higher than H1 2014. The 7% increase in sales volumes (24,523 ounces) was offset by a 7% decrease in the average realised gold price from US$1,290 per ounce sold in H1 2014 to US$1,200 in H1 2015 as a result of lower market prices. The increase in sales ounces was due to the higher production base.

Included in total revenue is co-product revenue of US$20.2 million for H1 2015, which increased by 8% from the prior year period (US$18.7 million) due to higher copper sales volumes, partly offset by a lower realised copper price. The H1 2015 average realised copper price of US$2.61 per pound compared unfavourably to that of H1 2014 (US$3.07 per pound), and was driven by the lower market price for copper.

Cost of sales

Cost of sales was US$363.6 million for H1 2015, representing an increase of 9% on the prior year period (US$332.5 million). The key aspects impacting the cost of sales for the six months were higher direct mining costs as discussed below combined with realised losses on fuel hedges, slightly offset by the higher production base.

The table below provides a breakdown of cost of sales:

A detailed breakdown of direct mining expenses is shown in the table below:

Gross direct mining costs of US$322 million for H1 2015 were 3% higher than H1 2014 (US$312.9 million). Individual cost components comprised:

Capitalised direct mining costs, consisting of capitalised development costs and the investment in inventory is made up as follows:

Capitalised development costs were 33% lower than H1 2014, driven by the decrease in capitalised waste stripping costs at Buzwagi and North Mara, partly offset by higher capitalised mining costs at Bulyanhulu due to increased development activity and capitalised underground development costs at North Mara. The investment in inventory was US$15.4 million, higher than in H1 2014 due to a build-up of ore inventory at North Mara and Buzwagi due to increased ore mining rates, slightly offset by a drawdown of finished goods at Buzwagi.

Central costs

Corporate administration expenses totalled US$18.3 million for H1 2015, a 31% increase on H1 2014 (US$14.0 million) driven by increased legal fees and increased consulting fees for business improvement projects. The increase in the share-based payment expense was a result of the stronger share price performance, specifically when compared to our peers, as the share price increased by 19% from December 2014, albeit this has largely subsequently reversed post period end.

Exploration and evaluation costs

Exploration and evaluation costs of US$8.7 million were incurred in H1 2015, 21% lower than the US$11.0 million spent in H1 2014. The key focus areas for the six months ended 30 June 2015 were exploration programmes at the West Kenya Joint Venture project amounting to US$3.9 million, South Houndé exploration costs in Burkina Faso for US$1.8 million and infill drilling on both Reef 1 and 2 at Bulyanhulu (US$1.1 million). Year to date expenditure is lower due to the timing of expenses, and is expected to increase over H2 2015.

Corporate social responsibility expenses

Corporate social responsibility costs incurred for H1 2015 amounted to US$5.3 million compared to the prior period of US$4.3 million. The main projects for H1 2015 related to Village Benefit Implementation Agreements (“VBIAs”) at North Mara and contributions to general community projects funded from the Acacia Maendeleo Fund; amounting to US$2.6 million.

Other charges

Other charges amounted to US$11.8 million, 8% lower than H1 2014 (US$12.8 million). The main contributors were: (i) non-cash foreign exchange losses mainly related to indirect tax receivables due to the weakening of the Tanzanian shilling, slightly offset by gains on accounts payable (US$15.2 million), (ii) legal costs of US$2.9 million mainly relating to settlement of the North Mara lawsuit and (iii) retrenchment costs of US$1.5 million. These costs were partly offset by Acacia’s ongoing programme of zero cost collar contracts to mitigate the negative impact of copper, rand and fuel market volatility, which resulted in a combined mark-to-market revaluation gain of US$5.6 million. As these arrangements do not qualify for hedge accounting these unrealised gains are recorded through profit and loss. In addition there was a gain on the sale of the previous corporate office in Dar es Salaam (US$2.1 million).

Finance expense and income

Finance expense of US$6.5 million for H1 2015 was 44% higher than 2014 (US$4.5 million). The key components were borrowing costs relating to the CIL Bulyanhulu Expansion project (US$2.6 million) which are no longer capitalised, accretion expenses relating to the discounting of the environmental reclamation liability (US$2.0 million) and US$1.2 million relating to the servicing of the US$150 million undrawn revolving credit facility. Other costs include bank charges and interest on finance leases.

Finance income relates predominantly to interest charged on non-current receivables and interest received on money market funds. Refer to note 7 of the condensed financial information for details.

Taxation matters

The taxation charge was US$10.2 million for H1 2015, compared to a charge of US$22.7 million in H1 2014. The tax charge was made up solely of deferred tax charges and reflects the impact of the profitability on a year to date basis. The effective tax rate in H1 2015 amounted to 40.9% compared to 36.5% in H1 2014. The increase in the effective tax rate is mainly driven by the increase in losses for exploration and corporate entities for which no deferred tax assets are recognised.

Net earnings from continuing operations

As a result of the factors discussed above, net profit from continuing operations for H1 2015 was US$14.8 million, against the prior year period profit of US$39.5 million. A lower gold price, higher cost of sales, corporate administration costs, share-based payments, finance costs and increased foreign exchange losses contributed to the variance.

Earnings per share

The earnings per share for H1 2015 amounted to US3.6 cents, a decrease of US6.4 cents from the prior year period of US10.0 cents. The decrease was driven by the lower net profit, with no change in the underlying issued shares.

Financial position

Acacia had cash and cash equivalents on hand of US$286.9 million as at 30 June 2015 (US$269.6 million as at 30 June 2014). The Group’s cash and cash equivalents are with counterparties whom the Group considers to have an appropriate credit rating. Location of credit risk is determined by physical location of the bank branch or counterparty. Investments are held mainly in United States dollars, with cash and cash equivalents in other foreign currencies maintained for operational requirements.

During 2013, a US$142 million facility was put in place to fund the bulk of the costs of the construction of the Bulyanhulu CIL Plant Expansion project (“Project”). The Facility is collateralised by the Project, and has a term of seven years with a spread over Libor of 250 basis points. The seven year Facility is repayable in equal instalments (bi-annual) over the term of the Facility, after a two year repayment holiday period. The interest rate has been fixed at 3.6% through the use of an interest rate swap. The full facility of US$142 million was drawn in 2013 with the first repayment of US$14.2 million due in H2 2015.

The above complements the existing undrawn revolving credit facility of US$150 million which runs until November 2017.

The net book value of property, plant and equipment increased from US$1.43 billion in December 2014 to US$1.44 billion in June 2015. The main capital expenditure drivers have been explained in the cash flow used in the investing activities section below, and have been offset by depreciation charges of US$63.4 million. Refer to note 11 to the condensed financial information for further details.

Total indirect tax receivables, net of a discount provision applied to the non-current portion, decreased from US$108.1 million as at 31 December 2014 to US$102.6 million as at 30 June 2015. The decrease was mainly due to refunds of US$45.9 million received during H1 2015 and foreign exchange losses of US$20.4 million, which was partially offset by a net increase in current VAT receivables of approximately US$60.8 million. The net deferred tax position increased from a liability of US$11.1 million as at 31 December 2014 to a liability of US$21.3 million as at 30 June 2015. This was mainly as a result of taxable income in H1 2015 and the impact of timing differences.

Net assets increased from US$2.00 billion in December 2014 to US$2.01 billion in June 2015. The increase reflects the current year profit attributable to owners of the parent of US$14.8 million and the payment of the final 2014 dividend of US$11.5 million.

Cash flow generation and capital management

Cash flow – continuing and discontinued operations

Cash flow from operating activities was US$107.1 million for H1 2015, a decrease of US$20 million, when compared to H1 2014 (US$127.1 million). The decrease relates to a lower net profit due to a lower gold price and higher operating costs, partly offset by an increase in inflows associated with working capital of US$19.1 million when compared to H1 2014. The working capital inflow relates to an increase in accounts payable of US$28.8 million due to the timing of payments compared to the prior year and a decrease in doré and concentrate receivables of US$11.8 million. This was partially offset by an investment in inventory of US$25.0 million and an increase in other current assets of US$11.4 million, mainly driven by the timing of VAT refunds received from the Tanzanian Government.

Cash flow used in investing activities was US$99.5 million for H1 2015, a decrease of 22% when compared to H1 2014 (US$128.1 million), driven by lower capitalised development and sustaining expenditure at Buzwagi and North Mara and lower expansionary capital expenditure at Bulyanhulu as the CIL Expansion project was completed.

A breakdown of total capital and other investing capital activities for H1 2015 is provided below:

1 Total non-cash sustaining capital includes the impact of capital accruals excluded from cash sustaining capital of US$22.4 million as well as FX adjustments on revaluation of assets.

2 Non-current asset movements relates to the investment in the land acquisitions reflected as prepaid operating leases and Tanzania government receivables.

Sustaining capital

Sustaining capital expenditure includes investment in the Bulyanhulu refrigeration plant of US$5.1 million, investment in mobile equipment of US$2.3 million, major component change-outs of US$5.3 million, investment in tailings and infrastructure of US$5.1 million and other sustaining capital expenditure across sites of US$6.9 million. During the six months, capital accruals from December 2014 of US$22.4 million were paid.

Expansionary capital

Expansionary capital expenditure consisted mainly of capitalised drilling at North Mara (US$0.9 million), offset by the reversal of accruals relating to the Bulyanhulu CIL Expansion project (US$0.9 million).

Capitalised development

Capitalised development includes Bulyanhulu capitalised underground development (US$34.0 million), capitalised stripping (US$12.7 million) and underground development (US$11.2 million) at North Mara and capitalised stripping at Buzwagi (US$0.3 million).

Non-cash capital

Non-cash capital was US$24.3 million and consisted mainly of a decrease in capital accruals (US$22.4 million) and reclamation asset adjustments (US$0.7 million). The reclamation adjustments were driven by higher US risk free rates driving higher discount rates.

Other investing capital

During 2015 North Mara incurred land purchases totalling US$6.0 million.

Cash flow used in financing activities for H1 2015 was an outflow of US$12.3 million, an increase of US$1.2 million on an outflow of US$11.1 million in 2014. The outflow relates to payment of the final 2014 dividend of US$11.5 million and finance lease payments of US$0.8 million.

Dividend

The final 2014 dividend of US2.8 cents per share was paid to shareholders on 29 May 2015. The Board of Directors have recommended an interim dividend for 2015 of US1.4 cents per share, payable to shareholders in September 2015.

Significant judgements in applying accounting policies and key sources of estimation uncertainty

Many of the amounts included in the condensed consolidated financial information require management to make judgements and/or estimates. These judgements and estimates are continuously evaluated and are based on management’s experience and best knowledge of the relevant facts and circumstances, but actual results may differ from the amounts included in the condensed consolidated financial information included in this release. Information about such judgements and estimation is included in the accounting policies and/or notes to the consolidated financial statements, and the key areas are summarised below.

Areas of judgement and key sources of estimation uncertainty that have the most significant effect on the amounts recognised in the condensed consolidated financial statements include:

Going concern statement

Acacia Group’s business activities, together with factors likely to affect its future development, performance and position are set out in the operational and financial review sections of this report. The financial position of Acacia Group, its cash flows, liquidity position and borrowing facilities are described in the preceding paragraphs of this financial review.

At 30 June 2015, the Group had cash and cash equivalents of US$286.9 million with a further US$150 million available under the undrawn revolving credit facility which remains in place until November 2017. Total borrowings at the end of the period amounted to US$142 million, of which the first repayment of US$14.2 million is repayable in H2 2015.

Included in other current assets are amounts due to the Group relating to indirect taxes of US$51.8 million which are expected to be received within 12 months, but these will be offset to an extent by new claims submitted for input taxes incurred during 2015. The refunds remain dependent on processing and payments of refunds by the Government of Tanzania.

We expect that the above, in combination with the expected operational cash flow generated during 2015, will be sufficient to cover the capital requirements and other commitments for the foreseeable future.

In assessing Acacia Group’s going concern status the Directors have taken into account the above factors, including the financial position of Acacia Group and in particular its significant cash position, the current gold and copper price and market expectations for the same in the medium term, and Acacia Group’s capital expenditure and financing plans. After making appropriate enquiries, the Directors consider that Acacia and Acacia Group as a whole has adequate resources to continue in operational existence for the foreseeable future and that it is appropriate to adopt the going concern basis in preparing the financial statements.

Non-IFRS Measures

Acacia has identified certain measures in this report that are not measures defined under IFRS. Non-IFRS financial measures disclosed by management are provided as additional information to investors in order to provide them with an alternative method for assessing Acacia’s financial condition and operating results. These measures are not in accordance with, or a substitute for, IFRS, and may be different from or inconsistent with non-IFRS financial measures used by other companies. These measures are explained further below.

Average realised gold price per ounce sold is a non-IFRS financial measure which excludes from gold revenue:

Cash cost per ounce sold is a non-IFRS financial measure. Cash costs include all costs absorbed into inventory, as well as royalties, and production taxes, and exclude capitalised production stripping costs, inventory purchase accounting adjustments, unrealised gains/losses from non-hedge currency and commodity contracts, depreciation and amortisation and corporate social responsibility charges. Cash cost is calculated net of co-product revenue. Cash costs per ounce sold is calculated by dividing the aggregate of these costs by total ounces sold.

The presentation of these statistics in this manner allows Acacia to monitor and manage those factors that impact production costs on a monthly basis. Cash costs and cash cost per ounce sold are calculated on a consistent basis for the periods presented.

The table below provides a reconciliation between cost of sales and total cash cost to calculate the cash cost per ounce sold.

All-in sustaining cost (AISC) is a non-IFRS financial measure. The measure is in accordance with the World Gold Council’s guidance issued in June 2013. It is calculated by taking cash cost per ounce sold and adding corporate administration costs, share-based payments, reclamation and remediation costs for operating mines, corporate social responsibility expenses, mine exploration and study costs, realised gains and/or losses on operating hedges, capitalised stripping and underground development costs and sustaining capital expenditure. This is then divided by the total ounces sold. A reconciliation between cash cost per ounce sold and AISC for the key business segments is presented below:

AISC is intended to provide additional information on the total sustaining cost for each ounce sold, taking into account expenditure incurred in addition to direct mining costs and selling costs.

Cash cost per tonne milled is a non-IFRS financial measure. Cash costs include all costs absorbed into inventory, as well as royalties, co-product credits, and production taxes, and exclude capitalised production stripping costs, inventory purchase accounting adjustments, unrealised gains/losses from non-hedge currency and commodity contracts, depreciation and amortisation and corporate social responsibility charges. Cash cost is calculated net of co-product revenue. Cash costs per tonne milled are calculated by dividing the aggregate of these costs by total tonnes milled.

EBITDA is a non-IFRS financial measure. Acacia calculates EBITDA as net profit or loss for the period excluding:

EBITDA is intended to provide additional information to investors and analysts. It does not have any standardised meaning prescribed by IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. EBITDA excludes the impact of cash costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore is not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate EBITDA differently.

A reconciliation between net profit for the period and EBITDA is presented below:

*Depreciation and amortisation includes the depreciation component of the cost of inventory sold.

EBIT is a non-IFRS financial measure and reflects EBITDA adjusted for depreciation and amortisation and goodwill impairment charges.

Mining statistical information

The following describes certain line items used in the Acacia Group’s discussion of key performance indicators:

Risk Review

We have made a number of further developments in the identification and management of our risk profile over the course of H1 2015. Where appropriate, risk ratings have been reviewed against risk management controls and other mitigating factors. Our principal risks continue to be within four broad categories: strategic risks, financial risks, external risks and operational risks and, while the overall makeup of our principal risks has not significantly changed from that published in the 2014 Annual Report, there have been changes in certain risk profiles as a result of developments in our operating environment and developments or trends affecting the wider global economy and/or the mining industry.

For the time being, this has resulted in risks relating to occupational health and life-threatening diseases being removed from those risks previously viewed as principal risks to Acacia and its operations, given the decreased impact of Ebola in West Africa and the wider threat that this disease was perceived to have to the African continent more generally; however, we will continue to assess the potential impact of occupational health risks on our business throughout the remainder of the year.

In conjunction with this and at this stage, we believe it appropriate to add two new risks as a principal risk for the remainder of 2015, these being aviation risk and risks relating to continuity of power supply. We have introduced an aviation risk due to Acacia’s reliance on aviation as a mode of transport across our operations and the potential impact that an aviation incident could have on our operations, whether in the context of serious injury or fatalities and/or the loss of a material means of employee and contractor transport more generally in the event of mechanical breakdown or equipment failure.

As regards risks relating to the continuity of power supply, we have decided to reintroduce this as a principal risk due to increasing and continuing fluctuations and stoppages in power supply, particularly electricity supply in Tanzania, which if not mitigated could result in production stoppages and, as a result of increased dependency on diesel usage, could increase operating costs.

As a result of the risk review outlined above, for the remainder of 2015 we view our principal risks as relating to the following:

• Single country risk

• Significant changes to commodity prices

• Political, legal and regulatory developments

• Security, trespass and vandalism

• Safety risks relating to mining operations

• Implementation of enhanced operational systems

• Equipment effectiveness

• Environmental hazards and rehabilitation

• Aviation risk

• Continuity of power supply

Further details as regards the nature of the new aviation risk and risks relating to continuity of power supply are provided above.

Further details as regards all other principal risks outlined above are provided as part of the 2014 Annual Report.

Directors’ Responsibility Statement

The Directors confirm that, to the best of their knowledge, the condensed consolidated interim financial information has been prepared in accordance with IAS 34 as adopted by the European Union. The half-year management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R and Disclosure and Transparency Rule 4.2.8R, namely:

The Directors of Acacia Mining plc are listed in the Acacia Mining plc Annual Report for 31 December 2014. A list of current Directors is maintained on the Acacia Mining plc Group website: www.acaciamining.com.

On behalf of the Board

Auditor’s Review Report

Independent review report to Acacia Mining plc

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed the consolidated interim financial information, defined below, in the interim financial statements of Acacia Mining plc for the six months ended 30 June 2015. Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

This conclusion is to be read in the context of what we say in the remainder of this report.

What we have reviewed

The condensed consolidated interim financial information, which is prepared by Acacia Mining plc, comprise:

As disclosed in note 2, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

The condensed consolidated interim financial information included in the half-yearly financial report have been prepared in accordance with International Accounting Standard 34, ‘Interim Financial Reporting’, as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

What a review of condensed consolidated financial information involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’ issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated interim financial information.

Responsibilities for the condensed consolidated interim financial information and the review

Our responsibilities and those of the directors

The half-yearly financial report, including the condensed consolidated interim financial information, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express to the company a conclusion on the condensed consolidated interim financial information in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers LLP

Chartered Accountants, London

27 July 2015 

Notes:

Condensed Financial Information

Consolidated income statement

The notes on pages 32 to 44 are an integral part of this financial information.

Consolidated statement of comprehensive income

The notes on pages 32 to 44 are an integral part of this financial information.

Consolidated balance sheet

The notes on pages 32 to 44 are an integral part of this financial information.

Consolidated statement of changes in equity

The notes on pages 32 to 44 are an integral part of this financial information.

Consolidated statement of cash flows

The notes on pages 32 to 44 are an integral part of this financial information.

Notes to the condensed financial information

1. General Information

Acacia Mining plc, formerly African Barrick Gold plc (the “Company”, "Acacia” or collectively with its subsidiaries the “Group”) was incorporated on 12 January 2010 and re-registered as a public limited company on 12 March 2010 under the Companies Act 2006. It is registered in England and Wales with registered number 7123187.

Barrick Gold Corporation (“Barrick”) currently owns approximately 63.9% of the shares of the Company and is the ultimate parent and controlling party of the Group. The financial statements of Barrick can be obtained from www.barrick.com.

This condensed consolidated interim financial information for the six months ended 30 June 2015 was approved for issue by the Board of Directors of the company on 27 July 2015. The condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2014 were approved by the Board of Directors on 9 March 2015 and delivered to the Registrar of Companies. The report of the auditors’ on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006. The condensed consolidated interim financial information has been reviewed, not audited.

The Group’s primary business is the mining, processing and sale of gold. The Group has three operating mines located in Tanzania. The Group also has a portfolio of exploration projects located across Africa.

2. Basis of Preparation of the condensed financial information

The condensed consolidated interim financial information for the six months ended 30 June 2015 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, ‘Interim Financial Reporting’ as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2014, which have been prepared in accordance with IFRS as adopted by the European Union.

The condensed consolidated interim financial information has been prepared under the historical cost basis, as modified by the revaluation of financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

The financial information is presented in US dollars (US$) and all monetary results are rounded to the nearest thousand (US$’000) except when otherwise indicated.

Where a change in the presentational format between the prior period and the current period financial information has been made during the period, comparative figures have been restated accordingly. No presentational changes were made in the current period.

The group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the group’s annual financial statements as at 31 December 2014. There have been no changes in the risk management department or in any risk management policies since the year end.

The impact of the seasonality on operations is not considered as significant on the condensed consolidated interim financial information.

After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing the consolidated interim financial information. Refer page 21 for the Going Concern statement.

3. Accounting Policies

The accounting policies adopted are consistent with those used in the Acacia Mining plc annual financial statements for the year ended 31 December 2014 except as described below.

There are no other new standards, interpretations or amendments to standards issued and effective for the period which materially impacted on the Group.

The following exchange rates to the US dollar have been applied:

4. Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2014, with the exception of changes in estimates that are required in determining the provision for income taxes (see note 3).

5. Segment Reporting

The Group has only one primary product produced in a single geographic location, being gold produced in Tanzania. In addition the Group produces copper and silver as a co-product. Reportable operating segments are based on the internal reports provided to the Chief Operating Decision Maker (“CODM”) to evaluate segment performance, decide how to allocate resources and make other operating decisions. After applying the aggregation criteria and quantitative thresholds contained in IFRS 8, the Group’s reportable operating segments were determined to be: North Mara gold mine; Bulyanhulu gold mine; Buzwagi gold mine; a separate Corporate and Exploration segment, which primarily consists of costs related to other charges and corporate social responsibility expenses, as well as discontinued operations (Tulawaka gold mine).

Segment results and carrying values include items directly attributable to the segment as well as those that can be allocated on a reasonable basis. Segment carrying values are disclosed and calculated as shareholders equity after adding back debt and intercompany liabilities, and subtracting cash and intercompany assets. Capital expenditures comprise additions to property, plant and equipment. The Group has also included segment cash costs and all-in sustaining cost per ounce sold (non-IFRS financial performance measures).

Segment information for the reportable operating segments of the Group for the periods ended 30 June 2015, 30 June 2014 and 31 December 2014 is set out below.

1 The CODM reviews cash operating costs for the three operating mine sites separately from corporate administration costs and exploration costs. Consequently, the Group has reported these costs in this manner.

2 These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to ‘Non IFRS measures’ on page 22 for definitions.

3 Segment carrying values are calculated as shareholders equity after adding back debt and intercompany liabilities, and subtracting cash and intercompany assets and include outside shareholders’ interests.

4 Represents Tulawaka, which has been discontinued.

5 Depreciation and amortisation includes the depreciation component of the cost of inventory sold and amortisation of land prepayments at North Mara.

6 Capital expenditure for the segment note and all-in sustaining cost calculations excludes foreign exchange movements on property, plant and equipment balances which are included in note 11 Property, plant and equipment.

7 Sustaining capital expenditure used for all-in sustaining cost calculations includes land purchases which are included in other assets on the consolidated balance sheet.

6. Other Charges

7. Finance Income and Expenses

a)Finance income

b) Finance expense

8. Tax Expense

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the profits of the consolidated entities as follows:

Tax periods remain open to review by the Tanzanian Revenue Authority (TRA) in respect of income taxes for five years following the date of the filing of the corporate tax return, during which time the authorities have the right to raise additional tax assessments including penalties and interest. Under certain circumstances the reviews may cover longer periods. Because a number of tax periods remain open to review by tax authorities, there is a risk that transactions that have not been challenged in the past by the authorities may be challenged by them in the future, and this may result in the raising of additional tax assessments plus penalties and interest.

9. Earnings Per Share (EPS)

Basic EPS is calculated by dividing the net profit for the year attributable to owners of the Company by the weighted average number of Ordinary Shares in issue during the year.

Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary Shares outstanding to assume conversion of all dilutive potential Ordinary Shares. The Company has dilutive potential Ordinary Shares in the form of share options. The weighted average number of shares is adjusted for the number of shares granted assuming the exercise of share options.

At 30 June 2015, 30 June 2014 and 31 December 2014, earnings per share have been calculated as follows:

10.  Dividends

The final dividend declared in respect of the year ended 31 December 2014 of US$11.5 million (US2.8 cents per share) was paid during 2015.

1 Assets under construction represents (a) sustaining capital expenditures incurred constructing property, plant and equipment related to operating mines and advance deposits made towards the purchase of property, plant and equipment; and (b) expansionary expenditure allocated to a project on a business combination or asset acquisition, and the subsequent costs incurred to develop the mine. Once these assets are ready for their intended use, the balance is transferred to plant and equipment and/or mineral properties and mine development costs.

Leases

Property, plant and equipment includes assets relating to the design and construction costs of power transmission lines and related infrastructure. At completion, ownership was transferred to TANESCO in exchange for amortised repayment in the form of reduced electricity supply charges. No future lease payment obligations are payable under these finance leases.

Property, plant and equipment included emergency back-up and spinning power generators leased at the Buzwagi mine under a three-year lease agreement, with an option to purchase the equipment at the end of the lease term. These leases have been classified as finance leases. The option has not been exercised and the property, plant and equipment related to these finance leases has been derecognised.

Property, plant and equipment also includes five drill rigs purchased under finance leases. The following amounts were included in property, plant and equipment where the Group is a lessee under a finance lease:

11. Derivative financial instruments

The table below analyses financial instruments carried at fair value, by valuation method. The Group has derivative financial instruments in the form of economic and cash flow hedging contracts which are all defined as level two instruments as they are valued using inputs other than quoted prices that are observable for the assets or liabilities. The following tables present the group’s assets and liabilities that are measured at fair value at 30 June 2015, 30 June 2014 and 31 December 2014. The carrying value of financial assets and liabilities approximate their fair value.

12. Borrowings

During 2013, a US$142 million facility was put in place to fund the bulk of the costs of the construction of one of Acacia’s key growth projects, the Bulyanhulu CIL Expansion project (“Project”). The Facility is collateralised by the Project, has a term of seven years with a spread over Libor of 250 basis points. The interest rate has been fixed at 3.6% through the use of an interest rate swap. The 7 year Facility is repayable in equal bi-annual instalments over the term of the Facility, after a two year repayment holiday period. The first principal payment is due in H2 2015. The full facility of US$142 million was drawn at the end of 2013. Interest accrued to the value of US$0.7 million was included in accounts payable at 30 June 2015. Interest incurred on the borrowings as well as hedging losses on the interest rate swap expensed for the six months ended 30 June 2015 was US$2.6 million.

13. Commitments and Contingencies

The Group is subject to various laws and regulations which, if not observed, could give rise to penalties. As at 30 June 2015, the Group has the following commitments and/ or contingencies.

Legal contingencies

As at 30 June 2015, the Group was a defendant in 333 lawsuits. The plaintiffs are claiming damages and interest thereon for the loss caused by the Group due to one or more of the following: unlawful eviction, termination of services, wrongful termination of contracts of service, non-payment for services, defamation, negligence by act or omission in failing to provide a safe working environment, unpaid overtime and public holiday compensation. Of these, over 230 are labour related matters.

The total amounts claimed from lawsuits in which specific monetary damages are sought amounted to US$286.7 million. The Group’s Legal Counsel is defending the Group’s current position, and the outcome of the lawsuits cannot presently be determined. However, in the opinion of the Directors and Group’s Legal Counsel, no material liabilities are expected to materialise from these lawsuits that have not already been provided for.

Included in the total amounts claimed is an appeal by the TRA intended for a tax assessment of US$21.3 million in respect of the acquisition of Tusker Gold Limited. The case was awarded in favour of Acacia however the TRA has served a notice of appeal. The calculated tax assessment is based on the sales price of the Nyanzaga property of US$71 million multiplied by the tax rate of 30%. Management is of the opinion that the assessment is invalid due to the fact that the acquisition was for Tusker Gold Limited, a company incorporated in Australia. The shareholding of the Tanzanian related entities did not change and the Tusker Gold Limited group structure remains the same as prior to the acquisition.

Also included in the total amounts claimed are TRA claims to the value of US$41.3 million for withholding tax on historic offshore dividend payments paid by Acacia Mining plc to its shareholders. In July 2015, the Tax Revenue Appeals Board found against the Company. The Company will appeal this decision. In addition to the claim, there are six other withholding tax claims which have not been quantified. These claims are made on the basis that Acacia is resident in Tanzania for tax purposes. Management are of the opinion that the claims do not have substance and that it will be successfully defended.

North Mara Gold Mine Limited (NMGML) and Diamond Motors Ltd (DML) have entered into arbitration over the interpretation of drilling contracts entered into by the parties, relating to periodic rate review and other provisions of the contracts. The claim by DML against NMGML is quantified as US$17.2 million, together with interest and unspecified damages. NMGML has counterclaimed against this amount and raised a provision of US$4.2 million reflecting the view of NMGML as to the proper interpretation and application of the rate review clauses of the contracts.

Bulyanhulu and MDM, the contractor responsible for the design and construction of the CIL plant, are engaged in a commercial arbitration relating to certain claims for delays in executing the project and other compensation events under the contract. An amount of US$4 million is currently provided for and management expects this to be sufficient to settle any liability arising from the arbitration and in any event management is of the opinion that it will be successful in respect of all claims and any related claim.

The TRA has issued a number of tax assessments to the Group relating to past taxation years from 2002 onwards. The Group believes that these assessments are incorrect and has filed objections to each of them. The Group is attempting to resolve these matters by means of discussions with the TRA or through the Tanzanian Appeals process. During 2013, the Board ruled in favour of BGML in relation to 7 of 10 issues raised by the TRA in final assessments for 2000 – 2006 years under review. The TRA filed a notice of intention to appeal against the ruling of the Board and Acacia filed a counter appeal in respect of BGML to the Appeals Tribunal for all three items that were lost. The Tribunal delivered its judgement in 2014 and confirmed the Board’s decision on the three items that Acacia lost. Following the Tribunals decision, two notices of intention to appeal were filed.The positions that were ruled against BGML were sufficiently provided for in prior year results and management is of the opinion that open issues will not result in any material liabilities to the Group.

14. Related party balances and transactions

The Group has related party relationships with entities owned or controlled by Barrick Gold Corporation, which is the ultimate controlling party of the Group.

The Company and its subsidiaries, in the ordinary course of business, enter into various sales, purchase and service transactions and other professional services arrangements with others in the Barrick Group. These transactions are under terms that are on normal commercial terms and conditions. These transactions are not considered to be significant.

At 30 June 2015 the Group had no loans of a funding nature due to or from related parties (30 June 2015: zero; 30 June 2014: zero; 31 December 2014: zero).

15. Post Balance Sheet Events

The Board of the Company has approved an interim dividend of US1.4 cents per share for this financial year to be paid on 25 September 2015 to shareholders on the register on 28 August 2015.