Results for the 12 months ended 31 December 2015

ACACIA MINING PLC - Results for the 12 months ended 31 December 2015

PR Newswire

London, February 14

15 February 2016

Results for the 12 months ended 31 December 2015 (Unaudited)

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

Acacia Mining plc (“Acacia’’) reports full year 2015 results

“2015 was another year of transformation for Acacia as we continued to transition our company into a low cost producer,” said Brad Gordon, Chief Executive Officer of Acacia Mining. “During the year we delivered gold production of 731,912 ounces, a third consecutive annual increase, with our continued investment into the turnaround of Bulyanhulu and the successful transition to underground operations at North Mara, leading to all-in sustaining costs (AISC) remaining flat year on year at US$1,112 per ounce. In light of the lower gold price we have reviewed the carrying value of our assets and have incurred a non-cash post-tax impairment charge of US$189 million at Buzwagi, but still expect to generate free cash flow at both the mine and the group in 2016 at levels well below the current gold price. We continue to have one of the strongest balance sheets in the sector and as a result of this and expected improvements in production, costs and cash flow generation in 2016, the Board have recommended maintaining the final dividend in line with 2014 at US2.8 cents per share.”

Full Year Financial Highlights

· Revenue of US$868 million, 7% lower than 2014, due to the 8% lower average gold price

· EBITDA1,2 of US$175 million, 31% lower than 2014, mainly due to lower revenue

· Non-cash post tax impairment charges of US$189 million at Buzwagi, due to lower gold price planning assumptions, leading to a net loss2 of US$197 million (US48.1 cents per share)

· Adjusted net earnings1,2 of US$7 million (US1.7 cents per share)

· Cash position of US$233 million as at 31 December 2015, with net cash of US$105 million, down US$46 million from 2014

· Capital expenditure of US$184 million, 30% lower than 2014 due to stringent capital controls

· Proposed final dividend of US2.8 cents per share, total dividend for 2015 of US4.2 cents per share, in line with 2014

Full Year Operational Highlights

· Gold production of 731,912 ounces, 2% higher than 2014, with gold sales of 721,203 ounces

· AISC1 of US$1,112 per ounce sold, in line with 2014

· Cash costs1 of US$772 per ounce sold, 5% higher than 2014

· Commenced production from Gokona Underground in Q2 2015, ahead of schedule

· Further expanded exploration footprint across Africa on highly prospective geological belts

· Total reserves reduced to 8.7 million ounces (Moz) from 12.5Moz, with the primary impact being at Bulyanhulu due to incorporation of updated operating assumptions and lower gold price assumptions

· Total reserves and resources reduced by 6% to 28.5Moz primarily due to revised assumptions and depletion

1 These are non-IFRS measures. Refer to page 23 for definitions

2 EBITDA, adjusted EBITDA, net (loss)/earnings, (loss)/earnings per share, adjusted net earnings, adjusted 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 and land purchases recognised as long term prepayments

CEO Statement

I am pleased with the progress we have made across the business over the past 12 months as we continued to transform Acacia into a leading company in Africa, although the speed of the turnaround is slower than I had hoped to achieve.

While we did not realise our primary aim of generating free cash flow in 2015 as a result of the challenges we faced, primarily in the third quarter, we did see an increase in production over 2014. This production was, however, lower than planned, which had a knock-on effect on costs.

Clearly we are disappointed that we did not achieve some of our goals, but the performance in Q3, together with the lower gold price, gave us a mandate to accelerate a wide-ranging right-sizing of our workforce in Q4. This process has now largely been completed and means we have a leaner, more nimble organisation that is set up to deliver in 2016 and beyond as was evident in our improved Q4 performance.

Year in Review

Much was accomplished in 2015 as we progressed the mechanisation of Bulyanhulu and successfully transitioned North Mara into a combined open pit and underground operation. As a result production increased for the third consecutive year to 731,912 ounces, 2% higher than 2014, but marginally below the initial guidance range for the year. Production increased by 5% at North Mara to 287,188 ounces driven by the contribution of the newly commissioned Gokona Underground and by 17% at Bulyanhulu to 273,552 ounces as we saw a full year of operations of the re-claimed tailings project. At Buzwagi, production fell by 19% as a result of operations being focused on low grade areas in the open pit.

On the cost side, we continue to demonstrate discipline and began to show the full benefit of the changes we have made to the cost base over the year in the fourth quarter, with all-in sustaining costs (“AISC”) of US$1,004 per ounce. This represents a US$700 per ounce reduction in our quarterly AISC since Q3 2012. Although we delivered strong cost performance in Q4, the impact of lower than expected annual production, together with continued investment into the development of Bulyanhulu, led to full year AISC of US$1,112 per ounce sold, broadly in line with 2014 and marginally above our initial guidance range. Encouragingly we continued to show strong capital discipline whilst delivering increased production, with capital expenditure being down by 30% over 2014.

We ended the year with US$233 million of cash on our balance sheet, a reduction over the previous year of US$61 million. This included outflows of US$20 million on exploration, US$17 million on dividends,US$10 million on restructuring our workforce and US$15 million spent on the first repayment of our outstanding project debt for the CIL expansion at Bulyanhulu. In the fourth quarter we added US$7 million to the balance sheet, at a time when the gold price hit a six year low and we believe with the expected reduction in costs in 2016 that we will add cash to the balance sheet in 2016 at levels below the current gold price. Given our planned production profile, we expect this to occur primarily in the second half of the year.

Total revenue for the year amounted to US$868 million which was 7% below 2014 as a result of the US$104 per ounce lower average realised gold price, despite the 2% increase in sales ounces. EBITDA was similarly affected by the gold price at US$175 million, down from US$253 million in 2014. We had a loss for the year of US$197 million primarily as a result of a US$189 million non-cash impairment at Buzwagi, with adjusted earnings at US$7 million.

Reserves and Resources

The continuing weakness in the gold price throughout 2015 has led to a reduction in the gold price assumption we have incorporated into our reserve and resource calculations. Our reserve pricing is now US$1,100 per ounce, down from US$1,300 per ounce, and our resource pricing at our mines has been reduced by US$100 per ounce to US$1,400 per ounce. This reduction in gold price, in tandem with updated operating assumptions at Bulyanhulu, following a detailed block by block re-appraisal of our reserves, has led to a total reduction of approximately 3.7 million ounces of gold reserves, with around 90% of the reduction being at Bulyanhulu. Whilst this is disappointing, Bulyanhulu continues to have a mine life in excess of 20 years and unchanged total reserves and resources of 17 million ounces. Our planning will be focused on the continued optimisation of our operating performance and on ultimately bringing as many of these ounces as possible back into our reserve base. This will only be once we are fully satisfied that they meet our return criteria at current prices. At North Mara, we more than replaced reserves in the Gokona Underground as an improved understanding of the ore body allowed us to both extend and add stopes within the mine plan to bring in additional profitable ore tonnes.

Carrying Value Review

As a result of the continued decrease in the gold price during 2015, the gold price used to assess the carrying value of our operating assets and exploration properties was reduced in line with market expectations to US$1,100 per ounce for 2016, US$1,150 for 2017 and US$1,200 from 2018 onwards. This change required us to test the carrying value of each of our operating mines for potential impairment. The impairment review resulted in no change to the carrying value at either Bulyanhulu or North Mara, but due to the impact of the lower gold price on the short life of mine at Buzwagi, where we have assumed a flat US$1,100 per ounce gold price, we have incurred a non-cash post-tax impairment charge of US$188.7 million at the mine. Following the impairment our total carrying value for the Company has decreased to US$1.7 billion, with Buzwagi now carried at US$81 million.

Expanding our Footprint

We continue to look to enhance our portfolio of assets, and in 2015 we expanded our exploration portfolio in Burkina Faso and made our first entry into Mali. We believe that exploration is a significant driver of value for the business over the long term and now is the time to invest, which is a contrarian view to many in the market.

We also had a successful year within our existing exploration portfolio as the drilling programmes in West Kenya identified exciting potential across the Liranda Corridor and we announced in December 2015 that we had intercepted multiple lenses of high grade mineralisation which will be followed up in 2016. In Burkina Faso, programmes on the South Houndé joint venture have expanded both the oxide and fresh rock resources and our joint venture partners Sarama Resources announced in February 2016 an increase of 600,000 ounces of inferred ounces at the project, giving a total resource of 2.1 million ounces at 1.5 grams per tonne (calculated and, where relevant, declared in accordance with JORC requirements).

We have also formed an earn-in joint venture with OreCorp Limited to progress our Nyanzaga Project in Tanzania. The structure of the joint venture allows us to continue our focus of delivery from our existing mines whilst retaining the optionality to participate in the potential future development of a large-scale gold mine. We believe that the team at OreCorp, having previously run large-scale projects in Tanzania, are well placed to advance the project.

Safety

We are pleased to report that we saw an improvement in safety performance in 2015 as the behavioural safety programme, “Tunajali” or “We Care”, began to take effect across all of our operations. As a result our total reportable incident frequency rate improved by 21% despite a toughening of the criteria we use to assess the measure. Whilst we experienced no fatal incidents in 2015, regrettably in January 2016 one of our contractors at North Mara passed away as a result of a haul truck accident. We continue to target zero injuries and having every person going home safely every day.

Final Dividend

As a result of net cash decrease for the year, strictly following our dividend policy would imply no final dividend be recommended for the year. However, to demonstrate our commitment to returns to shareholders, the strength of our balance sheet and to signal our confidence in the ability of our business to generate cash flow, the Board has recommended a final dividend of 2.8 cents per share. Subject to shareholder approval of this recommendation at the AGM on 21 April 2016, the final dividend will be paid on 27 May 2016 to shareholders on the register as of 6 May 2016. The ex-dividend date is 5 May 2016. Together with our interim dividend of US1.4 cents per share, this represents a full year dividend of US4.2 cents per share.

Cost Saving Initiatives

As we move into 2016 our focus continues to be the delivery of free cash flow. We successfully returned to free cash generation in Q4 2015, despite the costs associated with the significant reduction in workforce and expect to generate free cash for the full year 2016. To strengthen our ability to generate free cash flow, we have taken further action to reduce costs across the business, including:

· US$25 million annual saving from the restructuring of the workforce announced in late 2015

· US$10 million further reduction in capital expenditure (based on the bottom of 2016 guidance range)

· US$10 million reduction in corporate administration costs – spend reduced by 50% since 2012

· US$10 million of annualised savings targeted through renegotiation of contracts across supply chain

· The Board of Directors and the Executive Leadership Team have volunteered to take a 10% reduction in salary

Outlook

Whilst the group delivered strong performance in the fourth quarter, full year delivery in 2015 was below expectations despite a very successful year at North Mara. As a result, we have incorporated the learnings from this as well as our primary focus on free cash flow into our mine plans for 2016 and beyond. We expect production to increase to 750,000-780,000 ounces, a 5% increase over 2015 at the mid-point of the range. We also expect a reduction in AISC of approximately 15% to US$950-980 per ounce, with cash costs expected to fall to US$670-700 per ounce. Due to the grade profile at Buzwagi in Q1, we expect a production ratio of 45:55 in terms of the first half versus the second half of the year.

At Bulyanhulu we have fundamentally re-engineered the operation over the past two years and delivered a 40% production increase in that time. We have made significant progress in the mechanisation of the mine, increasing workforce productivities and improving underground operating metrics.

Our focus is on free cash flow and accordingly we have reviewed reserves based on the lower gold price assumption and a more detailed mine design approach. Following this review, and our experience in 2015, it was determined that within the Upper East Zone, which was expected to ramp up significantly in 2016, further definition drilling on the Reef 2 series is required in order to better define the geological complexity and as a result have deferred the planned increase in mining rates. As a result, we expect production in 2016 to be broadly in line with 2015 and with our focus on cost reduction measures we expect AISC to fall by more than 15% year on year.

We are still confident that Bulyanhulu will produce 350,000 ounce per annum over the medium term and are assessing the potential above this production rate through an ongoing three year drilling programme, primarily on the Reef 2 series.

North Mara is expected to continue to perform strongly as the Gokona Underground is fully ramped up and a second access portal is developed to provide additional flexibility. As a result of the increased proportion of mill feed being sourced from the underground we expect to see a 5% increase in production, with a similar reduction in AISC in 2016 over 2015.

At Buzwagi, we expect the mine to generate solid cash flows over 2016, with production expected to be 10% higher than 2015 with AISC down by approximately 15%. As a result of delays in waste movement in 2015, there will be a focus on waste stripping in Q1 2016 to reduce the backlog. This will result in the deferral of some of the high grade material previously planned to be mined in the year into Q1 2017 and will mean that approximately 35% of the mill feed in the first quarter will come from lower grade stockpiles.

We have continued to improve our capital discipline and expect a further 5% reduction in capital expenditure in 2016 to US$175-180 million, driven by a further reduction in sustaining capital to approximately US$60 million as we focus on production critical initiatives at each of the mines. Our investment in waste stripping and underground development is expected to be in line with 2015 as we continue to build flexibility in the underground operations at Bulyanhulu and North Mara.

As previously indicated we plan to maintain our exploration spend at approximately US$20 million, as we progress projects in Kenya, Burkina Faso and Mali and look to further add prospective land packages to our portfolio. Corporate administration costs are expected to fall by over 25% to US$25 million as we focus on a reduction in headcount, travel and other central expenses.

Finally, I would like to thank all of my colleagues for their commitment, enthusiasm and hard work throughout what has been another year of transformation at Acacia. We have made good progress to date and believe we are on the cusp of making this company a leader in Africa. I would also like to thank our Board for their support and guidance through the year and I am very much looking forward to 2016 and beyond.

Brad Gordon

Chief Executive Officer

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 23 for definitions.

2 Reflect the London PM fix price.

3 Cash cost per tonne milled excluding the reprocessing of tailings at Bulyanhulu amounting to US$69 per tonne for the quarter and US$68 for the year ended 31 December 2015.

*Reported process recovery rates and head grade include tailings retreatment at Bulyanhulu. Excluding the impact of the tailings retreatment Q4 and full year 2015 process recovery would be 90.4% and 89.7% respectively, with Q4 and full year 2014 head grade being 3.2g/t and 3.1g/t respectively

For further information, please visit our website: 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) is Tanzania’s largest gold miner and one of the largest producers of gold in Africa. We have three producing mines, all located in north-west Tanzania: Bulyanhulu, Buzwagi, and North Mara and a portfolio of exploration projects in Tanzania, Kenya, Burkina Faso and Mali.

Our approach is focused on strengthening our core pillars; our business, our people and our relationships, whilst continuing to invest in our future. Our name change from African Barrick Gold to Acacia in November 2014 reflected 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 is our majority shareholder. Acacia reports in US dollars and in accordance with IFRS as adopted by the European Union, unless otherwise stated in this report.

Conference call

A presentation will be held for analysts and investors on 15 February 2016 at 09:30 London time.

For those unable to attend, an audio webcast of the presentation will be available on our website 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

2015 Operating Review

We had a strong finish to 2015, delivering a record fourth quarter of production, which drove full year production of 731,912 ounces, an increase of 2% year on year. AISC was in line with the prior year at US$1,112 per ounce sold with a 5% increase in cash cost to US$772 per ounce sold. Increased production drove a 2% increase in sales volumes to 721,203 ounces.

Operationally, North Mara’s production of 287,188 ounces was 5% higher than the prior year mainly due to a 3% higher head grade as high grade underground ore supplemented lower grade Nyabirama ore together with marginally improved throughput rates and recovery rates. AISC fell by 3% to US$915 per ounce sold predominantly due to the higher production base and lower sustaining capital expenditure. During the year, the Gokona Underground moved into commercial production, with the first stoping ore from the underground delivered in Q2 2015 and grade and tonnes continuing to ramp up over the second half of the year.

Bulyanhulu saw a 17% increase in production to 273,552 ounces due to higher run of mine throughput driven by improved access to underground stopes and higher recovery rates as a result of improvements in the elution circuit. In addition, higher throughput and grade from the processing of reclaimed tailings delivered 33,508 ounces of production compared to 12,405 ounces in the prior year. AISC was down by 1% to US$1,253 per ounce sold as the higher production base was partly offset by higher sustaining capital expenditure.

At Buzwagi, gold production for the year of 171,172 ounces was 19% lower than 2014, due to an 18% reduction in head grade as operations continued to focus on the movement of waste and lower grade splay materials in order to open up access to higher grade areas in 2016. The lower production base drove a 13% increase in AISC to US$1,187 per ounce sold from US$1,055 per ounce sold in 2014.

Total tonnes mined during the year amounted to 41.4 million tonnes, in line with 2014. Ore tonnes mined were 10.3 million tonnes compared to 8.2 million in 2014 as a result of improved access to lower grade areas at Buzwagi and increased ore at North Mara delivered from the Gokona Underground and from the ramp up of mining in the Nyabirama pit.

Ore tonnes processed amounted to 9.3 million tonnes, an increase of 10% on 2014 primarily driven by increased throughput at Bulyanhulu as reprocessed tailings increased from 0.6 million tonnes in 2014 to 1.4 million tonnes in 2015.

Head grade for the year of 2.8 g/t was 7% lower than in 2014 (3.0 g/t). This was due to an 18% drop in head grade at Buzwagi, and increase processing of tailings grade at Bulyanhulu. 

Our cash costs for the year were 5% higher than in 2014, and amounted to US$772 per ounce sold. The increase was primarily due to:

– Lower capitalised development costs at North Mara as Gokona pit focused on final ore extraction and at Buzwagi due to lower waste stripping activity (US$48/oz); and

– Higher contracted services costs at Bulyanhulu and North Mara due to increased activity by the development contractor (US$38/oz)

Partly offset by:

– Lower labour costs at all sites but most significantly at Bulyanhulu due to a reduction in national and international employees and savings associated with the local workforce given the devaluation of the Tanzanian shilling (US$33/oz); and

– Lower energy and fuel costs due to global lower oil prices slightly offset by realised economic fuel hedge losses (US$25/oz)

The all-in sustaining cost of US$1,112 per ounce sold for the year was in line with 2014, with higher sustaining capital expenditure and higher cash costs offset by the higher production base and lower capitalised development costs.

As a result of the lower gold price impacting EBITDA, together with a working capital increase mainly relating to the build-up in long term ore stockpiles at Buzwagi and North Mara and an increase in indirect taxes due from the Tanzanian Government, cash generated from operating activities decreased by 46% in 2015 over the prior year period to US$156.5 million, despite the increase in the sales volumes.

Capital expenditure amounted to US$183.6 million in 2015 compared to US$262.8 million in 2014. Capital expenditure primarily comprised capitalised development expenditure (US$109.7 million), investments in tailings and infrastructure (US$21.0 million), investment in mobile equipment and component change-outs (US$18.8 million), investment in the Bulyanhulu refrigeration plant (US$12.0 million) and land purchases at North Mara (US$6.4 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 23 for definitions.

2 Includes land purchases recognised as long term prepayments

Operating performance

Gold production for the year of 273,552 ounces was 17% higher than the same period in 2014. This was due to ounces produced from underground mining increasing by 8% over 2014, driven by an 8% increase in throughput as access to stopes improved; and the new CIL circuit being in operation for the full year, delivering 33,508 ounces, against 2014 production of 12,405 ounces. Gold sold for the year amounted to 265,341 ounces, 23% higher than 2014 but 3% lower than production due to the timing of production at quarter end impacting the shipment of ounces.

Copper production of 6.3 million pounds for the year period was 19% higher than in 2014 due to higher copper grades combined with higher run of mine throughput.

Cash costs for the year of US$797 per ounce sold were 2% lower than 2014 (US$812) mainly due to the higher production base and lower labour costs driven by lower international and national employee headcount, partly offset by increased contracted services driven by increased development contractor activity and increased consumables costs as a result of the additional reagents required in the larger CIL circuit which was in operation for the full year.

AISC per ounce sold for the year of US$1,253 was 1% lower than 2014 (US$1,266) driven by the impact of the higher production base, partly offset by increased sustaining capital expenditure mainly relating to investments in equipment, tailings infrastructure and underground ventilation and refrigeration.

We have fundamentally re-engineered the operation over the past two years and have made significant progress in the mechanisation of the mine, increasing workforce productivities and improving underground operating metrics.

Our focus is on free cash flow and accordingly we have reviewed reserves based on the lower gold price assumption and a more detailed mine design approach. This has led to a reclassification of 3.4 million ounces of reserves to resources at the mine, with reserves now 6.1 million ounces and total reserves and resources remaining unchanged at 17.0 million ounces. Underground reserve grade has also reduced to 8.9 g/t as a result of increased mining widths assumptions.

We expect production in 2016 to be broadly in line with 2015 and with our focus on cost reduction measures we expect AISC to fall by more than 15% year on year. We are still confident that Bulyanhulu will produce 350,000 ounce per annum over the medium term and are assessing the potential above this production rate through an ongoing three year drilling programme, primarily on the Reef 2 series.

Capital expenditure for the year before reclamation adjustments amounted to US$101.3 million, 23% lower than the 2014 expenditure of US$131.5 million, mainly driven by lower expansionary capital spend as the new CIL circuit became operational in Q3 2014, partially offset by increased sustaining capital spend. Capital expenditure consisted mainly of capitalised underground development costs (US$59.8 million), investment in mobile equipment and component change-outs (US$5.4 million), investments in tailings and infrastructure (US$15.1 million) and investments in an underground refrigeration plant (US$12.0 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 23 for definitions.

Operating performance

Gold production for the year of 171,172 ounces was 19% lower than 2014, as head grade reverted towards reserve grade, due to mining being concentrated away from the main ore zone. This was partially offset by a 2% increase in recoveries due to initiatives focused on managing the plant’s stability and performance. Gold sold for the year amounted to 166,957 ounces, 2% below production due to the timing of concentrate production at year end.

Total tonnes mined for the year of 25.0 million tonnes were 2% higher than 2014 due to a focus on the accelerated mining of lower grade ore in order to supplement the low grade stockpiles in the first half of the year and the focus on increased waste movement in the second half of the year to improve access to higher grade areas in 2016.

Copper production of 8.7 million pounds for the year was in line with 2014.

Cash costs for the year of US$1,046 per ounce sold were 32% higher than in 2014 (US$791). Cash costs were primarily impacted by a lower capitalisation of mining costs given the lower strip ratio, the lower production base and higher freight and warehouse related costs. This was partially offset by lower energy and fuel costs due to lower oil prices and lower labour costs driven by a decrease in international employees.

AISC per ounce sold for the year of US$1,187 was 13% higher than 2014 (US$1,055). This was mainly driven by the higher cash cost and lower production base as discussed above.

As a result of delays in waste movement in late 2015, there will be a focus on waste stripping in Q1 2016. This will result in the deferral of some of the high grade material previously planned to be mined in the year into Q1 2017 and will mean that 35% of the mill feed in the first quarter is expected to come from the lower grade stockpiles. Over the full year we expect production to be 10% higher than in 2015, with AISC expected to fall by more than 15% year on year.

Capital expenditure for the year before reclamation adjustments of US$12.3 million was 72% lower than 2014 (US$44.2 million). This was mainly due to mining taking place in the final stage of the open pit resulting in lower capitalised stripping costs. Key capital expenditure for the year consists of component change out costs (US$6.6 million) and investments in tailings and infrastructure of US$2.3 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 23 for definitions.

2 Includes land purchases recognised as long term prepayments

Operating performance

Production for the year of 287,188 ounces was 5% higher than the prior year period as a result of higher head grades. Higher grade Gokona Underground stoping ore supplemented the lower grade Nyabirama ore from the open pit during the year with approximately 65,800 contained ounces being mined from the underground. Gold ounces sold for the year of 288,905 ounces were in line with production, and 5% 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 as the Gokona open pit was completed in Q3 2015.

Cash costs of US$590 per ounce sold were 5% lower than 2014 (US$623) driven by the higher production base and lower fuel costs, partly offset by increased contracted services costs as a result of the Gokona Underground project. 

AISC per ounce sold for the year of US$915 was 3% lower than 2014 (US$947) primarily due to the impact of increased sales volumes, lower cash costs and lower sustaining capital expenditures.

The mine is expected to continue to perform strongly in 2016 as the Gokona Underground is fully ramped up and a second access portal is developed to provide additional flexibility. As a result of the increased proportion of mill feed being sourced from the underground we expect to see a 5% increase in production, with a similar reduction in AISC.

Capital expenditure for the year before reclamation adjustments of US$69.0 million was 15% lower than in 2014 (US$81.1 million). Key capital expenditure included capitalised stripping costs (US$30.1 million), capitalised underground development costs (US$18.2 million), investment in mobile equipment and component change-outs (US$6.8 million) and investment in tailings and infrastructure (US$3.5 million). In addition, US$6.4 million was spent on land acquisitions primarily around the Nyabirama open pit. Land acquisition costs are included in capital expenditure above as they are included in AISC but are treated as long term prepayments in the balance sheet.

Exploration Review

Overall, 2015 was a successful year for exploration with the key highlights including our entry into highly prospective acreage in western Mali, expansion of our exploration acreage in Burkina Faso, successful drilling at our greenfield joint venture projects in Kenya, and further successful drilling results from our brownfield exploration projects at Bulyanhulu and North Mara from both surface and underground drilling.

Greenfields Projects

West Kenya Joint Venture Projects

An extensive exploration programme was completed in 2015, including the drilling of 121 aircore holes (8,221 metres), 79 reverse circulation holes (8,744 metres) and 57 diamond core holes (21,750 metres) across the West Kenya Joint Venture Project. The majority of this work occurred on the Liranda Corridor Project in the Kakamega Dome Camp; however regional targets in the Lake Zone Camp were also advanced.

Kakamega Dome Camp

In early 2015, an initial diamond core drilling programme that tested twelve gold anomalies derived from Aircore drilling of gold-in-soil anomalies along the 12 kilometre long “Liranda Corridor” was completed. The drilling programme was successful in identifying gold mineralisation in multiple locations along the corridor. A second and ongoing phase of diamond core and reverse circulation drilling commenced in late 2015 targeting three of the larger zones of mineralisation, namely the Bushiangala, Acacia and Shigokho shoots. A total of 64 diamond core holes (23,250 metres) have now been completed within the Liranda Corridor since 2014, of which 45 diamond holes for 19,391 metres were completed in 2015. To date, 38 holes have intersected mineralised zones of >1g/t Au, 25 holes >4g/t Au and 14 holes> 8g/t Au.

The gold mineralisation are mostly characterised by grey quartz veins within mudstones and pillow basalts with associated silica-sericite-carbonate-pyrite-pyrrhotite alteration. The higher grade intersections display green mica alteration (fuchsite and roscoelite). As part of the current phase of diamond core drilling, eight holes targeted mineralisation between 300 and 500 vertical metres to test the down plunge continuity of the higher grade shoots at Acacia, Bushiangala and Shigokho. Results from two holes, LCD0053 (Bushiangala shoot) and LCD0057 (Acacia shoot) returned multiple high grade zones showing the potential for an economic discovery. At LCD0053, results included 3m @ 62.3g/t from 32m, 3m @ 10.8g/t from 241m, 5m @ 9.02 g/t from 271m and 3m @ 3.36g/t from 301m. At LCD0057 results included 3.4m @ 30.5 g/t from 437m, 4m @ 10.2g/t from 453m, 6m @ 4.98 g/t from 461m, 6m @ 19.4g/t from 473m and 4m @ 9.88 g/t Au from 673m

The diamond core results from the deeper drilling are very encouraging and show the potential for significant extensions both laterally and vertically to both the Bushiangala and Acacia shoots. 

In 2016, the drilling will continue to test both the Bushiangala and Acacia shoots, with step out drilling along strike and at depth to determine the size potential of the system. We expect to drill to 1,000 metres vertical depth on 160 and 80 metre spaced holes targeting an Inferred resource that indicates we could have a deposit that meets Acacia’s economic thresholds. Additionally, other shoots within the Liranda Corridor will be targeted with a second phase of deeper diamond core drilling to look for higher grade domains.

Lake Zone Camp

A diamond core and reverse circulation drilling program following up selected gold targets with associated Induced Polarisation (IP) geophysical anomalies was undertaken throughout the Lake Zone Camp. A total of 12 diamond core holes and 73 shallow reverse circulation holes were completed across the Abimbo, Viyalo, Kitson and Barding prospect areas. Gold mineralisation was intersected at all prospects and their potential is presently being reviewed for further drilling programmes.

Burkina Faso Projects

South Houndé Joint Venture 

In November 2014, Acacia entered into an earn-in agreement with Sarama Resources Ltd (“Sarama”) whereby Acacia can earn an interest of up to 70% with the expenditure of up to US$14 million over a number of staged payments, at Sarama’s highly prospective South Houndé Project in Burkina Faso (the “Project”). Acacia may increase its interest in the Project to 75% on satisfaction of certain conditions relating to resource delineation. Acacia has spent approximately US$3.6M as at the end of November 2015.

During 2015 exploration programmes included the acquisition, processing and interpretation of high resolution satellite imagery, airborne magnetic and radiometric surveys, ground induced polarisation gradient array and pole-dipole surveys, mapping, alteration and structural studies, geochemical sampling programs, auger (652 holes for 4,012 metres), aircore (492 holes for 26,368 metres), reverse circulation (80 holes for 9,176 metres) and diamond core (30 holes for 7,663 metres) drilling.

While drill programmes primarily targeted the Tankoro Corridor prospects, including the MM Zone, MC Zone, Phantom, Obi, Kenobi, Dlarakoro, Autres and Guy prospects; reconnaissance aircore drilling was also carried out on regional targets such as Bini, Tyikoro and Ouangoro. Results from deeper diamond drilling into the MM and MC zones have been mixed; more work is needed to understand controls on high grade mineralisation. Results from step-out reconnaissance and Aircore drilling have intersected several new wide zones of mineralisation and the results from more regional targets are considered interesting and warrant follow-up.

As a result of the drilling programmes, in February 2016, Sarama have announced an updated JORC compliant Inferred Resource of 2.1Moz at 1.5g/t Au. Work during 2016 will continue to focus expanding existing resources and on defining high grade underground potential beneath MM and MC Prospect as well as further defining and testing targets within the Tankoro Corridor as well as regional targets. 

Pinarello and Konkolikan Projects

In March 2015 Acacia increased its exploration footprint in the Houndé Belt doing a deal with Canyon Resources on six exploration licences which are contiguous with other Acacia joint venture properties and comprise the Pinarello and Konkolikan Projects. The earn-in agreement required an upfront payment of US$400,000 to acquire a 51% interest in the projects with the potential to earn up to a 75% interest through exploration expenditure of US$1.5 million over the next two years.

During 2015, we completed regolith and geological mapping, mapping of artisanal sites and a regional surface geochemical sampling programme (soil, termite, quartz lag and rock chip samples) comprising 6,075 samples. Results from this first pass wide spaced reconnaissance sampling (800m x 100m) are considered extremely encouraging. Significant gold-in-soil/auger geochemical anomalies were defined along major structures defined from geology and airborne magnetic interpretation. Anomalous trends are seen to confirm known regional anomalous trends that in typically host gold occurrences, prospects and deposits. The most significant being the Ouro, Legle, and Tangolobe-Nlzele gold-in-soil anomalies identifiable over a 13 kilometre strike length. A gradient array induced polarisation survey was also carried out to follow-up a gold-in-auger anomaly located on Tankoro-Bantou mineralised corridor. The survey has defined a number of targets associated with coincident chargeability – resistivity anomalies some associated with anomalous auger geochemistry and an obvious structural disconformity.

Work during 2016 will consist of follow-up of regional targets, induced polarisation gradient array surveys, Auger, AC, RC and diamond drilling of artisanal sites, geochemical and geophysical anomalies and structural/magnetic and conceptual geological targets.

Central Houndé JV Project

The Central Houndé Project is a grassroots exploration project covering three exploration licences over an area of 474km2, where Acacia is in joint venture with Thor Explorations Ltd. The projects are located within the southern part of the prospective Houndé Belt and contiguous with some of the other Acacia joint venture properties.

During 2015, we completed regolith and geological mapping, mapping of artisanal sites, and a regional surface geochemical sampling program (soil, termite, quartz lag and rock chip samples) comprising 3,293 samples. Results from this first pass wide spaced reconnaissance sampling (800m x 100m) are considered extremely encouraging. Significant gold-in-soil/auger geochemical anomalies were defined along major structures defined from geology and airborne magnetic interpretation. Anomalous trends are seen to confirm known regional anomalous trends that in typically host gold occurrences, prospects and deposits. The most significant of these being the Legue Anomaly comprising 3 parallel zones over a strike length of over 7 kilometres.

Work during 2016 will consist of follow-up of regional targets, induced polarisation gradient array surveys, Auger, AC, RC and diamond drilling of artisanal sites, geochemical and geophysical anomalies and structural/magnetic and conceptual geological targets.

Mali

Tintinba Project

In June 2015, Acacia began exploring in Mali when it acquired interests in the Tintinba project by entering into an earn-in agreement with a local partner. The project comprises three exploration licences covering over 150 square kilometres within the Keneiba-Kedougou Window and along the world class Senegal-Mali Shear Zone.

Despite the earlier than expected start to the rainy season we managed to conduct reconnaissance field investigations, mapping of artisanal sites and commencement of a regional surface geochemical sampling program (soil, termite, quartz lag and rock chip sampling). To the end of December 1,460 samples had been collected.

Work during 2016 will consist of follow-up of geological and regolith mapping, infill sampling, trenching, induced polarisation gradient array surveys and AC and RC drilling.

Brownfield Projects

In 2015, brownfield exploration was focused on the Bulyanhulu ore body where surface and underground diamond core drilling targeted extensions to both Reef 1 and Reef 2 mineralised systems. The surface drilling demonstrated the potential for further resource potential on the Reef 2 vein series up to 3 kilometres west of existing underground infrastructure, while underground drilling continued to intersect multiple narrow high-grade Reef 2 series veins as part of the resource expansion programme. Aircore programmes were also undertaken within 5 kilometres of the mine targeting satellite discoveries, with several follow-up targets emerging.

Bulyanhulu

Reef 2 Underground Drilling

The programme is a multi-phase, multi-year drilling programme targeting a total resource increase of 5 million ounces from extensions of the Bulyanhulu Reef 1 and Reef 2 series veins outside the current resource model. The 2015 programme focused exclusively on the Reef 2 series west of the current resource and was drilled from several underground drill platforms with a total of 9,240 metres of diamond core completed from 18 holes. The drill holes were planned to intersect the Reef 2M zone at 200 metre centres across a total strike length of 1,000 metres.

Geological interpretation from the recent holes indicates four near-vertical narrow gold bearing quartz vein structures striking north-westerly. The highest assay returned was from the most northern vein 146.7 ounces of gold weighted over a metre (gram metre). The drill intersections to date prove the Reef 2 structures continue west of the current resource although proving continuity of high-grade intersections will require more closer spaced drilling than Reef 1 to move the resource from Inferred to Indicated and into reserve.

An infill drilling programme of 25,000 metre will start and be completed in 2016 to reduce the drill spacing to 100 metre across a 400 metre vertical area along the 1,000 metre strike length extension. The next phases of the exploration drilling program require development of drives in order to provide drill platforms for continued step-out drilling to the west. It is planned to complete the first of these drill access drives by Q3 2016 and expect to commence drilling in Q4 2016. The next exploration drilling phase will target extensions to the Reef 2 vein series on 200 metre spaced fans a further 800 metre west of the current phase. Additionally, from these platforms, drilling will also target a 200 metre extension of Reef 1 to the northwest.

Bulyanhulu North-Western Extensions and Nose Zone

Historic drilling northwest of the currently defined resources on Reef 1 and Reef 2 at Bulyanhulu shows that gold mineralisation extends at least a further 3 kilometres. During 2015, programmes of Aircore drilling and diamond core drilling were undertaken to test for indications of economic mineralisation within 2-5 kilometres of the Bulyanhulu mine. In the Northwest and Nose Zone areas a total of 103 Aircore holes for 4,583 metres and four diamond core drill holes for 1,856 metres were drilled to test several targets primarily associated with the Reef 2 series vein extensions. All the diamond core holes intersected gold mineralisation in a series of 2-5 veins per hole similar to those types of reefs intersected on Reef 2. These results, together with those from previous drilling programs, confirm the presence and lateral extension of the targeted multiple reefs associated with the Reef 2 series veins. Follow up programs in late 2016 or early 2017 will aim at testing the down-plunge potential of higher grade shoots.

Aircore drilling was undertaken across Nose Zone and extensions of this area further northwest of the diamond core drilling. The Aircore drilling targeted a 2km x 0.5km gold-in-soil anomaly that had received very little drill testing in the past. A programme totalling 275 holes for 10,909 metres of AC drilling completed over eleven (11) drill fences with positive results received. These results confirm the presence of North-westerly mineralised zones/structures (possible reefs) warranting further follow up drilling to test mineralisation potential at depth and continuity along strike.

North Mara

Nyabirama

During late 2014 and H1 2015 we completed a drilling programme of 29 holes for 5,421 metres in the Nyabirama pit primarily designed to confirm the geological and resource model of the Stage 4 cutback, but also to assess the potential for a future underground operation. The drilling program was completed on time and below budget and provided enhanced structural understanding and predictability of high-grade zones within the geological model and confirmed the resource model. As a result, we have identified four principal lodes below the final pit outline which appear to demonstrate continuity of high grade mineralisation between 300m and 600m vertical depth.

In 2016 we will undertake a deeper drilling programme of 7 holes for a total of 5,000 metre targeting underground potential. This is aimed at improving the 3-D geological model and predictability of high grade mineralisation for underground resource estimations and if successful is expected to form a basis for potential underground mining studies.

Financial Review

The continued cost discipline during the year was partially offset by the ongoing weak gold price environment in 2015, with the average realised gold price US$104 per ounce (8%) lower than the prior year period. This is reflected in the Acacia Group’s financial results for the year ended 31 December 2015:

· Revenue of US$868.1 million was US$62.1 million lower than 2014 driven by the 8% decrease in the average realised gold price to US$1,154 per ounce sold (US$1,258 per ounce sold in the prior year period), partly offset by an increase in sales volumes of 17,523 ounces (2%).

· Cash costs increased to US$772 per ounce sold from US$732 in 2014, driven by lower capitalisation of development costs, higher contracted services costs and higher general and administrative costs, partly offset by lower labour costs and lower energy and fuel.

· AISC was broadly in line with 2014 at US$1,112 per ounce sold with higher sustaining capital expenditure and higher cash costs offset by the higher production base and lower capitalised development costs.

· EBITDA decreased by 31% to US$175.0 million, mainly driven by a lower gold price, higher cost of sales, and the impact of negative foreign exchange revaluations of indirect tax receivables as a result of the weakness in the Tanzanian shilling of US$26.7 million.

· Impairment charge, after tax of US$188.7 million, relating to Buzwagi following the change in gold price assumption.

· As a result of the above, we incurred a loss of US$197.1 million, compared to a profit of US$89.9 million in 2014

· Adjusted net earnings of US$6.8 million, were 93% lower than 2014. Adjusted earnings per share, mainly excluding a US$188.7 million non-cash impairment adjustment, restructuring costs and prior year North Mara tax positions recognised, amounted to US1.7 cents, down from US24.1 cents in 2014.

· Operational cash flow of US$156.5 million was 46% lower than 2014, primarily as a result of lower revenue and increased operating costs, combined with unfavourable working capital outflows due to a build-up in indirect taxes receivable from the Tanzanian Government driven by the timing of refunds and a reduction in accounts payable as a result of timing of payments.

The following review provides a detailed analysis of our consolidated results for the year ended 31 December 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 27 to 52, 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 2015 of US$868.1 million was US$62.1 million lower than 2014. The 8% decrease in the average realised gold price from US$1,258 per ounce sold in 2014 to US$1,154 in 2015 as a result of lower market prices more than offset the 2% increase in sales volumes (17,523 ounces). The increase in sales ounces was due to the higher production base.

Included in total revenue is co-product revenue of US$35.7 million for 2015, which decreased by 21% from the prior year period (US$45.3 million) due to a 23% lower realised copper price. The 2015 average realised copper price of US$2.33 per pound compared unfavourably to that of 2014 (US$3.01 per pound), and was driven by the lower market price for copper.

Cost of sales

Cost of sales was US$734.2 million for 2015, representing an increase of 7% on the prior year period (US$688.3 million). The key aspects impacting the cost of sales for the year were a reduction in capitalisation of direct mining costs as discussed below combined with realised losses on fuel hedges and higher depreciation and amortisation costs as a result of the higher production base.

The table below provides a breakdown of cost of sales:

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

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

Gross direct mining costs of US$639 million for 2015 were 1% lower than 2014 (US$646 million). Individual cost components comprised:

· A 23% reduction in energy and fuel expenses across all sites due to lower diesel usage and lower global fuel prices.

· An 18% reduction in labour costs, mainly as a result of an 18% reduction in international employees and an 8% reduction in national employees across the sites, driven by localisation efforts and restructuring and the savings associated with the local labour costs given the devaluation of the Tanzanian shilling.

· A 28% increase in contracted services mainly as a result of contracted development activities at Bulyanhulu, the contracted development of the North Mara underground project combined with increased maintenance and repairs contractor charges at Buzwagi.

· A 17% increase in general administration costs driven by warehouse related costs at Buzwagi and increased freight costs due to higher consumable usage due to the expanded Bulyanhulu CIL.

· A 4% increase in consumables costs mainly at Bulyanhulu due to increased processing activity with the new CIL circuit operating for the full year.

· A 2% increase in maintenance costs mainly at Bulyanhulu driven by increased maintenance activity, specifically relating to investments to improve underground equipment availability and to improve group maintenance practices.

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

Capitalised development costs were 28% lower than 2014, driven by the decrease in capitalised waste stripping costs at Buzwagi and North Mara, partly offset by increased capitalised underground development costs at North Mara. The investment in inventory was US$29.7 million, marginally higher than in 2014 due to a build-up of ore inventory at North Mara and Buzwagi due to increased ore mining rates.

Central costs

Corporate administration expenses totalled US$34.5 million for 2015, a 5% increase on 2014 (US$32.7 million) driven by increased consulting fees for security, partly offset by lower legal fees and lower World Gold Council fees. The decrease in the share-based payment expense was a result of the weaker share price performance over 2015, specifically when compared to our peers and the global mining index, impacting on the valuation of share based payment liabilities to employees.

Exploration and evaluation costs

Exploration and evaluation costs of US$19.7 million were incurred in 2015, 8% higher than the US$18.3 million spent in 2014. The key focus areas for the year ended 31 December 2015 were exploration programmes at the West Kenya Joint Venture project amounting to US$8.2 million, exploration programmes in Burkina Faso for US$6.2 million and extension drilling on both Reef 1 and 2 at Bulyanhulu (US$4.3 million).

Corporate social responsibility expenses

Corporate social responsibility costs incurred for 2015 amounted to US$12.9 million compared to the prior period of US$10.8 million. The main projects for 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$7.6 million.

Other charges

Other charges amounted to US$28.1 million, 41% lower than 2014 (US$47.9 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$23.1 million), (ii) legal costs of US$5.4 million mainly relating to the North Mara lawsuit, (iii) retrenchment costs of US$9.9 million and (iv) one off legal settlement costs relating to a North Mara commercial dispute of US$4.9 million. These costs were partly offset by the following main contributors: (i) 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$2.3 million (as these arrangements do not qualify for hedge accounting these unrealised gains are recorded through profit and loss), (ii) a gain on the sale of the previous corporate office in Dar es Salaam and other assets (US$1.3 million), (iii) the reversal of a deferred consideration liability (US$5.3 million), (iv) a reduction in discounting provisions related to long term indirect taxes of US$5.9 million and (v) the de-recognition of finance lease liabilities at Buzwagi of US$3.9 million.

Finance expense and income

Finance expense of US$12.6 million for 2015 was 26% higher than 2014 (US$10.0 million). The key components were borrowing costs relating to the CIL Bulyanhulu Expansion project (US$5.1 million) which are no longer capitalised, accretion expenses relating to the discounting of the environmental reclamation liability (US$3.7 million) and US$2.2 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 9 of the condensed financial information for details.

Impairment charges

As a result of the continued decrease in the gold price during 2015, we reduced the gold price assumption used to calculate the recoverable amount of our assets as well as the reserve and resources estimations. For the reserve calculation we have used US$1,100 per ounce, with our carrying value review using the same figure for 2016, before rising to US$1,150 in 2017 and to US$1,200 per ounce over the longer term. In the case of Buzwagi, management has considered the gold price assumption in light of the fact that the remaining mine life is the shortest, consisting of just over one year of mining followed by just over two years of processing stockpiles. As a result, the current spot price has a heavier weighting in terms of likely achieved price for Buzwagi with a more limited period to benefit from any increase in the market price of gold. As such, management considered it more appropriate for Buzwagi to use a flat spot based price for the remaining life of mine of US$1,100 per ounce.

This required us to reassess the operating performance of each cash generating unit (“CGU”) in order to ensure optimised returns and cash flows in the lower gold price environment. Each of the operating mines and the exploration business are classified as separate CGUs.

The impairment review resulted in a post-tax impairment to the long-lived assets at Buzwagi of US$149.0 million and supplies inventory of US$39.7 million (2014: no impairment charge). On a gross basis, and before taking into account the impact of reduced future operating performance on deferred tax assets, the total impairment charge amounted to US$146.2 million at Buzwagi. Refer to note 7 of the consolidated financial statements for details.

Taxation matters

The taxation charge was US$73.0 million for 2015, compared to a charge of US$26.0 million in 2014. The tax charge was made up solely of deferred tax charges and reflects mainly the impact of the profitability on a year to date basis and the tax impact relating to the release of deferred tax assets as a result of reduced future operating performance of US$42.5 million. The effective tax rate in 2015 amounted to 59% compared to 23% in 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 as well as the de-recognition of a large portion of Buzwagi’s deferred tax asset, previously recognised, due to the impairment expense recognised in 2015.

Net loss

As a result of the factors discussed above, the net loss for 2015 was US$197.1 million, against the prior year profit of US$89.9 million. A lower gold price, higher cost of sales, corporate administration costs, impairment charges, finance costs, increased foreign exchange losses and a higher tax expense contributed to the variance.

Loss per share

The loss per share for 2015 amounted to US48.1 cents, a decrease of US70.2 cents from the prior year earnings per share of US22.1 cents. The decrease was driven by the lower net profit, with no change in the underlying issued shares.

Adjusted net earnings

Adjusted net earnings of US$6.8 million compared to US$98.7 million in 2014. The factors impacting the net loss in the year as described above has been adjusted for the impact of items such as impairment charges, restructuring costs, legal settlements and prior year tax positions recognised. Refer to page 25 for a reconciliation between net loss and adjusted net earnings.

Financial position

Acacia had cash and cash equivalents on hand of US$233.3 million as at 31 December 2015 (US$293.9 million as at 31 December 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 (“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 and the first repayment of US$14.2 million was made in H2 2015. At 31 December 2015, the outstanding capital balance is US$127.8 million (2014: US$142.0 million).

The above complements the existing undrawn revolving credit facility of US$150 million which runs until November 2018.

The net book value of property, plant and equipment decreased from US$1.43 billion in December 2014 to US$1.39 billion in December 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$133.4 million and an impairment to property, plant and equipment of US$37.5 million. Refer to note 12 to the condensed financial information for further details.

Total indirect tax receivables, net of the impact of discounting applied to the non-current portion, increased from US$108.1 million as at 31 December 2014 to US$110.2 million as at 31 December 2015. The increase was mainly due to a gross increase in current VAT receivables of approximately US$113.8 million and a decrease in the impact of discounting of US$5.9 million, partly offset by refunds of US$85.6 million received during 2015 and foreign exchange losses of US$26.7 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$84.0 million as at 31 December 2015. This was mainly as a result of the reversal of the deferred tax asset at Buzwagi which was adjusted in line with the reduced future operating performance, taxable income in 2015 and the impact of timing differences.

Net assets decreased from US$2.00 billion in December 2014 to US$1.79 billion in December 2015. The decrease reflects the current year loss of US$197.1 million and the payment of the final 2014 dividend of US$11.5 million and the interim dividend of US$5.7 million.

Cash flow generation and capital management

Cash flow – continuing and discontinued operations

Cash flow from operating activities was US$156.5 million for 2015, a decrease of US$133 million, when compared to 2014 (US$289.5 million). The decrease relates to a lower operating profit due to a lower gold price and higher operating costs and unfavourable working capital outflows of US$4.8 million compared to inflows of US$20.2 million in 2014. The working capital outflow relates to a build-up in long term ore stockpiles at Buzwagi and North Mara and a build-up in indirect taxes receivable from the Tanzanian Government driven by the timing of refunds.

Cash flow used in investing activities was US$181.4 million for 2015, a decrease of 29% when compared to 2014 (US$257.0 million), driven by lower capitalised development at Buzwagi and lower expansionary capital expenditure at Bulyanhulu.

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

1 Non-current asset movements relates to the movement in Tanzania government receivables, proceeds on the sale of property, plant and equipment and other long term assets.

Sustaining capital

Sustaining capital expenditure includes investments in tailings and infrastructure (US$21.0 million), investment in mobile equipment and component change-outs (US$18.8 million), investment in the Bulyanhulu refrigeration plant (US$12.0 million) and other sustaining capital expenditure across sites of US$15.6 million. During the year, capital accruals from December 2014 of US$15.9 million were paid.

Expansionary capital

Expansionary capital expenditure consisted mainly of capitalised drilling at North Mara (US$1.0 million), offset by the reversal of accruals relating to the Bulyanhulu CIL Expansion project (US$1.0 million).

Capitalised development

Capitalised development includes Bulyanhulu capitalised underground development (US$59.8 million), capitalised stripping (US$30.1 million) and underground development (US$18.2 million) at North Mara and capitalised stripping at Buzwagi (US$1.5 million).

Non-cash capital

Non-cash capital was US$51.9 million and consisted mainly of a decrease in capital accruals (US$15.9 million) and reclamation asset adjustments (US$31.9 million). The reclamation adjustments were driven by changes in estimates of future reclamation cash flows, partly offset by lower US risk free rates driving lower discount rates.

Other investing capital

During 2015 North Mara incurred land purchases totalling US$6.4 million. This was partly offset by proceeds from the sale of property, plant and equipment of US$3.7 million and a decrease in Tanzanian government receivables of US$2.0 million.

Cash flow used in financing activities for 2015 was an outflow of US$32.3 million, an increase of US$13.3 million on an outflow of US$19.0 million in 2014. The outflow relates to payment of the final 2014 dividend of US$11.5 million, the 2015 interim dividend of US$5.7 million, the payment of the first capital instalment of the borrowings related to the Bulyanhulu CIL expansion project of US$14.2 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 and the interim dividend of US1.4 cents per share was paid to shareholders on 25 September 2015. The Board of Directors have recommended a final dividend for 2015 of US2.8 cents per share, payable to shareholders in May 2016.

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:

· Estimates of the quantities of proven and probable gold and copper reserves;

· Estimates included within the life-of-mine planning such as the timing and viability of processing of long term stockpiles

· The capitalisation of production stripping costs;

· The capitalisation of exploration and evaluation expenditures;

· Review of goodwill, tangible and intangible assets’ carrying value, the determination of whether a trigger for an impairment review exist, whether these assets are impaired and the measurement of impairment charges or reversals;

· The estimated fair values of cash generating units for impairment tests, including estimates of future costs to produce proven and probable reserves, future commodity prices, foreign exchange rates and discount rates;

· The estimated useful lives of tangible and long-lived assets and the measurement of depreciation expense;

· Property, plant and equipment held under finance leases;

· Recognition of a provision for environmental rehabilitation and the estimation of the rehabilitation costs and timing of expenditure;

· Whether to recognise a liability for loss contingencies and the amount of any such provision;

· Whether to recognise a provision for accounts receivable, and in particular the indirect tax receivables from the Tanzanian Government, a provision for obsolescence on consumables inventory and the impact of discounting the non-current element of the indirect tax receivable;

· Recognition of deferred income tax assets, amounts recorded for uncertain tax positions, the measurement of income tax expense and indirect taxes;

· Determination of the cost incurred in the productive process of ore stockpiles, gold in process, gold doré/bullion and concentrate, as well as the associated net realisable value and the split between the long term and short term portions;

· Determination of fair value of derivative instruments; and

· Determination of fair value of share options and cash-settled share-based payments.

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:

- Unrealised mark-to-market gains and losses on provisional pricing from copper and gold sales contracts; and

- Export duties.

Average realised gold price per ounce sold is calculated by taking the above calculated revenue and dividing by ounces sold.

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.

* Depreciation and amortisation includes the depreciation component of the cost of inventory 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:

* The group total includes US$18/oz of unallocated credit for corporate related costs in Q4 2015 and a cost of US$52/oz in Q4 2014

* The group total includes US$10/oz of unallocated costs for corporate related costs in 2015 and US$27/oz in 2014

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:

- Income tax expense;

- Finance expense;

- Finance income;

- Depreciation and amortisation; and

- Impairment charges of goodwill and other long-lived assets.

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.

Adjusted EBITDA is a non-IFRS financial measure. It is calculated by excluding one-off costs or credits relating to non-routine transactions from EBITDA. It excludes other credits and charges that, individually or in aggregate, if of a similar type, are of a nature or size that requires explanation in order to provide additional insight into the underlying business performance. EBITDA is adjusted for items (a) to (e) as contained in the reconciliation to adjusted net earnings below.

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

Adjusted net earnings is a non-IFRS financial measure. It is calculated by excluding certain costs or credits relating to non-routine transactions from net profit attributed to owners of the parent. It includes other credit and charges that, individually or in aggregate, if of a similar type, are of a nature or size that requires explanation in order to provide additional insight into the underlying business performance.

Adjusted net earnings and adjusted earnings per share have been calculated by excluding the following:

Adjusted net earnings per share is a non-IFRS financial measure and is calculated by dividing adjusted net earnings by the weighted average number of Ordinary Shares in issue.

Free cash flow is a non-IFRS measure and represents the change in cash and cash equivalents in a given period.

Net cash is a non-IFRS measure. It is calculated by deducting total borrowings from cash and cash equivalents.

Mining statistical information

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

- Open pit material mined – measures in tonnes the total amount of open pit ore and waste mined.

- Underground ore tonnes hoisted – measures in tonnes the total amount of underground ore mined and hoisted.

- Underground ore tonnes trammed – measures in tonnes the total amount of underground ore mined and trammed.

- Total tonnes mined includes open pit material plus underground ore tonnes hoisted.

- Strip ratio – measures the ratio of waste–to–ore for open pit material mined.

- Ore milled – measures in tonnes the amount of ore material processed through the mill.

- Head grade – measures the metal content of mined ore going into a mill for processing.

- Milled recovery – measures the proportion of valuable metal physically recovered in the processing of ore. It is generally stated as a percentage of the metal recovered compared to the total metal originally present.

Risk Review

For 2015 our principal risks have continued to fall within four broad categories: strategic risks, financial risks, external risks and operational risks. Generally, the makeup of our principal risks has not significantly changed throughout the year. However, 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. We of course will continue to assess the potential impact of all material occupational health and general health risks on our business as part of our general health monitoring practices. In addition, as noted in our 2015 Interim results, we have decided to reintroduce risk relating to the continuity of power supply, due to increasing and continuing fluctuations and stoppages in TANESCO power supply experienced during the year, which continued throughout the latter half of the year.

As a result, as at the end of 2015 we viewed 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

• Continuity of power supply

Further details as regards our Principal Risks and Uncertainties and risk assessments conducted in respect thereof will be provided as part of the 2015 Annual Report and Accounts.

Condensed Financial Information

Consolidated income statement

The notes on pages 32 to 52 are an integral part of this financial information.

Consolidated statement of comprehensive income

The notes on pages 32 to 52 are an integral part of this financial information.

Consolidated balance sheet

The notes on pages 32 to 52 are an integral part of this financial information.

Consolidated statement of changes in equity

The notes on pages 32 to 52 are an integral part of this financial information.

Consolidated statement of cash flows

The notes on pages 32 to 52 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.

On 24 March 2010 the Company’s shares were admitted to the Official List of the United Kingdom Listing Authority (“UKLA”) and to trading on the Main Market of the London Stock Exchange, hereafter referred to as the Initial Public Offering (“IPO”). The address of its registered office is No.1 Cavendish Place, London, W1G 0QF.

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.

The condensed consolidated financial information for the year ended 31 December 2015 was approved for issue by the Board of Directors of the Company on 12 February 2016. The condensed consolidated financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. The condensed consolidated financial information is unaudited.

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 financial information set out above does not constitute the Group’s statutory accounts for the year ended 31 December 2015, but is derived from the Group’s full financial accounts, which are in the process of being audited. The Group’s full financial accounts will be prepared under International Financial Reporting Standards as adopted by the European Union. The financial statements are prepared on a going concern basis.

The condensed consolidated financial information has been prepared under the historical cost convention basis, as modified by the revaluation of financial assets and financial liabilities (including derivative instruments) at fair value through profit and loss. The financial statements are presented in US dollars (US$) and all monetary results are rounded to the nearest thousand dollars (US) except when otherwise indicated.

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

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 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 financial information.

After making the appropriate enquiries, the Directors confirm that they have a reasonable expectation that the Acacia Group will continue to operate and meet its liabilities, as they fall due, for the next three years. The Directors’ assessment has been made with reference to the Acacia Group’s current position and prospects, its strategy and the Acacia Group’s principal risks and how these are managed, with particular regard to those which are viewed as having the most relevance to Acacia continuing in operation, when assessed in terms of financial and operational planning and impact over a three-year period, being: environmental hazards and rehabilitation; implementation of enhanced operational systems; significant change to commodity prices; political, legal and regulatory developments; safety risks relating to mining operations and equipment effectiveness. On this basis this condensed consolidated financial information is presented on a going concern basis.

3. Accounting Policies

Accounting policies have remained consistent with the prior year except for the adoption of new standards and amendments to standards.

a) New and amended standards adopted by the Group

The following new standards and amendments to standards are applicable and were adopted by the Group for the first time for the financial year beginning 1 January 2015:

· Amendment to IFRS 2, ‘Share based payment’. The amendment clarifies the definition of a ‘vesting condition’ and separately defines ‘performance condition’ and ‘service condition’. The amendment did not have a significant effect on the group financial statements.

b) New and amended standards, and interpretations not yet adopted

The following standards and amendments to existing standards have been published and are mandatory for the Group’s accounting periods beginning on or after 1 January 2016:

· Amendments to IFRS 10, 'Consolidated financial statements' and IAS 28,'Investments in associates and joint ventures' on sale or contribution of assets. The IASB has issued this amendment to eliminate the inconsistency between IFRS 10 and IAS 28. Effective 1 January 2016. The amendment is not expected to have a significant impact on the Group.

· Amendments to IFRS 10, 'Consolidated financial statements' and IAS 28,'Investments in associates and joint ventures' on applying the consolidation exemption. The amendments clarify the application of the consolidation exception for investment entities and their subsidiaries. Effective 1 January 2016. The amendment is not expected to have a significant impact on the Group.

· Amendment to IFRS 11, 'Joint arrangements' on acquisition of an interest in a joint operation. This amendment adds new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business. Effective 1 January 2016. The standard is not expected to have a significant impact on the Group.

· Amendments to IAS 1,'Presentation of financial statements' disclosure initiative. In December 2014 the IASB issued amendments to clarify guidance in IAS 1 on materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies. Effective 1 January 2016. The amendment is not expected to have a significant impact on the Group.

· Amendment to IAS 16,'Property, plant and equipment' and IAS 38,'Intangible assets', on depreciation and amortisation. In this amendment the IASB has clarified that the use of revenue based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. The IASB has also clarified that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset. Effective 1 January 2016. The amendment is not expected to have a significant impact on the Group.

· Amendments to IAS 27, 'Separate financial statements' on equity accounting. In this amendment the IASB has restored the option to use the equity method to account for investments in subsidiaries, joint ventures and associates in an entity’s separate financial statements. Effective 1 January 2016. The amendment is not expected to have a significant impact on the Group.

· IFRS 15 – Revenue from contracts with customers. This standard is a single, comprehensive revenue recognition model for all contracts with customers to achieve greater consistency in the recognition and presentation of revenue. Revenue is recognised based on the satisfaction of performance obligations, which occurs when control of good or service transfers to a customer. Effective 1 January 2018. The standard is not expected to have a significant impact on the Group.

· IFRS 9 – Financial Instruments (2009 &2010). The IASB has updated IFRS 9, ‘Financial instruments’ to include guidance on financial liabilities and de-recognition of financial instruments. The accounting and presentation for financial liabilities and for derecognising financial instruments has been relocated from IAS 39, ‘Financial instruments: Recognition and measurement’, without change, except for financial liabilities that are designated at fair value through profit or loss. . Effective 1 January 2018. The standard is not expected to have a significant impact on the Group.

· Amendment to IFRS 9 -'Financial instruments', on general hedge accounting. The IASB has amended IFRS 9 to align hedge accounting more closely with an entity’s risk management. The revised standard also establishes a more principles-based approach to hedge accounting and addresses inconsistencies and weaknesses in the current model in IAS 39. The transitional provisions described above are likely to change once the IASB completes all phases of IFRS 9. Effective 1 January 2018. The amendment is not expected to have a significant impact on the Group.

· IFRS 16 – ‘Leases’. IFRS 16 supersedes IAS 17, ‘Leases’, IFRIC 4, ‘Determining whether an Arrangement contains a Lease’, SIC 15, ‘Operating Leases – Incentives’ and SIC 27, ‘Evaluating the Substance of Transactions Involving the Legal Form of a Lease’. Effective 1 January 2019. The standard is not expected to have a significant impact on the Group.

4. 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) for 2014.

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 of additions to property, plant and equipment. The Group has also included segment cash costs and all-in sustaining cost per ounce sold.

Segment information for the reportable operating segments of the Group for the periods ended 31 December 2015 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 23 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.

5. Revenue

1 Concentrate sales includes negative provisional price adjustments to the accounts receivable balance due to changes in market gold, silver and copper prices prior to final settlement as follows: US$4.0 million for the year ended 31 December 2015 (US$5.4 million for the year ended 31 December 2014).

2 Revenue by location of customer is determined based on the country to which the gold is delivered.

Included in revenues for the year ended 31 December 2015 are sales to seven major customers. Revenues of approximately US$604 million (2014: US$625 million) arose from sales to four of the Group’s largest customers.

6. Exploration and Evaluation costs

The following represents a summary of exploration and evaluation expenditures incurred at each mine site and significant exploration targets (if applicable).

1 - Included in “other” are the exploration activities conducted through ABG Exploration Limited and in West Africa for the South Houndé Project. All primary greenfield exploration and evaluation activities are conducted in these companies.

7. Impairment Charges

In accordance with IAS 36 “Impairment of assets” and IAS 38 “Intangible Assets” a review for impairment of goodwill is undertaken annually, or at any time an indicator of impairment is considered to exist, and in accordance with IAS 16 “Property, plant and equipment” a review for impairment of long-lived assets is undertaken at any time an indicator of impairment is considered to exist. During 2015, we have seen continued pressure on the price of gold driven by a number of market factors. Volatility of the gold price continued to be prevalent, and gold traded in a range from US$1,182 per ounce on 31 December 2014 to US$1,061 per ounce on 31 December 2015.

The shift in the gold price has required us to reassess our price assumptions for life-of-mine planning to realign to the current market conditions. For life-of-mine planning purposes, the gold price assumption for 2016 was lowered to US$1,100 per ounce, US$1,150 for 2017, and a longer term view from 2017 onwards of US$1,200 per ounce for Bulyanhulu and North Mara. For Buzwagi, in light of its short life-of-mine, the current spot price has a heavier weighting on a likely achieved price, and for this reason we have used a flat spot price of US$1,100 per ounce for the remaining life-of-mine. This reduction in the gold price assumption, in combination with the resultant impact on reserve and resource estimations represents an impairment trigger in our view, and as a result, we have performed impairment testing on all three operating sites in order to ensure that the recoverable value calculated exceeds the carrying values as presented.

The review compared the recoverable amount of assets for the cash generating units (“CGU”) to the carrying value of the CGU’s including goodwill. The recoverable amount of an asset is assessed by reference to the higher of value in use (“VIU”), being the net present value (“NPV”) of future cash flows expected to be generated by the asset, and fair value less costs to dispose (“FVLCD”). The FVLCD of a CGU is based on an estimate of the amount that the Group may obtain in a sale transaction on an arm’s length basis. There is no active market for the Group’s CGUs. Consequently, FVLCD is derived using discounted cash flow techniques (NPV of expected future cash flows of a CGU), which incorporate market participant assumptions. Cost to dispose is based on management’s best estimates of future selling costs at the time of calculating FVLCD. Costs attributable to the disposal of a CGU are not considered significant. The expected future cash flows utilised in the NPV model are derived from estimates of projected future revenues, future cash costs of production and capital expenditures contained in the life-of-mine (“LOM”) plan for each CGU. The Group’s LOM plans reflect proven and probable reserves, assume limited resource conversion, and are based on detailed research, analysis and modelling to optimise the internal rate of return for each CGU.

The discount rate applied to calculate the present value is based upon the real weighted average cost of capital applicable to the CGU. The discount rate reflects equity risk premiums over the risk-free rate, the impact of the remaining economic life of the CGU and the risks associated with the relevant cash flows based on the country in which the CGU is located. These risk adjustments are based on observed equity risk premiums, historical country risk premiums and average credit default swap spreads for the period.

The key economic assumptions used in the reviews at 31 December 2015 were:

At Bulyanhulu and North Mara, the impairment review did not indicate a need for impairment because the recoverable amount was calculated as higher than the carrying values.

At Buzwagi, the recoverable amount calculated was US$188.7 million lower than the carrying value. In conjunction with the recoverable value review, we have also reviewed anticipated future use of supplies in light of the short life-of-mine and a review of classification of critical spares, resulting in a portion of the impairment allocated to supplies. As there is no goodwill relating to Buzwagi, the impairment loss was allocated as below:

For purposes of testing for impairment of long-lived assets, we have assessed whether a reasonably possible change in any of the key assumptions used to estimate the recoverable value for CGUs would result in an additional impairment charge.

Management’s view is that the recoverable values are most sensitive to changes in the assumptions around gold prices and discount rates, and also sensitive to changes in the copper price. As a result, sensitivity calculations were performed for these for each of the CGUs. The sensitivity analysis are based on a decrease in the long term gold price of US$100 per ounce, i.e. US$1,100 per ounce for North Mara and Bulyanhulu, and US$1,000 per ounce for Buzwagi, an increase in the discount rate of 1%, in isolation, and a decrease in copper prices to US$2.00 per pound, in isolation.

Buzwagi

Any decrease in gold price will result in additional impairment at Buzwagi. A decrease in the Buzwagi gold price of US$100 would result in an additional impairment expense of US$46 million. An increase of 1% in the discount rate in isolation will have an immaterial impact on the recoverable value due to the short remaining life of the operation.

A decrease in long term copper price to US$2.00 per pound in isolation will not have a material impact on the recoverable amount.

North Mara and Bulyanhulu

In isolation, none of the reasonably possible changes set out above would result in an impairment.

8. Other Charges

9. Finance Income and Expenses

a) Finance income

b) Finance expense

1 The unwinding of discount is calculated on the environmental rehabilitation provision.

2 Included in credit facility charges are the amortisation of the fees related to the revolving credit facility as well as the monthly interest and facility fees.

10. 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:

1 Included is the tax impact of US$42.5 million of deferred tax assets derecognised at Buzwagi following the impairment review.

2 The 2015 reconciliation includes an amount of US$12.7 million relating to an increase in the amount of unrecognised tax benefits carried forward. The adjustment reflects uncertainty regarding recoverability of certain tax losses, and gives rise to an increased deferred tax charge.

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.

11. (Loss)/ Earnings Per Share (EPS)

Basic EPS is calculated by dividing the net (loss)/ 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 stock options. The weighted average number of shares is adjusted for the number of shares granted assuming the exercise of stock options.

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

12. Property, Plant and Equipment

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.

2The impairment in 2015 relates to property, plant and equipment at Buzwagi. Refer to note 7 for further details.

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.

2 The impairment in 2015 relates to property, plant and equipment at Buzwagi. Refer to note 7 for further details.

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 for 2014 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 were classified as finance leases. In 2015 the option to purchase was not exercised, but a new operating lease arrangement was entered into.

Property, plant and equipment also includes five drill rigs purchased under short-term finance leases.

The following amounts were included in property, plant and equipment where the Group is a lessee under a finance lease:

13. Deferred Tax Assets and Liabilities

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:

The above tax losses, which translate into deferred tax assets of approximately US$149 million (2014: US$111 million), have not been recognised in respect of these items due to uncertainties regarding availability of tax losses, or there being uncertainty regarding future taxable income against which these assets can be utilised.

Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

Balance sheet classifications

Legal entities

Uncertainties regarding availability of tax losses in respect of enquiries raised and additional tax assessments issued by the TRA, have been measured using the single best estimate of likely outcome approach resulting in the recognition of substantially all the related deferred tax assets and liabilities. Alternative acceptable measurement policies (e.g. on a weighted average expected outcome basis) could result in a change to deferred tax assets and liabilities being recognised, and the deferred tax charge in the income statement.

No deferred tax has been recognised in respect of temporary differences associated with investments in subsidiaries where the Group is in a position to control the timing of the reversal of the temporary differences, and it is probable that such differences will not reverse in the foreseeable future. The aggregate amount of temporary differences associated with such investments in subsidiaries is represented by the contribution of those investments to the Group’s retained earnings and amounted to US$391 million (2014: US$325 million).

14. 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 31 December 2015 and 31 December 2014.

15. Other Assets

1 Included in this amount are amounts receivable from the Tanzanian Social Security Fund of US$5.3 million (2014: US$6.6 million) as well as amounts due from TANESCO of US$2.7 million (2014: US$6.3 million).

2 Prepayments made to the landowners in respect of acquisition of the rights over the use of leasehold land.

3 The non-current portion of the indirect tax receivables has been discounted to its current value using a discount rate of 5% (2014: 5%). This resulted in a discounting credit of US$5.9 million (2014: US$3.6 million) to the income statement (refer note 8)

16. Trade Receivables and Other Current Assets

1 An agreement was concluded with a financial institution which gives the Group the option to factor certain concentrate receivables in order to reduce the Group’s exposure to price risk, credit risk and to reduce the Group’s investment in trade receivables. Under this agreement, concentrate receivables are advanced by the financial institution in exchange for a discount fee of 200 basis points per annum for the discount period. The financial institution has no recourse against the Group for changes in pricing from the time it was advanced. As at 31 December 2015, receivables to the approximate value of US$37 million (2014: Nil) were advanced under this agreement.

2 Other receivables relates to employee and supplier backcharge-related receivables and refundable deposits.

Trade receivables other than concentrate receivables are non-interest bearing and are generally on 30-90 day terms. Concentrate receivables are generally on 60-120 day terms depending on the terms per contract. Trade receivables are amounts due from customers in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets; if not, they are presented as non-current assets. The carrying value of trade receivables recorded in the financial statements represents the maximum exposure to credit risk. The Group does not hold any collateral as security.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less any provisions for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables.

3 To reflect the time value of money the long-term portion of this receivable has been discounted at a rate of 5% (2014: 5%).

4 Other receivables and advance payments relate to prepayments for insurance and income taxes offset against outstanding refunds for VAT and fuel levies and current amounts receivable from the NSSF of US$5.1 million (2014: US$5.5 million).

17. 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 full facility of US$142 million was drawn at the end of 2013. The first principal payment of US$14.2 million was paid in H2 2015 and at the end of 2015 the balance owing was US$127.8 million. Interest accrued to the value of US$0.7 million was included in accounts payable at year end. Interest incurred on the borrowings as well as hedging losses on the interest rate swap for the year ended 31 December 2015 was US$5.1 million.

18. Provisions

1 Rehabilitation provisions relate to the decommissioning costs expected to be incurred for the operating mines. This expenditure arises at different times over the LOM for the different mine sites and is expected to be utilised in terms of cash outflows between years 2016 and 2054 and beyond, varying from mine site to mine site.

2 Other provisions relate to provisions for legal and tax-related liabilities where the outcome is not yet certain but it is expected that it will lead to a probable outflow of economic benefits in future.

3 Toward the end of 2015 reclamation guarantees for the mine sites were discussed with the Ministry of Energy and Minerals including the required rehabilitation activity. These discussions, in conjunction with the annual review of closure estimates and closure planning have resulted in a re-estimation of the basis and assumptions for cost estimates and periods of closure needed. The change in estimate recorded in 2015 mainly relates to a reduction in cost estimated around post-closure activities, combined with changes in the mine plans, mining approach and scheduling which had a positive impact on rehabilitation in future.

Rehabilitation obligations arise from the acquisition, development, construction and normal operation of mining property, plant and equipment, due to government controls and regulations that protect the environment on the closure and reclamation of mining properties. The major parts of the carrying amount of the obligation relate to tailings and waste rock dumps closure/rehabilitation and surface contouring; demolition of buildings/mine facilities; ongoing water treatment; and ongoing care and maintenance of closed mines. The fair values of rehabilitation provisions are measured by discounting the expected cash flows using a discount factor that reflects the credit-adjusted risk-free rate of interest. Acacia prepares estimates of the timing and amount of expected cash flows when an obligation is incurred and updates expected cash flows to reflect changes in facts and circumstances. The principal factors that can cause expected cash flows to change are: the construction of new processing facilities; changes in the quantities of material in reserves and a corresponding change in the LOM plan; changing ore characteristics that impact required environmental protection measures and related costs; changes in water quality that impact the extent of water treatment required; and changes in laws and regulations governing the protection of the environment.

Each year Acacia assesses cost estimates and other assumptions used in the valuation of the rehabilitation provision at each mineral property to reflect events, changes in circumstances and new information available. Changes in these cost estimates and assumptions are recorded as an adjustment to the carrying amount of the corresponding asset. Rehabilitation provisions are adjusted to reflect the passage of time (accretion) calculated by applying the discount factor implicit in the initial fair-value measurement to the beginning-of-period carrying amount of the provision. Settlement gains/losses will be recorded in other (income) expense.

Other environmental remediation costs that are not rehabilitation provisions are expensed as incurred.

19. Commitments and Contingencies

The Group is subject to various laws and regulations which, if not observed, could give rise to penalties. As at 31 December 2015, the Group has the following commitments and/ or contingencies.

a) Legal contingencies

As at 31 December 2015, the Group was a defendant in approximately 341 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.

The total amounts claimed from lawsuits in which specific monetary damages are sought amounted to US$280.0 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 a claim for US$115 million by Bismark Hotel Limited alleging breach of contract arising from an Optional Agreement signed in 1995. The claim relates to an application for a prospecting licence with no attributable reserves, resources or value. We are waiting for the adjudicators to fix a hearing date. Management are of the opinion that the claim does not have substance and that it will be successfully defended.

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 award was delivered on 10 August 2015, with the Tribunal determining an award of US$4 million against the final claimed amount of US$25 million. This award was consistent with NMGML's position in relation to the arbitration and the full amount has been provided for. DML on 31 December 2015 filed a Petition at the High Court to challenge the award. 

A claim has been made for US$15 million by the contractor responsible for the engineering, procurement and construction of a carbon in leach circuit at Bulyanhulu Gold Mine (“BGML”). BGML has made claims in relation to delay damages and other breaches of the contract totalling US$22 million. These claims were referred to adjudication, with the initial decision finding in favour of the contractor. The claims have now been referred to arbitration and management is of the opinion that it will be successful in respect of both claims.

b) Tax-related contingencies

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 and we are still awaiting a hearing date from the Court of Appeal. 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.

Also included 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 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. The case was awarded in favour of Acacia however the TRA served a notice of appeal. The appeal was decided in favour of Acacia by the Tax Board and the Tax Tribunal, but the TRA has appealed against the Tribunal's decision in the Court of Appeal. We are waiting for the hearing date to be set.

The TRA raised 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 addition to the claim, there are six other withholding tax claims which have not been quantified. The TRA have also issued corporate tax assessments to Acacia Mining plc to the value of US$500.7 million. These claims are made on the basis that Acacia is resident in Tanzania for tax purposes. The corporate tax assessments have been levied on the Group net profits before tax. Management are of the opinion that the claims do not have substance and that it will be successfully defended in court in terms of the case already on appeal with the Tax Tribunal.

c) Exploration and development agreements – Mining Licences

Pursuant to agreements with the Government of the United Republic of Tanzania, the Group was issued special mining licences for Bulyanhulu, Buzwagi, and North Mara mines and mining licences for building materials at Bulyanhulu and Buzwagi Mines. The agreement requires the Group to pay to the government of Tanzania annual rents of US$5,000 per annum per square kilometre for as long as the Group holds the special mining licences and US$2,000 per annum per square kilometre for so long as the Group holds the mining licences for building materials. The total commitment for 2015 for the remaining special mining licences and mining licences for building materials amount to US$0.66 million per annum.

d) Purchase commitments

At 31 December 2015, the Group had purchase obligations for supplies and consumables of approximately US$43 million (2014: US$64 million).

e) Capital commitments

In addition to entering into various operational commitments in the normal course of business, the Group entered into contracts for capital expenditure of approximately US$7 million in 2014 (2014: US$20 million).

Post Balance Sheet Events

A final dividend of US2.8 cents per share has been proposed, which will result in a total dividend of US4.2 cents per share for 2015. The final dividend is to be proposed at the Annual General Meeting on 21 April 2016 and paid on 27 May 2016 to shareholders on the register on 6 May 2016. The ex-dividend date is 5 May 2016. These financial statements do not reflect this dividend payable.

Reserves and Resources statement

Mineral reserves and mineral resources estimates contained in this report have been calculated as at 31 December 2015 in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities, unless otherwise stated. Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definitions were followed for mineral reserves and resources. Calculations have been reviewed, verified (including estimation methodology, sampling, analytical and test data) and compiled by Acacia personnel under the supervision of Acacia Qualified Person: Haydn Hadlow, Technical Services Manager. However, the figures stated are estimates and no assurances can be given that the indicated quantities of metal will be produced. In addition, totals stated may not add up due to rounding.

Mineral reserves have been calculated using an assumed long-term average gold price of US$1,100.00 per ounce, a silver price of US$15.00 per ounce and a copper price of US$2.50 per pound. Reserve calculations incorporate current and/or expected mine plans and cost levels at each property.

Mineral resources at Acacia mines have been calculated using an assumed long-term average gold price of US$1,400.00 per ounce, a silver price of US$15.00 per ounce and a copper price of US$2.50 per pound. Mineral resources at Acacia exploration properties have been calculated using an assumed long-term average gold price of US$1,500.00 per ounce

Resources have been estimated using varying cut-off grades, depending on the type of mine or project, its maturity and ore types at each property. Reserve estimates are dynamic and are influenced by changing economic conditions, technical issues, environmental regulations and any other relevant new information and therefore these can vary from year to year. Resource estimates can also change and tend to be influenced mostly by new information pertaining to the understanding of the deposit and secondly the conversion to ore reserves. In addition, estimates of inferred mineral resources may not form the basis of an economic analysis and it cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Therefore, investors are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be economically or legally mined, or that it will ever be upgraded to a higher category. Likewise, investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be upgraded to mineral reserves.

See www.acaciaresources.com for Mine Reserves & Resources tables