Acacia Mining plc (formerly African Barrick Gold plc) LSE:ACA. ( Acacia or the Company )

Transcription

1 27 November 2014 Acacia Mining plc (formerly African Barrick Gold plc) ( Acacia or the Company ) Proposed Joint Venture with Sarama Resources Ltd on South Houndé Project Burkina Faso Acquisition of interests in a an emerging and highly prospective region for gold mineralisation The Houndé Belt is relatively under-explored using modern exploration techniques and is seen as a highly attractive opportunity Recent and historic discoveries confirm the potential of the Houndé Belt to host multiple styles of gold deposits Acacia is pleased to announce that it has entered into an earn-in agreement (the Agreement ) with Sarama Resources Ltd ( Sarama, TSX-V:SWA) whereby Acacia can earn an interest of up to 70% with the expenditure of up to USD 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. Completion of the Agreement is expected in the forthcoming weeks. The Project comprises seven (7) contiguous exploration licences covering a total area of 814km 2. Previous exploration by Sarama has identified a number of high-quality exploration targets and includes the 1.5Moz Au Tankoro Resource. The Project area is considered to have significant upside both in terms of ability to expand the existing resource and to discover new gold deposits. Commenting on the transaction, Brad Gordon CEO of Acacia, said: Acacia s entry into this transaction represents an exciting step in our continued efforts to expand our footprint throughout Africa. We are looking forward to working with the Sarama team, who have a proven track record in achieving results at the South Houndé Project, and we will continue to assess exploration opportunities throughout the region that support our growth strategy. Earn-In Structure Under the Agreement, Acacia has agreed to pay initial cash consideration at completion of USD 1 million. Following completion, Acacia will have the right to earn up to 70% of the equity in the Project over a four year period (the Earn-In Period ) in return for advancing a number of staged payments equal to a total aggregate value of USD 15 million, including the initial USD 1 million. During the first phase of the Earn-In Period, which will run for a 24 month period from completion, Acacia may earn up to a 50% interest in the Project in return for making two staged payments of

2 USD 3.5 million per year. Following its acquisition of a 50% interest in the Project, Acacia may increase its interest in the Project to 70% by making two additional stages payments of USD 3.5 million in years three and four of the Earn-In Period. In addition, following its acquisition of 70% of the Project Acacia will be entitled to increase its interest to 75% following the production of a feasibility study by an independent third party in accordance with the requirements of Canadian National Instrument that confirms a mineral reserve equal to 1.6 million troy ounces of gold within the Project licence area. An amount equal to 5% of total Project contributions is payable to Sarama in the event that Acacia elects to take its interest to 75% to reflect joint contributions made in any interim period. The Project will be sole funded by Acacia throughout the Earn-In Period via the earn-in contributions outlined above. Following the Earn-In Period, it is envisaged that the Project will be held under a 70/30 joint venture structure with Sarama, pursuant to which each party will contribute to Project funding pro-rata to its equity interests. Interests of any non-contributing party will be subject to dilution under a standard dilution formula. In addition to standard dilution mechanics, the Agreement also provides for the conversion of either party s interests to a net smelter return ( NSR ) royalty in the event that either Acacia s or Sarama s interest in the Project is diluted to less than 10%, payable following certain commercial production triggers. In such instances Acacia s interest would convert to a royalty equal to 1% NSR and Sarama s interest would convert to a royalty equal to 2% NSR. As regards any NSR held by Sarama, the royalty mechanics provide a right of repurchase to reduce the Sarama NSR from 2% to 1% on payment of an amount equal to USD 3 million. The right of repurchase must be exercised within sixty (60) Business Days from the date of the royalty payment trigger. Any NSR held by Acacia will expire following the production of 1.2 million troy ounces of gold from the Project, calculated solely by reference to production achieved following the royalty payment trigger. Sarama will act as the Project manager under the guidance of a joint Technical Committee. Acacia may elect to take over management of the Project at any time following its acquisition of a 50% interest in the Project and for so long as it continues to increase this interest in Phase 2 of the Earn- In Period.

3 Asset Location The Project is located in South-West Burkina Faso, approximately 300km south-west of Ouagadougou and 90 km South-East of Bobo-Dioulasso, the second largest city in Burkina Faso. Access to the area is via a major sealed bitumen road from Ouagadougou to Bobo-Dioulasso and then via a network of secondary and tertiary roads. The project area is sparsely populated. Figure 1: Regional Geology Houndé Belt Burkina Faso and location of South Houndé Project licences, and associated gold-in-soil image showing location of MM Deposit. Geology The Project is underlain by Birimian rocks of the Houndé Belt that consist of mafic to intermediate metavolcanic rocks and wide domains of volcaniclastic sedimentary rocks. A number of north to north-east trending, regional-scale shear zones traverse through the Project area and control the location of gold domains. The Houndé Belt contains a number of gold deposits associated with a number of belt-scale anomalous structures; the gold mineralisation is hosted by a variety of rock types all with different ore styles and metallurgical characteristics. The gold mineralisation identified to date on the South

4 Houndé Project is spatially related to quartz veining within sheared and foliated meta-sedimentary rocks intruded by quartz-feldspar porphyry dykes. The mineralised zones typically show pervasive silica and sericite alteration and associated fine disseminated pyrite and arsenopyrite. Historical Exploration Results Past exploration programmes focused on surface geochemical sampling across the South Houndé Project have identified several sub-parallel corridors of gold anomalism, each extending for more than 20km along strike. Drilling within the Tankoro area has intersected gold mineralisation (MM and MC Zones) along a 5.5km strike length, within a north-northeast striking sub-vertical structural corridor which is up to 1.1km wide. Sarama have announced a maiden Inferred Resource at Tankoro (MM and MC Zones) of 1.5Moz at 1.6g/t Au. Oxide zones total approximately 300koz Au at 1.4g/t Au, with potential to extend existing oxide zones and identify new zones. The MM and MC systems are believed to be open along strike and down-dip. It is also interpreted that significant potential exists to delineate additional ounces amenable to underground mining within high grade shoots. Metallurgical test work on oxide ore has returned a 93% recovery using conventional CIL, with the fine nature of gold providing excellent leach kinetics. Column leach test work on oxide ore indicates recoveries of ~85%, with 80% of the gold recovered within 10 days. In fresh ore, gold is typically fine (<10um) and associated with pyrite making it refractory using only conventional CIL. Metallurgical test work has demonstrated an overall 91.3% recovery using a combination of flotation and BIOX prior to recovery. Excellent flotation results using 150um grind produces a very clean concentrate with a mass pull of ~5% containing 94% on gold. The concentrate is amenable to treatment by BIOX and other oxidation methods. Figure 2: Large-scale targets within multi-kilometre wide anomalous gold corridors

5 The Tankoro Resource extends over 5.5km strike within a 25km long mineralised corridor, one of three such mineralised corridors on the property. Previous exploration including surface geochemistry, geophysics (IP), and Aircore and reverse circulation drilling have defined a number of quality exploration targets along strike from the current Tankoro resource and on multiple subparallel north-northeast trending corridors within the South Houndé Project. Future Exploration Programmes Going forward, exploration programmes will target high grade extensions to the existing resource base at the MM & MC Zones, both along strike and at depth. Regional programmes will target new high-value discoveries across the Project through the use of geophysics (IP and aeromagnetic surveys) and extensive drilling programmes. The Acacia Discovery Team has confidence that existing resources can be expanded significantly and that new economic discoveries will follow. ENQUIRIES For further information, please visit our website: or contact: Acacia Mining plc Brad Gordon, Chief Executive Officer Andrew Wray, Chief Financial Officer Giles Blackham, Investor Relations Manager Bell Pottinger Daniel Thöle About Acacia Mining plc Acacia Mining plc (), formerly African Barrick Gold, is Tanzania s largest gold miner and one of the largest producers of gold in Africa. We have three producing mines, all located in Northwest Tanzania: Bulyanhulu, Buzwagi, and North Mara and a portfolio of exploration projects in Tanzania, Kenya and Burkina Faso. Our approach is focused on strengthening our three core pillars; our business, our people and our relationships. Our name change from African Barrick Gold to Acacia Mining reflects a new approach to mining, and an ambition to create a leading African Company. Acacia Mining is a UK public company headquartered in London. We are listed on the Main Market of the London Stock Exchange with a secondary listing on the Dar es Salaam Stock Exchange. Barrick Gold Corporation remains our majority shareholder. Acacia Mining reports in US dollars and in

6 accordance with IFRS as adopted by the European Union, unless otherwise stated in this announcement. Disclaimer and forward-looking statements This announcement is for information purposes only and does not constitute an invitation or offer to underwrite, subscribe for or otherwise acquire or dispose of any securities of Acacia in any jurisdiction. This announcement includes forward-looking statements that express or imply expectations of future events or results as opposed to historical facts. These statements include, 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 herein. 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 and 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 announcement. Any forward-looking statements in this announcement 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, ABG explicitly disclaims any obligation or undertaking publicly to update or revise any forward-looking statements in this announcement, whether as a result of new information, future events or otherwise. Nothing in this announcement should be construed as a profit forecast or estimate.