A committed

partner
ACACIA MINING PLC
ANNUAL REPORT & ACCOUNTS 2017
ACACIA MINING PLC

Acacia is one of the largest gold Strategic report 

Group at a glance 02
Governance
Governance overview 62

producers in Africa. We have three Our lasting legacy

CEO statement
04
06
Board of Directors
Executive Leadership Team
64
66

mines, all located in north-west Q&A with the Chairman

Our business model
12
14
Corporate governance report
Committee reports
67
71

Tanzania, and a portfolio of Our strategy

Market overview
16
18
Remuneration report
Other information
77
92

exploration projects across Key performance indicators

Risk management
20
24
Directors’ responsibilities statement
Reserves and resources
97
98

the continent. Principal risks and uncertainties 26

Financial statements 
Performance review Independent Auditors’ report to the
Operating review 30 members of Acacia Mining plc 104
Financial review 44 Consolidated financial statements 111
Sustainability review 50 Notes to the consolidated financial
statements116
Parent company financial statements153
Notes to the parent company
financial statements 157

Shareholder information
Glossary of terms 168
Shareholder enquiries 174

FINANCIAL HIGHLIGHTS
Revenue EBITDA

US$752m
2016: US$1,054m
US$257m
2016: US$415m

Cash position Net earnings (loss)

US$81m
2016: US$318m
US$(707)m
2016: US$95m

OPERATIONAL HIGHLIGHTS
Gold production All-in sustaining cost

767,883oz
2016: 829,705oz
US$875/oz
2016: US$958/oz

Cash cost

US$587/oz
2016: US$640/oz

SUSTAINABILITY HIGHLIGHTS
Sustainable Community expenses Total Reportable Injury

US$8.2m Frequency Rate (“TRIFR”)

Amount spent in 2017

(2016: US$10.7m)
0.45
Frequency rate (2016: 0.74)

Localisation of workforce

96.2%
Percentage of nationals
in workforce (2016: 95.3%)

For more information, visit our website:

www.acaciamining.com
 Despite what became a difficult operating

STRATEGIC REPORT
environment in 2017, operational performance
through the year was resilient and we remain
resolute in our commitment to Tanzania,
which is and always has been at the heart
of everything we do.
Our business has been impacted by a ban imposed by the
Government of Tanzania on the export of gold/copper concentrate
(“concentrate”) in March 2017. The export ban prevented the sale
of 90% of the concentrate produced by Bulyanhulu and Buzwagi
in the year representing a loss of US$264 million of revenue.

We are committed to transparency and have continued to keep our

stakeholders informed and updated as events have unfolded through
the year. This report provides an overview of 2017 and what actions
we have taken to protect our shareholders’ interests whilst looking
to continue our long-term partnership with Tanzania.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 1

 GROUP AT A GLANCE

Operational delivery
continues to be resilient
Concentrate that currently cannot be exported
and sold is stockpiled in Tanzania.
PRODUCING MINES

Bulyanhulu 175,491oz PROGRESS

At Bulyanhulu, gold production of 175,491
FUTURE POTENTIAL
Whilst the mine is on reduced operations
2017 gold production ounces was 39% lower than the prior year. we are taking the opportunity to progress
This stemmed from a 34% decrease in essential capital spend, primarily on
US$1,373/oz run-of-mine tonnes for the year primarily the process plant, together with an
2017 All-in sustaining cost due to the decision to transition Bulyanhulu optimisation study designed to ensure
into reduced operations at the end of Q3 that when the mine restarts it does so
2017
PRODUCTION1
54% 2017 due to losses occurring as a result
of the concentrate export ban. Gold sales
in an optimised manner. We are targeting
a phased restart through 2019 assuming
GOLD BARS (DORÉ) for the year were 107,855 ounces, 39% the concentrate ban is resolved in 2018.
behind production due to the impact of
46% the concentrate export ban. The impact
GOLD/COPPER of the lower sales and production base
CONCENTRATE led to AISC per ounce sold being 30%
production at Bulyanhulu higher than 2016 at US$1,373.

Buzwagi 268,785oz PROGRESS

Buzwagi delivered record gold production
FUTURE POTENTIAL
Buzwagi is transitioning to a stockpile
2017 gold production of 268,785 ounces for 2017 which was
processing operation in 2018 as we seek
66% higher than in 2016 mainly due
US$667/oz to a 75% higher head grade. The higher
to responsibly manage the closure of the
mine in three years’ time. Our No Harm
2017 All-in sustaining cost production drove lower AISC of
2020 project will ensure our business,
US$667/oz, 39% lower than 2016.
2017 our people and the communities around
PRODUCTION1
58% Due to the inability to export concentrate, the mine are best prepared for the
GOLD BARS (DORÉ) in September 2017 Buzwagi ceased mine’s closure.
operating the flotation circuit which had
42% previously been planned to run into the
GOLD/COPPER first part of 2018 but continued to run
CONCENTRATE the existing gravity and CIL circuits which
resulted in gold production for the last four
production at Buzwagi
months of the year being solely in doré form.

North Mara 323,607oz PROGRESS

North Mara continued its solid delivery,
FUTURE POTENTIAL
As North Mara solely produces gold
2017 gold production producing 323,607 ounces and generating in doré form it was unaffected by the
strong free cash flow. Our successful concentrate export ban. In 2018 we
US$803/oz drilling programme at the mine has more expect production to be broadly in line
2017 All-in sustaining cost than doubled the Mineral Reserve at the with 2017 at approximately 325,000
Gokona Underground to 1.3Moz at a grade ounces as the continued increase in
2017
PRODUCTION 100% of 6.3 g/t. Mining of the Nyabirama Stage 3
open pit was substantially completed
production from the Gokona Underground
is offset by lower open pit tonnes and grade
GOLD BARS (DORÉ) during 2017 and we continued to progress as ore is sourced from the beginning of
production at North Mara waste stripping at the start of the Stage 4 the Stage 4 pit. Our strategic objective for
open pit which will provide the majority the mine is to deliver more than 300,000
of the mill feed going forward. ounces of production for at least a ten-year
period from twin underground mines.

1 Due to operating changes neither Bulyanhulu nor Buzwagi now

produce concentrate and instead solely produce gold bars (doré).

2 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 Relevant pages

p30

STRATEGIC REPORT
MALI
Kenieba JVs
Operating review
BURKINA
FASO
Houndé Belt JVs
p44
Financial review
West Kenya Project KENYA
Nyanzaga JV North
Bulyanhulu Mara
Buzwagi
TANZANIA

MALI

Kenieba JVs
BURKINA
FASO
EXPLORATION Houndé Belt JVs

STOCKPILED

12,983
Tonnes of concentrate West Kenya Project
stockpiled at year-end KENYA
MALI Nyanzaga JV
containing 76.6koz of gold,
3.6Mlbs of copper and
66.5koz of silver. Kenieba JVs
BURKINA
Which has an approximate net value of FASO TANZANIA

US$90m
Houndé Belt JVs

as at 31 December 2017

Key
West Kenya Project
2017 SPEND ON OUR Exploration projects KENYA
STOCKPILED EXPLORATION PROJECTS Nyanzaga JV

21,688 US$25m
Operational mines

Tonnes of concentrate 2016: US$24m TANZANIA

stockpiled at year-end
containing 109.1koz of
gold, 8.5Mlbs of copper
and 92.5koz of silver.
PROGRESS
Which has an approximate net value of

US$150m
as at 31 December 2017
Kenya
We declared a high-grade inferred resource
Mali
In 2017 we continued to delineate
at the Liranda Corridor within the West Kenya surface gold-in-soil anomalies across
Project in early 2017 following an extensive our five permits on the Senegal Mali
drilling programme during 2016 and early Shear Zone, through mapping and surface
2017. This resource was updated in the IP geophysical surveys, and commenced
second half of the year and at year-end stood drilling programmes on the resultant
BUSINESS AS USUAL
with no stockpiles at 2.9 million tonnes at 12.6 g/t for 1.2Moz. 25 targets.
Burkina Faso Tanzania
Extensive drilling programmes, including Our Nyanzaga Project in Tanzania
diamond, reverse circulation and air-core is a joint venture with OreCorp. The project
drilling, were completed in 2017 across is now progressing a DFS which is due for
all of our four joint ventures in Burkina completion in 2018. Due to the potential
Faso. In addition, we conducted a review impact of the new mining laws in Tanzania
of the structural architecture of our land we now have a carrying value of the project
holdings and to date we have delineated of US$34 million compared to US$46 million
more than 65 drilling targets for exploration in 2016.
in 2018.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 3

 OUR LASTING LEGACY

Proud to be a part
of Tanzania’s
growth story

From consistent exploration and

development of mines to infrastructure
projects and improving access to electricity
and clean water, the Acacia Group and
its predecessor companies have always
invested in Tanzania and its people.

p50
Sustainability review

4 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 STRATEGIC REPORT
BUILDING A LASTING LEGACY DELIVERING ECONOMIC GROWTH CREATING A SOCIAL IMPACT
We remain committed to Tanzania We are a major driver of economic growth In the last five years we have invested
and to operating as a long-term partner in the regions in which we operate due to heavily in key infrastructure, including
for the country in its efforts to realise its our overall financial contribution through schools, roads, health and water facilities,
socio-economic goals and in particular the payment of royalties, taxes, employees, and we now seek to add further value
its industrialisation agenda. suppliers, contractors and communities. through the development of the local
economies around our mines.

Capital investment in Tanzania Tanzanian tax contribution Number of people positively impacted

US$4bn
Acacia, and its predecessor companies, have made
US$143m
Acacia contributed US$143 million in taxes
60,000
In 2017 our Sustainable Communities projects
over US$4 billion of capital investment in Tanzania. to the Tanzanian Government in 2017. positively impacted over 60,000 Tanzanians.

Our employees Tanzanian supplier purchases Community investment

96.2%
Over 96% of our employees in Tanzania
US$434m
We spent US$434 million with Tanzanian
US$75m
We have spent more than US$75 million
are Tanzanian. suppliers in 2017. on communities since 2010.

Commitment to localisation Direct economic contribution to Tanzania Number of schools

85% reduction
International employees in Tanzania have been
US$644m
We contributed US$644 million
57
We have built or renovated 57 schools in
reduced by 85% in the last five years. towards Tanzanian GDP in 2017. the communities around our mines in the
last five years.

CASE STUDY

BUZWAGI BUZZING WITH BEEKEEPERS

Our Buzwagi mine has supported on the use of commercial beehives as well as
training in branding, packaging and marketing
a group of beekeepers in Kahama of their honey. We also built a project office
District who were facing a number and two apiaries.
of challenges in producing honey Beekeeping provides an important source
on a commercial scale. of income for people around the Buzwagi
mine. It is envisaged that engagement of
Their small hives encouraged the division the local beekeeping institute and the district
of bee colonies and limited the amount of government authority, as well as knowledge
honey they could produce. In an effort to and skills transfer within the community, will
support commercial production, at a cost support sustainable commercial beekeeping
of approximately US$85,000 we sponsored practices and boost the local economy for
a training programme for the beekeepers years to come.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 5

 CEO STATEMENT

A history of dedicated
investment
Whilst we have been impacted by events beyond One of our key focus areas over the last four
our control, our operations still continued to years has been on reducing the number of
deliver during 2017. It was especially pleasing international employees and contractors within
to see a record year of production at Buzwagi our business and ensuring that our Tanzanian
of 268,785 ounces in spite of the uncertainty assets are increasingly led and operated by
about the mine’s future as the mine effectively Tanzanian employees. Since 2013, we have
completed the final stage of the open pit ahead driven a reduction in international employees
of moving to a stockpile processing operation of approximately 85% within our business and
for the next three years. North Mara continued now over 96% of our people are Tanzanian.
to perform well and delivered strong free cash Since my appointment as Interim CEO, we have
flow despite production of 323,607 ounces continued this process and following the move
being below 2016’s record year. Grades from to reduced operations at Bulyanhulu and the
the Gokona Underground remained strong, transition of Buzwagi to stockpile processing
albeit behind 2016’s bonanza levels, as the we have consolidated the management teams
focus of mining was in the lower grade West at the two mines, which are located within the
PETER GELETA Zone. During the year we substantially same region, into one, under the leadership
INTERIM CHIEF EXECUTIVE OFFICER completed the mining of the Nyabirama Stage 3 of an experienced Tanzanian national,
open pit and continued to progress waste Benedict Busunzu. We are pleased to report
stripping at the start of the Stage 4 open pit the combined Bulyanhulu and Buzwagi
INTRODUCTION which will provide the majority of the mill feed management team is now made up of five
going forward. At Bulyanhulu we made the Tanzanian nationals and one international
The Company recorded resilient difficult decision to move the mine to reduced employee. Post year-end we also appointed
operations in September and temporarily cease Asa Mwaipopo as our Managing Director,
performance in what became a production from the underground mine and Tanzania. Asa is a highly experienced
difficult operating environment in therefore of gold/copper concentrates, after Tanzanian mining engineer who has worked
2017 and expects to return the significant cash outflows through the year. This in the industry and for us for a number of years
was the primary driver behind production of in increasingly senior roles. In his new role,
business to free cash generation1 175,491 ounces being 39% behind 2016’s level. he will head up our Tanzanian business by
during the forthcoming year. On the cost side, we demonstrated further
becoming the Managing Director of each of
our Tanzanian operating entities with the
Whilst operational performance improvement in AISC as strict cost discipline
mine general managers and functional heads
was solid, financial performance was maintained. Group AISC of US$875 per
in Tanzania reporting directly into him.
ounce sold was below the guidance range and
was significantly impacted by the lowest that Acacia has ever achieved. If Discussions between the Government of
Tanzania’s on-going ban on Group sales ounces had equalled production, Tanzania (“GoT”) and Barrick Gold Corporation
AISC would have been approximately US$798 (“Barrick”), Acacia’s majority shareholder, aimed
exporting gold/copper concentrate per ounce sold. Buzwagi benefited from at resolving the current situation remain
which resulted in approximately increased production rates which drove an on-going. In October 2017, the GoT and Barrick
US$264 million of lost revenue AISC of US$667 per ounce sold, 39% lower each announced that the parties had agreed to
than 2016, with inventory adjustments a framework on a way forward, and Barrick has
in 2017 and drove a total cash largely offsetting the lack of sales of gold in indicated that they expect to be able to present
outflow of US$237 million. concentrate. At North Mara we saw a small a detailed proposal for a possible solution to
increase in AISC to US$803 per ounce sold Acacia for review and approval during the first
primarily driven by the lower production base half of 2018. We are providing support to Barrick
compared to the previous year. At Bulyanhulu in its on-going discussions, and any proposal
the impact of the lower sales and production that may be agreed in principle between Barrick
base led to AISC per ounce sold being 30% and the GoT will require Acacia’s approval.
higher than 2016 at US$1,373 although
this was partly offset by lower capitalised
development costs and lower sustaining
capital spend.

1 Refer to non-IFRS measures on page 171

for the definition of free cash flow.

6 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 Relevant pages

p62

STRATEGIC REPORT
Governance overview

After leading significant change at

For nearly 20 years the Acacia
Acacia over the past four years,
Group and its predecessors have
Brad Gordon has stepped down from
been a significant contributor to
his position as CEO. The Board is
Tanzania; see the key milestones
pleased to announce the appointment
in our journey below:
of Peter Geleta, as Interim CEO,
effective as of 1 January 2018.

Barrick buys First gold North Mara

Sutton Resources, production at Gold Mine Barrick buys
owner of Bulyanhulu Bulyanhulu completes first North Mara
deposit Gold Mine gold pour Gold Mine

1999 2001 2002 2006

African Barrick
Launch of ABG lists Gold plc (ABG) listed Buzwagi
Maendeleo Fund on the Dar-es-Salaam on the London Stock Gold Mine pours
Stock Exchange Exchange first gold

2012 2011 2010 2009

The Acacia
Group’s total tax THE FUTURE
ABG changes
contribution
name to Aiming to be the partner
to Tanzania tops
Acacia Mining plc
US$1 billion of choice for many years
2014 2017 to come.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 7

 CEO STATEMENT CONTINUED

Financial overview During the second quarter of 2017 two as well as a subsequent conflicting set of
The positive operational performance was not Presidential Committees announced their adjusted assessments for PML which amount
translated into positive cash flow due to our findings following investigations into the to US$3 billion and appear to relate to the
inability to export and sell a total of 185,800 technical and economic aspects of the historic historical operation of the Tulawaka mine at
ounces of gold, 12.1 million pounds of copper exports of gold/copper concentrates. Acacia which PML ceased operations in 2013. The
and 158,900 ounces of silver contained in has fully refuted the implausible findings of TRA has so far not provided its calculations or
concentrate as a result of the concentrate both Committees, which claimed that the substantiation for the adjusted assessments,
export ban. This includes 10,678 ounces of Acacia Group and its predecessor companies and we are objecting to and defending these
gold in concentrate produced in late 2016 but had historically and significantly under-declared through the Tanzanian tax appeals processes.
not sold. This heavily impacted our Bulyanhulu the contents of exports of concentrate. Acacia The allegations made by the First and Second
and Buzwagi mines which produced gold in both reiterates that the Group has declared Committees are included in the matters that
doré and in concentrate form, while North Mara everything of commercial value that it has have already been referred to international
sales were unaffected by the ban due to 100% produced since it started operating in Tanzania arbitration by BGML and PML. In addition, the
of its production being doré. This, together with and has paid all appropriate royalties and taxes Company continues to dispute and defend in
an increase in indirect tax receivables, meant on all of the payable minerals that it has accordance with Tanzanian law and procedure
that we ended the year with US$81 million of produced. We have requested copies of the the outstanding tax claims previously reported
cash on our balance sheet, a decrease from reports of the two Presidential Committees as having been brought against it by the TRA,
US$318 million on hand at the end of the and called for independent verification of the on the purported basis that Acacia itself has
previous year. Net cash also fell, but we results announced by the Committees, but established tax residence in Tanzania. These
continued to repay our CIL debt facility during to date we have not received a response to appeals remain the subject of the Tanzanian
2017 and saw debt balances fall to US$71 these requests. tax appeals processes.
million at the end of 2017. Post year-end we
In late June 2017, new legislation was proposed In July 2017, Barrick, Acacia’s majority
completed the sale of a non-core royalty for
which made significant changes to the legal shareholder, announced that it had
US$45 million and this, together with the
and regulatory framework governing the natural commenced discussions with the GoT aimed
purchase of put options for a portion of future
resources sector as a whole in Tanzania. Post at identifying a possible solution to Acacia’s
gold sales and strong cost discipline, will
year-end new mining regulations were also disputes with the GoT. The GoT informed
provide additional support to our balance sheet.
issued which are currently being reviewed. Prior Barrick that it wished to continue their
Total revenue for the year amounted to to the legislation being passed into law in early dialogue, and therefore Acacia has not
US$752 million which was 29% lower than July 2017, in order to protect the Company, participated directly in these discussions.
2016 as a result of the inability to sell gold, Bulyanhulu Gold Mine Limited (“BGML”), the
copper and silver contained in concentrate owner of the Bulyanhulu mine, and Pangea
as set out above during the year. The lack
Timeline of events
Minerals Limited (“PML”), the owner of the
of sales impacted EBITDA, which at US$257 Buzwagi mine, each commenced international MAR
million was 38% below 2016. Net earnings arbitrations against the GoT in accordance with
were impacted by the lack of sales, but also the dispute resolution processes agreed by the The Tanzanian Ministry of Energy and
by a post-tax non cash impairment charge GoT in the Mineral Development Agreements Minerals announced a ban on the export
of US$644 million, primarily associated (“MDAs”) with BGML and PML. These of metallic mineral concentrates. The ban
with Bulyanhulu as a result of the increased arbitrations remain on-going. Acacia continues impacts the Bulyanhulu and Buzwagi mines
uncertainty in our operating environment to monitor the impact of the new legislation which ordinarily produced a proportion
and the movement to reduced operations. in light of the Group’s MDAs with the GoT. of their gold in concentrate form. During
This, together with an increase in our However, to minimise further disruptions to H1 2017, the last period of full production,
uncertain tax provision from US$128 million our operations, we have been, in the interim, gold in concentrate accounted for 50%
to US$300 million, drove a net loss of US$707 satisfying the requirements imposed by the new of the combined Bulyanhulu and Buzwagi
million. Adjusted net earnings amounted to legislation as regards the increased royalty rate production. North Mara is unaffected
US$146 million which was 9% below 2016. applicable to metallic minerals such as gold, by the ban as it produces solely doré.
copper and silver of 6% (increased from 4%),
in addition to a new 1% clearing fee on mineral
Operating environment exports. These payments are being made under
On 3 March 2017, the Ministry of Energy
protest, without prejudice to our legal rights
and Minerals of the Tanzanian Government
under our MDAs.
announced a general ban on the export of
metallic mineral concentrates following a In July, BGML and PML received adjusted tax
directive made by the President of the United assessments from the Tanzanian Revenue
Republic of Tanzania. Following the directive, Authority (“TRA”) totalling US$190 billion for

50%
we immediately ceased all exports of our alleged unpaid taxes, interest and penalties,
gold/copper concentrate including the 277 apparently issued in respect of alleged and
containers that had been approved for export disputed under-declared export revenues, and
prior to the ban and which remain impounded appearing to follow on from the announced
in Dar es Salaam at either the port or a findings of the First and Second Presidential
staging warehouse. As mentioned above, the Committees. Acacia refutes the findings of of combined production
export ban impacts Bulyanhulu and Buzwagi each Committee, reiterates that it has fully at Bulyanhulu and Buzwagi
which ordinarily produced a proportion of their declared all revenues, and has requested impacted by concentrate ban.
gold in concentrate form due to the mineralogy copies of the reports of the Committees
of the ore at those two mines. North Mara and independent expert verification of their
production and sales were unaffected by the findings. We have requested the TRA to
ban on export of concentrates due to 100% provide calculations and the necessary
of its production being doré. substantiation to support these assessments

8 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 STRATEGIC REPORT
In October 2017, Barrick and the GoT resolution. Acacia is not directly involved in the In terms of developing Sustainable
announced that they had agreed a framework on-going discussions, and awaits a detailed Communities around our mines, over the last
proposing a new partnership between Acacia agreed proposal and documented final five years we have invested heavily in building
and the GoT. As announced by Barrick, the agreements for a comprehensive settlement, social infrastructure such as schools, roads,
key terms of the proposal included that: the which will be reviewed by an Independent health and water facilities in close cooperation
economic benefits generated by the Group’s Committee of the Company’s Directors. with the surrounding population. In 2017
operations in Tanzania would be shared we began the implementation of the new
Contribution to Tanzania
between Acacia and the GoT on a 50/50 basis Sustainable Communities (“SC”) strategy
Acacia continues to share the Government
going forward, to be delivered in the form of which focuses on adding further value to this
of Tanzania’s goals of enhancing the country’s
royalties, taxes and a 16% free carry interest physical infrastructure and contributing
social and economic development and in 2017
in the operating mines; the establishment of positively to the development of a diversified
contributed US$143 million in taxes and
a new Tanzanian operating company to manage local economy in our zone of influence. We
royalties to Tanzania.
the mining operations, with GoT participation believe that the SC Strategy is aligned with
in decision-making on certain issues; a number Since the inception of its businesses, over 15 Tanzania’s national development agenda,
of social licence to operate projects and years ago, the Group, and its predecessors, as well as the United Nations’ Sustainable
commitments; there would be further work with have invested over US$4 billion into the Development Goals.
the GoT to advance concepts for increasing country to build and sustain our mines, spent
During 2017 we delivered against many
in-country beneficiation of gold; and Acacia over US$3 billion with Tanzanian suppliers
of our legacy infrastructure commitments.
would make a US$300 million payment, staged to support the operation of our businesses,
This included the completion and/or initiation
over time, in respect of outstanding tax claims invested over US$75 million into our
of a number of projects at all three mines.
between the Group and the GoT. communities and paid over US$1 billion in
Projects included a US$500,000 upgrade of
taxes and royalties. We have also built a 60
Since October, Barrick and the GoT have the Bugarama Health Centre at Bulyanhulu
kilometre water pipeline to supply clean water
continued discussions aimed at agreeing and which supports healthcare for 58,000 people
to communities around Bulyanhulu, invested
documenting the details of the announced living in the 14 villages in Kakola and its
US$45 million to provide electricity to
framework, and Barrick have announced that surrounding areas. The focus at Buzwagi has
communities, built and renovated 57 schools
they are targeting completion in H1 2018. been the construction of a new dormitory at
in the Lake Zone whilst providing over 18,000
Acacia continues to support Barrick in its Mwendakulima Secondary School for female
desks and building 129 teachers’ houses.
discussions with the Tanzanian Government pupils after the original dormitory was
towards identifying a possible negotiated

MAY JUL SEP THE FUTURE

The first Presidential The Acacia Group received We announced our We are continuing
Committee announced adjusted tax assessments intention to move to
findings post investigations totalling US$190 billion for reduced operations at to support Barrick
into mineral content of historic alleged unpaid taxes, interest Bulyanhulu mine and in its discussions
exports of gold/copper and penalties. In the same brought forward processing
concentrates which claim month Bulyanhulu Gold Mine changes at Buzwagi with the Government
the Acacia Group has Limited and Pangea Minerals to solely produce doré of Tanzania towards
under-declared the contents Limited (Buzwagi) commenced going forward.
of historic exports. Acacia international arbitration to
identifying a possible
fully refuted the implausible protect our position. negotiated resolution
findings of the Committee.

JUN OCT “Acacia continues to

believe that a negotiated
A second Presidential John Thornton, Chairman of Barrick and the Government
Committee announced Barrick, and the President of of Tanzania announced they resolution is in the
findings that alleged the Tanzania, Dr. John P. Magufuli, had agreed a framework best interests of all
Acacia Group under- met and agreed to enter for the resolution of the stakeholders and
declared revenues and tax into discussions to reach disputes. Barrick are targeting therefore is supporting
payments over a number a resolution to the dispute. H1 2018 to present an agreed
the on-going discussions
of years by tens of billions In the same month, new proposal to Acacia for review.
of US dollars. The findings legislation was proposed (and aimed at achieving this.”
were based on the first subsequently enacted) which PETER GELETA
Presidential Committee makes substantial changes INTERIM CHIEF EXECUTIVE OFFICER
findings which Acacia to the legal framework governing
fully refutes. the natural resources sector
in Tanzania.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 9

 CEO STATEMENT CONTINUED

“Remaining committed This carrying value review demonstrates

a potential reduction in value at all three
Reserves and Resources
Notwithstanding the performance of the gold
as we move forward, operating assets, but Buzwagi and North Mara
have sufficient headroom above their current
price in 2017 we have taken the decision to
maintain the 2016 gold price assumptions in
we continue to operate carrying values. At Bulyanhulu, however, the
impact of the changes was greater, due to the
our Reserve and Resource calculations. This
not only brings consistency of planning on an
efficiently and remain long life of the mine and the delay to a return
to positive cash generation due to the move
annual basis but it also helps underpin the
financial robustness of our long-term planning.
resolute in our to reduced operations. Acacia has therefore
recorded a net impairment of US$632 million
Our Reserve pricing is maintained at US$1,100
per ounce and our resource pricing has been
commitment to for Bulyanhulu, which includes a pre-tax
write-down of US$122 million for goodwill.
maintained at US$1,400 per ounce.

Tanzania and other

On a Group basis, our overall Reserves and
In addition we have recorded an impairment
Resources decreased slightly from 27.5 million
charge of US$12 million for the Nyanzaga
host countries.”
ounces (“Moz”) to 27.4Moz during the year
Project to reflect the current estimate for the
with total Reserves marginally decreasing
potential impact of the new mining laws on
from 7.6Moz to 7.5Moz driven by depletion.
the carrying value of the project, which now
stands at US$34 million. At North Mara, Reserves increased by
accidentally destroyed in a fire. The new
438,000 ounces (23%) from 1.9Moz in 2016
dormitory will accommodate more than In addition to the above net impairment, Acacia
to 2.3Moz. This was driven by successful drilling
100 pupils and make secondary education has also raised an additional tax provision
programmes at the Gokona Underground where
more accessible to girls. At North Mara we of US$172 million relating to the estimated
Reserves increased from 656,000 ounces
constructed the Nyamwaga and Kerende uncertain tax positions for its operating
at 6.0 g/t to 1,338,000 ounces at 6.3 g/t,
Health Centres and invested in the companies, based on an estimate of the impact
despite depletion of 188koz during the year.
Nyamwaga/Keisangora water projects of a comprehensive settlement reflecting the
This is the first step in demonstrating the
designed to improve access to clean water. key terms of the framework announcements.
long-term potential of the Gokona Underground.
This brings total provisions for Acacia’s
Carrying value review and tax provision uncertain tax positions to US$300 million. At Bulyanhulu, overall Reserves decreased
Acacia has identified a number of potential
Acacia continues to reserve and protect all by 417koz with the underground Reserve now
triggers for impairment testing of the carrying
its legal rights, as noted above and including amounting to 4.5Moz at 9.70 g/t compared
value of its assets, including, but not limited
through the arbitrations commenced by BGML to 4.9Moz at 9.76 g/t. The change included
to, the challenges experienced in the operating
and PML, and no liability has been incurred depletion of 223koz and a further reduction
environment in Tanzania, the announcement
by Acacia as a result of the framework of 199koz due to changes to the short and
of new legislation by the GoT in respect of the
announcements. The additional provision medium-term designs. A study completed on
natural resources sector and the resulting
is required, however, to meet applicable remnant mining around the Upper Reef 1 and
decision to reduce operations at Bulyanhulu.
accounting standards requiring assessment Reef 2 areas indicated positive economics
As a result, Acacia has undertaken a carrying of current obligations for accounting purposes and added 151koz to Reserves. The Tailings
value review of the Group’s affected Cash based on an assessment of relevant cash Reserve decreased to 180koz ounces at 1.05
Generating Units (“CGUs”). outflows from the relevant operating companies g/t due to depletion. During 2018 we expect
in respect of uncertain tax positions. to review the mine reserves in the context
Acacia considers that in accordance with
of the optimisation study currently underway.
applicable accounting standards, carrying Safety
values for the CGUs should be calculated by Safety performance during 2017 At Buzwagi, Reserves declined due to
reference to the key terms of the framework demonstrated significant progress on the depletion as the final stage of the open pit
announcements made by Barrick and by the previous year. We recorded a Group-wide was effectively completed. However, during
GoT in October 2017 and discussed above, with Total Reportable Injury Frequency Rate 2017, the run-of-mine stockpile, which will be
additional discounting to reflect the uncertainty (“TRIFR”) of 0.45 compared to 0.74 in 2016, processed over the next three years, increased
around the final terms of any comprehensive a 39% improvement. The number of Lost Time by 5 million tonnes with a 48% increase in
settlement that might be reached. While Acacia Injuries (“LTI”) decreased from 32 in 2016 contained gold to 414koz ounces, albeit at
continues to provide support to Barrick in its to 18 in 2017, a 44% improvement, and the lower grades of 0.91g/t.
discussions with the GoT, Acacia has not yet injury severity rate decreased by 35%. We
At our exploration properties overall resources
received for review and approval a detailed also progressed a number of initiatives within
remained flat with the addition of resources
proposal that has been agreed between Barrick an occupational health and safety context
in Kenya being offset by the removal of the
and the GoT, and no conclusions can be made to increase the effectiveness of existing
Golden Ridge project from resource and a
by Acacia as to whether any particular terms occupational health programmes and
reduction in resource at Nyanzaga. We
of settlement would be approved by Acacia. continued to progress health assessments,
updated the Maiden Inferred Mineral Resource
In the meantime, Acacia continues to reserve including malaria control assessments, for
declared in February 2017 after completing
its rights included under the Group’s Mineral our employees and wider community base.
a significant exploration drilling programme
Development Agreements, the disputes The total number of malaria cases and the
during the year at the Liranda Project in Kenya.
between Acacia and the GoT have not yet days lost due to malaria decreased by 29%
The updated model showed that the Isulu
been resolved, and PML and BGML remain in and 51% respectively during 2017.
Inferred Resource has changed with additional
international arbitration with the GoT. Acacia
drilling confirming structural complexity. The
would prefer a negotiated resolution, but
enhanced modelling of the Isulu resource has
believes that there remain a range of potential
upgraded confidence and increased grade.
outcomes to the current situation.
Additionally, the upper parts of two zones in

10 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 STRATEGIC REPORT
the Bushiangala Prospect were upgraded At North Mara we expect production to be expected to drop significantly resulting in
from mineral inventory to an Inferred Resource broadly in line with 2017 at approximately production for the year being approximately
Estimate. The updated Inferred Resource 325,000 ounces as the continued increase 100,000 ounces. As a result of the lower
Estimate returned 2.5 million tonnes at 12.9 in production from the Gokona Underground production and release of non-cash high
g/t Au for 1.044 million ounces at Isulu and is offset by lower open pit tonnes and grade cost inventory of approximately US$200 per
for Bushiangala 374,600 tonnes at 10.5 g/t as the Nyabirama Stage 3 open pit is ounce, reported AISC is due to increase to
Au for 126,600 ounces for a project total of completed and all ore is sourced from the approximately US$1,100 per ounce sold,
2.9 million tonnes at 12.6 g/t for 1.2Moz. beginning of the Stage 4 pit. AISC is expected although we are looking to optimise the cost
to be approximately US$850 per ounce, profile as we transition to stockpile processing.
Outlook approximately 5% higher than 2017, driven by
The Group has successfully managed through As a result of reduced operations at Bulyanhulu
an increase in cash costs due to the increased
a challenging environment to deliver a year we expect to see Group capital expenditure in
mining activity and increased allocation of
of resilient operational performance in 2017. 2018 fall to approximately US$100 million. This
corporate shared services costs. During 2018
As a result of Bulyanhulu’s transition to is comprised of approximately US$50 million
we will continue to progress the drilling
reduced operations and the planned transition of capitalised development /stripping at North
programmes at Gokona, which led to a
of Buzwagi to a stockpile processing operation Mara, US$35 million of sustaining capital,
doubling of underground reserves in 2017 to
in 2018 we expect to see a step-down in primarily at North Mara, and US$15 million of
1.3Moz at a grade of 6.3 g/t. At Nyabirama
production from 2017 levels to 435,000- expansion capital, made up predominantly of
we are also progressing the permitting for an
475,000 ounces at increased all-in sustaining investment in the process plant at Bulyanhulu
underground exploration decline; this process
cost of US$935-985 per ounce. Cash costs and capitalised drilling at North Mara as we
is expected to be completed in 2018.
per ounce are also expected to increase to look to delineate additional resources to
between US$690-720 per ounce in 2018. At Bulyanhulu we completed the transition support a 10 year life of mine producing in
Group AISC and cash costs are both negatively to reduced operations in the fourth quarter, excess of 300,000 ounces per annum.
impacted by approximately US$50 per ounce which regrettably led to the retrenchment
We are committed to strong cost discipline
due to the release of non-cash high cost of the majority of the workforce at the mine.
and are continuing to take steps to ensure the
inventory at Buzwagi as we process ore In total, the retrenchments, together with the
long-term viability of our business whilst we
stockpiles previously classified as ore cancellation of supply contracts, led to a cost
await an outcome of the discussions between
inventory. We expect production to be broadly of US$25 million, with US$20 million incurred
Barrick and the Government of Tanzania.
flat through the year although due to the in Q4 2017 and the balance due to be incurred
During 2017 we made significant decisions at
roll-over of cost from the movement to reduced in Q1 2018. In addition, we saw an outflow
both the Bulyanhulu and Buzwagi operations
operations at Bulyanhulu into Q1 2018 we of accounts payable of approximately US$35
and we should now be able to sell all of the
expect increased cash flow in the second half million, of which US$5 million is expected to
gold we produce going forward. We continue
of the year. All gold produced in 2018 is be incurred in Q1 2018. Whilst the mine is
to take steps to protect the balance sheet
expected to be in doré form. on reduced operations, at a monthly cost of
including a reduction in planned greenfield
approximately US$3 million, we are taking
exploration spend in 2018 to US$15 million,
the opportunity to progress essential capital
and whilst we currently anticipate corporate
“We delivered
spend of approximately US$10 million,
overheads being in line with 2017, we are
primarily on the process plant, together with
targeting reducing this spend during the year.
resilient operational
an optimisation study which is designed to
ensure that when the mine restarts it does

performance during
so in an optimised manner. These costs are
excluded from AISC on the principle that they

a challenging 2017,
are not representative of operational costs. Finally, I would like to thank all of my
The study is expected to take until H2 2018 colleagues for their commitment, resilience

with full year gold

to be completed and as a result we do not and continued focus during what has been
expect the underground mine to restart a challenging year. I would also like to thank

production of 767,883
in 2018 and are targeting a phased restart our Board for their support. We continue to
through 2019, assuming the concentrate prefer a negotiated solution to our disputes

ounces at all-in
ban is resolved during 2018. The mine will with the Government of Tanzania, continue
continue with the re-processing of tailings to support Barrick in its discussions with

sustaining costs
through 2018 at an annual production rate of the Government, and remain hopeful for
approximately 30,000 ounces and an AISC of a resolution during 2018.

(“AISC”) of US$875
approximately US$1,000 per ounce, which will
partially offset the cost of reduced operations.

per ounce.” As previously guided, Buzwagi is transitioning

to a stockpile processing operation in 2018 as
a result of the effective completion of the open
PETER GELETA
pit and will see a step down in production as INTERIM CHIEF EXECUTIVE OFFICER
a result. During 2017 the mine exceeded its
production plan by 15,000 ounces whilst
delivering over 5 million tonnes of ore to the
stockpile, albeit at lower grades. As a result
expected life of mine production has increased
by approximately 100,000 ounces. In 2018,
mill feed will be almost exclusively from the
stockpiles and as a result head grades are

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 11

 Q&A WITH THE CHAIRMAN

Focused on Corporate
Governance
Q Q
It has been a complex year, what have been Towards the end of the year there was
the key focus areas for the Board? management churn, how have you managed
the succession planning to ensure the new
team will be successful?
A
The work of the Board has been challenging A
during 2017. In particular we have had to
focus on addressing the introduction of the I would like to start by thanking those that
concentrate export ban in March, legislative have left the business during 2017 for their
changes affecting the natural resources efforts and many contributions during their
sector, and the receipt of tax assessments tenure. Whilst it was disappointing to see
from the Tanzanian Revenue Authority to the them depart, the quality of the people we have
Group companies that own and operate the put in their place demonstrates the work we
KELVIN DUSHNISKY
CHAIRMAN OF THE BOARD Bulyanhulu and Buzwagi mines. have done to build the talent pool within the
business. Peter Geleta, our Interim CEO, is
an industry veteran with 35 years’ experience,
Q primarily in African gold mining, and Jaco
INTRODUCTION Maritz, our CFO, has been with the business
You have formed an Independent Committee
for more than 15 years. They are the ideal
2017 was a challenging year of the Board, please can you explain why you
team to lead the stabilisation of the business
have done this?
for Acacia and resulting from over the next 12 months and then onto the
changes in its operating next stage in its development.
A
environment the Company did
Q
not deliver against its primary As part of our commitment to corporate
governance standards, we decided to form
objective of delivering free cash a Committee of the Board made up of the
Please can you talk through the changes in
the Board during the year. Are you happy with
generation. However, I am Independent Non-Executive Directors when
the current composition of the Board?
pleased with the dedication Acacia’s majority shareholder, Barrick Gold
Corporation (“Barrick”), entered into
and commitment shown at discussions with the Government of Tanzania A
all levels of the Group, which about resolving the current situation. As a
majority shareholder, Barrick nominates two During the year Peter Tomsett and
enabled the business to Directors to the Board of Acacia, including Ambassador (retd) Juma Mwapachu stepped
achieve solid operational myself, and in order to ensure that there down from the Board, and at the beginning
results for the year. were no conflicts of interest, we formed of 2018, Peter Geleta replaced Brad Gordon
the Independent Committee to manage the on the Board of Directors.
interactions between Acacia and Barrick
Following these changes, the Acacia Board
during the negotiations. If a resolution is
comprises seven members, including four
agreed between Barrick and the Government
Independent Non-Executive Directors, two
of Tanzania, it will be put to the Independent
Non-Executive Directors and one Executive
Committee, who will provide a recommendation
Director. Post year-end we also appointed
to the full Board of Acacia on the appropriate
Michael Kenyon as Senior Independent Director.
course of action.
The Board functioned well through 2017 and
has a good balance of UK and international
experience together with a broad skill set
across the mining and financial areas.

12 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 Relevant pages

p62

STRATEGIC REPORT
Governance overview

“The Board has been GOVERNANCE IN FOCUS

highly engaged during Ensuring the best interests of all shareholders

the year in overseeing In response to the entry of Barrick Gold of Tanzania and any related proposals.
the complex situation Corporation into discussions with the
Government of Tanzania, Acacia’s
In 2018, the Committee will continue
to focus on the above matters. As and
facing the Company.” Board of Directors made the decision
to form an Independent Committee,
when any detailed proposal is provided
to the Company, the Independent
made up of all four Independent Committee will be responsible for
Non-Executive Directors, in order to reviewing and evaluating these
oversee the process, ensure minority arrangements. Any proposal agreed
shareholders views are represented, in principle between Barrick and the
and ultimately review the final proposal Government of Tanzania will require
when it is presented to Acacia. Acacia’s approval.
Acacia would like to thank Brad, Peter and the
Ambassador for their valuable commitment The Independent Committee is
and support to the Company during their Chaired by Michael Kenyon, and met
tenure on the Board and wish them all the 14 times in 2017. The Committee is
best for the future. responsible for overseeing all aspects
and implications of the discussions
between Barrick and the Government
Q
You didn’t pay a dividend in 2017, please can
you explain why?
Board composition Board skills

A
Acacia has a cash flow based dividend policy
where we aim to pay a dividend of between
15-30% of our operational cash flow after
sustaining capital and capitalised development
but before expansion capital and financing
costs. As a result of the inability to export
concentrates, Acacia has experienced negative
free cash flow in 2017 and therefore the
Board of Directors has not recommended the
payment of a final dividend. Independent Non-Executive Directors 4 Geology 1
Non-Executive Directors 2 Financial 4
Executive Director 1 African and regional affairs 2
Q
How do you see 2018 panning out for Acacia? Member Specialty Nationality
Michael Kenyon (Chair) Geology Canada
A Rachel English Finance UK
Steve Lucas Finance UK
I would like to thank all Acacia employees
for their hard work through 2017 and hope Andre Falzon Finance Canada
that we will have a positive year in 2018. It is
encouraging that the Government is engaged
in discussions to resolve the dispute and
that all parties are working to support efforts
towards achieving a negotiated resolution.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 13

 OUR BUSINESS MODEL

Our business model is designed to

create a leading African business and
generate value for all of our stakeholders

OUR VALUE INPUTS CREATING VALUE

What drives us Discovering

high-quality assets
and operating them
to their full potential

EXPLORATION

Creating shared
stakeholder benefit WHAT WE DO
OUR RELATIONSHIPS
Invest through the cycle into highly
prospective exploration projects across
Africa in addition to looking for brownfield
extensions at our mines.

Developing
local talent HOW WE ADD VALUE
OUR PEOPLE
Undertake a systematic and methodical
grassroots approach in order to make
large high-grade discoveries.
Building a leading
asset portfolio in Africa
Allocating capital
OUR BUSINESS

1.3Moz
effectively

Doubled reserve at Gokona Underground,

Creating an extensive North Mara in 2017 due to successful
drilling programme
exploration portfolio
to enable discovery
OUR FUTURE of our next mines

RIGOROUS EFFECTIVE GOVERNANCE AND

RISK MANAGEMENT PRACTICES
CONTROLS UNDERPIN p24
EVERYTHING WE DO
14 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017
 STRATEGIC REPORT
OUTPUT LONG-TERM VALUE CREATION

The output of our Distributing

value creation is and reinvesting
the generation of the value created
free cash flow

PRODUCTION FOR GOVERNMENTS

––Tax contributions
––Driver of economic development
REINVESTMENT
WHAT WE DO US$143m
in taxes in 2017
Operate our large-scale gold mines
efficiently with a track record of
producing over 10Moz of gold since
inception from a combination of FOR TANZANIA
open pit and underground mines.
––Disciplined reinvestment of capital
into exploration and operations
HOW WE ADD VALUE
We continuously assess options
US$149.4m
invested in 2017
to improve mine design and working
practices to improve efficiencies
FREE CASH FLOW
in order to reduce cost and/or
increase production.
FOR COMMUNITIES
––Creating Sustainable Communities
––Delivering employment opportunities

US$8.2m
US$875/oz Sustainable Communities expenses in 2017

Record low Group full year

all-in sustaining cost
FOR SHAREHOLDERS
DEBT
REDUCTION ––Committed dividend policy

(46)%
Total shareholder return in 2017

STRONG COST AND SUSTAINABILITY

CAPITAL DISCIPLINE
p44 p50

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 15

 OUR STRATEGY

Focused on being a leading African gold

producer, we work towards our vision
through each of our strategic pillars
OUR BUSINESS OUR PEOPLE

We have made significant technical changes to our business over Our people are our core asset and we have created a high-
the past few years to ensure that each of our mines is correctly performance culture where everyone is held accountable.
engineered to match their geological endowment, and able to In order to achieve this we have significantly reduced the levels
deliver free cash flow and drive operating efficiencies. Each mine of management, restructured our corporate offices, and right-sized
operates as its own commercial business unit, with regulatory the workforce. A key focus area is on reducing the number of
and strategic oversight being provided by the central offices. international employees and contractors and ensuring that
our Tanzanian assets are increasingly led and operated by
Tanzanian employees.

2017 progress 2017 progress

––Delivered record year of production at Buzwagi ––Improved safety performance with TRIFR of 0.45 being 39%
––More than doubled the underground reserve at Gokona deposit, lower than 2016, with zero employee fatalities during the year
North Mara ––Increased proportion of national employees to 96.2%
––Successfully transitioned Bulyanhulu to reduced operations ––Combined Bulyanhulu and Buzwagi under one Tanzanian led
management team

2018 priorities 2018 priorities

––Complete optimisation study at Bulyanhulu ––Improve TRIFR trend with the ambition of zero injuries
––Complete transition to stockpile processing at Buzwagi ––Roll-out of the i-People HR information system
––Continue to demonstrate life extension potential at North Mara ––Increase proportion of Tanzanians in senior management
positions

2017 KPIs 2017 KPIs

768 875 0.45 96.2

Gold produced (koz) AISC (US$/oz) Safety – TRIFR (Frequency rate) Localisation (% of workforce
that are Tanzanian)

Relevant principal risks Relevant principal risks

Single country risk Political, legal and regulatory developments
Significant change to commodity prices Attraction and retention of employees
Liquidity risk Operational security and theft
Political, legal and regulatory developments Significant fraud and corruption
Attraction and retention of employees Safety risks relating to mining operations
Operational security and theft
Significant fraud and corruption
Reserve and Resource estimates
Environmental hazards and rehabilitation
Safety risks relating to mining operations

16 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 STRATEGIC REPORT
OUR RELATIONSHIPS OUR FUTURE

We have focused on delivering improved relationships with the We believe that exploration is a significant driver of value for
communities and other stakeholders around our mines. We have the business over the long term and as a result we have built a
also worked hard to strengthen our relationships with local and significant land package across Africa in the most geologically
national authorities to ensure that we receive the appropriate prospective belts. We believe this will provide our Discovery group
support for our business in order for us to continue to be a key the best opportunity to discover our next mines, as well as other
economic development driver for our host countries. If a resolution opportunities to drive shareholder value over the long term.
to the current dispute is achieved we will focus on rebuilding our
relationships with central Government.

2017 progress 2017 progress

––Total tax contribution to Tanzania of US$143 million ––Doubled underground reserve at Gokona deposit, North Mara
––Roll-out of Sustainable Communities strategy ––Declared initial inferred resource at West Kenya Project
––66% reduction in intruder-related fatalities at North Mara ––Delineated known mineralised zone at the Nyabirama Pit,
North Mara to a vertical depth of least 950m below surface

2018 priorities 2018 priorities

––Implementation of Sustainable Communities strategy ––Increase inferred resource at Liranda Corridor, Kenya
––Support Barrick in its discussions with the Tanzanian Government ––Expand underground resource and reserve at Gokona,
towards identifying a possible negotiated resolution North Mara
––Further reduce intruder numbers, fatalities and injuries ––Drill test high priority targets in Burkina Faso and Mali
at North Mara

2017 KPIs 2017 KPIs

8.2 27.4
Sustainable Communities expenses (US$m) Reserves and resources (Moz)

Relevant principal risks Relevant principal risks

Political, legal and regulatory developments Single country risk
Operational security and theft Political, legal and regulatory developments
Significant fraud and corruption Reserve and Resource estimates
Environmental hazards and rehabilitation
Safety risks relating to mining operations

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 17

 MARKET OVERVIEW

Development of mineral wealth

is key to the success of the mining
industry in Africa
COMMODITIES

Gold Copper Fuel

Trend
Gold opened 2017 at US$1,159/oz on During 2017, we produced copper as a At our operations we consume diesel
the PM fix and was affected throughout co-product which is recognised as a part of within our mobile fleet and to self-generate
the year by global geopolitical uncertainty revenue. 2017 marked a year of recovery power when required. Diesel is refined
which sparked safe haven demand. in the copper price which traded between from crude oil and is therefore subject to
Speculation surrounding monetary US$2.48 and US$3.27 per pound in 2017. the same price volatility affecting crude
tightening by major central banks and oil prices and has a significant impact
A strong demand outlook from China, a
a relatively stable bond market combined on our production costs. We consumed
weaker US dollar and speculation from
with a weakening dollar further approximately 367,241 barrels of diesel
investors all boosted prices during 2017,
contributed to gains in gold in 2017. in 2017 (479,000 in 2016).
making copper the top performing
In total, gold gained 11% in 2017 to close
commodity of 2017 with gains of 31%. Crude oil (Brent) opened 2017 at US$55/
at US$1,291/oz and traded in a range
bbl as OPEC cut supply but traded lower
between US$1,159/oz and US$1,346/oz
during H1 before gaining strongly in H2
throughout the year. Gold ETF holdings
and ending the year up 21%. Brent Crude
grew 3% YTD.
traded in a range of US$45/bbl and
US$67/bbl during 2017.

US$1,346/oz US$3.27/lb US$67/bbl

Peak gold price in 2017 Peak price of copper in 2017 Peak price of Brent Crude in 2017

Our response
In 2016, we entered into zero cost collars We utilised an option collar strategy We continued our option collar strategy
covering the majority of Buzwagi’s Q1 for copper production whereby 75% of in 2017 and hedged approximately 75%
2017 production. Following this the Group our expected annual 2017 production of 2017 usage, with an average floor of
was fully unhedged until September when was hedged at an average floor price US$44 and an average ceiling of US$74
we took the decision to ensure a floor of US$2.30 per pound and an average per barrel. We have continued with our
price of US$1,300 per ounce for the ceiling price of US$2.78. These options hedging programme for 2018 and have
majority of our production for the expired without being exercised due put in place collars over 21% of
remainder of 2017 and subsequently to our inability to export concentrate. consumption at a price between
at least US$1,300 per ounce for the US$39-US$65 per barrel.
majority of H1 2018 production.

Outlook
––We will continue to assess opportunities ––We ceased producing copper as a ––With Bulyanhulu on reduced operations
to provide a floor price for future co-product at the end of Q3 2017 as and mining activity ending at Buzwagi
production in excess of our budget Bulyanhulu moved to reduced operations we anticipate our future consumption
pricing to provide increased stability and Buzwagi brought forward the planned of diesel will fall, reducing our exposure
for our balance sheet. bypassing of the flotation circuit. to price changes.
––We currently have 186koz of ––We currently have 12.1 million pounds ––However we will continue to assess
gold stockpiled in Tanzania within of copper stockpiled in Tanzania within whether further hedging strategies
the concentrate that is unable to the concentrate that is unable to should be put in place.
be exported given the uncertain be exported.
operating environment.

18 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 Relevant pages

p30 p44

STRATEGIC REPORT
Operating review Financial review
OPERATING ENVIRONMENT

In-country developments
Trend
Political developments established to investigate the tanzanite to other industries with increasing demands
During 2017 the Tanzanian Government and diamond industries and post year-end a made on private investors and particularly
continued to focus on maximising state 12-member parliamentary committee was set those from outside Tanzania.
revenue collection, with a particular focus up to conduct an investigation into how the
Tax
on increasing the benefits to the Government country benefits from its oil and gas industry.
Under President Magufuli the Government
from the country’s natural resources.
Extractives legislation has undertaken a campaign to ensure
The Government plans to increase mining’s
Following the ban on the export of private businesses pay all taxes allegedly
contribution to GDP to around 8% by 2020.
concentrates, in July 2017 new legislation was owed to the Treasury. Following the findings
Meanwhile the year saw much financial
passed by Parliament which made significant of the two Presidential Committees, which
decision-making transferred to the Presidential
changes to the legal and regulatory framework we have expressly disputed, in July
Office and responsibility for tax collection
governing all extractives industries in Tanzania. Bulyanhulu Gold Mine Limited and Pangea
shifted from local to central government.
Among the changes, the legislation seeks to Minerals Limited received adjusted tax
The administration’s drive to ensure increase Government revenue generated from assessments from the Tanzanian Revenue
greater benefits from Tanzania’s extractives the mining industry through an increased Authority totalling US$190 billion for alleged
industries has included the President’s royalty rate applicable to metallic minerals such unpaid taxes, interest and penalties. The
urging for the beneficiation of Tanzania’s as gold, copper and silver of 6% (increased assessments apparently stem from the
minerals inside Tanzania, and in March from 4%) in addition to a new 1% clearing fee reports of the First and Second Presidential
2017 the Ministry of Energy and Minerals on mineral exports. The legislation further Committees which claimed that the Acacia
announced a ban on the export of metallic grants Tanzania’s National Assembly significant Group and its predecessor companies
mineral concentrates. During the year powers over investment terms in the extractives significantly under-declared the contents
the Government went on to announce a sector, requires in-country beneficiation of of exports of concentrate, allegations that
number of investigations into the country’s extracted minerals and prohibits recourse to Acacia fully denies. Aside from this, during
extractives industries. The first of these international dispute resolution in the event of 2017 there have continued to be a number
investigations saw the establishment of investment disputes. Post year-end new mining of tax cases that are being dealt with in the
two Presidential Committees to examine regulations were also issued which are currently court system in Tanzania which we are
existing and historic exports of gold/copper being reviewed. Reforms witnessed in the seeking to resolve.
concentrates. Subsequent committees were extractives sector have subsequently spread

Our response
Following the directive to ban the export of imposed by the new legislation as regards first part of 2018 – to Q3 2017 in order to
metallic mineral concentrates from Tanzania the increased royalty rate and clearing fee on stop concentrate production. In Q4 2017 we
we immediately ceased all exports of our gold/ mineral exports. These payments are being also moved Bulyanhulu mine to a reduced
copper concentrate and began stockpiling it made under protest, without prejudice to the operation state. These changes have meant
at the affected sites. Acacia has fully refuted Tanzanian operating companies’ legal rights that since September 2017 we have been
the implausible findings of both Presidential under our MDAs. able to sell all of the gold we produce.
Committees and reiterates that the Group has
Since July 2017, Barrick, the Company’s Throughout the year, and in line with the
declared all payable minerals produced since
majority shareholder, has been in discussions Government’s national development
it started operating in Tanzania and has paid
with the Government in an effort to identify a agenda, the Acacia Group has continued
all appropriate royalties and taxes on all
possible solution to the dispute. In October its localisation programme across all
payable minerals produced.
2017, Barrick and the Government announced areas of the business, invested in projects
Before the new legislation that governs that they had agreed a framework proposing across our communities and contributed
extractives industries came into force in a new partnership between the Company and US$143 million in taxes and royalties to the
July 2017, in order to protect the Company the Government, including a 50/50 split of the Treasury. Despite the challenges confronting
and Group, Bulyanhulu Gold Mine Limited economic benefits generated by the Acacia the business during 2017 the Group largely
and Pangea Minerals Limited each Group’s operating companies’ operations achieved its projected annual spend on
commenced international arbitration against in Tanzania. Since October, Barrick and the community projects around our mines.
the Government in accordance with the Government have continued discussions aimed
As the business has faced operating
dispute resolution processes agreed by at agreeing the details of the announced
challenges in Tanzania we have continued to
the Government in the existing Mineral framework, and Barrick have announced that
diversify our portfolio and invest in exploration
Development Agreements. These they are targeting completion in H1 2018.
success across Africa. We will invest US$15
arbitrations remain on-going. Acacia
In the light of the challenging operating million in greenfield exploration in 2018 with
continues to monitor the impact of the new
environment in Tanzania we have taken a investment in the Liranda Corridor project in
legislation in light of its MDAs with the
number of decisive steps to manage the Kenya remaining a priority while in Burkina
Government. However, to minimise further
changes and stabilise our business over the Faso we continue to invest in more than 65
disruptions to the Group’s operations the
last 12 months. On an operational level we targets across our portfolio in the Houndé Belt.
Tanzanian operating companies have been,
brought forward bypassing the flotation circuit
in the interim, satisfying the requirements
at Buzwagi mine – originally scheduled for the

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 19

 KEY PERFORMANCE INDICATORS

Our performance is assessed against the

following key performance indicators,
which are linked to our long-term strategy.

OPERATIONAL MEASURES

Gold production All-in sustaining costs Total Reportable Injury Frequency Rate
(koz) (US$/oz) (Frequency rate)
829.7
767.9
718.6 731.9 0.86
641.9
1,346 0.74
0.68 0.68
1,105 1,112
958
875 0.45

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

Relevance to strategy Relevance to strategy Relevance to strategy

Gold production is the aggregate of the AISC is used to provide additional information TRIFR tracks all employee and contractor
Group’s equity interest in gold ounces on the total sustaining cost for each ounce reported workplace injuries that require
produced from our mines and one of the sold in order to provide additional clarity as to medical treatment, including lost time and
key measures used to track progress the full cost of production. It is one of the key restricted duty. We use it to measure progress
made in increasing our productivity levels. indicators that we use to monitor and manage towards our health and safety goal of zero
those factors that impact production costs on harm. It is calculated as total reportable
a monthly basis. injuries multiplied by 200,000 then divided
by total number of hours worked.

Performance Performance Performance

Gold production was 767,883 ounces, 7% AISC for the year was US$875 per ounce Total Reportable Injury Frequency Rate
lower than 2016, primarily as a result of the sold, 9% lower than 2016, driven by strong (“TRIFR”) was 0.45 for the year, compared to
move to reduced operations at Bulyanhulu. cost discipline. 0.74 in 2016. This represents a 39% reduction
on the previous year.

Outlook and expectations Outlook and expectations Outlook and expectations

We expect gold production in 2018 to reduce We expect all-in sustaining costs in 2017 We are targeting a reduction in our TRIFR of
to between 435,000 to 475,000 ounces to rise to between US$935 to US$985 per at least 10% in 2018, with the goal of making
driven by reduced operations at Bulyanhulu ounce sold. The increase is primarily driven by sure everyone goes home safely and healthy
and a move to stockpile processing a US$50 per ounce sold release of non-cash every day.
at Buzwagi. high cost inventory as we process ore
stockpiles at Buzwagi.
Associated risk areas Associated risk areas Associated risk areas
––Strategic ––Financial ––Operational
––Financial ––External
––External ––Operational
––Operational

Linked to remuneration? Linked to remuneration? Linked to remuneration?

Yes. Weighting: 30%. Yes. Weighting: 20%. Yes. Weighting: 10%.

20 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 Relevant pages

p26

STRATEGIC REPORT
Principal risks and uncertainties
STRATEGIC PILLARS

OUR BUSINESS These KPIs are linked

to Executive Directors’
remuneration. For full
OUR PEOPLE disclosure please
see the Remuneration
Report on page 77.
OUR RELATIONSHIPS

OUR FUTURE

Cash cost per ounce sold Cash cost per tonne milled Total Reserves and Resources
(US$/oz) (US$/tonne) (Moz)

812 66 29.0 30.1 28.6 27.5 27.4

772 61 60
732
640 53
587
40

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

Relevance to strategy Relevance to strategy Relevance to strategy

Cash cost per ounce sold is calculated by Cash cost per tonne milled is calculated by Calculated as the total of Proven and Probable
dividing the aggregate of cash costs by gold dividing the aggregate of cash costs by ore Reserves, plus Measured, Indicated and
ounces sold. It is one of the key indicators tonnes milled. We use it to track cash costs Inferred Resources expressed in contained
that we use to monitor and manage those against productivity. ounces. It measures our ability to discover
factors that impact production costs on a and develop new ore bodies and to replace
monthly basis. and extend the life of our operating mines.

Performance Performance Performance

Cash cost per ounce sold for the year was Cash cost per tonne milled for the year was Total Reserves and Resources for the year
US$587 per ounce, a 8% decrease on 2016, US$40 per tonne, a 25% reduction on 2016, amounted to 27.4 million ounces of gold, a
as a result of strict cost discipline. as a result of the allocation of costs from reduction of 0.2 million ounces from 2016,
Bulyanhulu’s move to reduced operations primarily due to depletion.
and overall cost and production efficiency
improvements.
Outlook and expectations Outlook and expectations Outlook and expectations
We expect cash costs in 2017 to rise to We have not provided guidance on this metric. We have not provided guidance on this metric
between US$690 to US$720 per ounce but we are confident that the on-going drilling
sold. The increase is primarily due to a programmes at North Mara will provide
US$50 per ounce sold release of non-cash additional reserves during 2018.
high cost inventory as we process ore
stockpiles at Buzwagi.
Associated risk areas Associated risk areas Associated risk areas
––Financial ––Financial ––Strategic
––External ––External
––Operational ––Operational

Linked to remuneration? Linked to remuneration? Linked to remuneration?

No, but part of other KPIs. No, but part of other KPIs. No.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 21

 KEY PERFORMANCE INDICATORS CONTINUED

FINANCIAL MEASURES

EBITDA Operating cash flow per share Net earnings/(loss) per share
(US$ million) (US¢/share) (US¢/share)

415.3 77.5 22.1 23.2

70.6

(48.1)
240.4 252.7 257.2 45.6
38.2
175.0

(172.5)
(190.4)
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
5.6

Relevance to strategy Relevance to strategy Relevance to strategy

EBITDA is a valuable indicator of our ability to Operating cash flow per share is the cash Net earnings per share is calculated by dividing
generate operating cash flow to fund working generated from, or utilised in, operating net earnings by the weighted average number
capital and capital expenditures and to service activities, divided by the weighted average of Ordinary Shares in issue. It serves as an
debt obligations. of the number of Ordinary Shares in issue. indicator of our profitability and is often used
It helps to measure our ability to generate to determine share price and value.
cash from our business.

Performance Performance Performance

EBITDA for the year was US$257.2 million, Operating cash flow per share was US(5.6) Net loss per share was 172.5 cents,
38% lower than 2016 due to the impact cents compared to US77.5 cents per share compared to earnings of 23.2 cents in 2016.
of the concentrate ban. in 2016, and was impacted by the This was primarily a result of an impairment
concentrate ban and a lack of VAT refunds. charge driven by the impact of the
concentrate ban.

Associated risk areas Associated risk areas Associated risk areas

––Financial ––Financial ––Financial
––Operational ––Operational ––Operational

Linked to remuneration? Linked to remuneration? Linked to remuneration?

No. No. No.

22 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

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p26

STRATEGIC REPORT
Principal risks and uncertainties
STRATEGIC PILLARS

OUR BUSINESS

OUR PEOPLE

OUR RELATIONSHIPS

OUR FUTURE

Total shareholder return Sustainable Communities expenses GHG emissions

(%) (US$ million) (Total tonnes CO2e)
109.6

308,181 298,633
285,473 287,606
38.6
15.5 249,112

12.9
10.8 10.7
(28.7) 8.2
(46.0)
(57.6)

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

Relevance to strategy Relevance to strategy Relevance to strategy

Total shareholder return (“TSR”) is the return This represents the amount of money GHG emissions are measured on the
on investment a shareholder receives over that we invest across our corporate social basis of total tonnes of CO2 equivalent
a specified time frame based on our share responsibility programmes. It helps us to produced by our operations as a way
price appreciation/depreciation and dividends track progress made against our objective of assessing our carbon footprint.
received. It is used to compare our to support socio-economic development in
performance against industry peers. our operating environment.

Performance Performance Performance

TSR in 2017 was negative 46.0% compared Sustainable Communities expenses were Total CO2e emissions for 2017 amounted
to an increase of 109.6% in 2016 as the US$8.2 million, a reduction on 2016 to 249,112 tonnes, below 2016 due to
impact of the concentrate ban impacted the due to a re-focusing of spend in light of the energy saving projects at Bulyanhulu and
share price. revised Sustainable Communities strategy the move to reduced operations.
and operational priorities.
Further information as regards our GHG
emissions reporting is provided on page 92.

Associated risk areas Associated risk areas Associated risk areas

––Financial ––Financial ––Operational
––Operational ––External
––Operational

Linked to remuneration? Linked to remuneration? Linked to remuneration?

No. No. No.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 23

 RISK MANAGEMENT

The successful delivery of our strategy

depends on our ability to manage risks
appropriately in a manner that does not
jeopardise the interests of our stakeholders.
We assess the principal risks to our business RISK MANAGEMENT FRAMEWORK
as part of on-going business performance
and operational reviews, as follows:
We conduct Group-level risk workshops to Board
consider overall strategic risks to the business. Ultimately responsible for effectiveness of risk management and internal control systems

We conduct operational risk workshops

focused on specific operational risks
in the context of each of our operations.
We conduct functional risk workshops to assess
Audit Committee EHS&S Committee
key matters which could affect underlying
support functions, such as treasury, tax,
technical services and business improvement,
required for our long-term business plans.
Executive Leadership Team
Accountable for the design and implementation of risk management processes
We ensure that principal risks are assessed as and the consistent application of risk management systems
material components of our monthly operational
and financial performance reporting.
Our annual business plan and budgeting process General managers and functional heads
incorporates risks identified as a result of these Ensure risk management compliance is embodied in Acacia culture, practices and operations
reviews. Residual risks are identified based on
the effectiveness of existing controls. The
principal risks identified via this process are then
monitored, assessed and reviewed throughout Internal audit function
the year by the Executive Leadership Team in the Assists the Board and management in executing their responsibilities
first instance, the Audit and EHS&S and other
Board Committees where relevant to their
respective remits of responsibility, and ultimately
by the Board, as part of Acacia’s continuing in our operating environment and related may present a risk to funding. This has required
assessment of risk trends and developments. disputes and the overall resulting impact of the Group to implement various mitigation
these matters on the financial and operating measures, including Bulyanhulu’s move to
Further detail as regards to the outcome of the
conditions of the Group. reduced operations and the acceleration of
Board’s internal control and risk management
planned processing changes at Buzwagi to
review for the year is provided on page 68 of As such we have added the following principal
provide solely for doré production. In addition,
the Corporate Governance Report – Internal risks to the 2017 risk register:
management has taken, and continues to
Control and below. ––Attraction and retention of employees explore, cash optimisation opportunities as
2017 Principal risk review ––Liquidity risk evidenced by the gold hedging programmes
For 2017 our principal risks have continued ––Significant fraud and corruption executed during the year and subsequent to
to fall within four broad categories: strategic ––Reserve and resource estimates year-end and the divesture of the Houndé
risks, financial risks, external risks and Attraction and retention of employees royalty (a non-core asset) following year-end.
operational risks. The make-up of our Group This risk is now considered a principal risk due Significant fraud and corruption
principal risks has changed through the year to the increasing likelihood and impact of not In the past, the risk relating to significant fraud
from those identified as principal risks in being able to retain key staff or attract suitably and corruption has been disclosed together with
2016, with many of the risks being elevated experienced staff in the current operating the principal risk relating to security. However,
due to the current challenges in the operating environment. To respond to this risk, we have assessed that the controls over
environment in Tanzania, and our disputes with management has introduced long-term operational security and theft have improved
the Government of Tanzania. Non-technical incentive and retention programmes and are and that the residual risk in that area has
risk (risk relating to interactions with external continuing with implementation of the decreased. Although the trend in risks relating
stakeholders) remains high and financial risk employee localisation strategy. to fraud and corruption remained constant over
trends are increasing as a result of these
Liquidity risk 2017, it is now disclosed separately from
factors. The operational and sustainability-
Our primary source of liquidity is operating cash operational security and theft. Management
related risks show a decreasing trend, notably
flow together with cash holdings and credit continued to maintain a range of processes
equipment effectiveness, environmental and
facilities. The challenges in our operating and controls during 2017 to manage fraud and
safety-related risks have decreased.
environment have resulted in a decrease in corruption risks, including conducting risk
We have reassessed the Group’s principal operating cash flow and over the longer term assessments, maintaining and implementing
risks in light of the on-going challenges

24 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 Relevant pages

p26

STRATEGIC REPORT
Principal risks and uncertainties

annual compliance programmes, training in the PRINCIPAL RISK CHART: RESIDUAL RISK RANKING
Code of Conduct, maintaining our Whistle-blower 1. Political, legal and regulatory
Hotline, and formal anti-corruption and anti-fraud developments
policies and procedures, which are available on 2. Single country risk

Acacia’s website. 3. Attraction and retention

of employees (new)
Reserve and resource estimates 4. Significant changes
Generally reserves and resources estimates to commodity prices
are based on a range of assumptions and 5. Operational security
factors and each year we disclose risks and and theft
6. Liquidity risk (new)
factors relevant to reserves and resources
estimates in the context of our annual 7. Significant fraud and
reserves and resources estimates, which corruption (new)
in turn are calculated and reported on in 8. Reserve and resource
estimates (new)
accordance with the requirements of NI
9. Environmental hazards
43-101 of the Canadian Institute of Mining and rehabilitation
and Metallurgy and Petroleum. Nevertheless, 10. Safety risks relating
this risk has been reintroduced this year as a to mining operations

result of the on-going challenges in our Ranking in 2016

Low residual risk High residual risk
Current ranking 2017
operating environment and the impact that
these external factors may have on our
reserves and resources calculation and, Assessment of viability uncertainty that may cast significant doubt
ultimately carrying value of our assets, further In addition to annual risk management on the Group’s ability to remain viable.
details of which have been provided in the reviews, we also conducted additional
We continue to assess viability over a
Strategic report, the Finance review and the reviews relating to business viability relevant
three-year assessment period on the basis
notes to our financial statements. to our assessment of Acacia’s on-going
of the key components and criteria that
viability and the related confirmations
Overall improvements in controls as well as continue to underpin the Acacia Group’s
required to be made in this regard.
the reducing impact of certain risks have life of mine planning process. This process
resulted in three operational risks being In assessing the viability of the business is built on a mine by mine basis using a
removed from the list of risks previously the Directors have taken into account the detailed physical and financial model.
viewed as being principal risks. These three developments and trends across the
It makes certain assumptions as regards
operational risks are: Company’s principal risks and related
the on-going gold price environment and
––Equipment effectiveness on-going uncertainties affecting our
the performance level of each mine. Each
––Implementation of enhanced operational business and in particular the on-going
component of the plan is then stress tested
systems political, legal and regulatory developments
for market sensitivities as part of on-going
––Continuity of power supply affecting our operating environment, as
reviews. The key components of the plans,
explained in this Risk management section
The principal risk chart opposite shows how associated principal risks and relevant
and throughout this Annual Report.
we have allocated residual risk ratings across scenario testing to this planning process are
these principal risks for 2017. In addition, the In addition, the Directors’ consideration reviewed by the Directors at least annually.
table entitled principal risks and uncertainties of viability is subject to all considerations
In addition, the life of mine planning
overleaf sets out a description of each of and assumptions taken into account as
process is underpinned by regular Board
our principal risks, along with commentary part of the 2017 carrying value review and
briefings as part of on-going periodic
regarding management responsibility, tax provision assessment outlined on page
operational performance reviews and the
Committee and Board oversight, relevance 72 and the going concern statement on
discussion of any operational initiatives
to strategy, mitigating action and the status page 49 of this Annual Report.
to be undertaken in the ordinary course of
of the risk in 2017 for further information After making appropriate enquiries and business. In addition to this and in light of
purposes. We also chart year-on-year trends considering the uncertainties described above, the challenges faced in 2017 management
and continuing impact assessments. In addition the Directors have a reasonable expectation has enhanced its liquidity assessments for
to those risks stated, there may be additional that the Acacia Group will continue to operate going concern and viability purposes.
risks unknown to Acacia and other risks, and meet its liabilities, as they fall due, for
currently believed to be immaterial or that relate The information relating to Acacia’s
the next three years should the operating
to the wider gold mining industry, which could performance included on pages 30 to 61
environment not further deteriorate, however
turn out to be material to the Group. Additional (inclusive) of this Annual Report is incorporated
have concluded that the combination of the
discussions of certain trends and uncertainties by reference into this Strategic report and is
above circumstances represents a material
that may affect our operations are provided in deemed to form part of this Strategic report.
other parts of this Strategic report.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 25

 PRINCIPAL RISKS AND UNCERTAINTIES

We define principal risks as those risks

or combination of risks that would
threaten our business model, future
performance, solvency or liquidity.
EXECUTIVE BOARD/BOARD
POTENTIAL CHANGE LEADERSHIP TEAM COMMITTEE OVERSIGHT
RISK IMPACT FROM 2016 RESPONSIBILITY RESPONSIBILITY
STRATEGIC RISKS
Single country risk
All of our revenue is derived from production at our operations High CEO/CFO Board
in Tanzania. To ensure continued growth, the Group needs to identify
new resources and development opportunities through exploration and
acquisition targets. The identification of potential growth opportunities
in other territories is required to strengthen the business through
geographic diversification in order to mitigate the effects that significant
in-country developments could have on our operations and business.
FINANCIAL RISKS
Significant changes to commodity prices
Our financial performance is highly dependent on the price of High CFO Board
gold and, to a lesser extent, the price of copper and silver. Fluctuations
in the pricing of these commodities, which are largely attributable to
factors beyond our control, will likely have a corresponding impact on
our financial condition, particularly in the context of rapid pricing
fluctuations.

Liquidity risk
Our primary source of liquidity is operating cash flow together with High CFO Board
cash holdings and credit facilities. Impacts on operating cash flows
may present a risk of the Group not having access to sufficient funds
to meet its financial commitments and liabilities.

EXTERNAL RISKS
Political, legal and regulatory developments
Our exploration, development and operational activities are subject High CEO/Head Board
to extensive laws and regulations governing various matters in the of Legal and
jurisdictions in which we operate. Our ability to conduct business is Compliance
dependent on stable and consistent interpretation and application of
laws and regulations applicable to mining activities and our operations,
particularly in Tanzania. Changes to existing applicable laws and
regulations, a more stringent application or interpretation of applicable
law and regulation, or inconsistencies and irregularities in the
interpretation of applicable law and regulation by relevant Government
authorities could adversely affect the progression of our operations and
development projects. Our operations and financial condition will also
be adversely affected if existing Mineral Development Agreements are
not honoured by the Tanzanian Government. The Group may also be
adversely affected by changes in global economic conditions, and
political and/or economic instability in Tanzania or any of its
surrounding countries.

26 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

STRATEGIC PILLARS KEY

OUR BUSINESS OUR PEOPLE INCREASE DECREASE

STRATEGIC REPORT
OUR RELATIONSHIPS OUR FUTURE NO CHANGE NEW FOR 2017

RELEVANCE
TO STRATEGIC FURTHER
2017 STATUS MITIGATION/COMMENT PILLARS INFORMATION

This risk is elevated as a result of on-going challengesWe seek to assess a wide range of potential growth Please
in the operating environment in Tanzania, and our opportunities to build on our existing portfolio, particularly see our
on-going disputes with the Government. acquisition and development opportunities outside Exploration
Tanzania to maximise growth potential and to help mitigate review
Continued progression of exploration projects in Kenya,
the effects that significant developments in Tanzania could and the
Burkina Faso and Mali.
have on our business. Strategic
report.

In 2017 we implemented additional gold price We monitor our exposure to commodity price fluctuations Please
protection measures over the short term and will as part of financial and treasury planning and controls see our
continue to assess the requirement for further price procedures. Financial
protection arrangements. review.
We conduct on-going reviews of hedging policies for
certain commodity exposures and implement strategic
protections to secure cash flows from sales revenues.

Through 2017, we have faced increased risks of On-going mitigation of the risk includes the general Please
impacts on operating cash flows resulting from the continuation of cost control and cost discipline within see our
concentrate ban and resulting actions that have the business and reduction in corporate overheads, Financial
adversely impacted our operating environment. the deferral of capital expenditure, where possible, review.
Actions taken during 2017 to mitigate this risk include: and active management of cash and cash equivalents.
–– Moving Bulyanhulu into reduced operations
–– Accelerating planned processing changes at Buzwagi
to provide solely for doré production
–– Securing gold price protection via hedging programmes
–– Divesting non-core assets, such as the royalty over
the Houndé Mine in Burkina Faso

The introduction of the export ban on mineral We continue to seek a negotiated solution for the Please see
concentrates in 2017 has led to a number of on-going resolution of all relevant matters at issue by all available our Strategic
issues in our operating environment and resulted in a means, including those that may be achieved through report.
number of disputed actions. These include the issuance Barrick’s on-going negotiation of the framework with the
of a number of tax assessments, including those to the Government of Tanzania.
order of US$190 billion for alleged under-declared
In the meantime, the Group continues to protect its
revenues, which appear to follow on from the findings of
rights via the arbitration processes commenced under the
the First Presidential Committee announced on 24 May
Bulyanhulu and Buzwagi MDAs and continues to dispute
2017, and of the Second Presidential Committee
the erroneous tax assessments via legal procedures.
announced on 12 June 2017. The allegations contained
in these announced findings and the resulting tax
assessments are unfounded and the relevant tax
assessments unsubstantiated.
In addition to the export ban and the Presidential
Committees’ reports, new laws and regulations have
been enacted in Tanzania which have material impacts
on the natural resources sector and the mining industry
in particular.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 27

 PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

EXECUTIVE BOARD/BOARD
POTENTIAL CHANGE LEADERSHIP TEAM COMMITTEE OVERSIGHT
RISK IMPACT FROM 2016 RESPONSIBILITY RESPONSIBILITY
OPERATIONAL RISKS
Attraction and retention of employees
Our business depends upon our ability to recruit and retain qualified High CEO Board
personnel, such as skilled engineers and geologists. The loss of skilled
workers and a failure to recruit and train equivalent replacements may
affect our operations and production.

Operational security and theft

We face risks to our businesses in relation to gold thefts and wider High CEO/Head EHS&S
security-related matters relating to trespass, vandalism and serious of Legal and Committee
security-related incidents on our operations, and illegal mining in areas Compliance
covered by the Group’s exploration and mining licences, all of which may
have an adverse effect upon Group operations and financial condition.

Significant fraud and corruption

We face risks in ensuring fraud and corruption in relation to our High CEO/Head Audit
operations and businesses does not occur, with serious fraud and of Legal and Committee
corruption having the potential to threaten our licence to operate Compliance
and result in legal liability.

Reserve and resource estimates

The reserves and resources estimates are based on a range of High CEO Board
assumptions and factors. Changes to these assumptions, including for
commodity price, operating environment and applicable changes in law
may impact on the input parameters to the estimates. This in turn may
impact on economic recoverability of tonnages or grades in current
reserve and resource estimates.

Environmental hazards and rehabilitation

Our operations are subject to environmental hazards because of High CEO EHS&S
the processes and chemicals used in our extraction and production Committee
methods. Should environmental incidents occur despite the mitigating
measures implemented, we may be liable for losses and costs
associated with environmental hazards at our operations, have our
licences and permits withdrawn or suspended, or may be forced to
undertake extensive clean-up and remediation action.

Safety risks relating to mining operations

Our mining operations are subject to the usual hazards and safety risks High CEO EHS&S
in a mining workplace, such as fall of ground relating to underlying Committee
geotechnical risks, potential fires and mobile equipment incidents.
Should safety incidents occur despite the mitigating measures
implemented, we may be liable for associated losses and costs or
have our operations suspended or licences or permits withdrawn.

28 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

STRATEGIC PILLARS KEY

OUR BUSINESS OUR PEOPLE INCREASE DECREASE

STRATEGIC REPORT
OUR RELATIONSHIPS OUR FUTURE NO CHANGE NEW FOR 2017

RELEVANCE
TO STRATEGIC FURTHER
2017 STATUS MITIGATION/COMMENT PILLARS INFORMATION

As a result of on-going challenges in our operating We have embarked on training programmes and leadership Please see
environment, we have introduced the attraction and development programmes to develop local industry expertise. our Strategic
retention of employees as a principal risk. In addition, report and
Long-term incentive and retention programmes have been
key staff may depart leaving vacancies that may not be Sustainability
introduced to address retention because of developments
adequately filled whilst a resolution to on-going disputes review.
in our operating environment in 2017.
in Tanzania remains outstanding.
Continued progression of our localisation strategy.

Throughout 2017 we have continued to review and, Our security management system adopts a range Please
where possible, enhance our security model in line with of measures to protect employees, assets, operations and see our
our objectives for operational security. We have people, including local communities, from operational security Sustainability
continued to assess and enhance security and safety risks. Our approach to security management is guided review.
controls. We have also continued to enhance security by the Voluntary Principles on Security and Human Rights
and human rights training, on-going reviews of (“VPSHR”). These measures include the implementation
community grievance processes, and on-going of security checks and procedures; infrastructure such as
engagements with local police forces. perimeter and asset fencing and surveillance equipment;
contracts with private security providers and Memoranda of
Understanding with local police forces with clear expectations
regarding respect for human rights; support for human
rights training for private security personnel and the police;
and community grievance processes.

Throughout 2017 we have maintained on-going We have implemented a range of processes and controls
compliance programmes and training focused to manage the risk including conducting risk assessments,
on our Code of Conduct and Anti-Fraud and Anti- training in the Code of Conduct, maintaining a Whistle-
Corruption Policies. blower Hotline, and formal anti-corruption and anti-fraud
procedures.

This risk has been reintroduced this year as a result We seek to manage the varying nature of reserve Details of
of the on-going challenges in our operating environment and resource estimates through our life of mine planning our reserves
and the impact that these external factors may have on procedures, periodic reviews of such estimates and and resources
our reserves and resources calculation and, ultimately production targets and by ensuring that our reserve and are set out in
carrying value of our assets, further details of which resource estimates are calculated and reported on in the reserves
have been provided in the Strategic report, the Finance accordance with the requirements of NI 43-101 of the and resources
review and the notes to our financial statements. Canadian Institute of Mining and Metallurgy and Petroleum. statement
for 2017.

Throughout 2017 we have maintained our focus We use environmental management systems and Please see
on environmental objectives in support of our controls across our operations to provide for appropriate our Strategic
environmental strategy and have continued to environmental practices, including the adoption of report and our
make enhancements to the Group’s environmental specific environmental management plans for each of Operating and
management plans. our operations. We also monitor mining and operational Sustainability
activities against key international standards, such as the reviews.
International Cyanide Management Code, and assess
remediation and rehabilitation costs on an annual basis.

Throughout 2017 we have continued to enhance safety We use a wide range of safety management systems Please see
management systems and critical risk control standards to safeguard safety in the workplace. We provide our Strategic
for key operational safety risks in order to maintain our continuous training and supervision on safety management report and our
objectives for health and safety. to promote and embed the use of safe operating practices. Operating and
Sustainability
reviews.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 29

 OPERATING REVIEW

Bulyanhulu
Operational performance was
impacted by the concentrate export
ban which ultimately led to the move
to reduced operations in Q4 2017.

OVERVIEW

PROGRESS IN 2017
Improved safety performance, with TRIFR
falling from 1.38 to 0.80
Successfully completed the transition
to reduced operations in Q4 2017
Completed initial phase of the
optimisation study of the mine

PRIORITIES FOR 2018

Complete the optimisation study to
ensure the underground mine is able
to restart in an optimal manner
Complete investment into the
process plant
Ensure reduced operations cost profile
is optimised

30 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

175,491 0.80
Contribution to Group ounces (oz) TRIFR

23 4.7
Percentage contribution to total Group ounces (%) Total Reserves (Moz)

Operating performance Cash costs of US$840 per ounce sold were Capital expenditure for the year before
Gold production of 175,491 ounces was 16% higher than 2016 (US$722), mainly due reclamation adjustments amounted to
39% lower than 2016, mainly driven by a to the lower production base (US$712/oz), US$49.8 million, 41% lower than 2016
34% decrease in run-of-mine tonnes for lower co-product revenue (US$116/oz) and (US$84.6 million). This was mainly driven
the year primarily due to the transition of lower capitalised development costs (US$178/ by lower sustaining capital expenditure due
Bulyanhulu into reduced operations at the oz). This was partly offset by lower G&A costs to the transition of Bulyanhulu to reduced
end of Q3 2017. In addition, a drought mainly due to lower warehousing costs, lower operations and cash saving initiatives

PERFORMANCE REVIEW
experienced in the Kahama district led to stock write downs and lower camp costs implemented which resulted in projects
nearly a four-month halt in production from (US$207/oz), lower sales related costs due being deferred or cancelled as well as lower
reprocessed tailings. Gold production to lower sales volumes (US$153/oz), lower capitalised development driven by the halt
comprised 95,116 ounces in doré and maintenance costs (US$153/oz), lower of underground mining activities. Capital
80,375 ounces in gold/copper concentrate. consumables costs (US$152/oz), lower energy expenditure mainly consisted of capitalised
and fuel costs (US$92/oz), lower labour costs underground development costs (US$39.5
Gold sold for the year of 107,855 ounces
due to restructuring (US$66/oz) and lower million), underground ventilation raise
was 39% lower than production and 61%
contracted services costs (US$46/oz). borings (US$1.8 million), paste reticulation
lower than 2016 mainly as a result of
(US$1.5 million), ventilation fan upgrades
the inability to export concentrate from AISC per ounce sold of US$1,373 was 30%
(US$1.3 million) and a power stability
early March combined with the lower higher than 2016 (US$1,058/oz) driven by
project (US$1.2 million).
production base. the impact of lower sales ounces on individual
cost items (US$533/oz) and higher cash cost The transition to reduced operations
Copper production of 3.9 million pounds
as explained above (US$117/oz), partly offset at Bulyanhulu, which was completed in
for the year was 39% lower than 2016 mainly
by lower capitalised development costs the fourth quarter, regrettably led to the
due to Bulyanhulu moving to reduced
(US$218/oz) and lower sustaining capital retrenchment of the majority of the
operations in Q4 resulting in no concentrate
spend (US$104/oz). Should we have been able workforce at the mine. In total, the
production for the rest of 2017, combined
to sell all ounces produced, AISC would have retrenchments, together with the
with lower copper grades for the year. Copper
been approximately US$1,122 per ounce. cancellation of supply contracts, led to a
sales were 89% lower than 2016 primarily
cost of US$25 million, with US$20 million
due to the lack of exports of concentrate.
incurred in Q4 2017 and the balance due
to be incurred in Q1 2018. In addition,
Year ended Variance we saw an outflow of accounts payable
Key mine statistics 31 December %
of approximately US$35 million, of which
(Unaudited) 2017 2016
US$5 million is expected to be incurred
Key operational information:
in Q1 2018. Whilst the mine is on reduced
Ounces produced oz 175,491 289,432 (39)%
operations, at a monthly cost of
Ounces sold oz 107,855 279,286 (61)%
approximately US$3 million, we are
Cash cost per ounce sold 1 US$/oz 840 722 16%
taking the opportunity to progress essential
AISC per ounce sold 1 US$/oz 1,373 1,058 30%
capital spend of approximately US$10
Copper production Klbs 3,906 6,391 (39)%
million, primarily on the process plant,
Copper sold Klbs 588 5,570 (89)%
together with an optimisation study which
Run-of-mine:
is designed to ensure that when the mine
Underground ore tonnes hoisted Kt 596 909 (34)%
restarts it does so in an optimised manner.
Ore milled Kt 612 933 (34)%
The study is expected to take until H2 2018
Head grade g/t 8.6 9.3 (8)%
to be completed and as a result we do not
Mill recovery % 90.1% 91.4% (1)%
expect the underground mine to restart in
Ounces produced oz 153,279 254,552 (40)%
2018 and are targeting a phased restart
Cash cost per tonne milled 1 US$/t 126 197 (36)%
through 2019 assuming the concentrate
Reprocessed tailings:
ban is resolved during 2018. The mine will
Ore milled Kt 1,010 1,650 (39)%
continue with the re-processing of tailings
Head grade g/t 1.4 1.4 –
through 2018 at an annual production rate
Mill recovery % 48.0% 45.8% 5%
of approximately 30,000 ounces and an
Ounces produced oz 22,212 34,880 (34)%
AISC of approximately US$1,000 per
Capital expenditure
ounce, which will partially offset the cost
– Sustaining capital US$(‘000) 9,033 20,231 (56)%
of reduced operations.
– Capitalised development US$(‘000) 39,543 63,082 (37)%
– Expansionary capital US$(‘000) 1,190 1,262 (6)%
49,766 84,575 (41)%
– Non-cash reclamation asset adjustments US$(‘000) (4,158) 10,728 nm
Total capital expenditure US$(‘000) 45,608 95,303 (52)%

1 These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to
“Non-IFRS measures” on page 171 for definitions.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 31

 OPERATING REVIEW CONTINUED

Buzwagi
The mine delivered a record year of
production as it effectively completed
the open pit and transitioned to a
stockpile processing operation in 2018.

OVERVIEW

PROGRESS IN 2017
Delivered record production of 269koz
AISC of US$667/oz was 39% lower
than 2016
Added 1 year of life through addition
of 5Mt of ore to the ROM stockpile

PRIORITIES FOR 2018

Rightsize the mine for a stockpile
processing operation
Optimise the cost profile of the mine
Continue with No Harm 2020 programme
as mine prepares for closure in 2020

32 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

268,785 0.32
Contribution to Group ounces (oz) TRIFR

35 0.4
Percentage contribution to total Group ounces (%) Total Reserves (Moz)

Operating performance forward ceasing operation of the flotation grades. Copper sold was 92% lower than
Buzwagi delivered record gold production circuit. While ceasing to operate the flotation 2016, primarily due to the lack of mineral
of 268,785 ounces for 2017 which was circuit did not require prior regulatory concentrate exports.

PERFORMANCE REVIEW
66% higher than in 2016 mainly due to a approvals and did not involve additional
Cash costs of US$594 per ounce sold were
75% higher head grade as a result of higher or new process plant or processing
42% lower than 2016 (US$1,031/oz), primarily
grade ore mined from the main ore zone technology, post period-end Buzwagi
driven by the build-up in unsold ounces and
at the bottom of pit. Production for the year received correspondence from the Ministry
increased investment in ore stockpiles as a
comprised 113,035 ounces of gold in of Minerals requiring the restoration of
result of increased focus on ore mining
concentrate and 155,749 ounces of gold operation of the flotation circuit and seeking
(US$411/oz), lower consumable spend due to
in doré. further explanations from Buzwagi on the
lower unit costs and optimisation of cyanide
Government’s position regarding potentially
Gold sold for the year amounted to 160,552 usage (US$53/oz) and lower sales related
applicable regulatory approvals. The
ounces, in line with 2016 and 40% lower than cost due to lower sales volumes (US$25/oz).
Company continues to engage closely
production, a direct result of the inability to This was partly offset by lower co-product
with Government agencies on this and
export concentrate from early March 2017. revenue in the form of copper concentrates
other operating and regulatory issues.
As a result of this, in September 2017 (US$123/oz).
Buzwagi ceased operating the flotation circuit Total tonnes mined of 15.4 million tonnes
AISC per ounce sold of US$667 was 39%
which had previously been planned to run into were 29% lower than 2016, primarily due to
lower than 2016 (US$1,095/oz). This was
the first part of 2018 but continued to run the the focus of mining at the bottom of the pit
mainly driven by lower cash costs as explained
existing gravity and CIL circuits which resulted which contains more ore tonnes compared
above (US$437/oz). Should we have been
in gold production for the last four months of to waste tonnes, resulting in 75% higher ore
able to sell all ounces produced, AISC would
the year being solely in doré form. Prior to the tonnes mined during 2017 compared to 2016.
have been approximately US$564 per ounce.
change, gold/copper concentrate made up
Copper production of 9.0 million pounds for
approximately 60% of production. Capital expenditure before reclamation
the year was 9% lower than the comparative
adjustments of US$4.4 million was 21%
Buzwagi engaged extensively with relevant period mainly due to the bypass of the
higher than 2016 (US$3.6 million). Capital
Government agencies regarding the flotation circuit during September 2017
expenditure for the year mainly consisted of
processing trials, both prior to and after the resulting in no copper production for the rest
the expansion of the tailings storage facility
implementation of the decision to bring of 2017, partly offset by increased copper
(US$3.7 million).
As previously guided, Buzwagi is transitioning
Year ended Variance to a stockpile processing operation in 2018
Key mine statistics 31 December % as a result of the effective completion of
(Unaudited) 2017 2016 the open pit and will see a step down in
Key operational information: production as a result. During 2017 the mine
Ounces produced oz 268,785 161,830 66% exceeded its production plan by 15,000
Ounces sold oz 160,552 161,202 0% ounces whilst delivering over 5 million tonnes
Cash cost per ounce sold1 US$/oz 594 1,031 (42)% of ore to the stockpile, albeit at lower grades.
AISC per ounce sold1 US$/oz 667 1,095 (39)% As a result, expected life of mine production
Copper production has increased by approximately 100,000
Klbs 8,991 9,847 (9)%
ounces. In 2018, mill feed will be almost
Copper sold Klbs 752 9,175 (92)%
exclusively from the stockpiles and as a
Mining information:
result head grades are expected to drop
Tonnes mined Kt 15,368 21,585 (29)%
significantly resulting in production for the
Ore tonnes mined Kt 9,309 5,317 75% year being approximately 100,000 ounces.
Processing information: As a result of the lower production and
Ore milled Kt 4,256 4,404 (3)% release of non-cash high cost inventory of
Head grade g/t 2.1 1.2 75% approximately US$200 per ounce, reported
Mill recovery % 94.3% 94.5% 0% AISC is due to increase to approximately
Cash cost per tonne milled1 US$/t 22 38 (42)% US$1,100 per ounce sold, although we are
Capital expenditure looking to optimise the cost profile as we
– Sustaining capital US$(‘000) 4,338 3,582 21% transition to stockpile processing.
4,338 3,582 21%
– Non-cash reclamation asset adjustments US$(‘000) (1,978) 4,524 nm
Total capital expenditure US$(‘000) 2,360 8,106 (71)%

1 These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to
“Non-IFRS measures” on page 171 for definitions.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 33

 OPERATING REVIEW CONTINUED

North Mara
Continued strong delivery of cash flow,
whilst unlocking the long-term potential
of the mine through exploration

OVERVIEW

PROGRESS IN 2017
Solid production performance of 324koz
Doubled Gokona Underground reserve
to 1.3Moz through successful drilling
programmes
49% increase in tonnes mined from
the Gokona Underground

PRIORITIES FOR 2018

Deliver further increase in reserve at
Gokona Underground through drilling
Complete permitting process for the
Nyabirama Underground
Increase mined tonnes from Gokona
Underground

34 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

323,607 0.28
Contribution to Group ounces (oz) TRIFR

42% 2.3
Percentage contribution to total Group ounces (%) Total Reserves (Moz)

Operating performance Ore tonnes from underground mining were AISC of US$803 per ounce sold was 10%
North Mara’s gold production of 323,607 49% higher than 2016, due to Gokona higher than 2016 (US$733/oz) primarily
ounces was 14% lower than in 2016. This Underground development providing access due to higher cash costs as explained above

PERFORMANCE REVIEW
was as a result of a 13% lower head grade to more stopes compared to 2016 despite (US$88/oz) and the impact of the lower
driven by 44% lower mined grades received the underground development challenges production base (US$51/oz), partly offset
from the Gokona Underground due to an experienced in the year due to a now by lower capitalised development costs
increased proportion of ore being sourced resolved lack of development contractors on (US$45/oz) and lower sustaining capital
from the lower grade West Zone. The head account of work permit issues. Cemented expenditure (US$18/oz).
grade was also negatively impacted by 11% Aggregate Fill (CAF) continues to be placed
Capital expenditure for the year before
lower grades received from the Nyabirama in primary stopes, though further work is
reclamation adjustments of US$94.0 million
pit as an increased proportion of ore was required on the plant to ensure that forecast
was 12% lower than in the prior year
mined from the beginning of the Stage 4 fill volumes can be maintained.
(US$106.3 million). Key capital expenditure
of the open pit.
Cash costs of US$498 per ounce sold were includes capitalised stripping costs
As North Mara solely produces gold in doré 21% higher than 2016 (US$410/oz), mainly (US$45.4 million), capitalised underground
form it was unaffected by the concentrate driven by the lower production base (US$66/ development costs (US$15.7 million),
ban and gold ounces sold for the year of oz), lower capitalised development costs capitalised drilling expenditure mainly
324,455 ounces were broadly in line with (US$35/oz), higher consumable costs driven relating to Gokona resource and reserve
production, but 14% lower than 2016 due by higher CAF activities (US$18/oz) as well development and Nyabirama underground
to the lower production base. as higher energy and fuel costs (US$11/oz). studies (US$9.4 million) and investment
This was partly offset by a build-up in ore in mobile equipment and component
stockpiles due to the higher ore tonnes change-outs (US$4.9 million). In addition,
mined (US$31/oz) and lower external US$1.6 million was spent on land
services cost (US$9/oz). acquisitions primarily around the Nyabirama
open pit. Land acquisition costs are
Year ended Variance included in capital expenditure above
Key mine statistics 31 December % as they are included in AISC but are
(Unaudited) 2017 2016 treated as long-term prepayments on
Key operational information: the balance sheet.
Ounces produced Oz 323,607 378,443 (14)% In 2018 we expect production to be
Ounces sold Oz 324,455 376,255 (14)% broadly in line with 2017 at approximately
Cash cost per ounce sold1 US$/oz 498 410 21% 325,000 ounces as the continued increase
AISC per ounce sold1 US$/oz 803 733 10% in production from the Gokona Underground
Open pit: is offset by lower open pit tonnes and grade
Tonnes mined Kt 15,299 15,556 (2)% as ore is sourced from the Stage 4 pit. AISC
Ore tonnes mined Kt 3,147 2,752 14% is expected to be approximately US$850 per
Mine grade g/t 1.7 1.9 (11)% ounce, approximately 5% higher than 2017,
Underground: driven by an increase in cash costs due to
Ore tonnes trammed Kt 654 440 49% the increased mining activity and increased
Mine grade g/t 8.7 15.6 (44)% allocation of corporate shared services
Processing information:
costs. During 2018 we will continue to
Ore milled progress the drilling programmes at Gokona,
Kt 2,841 2,830 0%
which led to a doubling of underground
Head grade g/t 3.9 4.5 (13)%
reserves in 2017 to 1.3Moz at a grade
Mill recovery % 92.0% 92.0% 0%
of 6.3 g/t and at Nyabirama, we are also
Cash cost per tonne milled1 US$/t 57 55 4%
progressing the permitting of an
Capital expenditure
underground exploration decline which
– Sustaining capital2 US$(‘000) 22,563 28,317 (20)% is expected to be completed in 2018.
– Capitalised development US$(‘000) 61,066 75,609 (19)%
– Expansionary capital US$(‘000) 10,270 2,399 328%
93,899 106,325 (12)%
– Non-cash reclamation asset adjustments US$(‘000) (2,951) 6,703 nm
Total capital expenditure US$(‘000) 90,948 113,028 (20)%

1 These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to “Non-IFRS
measures” on page 171 for definitions.
2 Includes land purchases recognised as long-term prepayments.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 35

 OPERATING REVIEW CONTINUED

Exploration
A successful year of exploration as we
declared a maiden high-grade resource
in Kenya and continued to delineate
exciting drill targets in West Africa.

OVERVIEW

PROGRESS IN 2017
Declaration of 1.2Moz inferred resource
on Liranda Corridor, West Kenya
Identified extension of mineralisation
beneath Nyabirama pit to 950m below
surface
Identification of extensive gold in soil
anomalies across Burkina Faso and Mali
licence areas

PRIORITIES FOR 2018

Drill the Isulu SE and Gap target areas
in Liranda Corridor
Drill test top priority targets in Burkina
Faso joint ventures
Advance and test targets across Mali
licences

36 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 Significant drilling activity was focused Nyabirama
on delineating the western extension of Follow-up extensional and infill surface
the “Golden Banana” (East Zone) lode diamond drilling was completed at Nyabirama
mineralisation between the Gokona Fault and during 2017, in order to test the extent of
the completed Gokona open pit; which is now mineralisation down-plunge from the open pit,
termed the “GB2” zone. Several wide and high and allow consideration of an underground
grade intercepts were returned from this drill mining option. The better results from the
programme extending the previously modelled 2017 drilling programmes included:
mineralisation including:
NBD0149A 3.0m @ 66.6 g/t Au from 873m
UGKD320 33.0m @ 38.2 g/t Au from 36m incl. 1m @ 198g/t Au from 874m,
and 5.0m @ 4.8 g/t Au from 890m

PERFORMANCE REVIEW
UGKD321 31.0m @ 14.7 g/t Au from 31m
NBD0152 6.0m @ 51.9 g/t Au from 592m
UGKD323 24.8m @ 133.5 g/t Au from 35m incl. 1m @ 280g/t Au from 594m
UGKD328 52.0m @ 11.4g/t Au from 35m NBD0157 4.0m @ 10.8g/t Au from 264m,
UGKD331 57.0m @ 31.8g/t Au from 54m 4.0m @ 26.7g/t Au from 325m,
HANNES HENCKEL and 7.0m @ 9.50g/t Au from 464m
UGKD349 10.0m @ 75.7g/t Ay from 64m
HEAD OF DISCOVERY NBD0158 11.5m @ 26.5g/t Au from 272m
UGKD_00303 26.0m @ 40.8g/t Au from 110m
NBD0166 2.0m @ 87.9 g/t Au from 236m
UKGC_00308 23.0m @ 42.7g/t Au from 121m
incl. 1m @ 161g/t Au from 237m,
Brownfield exploration and 2.0m @ 6.5 g/t Au from 408m,
Tanzania The full set of drill data for GB2 was and 3.0m @ 3.8 g/t Au from 420m
In 2017, brownfield exploration was incorporated into the updated Mineral NBD0167 5.0m @ 8.5 g/t Au from 464m
focused predominantly at North Mara, with Resource model, and development was incl. 1m @ 36g/t Au from 467m,
underground diamond drilling at Gokona, commenced to access the mineralisation and 7.0m @ 12.8 g/t Au from 473m
during Q4 2017 with first stope production incl. 1m @ 81g/t Au from 475m
and further surface diamond drilling
scheduled for Q1 2018. NBD0170 2.4m @ 7.6 g/t Au from 324m,
conducted on the Nyabirama deposit to
and 5.2m @ 5.9 g/t Au from 367m, and
define the mineralised system below the The development of a drill drive on the 13.5m @ 20.1 g/t Au from 378m
planned final open pit. Drilling at North 1030mRL elevation advanced in 2017, with
Mara during 2017 resulted in significant the initial four drill sites completed during Drilling completed in 2016 and 2017 was
additions to the Mineral Reserve and Q3 2017. Drilling commenced from three of incorporated into an underground Mineral
Mineral Resource. The surface drilling these positions, with initial drilling targeting Resource model. Following the Mineral
demonstrated the potential for further continuation of mineralisation below the Resource model update, a provisional
resource potential up to 700 metres existing open pit. Initial results received underground decline design was developed
below the final Stage 4 Nyabirama pit. during Q4 2017 included: along with development for drill positions to
Underground drilling also continued on undertake infill diamond drilling. Permitting
the Reef 2 series at Bulyanhulu prior to UGKD415 22.0m @ 13.3g/t Au from 283m for the decline is underway. The conceptual
suspension of underground operations. UGKD418 28.0m @ 12.5 g/t Au from 251m drilling programme involves eight drill
UGKD405 46.0m @ 6.6g/t Au from 197m positions, and approximately 41,000m of
North Mara
UGKD409 10.0m @ 6.3g/t Au from 78m diamond drilling to be completed
Gokona Underground
UGKD410 14.0m @ 7.8g/t Au from 71m progressively as the development advances.
In addition to the grade control drilling,
In order to reduce expenditure commitments,
approximately 33,000 metres of infill and UGKD425 15.0m @ 9.5g/t Au from 120m
further drilling at Nyabirama was suspended
extensional diamond drilling was completed
Exploration activity during 2018 at Gokona in Q3 2017. The decision was also taken to
at Gokona Underground during 2017; with
Underground will continue to test the extension defer any drilling until 2019, and hence
a maximum of five underground diamond
of the known mineralisation, with 41,000m reduce expenditure commitments in 2018.
drill rigs in operation. The positive results
from the drilling were incorporated into the of underground diamond drilling budgeted. Bulyanhulu
year-end Resource update and led to a Reef 2 Central
doubling of Reserves from 656koz at 6.0g/t Underground diamond core drilling in 2017
to 1,338koz at 6.3g/t, post depletion of was primarily focused on infill drilling of Reef
over 188koz. 2 to increase the level of confidence in the
Mineral Resource, and testing the Reef 1
structure in areas where limited to no historic
drill testing has been undertaken. A total of
117 underground diamond drill core holes
were completed for 30,412 metres during H1
2017, testing both the Reef 1 and Reef 2
structures. The results demonstrated that
the Reef 2m Central vein displays good
continuity and extended the mineralisation a
further 100m vertically, and a further 150m
in strike. Drilling activity at Bulyanhulu was
suspended in the second half of 2017, as the
mine was moved to reduced operations.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 37

OPERATING REVIEW CONTINUED

Greenfield exploration Bushiangala Prospect zones have been modelled with a maximum
Kenya LCD0173 3.1m @ 7.07 g/t Au from 187m, strike length of 514 metres. Vertical extent
During 2017 an extensive diamond drilling ranges from 300 metres to 1,000 metres
LCD0174 3.5m @ 6.70 g/t Au from 154m,
programme continued on the Liranda Corridor while the plunge extent ranges from 300
LCD0176 1.5m @ 12.0 g/t Au from 134m and
Project within the Kakamega Dome Camp with 3.1m @ 12.0 g/t Au from 175m, metres to 1,100 metres. The majority of the
between four and seven drill rigs active. 86 resource ounces lie within four zones. The
LCD0177 1.5m @ 10.5 g/t Au from 114m,
diamond core holes (41,988 metres) were structures remain open at depth and to the
LCD0189 2.0m @ 12.7 g/t Au from 164m,
completed on the Isulu (formerly Acacia), east down plunge.
Bushiangala, Shigokho and Shibuname LCD0192 2.0m @ 23.1 g/t Au from 166m
At Bushiangala the gold mineralisation is
Prospects. Additionally, one reverse circulation
The gold mineralisation at Isulu is associated modelled in four zones contained within shears
(RC) rig completed reconnaissance drilling
with mostly steeply dipping shear zones ranging characteristically similar to Isulu. These zones
across gold-in-soil anomalies on the Barkalare
in true width from 0.5 metres to 17 metres have a maximum strike length of 304 metres
and Kitson-Kerebe target areas in the Lake
within a mafic volcanic sequence. The zones with a vertical extent ranging from 284 metres
Zone Gold Camp with 30 reverse circulation
are represented by shearing, brecciation, quartz to 556 metres. The structures continue to the
holes (“RC”) (3,250 metres) drilled.
veining, sulphides (pyrite, +/- pyrrhotite, east and down dip.
Kakamega Dome Camp +/- sphalerite, +/- arsenopyrite, +/- chalcopyrite,
In Q1 2017 a Maiden Inferred Resource Estimate
Exploration activity has focused on the +/- molybdenite) and alteration (carbonate,
conforming to NI 43-101 guidelines was
Bushiangala and Isulu (formerly Acacia) +/- sericite, +/- vanadium mica, +/- silica).
announced for the Isulu prospect, of 3.46 million
prospects since high grade results were Within the shears a total of nine mineralised
tonnes at 12.1 g/t Au for 1.31 million ounces.
returned in 2014 from the first pass diamond
drilling programme following up gold-in-soil
anomalies along the Liranda Corridor. In 2015
and 2016 closed spaced diamond drilling
programmes were undertaken confirming
multiple zones of mineralisation from 100
metres to 700 metres vertical depth at
Isulu and from 100 metres to 400 metres
MALI
at Bushiangala. In 2017 a diamond drilling
programme of 44,500 metres was budgeted Kenieba JVs
in order to finalise a Maiden Inferred Resource BURKINA
FASO
Estimate on the Isulu Prospect in Q1 2017 and Houndé Belt JVs
to further understand the potential size of the
mineralised zones (lateral and depth
extensions). A total of 79 diamond holes for
39,062 metres were completed on these
prospects in 2017. Better results received
during 2017 from the Isulu and Bushiangala West Kenya Project
KENYA
Prospects included: Nyanzaga JV

Isulu Prospect (formerly Acacia)

LCD0158W1 2.5m @ 114 g/t Au from 892m
TANZANIA
and 1.0m @ 11.0 g/t Au from 898m,
LCD0158W3 3.7m @ 10.7 g/t Au from 925m
and 0.6m @ 21.0 g/t Au from 931m,
LCD0161W1 2.0m @ 37.0 g/t Au from 995m
and 1m @ 21.5 g/t Au from 1,003m,
LCD0161W3 2.0m @ 8.49 g/t Au from 958m
and 4.0m @ 2.27g/t Au from 972m,
LCD0175 3.0m @ 55.2 g/t Au from 129m,
LCD00194 1.5m @ 37.2 g/t Au from 342.3m,
LCD00201 1.5m @ 15.2 g/t Au from 114m.

38 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

An updated Inferred Resource Estimate was
completed using drill data and interpretations

PERFORMANCE REVIEW
to the end of August 2017; with the updated
model showing that the Isulu Inferred Resource
has changed with additional drilling confirming
structural complexity.
The enhanced modelling of the Isulu resource
has upgraded confidence and increased
grade, although has led to reduced ounces.
Additionally, the upper parts of two zones in
the Bushiangala Prospect were upgraded from
mineral inventory to an Inferred Resource
Estimate. The updated Inferred Resource
Estimate completed for the year-end returned
2.5 million tonnes @ 12.9 g/t Au for 1.044
million ounces at Isulu and for Bushiangala
374,600 tonnes @ 10.5 g/t Au for 126,600
ounces. A technical study to determine
mineability of these deposits was commenced
in Q4 2017. We continue to believe that 2Moz Burkina Faso 3,051 metres of RC and 6,664 metres of
is a resource target for the Liranda Corridor During 2017 we continued to explore our diamond core were drilled. Mapping and
Project which we plan to continue drill testing properties in the highly prospective Houndé surface sampling was conducted on the
for in 2018. Belt in southwest Burkina Faso. We currently regional prospects.
have four joint ventures and an interest in over
In 2017 testing for further potential shoots Field mapping and sampling focused on the
2,800km2 of prospective greenstone belt. We
within 5km along strike from existing resources best targets on the Tankoro Corridor and on
manage all of the joint ventures. Extensive
at Isulu and Bushiangala was undertaken. regional prospects. The ranking of the targets
drilling programmes, including diamond, RC and
At Shigokho and Shibuname Prospects seven has been updated and an exploration
aircore (“AC”) drilling, were completed in 2017
holes were completed for 2924m. Best results programme was designed for 2018.
on the projects. A component of the 2017 work
were from Shibuname included LCD0181 6.6m
programmes was to review the structural The exploration budget for the South Houndé
@ 3.12 g/t Au from 200.4m and 3m @ 4.71 g/t
architecture of our land holdings and complete project in 2018 is US$3.8 million, comprising
Au from 218m, LCD0183 0.6m @ 3.48 g/t Au
a target generation exercise using airborne 7,000 metres of diamond core drilling, 8,000
from 400.9m. Although encouraging, more
aeromagnetic and radiometric data and ground metres of RC drilling, and 32,000 metres of AC
detailed structural work is required to
IP geophysical data where available. These drilling. A resource update is planned for Q1
understand the potential of these prospects
target generation layers are now being 2018. Additionally, mapping, soil sampling and
and if further drilling is warranted.
synthesised with our surface geochemical data pole-dipole gradient array induced polarisation
Lake Zone Camp layers to develop priority drilling targets. To date geophysical surveys will be carried out. The aim
RC drilling on gold-in-soil anomalies at we have delineated more than 65 targets, most of this programme is to extend current resource
Barkalare and Kitson-Kerebe Target areas was of them were followed up by field mapping in Q4 on the Tankoro Corridor and to assess the
completed in Q3 2017 with 30 RC holes for 2017. This programme was aimed to produce potential of the regional targets to deliver a
3,250m. Best intercept included LZRC0088 additional geology data to update the target new large-scale gold deposit, or at a minimum
(Barkalare) 4m @ 5.43 g/t Au from 52m and ranking and to design 2018 exploration. several satellite ore bodies, capable of
LZRC0097 (Kerebe) 5m @ 3.09 g/t Au from positively impacting the quality, size and
South Houndé Joint Venture (Sarama Resources
23m and 2m @ 10.05 g/t Au from 60m. In economics of the global resources on the
Limited) – current ownership 50%, next stage
2018, drill testing of these significant project.
earn-in to 70% (end 2018)
intercepts along strike and down dip will be
At the South Houndé JV project we continued Tankoro – MM and MC Zones
undertaken. In addition, further geological
field-based exploration activities focused During 2017 we continued a programme of
mapping and infill soil sampling across
both on resource extensions to the Tankoro drilling to test the down-plunge extensions
untested soil anomalies within the Lake Zone
Resource area (MM and MC zones), the Tankoro of higher grade gold mineralisation related
is underway to bring these targets to drill
Corridor prospects (Tankoro SW, Guy, Phantom interpreted cross structures at the MM and MC
testing stage.
and Phantom East) and regional targets Zones within the Tankoro resource. A “results
(Ouangoro, Tyikoro, Poyo/Werinkera and Bini based” phased strategy has been adopted
West). We commenced management of the “cycling” the rig between the Chewbacca, Yoda,
South Houndé JV as of 1 January 2017. Anakin and Jabba zones within the MM and MC
During 2017 a total of 34,165 metres AC, parallel mineralised zones. All holes drilled to

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 39

OPERATING REVIEW CONTINUED

date have intersected the targeted porphyries The geology model for the Tankoro resource Ouangoro Anomaly
and cross structures, however, in most cases has been updated in Q4 2017. Early in 2018 AC drilling commenced at the beginning
the interpreted high-grade shoots are either a mineral resource estimation update is of February on the Ouangoro Anomaly with
of lower grade, or of shorter strike extent than expected to be completed along with additional regional traverses across a 15 kilometre x 4
expected. The best potential at this stage metallurgic test work. 2018’s drilling kilometre zone of semi-continuous gold-in-soil
appears to be depth extensions on the MC programme across the resource area will geochemical anomalism along an interpreted
Zone where drilling has identified multiple follow-up on the most prospective deep NNE-trending linear geophysical anomaly being
mineralised porphyries and gold mineralisation high-grade shoots, locate repetitions of high drilled. Encouraging results have been returned
in the surrounding intercalated sediments. grade shoots by in-filling existing drill fences from all traverses but so far no economic grade
and test partially tested geophysics trends. has been encountered.
Better results from MM and MC Zone included:
At Djimbake (south-western extension of the Gold mineralisation and anomalism in drill
FRC1070 11.35m @ 3.50g/t Au from 397.5m
including 6.5m @ 5.02g/t Au Tankoro resource area) detailed geology and chips, and observed in artisanal workings,
regolith mapping, associated with rock-chip is typically associated with quartz veins in
FRC1075 6.86m @ 6.83g/t Au from 173.15m
including 2m @ 18.8g/t Au, and and termite mound sampling, was carried out sheared siltstone and sandstone units intruded
3.35m @ 8.17g/t Au from 236.5m to assist with the interpretation of the soil and by interpreted quartz-feldspar porphyries, with
FRC1076 3.2m @ 22.5g/t Au from 231m, recent drilling data. The 2018 programme will fresher drill chips showing carbonate and
FRC1083A 3.5m @ 3.79g/t Au from 406.5m consist of follow-up AC and RC drilling to test silica-sericite alteration. Q4 2017 field activity
(including 1m @ 8.75g/t Au), the continuity of the mineralisation along strike mostly focused on the 5 kilometre long Yankadi
1.85m @ 8.03g/t Au from 429.85m and at depth. zone which represents the best continuity of
and 1.05m @ 5.19g/t Au from 504m; gold mineralisation and hydrothermal alteration
FRC1076 6m @ 11.9g/t Au from 231m,
On the Ben potential new mineralised trend,
along the corridor.
6.7m @ 3.80g/t Au from 240.8m located west of the resource area, detailed
(including 4m @ 6.12g/t Au) mapping and rock-chip and termite mound Detailed geology and regolith mapping,
Phantom East FRC1081 – 1.85m @ 6.83g/t Au sampling showed the presence of significant associated with rock-chip and termite mound
from 173.65m; hydrothermal alteration associated with strong sampling, confirmed the presence of strong
Phantom East FRC1053RE1 – 5.5m @ 4.88g/t Au foliation. The 2018 programme will consist of hydrothermal alteration, prospective cross-
from 120m and 9m @ 4.85g/t Au gradient array induced polarisation geophysical cutting structures and significant artisanal
from 129.5m,
surveys, additional soil sampling and following mining workings. The 2018 programme will
Phantom FRC1088 – 2.45m @ 2.42g/t Au AC drilling. consist of gradient array induced polarisation
from 145.4m,
geophysical surveys, AC, RC and diamond
Phantom West FRC1091 – 4.25m @ 2.12g/t Au drilling. The aim of the programme is to
from 248.45m.
confirm the continuity of the mineralisation.
Tankoro Southwest Extension
AC drilling was completed across multiple
IP-geophysical and gold-soil geochemical
targets on the southwest extensions of the
Tankoro resource trend, known as the Djimbake
area. The drilling was following up anomalous
AC drill results from 2016, testing the southern
extension of the Kenobi Trend, and testing for
new mineralised zones. Assay results were
encouraging and included:
4m @ 1.46g/t Au 10m @ 1.73g/t Au
8m @ 1.19g/t Au 4m @ 1.17g/t Au
8m @ 2.57g/t Au 8m @ 4.25g/t Au
6m @ 1.33g/t Au 6m @ 1.99g/t Au

40 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Gold anomalism in the AC drilling occurs
in weathered and altered sediments and

PERFORMANCE REVIEW
porphyritic intrusive rocks with observed
alteration being carbonate, sericite and
kaolinite; minor quartz veining was also
observed co-incident with some better zones
of gold anomalism. Planned follow-up drilling
includes infill and step-out AC traverses as
well as some RC and diamond core drilling to
determine the significance of the shallow oxide
gold mineralisation and orientation/controls
in fresh rock.
Central Houndé Joint Venture – current ownership
51%, potential to earn 80%
Surface geochemical sampling undertaken has
identified several very encouraging zones of
gold anomalism coincident with the interpreted
NE-trending Legue-Bongui structural corridor,
including an 8km x 2km anomalous gold zone.
Additional interpretative work has identified
35 targets associated with mapped alteration,
artisanal sites, mineralised rock chips and/or
pathfinder geochemistry warranting follow-up.
During mapping a number of west-north west The exploration programme for the Central programmes. As a result of this targeting
trending mineralised structures were identified Houndé project in 2018 comprises 11,500 exercise we delineated 28 targets across the
in the Legue NW Corridor, and rock chips taken metres of AC drilling. Elements of the drilling Pinarello project area, and we commenced
along these structures returned a number of will be converted to RC drilling if the regolith field validation, geological mapping and further
significant results. In total 21 of 49 rock chip profile is stripped. Additional geology and surface sampling programmes on priority
samples returned assays >0.1g/t up to 77.4g/t regolith mapping, soil sampling and gradient target areas.
gold, including assays of 5.95g/t, 19.1g/t, array induced polarisation geophysical surveys
A total of 1,073 soil samples, 23,089 metres
28.1g/t, 62.8g/t and 77.4g/t. The anomalous are also comprised in the plan. The aim of the
of AC drilling and 6,401 metres of RC drilling
rock chip samples are associated with sheared programme is to advance targets to drill testing
have been completed during 2017. Results from
mafic volcanic rocks and boudinaged quartz phase (Legue-Bongui Corridor and Ouéré)
aircore drilling along the Tangalobe and Tankoro
vein zones. and to delineate new exploration targets.
Corridor South is considered positive with
RC drilling was completed in the Legue-Bongui Pinarello & Konkolikan Joint Venture better results of:
Corridor to follow-up best results from previous (Canyon Resources Limited)
3m @ 0.77g/t
drilling. 21 RC holes were drilled for an During 2017 we have earned 75% equity
aggregate of 2,797 metres. Best results are: in the project and we have therefore entered 3m @ 0.72g/t Au
the contributory/dilution phase of the JV 4m @ 1.64g/t Au
CHRC00050 6m @ 0.57g/t Au from 80m,
including 2m @ 1.19g/t Au; 2m @ agreement. Canyon Resources, our joint 2m @ 6.0g/t Au
1.83 g/t Au from 95m and 2m from venture partner, has elected to dilute, and the 6.0m @ 1.18 g/t Au
1.83g/t Au, including 1m @ 2.47g/t current programmes will increase Acacia’s 8m @ 0.52g/t Au
Au (ended in mineralisation) equity to approximately 89%.
CHRC00051 7m @ 0,97g/t Au from 144m, Mineralisation is mostly associated with quartz
including 3m @ 1.88g/t Au Surface geochemical sampling undertaken veins, oxidised sulphides and haematite.
CHRC00052 12m @ 1.40 g/t Au from 59 m, over the past two years has identified several
Results from RC drilling were mixed with broad
including 3m @ 2.60g/t Au from 66m very encouraging zones of gold anomalism
and 1m @ 4.03g/t from 67m zones of gold anomalism and narrow higher
coincident with the interpreted structural
and 13m @ 0.69g/t Au from 87m grade zones intersected at the Gaghny Prospect
corridors, magnetic features and surface IP
including 7m @ 1g/t Au from 82m whilst hole PIRC0039 on the northern Pinarello
geophysical anomalies. During the quarter
CHRC00054 16m @ 0.51g/t Au from 61m licence following up the projected extension of
we completed a structural targeting exercise,
including 5m @ 1.01g/t Au from 77m the Tankoro Trend intersected 6m @ 11.1g/t Au
reviewed the surface gold anomalies from
CHRC00056 1m @ 1.58g/t Au from 7m. from 28m, including 2m @ 32.4g/t Au from
soil sampling, and undertook multi-element
28m. An infill soil sampling programme was
geochemical analysis, using a portable XRF,
completed in Q4 on the Niofera licence.
of all samples from the regional soil sampling

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 41

OPERATING REVIEW CONTINUED

A total of 1,252 samples were collected with Processing and interpretation of the results and surface gold-in-soil anomalism have been
processing and interpretation of the results being undertaken in Q1 2018. identified. RC drilling commenced in mid-March
being undertaken in early 2018. 2017 aimed at testing around 18 targets in
The exploration budget for the Frontier project
total with single drill fences to test for gold
The exploration plan for the Pinarello and in 2018 comprises 6,000 metres of AC drilling.
mineralisation and to understand the geology
Konkolikan project in 2018 comprises 30,000 Part of the drilling will be converted to RC
and alteration of each target in order to rank
metres of aircore drilling. Part of the drilling drilling if the regolith profile is stripped. The
these targets moving forward. RC drilling has
will be converted to RC drilling if the regolith aim of the programme is to delineate new
returned positive results, from 8 of 13 gold
profile is stripped. The aim of the programme exploration targets.
anomalies, including:
is to push more advanced targets to
target-testing phase (Tankoro Corridor South,
Mali
4m @ 18.7g/t Au
In Mali we continued to delineate surface
Tangolobe and Gagnhy) and to delineate 4m @ 5.62g/t Au
gold-in-soil anomalies, already defined in
new exploration targets. 13m @ 1.11g/t Au
late 2016, through mapping and surface IP
Frontier JV (Metallor SA) – earning 100% through geophysical surveys, and commenced drilling 15m @ 0.50g/t Au
option payments programmes on the resultant targets. At the 13m @ 0.50g/t Au
Regional regolith and geological mapping has same time, we continued to build our land 7m @ 1.01g/t Au
been completed for both licences (Badoura position in the Senegal-Mali Shear Zone
Given the discovery history of several >3Moz
and Kanra). A regional 800m x 400m (“SMSZ”) with the grant of a further two land
deposits in the SMSZ, these results and the
reconnaissance BLEG soil sampling programme, packages, one under joint venture (Bourdala)
associated alteration on essentially single
combined with termite mound, rock chip and and the other 100% Acacia (Gourbassi);
RC fences, across large-scale gold-in-soil
quartz lag sampling programmes, has been Acacia now holds five exploration permits
anomalies, can be considered very significant
completed. This work has identified a number covering 192km2 on the SMSZ.
and warrant follow-up drilling.
of significant large scale gold-in-soil anomalies
Tintinba-Bane Project – earning 95% through
(soils up to 3g/t Au). A 200m x 200m infill RC drilling continued on selected targets
option payments
commenced but has been completed. A total in Q4 2017 with 42 holes for 4,987 metres.
The Tintinba-Bane Project consists of three
of 6,035 soil, 44 rock chip and 1,043 termite Drilling started on 26 November and ended
permits covering approximately 150km2. These
samples were collected during 2017. In addition on 5 January. The aim of the drilling was to
properties are located within the Kenieba Inlier
to this a detailed structural magnetic follow-up best mineralised intersections from
of Western Mali, along the world class SMSZ,
interpretation and targeting exercise was done. H1 2017 drilling (Zadie and Manjro targets)
which hosts more than 50 million ounces of
This interpretation integrated geological and and to delineate new targets (Karité, Tribala
gold endowment. During the year, a ground-
regolith mapping, Landsat, Aster and recently and Sounsou). Best results are below with
based gradient array induced polarisation
acquired high resolution airborne magnetic and parts of the assays still outstanding at
geophysical survey was completed (31 line km)
radiometric data. A number of high quality year-end:
and interpreted. Results from IP, soils, drilling
targets have been selected for reconnaissance
and mapped and interpreted geology have 2m @ 2.14g/t Au
AC drilling. An infill soil sampling programme was
been used to refine existing and define new 4m @ 1.44g/t Au
completed in Q4 2017 on the Badoura licence.
targets for drill testing. At least 25 targets 3m @ 0.95g/t Au
A total of 1,013 samples were collected.
with co-incident IP chargeability, resistivity,
1m @ 5.51g/t Au
1m @ 5.51g/t Au
Portable XRF analysis of soil and drilling
samples was completed in Q4 2017. The
interpretation of the results showed that
gold anomalies sit on or close to different
“lineaments” (regional trends, splays and
possibly conjugate shears). The exploration
budget for the Tintinba-Bane project in 2018
comprises 1,500m of diamond drilling and
10,000 metres of RC drilling. The programme
will be revised when all results from the Q4
2017 drilling is received and interpreted.
The aim of the programme is to push the
best targets (Manjor, Zadie) to advanced
exploration stage and to continue testing
other targets (Néré, Goni, Karité, Tribala,
Sounsou and Bouyagui).

42 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Bourdala JV – earning 100% through
option payments

PERFORMANCE REVIEW
The Bourdala JV is a joint venture with a local
company over the Bou Bou licence located
approximately 15km from the centroid of the
Tintinba JV further to the south. The property
is located within the central portion of the
Kedougou-Kenieba Inlier and just to the east
of the highly prospective SMSZ. We can earn
up to 100% of the project through a series of
staged payments over a period of 36 months.
During 2017, six RC holes for 800 metres
were completed across the Bourdala Artisanal
Prospect on the Bou Bou licence. These
returned anomalous results including:
BORC005: 64m @ 0.23g/t from 10m,
BORC004: 26m @ 0.31g/t from 72m and 26m
@ 0.58g/t from 104m. These results are
encouraging given that the results occur in
consecutive holes on the drill traverse and
define a 50 metre wide zone of gold anomalism,
within a 2km long artisanal site.
The exploration plan for the Bourdala JV in
2018 comprises 1,200m of reverse circulation Tanzania OreCorp and Acacia continue to review
drilling, 1,500m of air-core drilling and 2,000 Nyanzaga Joint Venture and seek advice on the impact of the new
soil samples. The aim of the programme is to During the period, OreCorp Limited published legislation in Tanzania on the Nyanzaga Project.
follow-up the mineralised intersects from H1 the results of the Pre-Feasibility Study (“PFS”) OreCorp has published an analysis of their
2017 drilling and to generate new targets. on the Nyanzaga Project. The PFS, led by preliminary view of the impact of the legislation
Lycopodium Minerals Pty Ltd of Perth, Western which can be found on their website
Gourbassi Est – 100% Acacia (ABG Exploration
Australia, delivered an optimal development (www.orecorp.com.au) and indicates that the
Mali SARL)
scenario of a 4Mtpa concurrent open pit (“OP”) legislation may potentially have an adverse
During H1 2017, the Gourbassi Est convention
and underground (“UG”) operation for pre- effect on the Nyanzaga Project. As a result we
was signed and arête for the licence was
production capital costs estimate of US$287 have recorded an impairment charge of US$12
received. The licence is located immediately
million, which includes a US$33 million million for the Nyanzaga Project to reflect the
west of the Tintinba-Bane Project in the central
contingency. The concurrent mining schedule current estimate for the potential impact of the
SMSZ area of the Kedougou-Kenieba Inlier.
significantly reduced the low grade stockpiling new mining laws on the carrying value of the
The property is located to the west of the SMSZ
scenario considered in the Scoping Study and project, which now stands at US$34 million.
in an area dominated by footway splays to the
increased the open pit contained ounces and
SMSZ. The programme for H2 2017 was to
life of mine (“LOM”) average mineralised
review the historic data and complete mapping
material grade processed from 1.9 g/t gold in
and surface sampling programmes.
the Scoping Study to 2.0 g/t (+5%). Based on
The exploration plan for the Gourbassi project the PFS, the Project is expected to deliver an
in 2018 comprises 1,500m of air-core drilling average gold production of 213koz per annum
and 3,000 soil samples. The aim of the over a 12 year LOM, peaking at 249koz in Year
programme is to generate exploration targets. 3 and totalling approximately 2.56Moz of gold
produced over the LOM. The AISC and AIC are
estimated to be US$838/oz and US$858/oz
respectively over the LOM (excluding initial
capital expenditure). Acacia and OreCorp have
agreed the scope of the Definitive Feasibility
Study (“DFS”) and this commenced in 2017.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 43

 FINANCIAL REVIEW

Taking actions to preserve

our balance sheet
“From a finance perspective
our key focus was on cost
discipline and managing the
cash outflow resulting from
the lack of concentrate sales
in the year.”

JACO MARITZ Revenue of US$751.5 million was US$302.0 million lower than 2016 driven by the 27% decrease
CHIEF FINANCIAL OFFICER in sales volumes mainly as a result of our inability to sell gold/copper concentrate which deferred
approximately US$264.0 million in gross revenue and reduced production at Bulyanhulu due to
the transition to reduced operations in Q4 2017. This was partially offset by approximately
INTRODUCTION US$11.3 million due to the higher gold price compared to 2016.
Cash costs decreased to US$587 per ounce sold in 2017 from US$640 per ounce sold in 2016
The impact of the gold/copper despite the lower production base; lower cash costs were driven by lower G&A costs, lower
concentrate export ban is consumable and maintenance costs, lower sales related costs, lower fuel costs, lower external
evident in our financial services costs, higher realised gains on copper hedges and lower labour costs, partly offset by the
lower production base, lower co-product revenue and lower capitalisation of development costs.
performance, and most
AISC of US$875 per ounce sold was 9% lower than in 2016 (US$958 per ounce sold), mainly due to
notably in cash flow generation. lower capitalised development cost, lower sustaining capital expenditure, the share-based payment
However, in an effort to credit driven by the decrease in the Acacia share price and lower cash costs, partly offset by the
impact of lower sales volumes on individual cost items.
minimise the impact, we
have further increased our As a result of the above and in combination with higher corporate administration charges driven by
higher legal costs due to the concentrate export ban and outstanding tax matters, EBITDA decreased
focus on cost control, cash by 38% to US$257.2 million.
flow management and capital Gross impairment charges of US$850.2 million (net US$644.3 million) following the carrying value
allocation. The key aspects review conducted in light of changes in the operating environment in Tanzania, and by reference to
the key terms of the framework announcements made by Barrick and by the GoT in October 2017.
of our financial performance This is made up of US$838.0 million relating to Bulyanhulu and US$12.2 million relating to Nyanzaga.
for 2017 are summarised
Tax credit of US$2.3 million compared to the prior year expense of US$147.1 million. The current year
opposite, and should be charge is driven by additional provisions raised for uncertain tax positions of US$172 million based
read in conjunction with on estimates of the impact of a comprehensive settlement reflecting the key terms of the framework
announcements by Barrick and the GoT, offset by the deferred tax impact relating to impairment
the audited consolidated charges noted above of US$205.9 million.
financial statements. As a result of the above, the net loss amounted to US$707.4 million, compared to net income
in 2016 of US$94.4 million. This amounted to a net loss per share of US172.5 cents.
Adjusted net earnings of US$146.2 million were US$14.8 million lower than 2016. Adjusted earnings
per share amounted to US35.7 cents, down from US39.2 cents in 2016.
Operational cash outflows of US$23.0 million compared to US$318.0 million of inflows in 2016,
primarily as a result of lower revenue as discussed above, unfavourable working capital outflows
due to a build-up of gold inventory and supplies, an increase in the indirect taxes receivable, and
payments of US$37.9 million relating to provisional 2017 and final 2016 corporate tax.

44 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 Relevant pages

p62
Governance overview

The following review provides a detailed relating to gold/copper concentrate. The 2017
Revenue
analysis of our consolidated results for the average realised copper price of US$2.98 per
(US$ million)

PERFORMANCE REVIEW
12 months ended 31 December 2017 and the pound compared favourably to that of 2016
main factors affecting financial performance. (US$2.21 per pound), and was mainly driven
It should be read in conjunction with the by the higher market price for copper. The 1,053.5
929.0 930.2
audited consolidated financial statements and benefit of a higher copper price is however 868.1
751.5
accompanying notes on pages 116 to 152, not fully reflected in 2017 revenues due to
which have been prepared in accordance with the inability to sell copper.
International Financial Reporting Standards as
The impact of the ban during the year has
adopted for use in the European Union (“IFRS”).
resulted in a build-up of approximately 185,800
Revenue ounces of gold contained in unsold concentrate. 2013 2014 2015 2016 2017
Revenue for 2017 of US$751.5 million was In addition, we have approximately 12.1 million
US$302.0 million lower than 2016 due to a pounds of copper and 158,900 ounces of silver
All-in sustaining cost1
27% decrease in gold sales volumes from contained in unsold concentrate. If these had
(US$/oz)
Bulyanhulu and Buzwagi (223koz), primarily been sold, gross revenue and cash flow would
driven by the ban on export of mineral have increased by approximately US$264.0
concentrates from early March 2017, and million and US$240.0 million respectively based
1,346
reduced production at Bulyanhulu due to the on average spot prices in the year.
1,105 1,112
transition to reduced operations in Q4 2017,
Cost of sales 958
875
partly offset by a 2% increase in the average
Cost of sales was US$458.4 million for
net realised gold price from US$1,240 per
2017, representing a decrease of 37% on
ounce sold in 2016 to US$1,260/oz in 2017.
the prior year period (US$727.1 million).
The net realised gold price for the year of The key aspects impacting the cost of sales 2013 2014 2015 2016 2017
US$1,260/oz was US$3/oz higher than the for the year include a 37% reduction in direct
average market price of US$1,257/oz due to the mining costs, primarily driven by higher
EBITDA1
impact of gold price protection measures in the capitalised mining costs including a credit
(US$ million)
form of put options entered into in September of approximately US$94.2 million relating
2017 at a cost of US$2.7 million. These options to a build-up of finished gold ounces,
415.4
had a strike price of US$1,300/oz with full combined with lower activity at Bulyanhulu
exposure to gold prices above that level. due to the move to reduced operations,
lower depreciation and amortisation costs 257.2
Included in total revenue is co-product revenue 240.4 252.7
as a result of the lower production base at
of US$7.2 million for the 2017 year, 82% lower 175.0
Bulyanhulu and lower sales related cost due
than the prior year (US$39.1 million). This was
to lower sales volumes, partly offset by higher
as a result of the lack of concentrate sales
realised gains on gold put options. 2013 2014 2015 2016 2017
from March 2017 as a result of the export ban

1 These are non-IFRS measures.

The table below provides a breakdown of cost of sales: Refer to page 171 for definitions.
Year ended
(US$’000) 31 December
2017 2016
Cost of sales
Direct mining costs1 299,591 479,022
Third-party smelting and refining fees 9,675 25,588
Realised losses on economic hedges 743 9,619
Realised (gains)/losses on gold hedges (2,693) 1,818
Royalty expense 44,930 47,237
Depreciation and amortisation2 106,201 163,796
Total 458,447 727,080

1 Net of Bulyanhulu reduced operations cost (ROP).

2 Depreciation and amortisation includes credits due to the cost build-up in inventory US$26.9 million for 2017
(2016: US$2.6 million).

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 45

FINANCIAL REVIEW CONTINUED

A detailed breakdown of direct mining expenses is shown in the table below: Central costs
Total central costs amounted to US$18.7 million for 2017, a 64% decrease
on 2016 (US$51.8 million) mainly driven by a non-cash share-based
Year ended payment revaluation credit as a result of the lower share price and share
(US$’000) 31 December
price performance compared to 2016, specifically when compared to our
2017 2016
peers and the global mining index, impacting on the valuation of future
Direct mining costs
Labour 83,238 90,013
share-based payment liabilities to employees. Acacia’s share price
Energy and fuel 80,461 89,757 decreased by approximately 47% compared to December 2016. This was
Consumables 85,698 105,152 partly offset by a 23% increase in corporate administration costs as a
Maintenance 92,603 111,451 result of higher legal costs amounting to approximately US$10 million
Contracted services 124,592 133,734 relating to the concentrate export ban and other matters.
General administration costs 77,546 86,761 Year ended
Gross direct mining costs 544,138 616,868 (US$’000) 31 December
Bulyanhulu reduced operations cost1 (14,227) – 2017 2016
Capitalised mining costs (230,320) (137,846) Corporate administration 26,913 21,895
Total direct mining costs 299,591 479,022 Share-based payments (8,236) 29,929
Total central costs 18,677 51,824
1 Includes non-sustaining costs relating to Bulyanhulu reduced operations cost (ROP).

Gross direct mining costs of US$544.1 million for 2017 were 12% Exploration and evaluation costs
lower than 2016 (US$616.9 million). The overall decrease was driven Exploration and evaluation costs of US$24.8 million were incurred
by the following: in 2017, marginally higher than the US$24.0 million spent in 2016.
The key focus areas for the year were greenfield exploration programmes
––A 19% decrease in consumable costs mainly driven by lower usage at in West Kenya amounting to US$12.9 million and greenfield exploration
Bulyanhulu and improved consumable unit costing and usage programmes in West Africa amounting to US$10.3 million.
optimisation at other sites;
––A 17% decrease in maintenance costs mainly at Bulyanhulu due to the
Corporate social responsibility expenses
Corporate social responsibility costs incurred in 2017 amounted to
transition to reduced operations in combination with initiatives to
US$8.2 million compared to the prior year of US$10.7 million. Corporate
improve planned maintenance activities;
social responsibility overheads and central initiatives in 2017 amounted
––A 11% decrease in G&A costs driven by lower stock write downs, lower to US$3.6 million and were lower than 2016. In addition, general
logistic and warehousing costs and lower camp costs at Bulyanhulu as community projects funded from the Acacia Maendeleo Fund amounted
well as lower aviation costs at all sites; to US$2.9 million, which was US$3.2 million lower than in 2016,
––A 10% decrease in energy and fuel costs mainly driven by lower usage driven by the timing of projects and the number of qualifying
at Bulyanhulu and improved supply from Tanesco; initiatives identified.
––A 8% decrease in labour costs mainly at Bulyanhulu due to a decrease Impairment charges
in headcount as part of the transition to reduced operations; and Acacia has identified a number of potential triggers for impairment
––A 7% decrease in contracted services mainly at Bulyanhulu due to the testing of the carrying value of its assets, including but not limited to,
transition to reduced operations resulting in the halting of underground the challenges experienced in the operating environment in Tanzania,
mining and development activities. the announcement of new legislation by the GoT in respect of the natural
resources sector and Acacia’s decision to reduce operations at
Capitalised direct mining costs, consisting of capitalised development
Bulyanhulu, As a result, Acacia has undertaken a carrying value review
costs and investment in inventory, is made up as follows:
of the Group’s affected Cash Generating Units (CGUs).
Year ended
(US$’000) 31 December Acacia considers that in accordance with applicable accounting
2017 2016 standards, carrying values for the CGUs should now be calculated by
Capitalised direct mining costs reference to the key terms of the framework announcements made by
Capitalised development costs (89,388) (119,905) Barrick and by the GoT in October 2017, with additional discounting to
Investment in inventory (140,932) (17,941) reflect the uncertainty around the final terms of any comprehensive
Total capitalised direct mining costs (230,320) (137,846) settlement that might be reached.
Capitalised direct mining costs were 67% higher than 2016, primarily driven The review demonstrates a potential reduction in value at all three assets,
by a build-up of gold ounces in concentrate at Bulyanhulu and Buzwagi but Buzwagi and North Mara have sufficient headroom above their current
resulting in an investment in inventory of US$140.9 million. The decrease carrying values. At Bulyanhulu, however, the impact of the changes was
in capitalised development costs mainly relates to halting of development greater, due to the long life of the mine and the delay to a return to positive
activities at Bulyanhulu following the transition to reduced operations, and cash generation due to the move to reduced operations. The review
at North Mara, due to a decrease in capitalised stripping relating to the resulted in a net impairment of US$632 million for Bulyanhulu, which
Nyabirama Stage 4 cutback and lower underground waste development. includes pre-tax write-downs of US$122 million for goodwill and
US$30 million for supplies inventory (2016: no impairment). In addition,

46 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

we have recorded an impairment charge of US$12 million for the Nyanzaga to date profitability. This brings total provisions for Acacia’s uncertain
Project to reflect the impact of the new mining laws on the carrying value tax positions to US$300 million. The tax expense for 2016 of US$147.1

PERFORMANCE REVIEW
of the project, which now stands at US$34 million. On a gross basis, and million included US$69.9 million relating to uncertain tax positions raised
before taking into account the impact of a reduced asset base on deferred for historical tax disputes. The effective tax rate in 2017 amounted to
tax liabilities, the total impairment charge amounted to US$850 million. 0.4% compared to 61% in 2016, as a result of the above.
Other charges During 2017, we made provisional corporate tax payments of US$34.6
Other charges in 2017 amounted to US$90.4 million, compared to million relating to North Mara, as well as a US$3.3 million final corporate
an income of US$11.6 million in 2016. The main contributors include tax payment relating to 2016 final tax assessments. These provisional
Bulyanhulu non sustaining costs (US$13.9 million), Bulyanhulu stock and final corporate tax payments have been offset against the indirect
obsolescence (US$7.5 million) and Bulyanhulu contractor exit and tax receivable covered under the Memorandum of Settlement entered
demobilisation cost (US$4.9 million). Retrenchment costs of into with the Tanzanian Government in 2011, and as a result, were not
US$25.1 million mainly relating to Bulyanhulu reduced operations paid in cash. In addition, during 2017 we have also made a corporate
(US$16.9 million), discounting of indirect taxes US$13.3 million, legal tax deposit payment of US$9.5 million relating to an advance payment
costs of US$14.4 million mainly relating to the concentrate export ban relating to a dispute raised on claimed historical North Mara taxes,
and other matters, once-off legal settlements of US$5.0 million relating which was paid in cash.
to the MDM settlement, foreign exchange losses of US$2.7 million and
project development costs of US$1.5 million. The charges were partly
Net earnings and earnings per share
As a result of the factors discussed above, the net loss for 2017 was
offset by income of US$1.8 million generated through the sale of a
US$707.4 million, against the prior year earnings of US$94.9 million.
mineral royalty previously held by Acacia and the Houndé royalty income
received of US$1.6 million. The loss per share for 2017 amounted to US172.5 cents, a decrease of
US195.7 cents from the prior year earnings per share of US23.2 cents.
All costs not classified as on-going operating costs were allocated to
The decrease was driven by the lower earnings, with no change in the
the new cost category called Reduced Operations Costs (“ROP”) and will
underlying issued shares.
be included in other charges, and do not form part of AISC for Bulyanhulu
or the Group (US$ 24.8 million). The costs reallocated to reduced Adjusted net earnings and adjusted earnings per share
operations include all underground mining costs and processing costs Adjusted net earnings were US$146.2 million compared to US$161.0
as well as site overheads such as shift transportation, health and million in 2016. Net earnings as described above have been adjusted
safety and environmental costs, camp cost and security costs were for the impact of items such as impairment charges, prior year tax
systematically reallocated based on headcounts. provisions, discounting of indirect tax receivables, restructuring costs,
insurance proceeds, legal settlements as well as Bulyanhulu reduced
Finance expense and income operations cost. Refer to page 172 for reconciliation between
Finance expense of US$12.4 million for 2017 was 12% higher than 2016
net profit and adjusted net earnings.
(US$11.0 million). The key components were borrowing costs relating to
the Bulyanhulu CIL facility (US$2.9 million) which were lower than the Adjusted earnings per share for 2017 amounted to US35.7 cents, a decrease
prior year due to a lower outstanding facility following repayments, higher of US3.5 cents from 2016 adjusted earnings per share of US39.2 cents.
accretion expenses of US$3.4 million relating to the discounting of the
environmental reclamation liability, US$2.3 million relating to the
Financial position
Acacia had cash and cash equivalents on hand of US$80.5 million as
servicing of the US$150 million undrawn revolving credit facility and the
at 31 December 2017 (US$317.8 million as at 31 December 2016).
US$2.1 million premium paid on gold put options. Other costs include
The Group’s cash and cash equivalents are with counterparties whom
bank charges and interest on finance leases US$0.2 million.
the Group considers to have an appropriate credit rating. Location of
Finance income relates predominantly to interest charged on non-current credit risk is determined by physical location of the bank branch or
receivables and interest received on money market funds. Refer to note counterparty. Investments are held mainly in United States dollars,
11 of the audited consolidated financial statements for details. with cash and cash equivalents in other foreign currencies maintained
for operational requirements.
Taxation matters
The total income tax credit of US$2.3 million is lower than the prior year During 2013, a US$142 million facility (“Facility”) was put in place to
tax expense of US$147.1 million. The current year tax credit comprised fund the bulk of the costs of the construction of the Bulyanhulu tailings
deferred tax credits of US$209.9 million (2016: US$55.9 million) driven retreatment project (“Project”). The Facility is collateralised by the
primarily by the tax impact of the impairment charge (US$205.9 million) Project, and has a term of seven years with a spread over LIBOR of 250
which reflects movements in temporary differences, partly offset by basis points. The seven year Facility is repayable in equal instalments
current tax charges of US$207.7 million (2016: US$91.2 million) (bi-annual) over the term of the Facility, after a two year repayment
predominantly made up of the additional tax provisions raised of US$172 holiday period. The interest rate has been fixed at 3.6% through the use
million for uncertain tax positions for the operating companies, based of an interest rate swap. The full facility of US$142 million was drawn
on estimates of the impact of a comprehensive settlement reflecting the in 2013. During 2017, the 4th and 5th repayments amounting to US$28.4
key terms of the framework announcements by Barrick and the GoT and million in total were made. At 31 December 2017, the outstanding capital
current year income tax for North Mara of US$35.7 million driven by year balance was US$71.0 million (31 December 2016: US$99.4 million).

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 47

FINANCIAL REVIEW CONTINUED

As at 31 December 2017 (and to date), the existing revolving credit facility The working capital outflow relates to a net increase in total inventories
of US$150 million, which runs until November 2019, remained undrawn. on hand of US$172.2 million driven by the inability to export concentrate, a
In common with borrowing arrangements of this nature the facility gross increase in indirect tax receivables of approximately US$51.7 million,
includes various covenants as well as material adverse effect clauses. provisional corporate tax paid of US$34.6 million relating to North Mara
and a final corporate tax payment relating to North Mara’s 2016 assessed
The net book value of property, plant and equipment decreased from
income tax of US$3.3 million. These provisional and final corporate tax
US$1.44 billion as at 31 December 2016 to US$0.77 billion as at
payments have been offset against the indirect tax receivable covered
31 December 2017 as a result of an impairment charge booked in 2017
under the Memorandum of Settlement entered into with the Tanzanian
of US$686.4 million. The main capital expenditure drivers have been
Government in 2011. Other items included in the working capital outflows
explained above, and have been offset by depreciation charges of
included a corporate tax deposit relating to North Mara of US$9.5 million.
US$126.0 million. Refer to note 19 of the audited consolidated financial
statements for further details. Cash flow used in investing activities was US$151.7 million for 2017,
a decrease of 18% when compared to 2016 (US$185.2 million), driven
The current portion of inventories increased from US$184.3 million as
by lower capitalised development at both North Mara and Bulyanhulu
at 31 December 2016 to US$291.9 million as at 31 December 2017.
and lower sustaining capital expenditure at Bulyanhulu and North Mara.
This was due to an increase of US$124.7 million in finished goods,
mainly relating to gold in concentrate. Total gold ounces on hand of A breakdown of total capital and other investing capital activities for
192,290 ounces as at 31 December 2017 comprised 185,772 ounces 2017 is provided below:
of gold in unsold concentrate and 6,518 ounces of gold in doré. Year ended
(US$’000) 31 December
Total indirect tax receivables increased from US$136.4 million as at
2017 2016
31 December 2016 to US$170.7 million as at 31 December 2017.
Sustaining capital (45,226) (51,291)
The increase was mainly due to a build-up in VAT receivable as no VAT
Capitalised development (100,609) (138,691)
refunds were received during 2017, with all submitted VAT returns still
Expansionary capital (11,573) (3,660)
the subject of on-going audits by the Tanzanian Revenue Authority. Our
Total cash capital (157,408) (193,643)
gross increase in receivables, before the corporate tax prepayment
Non-current asset movement1 5,697 8,480
offset, amounted to approximately US$89.5 million. This was partly
Cash used in investing activities (151,711) (185,163)
offset by provisional and final corporate tax payments of US$37.9 million,
discounting of indirect taxes of US$13.3 million and revaluation losses
Capital expenditure reconciliation:
with the net increase in receivables being US$47.6 million.
Total cash capital 157,408 193,643
The net deferred tax position was a liability of US$140.0 million as at Land purchases 1,637 4,759
31 December 2016 compared to the asset of US$70.0 million as at Movement in capital accruals (9,669 ) (2,504)
31 December 2017. This was mainly as a result of the US$205.9 million Capital expenditure 149,376 195,898
tax effect of the impairment charges.
Land purchases classified as long-term prepayments (1,637) (4,759)
Net assets decreased from US$1.86 billion as at 31 December 2016 Non-cash rehabilitation asset adjustment (9,087) 21,955
to US$1.12 billion as at 31 December 2017. The decrease reflects the Total capital expenditure per segment note 138,652 213,094
current year loss of US$707.4 million and the payment of the final 2016
1 Non-current asset movements relates to the movement in Tanzania Government
dividend of US$34.4 million. receivables, other long-term assets and the sale of a mineral royalty.

Cash flow generation and capital management Sustaining capital

Cash flow Sustaining capital expenditure includes investment in fixed equipment
Year ended
(US$’000) 31 December
and mining infrastructure at Bulyanhulu (US$9.0 million) and at
2017 2016
North Mara (US$13.7 million), and investment in mobile equipment
Cash (used in)/ generated from operating activities and component change-outs at both North Mara and Bulyanhulu
(22,972) 317,976
(US$8.1 million). In addition, US$1.6 million was spent on land
Cash used in investing activities (151,711) (185,163)
acquisitions primarily around the Nyabirama open pit. During the year,
Cash used in financing activities (62,785) (48,032)
capital accruals from December 2016 of US$10.0 million were paid.
(Decrease)/ increase in cash (237,468) 84,781
Foreign exchange difference on cash 190 (258) Capitalised development
Opening cash balance 317,791 233,268 Capitalised development includes Bulyanhulu capitalised underground
Closing cash balance 80,513 317,791 development costs (US$58.8 million), North Mara capitalised stripping costs
(US$45.4 million) and capitalised underground development (US$15.7 million).
Cash flow from operating activities was an outflow of US$23.0 million
for 2017, a decrease of US$340.9 million from 2016 (US$318.0 million Expansionary capital
inflow). The decrease relates to unfavourable working capital outflows of Expansionary capital expenditure consisted mainly of capitalised expansion
US$313.0 million compared to unfavourable outflows of US$58.5 million drilling at North Mara of US$10.3 million mainly relating to drilling performed
in 2016 combined with the impact of the inability to export and sell our as part of Gokona resource and reserve development (US$6.7 million) as
concentrate on operating cash flow of approximately US$233.0 million. well as initial works on Nyabirama underground studies (US$3.1 million) and
US$1.2 million relating to the Bulyanhulu optimisation study.

48 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Non-cash capital a provision for obsolescence on consumables inventory and the impact
Non-cash capital was a negative US$9.1 million and consisted mainly of discounting the non-current element of the indirect tax receivable;

PERFORMANCE REVIEW
of a decrease in capital accruals (US$9.0 million) due to the cancellation ––Recognition of deferred income tax assets, amounts recorded for
of open capital orders as part of transitioning Bulyanhulu to reduced uncertain tax positions, the measurement of income tax expense and
operations and reclamation asset adjustments (US$9.1 million). The indirect taxes;
reclamation adjustments were driven by an update in estimate around
––Determination of the cost incurred in the productive process of ore
closure related retrenchment costs, and a reduction in US risk free rates
stockpiles, gold in process, gold doré/bullion and concentrate, as
which drove a change in discount rates.
well as the associated net realisable value and the split between the
Cash flow used in financing activities for 2017 was US$62.8 million, an long-term and short-term portions;
increase of US$14.8 million from US$48.0 million in 2016. The outflow ––Determination of fair value of derivative instruments;
relates to payment of the final 2016 dividend of US$34.4 million and the
––Determination of fair value of share options and cash-settled share-
payment of the 4th and 5th instalments of the borrowings related to the
based payments;
Bulyanhulu CIL facility totalling US$28.4 million.
––Judgements around the prospect, timing and final terms of any
Dividend comprehensive negotiated settlement that the Company might be able to
Given the negative cash generation through 2017, and in line with our agree with the Government of Tanzania, including by reference to the key
dividend policy, no final dividend has been declared. terms of the framework announcements made in October 2017 by Barrick
Significant judgements in applying accounting policies and the GoT and including judgements around the timing and quantum of any
and key sources of estimation uncertainty cash outflows that might be made in respect of historical tax matters; and
Many of the amounts included in the audited consolidated financial ––Judgements around the timing of Bulyanhulu’s restart and production
statements require management to make judgements and/or estimates. ramp up.
These judgements and estimates are continuously evaluated and are
Going concern
based on management’s experience and best knowledge of the relevant
In assessing the Acacia Group’s going concern status the Directors have
facts and circumstances, but actual results may differ from the amounts
taken into account the impact of the concentrate export ban on on-going
included in the audited consolidated financial statements included in this
operations as well as the following factors and assumptions: the current
Annual Report. Information about such judgements and estimation is
cash position; the latest mine plans, the short-term gold price, and
included in the accounting policies and/or notes to the consolidated
Acacia Group’s capital expenditure and financing plans.
financial statements, and the key areas are summarised below.
In addition, the Directors have considered a range of scenarios around
Areas of judgement and key sources of estimation uncertainty that
the various potential outcomes for the resolution of the current operating
have the most significant effect on the amounts recognised in the
challenges in Tanzania in the circumstances, including the cash flow
audited consolidated financial statements include:
impact of an extended concentrate export ban; and the potential impacts
––Estimates of the quantities of proven and probable gold and of the timing and final terms of any comprehensive settlement which
copper reserves; might be approved by the Company which reflect key terms of the
––Estimates included within the life-of-mine planning such as the framework announcements made by Barrick and the GoT in October
timing and viability of processing of long-term stockpiles; 2017, including the lifting of the concentrate export ban and staged
payments of US$300 million relating to historical tax matters.
––The capitalisation of production stripping costs;
––The capitalisation of exploration and evaluation expenditures; In addition, the Directors have assumed that the Group will not be required
to settle its current outstanding borrowing obligations and will repay these
––Review of goodwill, tangible and intangible assets’ carrying value,
in accordance with the current terms of the relevant agreements. After
the determination of whether a trigger for an impairment review
making appropriate enquiries and considering the uncertainties described
exists, whether these assets are impaired and the measurement of
above, the Directors consider that it is appropriate to adopt the going
impairment charges or reversals, and also includes the judgement
concern basis in preparing the consolidated financial statements however
of reversal of any previously recorded impairment charges;
have concluded that the combination of the above circumstances
––The estimated fair values of Cash Generating Units for impairment tests, represents a material uncertainty that may cast significant doubt on the
including estimates of future costs to produce proven and probable reserves, Group’s ability to continue as a going concern. The consolidated financial
future commodity prices, foreign exchange rates and discount rates; statements do not include any adjustments that would result if the Group
––The estimated useful lives of tangible and long-lived assets and the was unable to continue as a going concern should the assumptions
measurement of depreciation expense; referred to above prove not to be correct.
––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 JACO MARITZ
particular the indirect tax receivables from the Tanzanian Government, CHIEF FINANCIAL OFFICER

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 49

 SUSTAINABILITY REVIEW

Committed
delivery, always

OUR APPROACH
1 2
We continue to develop our
sustainability practices for
the benefit of our stakeholder
group as a whole. We aim to SUSTAINABLE ENVIRONMENT
maintain and improve our social COMMUNITIES
licence to operate through acting
responsibly in relation to our Context Context
––As a long-term partner for Tanzania, ––The Group remains committed
people, the environment and the the Group invests in its local to environmental protection and
communities in which we operate. regions to support the creation minimising harm to our surroundings.
of “Sustainable Communities”. ––Our environmental priorities are
––We are aligned with Tanzania’s under continuous review.
Development Vision 2025 and ––On-going projects to improve
1 regional development plans water reprocessing and reduce
Sustainable including “Kiwanda Changu, Mkoa GHG emissions.
communities Wangu”, (My Industry, My Region).
Achievements
Achievements We recorded a 15% reduction
5
2 We invested US$500,000 to in GHG emissions compared
Security
Environment upgrade Bugarama Health Centre to 2016 levels.
and human
rights in Kakola to a district level hospital.
Our statcom project at
We completed six new libraries, Bulyanhulu resulted in the
providing more than 6,000 books decommissioning of 15 diesel
to local schools and communities. generators at the mine.
4 3 We delivered against majority At Bulyanhulu we recorded a
Safety Employees of legacy infrastructure 16% reduction in water usage.
commitments.
Our upgrade of North Mara’s
We fostered knowledge-sharing water treatment plant meant
in Tanzania’s extractives sector. no water was drawn from the
Mara River during 2017.
Future objectives
The Acacia Group has put in place
Continue to be a partner Future objectives
Community Relations, Community Investment,
for Tanzania and its national Reduce GHG emissions by 2%
Environmental, Human Rights, Responsible
development agenda. in 2018.
Supply Chain, Safety and Health and Security
policies, all of which are available on our  eliver a fresh socio-economic
D Continued reduction of our
website. These policies are in addition to focus, bringing value-add environmental impact.
our Business Ethics Policies, which include services to our infrastructure.
Enhanced water conservation
our Code of Conduct and Anti-Fraud and  ur Sustainable Communities
O through the year.
Anti-Bribery and Anti-Corruption policies, programme will improve market
which are also available on our website: linkages for farmers and small
http://www.acaciamining.com/about-us/ businesses around our mines.
corporate-policies.aspx

50 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 PERFORMANCE REVIEW
3 4 5

EMPLOYEES SAFETY SECURITY AND

HUMAN RIGHTS

Context Context Context

––We have reduced international ––The Group targets zero injuries ––The Group operates its own Human
employees in our workforce by and every person going home Rights Policy and Procedures
85% over last five years. safely every day. alongside voluntary commitments
––Our move to reduced operations ––We operate to the highest of to the VPSHR.
at Bulyanhulu led to a significant safety standards. ––Our approach is in line with the
increase in employee turnover United Nations Guiding Principles
during the year. Achievements on Business and Human Rights
We recorded a 39% improvement (UNGPs).
Achievements in Total Reportable Injury
Tanzanian employees currently Frequency Rate (“TRIFR”) in 2017. Achievements
make up 96.2% of our workforce. Number of Lost Time Injuries We recorded a 20% reduction in
Management team at (“LTI”) decreased from 32 the number of illegal incursions at
Bulyanhulu and Buzwagi now in 2016 to 18 in 2017, a North Mara compared with 2016.
made up of five Tanzanians and 44% reduction. Implemented the
one international employee. High Potential Incidents recommendations of an
Increased percentage decreased by 35% independent Human Rights
of women in our workforce Impact Assessment (HRIA)
We developed an improved safety
to 10% (2016: 8%). conducted at all our mine
culture through hazard reporting,
sites in 2016.
102 staff have completed investigation processes and risk
our Rainbow Leadership assessments. Supported more extensive
programme since 2016. human rights training targeting
Future objectives the Tanzanian police in
Future objectives Continue to target zero injuries. Tarime District.
Continue to reduce the number Focus on contractor controls
of international employees. Future objectives
processes to reduce contractor
Conclude consultations on
Training of Tanzanian staff involvement in safety incidents.
our new Community Grievance
to fill management roles. Progress occupational health and Process in 2018.
Increase overall employment safety initiatives including malaria
Recruitment of a Lead Grievance
numbers in Tanzania once control assessments in the
Officer to oversee and administer
export ban is lifted. workforce and local communities.
the process.
 ontinued review of our safety
C
and security arrangements to
eliminate human rights incidents.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 51

 SUSTAINABILITY REVIEW CONTINUED

We aim to contribute to socio-economic

development in the areas in which we operate
through on-going stakeholder engagement
and participation.
The Group’s direct economic contribution is However, our true economic contribution stamp duties, local service levies and
made up of the economic value we add by is far greater once the wider effects of our environmental levies. Geographically, the
paying our employees, governments, suppliers, presence are considered. These include majority of our taxes are paid in Tanzania,
shareholders, contractors and communities. the indirect effects of people spending being the location of our operating mines.
Our overall direct economic contribution in their wages, governments distributing tax Our net taxation contribution in Tanzania
2017 was US$926 million compared to and royalty revenues, and neighbouring was US$143 million in 2017, compared
US$911 million in 2016, with US$644 million communities using the infrastructure to US$164 million in 2016. The drop was
being contributed to the Tanzanian economy developed for our operations. a result of the inability to export and
directly through local suppliers, employees sell 90% of our concentrate production.
The distribution of Group taxes includes
and taxes.
royalties, indirect taxes (withholding taxes
and non-claimable VAT), payroll taxes (inclusive
of social security payments and other taxes),

2016 Net tax contribution to Tanzania 2017 Net tax contribution to Tanzania
(US$million) (US$million)
22 19
47 45

36
55
40 44

Royalty – Government 47.2 Royalty – Government 44.9

Payroll taxes (including social security) 39.9 Payroll taxes (including social security) 43.7
Corporate income tax – incurred 54.5 Corporate income tax – incurred 35.7
Other taxes 21.8 Other taxes 18.8
Total taxes incurred 163.5 Total taxes incurred 143.1

Distribution of revenues
Direct economic contribution Financing
(US$m) (US$m) 2017
2016

500 800

400 600

300 400

200 200

100 0

0 International Tanzanian Indirect taxes Taxes and Employees, -200 Dividends Available for Interest Repayment
suppliers suppliers not refunded Government net of tax reinvestment payments of borrowing
royalties
Total 2017 926.7 Total 2017 (167.4)
Total 2016 911.3 Total 2016 139.8

52 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

CASE STUDY
DEVELOPING Q Q
TANZANIAN LEADERS How has your role developed since you Why work for Acacia?
joined the Acacia Group?
A
A
Acacia has opened up so many doors for my

PERFORMANCE REVIEW
Since joining the Group I progressed up personal and professional growth. The Group
through the Finance Department and was later employs a host of well-trained individuals who
appointed Commercial Manager at Bulyanhulu can support you in so many ways due to their
mine and am now serving as General Manager range and depth of experience.
of Bulyanhulu and Buzwagi mines. Throughout
Bulyanhulu is a world class gold reserve and
my progression I feel extremely lucky to have
BENEDICT MASILI BUSUNZU has the potential to emerge as a world class
GENERAL MANAGER, BULYANHULU & BUZWAGI
had the opportunity to benefit from Acacia’s
mine. This potential currently serves as a
career development pathway and gain a much
huge motivation to successfully complete
better understanding of the business as I have
Q taken on new roles.
the on-going transformation programme at
the mine.
When did you start working for Acacia and
It has always been an honour to work with
what was your role? Q first class employees over the past 11 years
and I am looking forward to seeing the same
Can you describe the kind of career
A development support you have received
team working together throughout the life
of mine. I can only hope that someday my
since joining the Group?
I joined the Acacia Group (which was then daughters will be part of this amazing team.
wholly owned and operated by Barrick Gold)
as a Management Accountant in February A
2007. I was initially posted to our Bulyanhulu
Q
mine for a two-year period during which I had Since I joined 11 years ago I have consistently
What does the Acacia Group mean for
oversight of the mine’s accounts and developed my own professional skill-set and
a Tanzanian?
reported to the Finance Manager. I soon had the opportunity to steadily progress my
transferred to the Dar-es-Salaam office role within the Group. It has provided specific
where I was promoted to Senior Accountant. support at various points. Notably, in my early A
days I was seconded to our Johannesburg office
for a year to gain more exposure within the The Group not only provides direct investment
Q Finance Department and develop a greater into the country in terms of capital but can
understanding of the whole business. In also provide significant direct benefits to
Currently what are your key responsibilities?
2014-15 I was sponsored to attend the Mining Tanzanians. It enables direct and indirect
Leaders Programme at the University of employment to Tanzanians, as well as training
A Queensland, Australia. and professional exposure so that Tanzanians
can take on positions previously filled by
I have also undertaken a cultural and
In September 2017 I was appointed as expats. We also provide opportunities for
leadership programme called Tufanikiwe
Interim General Manager of Bulyanhulu mine other businesses in Tanzania as suppliers
Pamoja that defined the overall culture of the
and have subsequently taken on the role of of goods and services. We have seen some
organisation as well as the understanding
General Manager of Bulyanhulu and Buzwagi small businesses growing to become medium
of what is expected from leaders.
mines within a joint management structure. sized operations through strong support from
Reporting to the Managing Director, Tanzania, Shortly after graduating from the Mining Acacia. This is all in addition to the Group’s
Asa Mwaipopo, the role requires the daily Leaders Programme, I took on the role of contribution to the country through the taxes
management and oversight of two large-scale Acting General Manager at Bulyanhulu, it pays and the social projects it supports in
and vastly different gold mining operations providing direct support to the General the communities around our mines.
which employ approximately 1,000 staff and Manager and taking on his responsibilities
contractors. As well as maintaining and whenever he was on rotational leave or away
improving operations there is a strong focus from site. This is something that really helped
Q
on preparing for the restart of operations at me to understand the operations and the
What are your aspirations for the future?
Bulyanhulu mine if the current ban on the requirements of management and prepared
export of mineral concentrates is lifted. me for my current role as General Manager.
At our Buzwagi mine I am also overseeing the A
processing of stockpiles and preparation for
the mine’s closure in three years’ time under In future I would like to use the exposure
our No Harm 2020 programme. and experience that I am getting here to
be able to open and run my own business.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 53

 SUSTAINABILITY REVIEW CONTINUED

Sustainable Communities North Mara

We invest in the regions around mine At North Mara, we completed the construction As we delivered on these legacy commitments,
sites with the specific goal of significantly and renovation of classrooms and teachers’ we simultaneously began the journey
contributing to the development of housing at Bwirege and Genkuru Schools, of shifting emphasis to local economic
“Sustainable Communities” that are built constructed the Nyamwaga and Kerende development and delivering value-add
on trusting and transparent relationships, Health Centres and invested in the services to the infrastructure.
achieved through sustained dialogue and Nyamwaga/Keisangora water project,
engagement. Our communities should enjoy among other investments.
a thriving local economy and have access to
basic social infrastructure. Over the last five
years, we have invested heavily in building Goal 4 Ensure inclusive and equitable
social infrastructure such as schools, roads, quality education and promote
health and water facilities. In 2017 we began lifelong learning opportunities
implementation of the new Sustainable for all
Communities (SC) strategy which focuses on Goal 5 Achieve gender equality and
adding value to this physical infrastructure empower all women and girls
We are also aligned with the Government’s
and contributing positively to the development
Tanzania Development Vision 2025 and Goal 6 Ensure availability and sustainable
of a diversified local economy in our zone
its commitment to the United Nations’ management of water and sanitation
of influence. In order to achieve this shift in
Sustainable Development Goals (“SDGs”). for all
focus we spent most of 2017 delivering first
on our legacy commitments and building the Acacia’s Sustainable Communities strategy Goal 7 Ensure access to affordable,
foundations for more sustainable development focuses on the following SDGs: reliable, sustainable and modern
projects. This included the completion and/or energy for all
Goal 1 End poverty in all its forms
initiation of the following projects: Goal 8 Promote sustained, inclusive and
everywhere
sustainable economic growth,
Bulyanhulu Goal 2 End hunger, achieve food security full and productive employment
We constructed classrooms at Lwabakanga and improved nutrition and promote and decent work for all
Primary School; fenced the 1.2 kilometre sustainable agriculture
perimeter of Kakola Primary School; Goal 10 Reduce inequality within and
Goal 3 Ensure healthy lives and promote among countries
constructed three community pit latrines in
well-being for all at all ages
Lyenze village, and improved the provision of
water through building water tanks in Kakola
village. We also initiated the construction of
the more than US$500,000 (Tzs 1.1 billion) CASE STUDY
Bugarama Health Centre – which is a second
phase of a similar value investment we made BULYANHULU EXTENDS HEALTHCARE INVESTMENT FOR THE
in 2016. This phase of construction aims to
upgrade the health centre to a district level
BENEFIT OF OUR COMMUNITIES
hospital. The Bugarama Health Centre
currently supports healthcare for 58,000 In November 2017 a Memorandum of The Bugarama Health Centre currently
people living in the 14 villages in Kakola Understanding (MoU) was signed between supports healthcare for 58,000 people
and its surrounding areas. our Bulyanhulu mine and the Msalala living in the 14 villages in Kakola and its
District Council to support the second phase surrounding areas. Upon completion, the
Buzwagi
of construction of the local Bugarama centre will be able to cater for over 150,000
We added more classrooms to Mwendakulima
Health Centre. This follows on from the first community members. The construction will
B Primary School and are completing the
phase of the project, completed in 2016 at be undertaken by a local contractor who is
construction of a girls’ dormitory at
a cost of US$470,000 (Tzs 1.0 billion). expected to recruit workers from the local
Mwendakulima Secondary School after the
community. Once operational, the facility
original dormitory was accidentally gutted by The Bulyanhulu mine has committed a
will be run by the Msalala District Council.
fire. The dormitory will accommodate more further US$500,000 (Tzs 1.1 billion) for the
than 100 pupils and make secondary second phase of construction, which aims The health centre project will expand the
education more accessible to girls. to upgrade the health centre to a district provision of much-needed medical care in
level hospital. This project stems from the region to create a healthier community
our Sustainable Communities strategy and enhance maternity care in line with the
which aims to improve access to social Government’s five year development plan
infrastructure for our communities. of reducing the under-five mortality rate and
reducing maternal mortality.

54 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 Relevant pages

p62
Governance overview

CASE STUDY

PERFORMANCE REVIEW
ACACIA LAUNCHES
COMMUNITY LIBRARIES
TO IMPROVE ACCESS
TO EDUCATION

Acacia – through its Sustainable

Communities programme – has
supported the establishment of
the first community libraries in
the local areas around each of
our mine sites. The new libraries
are in Kahama (Buzwagi),
Nyangh’wale (Bulyanhulu) and
Tarime (North Mara) districts
in Tanzania.
In order to be more effective in our delivery
in the education sector we conducted an
independent education needs assessment
which was designed to inform our efforts to
enhance educational outcomes. The project
is part of a broader strategy that aims to
contribute directly to Tanzania’s National
Five Year Development Plan and the
Tanzania Development Vision 2025. Our
efforts seek to help resolve challenges
identified in Tanzania’s education sector and
thereby support the provision for people’s
Top: Tarime District Commissioner Hon. Glorious Luoga cuts the ribbon to officially open the new JK Nyerere
basic needs and enable Tanzania to be School library.
competitive in the regional and global Bottom: North Mara Sustainable Communities Manager Richard Ojendo with Hon. Glorious Luoga at the opening
economy. Our support for education in of the JK Nyerere library.
Tanzania is also in line with the United
Nations’ Sustainable Development Goal 4
of achieving inclusive and equitable quality establishment of the libraries which are by Read International. It is anticipated
education for all. created in existing buildings provided by that nearly 15,000 Tanzanian community
the Local District Council and communities members will access the library services
The libraries are aimed at encouraging
in the respective areas. across the districts. Read and Acacia have
the public to engage and develop a reading
prioritised new campaigns to demonstrate
culture by providing access to educational In 2017 we successfully completed the
the importance of reading together as
resources for students, teachers and the refurbishment of six libraries. This was a
an important aspect of developing a
wider local communities. The initiative successful pilot project that we intend to
book culture.
is also supported by Read International, replicate and which provided 800-1,000 books
a charity that aims to improve access to per library. The project has a teacher training The initiative ties into the national education
education in East Africa by renovating component, enabling communities to manage agenda which encourages country-led actions
school libraries and providing educational their own libraries and encourage a reading to obtain support from multi-stakeholder
material. We provided the funding culture. The libraries will be open daily to the partnerships and financing to bring the
and Read engages university students communities and will be run and managed by required change in the quality of education.
as volunteers in the refurbishment and community members who have been trained

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 55

 SUSTAINABILITY REVIEW CONTINUED

As part of adding value to the education We also embarked on an initiative, in Our overall performance for 2017 was good,
infrastructure we managed to bring together partnership with Read International Tanzania, with the Group initiating and progressing
Tanzanian and South African universities to to create a reading culture in schools and identified improvement programmes for the
create a network for sharing knowledge. South communities. Please see the case study year. Key achievements include the completion
Africa has a long history of mining and working on page 55 for details. These partnerships of Phase 1 of the water management
with its academic institutions to develop skills demonstrate one of the key principles of the infrastructure upgrade at our Bulyanhulu mine,
and solutions for the sector. We believe there SC strategy which dictates that we work in the building of a new water balance model, and
is benefit for Tanzanian academic institutions partnership with others. installation of additional new water flow meters
and the country’s mining industry from creating for accurate data capturing.
Stakeholder engagement continued to be
formal relationships with South African
a key priority for delivering our work. Our key Buzwagi mine achieved its ICMI Cyanide
academia as part of building national capacity
stakeholders include local district and regional Code recertification while North Mara mine
and thus contributing to the President of
councils, community leaders and communities continued to implement various water
Tanzania’s vision to see more Tanzanians
in general in our zone of influence. We management projects and completed the
participating in the mining industry. In
continued to host mine tours at all sites to upgrade of its water treatment plant pertaining
November, we convened a workshop with the
expose our stakeholders to our operations. to the TSF and mining areas. Implementation
theme “Academic and industry partnership
These tours create transparency in the way of the Acacia EMS in line with ISO 14001 was
for the extractives industry in Tanzania”
we operate and create understanding of our progressed during the year, further improving
which brought together mining experts from
business processes. programmes to manage our top environmental
Tanzanian and South African universities as
risks at all our sites.
well as industry peers. The partnership is In 2018, our plans are to focus on initiatives
aimed at “developing a network of centres for economic development that tackle some of
of excellence that build the capacity of these identified in scoping study on agriculture
Total water used
Tanzanians to support and lead a sustainable and small and medium enterprises (SMEs)
(Litres per tonne of ore milled)
extractives sector, through collaborative conducted by an independent consulting
efforts in education, research and knowledge firm, Dalberg in 2017. These include the 486 468 486
451 424
sharing” and plans have been developed development of demonstration farms, SME
in line with this objective. The partnership service centres and market linkages for
will initially be made up of the following farmers and small businesses. These
institutions: The University of Dar Es Salaam initiatives are aligned with the Tanzania
and Muhimbili University from Tanzania Development Vision 2025 and regional 2013 2014 2015 2016 2017
and The University of Witwatersrand, development plans including “Kiwanda Bulyanhulu 711
Johannesburg, and The University of Cape Changu, Mkoa Wangu” (My Industry, My Buzwagi 473
Town from South Africa, as well as Acacia Region) which aims to create about 100 small North Mara 372
and AngloGold Ashanti as industry partners. and medium businesses in each region by
December 2018. Impact measurement will be
Sustainable Communities expenses central in demonstrating our contribution to Average energy intensity
(US$million) these Tanzanian Government priorities. (megajoule per tonne of ore milled)
592 569
15.5 Environment 511
464
12.9 Our commitment to environmental protection 447
10.8 10.7 continued to be demonstrated through various
8.2 programmes and projects that minimise harm
to the environment in which we operate. During
2017 we reviewed our environmental priorities 2013 2014 2015 2016 2017
2013 2014 2015 2016 2017 and goals for the short to medium term to Bulyanhulu 786
Bulyanhulu 0.5 ensure they remain valid and meet the overall Buzwagi 394
Buzwagi 0.6 Company strategy. North Mara 522
North Mara 1.8
Local Service Levies 1.7
Corporate projects & other 3.6

56 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

As part of efforts to improve our efficiency in our energy usage per tonne of ore milled the primary sources of water for our
power usage and reduce our GHG emissions, increased by 14% on 2016 levels. Further operational activities, accounting for more

PERFORMANCE REVIEW
we commissioned a project at Bulyanhulu information on Group GHG emissions is than 64% of water used for processing.
which uses a static device (Static Synchronous provided on page 92.
At North Mara, no freshwater was drawn from
Compensator) to control voltage fluctuations
Understanding that water is a precious Mara River during 2017, making the site fully
and stabilise electricity supply from the
resource, water conservation and the reliant on the water generated from the open
national grid. The benefits of the system reach
protection of the surrounding water resources, pits and underground mine, of which some
beyond Bulyanhulu mine, up to Kahama and
form part of our key principles of water is treated via the Reverse Osmosis and
the Buzwagi mine. The project ensures both
management. Our understanding of our water Microfiltration processes to make raw water.
the stability of our electricity supply and more
balances across our sites is being enhanced Buzwagi’s usage of purchased water more
effective utilisation of low carbon emission
through the use of well-designed water than doubled due to a prolonged drought which
electricity from the grid, thus resulting in the
balance models and reliable records of our reduced water collection through the site’s
decommissioning of the 15 1MVA Diesel
water flows and usage. Our total water usage 78 hectare water harvesting area. We will look
Generators at Bulyanhulu. Overall, 2017
in 2017 was in line with 2016 but Bulyanhulu to enhance our water balance models and
GHG emissions equalled 249,112 tonnes of
mine recorded a 16% reduction primarily identify areas of additional water conservation
CO2e, which is 15% lower than 2016 levels,
because of reduced operations at the mine. in 2018 as part of overall Group water
indicating the positive impact of the above
Reclaimed waters from tailing storage facilities management programmes.
project. However, as a result of reduced
as well as mine dewatering continued to be
operations and throughput at Bulyanhulu,

CASE STUDY

GREEN KAHAMA PROJECT

In an effort to mitigate the

effects of mining and dry
weather on the area’s natural
vegetation, in 2017 Buzwagi
mine embarked on a tree
planting campaign known as
the Green Kahama Project.
The initiative is supported by Kahama
District’s leaders and aims to plant more
than one million trees over a period of three
years. In 2017 alone, a total of 650,000
trees were planted both on and beyond
the mine lease area. Local communities
got involved in the tree planting exercise
and thus enhanced their horticultural skills
and developed a sense of the value that
comes from protecting natural vegetation
and the environment as a whole. The project
is aligned with Buzwagi’s mine closure
goals, its No Harm 2020 programme,
and will leave behind a positive legacy
in the community.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 57

 SUSTAINABILITY REVIEW CONTINUED

Biodiversity Incident reporting We continued to invest in training and

Our responsibility towards biodiversity was We keep records of all environmental incidents development programmes throughout the
maintained during the year by maintaining occurring at our sites. Our Environmental year, notably through the launch of our
strict controls on land disturbances. A Incident Management standard provides for Future Leaders programme and a number of
standard applies to all our sites prohibiting three classes of incidents, namely: High additional business improvement and project
unauthorised land disturbances unless the (reportable incidents), Moderate or Low. The management programmes. We maintained
Environment Department has reviewed the incidents classified as High require a detailed our focus on longer-term training initiatives,
need and approved disturbances to take place. investigation and subsequent reporting to the such as our Rainbow Leadership Training
Our ultimate goal for biodiversity management Government while Moderate and Low are only programme for first line leaders which was
remains to protect and minimise land recorded internally and get reported to the successfully rolled out in 2016; to date, 102
disturbance as much as possible, and Government through the annual environmental participants have completed the training
eventually rehabilitate disturbed land to report submitted to the Government each year. with a further 31 apprentices currently in
achieve land productivities of higher value than Two reportable incidents were recorded during the Integrated Mining Technical Training
what existed prior to disturbance. Progressive the year at two of our sites and there was a 35% (“IMTT”) programme.
rehabilitation was undertaken during 2017 at decrease in non-reportable incidents during the
Approximately 10% of our overall workforce
Bulyanhulu’s portion of the TSF wall where year. The significant decrease in the number
are women (2016: 8%), something which is
more than 8,000 native trees were planted. of incidents is largely due to improvement
reflective of gender diversity generally within
At North Mara and Buzwagi we commenced programmes implemented during the year and
the mining industry.
initial rehabilitation earthworks on their waste the lower activity levels at Bulyanhulu.
rock dumps which will continue through 2018.
Furthermore, Buzwagi embarked on a tree
Employees Female representation
We continued to make noticeable progress (Percentage of overall workforce)
planting campaign of 500,000 trees within
across a variety of employee initiatives
the mine lease area and 150,000 around 10
throughout 2017, although due to the 9
the surrounding communities. The area 8 8
movement to reduced operations at 7
surrounding Buzwagi mine is fairly dry and
Bulyanhulu we saw Group-wide annual turnover
the vegetation impacted by urbanisation, thus
increase to 55%, compared to 9% in 2016.
this tree planting campaign will help to restore
Group turnover is now calculated based on
the lost vegetation and achieve a net positive 2013 2014 2015 2016 2017
year end numbers and as such prior years
impact on biodiversity. Only native tree species
have been restated.
are used for rehabilitation programmes to
enhance biodiversity in the areas we operate. One of our key focus areas over the last four Localisation of workforce
The disturbed areas that are not rehabilitated years has been on reducing the number of (Percentage of Tanzanian nationals in workforce)
include areas where active operation still international employees and contractors within 92.8 94.5 94.6 95.3 96.2
takes place. We maintain active rehabilitation our business and ensuring that our Tanzanian
programmes for areas as soon as they assets are increasingly led and operated by
become available. Tanzanian employees. Since 2013, we have
driven a reduction in international employees
of approximately 85% within our business and
now 96.2% of our people are Tanzanian (2016: 2013 2014 2015 2016 2017
95.3%).
In Q4 2017, we consolidated the management Group-wide turnover
teams at Bulyanhulu and Buzwagi, which (Percentage within operations)
55%
are located within the same region, under
the leadership of an experienced Tanzanian
national. The combined Bulyanhulu and 36%

Buzwagi management team is now made 26% 27%

up of five Tanzanian nationals and one

international employee. 9%
2013 2014 2015 2016 2017

58 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Safety Human rights In 2017, we took further steps to ensure that
Group-wide Total Reportable Injury Frequency We strive to maintain strong governance and human rights considerations are included in

PERFORMANCE REVIEW
Rate (“TRIFR”) was 0.45 compared to 0.74 in policy frameworks to enable our people to our business processes and worked to
2016, a 39% improvement. The number of respect human rights at all times despite the implement the findings of the Human Rights
Lost Time Injuries (“LTI”) decreased from 32 challenges of the complex social, economic Impact Assessment (HRIA) that the consulting
in 2016 to 18 in 2017, a 44% improvement, and political environments in which we firm Avanzar conducted at all our mine sites in
and the injury severity rate decreased by 35%. operate. We have our own Human Rights Policy 2016. In 2017, we also updated our human
The number of High Potential Incidents and Procedures and have made voluntary rights training, including training for managers
(these are incidents that could under slightly commitments to the Voluntary Principles on on the VPSHR. All our employees are required
different circumstances have led to a fatality Security and Human Rights (VPSHR) through to undergo human rights training as part of our
or permanent disability) decreased from 55 our majority shareholder. We also encourage code of conduct training, and employees in
in 2016 to 36 in 2017, a 35% reduction. the governments of the countries where we are higher risk positions undergo bespoke human
active to protect human rights in accordance rights training.
The 11 Critical Risk Control Standards have
with the international human rights treaties
now all been rolled out and implemented.
to which they are parties. Our human rights
Security and human rights
The targeted compliance to these standards In 2017, we supported the NGO Search for
approach is consistent with the United Nations
has been met and the continued reduction Common Ground in rolling out new, longer
Guiding Principles on Business and Human
in injuries and the occurrence of High and more extensive human rights training for
Rights (UNGPs). Where our standards and
Potential Incidents can be attributed to the the Tanzanian police in the Tarime district
procedures are stricter than national laws,
implementation and increased compliance (including on international standards on the
we seek to apply our own standards, require
to these standards. The safety interactions use of force and firearms, sexual violence
contractors and suppliers to do likewise and
process (visible felt leadership), hazard and treatment of vulnerable groups). The
encourage others linked to our operations to
reporting and investigation process, task Tarime police face special challenges trying
follow accepted international standards of
observations and pre-task risk assessments to maintain law and order in the remote area
conduct regarding human rights.
improved the safety culture and remain around the North Mara mine, which is prone
valuable tools in further driving down safety Our most salient human rights issues are to violent crime and mine intrusion, and
and health related incidents. those relating to security; land access and North Mara continued to engage directly
resettlement; environment, including access with the regional police to convey our
We also progressed a number of initiatives
to water; labour rights; and in-migration-related expectations about respect for human rights.
within an occupational health and safety
impacts on local communities such as access
context to increase the effectiveness of The number of times that the police and mine
to education, employment and health services.
existing occupational health programmes and security were required to respond to security
As these are predominantly issues that can
continued to progress health assessments, threats, violence and theft by intruders on our
best be addressed by, or in collaboration
including malaria control assessments, for our mine sites continued its year-on-year decline.
with, Government, in 2017 we continued
employees and wider community base. The The number of illegal incursions onto the
to engage with the Tanzanian Government
total number of malaria cases and the days mining lease (including waste dumps) at North
to identify concerns and seek to identify
lost due to malaria decreased by 29% and 51% Mara decreased by 20% in 2017, compared
improvements or solutions. This included
respectively during 2017. with 2016, with almost no illegal incursions at
our continued work to promote and support
Bulyanhulu and Buzwagi. Incursions into the
Government efforts to improve security and
Total Reportable Injury Frequency Rate (‘TRIFR’) active mining areas remained flat year on year.
human rights awareness and training of the
(Frequency rate)
members of the Tanzanian Police Force who
0.86
maintain law and order in the communities
0.74
0.68 0.68 surrounding our mines. We also engaged
0.45
with investors, civil society and community
members on issues related to our own
operations, our business partners and the
2013 2014 2015 2016 2017
Tanzanian State.
Bulyanhulu 0.80
Buzwagi 0.32
North Mara 0.28

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 59

 SUSTAINABILITY REVIEW CONTINUED

There was a commensurate decline in the Trespassers in active mining areas New community grievance process
number of incidents involving the police on or (monthly average) at North Mara
in the vicinity of the mine that raised, or were 7,157 North Mara’s human rights team also held a
alleged by others to raise, possible human series of human rights workshops and capacity
rights impacts relating to the use of force building exercises for North Mara community
against intruders. There were two such members in 2017. The team then consulted
incidents, five fewer than in 2016. North Mara with the community to hear whether they would
forwarded information about the two incidents like to see changes in the mine’s Community
to the authorities for investigation, requested 534
Grievance Process. The mine also considered
130
follow-up and is awaiting a response. There 126 the views of Tanzanian and international NGOs
2014 2015 2016 2017
were no such incidents involving mine security on the subject.
guards. Tragically, one individual was found
On that basis, the mine developed and
dead on the mine site with a gunshot wound. Intruder fatalities
continued piloting a new Community
Investigations into the circumstances of this 17 Grievance Process during 2017. It held
individual’s death and presence on the mine
further consultations with the community,
site are on-going. There was one additional
civil society and Tarime district government
trespasser fatality at North Mara, unrelated
9 to assess whether the new process meets
to security: one person drowned in a flooded
6 the expectations of these key stakeholders
former pit outside the secured perimeter.
and is in line with the effectiveness criteria
2
Whilst the 66% reduction in intruder fatalities for operational-level grievance mechanisms
from 2016, and 88% reduction from 2014 is 2014 2015 2016 2017 in the UNGPs. The new Standard Operating
positive, any loss of life is unacceptable. North Procedure and a Handbook for Grievants
Fall from height 0
Mara will continue to review its security and explaining the process were issued in draft
Infighting 0
safety arrangements, to further reduce the risk form by the mine, and are now on the
Police involvement 1
of incidents occurring and towards eliminating Acacia website with an invitation to other
Drowning 1
such incidents altogether. interested parties to submit their comments.
Rockfall 0
The mine will conclude the current round of
Vehicle accident 0
consultations and adopt the new procedure
Other 0
in 2018.
All types of community grievances can
be submitted to the Community Grievance
Process, including grievances about security
and human rights, the environment, enjoyment
of land or other property, housing and
livelihoods, or health and safety. Apart from
grievances regarding rights to land and
resettlement (which require State involvement
and go to the mine’s Land Department),
grievances are resolved through the
Community Grievance Process through a
two stage process. First, the mine and the
grievant seek to resolve the grievance through
facilitated engagement and dialogue; and then,
if engagement and dialogue do not resolve
the grievance, an independent three-member
Grievance Committee reviews the grievance
and makes a determination which the mine
undertakes to follow. In 2018, the mine
is recruiting a new Lead Grievance Officer
to oversee and administer the process.

60 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Grievances in 2017 The process of engagement and dialogue Breakdown of new grievances lodged by type
In 2017, a total of 38 new grievances were produced an agreement between the mine (number)

PERFORMANCE REVIEW
received at North Mara, with no grievances and grievants about whether there had been
received at our other mines or exploration a human rights impact in six cases (a grievant 10
properties. The reduction in grievances lodged agreed to withdraw his grievance in one case).
since 2016 is a result of our improved security, This includes a grievance regarding the 17
1
combined with important progress with training individual mentioned above who was found
the police by SFCG. Meanwhile the significant shot dead on the mine site, which was
10
reduction in grievances relating to land and resolved in late 2017 with the mine agreeing
property can be attributed to greater efforts to provide remedies to help the deceased’s
to engage with our communities. Ten of the family and follow up with the authorities.
grievances related to land, with eight Security/Human Rights 17
The Community Grievance Committee, which Land and property 10
grievances related to the treatment of
independently reviews grievances that are Environmental 1
intruders on the mine site by the Tarime police
not resolved through engagement and dialogue, Other 10
responding to security emergencies and five
determined that there appeared to have
related to mine security personnel. The total
been a human rights impact in 14 of the 28
of 13 grievances, seeking remedies for
security-related grievances which came before Breakdown of new grievances lodged
impacts they alleged they had suffered at the
it in 2017. In the other 14 of those 28 cases, by mine site
hands of the Police or by North Mara security,
the Committee determined that there did not (Total number)
compares to 37 allegations relating to the
appear to have been a human rights impact –
activities of the Mine’s security personnel or
these complaints were not substantiated,
the Tanzanian Police Force reported in 2016.
appeared to have been fabricated or the 264 267
A further four non-employee accident-related 236
actions of the security personnel or police
grievances were also recorded in 2017.
appeared to have been reasonable in all 79
38
North Mara’s Community Grievance Process of the circumstances.
currently admits grievances alleging harm 2013 2014 2015 2016 2017
Remediation plans were established in
suffered at the hands of the Tanzanian Police Bulyanhulu 0
16 cases, 12 of which were from past
Force, as part of North Mara’s corporate social Buzwagi 0
years, with the remedies designed to
responsibility commitments including to the North Mara 38
provide effective reparation in accordance
principles of the UNGPs. North Mara also
with local and international human rights
raises concerns with the Tanzanian State
standards. The Grievance Process made
about credible allegations regarding Police
good headway in clearing its backlog and
conduct, and will provide access to remedies
in speeding up the resolution of grievances
through the Grievance Process to members of
in 2017. The average turn-around time
the North Mara community in respect of police
was two months from the time of lodging
actions only to the extent that such remedies
the grievance to its resolution through
are not forthcoming from the State itself.
engagement and dialogue.
In 2017, the pilot modified Grievance Process
considered 25 security-related human rights
grievances that were pending or had been
considered by the previous process in past
years. It also considered one of the 13 new
grievances lodged in 2017.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 61

GOVERNANCE OVERVIEW

KELVIN DUSHNISKY
CHAIRMAN OF THE BOARD

DEAR SHAREHOLDERS
The work of the Board has been challenging during During a challenging year, I have greatly valued the diverse and
complementary range of skills and experience of my fellow Directors.
2017. In particular we have had to focus on I am confident that the Board will continue to show its commitment
addressing the introduction of the concentrate export during 2018 as we look to deliver optimal performance in the current
ban in March, legislative changes affecting the natural operating environment and deliver value for all of our stakeholders.

resources sector, and the receipt of significant tax

assessments from the Tanzanian Revenue Authority
to the Group companies that own and operate the
Bulyanhulu and Buzwagi mines.
KELVIN DUSHNISKY
The Board has overseen the implementation of a number of steps to address CHAIRMAN OF THE BOARD
the impact of these challenges as described in the Strategic Report.
We have focused in particular on the Company’s cash position and ensuring Key areas of focus in 2017
that appropriate steps are taken to safeguard the viability of the business. The Board focused on the following areas in 2017:
Discussions commenced in late July between Barrick Gold Corporation Overseeing steps to mitigate risks arising from events in Tanzania
and the Government of Tanzania with a view to seeking a resolution to
the current state of impasse. In October 2017, Barrick announced that Overseeing operational changes at Bulyanhulu and Buzwagi
a proposed framework had been agreed between Barrick and the Overseeing further measures to protect the Company’s balance
Government relating to the future relationship between Acacia and the sheet and cash position
Government of Tanzania. Barrick has indicated that it expects to be able
to present a detailed proposal to Acacia for review during the first half  verseeing steps to protect the Company’s rights, including commencing
O
of 2018. Any proposal agreed-in-principle between Barrick and the international arbitration proceedings
Government of Tanzania will require Acacia’s approval. Overseeing appointments to key executive positions and management
In light of Barrick’s position as a controlling shareholder of Acacia, and its of change in those positions
role in the discussions that have taken place to date with the Government Conducting risk reviews
of Tanzania, specific governance arrangements have been put in place to
protect the interests of all shareholders, including the establishment of Conducting performance evaluations
the Independent Committee of the Board, chaired by Michael Kenyon.
See “Framework discussions with the Government of Tanzania” on page 66.
In addition, Michael has been appointed as the Senior Independent Director The Board’s plan for 2018
of the Company, in light of his role as Chair of the Independent Committee. The Board’s focus areas for 2018 include:

There have been a number of other changes to the Board during 2017. Continuing focus on preservation of cash and protection of balance sheet
Peter Tomsett stepped down from the Board following the AGM in 2017  ontinuing to assess all options available to achieve resolution of the
C
and Ambassador Juma Mwapachu resigned as a Director in July on the challenges in Tanzania
expiry of his second three-year term. In December, Brad Gordon stepped
down from the Board following his resignation as Chief Executive Officer. On-going review of Group strategy and risk as discussions in
On behalf of the Directors I would like to thank each of Brad, Peter and Tanzania progress
Juma for their many contributions to the Company. Assessing on-going composition of the Board
In January we welcomed Peter Geleta to the Board and to his new Overseeing operational, financial and exploration project performance
position as Interim Chief Executive Officer. Peter knows the Company and
its assets extremely well and brings substantial industry and leadership Reviewing growth opportunities
experience to the role.

62 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

BOARD STRUCTURE

MANAGEMENT COMMITTEES EXECUTIVE LEADERSHIP TEAM

Further support the Board and comprise Responsible for day-to-day management
the following key committees: of our business and operations and for
– Disclosure Board monitoring detailed performance of all
aspects of our business
– Reserves and resources
– Capital allocation

BOARD COMMITTEES

AUDIT EHS&S NOMINATION & COMPENSATION INDEPENDENT

COMMITTEE COMMITTEE GOVERNANCE COMMITTEE COMMITTEE
––reviews and ––oversees the COMMITTEE ––reviews and ––oversees all aspects
monitors financial development of ––makes recommends overall and implications of
statements strategy and policy recommendations remuneration policy the discussions
––oversees on Sustainable to the Board on its and strategy between Barrick and
relationships Communities, composition and that ––reviews and the Government of
with internal and environmental, of its Committees approves Tanzania, and any
external auditors health and safety ––reviews and oversees remuneration related proposals
––oversees external and security matters the formulation and arrangements for
audit process ––reviews the adoption of Acacia Executive Directors
––reviews internal effectiveness corporate governance and Executive
audit plans of Sustainable policies and Leadership Team
––compliance matters Communities, procedures

GOVERNANCE
environmental,
health and safety
and security
management
programmes
and systems

2017 Membership 2017 Membership 2017 Membership 2017 Membership 2017 Membership
Andre Falzon (Chair) Rachel English (Chair) Kelvin Dushnisky (Chair) Michael Kenyon (Chair) Michael Kenyon (Chair)
Rachel English Peter Geleta Michael Kenyon Rachel English Rachel English
Steve Lucas Andre Falzon Steve Lucas Steve Lucas Andre Falzon
Steve Lucas

Non-Executive Chairman Executive Director Non-Executive Directors

The Chairman creates the conditions for overall Board The CEO is the most senior Executive Director on the Non-Executive Directors have a responsibility to uphold
and individual Director effectiveness. The Chairman is Board with responsibility for proposing strategy to the high standards of integrity and probity and are required
required to demonstrate the highest standards of Board, and for delivering the strategy as agreed. The to have a strong command of the issues relevant to the
integrity and probity, and set clear expectations CEO has, with the support of the ELT, primary business in order to make a positive contribution to the
concerning the Company’s culture, values and responsibility for setting an example to the Company’s Board. Non-Executive Directors support the Chairman
behaviours, and the style and tone of Board employees, and communicating to them the and the CEO in instilling the appropriate culture, values
discussions. The Chairman’s role is wide-ranging and expectations of the Board in relation to the Company’s and behaviours in the boardroom and beyond. All
includes: demonstrating ethical leadership; setting a culture, values and behaviours. The CEO is responsible Non-Executive Directors are required to ensure that
Board agenda which is primarily focused on strategy, for supporting the Chairman to make certain that there is sufficient consideration of business issues
performance, value creation and accountability, and appropriate standards of governance permeate prior to, and informed debate and challenge at, Board
ensuring that issues relevant to these areas are throughout Acacia. The CEO ensures that the Board is meetings. In making decisions, they take into account
reserved for Board decision; making certain that the made aware, when appropriate, of the views of the views of shareholders and other stakeholders,
Board determines the nature, and extent, of the employees on issues of relevance to the business. In given that such views may provide different
significant risks the Company is willing to embrace in addition, the CEO ensures the Board knows the ELT’s perspectives on the Company and its performance.
the implementation of its strategy; regularly considering views on business issues in order to improve the
succession planning and the composition of the Board; standard of discussion in the boardroom and, prior to
making certain that the Board has effective decision- final decision on an issue, explain in a balanced way
making processes and applies sufficient challenge to any divergence of view in the executive team.
major proposals; encouraging all Board members to
engage in Board and Committee meetings by drawing
on their skills, experience, knowledge and, where
appropriate, independence; and consulting the Senior
Independent Director on Board matters, as necessary
in any given context.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 63

BOARD OF DIRECTORS

Our Directors have considerable knowledge

and experience of the mining industry and
bring other relevant experience to the Board
to assist Acacia in achieving its strategic goals.

Kelvin Dushnisky, age 54 Michael Kenyon, age 68 Peter Geleta, age 54 Steve Lucas, age 63
Chairman of the Board Senior Independent Interim Chief Executive Officer Independent Non-Executive Director
Year appointed: 2012 Non-Executive Director Year appointed: 2018 Year appointed: 2013
Tenure: 5 years Year appointed: 2010 Tenure: 0 years Tenure: 4 years
Tenure: 7 years
2017 Committee membership 2017 Committee membership 2017 Committee membership 2017 Committee membership
– Nomination & Governance Committee – Compensation Committee – EHS&S Committee – Audit Committee
– Independent Committee – Compensation Committee
– Nomination & Governance Committee – Independent Committee
– Nomination & Governance Committee
Skills and experience Skills and experience Skills and experience Skills and experience
Mr Dushnisky was appointed Chairman Mr Kenyon has more than 40 years of Mr Geleta was appointed as Acacia’s Mr Lucas is a Chartered Accountant
of the Board in February 2013, having experience in the mining and mineral Interim Chief Executive Officer on with long and wide-ranging financial
served as a Director since July 2012. exploration industry and is a geologist 1 January 2018, having previously been experience as an executive and
Mr Dushnisky has more than 25 years of by training. He is Chairman of the Board Head of People. Mr Geleta joined Acacia non-executive director in the energy and
international mining industry experience. of Directors of Detour Gold Corporation. in May 2012. He has 35 years of mining extractive industries. He was finance
He was appointed President of Barrick Gold He has previously been Chairman of the industry experience in both operational director at National Grid plc from 2002
Corporation in August 2015 with overall Board of Directors of Troon Ventures Ltd, and corporate leadership positions, and to 2010 and previously worked for
responsibility for execution of Barrick’s President and Chief Executive Officer at has extensive experience on the African 11 years at Shell and for six years at
strategic priorities, and was appointed both Canico Resource Corp and Sutton continent. During his time with Acacia he BG Group, latterly as group treasurer.
to the Board of Directors of Barrick in Resources Ltd, and a Director of has served as General Manager of the He is currently Non-Executive Chairman
February 2016. Cumberland Resources Ltd until their Bulyanhulu mine and helped lead the of Ferrexpo plc and a Non-Executive
respective acquisition by third parties. successful restructuring of the business. Director of Tullow Oil plc.
Mr Dushnisky represents Barrick at the
World Gold Council (Chair, Investment Mr Kenyon holds an MSc degree in Prior to joining Acacia Mr Geleta held Mr Lucas holds a BA in Geology from
Committee), and the International Economic Geology from the University a number of roles at Barrick, including Oxford University.
Council on Mining and Metals (“ICMM”). of Alberta in Canada. He was also the Organisational Effectiveness Director
He is a director of the Canadian Council recipient of the 2005 Developer of the for Barrick Africa, Human Resources
for the Americas, and The Business Year award from the Prospector and Director for the Australia Pacific Region
Council of Canada. He is a member of Developers Association of Canada in and General Manager for Barrick’s Cowal
the International Advisory Board of the recognition of his mining development Gold Mine in New South Wales. Before
Shanghai Gold Exchange and the Accenture accomplishments. joining Barrick, he worked for AngloGold
Global Mining Executive Council. Ashanti for 25 years, where he held
a number of roles including Head of
Mr Dushnisky holds an Honors Bachelor Human Resources and Sustainability for
of Science (Hon.) degree from the University AngloGold Ashanti’s Africa Operations
of Manitoba, in addition to a Master of and General Manager of the Navachab
Science degree and a Juris Doctor degree Mine in Namibia. Mr Geleta holds an
from the University of British Columbia. Executive MBA qualification from the
He is a member of the Law Society University of Cape Town.
of British Columbia and the Canadian
Bar Association.

Board meetings attended Board meetings attended Board meetings attended Board meetings attended
19 19 N/A 17

Independent Independent Independent Independent

No Yes Not applicable Yes

64 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 Board skills
1
2

Rachel English, age 55 Andre Falzon, age 63 Stephen Galbraith, age 46 Geology
Independent Non-Executive Director Independent Non-Executive Director Non-Executive Director Financial
Year appointed: 2013 Year appointed: 2010 Year appointed: 2010 African and regional affairs
Tenure: 4 years Tenure: 7 years Tenure: 7 years
Board independence
2017 Committee membership 2017 Committee membership 2017 Committee membership
– Audit Committee – Audit Committee None
– Compensation Committee – EHS&S Committee
– EHS&S Committee – Independent Committee 3
– Independent Committee
4

GOVERNANCE
Skills and experience Skills and experience Skills and experience
Ms English is a Fellow of the Institute of Mr Falzon is a senior financial executive Mr Galbraith has been employed by
Chartered Accountants. Ms English has with over 25 years of financial and Barrick since August 2000 in treasury
held senior positions in BG Group and management experience within the and finance functions, and is currently Non-independent
Royal Dutch Shell, with responsibilities mining industry, including a period as Managing Director of Barrick International Independent
spanning finance, corporate strategy, Vice President and Controller at Barrick (Barbados) Corporation. Mr Galbraith
mergers and acquisitions, and business between 1994 and 2006. He is a previously held the role of Audit Manager
development. She began her career Director of Detour Gold Corporation for PricewaterhouseCoopers.
at PriceWaterhouseCoopers and and was previously a director and Board diversity
subsequently worked for the World audit committee Chair of a number of Mr Galbraith holds a Bachelor of Arts
Bank Group and European Bank for publicly listed gold mining companies. degree in Accountancy from Strathclyde 1
Reconstruction and Development University, is a member of the Institute
(“EBRD”), where she was involved Mr Falzon holds a Bachelor of Commerce of Chartered Accountants of Scotland
in policy development and lending degree from the University of Toronto, and is a Chartered Financial Analyst
operations. Currently, Ms English is Canada and is a CPA, CA, CGA (Canada). Charterholder.
a Non-Executive Director and Acting 6
Chair of Adam Smith International and
a Non-Executive Director of Helios
Female
Social Enterprise, which she founded
to develop renewable energy access Male
projects in rural sub-Saharan Africa.

Ms English holds an MA in Politics,

Philosophy & Economics from Oxford
University.

Board meetings attended Board meetings attended Board meetings attended

18 19 19

Independent Independent Independent

Yes Yes No

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 65

EXECUTIVE LEADERSHIP TEAM

Jaco Maritz, age 42 Charlie Ritchie, age 48

Chief Financial Officer Head of Legal & Compliance
Jaco Maritz was appointed as Chief Financial Officer on 1 January 2018. Jaco has Charlie Ritchie joined Acacia as Head of Legal & Compliance in January 2017. Charlie
been with Acacia and its predecessor companies since 2001 in a range of increasingly came to Acacia after more than 20 years in corporate and private legal practice across
senior finance roles covering all aspects of the finance function. He was initially Australia, the UK and the USA. His legal career includes 13 years at the Rio Tinto
employed by Placer Dome, which was acquired by Barrick in 2006, and was part Group, including considerable experience in the African mining sector.
of Acacia at its inception. In 2013, Jaco spent six months acting as Interim Chief
Financial Officer for the business. Jaco is a member of the South African Institute Until the end of 2016, he served as Rio Tinto’s General Counsel Diamonds & Minerals
of Chartered Accountants. and the United States, based initially in London and then Salt Lake City. Prior to this,
he was Legal Counsel and Company Secretary for the ASX-listed Energy Resources of
Australia Limited (Rio Tinto: 68%) between 2007 and 2010, and he first joined Rio Tinto
in 2004 to manage significant disputes and litigation in the Australia-Pacific region.
Before joining Rio Tinto, Charlie worked at private law firms in London and Melbourne,
specialising in international commercial litigation and dispute resolution. Professionally
qualified in both the United Kingdom and Australia, Charlie holds Bachelor of Laws
(Hons.) and Bachelor of Arts degrees from the University of Melbourne.

Hannes Henckel, age 67

Head of Discovery
Hannes Henckel has been with Acacia and its predecessor companies since 2002 and
prior to becoming Head of Discovery was involved in Africa wide target generation,
project evaluation and exploration as Chief Geologist Discovery. He has extensive
experience in the field of exploration, covering various commodities. After a short stint
at the University of Munich he worked at the Chamber of Mines Research Organisation
of South Africa doing research on Witwatersrand gold deposits. He then joined
Goldfields working on exploration projects in Southern Africa. He was seconded for
several years to South America as Chief Geologist for Goldfields Latin American
Operations. From 2002 he was part of Placer Dome’s Platinum Division which was
acquired by Barrick in 2006.

Hannes holds an MSc and PhD in geology from Ludwig Maximilian University of Munich.
He is a fellow of the GSSA and SEG.

FRAMEWORK DISCUSSIONS WITH In light of Barrick’s position as a controlling shareholder of Acacia,

THE GOVERNMENT OF TANZANIA and its role in the discussions that have taken place to date with the
In October 2017, Barrick announced that it had agreed with the Government of Tanzania, the Board has established specific governance
Government of Tanzania a proposed framework for a new partnership arrangements to protect the interests of all shareholders, including
between Acacia and the Government of Tanzania. Acacia was not directly the establishment of an independent committee of the Board (the
involved in the discussions between Barrick and the Government of Independent Committee), chaired by Michael Kenyon. The Independent
Tanzania that resulted in the announcement of the proposed framework. Committee has been established to oversee all aspects and implications
The Government of Tanzania informed Barrick that it wished to carry on of the discussions between Barrick and the Government of Tanzania,
dialogue solely with Barrick. However, Barrick has engaged with the and any related proposals. The Independent Committee and the
Company during Barrick’s discussions with the Government of Tanzania Company have engaged with Barrick during Barrick’s discussions with
and has stated that it will continue to do so. the Government of Tanzania. In addition, Michael Kenyon has engaged
with a number of shareholders on matters related to these discussions,
No formal proposal has been put to Acacia at this stage. Barrick has including governance arrangements to ensure the Company’s
indicated that it expects a detailed proposal to be put to Acacia during independence is maintained throughout this process.
the first half of 2018. The key features of the proposed framework
announced by Barrick are described on page 9. Any proposal agreed in
principle between Barrick and the Government of Tanzania will require
Acacia’s approval.

66 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

CORPORATE GOVERNANCE REPORT

Board composition Delegation of authority

As at 31 December 2017, the Board comprised a Non-Executive The Board has delegated responsibility for certain matters to five
Chairman, one Executive Director and five Non-Executive Directors, committees: the Audit Committee, the Compensation Committee,
of whom four were independent. the EHS&S Committee, the Nomination & Governance Committee and
the Independent Committee. The membership, chairmanship and
Board changes during 2017 activities of each of these Committees are set out in each Committee
There were no new Board appointments during the reporting period.
report on pages 71 to 76 and as part of the Remuneration Report.
Ambassador Juma V. Mwapachu retired from the Board in July 2017
following the expiry of his second three-year appointment term. Peter Board effectiveness
Tomsett retired from the Board following the 2017 AGM. Brad Gordon Board meetings and attendance
resigned as Chief Executive Officer on 31 December 2017. Peter Geleta Board decisions are predominantly made by achieving a consensus at
was appointed as Interim Chief Executive Officer with effect from Board meetings. In exceptional circumstances, decisions may be taken
1 January 2018 and also became an Executive Director as of this date. by the majority of Board members. Questions arising at any meeting are
determined by a majority of votes. In the case of an equality of votes,
Retirement and re-election the Company’s Articles of Association do not provide the Chairman with
In line with the requirements for annual re-election under the UK
a second or casting vote. All Directors are required to take decisions
Corporate Governance Code, all Directors will offer themselves for
objectively and in the best interests of the Company. As part of their
re-election at the forthcoming AGM. The Board determines all of these
duties as Directors, Non-Executive Directors are expected to apply
Directors to be eligible for re-election.
independent judgement to contribute to issues of strategy and
Board leadership performance and to scrutinise the performance of management.
Chairman and Chief Executive Officer
The Board is scheduled to meet at least four times a year, and at
In line with best practice, the roles of Chief Executive Officer and
such other times as are necessary to discharge its duties. The Board
Chairman, and their related responsibilities, are separated. The divisions
met a total of 19 times in 2017. Meetings occurred in person and by
of responsibility and the specifications of each role are set out in writing
teleconference. Details of individual attendance are provided in the
and reviewed periodically as part of annual corporate governance
table overleaf.
reviews. Responsibilities are divided so as to ensure that the Chairman
remains principally responsible for the leadership of the Board and Board briefings and development
ensuring that the Board plays a full and constructive part in the The Board receives monthly management reports and quarterly reports
development and determination of the Company’s strategy and overall outlining all material operational, financial and strategic developments.

GOVERNANCE
commercial objectives. The Chief Executive Officer is primarily These ensure that Board members remain properly briefed on the
responsible for all executive management matters affecting Acacia performance and financial position of the Group on a continuous basis.
and is principally responsible for running the Company’s business. Board and Committee papers are circulated prior to all meetings to
All members of the Executive Leadership Team report directly to him. allow Directors to be briefed in advance of discussions. Board meetings
include quarterly operational, financial and exploration project
Senior Independent Director
performance reviews to ensure that, in addition to specific scheduled
Michael Kenyon is Acacia’s Senior Independent Director (“SID”). The
matters and any other business, core business performance is
responsibilities and duties of the SID are determined in accordance with
monitored and assessed on a continuous basis. In addition to scheduled
the requirements of the UK Corporate Governance Code. In particular,
Board meetings, all Directors have access to members of the Executive
the SID is required to:
Leadership Team and to whatever further information they need to
––act as a sounding board for the Chairman; perform their duties and to satisfy their responsibilities. Acacia’s
independent Non-Executive Directors and Committee Chairs meet with
––act as an intermediary for other Directors, when necessary;
members of the Executive Leadership Team to receive more in-depth
––ensure that an annual appraisal of the Chairman is conducted by the briefings on Board and Committee matters whenever required or
Non-Executive Directors, without the Chairman present; and requested. In addition, all Directors continue to have free access to visit
operations outside scheduled Board arrangements. Board training and
––be available to shareholders for discussion purposes, in cases where
development needs are reviewed on an on-going basis. Directors may
contact between such shareholders and the Chairman and/or CEO has
take independent professional advice, as necessary, at the Company’s
been ineffective or is otherwise inappropriate.
expense in the furtherance of their duties. In addition to this, each Board
Matters reserved Committee is entitled to seek independent professional advice at the
There is a schedule of matters that the Board has specifically reserved Company’s expense, where necessary, to assist or guide the Committee
for its decision. This schedule was reviewed during the year and includes in the performance of its functions.
matters such as setting the Group’s strategic aims and objectives,
approving significant contractual commitments (including merger and
acquisition activity), approving capital-raising, approving changes to the
Group’s share capital and corporate structure, approving financial reports
and ensuring maintenance of a sound system of internal control and
risk management.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 67

CORPORATE GOVERNANCE REPORT CONTINUED

Internal control In compliance with its obligations, the Board conducted a review of the
The Board is responsible for the Group’s system of internal control and effectiveness of the Company’s risk management and internal control
risk management and for reviewing its effectiveness. In line with this systems for the reporting period. The review also covered a review of
responsibility, the Board has established on-going processes and all material controls, including financial, operational and compliance
systems for identifying, evaluating and managing principal risks that controls and considered all significant aspects of internal control for
the Group faces, which have been in place throughout the year and the reporting period. During the course of the review the Board did not
up to the date of approval of the Annual Report. identify or hear of any failings or weaknesses that it determined to be
material. Therefore a confirmation of any necessary actions undertaken
The Board principally bases its monitoring and review of the
is not required.
effectiveness of risk management and internal control systems on its
review of management reports and assessments, and on the quarterly Additional information regarding the internal control and risk
reports it receives on the status of the Group’s risk management and management process specifically in relation to the financial reporting
internal control environment. This is supported by the risk profile reviews process and the preparation of the consolidated financial statements
that our internal audit function carries out to help the Board identify and is provided as part of the Audit Committee report and the notes to the
manage the most significant risks and events that could affect the consolidated financial statements.
Company’s operations, financials and performance on an on-going basis.
Further detail as regards the governance structure used for Acacia’s
Where necessary, the Board is assisted by its Committees in reviewing
approach to risk management and the processes and procedures used
internal systems and controls, particularly the Audit Committee, which is
in the context of risk management is provided on pages 24 to 29 of this
responsible for reviewing the effectiveness of the Group’s internal control
Annual Report. The Company’s viability statement is also provided in this
and risk management framework systems, as components of the
context on page 25.
Company’s internal control framework.

Nomination &
Audit Compensation Governance EHS&S Independent
Board meetings Committee Committee Committee Committee 1 Committee
Number Maximum Number Maximum Number Maximum Number Maximum Number Maximum Number Maximum
attended possible attended possible attended possible attended possible attended possible attended possible
Current Directors
Kelvin Dushnisky 19 19 – – – – 2 2 – – – –
Brad Gordon2 19 19 – – – – – – 3 3 – –
Peter Tomsett3 2 3 1 2 1 2 1 1 – – – –
Ambassador Juma 0 4 – – – – 0 1 1 1 – –
V. Mwapachu4
Andre Falzon 19 19 5 5 – – – – 2 2 14 14
Michael Kenyon 19 19 – – 4 4 1 1 – – 14 14
Steve Lucas 17 19 4 5 3 4 1 1 – – 13 14
Rachel English 18 19 5 5 2 2 – – 3 3 13 14
Stephen Galbraith 19 19 – – – – – – – – – –
1 Brad Gordon stepped down from the EHS&S Committee following the meeting in February 2017 and was replaced by Peter Tomsett. Brad Gordon joined the EHS&S Committee
again to replace Peter Tomsett upon his resignation as a Director.
2 Brad Gordon resigned as Chief Executive Officer, and ceased to be a Director, on 31 December 2017.
3 Peter Tomsett stepped down from the Board during the year and therefore his attendance at Board, Audit Committee, Compensation Committee and Nomination & Governance
Committee meetings reflect the maximum number of meetings attended prior to departure. Steve Lucas joined the Audit Committee and Rachel English joined the Compensation
Committee and the Nomination & Governance Committee to replace Peter Tomsett upon his resignation as a Director.
4 Ambassador Juma V. Mwapachu stepped down from the Board during the year and therefore his attendance at Board, Nomination & Governance Committee and EHS&S
Committee meetings reflect the maximum number of meetings attended prior to departure. Michael Kenyon joined the Nomination & Governance Committee and Andre Falzon
joined the EHS&S Committee to replace Ambassador Juma V. Mwapachu upon his resignation as a Director.

68 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Majority shareholder been delegated to the Independent Committee. As such, the Board can
Barrick is the Group majority shareholder, holding approximately 64% of confirm that Acacia has complied with the independence requirements
Acacia’s issued shares as at the date of this report. Acacia’s relationship stated above since their adoption and, so far as the Board is aware,
with Barrick is governed by the terms of a Relationship Agreement, the Barrick and its associates have also complied with these requirements.
principal purpose of which is to ensure that the Acacia Group is capable In this regard, all members of the Board support the giving of this
of carrying on its business independently of the Barrick Group and that statement and no independent Non-Executive Director has raised any
any transactions and relationships with the Barrick Group are conducted objections in this regard.
at arm’s length and on normal commercial terms. The Relationship
Dialogue with the investment community
Agreement will continue for so long as Acacia is listed on the London
Acacia has a designated investor relations team which acts as
Stock Exchange and Barrick owns or controls at least 15% of Acacia’s
the primary point of contact with the investment community and is
issued share capital or voting rights.
responsible for maintaining Acacia’s on-going relations with investors and
The Relationship Agreement provides Barrick with certain Director shareholders. Acacia conducts regular investor meetings and telephone
appointment rights in line with a sliding scale, structured as follows: calls with the investment community to discuss results, and participates
in mining conferences to meet with current and prospective investors.
In addition to its annual and half-year reports, Acacia publishes quarterly
Barrick percentage shareholding Barrick Director appointment rights reports to the market, which provide further information on production
40% or more The higher of three Non-Executive and financial results, and updates on its business and operations.
Directors and the maximum that may Acacia’s investor relations team also arranges operational site tours
be appointed under the UK Corporate for members of the analyst community, as and when appropriate.
Governance Code
AGM
25% up to 40% The higher of two Non-Executive
Acacia’s 2018 AGM will be held on 19 April 2018 at 13.00 BST. The
Directors and one less than the
business of the meeting will be conducted in accordance with Companies
maximum number of Non-Executive
Act 2006 requirements and standards promoted by the UK Corporate
Directors that may be appointed under
Governance Code. The Chairman of the Board and the Chairs of the
the UK Corporate Governance Code
Audit, Compensation, EHS&S and Nomination & Governance Committees
15% up to 25% The higher of one Non-Executive will be available to answer questions put to them by shareholders at the
Director and two less than the meeting. The AGM Notice is included in the documentation that has been

GOVERNANCE
maximum number of Non-Executive provided with this Annual Report and is also available on the Company’s
Directors that may be appointed under website. In accordance with best practice, the notice has been sent to
the UK Corporate Governance Code shareholders at least 20 business days prior to the date of the meeting.

In addition to Director appointment rights, and subject to certain Conflicts of interest

exceptions, as part of the terms of the Relationship Agreement, Barrick Mr Dushnisky and Mr Galbraith are nominee Directors appointed by
has undertaken that members of the Barrick Group will not carry on the Barrick. These individuals hold a number of cross directorships with
exploration of gold or silver in Africa, or acquire, whether through an asset members of the Barrick Group which give rise to situations in which
purchase or the purchase of securities, a gold or silver mining business these Directors could have a direct or indirect interest that conflicts, or
in Africa that competes with Acacia, without giving Acacia the option to possibly may conflict, with those of Acacia. In addition, as a result of
exercise certain rights of first refusal for so long as Barrick holds 30% or their employment within the Barrick Group, these individuals also hold
more of the issued share capital or voting rights of Acacia. Acacia has interests under Barrick’s restricted stock unit plan and other employee
given a reciprocal non-compete commitment to Barrick in this regard. incentive plans.

Acacia entered into the Relationship Agreement at the time of its The Companies Act 2006 requires directors to avoid situations where
initial public offering in 2010. It was amended in 2014 to ensure full they have, or can have, a direct or indirect interest that conflicts, or may
compliance with the independence requirements introduced to the possibly conflict, with company interests. However, the Act does allow
Listing Rules, which took effect in November 2014. Following these directors of public companies to authorise conflicts and potential
amendments the Relationship Agreement expressly provides that: conflicts of interest where a company’s articles of association contain
a provision to that effect. Acacia’s Articles of Association contain such
(i) any and all transactions with Barrick (or its associates) shall be provision and a procedure for this. In accordance with this procedure,
conducted at arm’s length and on normal commercial terms; the conflicts outlined above were declared and authorised by the Board.
(ii) neither Barrick, nor any of its associates, will take any action that The monitoring and, if appropriate, authorisation of any actual or
will prevent Acacia from complying with its obligations under the Listing potential conflict of interest is an on-going process. Directors are
Rules; and required to notify the Company of any material changes in positions or
situations that have already been considered and any new situations.
(iii) neither Barrick, nor any of its associates, will propose or procure
the proposal of a shareholder resolution which is intended or appears In addition, Directors are required to declare interests in potential or
to be intended to circumvent the proper application of the Listing Rules. actual transactions and are required to abstain from voting on such
transactions, subject to permitted exceptions. If a question arises as
In addition, the Listing Rules require premium listed companies with to whether any interest of a Director prevents him or her from voting
controlling shareholders to provide a confirmation in their annual reports or being counted in a quorum in the context of a potential or actual
that all of the independence provisions contained in their relationship transaction, the matter is referred to the Chairman, whose findings are
agreements have been complied with. In line with this requirement, final and conclusive. In the context of questions relating to any such
the Board has assessed Barrick and Acacia’s compliance with the conflict of the Chairman, the question may ultimately be decided by a
Relationship Agreement’s independence requirements as amended, resolution of the other Directors. The Board reviews conflicts of interest
and has sought advice where appropriate from its professional advisers. on a periodic basis and maintains a record of all declared conflicts.
In this regard, responsibility for monitoring the Company’s on-going
compliance with relevant independence requirements in connection with
the discussions between Barrick and the Government of Tanzania has

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 69

CORPORATE GOVERNANCE REPORT CONTINUED

Specifically as regards nominee Directors appointed by Barrick, the Corporate governance compliance
Relationship Agreement provides that if any transaction or arrangement For the year under review, as a UK company with a premium listing on the
arises directly between a member of the Barrick Group and a member Main Market of the London Stock Exchange, Acacia is required to make
of the Acacia Group and does or could, in the opinion of a majority of certain statements regarding the way it is governed, as required by the
Directors (excluding any Director(s) appointed by Barrick), give rise to a 2016 edition UK Corporate Governance Code, which is available at
conflict of interest between Acacia and any Director appointed by Barrick, www.frc.org.uk. Accordingly, this report explains how Acacia has applied
any such matter must be approved and authorised at a duly convened the Main Principles of the UK Corporate Governance Code during 2017.
Board meeting or in writing by a majority of Directors (excluding any
Generally, Acacia seeks to comply with all relevant provisions of the UK
Director(s) appointed by Barrick) prior to the Company taking further
Corporate Governance Code wherever possible and for the reporting year
action in relation to such matter. Save for the matters set out on the
it is the Board’s view that Acacia has complied with all such provisions,
previous page, no other conflicts of interest were disclosed to the Board
save for the following:
during the reporting period.
––Mr Kenyon has recently been confirmed as the Senior Independent
Performance evaluation Director, a role which Mr Kenyon has effectively discharged following
The Board believes that annual evaluations are helpful and provide a
Mr Tomsett’s retirement from the Board by virtue of Mr Kenyon’s
valuable opportunity for continuous improvement. In 2015, we engaged
position as Chair of the Independent Committee. During 2017 the
Lintstock to undertake our first externally-facilitated performance
Independent Non-Executive Directors, through the Independent
evaluation of the Board, its Committees and individual Directors
Committee, have provided rigorous and constructive challenge to
(including the Chairman). This was followed in 2016 with tailored surveys,
the Board on strategic, operational and other matters. In addition,
developed with the support of Lintstock, addressing the performance of
Mr Kenyon has made himself available for discussions with
the Board and its Committees and Directors.
shareholders, including with regard to governance structures in light
In 2017, again with the assistance of Lintstock, we developed tailored of Barrick’s on-going framework discussions with the Government
surveys that reflected the Company’s specific circumstances in 2017 of Tanzania. Accordingly, the principal responsibilities of the Senior
and built upon the themes and outputs from the 2016 review. All Board Independent Director, as described in the Corporate Governance Code,
members were requested to complete online surveys addressing the have been discharged by Mr Kenyon during the reporting period
performance of the Board and its Committees. The anonymity of all following Peter Tomsett’s retirement from the Board (Provisions A.1.2,
respondents was ensured throughout the process in order to promote A.4.1, A.4.2, B.6.3 and E.1.1).
the open and frank exchange of views. ––Mr Dushnisky was not independent on appointment as Chairman and
Lintstock subsequently produced a report addressing the following areas an external search consultancy was not used in connection with his
of Board performance: appointment. Given Mr Dushnisky’s experience within the mining
sector, his skill set and his familiarity with the operating and
––The appropriateness of the Board’s composition and the attributes that geographical environment in which the Company’s assets are located,
ought to be prioritised in any new Non-Executive Director appointments. the Board believes his appointment to be in the best interests of the
––The Board’s understanding of the operating and political environment in Company irrespective of this (Provisions A.3.1 and B.2.4).
the countries in which the Company is active. ––The Company has not adopted a formal diversity policy, given the focus
––The relationships between Board members and management, and the during 2017 on addressing the operational challenges in Tanzania. We
atmosphere in meetings. will look to implement a policy during 2018 as part of our review of Board
––The Board’s oversight of the Company’s strategy and its composition and succession planning in light of, among other things,
implementation. Group strategy in the context of any resolution of the current operational
challenges faced in Tanzania. However, we are committed to diversity.
––The Board’s focus on risk and the effectiveness with which the Board
As a Company we base all recruitment on the premise that we strive to
oversees culture and behaviours throughout Acacia.
attract a broad mix of individuals from both the traditional and non-
––The Board’s oversight of succession plans for members of senior traditional mining labour markets in order to create a diverse workgroup
management. and maintain a unique company culture. In particular, during 2018, a
In addition, Directors were asked to provide their views as to the top priority for the business is to increase Tanzanian representation in senior
strategic issues facing the company and those matters to prioritise management positions (Provision B.2.4).
in 2018. The UK Corporate Governance Code requires that the Board provides
The findings were collectively considered by all Directors. Overall, the a fair, balanced and understandable assessment of Acacia’s position
Board concluded that, notwithstanding the challenges faced throughout and prospects in its external reporting. Accordingly, the Directors were
2017, it had continued to operate effectively throughout the reporting responsible for the preparation and approval of this Annual Report and
period. Nevertheless, opportunities for improvement and specific consider the Annual Report and Accounts for 2017, taken as a whole,
priorities were identified of which the top priorities for 2018 are: to be fair, balanced and understandable and believe that it provides the
(i) continuing to review all options available to achieve a resolution to information necessary for shareholders to assess Acacia’s position and
on-going challenges and disputes affecting the operating environment performance, business model and strategy.
in Tanzania; (ii) continuing the appropriate management of the Company’s In addition to compliance with the UK Corporate Governance Code,
relationship with Barrick, particularly in the context of Barrick’s as part of commitments given in connection with Acacia’s secondary
discussions with the Government of Tanzania; (iii) continuing to attract listing on the Dar es Salaam Stock Exchange, the Board has undertaken
and retain key employees; and (iv) Board succession planning. to comply with the Corporate Governance Guidelines issued by the
The effectiveness of each Board Committee was also assessed through Tanzanian Capital Markets and Securities Authority to the extent
this exercise and feedback provided to each Committee for review and that these requirements are equivalent to applicable UK corporate
discussion purposes.  governance standards. In the case of any conflict between the two,
the requirements of the UK Corporate Governance Code prevail.
Acacia’s external auditors have reviewed those parts of this statement
which they are required to review under the Listing Rules.

70 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

AUDIT COMMITTEE

Activities in 2017 and plans for 2018

Our activities during the year were wide ranging,
comprising in particular the following:

Objective Achieved
Reviewing Committee composition based on succession
planning, skill set and qualification requirements.
Reviewing our terms of reference and our remit of
responsibilities in light of corporate governance developments.
Reviewing the external auditors’ terms of engagement, plans,
ANDRE FALZON
COMMITTEE CHAIR
scope of work, compensation, the findings arising from all
external audit work and external auditor performance.
Reviewing Acacia’s periodic financial reporting.
Percentage
Meetings of meetings
Members attended attended Reviewing key accounting policies and developments in
Andre Falzon (Chair) 5 100% financial reporting and regulatory environment.
Rachel English 5 100% Reviewing the internal audit plan together with internal audit
reports, findings and monitoring related action plans.
Steve Lucas 4 80%
Reviewing enterprise risk registers, tax disputes and
other litigation.
Introduction Reviewing the progress of the annual anti-corruption
I am the Chair of the Committee and a CPA, CA, CGA (Canada), compliance programme.
with over 25 years of financial and management experience within Reviewing whistleblowing arrangements to support reporting
the mining industry. During the year, Rachel English and Steve requirements under Acacia’s Code of Conduct and Anti-Fraud
Lucas acted as the other members of the Committee. Details and Anti-Corruption policies and other reports from the
of members’ experience and qualifications are provided as part Company’s compliance function.
of the Board of Directors’ biographies.

GOVERNANCE
Receiving periodic risk management reports and updates as
The composition of the Audit Committee, whose members have regards the principal risks for which the Committee has
a wide range of experience with an emphasis on financial and delegated oversight on behalf of the Board.
audit committee experience across the extractive industry, Participating in the Committee’s annual performance
meets the enhanced requirements of the 2016 edition of the assessment.
UK Corporate Governance Code and of the revised FRC Audit
Committee Guidance published during 2016 which became In 2018, the Committee will continue to focus on the majority of
effective during 2017. the above matters, these being core to its remit of responsibilities.
In particular, the Committee will provide support to the Board in its
Our terms of reference require us to meet at least four times a on-going review of appropriate measures to be taken to preserve
year, and in 2017 we met five times, holding meetings in person cash and to protect the Company’s balance sheet.
and by conference call. The Chief Executive Officer, the Chief
Financial Officer, the Head of Legal and Compliance, the Chief
Compliance Officer, the Head of Risk and Internal Audit, members
of the Company’s finance function and the external auditors
also attend Committee meetings on a regular basis by invitation.
We also hold individual meetings with Acacia’s external auditors
and the Head of Risk and Internal Audit without management
present to discuss matters within our remit of responsibilities.
Key responsibilities
Our key responsibilities include oversight of financial reporting and
internal controls over financial reporting, overseeing the Group’s
relationship with its external auditors and Acacia’s internal audit
function, overseeing the external and internal audit processes
generally and reviewing the effectiveness of the Group’s systems
of internal control, including its risk management framework.
In addition, we receive reports from the Chief Compliance Officer
as regards anti-fraud, anti-bribery and anti-corruption compliance
programmes, these being directly related to our oversight of
whistleblowing arrangements and related policy reviews.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 71

AUDIT COMMITTEE CONTINUED

Significant issues considered by the Committee in 2017 due to the move to reduced operations. As a result Acacia has recorded a
net impairment of US$632 million for Bulyanhulu, which includes a pre-tax
Uncertain tax positions and taxation litigation
write-down of US$122 million for goodwill. In addition, Acacia has recorded
A number of tax assessments have been raised by the Tanzanian
an impairment charge of US$12 million for the Nyanzaga Project to reflect
Revenue Authority (“TRA”) covering existing and prior years which have
the current estimate for the potential impact of the new mining laws on
been challenged by members of the Group. We have reviewed the basis
the carrying value of the project, which now stands at US$34 million.
of these assessments and discussed with management their views as
In addition to the above net impairment, Acacia also raised an additional
to why the assessments are incorrect, along with the status of on-going
tax provision of US$172 million relating to the estimated uncertain tax
disputes and appeals procedures. We also reviewed the Company’s
positions for its operating companies, based on an estimate of the impact
position in light of Barrick’s announcement that it had increased
of a comprehensive settlement reflecting the key terms of the framework
its provision with respect to historical uncertain tax positions from
announcements. This brings total provisions for Acacia’s uncertain tax
US$128 million to US$300 million. We discussed these matters
positions to US$300 million. Whilst Acacia continues to reserve and
with the external auditors and legal counsel where relevant.
protect all its legal rights, including through the arbitrations commenced
Based on this review the Committee concluded that the Company had by BGML and PML, and no liability has been incurred by Acacia as a result
sufficiently provided for any uncertain tax positions and that any material of the framework announcements, the additional provision was viewed
contingent liabilities had been adequately disclosed. In addition, the as required to meet applicable accounting standards. These standards
Committee reviewed the amount of deferred tax recognised with respect require the assessment of current obligations for accounting purposes
to losses incurred in previous periods and was comfortable with the based on an assessment of relevant cash outflows from the relevant
amounts recognised. Once a formal detailed proposal is received operating companies in respect of uncertain tax positions. The Committee
regarding the framework between Barrick and the GoT, the Company has reviewed and examined key assumptions used by management for
will conduct a further assessment of the potential impact of the impairment testing and for purposes of assessing the tax provision. In
arrangements on the Company’s historical tax position. particular, the Committee has reviewed and challenged the assessment
of the framework announcements in this context, given that Acacia has
Indirect tax recoverability
not yet received for review and approval a detailed proposal that has
As part of on-going monitoring and review of taxation matters, we have
been agreed between Barrick and the Government of Tanzania, and no
reviewed the status, recoverability and classification of the Group’s
conclusions can be made by Acacia as to whether any particular terms
indirect tax receivables relating to VAT charged on imports and the
of settlement would be approved by Acacia, in the event that any proposal
domestic supply of goods and services. In this regard, we have received
is received in the future. In addition, the Committee has reviewed other
reports from management on the status of discussions and negotiations
assumptions used, such as the long-term average gold price, and discount
of such matters between management and the TRA; we have reviewed
rate used and the factors relevant to this selection, such as operating
management’s on-going calculations of amounts so outstanding; the
cash cost levels and related factors underpinning relevant mine planning,
procedure established to recover refunds and amounts due under the
budgets and forecasts. Views and contributions of the external auditors as
escrow account established to fund refunds due in respect of portions
regards the impairment testing procedures and tax provision assessments
of the receivable; the audit process followed to confirm such refunds;
and key assumptions used formed part of the Committee’s review of these
and the overall time frame for the receipt of such refunds against
matters. Following these reviews, the Committee satisfied itself that the
amounts outstanding under the receivable from time to time. The
carrying value and tax provision review used to ascertain the carrying value
Committee has also taken into account the views and contributions
of the Company’s CGUs had been appropriately reviewed and challenged
of the external auditors regarding recoverability and classification of
and were therefore sufficiently robust for use. The Committee also
relevant indirect tax receivables. Based on the foregoing, the Committee
reviewed the disclosure contained in this Annual Report and, in particular,
has satisfied itself that the Group’s indirect tax receivables remain
the disclosure contained in the notes to the consolidated financial
recoverable and appropriately classified in the circumstances and is
statements as regards impairment and tax provisions in order to satisfy
satisfied with the suitability of the related disclosures contained in
itself of the accuracy and suitability of the disclosures so made.
this Annual Report.
Going concern review
Carrying value review and tax provision
In addition to the matters stated above, all of which are relevant to
As a result of developments within our operating environment this year,
the Board’s assessment of Acacia’s position as a going concern, the
management identified a number of potential triggers for impairment
statement relating to which is provided on page 49, the Committee also
testing of the carrying value of the Company’s assets, including but not
reviewed other matters relevant to Acacia’s liquidity, namely the on-going
limited to, the challenges experienced in the operating environment in
availability of net cash balances, Acacia’s hedging strategy and policy,
Tanzania, the announcement of new legislation by the Government of
material contingent liability exposure and various cash optimisation
Tanzania in respect of the natural resources sector and the resulting
opportunities, the latter of which also being a focus for the Board.
decision to reduce operations at Bulyanhulu. As a result, management
Management reported to the Committee on each of these matters and
has undertaken a carrying value review of the Group’s affected Cash
was questioned accordingly. In this regard, the Committee has also taken
Generating Units (CGUs). Following this review management considered
into account the views of the external auditors in order to satisfy itself
that in accordance with applicable accounting standards, carrying values
of the position taken by the Board as regards to the appropriateness
for the CGUs should be calculated by reference to the key terms of the
of the going concern assumption contained in this Annual Report.
framework announcements made by Barrick and by the Government of
Tanzania in October 2017, with additional discounting to reflect the
uncertainty around the final terms of any comprehensive settlement that
might be reached. The carrying value review demonstrated a potential
reduction in value at all three operating assets, but Buzwagi and North
Mara have sufficient headroom above their current carrying values.
At Bulyanhulu, however, the impact of the changes was greater, due to the
long life of the mine and the delay to a return to positive cash generation

72 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Risk reviews With respect to non-audit services provided by the external auditors,
Throughout the year, the Committee has continued to have delegated the Committee reviews the status of all non-audit services on a quarterly
oversight of certain financial-related principal risks and the Company’s basis and is required to consider, and where appropriate provide prior
risk management framework itself, as a component of internal controls approval for, the provision of all non-audit work by the external auditors to
systems generally. Further information regarding risk management and ensure that any such work can be conducted without adversely affecting
risk governance is provided and the principal risks for which the auditor independence. The Committee also reviews the proposed
Committee retains oversight are identified on pages 24 to 29. In this provision of non-audit services against the backdrop of UK and EU
regard our risk monitoring activities involve receipt of periodic prohibitions regarding the provision of non-audit services to ensure the
risk reports and the monitoring of trends and development relevant Company complies with all restrictions and requirements applicable to it.
to risk environment, as supported by management’s oversight and
The auditors are precluded from engaging in non-audit services that
implementation of day to day risk management across our operations.
would compromise their independence, objectivity or violate any
Fair, balanced and understandable review professional requirements or regulations affecting their appointment as
At the request of the Board, the Committee has also reviewed the auditors. The auditors may, however, provide non-audit services which
narrative content of the Annual Report in order to make a do not impair their independence, and where their skills and experience
recommendation that the report satisfies revised narrative reporting make them a logical supplier, subject to pre-approval by the Committee.
requirements in that the Annual Report, when taken as a whole, is fair, For example, this may include the conduct of certain matters relating
balanced and understandable and provides the information necessary to Tanzanian taxation assessments, given the materiality of taxation
for shareholders to assess the Company’s position and performance, considerations to the financial assessment and external audit of the
business model and strategy. In this regard the Committee has taken Company. The Company’s procedures require that any non-audit services
advice from the Company’s legal function to satisfy itself of the relevant proposed to be provided by the auditors be supported by a justification
legal and regulatory framework underpinning this disclosure standard. as to why the appointment of the external auditors to provide the
services is in the Company’s best interests, and how auditor
Internal and external audit reviews independence would be safeguarded in the specific context of the
Throughout the year, the Committee received regular reports on matters
proposed services. In addition to this, the lead audit partner rotates
under review by the internal audit function, and has reviewed such
at least every five years.
matters and raised questions with the Head of Risk and Internal Audit
accordingly. We also reviewed the internal audit charter, mandate and Fees for non-audit services incurred during the year amounted to
performance in order to assess on-going effectiveness, following which approximately US$0.3 million (2016: approximately US$0.4 million)

GOVERNANCE
the Committee concluded that the internal audit function remains representing 26% of the 2017 audit fees. Audit related and non-audit
effective and performs in accordance with requirements of the business. services provided by the external auditors included their review of the
We have also assessed the effectiveness of the external audit process Company’s half-year report. Further information on audit and non-audit
via responses to surveys received from the Chief Financial Officer, fees paid to PwC can be found in Note 10 to the consolidated financial
members of the finance and treasury function, and in particular members statements.
of the Company’s financial reporting team and the Company secretariat.
As a Company we also maintain a strict discipline on the recruitment of
The survey comprised a range of factors including the following:
any former employees of the external auditors to ensure independence
––Progress achieved against the agreed external audit plan is not undermined. The Committee has adopted a formal written policy
––Competence with which the external auditors handled key accounting regarding the recruitment of former employees of the external auditor.
and audit judgements and communication of the same between The policy prohibits the hiring of any former member of the external audit
management, the Committee and the external audit team team into any financial oversight role or as an officer of the Company
for a period of two years following their association with the audit, save
––Compliance with relevant regulatory, ethical and professional guidance
in instances where the appointment has been pre-approved by the
on rotation of lead audit partners
Committee. Between meetings, the Committee Chair has delegated
––Qualifications, expertise, resources and the external auditors’ own authority to deal with such appointments at his discretion. Any such
assessment of their quality control procedures interim approval must be ratified at the next meeting of the Committee.
––The stability and continuity provided to the business as a result of the In addition, any employee of the external auditor who accepts
continued appointment of PricewaterhouseCoopers LLP (“PwC”) as employment with the Acacia Group whatever the role must cease all audit
external auditors activity immediately and tender their resignation to the audit firm.
Based on this assessment, the Committee concluded that the external
auditors remain effective and we will be recommending the
reappointment of the external auditors at the forthcoming AGM in light
of this assessment. As regards external audit tender considerations,
PwC have acted as external auditors for the Group since its listing on
the London Stock Exchange in March 2010. The Committee has reviewed
the requirements of the Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender Processes
and Audit Committee Responsibilities) Order 2014 (“Order”), which
requires mandatory tendering of audit services every ten years by FTSE
350 companies, and determined that an audit tender will be required
in respect of the 2020 financial year at the earliest. We are therefore
compliant with the requirements of the Order.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 73

EHS&S COMMITTEE

Activities in 2017 and plans for 2018

Our activities during the year were wide ranging,
and comprised the following in particular:

Objective Achieved
Reviewing Committee composition, based on succession
planning, skill set and qualification requirements.
Reviewing our terms of reference and our remit of
responsibilities in light of on-going developments within the
Company’s business and operating environment.
RACHEL ENGLISH
COMMITTEE CHAIR
Reviewing Group-wide EHS&S and SC strategies and priorities,
performance, metrics, trends and incident reports.
Overseeing the development of a Sustainable Communities
Percentage
Meetings of meetings strategy and programme as a driving component of our approach
Members attended attended1 to SC and the operation of the Acacia Maendeleo Fund.
Rachel English (Chair) 3 100% Reviewing key risks in the Group’s operating environment
Andre Falzon 2 100% regarding EHS&S and SC.
Reviewing key regulatory and other developments relevant to
Brad Gordon 3 100%
the EHS&S and SC operating environment.
1 Based on the number of meetings held during the relevant individual’s period Reviewing and monitoring the status of occupational, health
of membership of the Committee.
and safety targets and systems.
Introduction Identifying and reviewing specific focus areas in the context of
I am the Chair of the Committee, with extensive experience of performance and strategic reviews, as relevant to EHS&S and
corporate social responsibility and Sustainable Communities SC matters.
from my work with the World Bank Group, as well as Helios Social Receiving periodic risk management reports and updates
Enterprise, which I founded to develop renewable energy access regarding the principal risks for which the Committee has
projects in rural sub-Saharan Africa. I assumed the role of Chair delegated oversight on behalf of the Board.
of the Committee from Ambassador Juma V. Mwapachu upon him Participating in the Committee’s annual performance
stepping down from the Board in July 2017. Andre Falzon was assessment.
appointed to fill the vacancy on the Committee that arose as a
result. Peter Tomsett ceased to be a member of the Committee In 2018, the Committee will continue to focus on the majority of the
upon stepping down from the Board in April 2017, at which time above matters, these being core to its remit of responsibilities. From a
Brad Gordon was appointed to the Committee. Peter Geleta risk management and oversight perspective, the specific EHS&S-related
has been appointed to replace Brad Gordon with effect from principal risks for which the Committee has delegated oversight are
1 January 2018. identified as part of the principal risks and uncertainties table on pages
26 to 29. In this regard our risk monitoring activities involve receipt of
Details of members’ experience and qualifications are provided periodic risk reports and the monitoring of trends and development
as part of the Board of Directors’ biographies. Our terms of relevant to risk environment, as supported by management’s oversight and
reference require us to meet at least twice a year, and in 2017 we implementation of day to day risk management across our operations.
met three times. Those involved in the Company’s environmental,
health, safety and security (“EHS&S”) and Sustainable We have not changed our commitment to Corporate Social Responsibility
Communities (“SC”) functions also attend Committee meetings notwithstanding the challenges faced in our operating environment and
on a regular basis by invitation, in order to report on EHS&S/SC the move to reduce operations at Bulyanhulu during 2017. The
developments and performance. Committee will continue to monitor that activity during 2018
to ensure that it is appropriately executed.
Key responsibilities
Our key responsibilities focus on the oversight and review of
activities that are of core importance to Acacia’s social licence
to operate. These include Acacia’s strategy and policy on
environmental, occupational health and safety, SC and security
matters; reviewing the effectiveness of Group EHS&S systems and
controls; and generally overseeing management’s monitoring and
evaluation of emerging SC issues to assess the potential impact
on Acacia’s business and operations. In addition, we also have
delegated oversight of human rights from the Board, in line with
similar oversight responsibilities assumed by EHS&S Committees
or their equivalent in peers across the mining industry.

74 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

NOMINATION & GOVERNANCE COMMITTEE

Activities in 2017 and plans for 2018

Our activities during the year were wide ranging, and
comprised the following in particular:

Objective Achieved
Reviewing Committee composition based on succession
planning, skill set and qualification requirements.
Reviewing our terms of reference and our remit of
responsibilities in light of on-going developments within the
Company’s business and operating environment and
KELVIN DUSHNISKY developments within a corporate governance context.
COMMITTEE CHAIR
Reviewing the Board’s structure, size and composition in the
context of the Company’s strategic and business objectives.
Percentage
Meetings of meetings Reviewing the Company’s core corporate governance policies in line
Members attended attended1 with best practice developments and recent trend developments.
Kelvin Dushnisky (Chair) 2 100% Participating in the Committee’s annual performance
Michael Kenyon1 1 100% assessment.
Providing oversight and review of the Board’s and Board Committees’
Steve Lucas2 1 100%
annual performance evaluation and overseeing the adoption of
1 Based on the number of meetings held during the relevant individual’s period recommendations for 2018 work plans. In this regard an overview of
of membership of the Committee.
the 2017 performance evaluation is provided on page 70.
Reviewing periodic training and development requirements
Introduction for Directors.
In addition to acting as the Chairman of the Board, I also act as Chair
of the Nomination & Governance Committee. Michael Kenyon and
A current key focus is on reducing the number of international employees
Steve Lucas act as the other members of the Committee, having joined
and contractors in our operations in Tanzania and ensuring that our
the Committee following Ambassador Juma V. Mwapachu and Peter
Tanzanian assets are increasingly led and operated by Tanzanian

GOVERNANCE
Tomsett stepping down from the Board during the year.
employees. During 2017 we successfully combined Bulyanhulu and
Details of members’ experience and qualifications are provided Buzwagi under a single management team led by a Tanzanian national.
as part of the Board of Directors’ biographies. Our terms of During 2018, a priority for the business is to increase Tanzanian
reference require us to meet at least twice a year, and we did so in representation in senior management positions.
2017. The Chief Executive Officer and members from the Company
We have employment policies in place which demonstrate the Group’s
secretariat also attend Committee meetings by invitation to discuss
commitment to equal opportunities for all employees, workers and
matters within our remit of responsibilities.
applicants for employment, and to ensuring that they will not be subject
Key responsibilities to any discrimination, bullying, harassment or victimisation on the
We play a leading role in reviewing the structure, size and composition grounds of age, colour, disability, ethnic or national origin, gender, gender
of the Board and in reviewing prospective new Board appointments and expression, gender identity, marital status, pregnancy, race, religion or
succession planning requirements. We also have primary responsibility belief, or sexual orientation. These policies are supported by appropriate
for making recommendations to the Board on the composition of Board harassment, disciplinary and grievance procedures.
Committees and we manage recommendations for the retirement and
Save for appointments made by Barrick under nomination rights contained
replacement of Directors. In addition, our remit of responsibilities
in the Relationship Agreement, Board appointments are made on the basis
includes delegated authority from the Board to oversee and review
of pre-determined job descriptions which include, as regards independent
Acacia’s corporate governance policies and procedures, including
Non-Executive Directors, estimates of time commitment requirements.
independence reviews and the monitoring of Company procedures
From a recruitment and candidate search perspective, our existing Directors
for the management of actual and/or potential conflicts of interest.
provide access to a wide network of potential Board appointment candidates,
particularly within the extractive industry, as a result of their collective
experience and standing within the extractive sector. In addition to this, we
In 2018, the Committee will continue to focus on the majority of the above look to retain external search consultants to assist us in identifying potential
matters, these being core to its remit of responsibilities, and will continue candidates for Board positions, when appropriate to do so. We did not make
to assess Board composition and Board succession requirements, any new appointments to the Board in 2017 and, as such, no external
particularly in the context of the changes to the Board during 2017, recruitment consultants were retained for Board recruitment purposes.
as well as in light of FRC’s continuing reviews and consultations around
During 2017, following the resignation of Brad Gordon, the Nomination
succession planning as a driver of Board effectiveness.
Committee oversaw a process to identify a replacement, which took into
In the context of diversity, the Company has not adopted a formal diversity account skill sets and experience of candidates, as well as the Company’s
policy, given the focus during 2017 on addressing the operational succession plans and strategy. Following this process, Peter Geleta was
challenges in Tanzania. However, as a Company, we base all recruitment appointed to the role of Interim Chief Executive Officer. I engaged with
on the premise that we strive to attract a broad mix of individuals from various shareholders to discuss the changes to the CEO and CFO positions,
both the traditional and non-traditional mining labour markets in order to as part of our on-going commitment to dialogue with our investors.
create a diverse workgroup and maintain a unique company culture. We
recognise the value of a diverse workforce and the creative potential that
individuals of different backgrounds and abilities bring to their work, to
increase and leverage diversity of thought, enhance our risk management
capability, drive innovation and remove barriers to success.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 75

INDEPENDENT COMMITTEE

Activities in 2017 and plans for 2018

Our activities during the year included the following in particular:

Objective Achieved
Monitoring the nature and extent of engagement by the
Company in the discussions between Barrick and the
Government of Tanzania.
Reviewing the disclosure of information by the Company to
Barrick, having due regard, among other things, to the
Relationship Agreement between the Company and Barrick.
MICHAEL KENYON
COMMITTEE CHAIR
Reviewing the Company’s strategy in connection with the
operational challenges in Tanzania, including strategies and
actions that may be appropriate in light of these challenges.
Percentage
Meetings of meetings Communicating with Barrick regarding the discussions
Members attended attended5 between Barrick and the Government of Tanzania.
Michael Kenyon (Chair) 14 100% Monitoring the need for disclosure to the market in connection
Rachel English 13 93% with developments in the discussions of which the Company
becomes aware.
Andre Falzon 14 100%
Communication with shareholders regarding the discussions
Steve Lucas 13 93% between Barrick and the Government of Tanzania.
Monitoring on-going compliance with the independence
Introduction requirements of the Listing Rules and other applicable
The Independent Committee was formed by the Board during 2017 regulations in connection with the discussions between
as a result of the commencement of discussions between Barrick Barrick and the Government of Tanzania.
and the Government of Tanzania regarding the issues impacting the
Company’s operations in Tanzania. In 2018, the Committee will continue to focus on the above matters.
As and when any detailed proposal is provided to the Company, the
The Committee comprises the Independent Directors of the Independent Committee will be responsible for reviewing and evaluating
Company. Details of members’ experience and qualifications are these arrangements, including the terms of any document or agreement
provided as part of the Board of Directors’ biographies. Meetings proposed to be entered into by the Company. We will then provide a
are held at such frequency as I consider appropriate. During 2017 recommendation to the full Board of Acacia on the appropriate course
we met 14 times. The Chief Executive Officer, the Chief Financial of action. Any proposal agreed in principle between Barrick and the
Officer and other members of senior management and external Government of Tanzania will require Acacia’s approval.
advisers may also attend Committee meetings by invitation to
discuss matters within our remit of responsibilities.
Key responsibilities
We are responsible for overseeing all aspects and implications of
the discussions between Barrick and the Government of Tanzania,
and any related proposals.
This includes responsibility for ensuring that due consideration
is taken of Acacia’s interests with regard to Barrick’s discussions
with the Government of Tanzania and any related proposals.
In discharging its role, the Committee must ensure that due
consideration is given to the Board’s overall responsibility to
promote the long-term success of Acacia, and the responsibility
of the Board to exercise its independent judgement in the context
of Barrick’s discussions with the Government of Tanzania and any
related proposals.
The Committee reports back to the Board and shall make
recommendations as it sees fit as regards any deliberations
and decisions that the Board may consider in the context of
this process. The Committee is entitled to communicate directly
with third parties (including Barrick) or any of their advisers.
In my role as Chair, I provide leadership to the Committee and
preside over Committee meetings. I also facilitate the flow of
information to and from the Committee and foster an environment
in which Committee members may ask questions and express their
viewpoints. My responsibilities also include reporting to the Board
with respect to the significant activities of the Committee and any
recommendations of the Committee.

76 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

REMUNERATION REPORT

Implementation of Remuneration Policy during 2017 and leaver

arrangements for Brad Gordon
Brad Gordon received a 3% increase in his salary effective 1 January
2017 bringing his salary to £489,250 per annum.
Having served in the role of Chief Executive Officer for the entire financial
year, Brad Gordon was eligible for an STI award in respect of 2017
performance. Taking into account both Company-wide and individual
performance, the Committee approved a payment of 74% of salary.
Further details as regards the 2017 STI assessment are provided on
pages 86 to 87.
MICHAEL KENYON
COMPENSATION COMMITTEE CHAIR On long-term incentives, the final tranche of Brad’s 2013 SOP awards
lapsed based on relative TSR performance to 20 August 2017. No other
long-term incentive awards were eligible to vest during the year. Following
Dear shareholders, shareholder approval of the revised LTIP rules at the 2017 AGM, Brad
On behalf of the Board, I am pleased to present the Directors’ received an LTIP award in the form of nil-cost options representing 400%
Remuneration Report for the year ended 31 December 2017. of base salary on 26 April 2017. These awards, along with outstanding
awards made in February 2015 and February 2016, lapsed upon Brad’s
2017 was a challenging year for the Company following the imposition
resignation from the Company.
of the concentrate export ban towards the start of the year. Despite
the challenging operating environment and variety of factors outside Mr Gordon was not eligible for any further payments following his
management’s control, overall performance during the year was resilient. departure from the Company.
2017 AISC was the lowest level ever achieved by Acacia, coming in c.9%
2015 and 2016 STI target disclosure
lower than in 2016 and below full year guidance. Gold production was
In line with the commitment made last year to retrospective disclosure
robust, although somewhat impacted by the transitioning to reduced
of STI targets, this report contains full retrospective disclosure of targets
operations at Bulyanhulu, with an outturn being c.7% below 2016 levels,
applying to the 2015 and 2016 STIs, which are no longer deemed to be
whilst free cash flow fell short of the stretching targets set at the start
commercially sensitive given developments over 2017.
of the year. In light of these material events, the Committee reassessed
the targets around which the 2017 STI was assessed to help ensure the Remuneration Policy considerations

GOVERNANCE
bonus continued to reinforce the best outcome for shareholders during The Committee submitted a revised Remuneration Policy to shareholders
the period. More details around the 2017 STI outcome can be found at the 2017 AGM, receiving 88% support for the relevant resolution.
on pages 86 to 87 of this report. Payments made during 2017 were made in accordance with this
new policy which is repeated on pages 78 to 83 of this report for ease
As announced to the market on 2 November 2017, Brad Gordon stepped
of reference.
down from his role as Chief Executive Officer of Acacia on 31 December
2017 following four successful years with the Company. Peter Geleta, In terms of wider remuneration practices, last year we enhanced our
previously Head of People, has taken on the role of Interim Chief shareholding guidelines for Executive Directors, introduced the flexibility
Executive Officer effective 1 January 2018. to grant executive long-term incentive awards in the form of nil-cost
options and extended the LTIP performance period from three to five
Implementation of policy for 2018 – Peter Geleta
years. The Committee continues to monitor developments in the context
As Interim Chief Executive Officer, with effect from 1 January 2018
of mandatory executive bonus deferral. Again, this year the Committee
Peter Geleta will receive a salary of £400,000 per annum. Mr Geleta will
has refrained from introducing mandatory bonus deferral, in light of the
receive a pension contribution of 15% of salary and be entitled to receive
five year horizon of the LTIP. The Committee believes that the five year
company benefits including a car allowance and medical cover.
performance period for LTIP awards continues to ensure that a significant
Mr Geleta will be eligible for an STI award of up to 150% of salary based proportion of executive pay remains at risk over the longer term and that
on a combination of Group and individual performance, weighted 80% executives remain sufficiently aligned with shareholders, whilst ensuring
and 20% respectively. The Committee will continue to adopt strenuous that executives remain sufficiently motivated and talent retained,
performance requirements for the vesting of bonus awards to ensure that particularly given the on-going challenges faced by the Company.
vesting levels remain focused on the achievement of target and above
Lastly, as required under the Large and Medium-sized Companies and
target performance, with further details to be provided in next year’s
Groups (Accounts and Reports) (Amendment) Regulations 2013, the
Annual Report on Remuneration.
remaining content of this Remuneration Report is divided into the
For 2018, Peter Geleta will be made an LTIP award over nil-cost options Directors’ Remuneration Policy (pages 78 to 83) and the Annual Report
representing 400% of salary, with vesting subject to five-year relative TSR on Remuneration for 2017 (pages 84 to 91).
performance against a group of listed gold miners. Further details on this
award are included later in this report.

MICHAEL KENYON
CHAIR OF THE COMPENSATION COMMITTEE

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 77

REMUNERATION REPORT CONTINUED

Directors’ Remuneration Policy

This section of the report sets out the Policy for Executive Directors, which shareholders approved at the 2017 Annual General Meeting on
20 April 2017, and which came into effect from that date.
Summary table for Executive Directors’ Remuneration Policy

Fixed remuneration
Base salary Pension Benefits
Purpose To provide an appropriately competitive level of base To help provide To provide benefits which are competitive in the
salary with due regard to the size and nature of the for an appropriate market in which the individual is employed.
responsibilities of each role, as well as an individual retirement benefit.
executive’s experience.
Operation Reviewed annually, with any adjustments effective Executive Directors Executive Directors receive benefits, which
1 January and made at the discretion of the receive contributions usually include the provision of a company car
Compensation Committee. into a personal or cash alternative, health and life insurance,
Salaries are benchmarked against international gold pension scheme liability insurance, fitness club membership
mining, general mining and FTSE listed companies of their choice, or and professional membership; however, the
of similar size and complexity. a cash supplement Compensation Committee retains discretion to
of commensurate approve any other form of benefit that it deems
The Compensation Committee also takes into
value. appropriate to award depending on individual
account corporate and individual performance and
The Group does not circumstances. For example, relocation allowances
experience; general market conditions; and salary
operate any defined and international transfer-related benefits are
increases applied within the Company as a whole.
benefit schemes. often provided for, when required, in line with
general industry practices for the recruitment
of international employees.
Opportunity To avoid setting expectations of Executive Directors Executive Directors The value of benefits will generally be assessed
and other employees, no maximum salary is set receive pension on the basis of market norms at the relevant
under the Remuneration Policy. It is not anticipated contributions or point in time.
that salary increases for Executive Directors will an equivalent cash The Compensation Committee retains the
exceed those of the wider workforce over the period supplement equal discretion to approve a higher total cost of benefits
during which this Remuneration Policy is effective. to a percentage of in exceptional circumstances (e.g. relocation)
Where increases are awarded in excess of the wider gross base salary or in circumstances where factors outside the
employee population, the Committee will provide in line with market Company’s control have changed materially
the rationale in the relevant year’s Annual Report norms at the relevant (e.g. increases in medical coverage inflation).
on Remuneration. point in time.
Short-Term Incentive (“STI”)
Purpose To reinforce the delivery of key short-term operational objectives on an annual basis in order to promote performance
as regards business priorities for each financial year in the context of individual and Company performance.
Operation Performance measure weightings and targets are set at the start of the year and weighted to reflect business priorities. At the
end of the year, the Compensation Committee determines the extent to which targets have been achieved, taking into account
Company-wide performance and the individual performance of each Executive Director.
STI payments are delivered in cash and are subject to appropriate clawback provisions, further details of which are included as
a note to the policy table.
Opportunity The STI provides Executive Directors with an annual bonus opportunity in the range of 0% to 150% of base salary, with target
bonus opportunity of up to 100% of base salary, unless otherwise determined by the Compensation Committee.
Performance Bonus outcomes are assessed by the Compensation Committee on a scorecard assessment, based on the achievement
measures of the targets set for each performance measure and the Committee’s broad assessment of Company performance.
Performance measures are based on challenging budget and stretch targets for Company-wide financial and operational
performance and, where appropriate, individual performance. Performance measures may include financial, operational,
growth, production, cost and capital expenditure control and sustainability metrics. Performance measures are selected
annually to reflect key strategic initiatives and matters underpinning the key financial and non-financial performance indicators
used to manage performance across the Acacia Group. Performance measures will be weighted appropriately each year
according to the business plan. Weightings of performance measures may vary, typically up to 10% and 50%, with the range
of performance required under each measure calibrated to reflect the Company’s annual published guidance range, particularly
as regards production, cash costs and capital expenditure.
Whilst performance measures, weightings and targets for any given year will not be disclosed on a prospective basis due
to commercial sensitivities, the Compensation Committee aims to provide such details retrospectively as part of the Annual
Report on Remuneration, unless on-going commercial sensitivities discourage such disclosures.

78 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Long-Term Incentive Plan (“LTIP”)
Purpose To reinforce an enterprise culture that promotes and protects shareholders’ long-term interests, so as to reward long-term
decision making and performance that support the delivery of shareholder returns and drive shareholder value over the
long term.
Operation Awards of conditional shares, nil-cost options or restricted stock units (“RSUs”) may be granted annually, with the maximum
value that may be awarded to each Executive Director defined as a percentage of base salary at the date of grant. Vesting is
based on Acacia’s corporate performance over a period of not less than three years. If no entitlement has been earned at the
end of the relevant performance period, awards will lapse.
Awards under the LTIP are subject to malus and clawback provisions, further details of which are included as a note to the
policy table.
Opportunity The LTIP permits a maximum award with a value equal to 400% of base salary at the time of grant to be made each year under
normal circumstances. The Committee may exceed this limit in exceptional circumstances only. Such circumstances would
include, for example, specific recruitment or retention scenarios. The exercise of this discretion would be assessed in each
case on the circumstances in question.
The level of LTIP awards granted to Executive Directors each year is determined by the Committee, within the limits set out
above, with reference to a range of factors including individual performance ratings.
Dividends accrue on unvested LTIP awards over the vesting period and are released, to the extent the LTIP award vests,
on the date of release.
Performance Subject to continued employment and Acacia’s relative TSR performance over the performance period when compared to a
measures relevant listed index (currently comprising the constituents of the EMIX (formerly Euromoney) Global Gold Index). TSR
performance must be at least equal to that of the TSR comparator group in order to receive any payment under LTIP awards,
at which level 25% of the maximum award will vest. If no entitlement has been earned at the end of the performance period,
awards will lapse.
The Compensation Committee reviews the comparator group of international gold miners against which TSR performance is
measured from time to time to ensure it remains appropriate. The Compensation Committee has the discretion to determine
the treatment of comparators in the event of their delisting or otherwise in any event which, in the opinion of the Committee,

GOVERNANCE
compromises the suitability of a company as a comparator for Acacia. Additionally, the Committee may, at its discretion,
reduce the number of awards vesting in the event that the achievement against the performance condition is not a genuine
reflection of the underlying performance of the Company. More generally, the performance measures applied to LTIP awards
are reviewed periodically to ensure they remain aligned with shareholder interests and, in this regard, the Committee retains
discretion to employ performance measures other than TSR to the LTIP in order to allow for performance assessments to
evolve over time.
Share Option Plan (“SOP”)
Purpose To reinforce an enterprise culture that promotes and protects shareholders’ long-term interests, so as to reward long-term
decision making and performance that support the delivery of shareholder returns and drive shareholder value over the
long term.
Operation Whilst the LTIP is expected to be used as the main long-term incentive for Executive Directors going forward, the Committee
retains the ability to grant stock options under the SOP where appropriate, such as in recruitment or retention scenarios.
The Compensation Committee will set a vesting period for SOP awards appropriate to the circumstances at the time of grant.
Historically, this has included vesting in equal parts over four years or vesting after three years. All awards expire seven years
from the date of grant. There are no clawback provisions included under the SOP.
Opportunity The SOP permits a maximum share option award with a value equal to 200% of base salary at the time of grant to be made
each year under normal circumstances. The Committee may exceed this limit in exceptional circumstances only. Such
circumstances would include, for example, specific recruitment or retention scenarios. The exercise of this discretion would
be assessed in each case on the circumstances in question.
In the event that a stock option award was used for annual incentive purposes, such awards would ordinarily be granted at a
target level equal to 150% of base salary at the time of grant. In this regard, the Committee would look to use an appropriate
valuation model, for example, the Black-Scholes model, for purposes of ascertaining the fair value of any award made.
Performance The Compensation Committee determines the performance metrics applying to share option awards as appropriate to the
measures circumstances at the time of grant, based on the purpose of making such award, i.e. whether for recruitment, retention or
as a matter of annual performance incentive. Generally, in the event that the Committee were to grant an SOP award as an
incentive, it would look to apply an appropriate performance condition.
Shareholding guidelines
Purpose To align the interests of Executive Directors with shareholders through the building up of a significant shareholding in
the Company.
Operation Executive Directors are required to establish a shareholding equivalent to four times base salary by retaining 50% of vested
awards (net of tax) until the guideline has been met.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 79

REMUNERATION REPORT CONTINUED

Pay-for-performance: scenario analysis Use of Compensation Committee discretions

The chart below provides an estimate of the potential future reward Generally, it is not possible for any remuneration policy to pre-empt
opportunity for the Interim CEO, and the potential split between the every possible scenario and for this reason the Compensation
different elements of remuneration under three different performance Committee has been provided with the ability to apply various discretions
scenarios: Minimum, On-target and Maximum. and judgements in order to ensure the achievement of fair outcomes and
to maintain the flexibility required to balance the interests of individuals
Potential reward opportunities are based on the Remuneration Policy. In
and those of the Company. For example, the Compensation Committee
each scenario, the STI and LTIP are based on the maximum opportunities
may be required to exercise discretion when determining whether or not
in 2018 applied to the CEO’s 2018 salary. From 2017 onwards, the LTIP
the outcomes of performance measures and targets applicable to
awards granted in a year will not normally vest until at least the fifth
incentive plans are fair in context, or if realities encourage the use of
anniversary of the date of grant, and the projected value excludes the
upward or downward adjustments. By means of illustration, this may be
impact of share price movement.
the case as a result of the impact of wider socio-economic or political
The minimum scenario reflects the 2018 base salary, pension and factors or market-wide developments that were generally unforeseeable
estimated benefits (i.e. fixed remuneration) which are the only elements or remote at the time of setting performance measures, but nonetheless
of the Chief Executive Officer’s remuneration package not linked occur during a performance period. It is for such reasons that the
to performance. Compensation Committee retains a number of discretions for the
operation of all incentive schemes (STI, LTIP and SOP) including, but not
The on-target scenario reflects fixed remuneration as above, plus target
limited to, the ability to determine the following:
STI (75% of salary) and half of the LTIP vesting (200% of salary).
––Scheme participants.
The maximum scenario reflects fixed remuneration, plus maximum
payout under all incentives – 150% of salary under the STI and full ––The timing of grant and size of awards.
vesting of an LTIP award (400% of base salary). ––Appropriate treatment of vesting of awards in the context of
restructurings and/or takeovers.
Peter Geleta ––Appropriate adjustments to awards in the event of variations to the
(£’000) Company’s share capital.
£2,698
––Absent specific bad leaver scenarios, the ability to determine and
designate leavers as good leavers in order to determine appropriate
£1,598 59%
treatment of awards in exit scenarios.
50%
––Treatment, size and grant of awards in a recruitment context.
£498 19% 22%
100% 31% 18% The application, scope, weighting and targets for applicable performance
Minimum On-target Maximum measures and performance conditions from time to time, including
any amendments to existing performance measures/conditions and
Fixed remuneration
related targets.
Annual bonus
Long-term incentives Whilst it may not be possible to give an exhaustive list of Compensation
Committee discretions, the exercise of discretions and the rationale
underpinning their use, if any, will generally be provided in context,
as part of the Annual Report on Remuneration.
Malus and clawback
Awards under the STI and the LTIP are subject to clawback and, in
respect of the LTIP from 2017, malus provisions which can be applied
to both vested and unvested awards. Clawback provisions will apply
for a period of up to one year from the end of the performance period.
Circumstances in which malus and clawback may be applied include
misconduct and misstatement.
Approach to recruitment of Executive Directors
When determining the remuneration package for a new Executive Director
the Compensation Committee aims to offer a package that is sufficiently
competitive, to attract, motivate and retain candidates of the calibre
and experience required to run our business. This will generally be
determined in each case not only in the context of the skills required
for a position and those of each candidate, but also on the basis of
recruitment trends within the global mining industry and any additional
considerations relevant to the recruitment of executives. In addition,
our approach to recruitment will also depend on whether we use external
recruitment or internal promotion routes.

80 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

External recruitment
In determining appropriate remuneration for an external candidate, the Compensation Committee will take into consideration all relevant factors
(including quantum, the nature of remuneration and the jurisdiction the candidate was recruited from) to ensure that arrangements are in the best
interests of the Company and its shareholders. For such purposes, the Compensation Committee may make use of all of the existing components
of the Remuneration Policy as follows:
Maximum annual
Component Approach
grant value
Fixed Base salary The base salaries of new appointees will be determined by reference to relevant market data, N/A
remuneration experience and skills of the individual, internal relativities and their current basic salary. Where
new appointees have initial basic salaries set below market, any shortfall may be managed with
phased increases over a period of two to three years subject to their development in the role.
Pension New appointees will receive pension contributions or an equivalent cash supplement, which is N/A
equivalent to that received by existing executives and in line with market norms.
Benefits New appointees will be eligible to receive benefits which may include (but are not limited to) the N/A
provision of a company car or cash alternative, private medical insurance and any necessary
relocation expenses.
Variable STI The STI described in the Summary Table for Executive Directors’ Remuneration Policy will apply 150% of salary
remuneration to new appointees with the relevant maximum being pro-rated to reflect the proportion of
employment over the year. Targets for the individual element will be tailored towards the executive.
LTIP New appointees will be granted awards under the LTIP on the same terms as other executives, 400% of salary1
as described in the Summary Table for Executive Directors’ Remuneration Policy.
SOP New appointees may be granted awards under the SOP, as described in the Summary Table for 200% of salary1
Executive Directors’ Remuneration Policy.
1 Award can be higher in circumstances deemed by the Committee to be exceptional, i.e. where it is necessary to buy out incentive arrangements or make offers equivalent to
sign-on bonuses.

The Compensation Committee may also make an award under the terms Approach to Executive Director exit arrangements

GOVERNANCE
of one of the Company’s incentive plans outlined above in respect of a Executive Director service contracts, including arrangements for early
new appointment to buy out incentive arrangements forfeited on leaving termination, are carefully considered by the Compensation Committee
a previous employer. In doing so, the Committee will consider relevant and are designed to recruit, retain and motivate directors of the
factors including any performance conditions attached to these awards, quality required to manage the Company. The Committee considers
the likelihood of those conditions being met and the term remaining to appointments of an indefinite term and with a notice period of one year
their vesting. In addition, where candidates are recruited from overseas, to be appropriate. The service contract used for the Company’s current
the Committee may be required to consider additional benefits received Interim CEO, being the sole Executive Director at present, provides for
in the home jurisdiction or arrange for a form of substitution of such compensation of 12 months’ salary in the event of early termination.
benefits in addition to the payment of suitable relocation allowances.
The Company has the discretion to pay such compensation in
The Compensation Committee may also consider it appropriate to grant
instalments, requiring the Executive Director to mitigate loss (i.e. by
an award under a structure not included in the Remuneration Policy,
gaining new employment) over the relevant period, or in a lump sum.
exercising the discretion available under Listing Rule 9.4.2 R where
In respect of the Interim CEO, this discretion is not included in his
necessary. Such an award would include, for example, a sign-on
legacy contract.
payment. The Compensation Committee confirms that any arrangement
specifically established to recruit an individual would take the form of If notice to terminate is served by either the Executive Director or the
performance-related variable remuneration. On recruitment, the value Company, the Executive Director can continue to receive basic salary,
of this remuneration would be capped at the limits contained in the LTIP benefits and pension for the duration of his/her notice period during
and SOP or the value of awards which the individual had to surrender which the Company may require the individual to continue to fulfil his/her
in order to be recruited, whichever is the greater. The policy that exists current duties or may assign a period of garden leave, depending on the
for current Executive Directors would then apply to the balance of the circumstances in question. The service contract used for any new hire
individual’s remuneration package. In addition, the Compensation would be based on similar terms. The Interim CEO’s service contract is
Committee does not envisage that a cash payment such available for inspection at the Company’s registered office.
as a “golden hello” would be offered.
Generally, in an exit scenario the Company will honour all contractual
Internal promotion entitlements, this being a matter required by the operation of law, and
In cases of appointing a new Executive Director by way of internal for individuals who relocated from overseas, reasonable relocation costs
promotion, the Committee will be consistent with the policy used for will be considered as appropriate in the circumstances.
external appointees detailed above. Where an individual has contractual
commitments made prior to his or her promotion to Executive Director
level, the Company will continue to honour these arrangements even
in instances where they would not otherwise be consistent with the
prevailing Remuneration Policy at the time of appointment.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 81

REMUNERATION REPORT CONTINUED

The treatment of incentive arrangements in exit scenarios are considered composition generally, as a result of operational or market
on a case-by-case basis, taking into account the relevant contractual developments, or other developments in the business, such as entry
terms of the individual, the circumstances of the exit and any applicable into new markets or a restructuring of the business. In any event, when
duty to mitigate. Generally, the payment of incentives as part of exit exercising such discretion the Compensation Committee would always
arrangements is determined on the basis of good leaver/bad leaver and recognise and take into account the balance of shareholder interests
change of control scenarios, subject to Committee discretions, as follows: and those of the departing individual.
STI Executive Director external appointments
There is no automatic eligibility for payment under the STI. The It is the Board’s policy to allow Executive Directors to accept non-
Committee may exercise discretion to award a bonus for the performance executive directorships of other quoted companies for which they would
year. Such discretion would generally only be used in good leaver normally be allowed to retain fees. Any such directorships must be
scenarios. If an award is made, the award will be made on a pro-rata formally approved by the Chairman of the Board. Currently, no such
basis for the period of time served to the agreed termination date. Any positions are held by the Company’s sole Executive Director.
STI payment would be subject to applicable STI performance measure
Approach to Non-Executive Director remuneration
and target assessments for the year in question.
The Board aims to recruit Non-Executive Directors of a high calibre with
LTIP (pre-2017) and SOP broad commercial, international and other experience relevant to mining
In the event of a Director’s resignation, all outstanding awards will lapse. operations. Non-Executive Directors are appointed by the Board on the
For good leavers, vesting of LTIP awards is typically calculated based on recommendation of the Nomination & Governance Committee.
performance to the end of the relevant performance period with awards
Their appointment is for an initial term of three years, subject to
pro-rated to reflect time employed, although the Committee may exercise
annual re-election by shareholders at each AGM in accordance with
discretion to waive time pro-rating of award in certain circumstances.
the requirements of the UK Corporate Governance Code. Upon the
Stock options for good leavers vest in full subject to the vesting schedule
recommendation of the Nomination & Governance Committee, they may
determined at grant. Any stock options which remain unexercised six
be re-appointed for two additional terms of three years, subject to their
months following the vesting date will lapse.
continuing to satisfy requirements for continuing appointment and, again,
LTIP (2017 onwards) subject to annual re-election by shareholders. The terms of engagement
As executive LTIP awards made from 2017 onwards have five-year of the Non-Executive Directors are set out in a letter of appointment.
performance and vesting periods, the treatment of awards held by These letters do not contain any provision for compensation for early
leavers will depend on the period elapsed from the date of grant. These termination of office. Requirements for notice periods are reviewed on
leaver conditions are drafted to ensure broad consistency of leavers with a case by case basis. All letters of appointment for Non-Executive
market norms for a more traditional LTIP with a three-year performance Directors are available for inspection at the Company’s registered office.
period, and two-year holding period.
Non-Executive Director remuneration primarily focuses on the payment
If a Director leaves the Group during the first 36 months from the date of fees. Non-Executive Directors are not entitled to participate in any
of grant and is a bad leaver, awards will lapse. For good leavers within of the incentive plans available to Executive Directors. However,
the first 36 months from the date of grant, vesting of LTIP awards will Non-Executive Directors may participate in the Company’s DSU Plan.
typically be calculated based on performance to the end of the relevant This plan provides Non-Executive Directors with the option to receive
performance period with awards pro-rated to reflect the proportion of the some or all of their annual fees in return for a deferred right to a cash
first 36 months from grant elapsed at the time of leaving and released payment, payable only after a participant ceases to hold office with the
at the normal date, unless otherwise determined by the Committee. Company. Broadly, cash payments under this plan are calculated by
reference to the fair market value of the Company’s shares at the time
Awards for which more than 36 months have elapsed will lapse only in
of payment and remain subject to market fluctuations in the context
the event of misconduct on the part of the Director. In all other
of the Company’s share price until the time of payment. This plan was
scenarios, awards will continue in the plan with no time-based reduction,
adopted by the Company in 2012 to address certain equivalent practices
but with vesting based on performance to the end of the relevant
and trends of North American mining companies to ensure that our
performance period and released at the normal date, unless otherwise
practices for Non-Executive Director compensation structures remain
determined by the Committee.
flexible and competitive against our global peers. DSUs are granted
On a change of control, outstanding LTIP awards will vest according to annually, usually in April of each year. In addition, to align Non-Executive
performance up to the date of the event and be subject to a time-based Director interests with shareholders, the Company has adopted
reduction if such awards are less than 36 months from the grant date, Non-Executive Director shareholding guidelines for its independent
unless the Committee determines otherwise. Alternatively, Acacia awards Non-Executive Directors, which require relevant individuals to acquire
may be exchanged for new equivalent awards in the acquirer where agreed. a minimum shareholding equivalent to their annual base fee within
five years from election to the Board, which may be satisfied through
Summary termination, termination for misconduct or gross negligence
the purchase of Acacia Ordinary Shares or by DSUs holdings.
or termination in circumstances which would justify summary termination
are all examples of bad leaver scenarios. Good leavers include Details as regards current outstanding awards under the DSU Plan and
individuals who have left the Company as a result of retirement, injury, Acacia Ordinary Shares currently held by Non-Executive Directors are
disability or death. In addition, the Compensation Committee retains provided on page 90.
the discretion to determine any leaver that is not a bad leaver as a good
leaver. This discretion is viewed as necessary by the Company given the
vast range of scenarios in which an individual may leave the Company
where conduct is not at issue. Whilst it is not possible to provide an
exhaustive list of such scenarios, examples would include circumstances
in which the Board determines a need to change the Company’s strategic
direction or focus, or is required to review Board and management

82 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Summary table for Non-Executive Director Remuneration Policy

Fees
Purpose To attract and retain candidates with the required skill and experience to form part of the Board and to ensure fees paid to the
Non-Executive Directors are competitive and comparable with other companies of equivalent size and complexity operating within
the global mining industry.
Operation The base fee for Non-Executive Directors is reviewed annually, with any adjustments effective 1 April each year. Fees payable
to the Chairman are determined by the Compensation Committee, while the base fee and any other fee payable to the other
Non-Executive Directors are determined by the Chairman of the Board on behalf of the Board.
In addition to the base fee, additional fees are payable for acting as Senior Independent Director and as Chair of any of the
Board’s Committees (Audit, Compensation, EHS&S, Nomination & Governance) and for individual membership of such
Committees. These additional fees are also reviewed annually, with any adjustment effective 1 April each year. In the event that
the Board requires the formation of an additional Board Committee, fees for the Chair and membership of such Committee will
be determined by the Board at the time.
No base fee or fee for membership of Board Committees is payable to Non-Executive Directors appointed by Barrick pursuant
to the nomination rights contained in the Relationship Agreement.
Non-Executive Director fee levels are benchmarked against international gold mining, general mining and FTSE listed companies
of similar size and complexity. Time commitment, responsibility, and technical skills required to make a valuable contribution to
an effective Board are taken into account when reviewing fee levels.
Opportunity Non-Executive Director fee increases are set in response to the outcome of the annual fee review. Fees for the year ending
31 December 2017 are set out in the Annual Report on Remuneration. The maximum aggregate annual fee for all Directors
provided in the Company’s Articles of Association is £3,000,000.
Deferred Share Unit Plan (“DSU Plan”)
Purpose To ensure Acacia Non-Executive Director compensation structures remain flexible and competitive against global peers.
Operation Non-Executive Directors can receive some or all of their annual fees in return for a deferred right to a cash payment under
the DSU Plan. The value of additional DSUs is credited to reflect dividends paid on Acacia Ordinary Shares over the period

GOVERNANCE
of participation.
Cash payments become payable only after a participant ceases to hold office with the Company.
Cash payments are calculated by reference to the fair market value of Acacia’s Ordinary Shares at the time of payment and
remain subject to market fluctuations in Acacia’s share price until payment.
Awards lapse in the event that an individual is summarily terminated for: (i) breach of contract; (ii) breach of Director’s duties;
or (iii) misconduct, or if an individual resigns in circumstances justifying summary termination.
Opportunity Non-Executive Directors can waive up to 100% of their annual fee.

Approach to recruitment of Non-Executive Directors

In the case of hiring or appointing a new Non-Executive Director, the Board will utilise the Remuneration Policy summarised in the table entitled
Summary Table for Non-Executive Director Remuneration Policy, above. A base fee which is aligned with the prevailing fee schedule would be payable
for Board membership, with additional fees payable for acting as Senior Independent Director or as Chair of any of the Board’s Committees and for
individual membership of such Committees. Non-Executive Directors would also be eligible to waive some or all of their annual fees in return for a
deferred right to a cash payment under the DSU Plan.
Approach to Non-Executive Director exit arrangements
As regards Non-Executive Director resignation, retirement or termination, base fee and any additional fees would be payable to the resignation/
retirement/termination date. In respect of DSU awards, save in the case of summary termination, termination for gross misconduct or termination
in circumstances which would justify summary termination, DSU awards vest in full on leaving office, whereby the relevant cash payment made in
respect of awards is determined by reference to the fair market value of an Acacia Ordinary Share at the time of payment.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 83

REMUNERATION REPORT CONTINUED

Annual Remuneration Report for 2017

Compensation Committee membership in 2017 Advisers

As of 31 December 2017, the Compensation Committee comprised three During the year, the Committee received independent advice on
Non-Executive Directors, all of whom were, and remain, independent: executive compensation matters from Mercer which forms part
––Michael Kenyon (Chair) of the MMC group of companies. Mercer was first appointed by the
Compensation Committee in 2010 and retained during the year.
––Steve Lucas
The Compensation Committee evaluates the support provided by its
––Rachel English advisers annually and is comfortable that the Mercer team provides
Peter Tomsett served on the Committee until his retirement from the independent remuneration advice to the Committee and does not have
Board in April 2017. any connections with the Company that may impair its independence.
Mercer is a founding member and signatory of the Code of Conduct
The following individuals also attended meetings by invitation during the for Remuneration Consultants, details of which can be found at
year and provided information to the Committee to enable it to make www.remunerationconsultantsgroup.com
informed decisions:
In 2017, Mercer provided independent advice on trends and
––Brad Gordon, former Chief Executive Officer
developments and reporting regulations, and attended the Compensation
––Peter Geleta, Head of People / Interim Chief Executive Officer Committee meetings. Mercer does not advise the Company on any
No Director is present when his or her own remuneration is being issues outside compensation and governance thereof. Mercer’s total
determined. The Compensation Committee met four times during the fees for the provision of remuneration services in 2017 were £104,720
year and details of members’ attendance at meetings are provided on on the basis of time and materials. Other than advice on remuneration,
page 68. An overview of Committee activities during the year is provided no other services were provided by Mercer (or any other part of the MMC
as part of the Committee Chair’s introduction to this report. group of companies). The Committee also received legal advice from
Travers Smith LLP as regards certain remuneration practices during the
year, the total fees for which equalled £25,836.

Details of Directors’ service contracts and letters of appointment

As at 31 December 2017, Directors’ current appointments were as follows:
Date of current service contract/ Unexpired term as of
letter of appointment 31 December 2017
Executive Director
Brad Gordon1 21 August 2013 N/A
Non-Executive Directors
Kelvin Dushnisky 6 June 2015 6 months
Rachel English 23 October 2016 22 months
Andre Falzon 18 April 2016 16 months
Stephen Galbraith 18 April 2016 16 months
Michael Kenyon 18 April 2016 16 months
Steve Lucas 23 October 2016 22 months
1 Brad Gordon ceased to be a Director on 31 December 2017.

84 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Single total figure of remuneration for Directors (audited)
The table below sets out a single figure for the total remuneration received by each Director for the financial years ending
31 December 2016 and 31 December 2017.
Salary/fees1 Taxable benefits2 STI 3 LTIs Pension Total5
2017 2016 2017 2016 2017 2016 2017 20164 2017 2016 2017 2016
£ £ £ £ £ £ £ £ £ £ £ £
Current Directors
Executive
Brad Gordon 489,250 427,500 42,762 38,488 362,045 449,730 – 10,669,928 73,388 64,125 967,445 11,649,771
Non-Executive
Kelvin Dushnisky – – – – – – – – – – – –
Peter Tomsett6 35,589 116,875 – – – – – – – – 35,589 116,875
Ambassador Juma 50,625 96,875 – – – – – – – – 50,625 96,875
V. Mwapachu7
Andre Falzon 144,875 96,875 – – – – – – – – 144,875 96,875
Michael Kenyon 159,875 91,875 – – – – – – – – 159,875 91,875
Steve Lucas 119,625 81,875 – – – – – – – – 119,625 81,875
Rachel English 131,875 76,597 – – – – – – – – 131,875 76,597
Stephen Galbraith – – – – – – – – – – – –
Notes:
1 Non-Executive Director fees payable include all base fees paid in respect of the appointment as a Non-Executive Director and additional fees payable in respect of appointments
as SID, Chair and/or members of Board committees. An overview of fees payable for 2017 is provided on page 86. In addition, Non-Executive Directors can elect to receive all or
some of their annual fees in DSUs, pursuant to the terms of the Company’s DSU Plan. Further details of this plan are provided on page 82. Non-Executive Directors appointed
pursuant to Barrick’s nomination rights under the Relationship Agreement (Kelvin Dushnisky and Stephen Galbraith) do not receive any fees in respect of their appointment.
2 A breakdown of 2017 taxable benefits is provided below:

Car allowance (£) Medical (£) Total (£)

GOVERNANCE
Brad Gordon 36,924 5,838 42,762
3 This represents the short-term incentive payable in cash for annual performance. Details as regards the performance assessment applicable to the CEO 2017 STI award are
provided on page 86.
4 The final quarter of the 2013 SOP award lapsed in full during the year. No other long-term incentive awards were eligible to vest during the year.
5 No DSU elections were made by any Non-Executive Directors in 2017.
6 Peter Tomsett stepped down from the Board in April 2017.
7 Ambassador Juma V. Mwapachu stepped down from the Board in July 2017.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 85

REMUNERATION REPORT CONTINUED

Executive Director salaries

Brad Gordon received a 3% increase in his salary effective 1 January 2017 bringing his salary to £489,250 per annum. As explained in the 2016
Annual Report on Remuneration, Mr Gordon’s base salary was re-instated to £475,000 at the end of 2016 for purposes of assessing 2017 salary
increases and therefore the amount of £489,250 is a 3% increase on the re-instated 2016 salary.
Non-Executive Director fees
For the year ending 31 December 2017, no fees were paid to Non-Executive Directors, including the Chairman, appointed by Barrick pursuant to its
nomination rights under the Relationship Agreement. Non-Executive Director fees are assessed in April each year. The table below reflects fees
payable in respect of 2017, effective as of 1 April 2017.
Fee component Amount
Base fee £85,000
Senior Independent Director fee £25,000
Chair of Audit Committee fee £20,000
Chair of Compensation Committee, EHS&S Committee, and Nomination & Governance Committee fee £15,000
Board Committee membership fee £5,000

In addition to the above fees, effective July 2017 the Acacia Board established an additional committee to deal with the on-going challenges in the
Tanzanian operating environment. Following careful consideration, the Board approved additional fees of £1,500 and £2,300 payable per meeting of
this committee to each member and the Chairman respectively. The Board believes that such fees represent reasonable fees due in connection with
the assumption of additional responsibilities arising from the appointment to this committee.
Executive Directors’ Short-Term Incentive awards
For the year ending 31 December 2017, Executive Director STI awards were earned on the basis of Company-wide performance (80%), this being
representative of the overall leadership, management and performance of an individual holding this position and also include a component to assess
individual performance (20%). Company-wide performance measures continue to focus on the core metrics which we use to assess performance as
regards safety, production, cost control and profit generation. These performance metrics were assessed on the basis of individual weightings and
in line with a range of performance targets to provide for threshold, target and maximum performance, as outlined in the table opposite. The
Committee has given careful consideration to the retrospective disclosure of 2017 annual bonus targets and considers that these remain
commercially sensitive at this time. It is intended that targets will be disclosed within two years of the relevant bonus year, with the Committee
providing disclosure of both the 2015 and 2016 annual bonus targets at the end of this report on page 91.
Having served in the role of Chief Executive Officer for the entire financial year, the Committee determined that Brad Gordon was eligible for an STI
award in respect of 2017 performance. Despite the challenging operating environment and variety of factors outside management’s control, overall
performance during the year was resilient. 2017 AISC was the lowest level ever achieved by Acacia, coming in c.9% lower than in 2016 and below full
year guidance. Gold production was robust, although somewhat impacted by the transitioning to reduced operations at Bulyanhulu, with an outturn
being c.7% below 2016 levels, whilst free cash flow fell short of the stretching targets set at the start of the year. From a safety perspective, 2017
saw 39% improvement in our Total Reportable Injury Frequency Rate (“TRIFR”), with strong performance under other safety KPIs and the roll-out of a
number of important occupational health and safety initiatives. As a Company, we continue to target zero injuries and so the improvement in safety
performance shown in 2017 was particularly pleasing.
Given the impact of the Tanzanian concentrate export ban, the Committee elected to make a number of adjustments to the production, cash flow
and AISC outturns to ensure the targets were of broadly equivalent difficulty to those set at the start of the year and remained motivational for
participants. Adjustments took into account Bulyanhulu’s move to reduced operations in September and moving Buzwagi to doré-only production
for the final four months of the year. Against these adjusted figures, Company-wide performance was assessed as 66.9% overall, equivalent to 54%
of the CEO’s salary following the application of the Company STI weighting.
With the on-going concentrate export ban, the Committee was unable to assess many of the individual performance objectives relating to Group
strategy. For 2017 the Committee has made a holistic assessment of Brad’s contribution during the year, with key achievements including his strong
stakeholder management, team leadership and cost management. Against this backdrop, the Board has assessed Brad’s personal performance
levels as equivalent to 20% of base salary overall. When combined with the assessment of Company-wide performance, this equates to a bonus
rating of 74% of base salary, compared to a target of 100%.

86 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

2017 Company STI scorecard assessment
Overall
2017 Scorecard
Strategic focus KPI Weighting Performance assessment Outcome* Rating (%)
Safety Total Reportable Injury 10% Base (50%): 2016 performance
Frequency Rate (“TRIFR”) 1 Target (100%): 10% improvement on base
0.45 18.1%
Stretch (150%): 20% improvement on base
Wall (200%): 30% improvement on base
Production Ounces of gold 30% Base (30%): 95% of target
produced (oz)2 Target (50%): 100% of target
775,883 12.6%
Stretch (150%): 103% of target
Wall (200%): 106% of target
Profit generation Free cash flow3 40% Base (30%): 95% of target
Target (50%): 100% of target
146,234 0%
Stretch (150%): 110% of target
Wall (200%): 120% of target
Cost control All-in sustaining cost 20% Base (30%): 3%> target
per ounce sold (“AISC”) 4 Target (50%): Approved target AISC
887 36.2%
Stretch (150%): 3%< target
Wall (200%): 6%< target
Sum of Company scorecard ratings 66.9%
Notes to Company STI scorecard table:
1 Please refer to page 20 of this Annual Report for an explanation of how TRIFR is measured and its relevance to safety performance.
2 Please refer to page 20 of this Annual Report for an explanation of how gold production is measured and its relevance to our productivity levels.
3 For STI KPI purposes, free cash flow is calculated as: (gold revenue, copper revenue, silver revenue) – (all costs including sustaining capital, corporate social responsibility costs,
finance leases relating to operations and exploration) + dividends +/– working capital.
4 Please refer to page 20 of this Annual Report for an explanation of how AISC is measured and its relevance to cost control achievements across the business.

GOVERNANCE
*Please note that 2017 outcomes for STI purposes were adjusted as explained in the accompanying narrative.
Overall outcome of CEO 2017 STI assessment (Company and individual performance)
Element Weighting Assessment Outcome (as a % of salary)
Company-wide performance 80% 66.9% 54%
Individual performance 20% – 20%
Total – – 74%

For 2018, the Interim CEO will have a target / maximum STI opportunity of 75 / 150% of salary. Performance measures for 2018 will continue to
focus on production, costs, safety and profitability and will be assessed on the same basis as in 2017. Company performance will continue to
account for 80% of the total bonus opportunity, with individual performance accounting for the remaining 20%.
Executive Director LTIP awards vesting in 2017 (audited)
There were no LTIP awards eligible to vest in 2017.
Executive Director LTIP awards existing as at 31 December 2017 (audited)
As at the date of his resignation, Brad Gordon had the following outstanding awards under the LTIP. All of these have been forfeited by him following
his resignation, refer below.
Shares over which Shares over which
awards held as of awards granted Market price at End of
Award date Form of award 01 January 2017 during the year date of award performance period Vesting date
Brad Gordon
17 February 2015 PRSU 310,383 – £2.77 16 February 2018 16 February 2018
16 February 2016 PRSU 418,502 – £2.27 15 February 2019 15 February 2019
26 April 2017 NCO – 464,624 £4.21 26 April 2022 26 April 2022

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 87

REMUNERATION REPORT CONTINUED

Awards made on 26 April 2017 reflect the revised Remuneration Policy and LTIP rules approved at the 2017 AGM. These awards were made in the
form of nil-cost options and represent an award with a value 400% of base salary. Like awards made in 2015 and 2016, the 2017 LTIP awards are
subject to an assessment of the Company’s TSR performance against the constituents of the EMIX (formerly Euromoney) Global Gold Index. However,
unlike previous awards, the 2017 LTIP awards have a five-year performance and vesting period (previously three years), with performance targets
increased commensurately to reflect the extended performance period, as follows:
February 2015 award and February 2016 award April 2017 award
Acacia’s TSR % outperformance of % of target Acacia’s TSR % outperformance of % of target
comparator group median over three years level of award comparator group median over five years level of award
+35% 200% +50% 100%
+12% 100% +16% 50%
0% 50% 0% 25%
Below 0% 0% Below 0% 0%

Following his resignation, all of Brad Gordon’s outstanding LTIP awards under the 2015, 2016 and 2017 cycles detailed above lapsed in full.
Executive Director LTIP awards to be granted in respect of 2017 (audited)
On 26 February 2018 Peter Geleta received an LTIP award in the form of nil cost options over 1,077,731 Acacia shares (equivalent to 400% of base
salary). The market value of an Acacia share at the time of grant was 148.46 pence per share.
The award will be subject to a five-year performance period, with the vesting date being the fifth anniversary of the date of grant. The award will be
subject to the assessment of the Company’s TSR performance against the constituents of the EMIX (formerly Euromoney) Global Gold Index as follows:
Acacia’s TSR % outperformance of comparator group median over five years % of interests transferred
+50% 100%
+16% 50%
0% 25%
Below 0% 0%

Executive Directors’ interests under the SOP (Stock Options only) (audited)
As part of his recruitment package Brad Gordon received a stock option award equal to 841,308 Acacia Ordinary Shares on 21 August 2013,
representing an award with a fair market value (at the time of grant) equal to one year of base salary (£425,000). The fair market value of the award
was ascertained using the Monte Carlo Simulation valuation (31.5% of the market value of an Acacia Ordinary Share). The market price of Acacia
Ordinary Shares at the time of this award was £1.60, assessed on the basis of the average of middle market quotations from the Daily Official List
of the LSE for the day of grant and the following two dealing days. The award vested in equal parts over four years and had an overall expiration date
seven years from the date of grant. Vesting was subject to the satisfaction of a TSR performance condition similar to that outlined above for the
RSU award made to Mr Gordon in 2013.
As disclosed in previous reports, the first three tranches of Mr Gordon’s 2013 SOP award vested in full as at 20 August 2014, 2015 and 2016
respectively, with 210,327 options having become exercisable to Mr Gordon on each of these dates. During the year, the final tranche of Mr Gordon’s
2013 SOP award was tested for performance as at 20 August 2017, with Acacia’s TSR being below the weighted mean of comparators. Consequently
the final 210,327 options under the SOP lapsed on 20 August 2017. Mr Gordon exercised his 630,981 vested options on 23 November 2017,
as follows:
Market price at
Options held Exercise price Exercise date date of exercise Value at exercise
630,981 £1.60 23 November 2017 £1.90 £191,648

Percentage change in CEO remuneration

The table below shows the percentage change in CEO remuneration from the prior year compared to the average percentage change in remuneration
for ELT members. Given that the Company operates across a number of diverse economies with pay levels and structures reflecting local market
conditions, the Compensation Committee believes that using the ELT as a subset for the purposes of comparing CEO remuneration provides a more
meaningful comparison than using pay data for all employees.
The CEO’s remuneration includes base salary, taxable benefit and STI payments. ELT data is based on a consistent set of employees, i.e. the same
individuals appear in the 2017 and 2016 populations.
CEO ELT members
2017 2016 % change 2017 2016 % change
£ £ 2016–2017 £ £ 2016–2017
Base salary 489,250 427,500 14% 295,405 269,227 10%
Taxable benefits 42,762 38,488 11% 21,219 29,950 21%
Annual bonus 362,045 449,730 -19% 156,089 195,835 -20%
Total 894,057 915,718 -2% 472,713 495,012 -5%

88 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Relative importance of spend on pay
The table below shows shareholder distributions (i.e. dividends) and total employee pay expenditure for the financial years ended 31 December 2016
and 31 December 2017, along with the percentage change in both. Further details of the Company’s economic contribution, including the economic
value we add by paying our employees, Governments, suppliers, shareholders, contractors and communities, is included in the sustainability review
of this Annual Report.
2017 2016 % change
(£’000) (£’000) 2016–2017
Shareholder distributions 26,450 15,101 75%
Total employee expenditure 93,895 93,518 0%

Comparison of Company performance

The following graph shows Acacia’s TSR performance for the period from the IPO to 31 December 2017 (calculated in accordance with the
regulations) against the FTSE 350 and Acacia’s LTIP comparator group. The FTSE 350 was chosen on the basis of it being a recognised broad equity
market index, of which Acacia was a member for the reporting period. The CEO remuneration table below details the Chief Executive Officer’s “single
figure” remuneration over the same period.

Historical TSR performance

Growth in the value of a hypothetical £100 holding from IPO to 31 December 2017

200
175
Value of £100 invested at IPO

150
125
100
75

GOVERNANCE
50
25
0
18 Mar 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec
2010 2010 2011 2012 2013 2014 2015 2016 2017

Acacia
FTSE 350
2017 LTIP comparator group (unweighted median)
Based on spot share prices in GBP
2017 LTIP comparator group based on an unweighted median

CEO remuneration table

Individual 2010 2011 2012 2013 2014 2015 2016 2017
CEO single figure of Greg Hawkins £774 £936 £1,282 £1,171 N/A N/A N/A N/A
remuneration (£’000)
Brad Gordon N/A N/A N/A £317 £931 £919 £11,650 £967
STI payout as % of Greg Hawkins 60% 50% 43% 90% N/A N/A N/A N/A
maximum opportunity
Brad Gordon N/A N/A N/A 90% 36% 17% 63% 74%
RSU vesting as % of Greg Hawkins N/A N/A N/A 44% N/A N/A N/A N/A
maximum opportunity
Brad Gordon N/A N/A N/A N/A N/A N/A 100% N/A
Option vesting as % of Greg Hawkins N/A 100% 100% N/A N/A N/A N/A N/A
maximum opportunity
Brad Gordon N/A N/A N/A N/A 100% 100% 100% 0%

Executive Director exit arrangements (audited)

There were no payments to past Directors during 2017.
Brad Gordon stepped down as Chief Executive Officer on 31 December 2017. Details of his leaver arrangements, which are in accordance with
the Remuneration Policy approved by shareholders at the 2017 AGM, are detailed below:
––Mr Gordon was entitled to an annual bonus payment in respect of the 2017 financial year. Details of the performance assessment for the bonus
are included on page 86, with an overall payment of £367,045 due to be paid to Mr Gordon in February 2018.
––Mr Gordon’s unvested awards granted under the LTIP lapsed on his stepping down from the Company on 31 December 2017. Mr Gordon retains
no further interests in Acacia LTIP awards.
No other amounts are payable to Mr Gordon in relation to his leaving employment with Acacia.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 89

REMUNERATION REPORT CONTINUED

Directors’ interests in Acacia Ordinary Shares and shareholding requirements (audited)

Following approval of the 2017 Remuneration Policy, Executive Directors are required to acquire a minimum holding in Acacia Ordinary Shares
equivalent to four times base salary by retaining 50% of vested awards (net of tax) until the guideline has been met. Independent Non-Executive
Directors are required to acquire a minimum holding equivalent to their annual base fee within five years of election to the Board, which may be
satisfied via the acquisition of Acacia Ordinary Shares or by the receipt of DSU awards under the Acacia DSU Plan. The table below shows the
shareholding of each Director against their respective shareholding requirement as at 31 December 2017 along with the form of their interests
in Acacia Ordinary Shares.
Shares held Options held RSUs held DSUs held
Unvested and Unvested and
Vested subject to subject to Shareholding Current
Owned outright but not performance performance requirement shareholding Requirement
or vested exercised condition(a) condition(a) Unvested(b) % salary/fee % salary fee(c) met?
Executive Director
Brad Gordon – – – – – N/A N/A N/A
Non-Executive Directors(d)
Kelvin Dushnisky – – – – – N/A N/A N/A
Andre Falzon 9,000 – – – 15,330 100% 152% Yes
Michael Kenyon – – – – 41,067 100% 256% Yes
Steve Lucas – – – – 12,384 100% 62% N/A
Rachel English 17,383 – – – 13,946 100% 156% Yes
Stephen Galbraith – – – – – N/A N/A N/A
Notes:
(a) Options and RSUs vest subject to a relative TSR performance condition.
(b) The Company’s DSU Plan for Non-Executive Directors provides Non-Executive Directors with the option to receive some or all of their annual fees in return for a deferred right to a
cash payment, payable only after a participant ceases to hold office with the Company. Broadly, cash payments under this plan are calculated by reference to the fair market value
of Acacia’s Ordinary Shares at the time of payment and remain subject to market fluctuations in the context of Acacia’s share price until the time of payment. No DSUs were
allocated for 2017.
(c) As regards Executive Directors this is calculated by reference to annual base salary at the time of the relevant individual’s appointment against the value of relevant awards at
the time of grant. As regards existing Independent Non-Executive Directors, this is calculated by reference to either: (i) the annual Non-Executive Director base fee at the time
of adopting the guidelines, if appointed to the Board at that time; or (ii) the annual Non-Executive Director base fee at the time of appointment, assessed against the higher of:
(i) the number of shares multiplied by the mid-market price on the last trading day before the valuation date; or (ii) the number of shares multiplied by the share price on the date
of acquisition of each relevant interest during the applicable five-year acquisition period.
(d) As at their respective cessation dates, Peter Tomsett and Ambassador Juma V. Mwapachu had both achieved their respective shareholding guidelines.

Brad Gordon exercised his outstanding SOP options in November 2017, whilst his outstanding LTIP awards lapsed on leaving the Company. As at the
close on 31 December 2017, Mr Gordon holds no interests in Acacia shares.
Details of the LTIP Award made to Peter Geleta post year-end are provided on page 87.
There have been no other changes in Directors’ shareholdings between 31 December 2017 and 6 March 2018.
Summary of shareholder voting at the 2017 AGM
The following table shows the results of the binding vote on the 2016 Remuneration Policy and the advisory vote on the 2016 Annual Report on
Remuneration at the 2017 AGM:
Annual Report on
Remuneration Policy 2016 Remuneration 2016
Total number of votes % votes cast Total number of votes % votes cast
For 333,828,526 87.69 371,674,846 97.76
Against 46,875,017 12.31 8,526,728 2.24
Votes cast (excluding withheld votes) 380,703,543 380,201,574
Votes withheld 1,149 503,118
Total votes cast (including withheld votes) 380,704,692 380,704,692

90 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

2015 and 2016 STI target disclosure
The 2015 and 2016 Company scorecard STI targets have not been provided to date as they have been considered to be commercially sensitive.
We indicated in last year’s report that retrospective disclosure of those targets would be given where this is no longer the case, and in any event
within two years. Targets applying to both the 2015 and 2016 Company scorecards are now included in the table below for reference:
Performance 2015 2016
Strategic focus KPI Weighting assessment 2015 STI Outcome* 2016 STI Outcome*
Safety Total Reportable Injury 10% Base (50%): 0.79 0.68
Frequency Rate (“TRIFR”)1 Target (100%): 0.71 0.61
0.68 0.74
Stretch (150%): 0.64 0.54
Wall (200%): 0.57 0.48
Production Ounces of gold 30% Base (30%): 792,286 770,234
produced (oz)2 Target (50%): 833,985 810,773
731,912 829,705
Stretch (150%): 859,005 835,096
Wall (200%): 884,024 859,419
Profit generation Free cash flow3 20% in 2015 Base (30%): 130,308 85,951
40% in 2016 Target (50%): 137,166 90,475
-10,183 115,557
Stretch (150%): 145,396 99,523
Wall (200%): 153,626 108,570
Cost control All-in sustaining cost 40% in 2015 Base (30%): 1,045 949
per ounce sold (“AISC”) 4 20% in 2016 Target (50%): 1,014 921
1,112 925
Stretch (150%): 984 893
Wall (200%): 953 866
Overall scorecard outcome 12.0% 127.8%
1 Please refer to page 20 of this Annual Report for an explanation of how TRIFR is measured and its relevance to safety performance.
2 Please refer to page 20 of this Annual Report for an explanation of how gold production is measured and its relevance to our productivity levels.

GOVERNANCE
3 For STI KPI purposes, free cash flow is calculated as: (gold revenue, copper revenue, silver revenue) – (all costs including sustaining capital, corporate social responsibility costs,
finance leases relating to operations and exploration) + dividends +/– working capital.
4 Please refer to page 20 of this Annual Report for an explanation of how AISC is measured and its relevance to cost control achievements across the business.

*The 2015 and 2016 outcomes for STI payment purposes were subject to adjustments as disclosed in the 2015 and 2016 Annual Reports
respectively.
Approval of Directors’ Remuneration Report
The Directors’ Remuneration Report has been approved by the Board and signed on its behalf by

MICHAEL KENYON
CHAIR OF THE COMPENSATION COMMITTEE

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 91

OTHER INFORMATION

The Companies Act 2006 requires Acacia’s Directors Global GHG emissions data for period 1 January 2017
to prepare a Directors’ Report for the financial year to 31 December 2017 (unaudited)
According to the GHG Protocol developed by the World Business Council
under review. The UKLA’s Listing Rules and for Sustainable Development and the World Resources Institute, GHG
Disclosure Guidance and Transparency Rules also emissions are classified as either direct or indirect, and from there are
divided further into Scope 1, Scope 2 and Scope 3 emissions. Direct
require Acacia to make certain other disclosures. GHG emissions are emissions from sources that are owned or controlled
The information contained on pages 92 to 96 by the reporting entity. Indirect GHG emissions are emissions that are
a consequence of the activities of the reporting entity but that occur at
(inclusive) (together with all other information in sources owned or controlled by another entity. Each scope is classified
the Annual Report which has been specifically as follows:
incorporated into these pages by reference) ––Scope 1 emissions: direct emissions from sources owned or operated
constitutes Acacia’s Directors’ Report. by our Company.
––Scope 2 emissions: indirect emissions attributable to our Company due
to its consumption of purchased electricity, notably our consumption of
Legal form of the Company electricity from TANESCO.
Acacia is a public listed company incorporated in England and Wales with ––Scope 3 emissions: all other indirect emissions associated with
the registered number 7123187. It conducts limited business activities activities that support or supply our Company’s operations.
itself and trades principally through its subsidiaries and subsidiary
undertakings in various jurisdictions. Further information as regards For 2017, we have calculated Acacia’s Scope 1 and Scope 2 emissions
Acacia’s subsidiaries is provided in Note 1 to the consolidated financial footprint on the basis of carbon dioxide equivalent (CO2e) emissions.
statements on page 116. Year-on-year
Percentage of total percentage,
Strategic report Total tonnes of CO2e emissions (%) change (%)
The requirements of the Companies Act 2006 as regards the production 2017 2016 2017 2016
of a strategic report are satisfied in the Strategic report contained at Scope 1
pages 5 to 29. The Strategic report provides an overview of the emissions 189,321 231,754 76 79 (18.3)
development and performance of Acacia’s business for the financial year Scope 2
ended 31 December 2017 and also provides information relevant to likely emissions 59,791 59,895 24 21 –
future developments in the business.
Total 249,112 291,649 100 100 (14.6)
In addition, for purposes of compliance with the Disclosure Guidance and
Transparency Rules, the required content for the Management report can Total CO2e emissions for 2017 amounted to 249,112 tonnes, a 15%
be found in the Strategic report and the Directors’ Report. decrease on 2016 (291,649 CO2e). The decrease is principally due to the
reduction in operational activity at Bulyanhulu.
Directors
The names and biographies of the Directors serving as at 31 December CO2e emission intensity for the year was 0.0284 per tonne of ore milled,
2017 are provided on pages 64 to 65. An overview of Directors’ this being a 5% increase on 2016 (0.0297). Further information as
appointments, by reference to current terms under appointment letters, regards our GHG emissions reporting for 2017 is provided on page 60.
is provided on page 84. Details of Director re-election requirements are
provided on page 67.
Directors’ indemnity and insurance
In accordance with Acacia’s Articles of Association and to the extent
permitted by the Companies Act 2006, Acacia may indemnify its
Directors out of its own funds to cover liabilities incurred as a result
of their office. The relevant provision contained in the Articles can be
categorised as a “qualifying third-party indemnity provision” under the
Companies Act 2006. Acacia has adopted Directors’ and Officers’
liability insurance, which provides insurance cover for any claim brought
against Directors or officers for wrongful acts in connection with their
positions. The insurance provided does not extend to claims arising
from fraud or dishonesty and it does not provide cover for civil or criminal
fines or penalties imposed by law.

92 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Directors’ interests Major shareholdings
Details of the interests of Directors and their connected persons in The following persons as at 31 December 2017 are interested in the
Acacia’s Ordinary Shares or in related derivatives or financial instruments following percentages of Acacia’s issued Ordinary Share capital:
are outlined in the Directors’ Remuneration Report. Percentage
of issued
Employee share schemes Number of share
Details of Acacia’s employee share plans and long-term incentive plans Name shares capital (%)
are provided in the Directors’ Remuneration Report. Barrick International (Barbados) Corp1 179,609,530 43.80
Employee diversity PDG Sona (Cayman) Ltd1 45,258,970 11.04
An overview of female representation percentages across our workforce PDG Bank Limited1 37,378,450 9.11
is provided on page 58. In addition, the total breakdown of male and Blackrock Inc 24,932,954 6.08
female employees as at 31 December 2017 was as follows: Total 287,179,904 70.03
Female Male
Board of Directors 1 6 1 Members of the Barrick Group.

Executive Leadership Team 0 3

Relationship with major shareholder
Other employees 179 1,536 An overview of Acacia’s relationship with Barrick and the Relationship
Agreement that has been executed in respect of their on-going
Dividends relationship is provided on page 69.
As a result of negative cash flow arising from the ban of exporting
Political and charitable donations
concentrate from Tanzania, no interim dividend was paid during 2017,
Acacia does not make political donations. Information as regards
in line with Acacia’s cash flow based dividend policy. The Board will
Acacia’s social and community contributions for the year is provided
not recommend the payment of any final dividend for the year ended
as part of our Sustainability and Financial reviews.
31 December 2017.
Information required by LR 9.8.4R
Share capital There is no information required to be disclosed under LR 9.8.4R save
As at 31 December 2017, the Company’s issued share capital comprised
in respect of LR 9.8.4R (10) (Contracts of significance with controlling
410,085,499 Ordinary Shares of 10 pence each. The voting rights of all
shareholder/in which director interested), LR 9.8.4R (11) (Contracts for
Acacia Ordinary Shares are identical, with each share carrying the right

GOVERNANCE
the provision of services by a controlling shareholder) and LR 9.8.4R (14)
to one vote. The Company holds no Ordinary Shares in Treasury and
(Relationship Agreement with controlling shareholder) which can be found
does not have any class of share other than its Ordinary Shares. Further
on page 69 of this Annual Report. Details of interest capitalised by the
details on voting rights and rights relating to the transfer of shares are
Group are provided in Note 11 of the consolidated financial statements
provided overleaf.
on page 132.
Acacia’s Articles of Association provide the authority for the Company to
Policy on derivatives, financial instruments and financial
purchase its own shares (including any redeemable preference shares),
risk management
provided that it complies with any applicable requirements contained in
Acacia’s policies on financial risk management, derivatives, financial
the Companies Act 2006, the CREST regulations or any other applicable
instruments and information on its exposures to foreign currency,
law. As part of resolutions passed at the 2017 AGM, the Company
commodity prices, credit, equity, liquidity and interest rates can be found
obtained shareholder approval to make market purchases of up to
in Note 31 to the consolidated financial statements contained on pages
£4,100,854 of its Ordinary Shares, equivalent to 10% of the issued
142 and 144 of this Annual Report. All such information is incorporated
share capital at the time of approval. The authority was granted subject
by reference into this Directors’ Report and is deemed to form part of
to stated upper and lower limits in accordance with Listing Rule
this Directors’ Report.
requirements and expires at the forthcoming AGM. The authority was not
exercised during the year under review. An equivalent shareholder
resolution will be sought as a matter of ordinary business at the
forthcoming AGM. Details of Acacia’s issued share capital and any
movements during the year are included in Note 23 to the consolidated
financial statements on page 141.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 93

OTHER INFORMATION CONTINUED

Material agreements containing change of control Alternatively, awards may be exchanged for new equivalent awards
provisions/significant agreements with Directors/ where appropriate.
Controlling Shareholders Going concern
The Directors consider the following as material agreements/
The Directors’ statement on going concern is contained on page 49
arrangements for Acacia’s business and operations, which alter or
of this Annual Report.
terminate on a change of control of Acacia and/or significant agreements
with Directors/Barrick: Corporate governance compliance
The corporate governance statement as required by Rule 7.2.1 of the
––Relationship Agreement: see page 69 of this report for an overview of
UKLA’s Disclosure Guidance and Transparency Rules is set out in the
the Relationship Agreement. In addition to the Relationship Agreement,
corporate governance report on pages 67 to 70 of this Annual Report.
Acacia entered into a Services Agreement with Barrick in February
2010 as part of arrangements for the IPO, under which Barrick provides All information detailed in the corporate governance statement is
certain services to the Acacia Group for the on-going operation of the incorporated by reference into this Directors’ Report and is deemed
business. These services include support for information technology, to form part of this Directors’ Report.
technical services and other administrative and corporate functions.
Articles of Association
The agreement’s termination events include a basis for either party to
The Company’s Articles of Association may be amended by special
terminate the agreement with immediate effect in the event of specified
resolution of the shareholders.
breaches of the agreement, insolvency, analogous events or a change
of control. Whilst this agreement remains in force, limited services are Shareholder rights
provided under it and no services provided are deemed to be material The rights and obligations attaching to the Ordinary Shares contained
or significant. in the Articles of Association are as follows:
––Credit Agreement: an overview of the Credit Agreement between, Voting rights
among others, the Company and Citibank International plc as Subject to any special rights or voting restrictions contained in the
administrative agent, is provided in Note 9 to the consolidated Articles of Association for any class of share, at any general meeting
financial statements on page 133. A change of control is a mandatory every member who is present in person or by proxy shall, on a show of
prepayment event under the Credit Agreement and, subject to hands, have one vote and every member present in person or by proxy
certain exceptions, a termination event. shall, on a poll, have one vote for each share of which he or she is the
Acacia’s mining concessions are held by its operating companies in holder. A resolution put to a vote of the meeting shall be decided on a
Tanzania. Under applicable law, a change of control of the operating show of hands, unless a poll is duly demanded. Subject to the provisions
companies requires the consent of the Minister of Energy and Minerals of the Companies Act 2006, a poll may be demanded by the Chairman;
in Tanzania. In addition, each Acacia Group operating mine has a Mineral by at least five members who have the right to vote at the meeting; by
Development Agreement (“MDA”) with the Tanzanian Government. The a member or members representing not less than one-tenth of the total
material terms and conditions of each MDA are substantially similar and voting rights of all the members having the right to vote at the meeting;
include provisions governing royalty payments, taxes and other charges, or by a member or members holding shares conferring a right to vote at
banking arrangements, local procurement obligations, and import rights. the meeting, being shares on which an aggregate sum has been paid
The MDAs also provide for no expropriation or nationalisation rights. up equal to not less than one-tenth of the total sum paid up on all the
Broadly, these rights provide that the Tanzanian Government will not shares conferring that right. Unless the Directors otherwise determine,
nationalise or compulsorily acquire the whole or any part of the Acacia a shareholder is not entitled to vote at a shareholders’ meeting, either
Group’s interest in the applicable special mining licences or any of its in person or by proxy, or to exercise any other right conferred by
property or its contractors’ or subcontractors’ property used for the membership in relation to a shareholders’ meeting, unless and until all
purpose of mining operations or in relation to the applicable special calls or other sums presently payable by him or her in respect of that
mining licences, without adequate compensation. Each MDA is governed share with interest and expenses (if any) have been paid to the Company
by Tanzanian law. Adherence to the terms and conditions of the MDAs is or if he/she or any other person appearing to be interested in shares has
of significant importance to Acacia’s business, given the agreements’ been issued with a notice pursuant to Section 793 of the Companies Act
overall importance to our operations. Acacia is carefully monitoring its 2006 (requiring disclosure of interest in shares) and has failed to provide
rights under relevant MDAs in the context of the legislative changes and the required information within 14 days from the service of the notice.
tax assessments made in Tanzania during 2017.
Certain employment contracts for members of the Company’s Executive
Leadership Team, excluding the current Interim CEO, contain change of
control provisions, which provide entitlements to severance payments in
the event of being dismissed without cause or resigning for good reason
in the 12 months following a change of control. Any payment made under
these arrangements would replace the entitlement to receive payment
under applicable contractual notice periods in each case. Special
provisions also allow the early exercise of awards made under the
Company’s Stock Option Plan (“SOP”) and early vesting of awards made
under the Long-Term Incentive Plan (“LTIP”) in the event of a takeover,
reconstruction or winding up. In such circumstances, the Compensation
Committee determines whether and to what extent options or awards
become exercisable, by taking into account all relevant facts and
circumstances including, but not limited to, satisfaction of any applicable
performance condition. When determining the vesting of LTIP awards or
options, the Compensation Committee may proportionately reduce the
award depending on the time which has elapsed between the first day
of the performance period and the date of the change of control.

94 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Dividend rights ––it is lodged duly stamped (if so required) at the transfer office;
The Board may declare and pay dividends on any class of shares carrying ––it is accompanied by the relevant certificate for the shares to which
a fixed dividend expressed to be payable on fixed dates and may from it relates and such other evidence as the Directors may reasonably
time to time pay interim dividends as it thinks fit. Final dividends shall require to prove the title of the transferor and the due execution of
be declared by Ordinary Shareholder resolution, in accordance with Board the transfer or, if the transfer is executed by some other person on
recommendations. No dividend declared by shareholders shall exceed his behalf, the authority of that person to do so; and
the amount recommended by the Board. Provided that the Board acts in
––in the case of partly paid shares listed on the London Stock Exchange,
good faith, it shall not incur any liability to shareholders for any loss that
such refusal would prevent dealings in such shares from taking place
they may suffer by the lawful payment of any fixed or interim dividend on
on an open and proper basis.
any shares ranking after or pari passu with those shares. Except as
otherwise provided by the rights attached to shares, all dividends shall Unless the Board otherwise determines, a transfer of shares will not be
be apportioned and paid proportionately to the amounts paid up on the registered if the transferor or any other person appearing to be interested
shares during any portion or portions of the period in respect of which in the transferor’s shares has been issued with Section 793 shares
the dividend is paid, but if any share is issued on terms providing that it in respect of shares representing at least 0.25% of their class and
shall rank for dividend as from a particular date, it shall rank for dividend the relevant information has not been supplied within 14 days. This
accordingly. No amount paid up on a share in advance of the date on restriction on transfer will not automatically apply if the member is not
which a call is payable shall be treated as paid up on the share. personally in default as regards supplying the information required and
the proposed transfer is only part of the member’s holding, provided that
Payment of any dividend declared may be satisfied wholly or partly by
certain requirements are satisfied at the time of presenting the transfer
the distribution of specific assets, and in particular of paid up shares
for registration.
or debentures of the Company, with shareholder approval. The Directors
may retain any dividend or other money payable on or in respect of Division of assets on a winding up
a share on which the Company has a lien and may apply the same If the Company is wound up the liquidator may, with the sanction of
towards satisfaction of the monies payable to the Company in respect a shareholder special resolution, divide the whole or any part of the
of that share. Company’s assets between shareholders. In such circumstances the
liquidator may value any assets and determine how the division shall
Unless the Directors otherwise determine, the payment of any dividend
be carried out as between the shareholders or different classes of
or other money that would otherwise be payable in respect of shares will
shareholder. Subject to certain requirements, the liquidator may also
be withheld, and the Company shall have no obligation to pay interest
vest any part of the assets in trustees on such trusts for the benefit of

GOVERNANCE
on it, if such shares represent at least 0.25% of the nominal value of
the shareholders, but no shareholder shall be compelled to accept any
the issued share capital of their class and the holder, or any other person
assets on which there is a liability.
appearing to be interested in those shares, has been issued with a
Section 793 notice and has failed to supply the information required Variation of rights
by such notice within 14 days. Furthermore, such a holder shall not be If at any time the share capital of the Company is divided into shares
entitled to elect to receive shares instead of a dividend. of different classes, rights attached to a class may only be varied in
such manner (if any) as may be provided by prescribed rights or, in the
The payment by the Board of any unclaimed dividend or other monies
absence of any such provision, either with the consent in writing of the
on or in respect of a share into a separate account shall not constitute
holders of not less than three-quarters in nominal value of the issued
Acacia a trustee in respect thereof. All dividends unclaimed for a period
shares of the class or with the sanction of a special resolution passed
of 12 years after having been declared or become due for payment shall
at a separate general meeting of the holders of shares of the class duly
be forfeited and shall revert to Acacia.
convened and held.
Transfer of shares
Subject to any applicable restrictions, each member may transfer all or
any of his or her shares, which are in certificated form, by instrument of
transfer in writing in any usual form or in any other form acceptable to the
Board and may be under hand only. Such instrument shall be executed
by or on behalf of the transferor and (in the case of a transfer of a share
which is not fully paid up) by or on behalf of the transferee. The transferor
shall be deemed to remain the holder of such share until the name of the
transferee is entered in the register in respect of it.
All transfers of shares which are in uncertificated form shall, unless the
CREST regulations otherwise provide, be effected on a relevant system.
The Directors may, in their absolute discretion and without giving any
reason, refuse to register any transfer of a share in certificated form
(or renunciation of a renounceable letter of allotment) unless:
––it is in respect of a share which is fully paid up;
––it is in respect of only one class of shares;
––it is in favour of not more than four joint transferees;

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 95

OTHER INFORMATION CONTINUED

Powers of Directors Appointment and replacement of Directors

Managing the business Shareholders may appoint any person who is willing to act as a Director
Acacia’s business is managed by the Board, and the Articles of by ordinary resolution and may remove any Director by ordinary
Association permit the Board to exercise all of the Company’s powers resolution. The Board may appoint any person to fill any vacancy or as
in this regard. These powers may be exercised by any meeting of the an additional Director, provided that they are submitted for re-election
Board at which a quorum of two Directors is present. The power of the by the shareholders at the AGM following their appointment.
Board to manage the business is subject to any limitations imposed by
Specific conditions apply to the vacation of office, including cases where
the Companies Act, the Articles of Association or any directions given
a Director becomes prohibited by law or regulation from holding office,
by special resolution of the shareholders applicable at a relevant time.
or is persistently absent from Directors’ meetings, or if three-quarters
The Articles contain an express authority for the appointment of
of appointed Directors request his or her resignation or in the case of
Executive Directors and provide the Directors with the authority to
mental incapacity or bankruptcy. Barrick’s rights to appoint Directors
delegate or confer upon such Directors any of the powers exercisable
are summarised on page 69. Additional information regarding Director
by them upon such terms and conditions and with such restrictions
re-election requirements is provided on page 67 as part of the corporate
as they see fit. The Articles contain additional authorities to delegate
governance report.
powers and discretions to Board committees and subcommittees.
Related party transactions
Borrowing powers
Details of related party transactions undertaken during the year are
Subject to the provisions of the Companies Act 2006, and any other
contained in Note 34 on page 151 of the consolidated financial
applicable law, the Directors may exercise all the powers of the Company
statements.
to borrow money, guarantee, indemnify, mortgage or charge its
undertaking, property (present and future) and uncalled capital or any Post-balance sheet events
part or parts thereof and issue debentures and other securities, whether Particulars of any important events affecting the Company or the
outright or as collateral security for any debt, liability or obligation of Group since the year-end are contained in Note 36 on page 152 of the
Acacia or of any third party up to a maximum amount of two times the consolidated financial statements. Such information is incorporated
aggregate of the Group’s adjusted total equity, calculated in accordance into this Directors’ Report and is deemed to be part of it.
with the procedure contained in the Articles of Association. Borrowings
in excess of this amount require prior shareholder approval.
Audit information
Having made the requisite enquiries, so far as the Directors are aware,
New issues of shares there is no relevant audit information (as defined by Section 418(3) of
Subject to the provisions of the Companies Act 2006, the CREST the Companies Act 2006) of which the auditors are unaware and each
regulations and every other enactment for the time being in force relating Director has taken all steps that he or she ought to have taken as a
to the Directors’ authority to allot shares and/or the disapplication of Director to make him or herself aware of any relevant audit information
pre-emption rights and to any resolution of the Company in general and to establish that the auditors are aware of that information.
meeting regarding the same, the Directors may allot (with or without
conferring a right of renunciation), grant options over or otherwise
Auditors
The Company’s auditors are PricewaterhouseCoopers LLP (“PwC”).
dispose of them to such persons, at such times and on such terms
A resolution to reappoint PwC as auditors will be proposed at the
as they think appropriate.
forthcoming AGM. Refer to page 104 as part of the consolidated financial
Acacia’s shareholders passed the following resolutions relating to the statements for the Independent Auditors’ report on such statements.
allotment and pre-emption right disapplications at the 2017 AGM:
––The Directors were granted authority to allot new shares (or grant rights
to subscribe for or convert securities into shares) up to a nominal value
of £13,532,821, equivalent to approximately 33% of the total issued
Ordinary Share capital of the Company, exclusive of treasury shares,
at the time of passing the resolution. In addition to this, the Directors
were also granted authority to allot additional new shares (or grant
rights to subscribe for or convert any security into shares) up to a
further nominal amount of £13,532,821, but only in connection with
a rights issue.
––Pre-emption rights were disapplied over new shares allotted for cash
pursuant to the authority granted at (i) above, but only:
(a) in connection with a pre-emptive offer or rights issue; or
(b) o
 therwise up to a nominal value of £4,100,854
(equivalent to approximately 10% of the Company’s total
issued Ordinary Share capital at the time of passing the
resolution).
––These authorities have not been exercised during the reporting period
and will expire on the date of the 2018 AGM. Equivalent resolutions for
a renewal of these authorities will be put to the shareholders at the
forthcoming AGM. The resolution sought as regards pre-emption right
disapplication reflects the requirements of the Pre-Emption Group’s
revised Statement of Principles that provide for certain non-pre-emptive
allocations in the context of acquisitions and specified capital
investments.

96 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

DIRECTORS’ RESPONSIBILITIES STATEMENT

Under applicable UK law, the Directors are Responsibility statement required by Disclosure Guidance
and Transparency Rules
responsible for preparing the Annual Report, the The Directors, whose names and functions are set out on pages 64 to
consolidated financial statements and parent 65 of this Annual Report, confirm to the best of their knowledge that:
company financial statements in accordance with ––The financial statements, prepared in accordance with applicable
applicable law and regulation. accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the
Responsibility for financial statements undertakings included in the consolidation as a whole.
The Companies Act 2006 requires the Directors to prepare financial
statements for each financial year. Under that law the Directors have ––The Management report, which is comprised of the Strategic report
prepared the Group and parent company financial statements in and the Directors’ Report, includes a fair review of the development
accordance with International Financial Reporting Standards (“IFRS”) or performance of the business and the position of the Company and
as adopted by the European Union. Under company law, the Directors the undertakings included in the consolidation as a whole, together
must not approve the financial statements unless they are satisfied with a description of the principal risks and uncertainties that they face.
that they give a true and fair view of the state of affairs of the Group Approval of Strategic report and the Directors’ Report
and the Company and of the profit or loss of the Group for that period. The Strategic report and the Directors’ Report have been approved by
In preparing these financial statements, the Directors are required to: the Board and signed on its behalf by

––Select suitable accounting policies and then apply them consistently.

––Make judgements and accounting estimates that are reasonable
and prudent.
––State whether applicable IFRS as adopted by the European Union have
been followed, subject to any material departures disclosed and CHARLIE RITCHIE
COMPANY SECRETARY
explained in the financial statements.
––Prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records

GOVERNANCE
that are sufficient to show and explain the Company’s transactions
and disclose with reasonable accuracy at any time the financial position
of the Company and the Group and enable them to ensure that the
financial statements comply with the Companies Act 2006 and, as
regards the Group’s consolidated financial statements, Article 4 of the
IAS Regulations. They are also responsible for taking such steps as are
reasonably open to them to safeguard the assets of the Company and
the Group and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
––The Directors are responsible for the maintenance and integrity of the
Company’s website and legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 97

RESERVES AND RESOURCES

Mineral reserves and mineral resources estimates contained in this An Inferred Mineral Resource
Report have been calculated as at 31 December 2017 in accordance The part of a Mineral Resource for which quantity and grade or quality
with National Instrument 43-101 as required by Canadian securities are estimated on the basis of limited geological evidence and sampling
regulatory authorities, unless otherwise stated. Canadian Institute of gathered through appropriate sampling techniques from locations such
Mining, Metallurgy and Petroleum (“CIM”) definitions were followed for as outcrops, trenches, pits, workings and drill holes. Geological evidence
mineral reserves and resources. Calculations have been reviewed, is sufficient to imply but not verify geological and grade or quality
verified (including estimation methodology, sampling, analytical and test continuity. An Inferred Mineral Resource has a lower level of confidence
data) and compiled by Group personnel under the supervision of Group than that applying to an Indicated Mineral Resource and must not be
Qualified Persons: John Haywood, Chief Geologist – Operations, and converted to a Mineral Reserve. It is reasonably expected that the
David Blamires, Manager – Long Term Planning. However, the figures majority of Inferred Mineral Resources could be upgraded to Indicated
stated are estimates and no assurances can be given that the indicated Mineral Resources with continued exploration.
quantities of metal will be produced. In addition, totals stated may not
An Indicated Mineral Resource
add up due to rounding.
The part of a Mineral Resource for which quantity, grade or quality,
Mineral reserves have been calculated using an assumed long-term densities, shape and physical characteristics are estimated with
average gold price of US$1,100 per ounce, a silver price of US$15.00 sufficient confidence to allow the application of Modifying Factors in
per ounce and a copper price of US$2.50 per pound. Reserve sufficient detail to support mine planning and evaluation of the economic
calculations incorporate current and/or expected mine plans and cost viability of the deposit. Geological evidence is derived from adequately
levels at each property and reflect contained ounces. Mineral resources detailed and reliable exploration, sampling and testing and is sufficient
at Group mines have been calculated using an assumed long-term to assume geological and grade or quality continuity between points
average gold price of US$1,400 per ounce, a silver price of US$19.00 of observation. An Indicated Mineral Resource has a lower level of
per ounce and a copper price of US$2.80 per pound and reflect confidence than that applying to a Measured Mineral Resource and
contained metal. may only be converted to a Probable Mineral Reserve.
Mineral resources at Group exploration properties have been calculated A Measured Mineral Resource
using an assumed long-term average gold price of US$1,500.00 per The part of a Mineral Resource for which quantity, grade or quality,
ounce for Tankoro and Golden Ridge (however, this Mineral Resource has densities, shape, and physical characteristics are estimated with
now been removed from the declaration); whilst Nyanzaga is a foreign confidence sufficient to allow the application of Modifying Factors to
estimate compiled to JORC Code 2012 and reported above a lower support detailed mine planning and final evaluation of the economic
cut-off grade of 1.5g/t. The new Mineral Resource estimate for the viability of the deposit. Geological evidence is derived from detailed
Liranda Project in Kenya is reported above varying lower cut-off grades and reliable exploration, sampling and testing and is sufficient to confirm
appropriate for the mineralisation. Resources have been estimated using geological and grade or quality continuity between points of observation.
varying cut-off grades, depending on the type of mine or project, its A Measured Mineral Resource has a higher level of confidence than that
maturity and ore types at each property. applying to either an Indicated Mineral Resource or an Inferred Mineral
Resource. It may be converted to a Proven Mineral Reserve or to a
Reserve estimates are dynamic and are influenced by changing economic
Probable Mineral Reserve.
conditions, technical issues, environmental regulations and any other
relevant new information and therefore these can vary from year to year. A Mineral Reserve
Resource estimates can also change and tend to be influenced mostly The economically mineable part of a Measured and/or Indicated Mineral
by new information pertaining to the understanding of the deposit and Resource. It includes diluting materials and allowances for losses, which
secondly the conversion to ore reserves. In addition, estimates of may occur when the material is mined or extracted and is defined by
inferred mineral resources may not form the basis of an economic studies at Pre-Feasibility or Feasibility level as appropriate that include
analysis and it cannot be assumed that all or any part of an inferred application of Modifying Factors. Such studies demonstrate that, at the
mineral resource will ever be upgraded to a higher category. Therefore, time of reporting, extraction could reasonably be justified. Mineral
investors are cautioned not to assume that all or any part of an inferred Reserves are sub-divided in order of increasing confidence into Probable
mineral resource exists, that it can be economically or legally mined, or Mineral Reserves and Proven Mineral Reserves. A Probable Mineral
that it will ever be upgraded to a higher category. Likewise, investors are Reserve has a lower level of confidence than a Proven Mineral Reserve.
cautioned not to assume that all or any part of measured or indicated
Modifying Factors
mineral resources will ever be upgraded to mineral reserves.
These are considerations used to convert Mineral Resources to Mineral
Definitions Reserves. These include, but are not restricted to, mining, processing,
A Mineral Resource metallurgical, infrastructure, economic, marketing, legal, environmental,
A concentration or occurrence of solid material of economic interest in or social and governmental factors.
on the Earth’s crust in such form, grade or quality and quantity that there
A Probable Mineral Reserve
are reasonable prospects for eventual economic extraction. The location,
The economically mineable part of an Indicated, and in some
quantity, grade or quality, continuity and other geological characteristics
circumstances, a Measured Mineral Resource. The confidence in the
of a Mineral Resource are known, estimated or interpreted from specific
Modifying Factors applying to a Probable Mineral Reserve is lower than
geological evidence and knowledge, including sampling. Material of
that applying to a Proven Mineral Reserve. Probable Mineral Reserve
economic interest refers to diamonds, natural solid inorganic material,
estimates must be demonstrated to be economic, at the time of
or natural solid fossilised organic material including base and precious
reporting, by at least a Pre-Feasibility Study.
metals, coal, and industrial minerals. Mineral Resources are sub-divided,
in order of increasing geological confidence, into Inferred, Indicated and A Proven Mineral Reserve
Measured categories. An Inferred Mineral Resource has a lower level The economically mineable part of a Measured Mineral Resource.
of confidence than that applied to an Indicated Mineral Resource. A Proven Mineral Reserve implies a high degree of confidence in
An Indicated Mineral Resource has a higher level of confidence than the Modifying Factors. Proven Mineral Reserve estimates must be
an Inferred Mineral Resource but has a lower level of confidence than demonstrated to be economic, at the time of reporting, by at least
a Measured Mineral Resource. a Pre-Feasibility Study.

98 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Mine gold reserves and resources
2017 2016
Mine Tonnes (’000s) Grade Au (g/t) Ounces (’000s) Tonnes (’000s) Grade Au (g/t) Ounces (’000s)
Bulyanhulu – Underground Proven and probable 14,500 9.70 4,522 15,662 9.75 4,910
Mineral resource 14,409 9.04 4,188 13,904 8.91 3,982
Inferred 24,208 9.75 7,587 24,208 9.75 7,587
Bulyanhulu – Tailings Proven and probable 5,186 1.05 175 6,181 1.05 209
Mineral resource – – – – – –
Inferred – – – – – –
Buzwagi – Open Pit Proven and probable 132 1.71 7 5,993 1.74 336
Mineral resource 4,524 1.05 152 25,873 1.23 1,024
Inferred 49,918 0.77 1,236 2,058 1.37 91
Buzwagi – Stockpiles Proven and probable 14,122 0.91 414 9,067 0.96 279
Mineral resource – – – – – –
Inferred – – – – – –
North Mara – Open Pit Proven and probable 15,141 1.74 847 16,946 2.04 1,110
Mineral resource 6,664 1.95 417 15,261 2.07 1,018
Inferred 447 1.20 17 3,600 0.84 97
North Mara – Stockpiles Proven and probable 4,695 0.95 144 3,452 1.13 125
Mineral resource – – – – – –
Inferred – – – – – –
North Mara – Gokona UG Proven and probable 6,652 6.26 1,338 3,393 6.01 656
Mineral resource 570 3.94 72 2,270 3.35 244
Inferred 2,642 5.08 432 6,356 3.39 693
North Mara – Nyabigena UG Proven and probable – – – – – –
Mineral resource 1,237 3.19 127 1,237 3.19 127

GOVERNANCE
Inferred 50 4.20 7 50 4.20 7
North Mara – Nyabirama UG Proven and probable – – – – – –
Mineral resource 3,756 3.84 463 1,401 3.19 144
Inferred 3,208 3.86 398 483 3.16 49
Total Proven and probable 60,429 3.83 7,448 60,694 3.91 7,625
Mineral resource 31,161 5.41 5,420 59,945 3.39 6,539
Inferred 80,473 3.74 9,676 36,755 7.21 8,523

Exploration property gold reserves and resources1

2017 2016
Mine Tonnes (’000s) Grade Au (g/t) Ounces (’000s) Tonnes (’000s) Grade Au (g/t) Ounces (’000s)
Tankoro (50%) Proven and probable – – – – – –
Mineral resource – – – – – –
Inferred 21,500 1.52 1,050 21,500 1.52 1,050
Nyanzaga (85%) Proven and probable – – – – – –
(Tusker/Kilimani) Mineral resource 17,680 4.06 2,308 22,230 3.49 2,495
Inferred 2,465 3.84 304 4,590 3.49 515
Liranda Proven and probable – – – – – –
(Isulu/Bushiangala) Mineral resource – – – – – –
Inferred 2,889 12.60 1,171 – – –
Golden Ridge Proven and probable – – – – – –
Mineral resource – – – 7,944 2.78 710
Inferred – – – 1,414 2.27 103
Total Exploration Proven and probable – – – – – –
Mineral resource 17,680 4.06 2,308 30,174 3.30 3,205
Inferred 26,854 2.92 2,524 27,504 1.89 1,667
Total Acacia Proven and probable 60,429 3.83 7,448 60,694 3.91 7,625
Mineral resource 48,841 4.92 7,727 90,119 3.36 9,744
Inferred 107,328 3.54 12,200 64,259 4.93 10,190
1 Exploration property gold resources have been estimated using a gold price of $1,500/oz for Golden Ridge and Tankoro; and reported above 1.5g/t Au lower cut-off for Nyanzaga.
Acacia’s holding in the Nyanzaga property has been reduced to 85% following completion of Pre-Feasibility Study by OreCorp. Liranda has been reported above variable lower cut-
off grades. Golden Ridge was removed due to ownership uncertainty and awaits clarification by the Government of Tanzania.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 99

RESERVES AND RESOURCES CONTINUED

Contained copper reported within gold reserves and resources1

2017 2016
Mine Tonnes (’000s) Grade Cu (%) Pounds (’000s) Tonnes (’000s) Grade Cu (%) Pounds (’000s)
Bulyanhulu – Underground Proven and probable 14,500 0.54 172,798 15,662 0.55 188,283
Mineral resource 14,409 0.44 138,961 13,904 0.44 136,247
Inferred 24,208 0.63 337,251 24,208 0.63 337,251
Bulyanhulu – Tailings Proven and probable – – – – – –
Mineral resource – – – – – –
Inferred – – – – – –
Buzwagi Proven and probable – – – 15,060 0.10 32,497
Mineral resource 4,524 0.11 10,971 25,873 0.12 66,187
Inferred 49,918 0.08 89,116 2,058 0.13 5,760
Total Proven and probable 14,500 0.54 172,798 30,722 0.33 220,780
Mineral resource 18,913 0.36 149,781 39,777 0.23 202,434
Inferred 74,126 0.26 426,367 26,266 0.59 343,010
1 Buzwagi’s proven and probable reserve is formed by the low grade stockpiles being processed without flotation circuit operation, and thus no copper content is reported. Buzwagi
Mineral Resources may be mined in future with flotation circuit in operation, and thus copper content is reported.

Contained silver reported within gold reserves and resources

2017 2016
Mine Tonnes (’000s) Grade Ag (g/t) Ounces (’000s) Tonnes (’000s) Grade Ag (g/t) Ounces (’000s)
Bulyanhulu – Underground Proven and probable 14,500 7.87 3,668 15,662 8.11 4,085
Mineral resource 14,409 6.61 3,062 13,904 6.64 2,969
Inferred 24,208 6.96 5,416 24,208 6.96 5,416
Bulyanhulu – Tailings Proven and probable – – – 6,181 3.56 708
Mineral resource – – – – – –
Inferred – – – – – –
Total Proven and probable 14,500 7.87 3,668 21,843 6.82 4,793
Mineral resource 14,409 6.61 3,062 13,904 6.64 2,969
Inferred 24,208 6.96 5,416 24,208 6.96 5,416

Mine gold reserves

Mine Classification Tonnes Grade Au (g/t) Contained Au (oz)
Bulyanhulu – Underground Proven 2,917,033 10.66 1,000,203
Probable 11,583,055 9.46 3,521,935
Total (P+P) 14,500,088 9.70 4,522,138
Bulyanhulu – Tailings Proven – – –
Probable 5,186,447 1.05 175,085
Total (P+P) 5,186,447 1.05 175,085
Buzwagi – Open Pit Proven 132,165 1.71 7,258
Probable – – –
Total (P+P) 132,165 1.71 7,258
Buzwagi – Stockpiles Proven 14,121,585 0.91 413,944
Probable – – –
Total (P+P) 14,121,585 0.91 413,944
North Mara – Open Pit Proven 1,510,195 2.10 101,963
Probable 13,631,060 1.70 745,023
Total (P+P) 15,141,255 1.74 846,986
North Mara – Stockpiles Proven 4,695,233 0.95 143,932
Probable – – –
Total (P+P) 4,695,233 0.95 143,932
North Mara – Gokona UG Proven 2,085,586 5.86 393,166
Probable 4,566,366 6.44 945,133
Total (P+P) 6,651,952 6.26 1,338,299
North Mara – Nyabigena UG Proven – – –
Probable – – –
Total (P+P) – – –
North Mara – Nyabirama UG Proven – – –
Probable – – –
Total (P+P) – – –
Total mine gold reserves Proven 25,461,797 2.52 2,060,465
Probable 35,114,715 4.78 5,392,165
Total (P+P) 60,576,511 3.83 7,452,631

100 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Contained copper reported within gold reserves
Mine Classification Tonnes Grade Cu (%) Contained Cu (lbs)
Bulyanhulu – Underground Proven 2,917,033 0.43 27,972,038
Probable 11,583,055 0.57 144,826,151
Total 14,500,088 0.54 172,798,189
Bulyanhulu – Tailings Proven – – –
Probable – – –
Total – – –
Buzwagi Proven – – –
Probable – – –
Total – – –
Total copper reported within gold reserves Proven 2,917,033 0.43 27,972,038
Probable 11,583,055 0.57 144,826,151
Total 14,500,088 0.54 172,798,189

Contained silver reported within gold reserves

Mine Classification Tonnes Grade Ag (g/t) Contained Ag (oz)
Bulyanhulu – Underground Proven 2,917,033 5.59 524,327
Probable 11,583,055 8.44 3,143,439
Total 14,500,088 7.87 3,667,766
Bulyanhulu – Tailings Proven – – –
Probable – – –
Total – – –
Total silver reported within gold reserves Proven 2,917,033 5.59 524,327
Probable 11,583,055 8.44 3,143,439
Total 14,500,088 7.87 3,667,766

GOVERNANCE
Mine gold resource (measured and indicated, exclusive of reserves)
Mine Classification Tonnes Grade Au (g/t) Contained Au (oz)
Bulyanhulu – Underground Measured 1,367,300 11.55 507,654
Indicated 13,042,060 8.78 3,680,403
Total (M+I) 14,409,360 9.04 4,188,057
Bulyanhulu – Tailings Measured – – –
Indicated – – –
Total (M+I) – – –
Buzwagi – Open Pit Measured 20,453 2.98 1,958
Indicated 4,504,014 1.04 150,020
Total (M+I) 4,504,014 1.04 151,978
Buzwagi – Stockpiles Measured – – –
Indicated – – –
Total (M+I) – – –
North Mara – Open Pit Measured 1,756,883 2.27 128,508
Indicated 4,907,230 1.83 288,721
Total (M+I) 6,664,113 1.95 417,229
North Mara – Stockpiles Measured – – –
Indicated – – –
Total (M+I) – – –
North Mara – Gokona UG Measured 182,852 5.80 34,092
Indicated 386,856 3.06 38,055
Total (M+I) 569,708 3.94 72,147
North Mara – Nyabigena UG Measured 80,929 3.16 8,216
Indicated 1,156,078 3.19 118,548
Total (M+I) 1,237,007 3.19 126,764
North Mara – Nyabirama UG Measured – – –
Indicated 3,756,376 3.84 463,351
Total (M+I) 3,756,376 3.84 463,351
Total mine resource (M+I) Measured 3,387,964 6.23 678,470
Indicated 27,752,614 5.31 4,739,098
Total (M+I) 31,140,578 5.41 5,417,568

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 101

RESERVES AND RESOURCES CONTINUED

Contained copper reported within gold resources

Mine Classification Tonnes Grade Cu (%) Contained Cu (lbs)
Bulyanhulu – Underground Measured 1,367,300 0.40 12,186,673
Indicated 13,042,060 0.44 126,774,020
Total (M+I) 14,409,360 0.44 138,960,693
Bulyanhulu – Tailings Measured – – –
Indicated – – –
Total (M+I) – – –
Buzwagi Measured 20,453 0.33 150,562
Indicated 4,504,014 0.11 10,820,263
Total (M+I) 4,524,467 0.11 10,970,825
Total copper reported within gold resources Measured 1,387,753 0.40 12,337,235
Indicated 17,546,074 0.36 137,594,283
Total (M+I) 18,933,827 0.36 149,931,518

Contained silver reported within gold resources

Mine Classification Tonnes Grade Ag (g/t) Contained Ag (oz)
Bulyanhulu – Underground Measured 1,367,300 7.16 314,735
Indicated 13,042,060 6.55 2,747,066
Total (M+I) 14,409,360 6.61 3,061,801
Bulyanhulu – Tailings Measured – – –
Indicated – – –
Total (M+I) – – –
Total silver reported within gold resources Measured 1,367,300 7.16 314,735
Indicated 13,042,060 6.55 2,747,066
Total (M+I) 14,409,360 6.61 3,061,801

Mine Gold Inferred Resource

Mine Classification Tonnes Grade Au (g/t) Contained Au (oz)
Bulyanhulu – Underground Inferred 24,208,157 9.75 7,586,565
Bulyanhulu – Tailings Inferred – – –
Buzwagi Inferred 49,918,193 0.77 1,235,779
North Mara – Surface Inferred 446,630 1.20 17,249
North Mara – Underground Inferred 5,900,471 4.41 836,501
Total Mine Inferred Resource Total Inferred 80,473,451 3.74 9,676,094

Contained Copper Reported within Inferred Gold Resources

Mine Classification Tonnes Grade Cu (%) Contained Cu (lbs)
Bulyanhulu – Underground Inferred 24,208,157 0.63 337,250,568
Bulyanhulu – Tailings Inferred – – –
Buzwagi Inferred 49,918,193 0.08 89,115,955
Total Mine Inferred Resource Total Inferred 74,126,350 0.26 426,366,522

Contained Silver Reported within Inferred Gold Resource

Mine Classification Tonnes Grade Ag (g/t) Contained Ag (oz)
Bulyanhulu – Underground Inferred 24,208,157 6.96 5,415,652
Bulyanhulu – Tailings Inferred – – –
Total Mine Inferred Resource Total Inferred 24,208,157 6.96 5,415,652

102 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Exploration property Resource (M+I)
Mine Classification Tonnes Grade Au (g/t) Contained Au (oz)
Tankoro (50%) Measured – – –
(South Houndé) Indicated – – –
Total (M+I) – – –
Nyanzaga (85%) Measured 3,935,500 4.96 627,300
(Tusker/Kilimani) Indicated 13,744,500 3.80 1,680,450
Total (M+I) 17,680,000 4.06 2,307,750
Liranda Measured – – –
(Isulu/Bushiangala) Indicated – – –
Total (M+I) – – –
Golden Ridge Measured – – –
Indicated – – –
Total (M+I) – – –
Total Measured 3,935,500 4.96 627,300
Indicated 13,744,500 3.80 1,680,450
Total (M+I) 17,680,000 4.06 2,307,750

Exploration property Resource (Inferred)

Mine Classification Tonnes Grade Au (g/t) Contained Au (oz)
Tankoro (50%) Inferred 21,500,000 1.52 1,049,500
(South Houndé) Total Inferred 21,500,000 1.52 1,049,500
Nyanzaga (85%) Inferred 2,465,000 3.84 304,300
(Tusker/Kilimani) Total Inferred 2,465,000 3.84 304,300
Liranda Inferred 2,889,400 12.60 1,170,500
(Isulu/Bushiangala) Total Inferred 2,889,400 12.60 1,170,500

GOVERNANCE
Golden Ridge Inferred – – –
Total Inferred – – –
Total Inferred 26,854,400 2.92 2,524,300
Total Inferred 26,854,400 2.92 2,524,300

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 103

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ACACIA MINING PLC

Report on the audit of the financial statements Material uncertainty relating to going concern –
Opinion Group and parent company
In forming our opinion on the financial statements, which is not modified,
In our opinion, Acacia Mining plc’s Group financial statements and parent
we have considered the adequacy of the disclosure made in Note 2 to
company financial statements (the “financial statements”):
the Group financial statements concerning the Group’s and the parent
––give a true and fair view of the state of the Group’s and of the parent company’s ability to continue as a going concern. The impact of the
company’s affairs as at 31 December 2017 and of the Group’s and the mineral concentrate export ban and negotiation with the Government
parent company’s loss and the Group’s and the parent company’s cash of Tanzania, along with the other matters explained in Note 2 to the
flows for the year then ended; financial statements, indicate the existence of a material uncertainty
––have been properly prepared in accordance with IFRSs as adopted by which may cast significant doubt about the Group’s and the parent
the European Union; and company’s ability to continue as a going concern. The financial
statements do not include the adjustments that would result if the
––have been prepared in accordance with the requirements of the
Group and parent company were unable to continue as a going concern.
Companies Act 2006 and, as regards the Group financial statements,
Article 4 of the IAS Regulation. Explanation of material uncertainty
Note 2 to the financial statements details the directors’ disclosures
We have audited the financial statements, included within the Annual
of the material uncertainties relating to going concern. In addition, the
Report and Accounts (the “Annual Report”), which comprise: the
disclosures included in Note 6 to the financial statements provide further
consolidated and parent company income statement and statement
detail relating to the status and potential impact of the on-going mineral
of comprehensive income for the year then ended; the consolidated
concentrate export ban and negotiation with the Government of Tanzania
and parent company balance sheet as at 31 December 2017, the
on the going concern status of the Group and parent company.
consolidated and parent company statement of changes in equity, and
the consolidated and parent company cash flow statement for the year In forming their conclusions regarding going concern of the Group and
then ended; and the notes to the financial statements, which include parent company, and as described in Note 2, the directors have
a description of the significant accounting policies. considered, but not limited to, the following matters:
Our opinion is consistent with our reporting to the Audit Committee. ––the impact of the ban on on-going operations;
Basis for opinion ––the current cash position;
We conducted our audit in accordance with International Standards on ––the latest mine plans and a range of scenarios around the various
Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under options under these circumstances, including the cash flow impact of
ISAs (UK) are further described in the “Auditors’ responsibilities for the an extended concentrate export ban; and the potential impacts of the
audit of the financial statements” section of our report. We believe that timing and final terms of any comprehensive settlement which might be
the audit evidence we have obtained is sufficient and appropriate to approved by the parent company, including the lifting of the concentrate
provide a basis for our opinion. export ban and staged payments of US$300 million relating to
historical tax matters;
Independence
We remained independent of the Group in accordance with the ethical ––the short-term gold prices and market expectations for the same in the
requirements that are relevant to our audit of the financial statements medium-term; and
in the UK, which includes the FRC’s Ethical Standard, as applicable to ––Acacia Group’s capital expenditure and financing plans.
listed public interest entities, and we have fulfilled our other ethical
In addition, the directors have assumed that the Group will not be
responsibilities in accordance with these requirements.
required to settle its current outstanding borrowing obligations and
To the best of our knowledge and belief, we declare that non-audit will repay these in accordance with the current terms of the relevant
services prohibited by the FRC’s Ethical Standard were not provided to agreements. Given the risks associated with the impact of the mineral
the Group or the parent company. concentrate export ban and negotiations with the Government of
Tanzania, the directors have drawn attention to this in disclosing a
Non-audit services to the Group and parent company in the period from
material uncertainty relating to going concern in the basis of preparation
1 January 2017 to 31 December 2017 are disclosed in note 10 to the
to the Annual Report.
financial statements.
Emphasis of matter – Group and parent company – Impact
of mineral concentrate export ban and negotiation with the
Government of Tanzania
We draw attention to Notes 2, 6 and 34 to these financial statements,
which describe the material uncertainties related to the impact of the
mineral concentrate export ban and negotiations with the Government
of Tanzania on the Group’s and parent company’s assets, liabilities and
cash flows. Our opinion is not modified in respect of these matters.

104 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

What audit procedures we performed The scope of our audit and our areas of focus
In concluding there is a material uncertainty, our audit procedures As part of designing our audit, we determined materiality and
included: assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made
––Considering the ability of the Group to repay its borrowing obligations in
subjective judgements, for example in respect of significant accounting
accordance with the current terms of its agreement, including through
estimates that involved making assumptions and considering future
inquiries of management and the directors, understanding of the status
events that are inherently uncertain.
of the export ban negotiations and potential settlement outcomes and
considering management’s external advice; We gained an understanding of the legal and regulatory framework
––Assessing management’s cash flow forecasts and capital expenditure applicable to the Group and the industry in which it operates, and
plans, including reconciliation of the forecasts to the life of mine considered the risk of acts by the Group which were contrary to
models; applicable laws and regulations, including fraud. We designed audit
procedures at the Group and mine site level to respond to the risk,
––Considering the on-going availability of the Group’s facilities, including
recognising that the risk of not detecting a material misstatement due
reading correspondence between management and the finance
to fraud is higher than the risk of not detecting one resulting from error,
provider; and
as fraud may involve deliberate concealment by, for example, forgery
––Sensitising management’s assessment for the impact of downside or intentional misrepresentations, or through collusion. We focused
risks including a delay in finalising a settlement, cash outflows in on laws and regulations that could give rise to a material misstatement
excess of current forecasts, and continuation of the ban for the period in the Group and parent company financial statements, including the
of management’s assessment. Companies Act 2006, the Listing Rules and mining licence compliance
Our audit approach within Tanzania. Our tests included, but were not limited to, inquiry of
management, consideration of management’s external advice and review
Overview of mining licence documentation. There are inherent limitations in the
audit procedures described above and the further removed non-
Materiality ––Overall Group materiality: US$7.0 million (2016: compliance with laws and regulations is from the events and transactions
US$7.4 million), based on approximately 5% of reflected in the financial statements, the less likely we would become
profit before tax adjusted for the impairment aware of it.
charge of US$850 million.
We did not identify any key audit matters relating to irregularities,
––Overall parent company materiality: US$7.0 million
including fraud. As in all of our audits we also addressed the risk of
(2016: US$7.3 million), based on the lower of 1%
management override of internal controls, including testing journals
of total assets and overall Group materiality.
and evaluating whether there was evidence of bias by the directors
Audit scope ––We identified three mine sites located in that represented a risk of material misstatement due to fraud.
Tanzania which, in our view, required an audit
of their complete financial information. Key audit matters
Key audit matters are those matters that, in the auditors’ professional
––We conducted other audit procedures in London, judgement, were of most significance in the audit of the financial
South Africa, Tanzania and Kenya. statements of the current period and include the most significant
––Taken together, the territories and functions assessed risks of material misstatement (whether or not due to fraud)
where we performed our audit work accounted identified by the auditors, including those which had the greatest effect
for 100% of revenue and approximately 98% of on: the overall audit strategy; the allocation of resources in the audit;
absolute profit before tax (i.e. the sum of the and directing the efforts of the engagement team. These matters, and

FINANCIAL STATEMENTS
numerical values without regard to whether they any comments we make on the results of our procedures thereon, were
were profits or losses for the relevant territories addressed in the context of our audit of the financial statements as a
and functions). whole, and in forming our opinion thereon, and we do not provide a
Key audit matters ––Impairment assessments of goodwill, intangible separate opinion on these matters. This is not a complete list of all risks
assets and property, plant & equipment (Group). identified by our audit.
––Taxation including provisions for uncertain
deferred tax positions and the recoverability
of indirect taxes (Group).

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 105

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ACACIA MINING PLC CONTINUED

Key audit matter How our audit addressed the key audit matter
Impairment assessments of goodwill, intangible assets We considered management’s impairment trigger analysis and agreed
and property, plant & equipment that impairment indicators exist.
Refer to page 71 (Audit Committee report), page 121 (significant
In assessing the valuation of the CGUs, we evaluated management’s
judgements in applying accounting policies and key sources of estimation
future cash flow forecasts for each CGU, and the process by which they
uncertainty), page 118 (significant accounting policies) and Note 6.
were drawn up, including checking the mathematical accuracy of the cash
Acacia Mining has goodwill of US$6.4 million, indefinite-lived intangible flow models and agreeing future capital and operating expenditure to the
assets of US$76.0 million and property, plant and equipment of US$770.6 latest Board approved budgets and the latest approved life of mine plans.
million as at 31 December 2017, primarily contained within the following
Management’s future cash flow forecasts are underpinned by key
Cash Generating Units (“CGUs”); Bulyanhulu, North Mara, Buzwagi and
assumptions regarding their current estimation of the timing and form
acquired exploration and evaluation properties.
of a resolution of the export ban. With regards to the outcome, we made
Management determined that, amongst other things, the challenges inquiries of management and considered publically available information
experienced in the operating environment in Tanzania and the announcement from the Government of Tanzania and Barrick Gold Corporation. Whilst
of new legislation by the Government of Tanzania in respect of the natural we consider management’s best estimate to be consistent with the
resource sector are impairment triggers for all CGUs. Management therefore information made available to them, significant uncertainty remains as
performed impairment assessments for all CGUs by reference to key terms a result of the nature of the on-going negotiations.
of the Framework and new legislation announcements made by Barrick and
For each CGU we used our valuation experts to assist us in evaluating
the Government of Tanzania in October 2017.
the appropriateness of key market related assumptions in management’s
The Bulyanhulu CGU had a pre-impairment carrying value of US$1,232.4 valuation models, including gold prices, and discount rates.
million and contained goodwill and indefinite-lived intangible assets.
We assessed the reasonableness of management’s future forecasts of
Management determined that the recoverable amount of the CGU
capital and operating expenses included in the cash flow forecasts in light of
including the goodwill was lower than the carrying value, with a resulting
the historical accuracy of such forecasts and the current operational results.
pre-tax impairment charge of US$837.9 million.
We performed sensitivity analysis around the key assumptions within the
Whilst impairment indicators were noted for all CGUs, the carrying values of
cash flow forecasts using a range of discount rates and lower long term
the Buzwagi and North Mara CGUs of US$194.3 million and US$249.2 million
gold prices based on what, in our view, a market participant may apply.
respectively were supported by their recoverable value under management’s
impairment assessment, albeit with reduced headroom from prior years. The For the Bulyanhulu CGU, the estimation of recoverable amount is
determination of recoverable amount was based on the higher of value-in-use sensitive to changes in gold price assumptions and the effect on timing
and fair value less costs to dispose, which requires significant judgements on of the start-up from reduced operation. We formed an independent view
the part of management in valuing the relevant CGUs. of the gold price and discount rate that a market participant might use
in a fair value less cost to dispose scenario which indicated a range of
Recoverable amounts are based on management’s views of the potential
possible values for the CGU. The carrying value of this CGU exceeded
outcome of negotiations with the Government of Tanzania and variables
this estimated recoverable amount, resulting in the need for an
such as future commodity prices, the most appropriate discount rate and
impairment charge. We considered the allocation of the impairment
timing and approval of future capital and operating expenditure.
charge between goodwill, property, plant and equipment and inventory
In addition, management has recorded an impairment charge of US$12 and were satisfied that the methodology applied was appropriate.
million for the Nyanzaga exploration project to reflect the current estimate The remaining carrying value remains at risk depending on the outcome
for the potential impact of the new mining laws on the carrying value of of a negotiated settlement with the Government of Tanzania.
the project, which now stands at $34 million.
With regards to the North Mara and Buzwagi CGUs, management’s
Management has additionally considered the recoverability of the estimated recoverable amounts supported the carrying value of these
Investments in subsidiaries held in the parent company financial assets as at 31 December 2017. In assessing the level of headroom
statements and recognised an impairment of US$463.9 million, calculated at these CGUs we performed downside sensitivities based on an
as the difference between the carrying amount of the individual investment independent view of a range of possible gold prices and discount rates,
and the relevant segmental recoverable amount as calculated in the concluding that headroom was maintained under these scenarios, albeit
Group’s year-end carrying value assessment. lower than in previous years. Consequently, no impairment charge was
considered necessary, although the estimate of recoverable amount
remains sensitive to changes in these key assumptions.
With regards to the impairment charge recognised against the
Nyanzaga exploration project, we agreed the assumptions within the
estimated recoverable amount to a third party pre-feasibility study and
confirmed the assessment of recoverable amount included the impact
of the new Tanzanian mining laws to which the project is subject.
We validated the appropriateness of the related disclosures in Note 6
of the financial statements, including the sensitivities provided with
respect to the CGUs. We consider that the disclosures in respect of the
impairment assessments of goodwill, intangible assets and property, plant
& equipment are of such importance that they are fundamental to users’
understanding of the financial statements and we have therefore included
reference to the disclosures within the emphasis of matter above.
With regards to the impairment of Investments in subsidiaries, we have
recalculated the charge with no exceptions noted.

106 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Key audit matter How our audit addressed the key audit matter
Taxation including provisions for uncertain deferred tax positions and the We read correspondence between management and the Tanzanian
recoverability of indirect taxes – Group Revenue Authority and assessed management’s position in relation
Refer to page 71 (Audit Committee report), page 118 (significant to the specific matters disputed.
judgements in applying accounting policies and key sources of estimation
In relation to deferred tax, we also assessed the availability of estimated
uncertainty), page 120 (significant accounting policies) and Note 21.
future taxable income to utilise recognised carry forward losses and
The Group has material deferred tax balances which include prior year the reversal of temporary deferred tax differences by comparing the
tax loss assessments that continue to be in dispute with the Tanzanian estimates to the latest Board approved budgets and the latest approved
Revenue Authority. life of mine plans, and current expectations of the timing and form of a
potential negotiated settlement with the Government of Tanzania based
The Group has US$300 million of provisions for uncertain tax positions,
on the Framework. We consider the recognition of an additional
with US$172 million recognised in the current period, on the basis that
US$172 million of provisions appropriate taking into account the current
it is more probable than not that this amount may be paid to settle
status of negotiations, however recognise that a material risk continues
outstanding assessments as part of a broader negotiated settlement with
to exist with regards to the exposure.
the Government of Tanzania. This is based on the announcements made
by Barrick Gold Corporation in October 2017 following their discussions We also determined based on the existence of a memorandum of
with the Government of Tanzania. settlement with the Tanzanian Revenue Authority for the indirect tax
receivable, that the balance is recoverable, and appropriately classified
In addition, the Group recognises significant indirect tax receivables,
as non-current based on the expectation of future taxable profits in
against which no payments have been received during the year. The majority
2018 and beyond. We further determined that the offset between the
of the receivables have been classified as non-current due to the continued
corporate tax prepayment, current tax payable and the indirect tax
delays in receiving cash refunds from the Tanzanian Revenue Authority.
balances is appropriately reflected in the financial statements based
Management has therefore assessed that not all of the receivables will be
on current agreements between the Group and the Tanzanian Revenue
realised within 12 months. The effect of discounting is immaterial.
Authority and Government of Tanzania.
Based on management’s understanding, tax receivables and deferred tax
We examined the Annual Report disclosures to ensure the risk
losses remain recoverable.
associated with recovery was appropriately highlighted. We consider
that the disclosures in respect of taxation, including provisions for
uncertain tax positions and the recoverability of indirect taxes, are of
such importance that they are fundamental to users’ understanding
of the financial statements and we have therefore included reference
to the disclosures within the emphasis of matter above.

Except for the matters described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit
matters in respect of the parent company to communicate in our report.

How we tailored the audit scope Involvement of the Group engagement team included attendance at
We tailored the scope of our audit to ensure that we performed enough Acacia’s Tanzanian and South African offices, conference calls and
work to be able to give an opinion on the financial statements as a whole, meetings with the Tanzanian audit team, review of the Tanzanian and
taking into account the structure of the Group and the parent company, the Kenyan component auditor work papers, attendance at local audit
accounting processes and controls, and the industry in which they operate. clearance meetings in Tanzania and South Africa, and other forms of

FINANCIAL STATEMENTS
communication as considered necessary depending on the significance
The Group’s assets and operations are primarily located at three mine sites in
of the accounting and audit issues arising. Taken together, the territories
Tanzania representing the Group’s three CGUs, with exploration properties in
and functions where we performed our audit work accounted for 100%
Kenya and West Africa. Financial reporting processes related to the activities
of revenue and approximately 98% of absolute profit before tax (i.e. the
of these mine sites and exploration properties are undertaken at shared
sum of the numerical values without regard to whether they were profits
business centres (“SBCs”) located in Dar es Salaam and Johannesburg.
or losses for the relevant territories and functions).
In establishing the overall approach to the Group audit, we determined
the type of work that needed to be performed at each of the three mine
sites, the exploration entities and the SBCs by us, as the Group
engagement team and by component auditors from other PwC network
firms operating under our instruction. We requested that full scope audits
were performed at each of the three main mine sites which included the
relevant SBC. In addition, we conducted other audit procedures in
London, South Africa, Tanzania and Kenya, including specified procedures
performed by a component audit team in Kenya over exploration expenses
incurred within Acacia Exploration Kenya due to the quantum of costs
incurred during the current year. Where the work was performed by
component auditors, we determined the level of involvement we needed
to have in the audit work at those sites and SBCs to be able to conclude
whether sufficient appropriate audit evidence had been obtained as a
basis for our opinion on the Group financial statements as a whole.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 107

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ACACIA MINING PLC CONTINUED

Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial
statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Group financial statements Parent company financial statements

Overall materiality US$7.0 million (2016: US$7.4 million). Overall parent company materiality: US$7.0 million
(2016: US$7.3 million).
How we determined it 5% of profit before tax, adjusted for the impairment charge Lower of 1% of total assets and overall Group materiality
of US$850 million
Rationale for We considered the impact of the on-going mineral concentrate We believe that total assets is the primary measure used in
benchmark applied export ban and the reduced operations at Bulyanhulu and assessing the performance of the parent company as the
consider the current year performance, adjusted for the function of the parent is to hold investments within the Group.
impairment charge, to be the most appropriate benchmark
for materiality of the Group financial statements.

For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range of materiality
allocated across components was between US$3 million and US$6.9 million. Certain components were audited to a local statutory audit materiality
that was also less than our overall Group materiality.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above US$1 million (Group and parent
audit) (2016: US$1 million) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
Going concern
In accordance with ISAs (UK) we report as follows:
Reporting obligation Outcome
We are required to report if we have anything material to add or draw attention to in We draw your attention to the matters described in the Material
respect of the directors’ statement in the financial statements about whether the Uncertainty Related to Going Concern section.
directors considered it appropriate to adopt the going concern basis of accounting in
Because not all future events or conditions can be predicted,
preparing the financial statements and the directors’ identification of any material
this statement is not a guarantee as to the Group’s and parent
uncertainties to the Group’s and the parent company’s ability to continue as a going
company’s ability to continue as a going concern.
concern over a period of at least twelve months from the date of approval of the
financial statements.
We are required to report if the directors’ statement relating to Going Concern in We have nothing to report.
accordance with Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge
obtained in the audit.

108 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Reporting on other information We have nothing to report having performed a review of the directors’
The other information comprises all of the information in the Annual Report statement that they have carried out a robust assessment of the
other than the financial statements and our auditors’ report thereon. principal risks facing the Group and statement in relation to the
The directors are responsible for the other information. Our opinion on the longer-term viability of the Group. Our review was substantially less
financial statements does not cover the other information and, accordingly, in scope than an audit and only consisted of making inquiries and
we do not express an audit opinion or, except to the extent otherwise considering the directors’ process supporting their statements; checking
explicitly stated in this report, any form of assurance thereon. that the statements are in alignment with the relevant provisions of the
UK Corporate Governance Code (the “Code”); and considering whether
In connection with our audit of the financial statements, our responsibility
the statements are consistent with the knowledge and understanding
is to read the other information and, in doing so, consider whether the
of the Group and parent company and their environment obtained in the
other information is materially inconsistent with the financial statements
course of the audit. (Listing Rules)
or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. If we identify an apparent material inconsistency Other Code Provisions
or material misstatement, we are required to perform procedures to We have nothing to report in respect of our responsibility to report when:
conclude whether there is a material misstatement of the financial
––The statement given by the directors, on page 70, that they consider
statements or a material misstatement of the other information. If, based
the Annual Report taken as a whole to be fair, balanced and
on the work we have performed, we conclude that there is a material
understandable, and provides the information necessary for the
misstatement of this other information, we are required to report that
members to assess the Group’s and parent company’s position and
fact. We have nothing to report based on these responsibilities.
performance, business model and strategy is materially inconsistent
With respect to the Strategic Report and Directors’ Report, we also with our knowledge of the Group and parent company obtained in the
considered whether the disclosures required by the UK Companies Act course of performing our audit.
2006 have been included. ––The section of the Annual Report on page 71 describing the work of the
Based on the responsibilities described above and our work undertaken Audit Committee does not appropriately address matters
in the course of the audit, the Companies Act 2006, (CA06), ISAs (UK) communicated by us to the Audit Committee.
and the Listing Rules of the Financial Conduct Authority (FCA) require us ––The directors’ statement relating to the parent company’s compliance
also to report certain opinions and matters as described below (required with the Code does not properly disclose a departure from a relevant
by ISAs (UK) unless otherwise stated). provision of the Code specified, under the Listing Rules, for review by
the auditors.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, Directors’ Remuneration
the information given in the Strategic Report and Directors’ Report for In our opinion, the part of the Directors’ Remuneration Report to be
the year ended 31 December 2017 is consistent with the financial audited has been properly prepared in accordance with the Companies
statements and has been prepared in accordance with applicable legal Act 2006. (CA06)
requirements. (CA06)
Responsibilities for the financial statements and the audit
In light of the knowledge and understanding of the Group and parent
Responsibilities of the directors for the financial statements
company and their environment obtained in the course of the audit, we
As explained more fully in the Directors’ responsibilities statement set
did not identify any material misstatements in the Strategic Report and
out on page 97, the directors are responsible for the preparation of the
Directors’ Report. (CA06)
financial statements in accordance with the applicable framework and for
The Directors’ assessment of the prospects of the Group being satisfied that they give a true and fair view. The directors are also
and of the principal risks that would threaten the solvency responsible for such internal control as they determine is necessary to

FINANCIAL STATEMENTS
or liquidity of the Group enable the preparation of financial statements that are free from material
We have nothing material to add or draw attention to regarding: misstatement, whether due to fraud or error.
––The directors’ confirmation on page 25 of the Annual Report that they In preparing the financial statements, the directors are responsible for
have carried out a robust assessment of the principal risks facing the assessing the Group’s and the parent company’s ability to continue as a
Group, including those that would threaten its business model, future going concern, disclosing as applicable, matters related to going concern
performance, solvency or liquidity. and using the going concern basis of accounting unless the directors
––The disclosures in the Annual Report that describe those risks and either intend to liquidate the Group or the parent company or to cease
explain how they are being managed or mitigated. operations, or have no realistic alternative but to do so.
––The directors’ explanation on page 25 of the Annual Report as to
how they have assessed the prospects of the Group, over what period
they have done so and why they consider that period to be appropriate,
and their statement as to whether they have a reasonable expectation
that the Group will be able to continue in operation and meet its
liabilities as they fall due over the period of their assessment, including
any related disclosures drawing attention to any necessary
qualifications or assumptions.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 109

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ACACIA MINING PLC CONTINUED

Auditors’ responsibilities for the audit of the financial

statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
financial statements.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for
the parent company’s members as a body in accordance with Chapter 3
of Part 16 of the Companies Act 2006 and for no other purpose. We do
not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our prior
consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in
our opinion:
––we have not received all the information and explanations we require for
our audit; or
––adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
––certain disclosures of directors’ remuneration specified by law are not
made; or
––the parent company financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the
accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were
appointed by the members on 29 March 2010 to audit the
financial statements for the year ended 31 December 2010 and
subsequent financial periods. The period of total uninterrupted
engagement is 8 years, covering the years ended 31 December
2010 to 31 December 2017.

JONATHAN LAMBERT (SENIOR STATUTORY AUDITOR)

FOR AND ON BEHALF OF PRICEWATERHOUSECOOPERS LLP
CHARTERED ACCOUNTANTS AND STATUTORY AUDITORS
LONDON

6 MARCH 2018

110 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

CONSOLIDATED INCOME STATEMENT

For the For the

year ended year ended
31 December 31 December
(in thousands of United States dollars) Notes 2017 2016
Revenue 4 751,515 1,053,532
Cost of sales 5 (458,447) (727,080)
Gross profit 293,068 326,452
Corporate administration (26,913) (21,895)
Share-based payments 8,236 (29,929)
Exploration and evaluation costs 8 (24,829) (24,020)
Corporate social responsibility expenses (8,213) (10,665)
Impairment charges 6 (850,182) –
Other (charges)/income 9 (90,370) 11,649
(Loss)/Profit before net finance expense and taxation (699,203) 251,592
Finance income 11 1,944 1,512
Finance expense 11 (12,407) (11,047)
(10,463) (9,535)
(Loss)/Profit before taxation (709,666) 242,057
Tax credit/(expense) 12 2,272 (147,113)
Net (loss)/profit for the year (707,394) 94,944

(Loss)/Earnings per share:

– Basic (loss)/earnings per share (cents) 13 (172.5) 23.2
– Diluted (loss)/earnings per share (cents) 13 (172.5) 23.1

The notes on pages 116 to 152 are an integral part of these consolidated financial statements.

FINANCIAL STATEMENTS

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 111

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the For the

year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Net (loss)/profit for the year (707,394) 94,944
Other comprehensive income:
Items that may be subsequently reclassified to profit or loss:
Changes in fair value of cash flow hedges 108 7
Total comprehensive (loss)/income for the year (707,286) 94,951

The notes on pages 116 to 152 are an integral part of these consolidated financial statements.

112 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

CONSOLIDATED BALANCE SHEET

As at As at
31 December 31 December
(in thousands of United States dollars) Notes 2017 2016
Assets
Non-current assets
Goodwill and intangible assets 20 82,383 216,190
Property, plant and equipment 19 770,574 1,443,176
Deferred tax assets 21 169,513 8,431
Non-current portion of inventory 16 133,550 98,936
Derivative financial instruments 30 907 821
Other assets 22 180,708 63,297
1,337,635 1,830,851
Current assets
Inventories 16 291,880 184,313
Trade and other receivables 17 18,085 18,830
Derivative financial instruments 30 2,619 1,343
Other current assets 17 70,155 149,518
Cash and cash equivalents 18 80,513 317,791
463,252 671,795
Total assets 1,800,887 2,502,646

Equity and liabilities

Share capital and share premium 23 929,199 929,199
Other reserves 191,793 933,696
Total owners’ equity 1,120,992 1,862,895
Non-controlling interests – –
Total equity 1,120,992 1,862,895

Non-current liabilities
Borrowings 26 42,600 71,000
Deferred tax liabilities 21 99,533 148,390
Derivative financial instruments 30 – 30
Provisions 27 127,028 145,722
Other non-current liabilities 28 5,038 15,699
274,199 380,841

Current liabilities
Trade and other payables 25 350,450 222,543

FINANCIAL STATEMENTS
Borrowings 26 28,400 28,400
Derivative financial instruments 30 481 584
Provisions 27 24,650 7,235
Other current liabilities 1,715 148
405,696 258,910
Total liabilities 679,895 639,751
Total equity and liabilities 1,800,887 2,502,646

The notes on pages 116 to 152 are an integral part of these consolidated financial statements.
The consolidated financial statements on pages 111 to 152 were authorised for issue by the Board of Directors on 6 March 2018 and were signed
on its behalf:

PETER GELETA
INTERIM CHIEF EXECUTIVE OFFICER

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 113

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Total
Other Cash flow Share (Accumulated non-
Share Share distributable hedging option losses)/retained Total controlling Total
(in thousands of United States dollars) Notes capital premium reserves reserve reserve earnings owners’ equity interests equity
Balance at 1 January 2016 62,097 867,102 1,368,713 552 3,876 (514,841) 1,787,499 – 1,787,499
Profit for the year – – – – – 94,944 94,944 – 94,944
Other comprehensive income – – – 7 – – 7 – 7
Share option grants – – – – 77 – 77 – 77
Transactions with non-controlling
interest holders – – – – – – – – –
Dividends to equity holders
of the Company 14 – – – – – (19,632) (19,632) – (19,632)
Balance at 31 December 2016 62,097 867,102 1,368,713 559 3,953 (439,529) 1,862,895 – 1,862,895
Loss for the year – – – – – (707,394) (707,394) – (707,394)
Other comprehensive income – – – 108 – – 108 – 108
Share option grants – – – – (232) – (232) – (232)
Transactions with non-controlling
interest holders – – – – – – – – –
Dividends to equity holders
of the Company 14 – – – – – (34,385) (34,385) – (34,385)
Balance at 31 December 2017 62,097 867,102 1,368,713 667 3,721 (1,181,308) 1,120,992 – 1,120,992

The notes on pages 116 to 152 are an integral part of these consolidated financial statements.

114 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

CONSOLIDATED CASH FLOW STATEMENT

For the For the

year ended year ended
31 December 31 December
(in thousands of United States dollars) Notes 2017 2016
Cash flows from operating activities
Net (loss)/profit for the year (707,394) 94,944
Adjustments for:
Tax (credit)/expense (2,272) 147,113
Depreciation and amortisation 19 125,968 156,301
Finance items 10,463 9,535
Impairment charges 850,182 –
Loss/(Profit) on disposal of property, plant and equipment 123 (289)
Sale of mineral royalty (1,753) –
Cash settlement of share options (259) –
Working capital movements 15 (313,091) (58,497)
Other non-cash items 15 22,160 (23,850)
Cash (used in)/generated from operations before interest and tax (15,873) 325,257
Finance income 1,944 1,512
Finance expenses (9,043) (8,793)
Cash (used in)/generated by operating activities (22,972) 317,976

Cash flows from investing activities

Purchase of property, plant and equipment (157,408) (193,643)
Movement in other assets 6,856 6,952
Acquired mineral interest – (5,000)
Proceeds from sale of mineral royalty 1,753 –
Other investing activities 15 (2,912) 6,528
Net cash used in investing activities (151,711) (185,163)

Cash flows from financing activities

Loans paid 15 (28,400) (28,400)
Dividends paid (34,385) (19,632)
Net cash used in financing activities (62,785) (48,032)

Net increase/(decrease) in cash and cash equivalents (237,468) 84,781

Net foreign exchange difference 190 (258)
Cash and cash equivalents at 1 January 317,791 233,268
Cash and cash equivalents at 31 December 80,513 317,791

FINANCIAL STATEMENTS
The notes on pages 116 to 152 are an integral part of these consolidated financial statements.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 115

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 5th Floor, 1 Cavendish Place, London, W1G 0QF, United Kingdom.
Barrick Gold Corporation (“BGC”) 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 BGC can be obtained from www.barrick.com. BGC is incorporated in Canada.
The consolidated financial statements for the year ended 31 December 2017 were approved for issue by the Board of Directors of the Company
on 6 March 2018.
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. The principal activities of the Company, its subsidiaries and joint ventures included in
the consolidated financial statements are as follows:
Country of Equity interest at
Company Principal activity incorporation3 Relationship 31 December 2017 & 2016
Acacia Mining plc Holding Company UK – 100%
BUK HoldCo Limited 1 Holding Company UK Subsidiary 100%
BUK East Africa Limited 1 Holding Company UK Subsidiary 100%
1816962 Ontario Inc Holding Company Canada Subsidiary 100%
Acacia Mining (Barbados) Corp Ltd Group Finance Company Barbados Subsidiary 100%
BAPL Holding Ltd Holding Company Mauritius Subsidiary 100%
Acacia Exploration Kenya Ltd Exploration Kenya Subsidiary 100%
CayCo Tz Ltd Holding Company Cayman Islands Subsidiary 100%
ABG Exploration Limited Exploration Tanzania Subsidiary 100%
Matinje Exploration Ltd Exploration Tanzania Subsidiary 75%
Itobo Exploration Ltd Exploration Tanzania Subsidiary 75%
Nyanzaga Exploration Company Ltd Exploration Tanzania Subsidiary 100%
Barrick Tanzanian Holdings Ltd Exploration Cayman Islands Subsidiary 100%
Barisun Exploration Ltd Exploration Tanzania Subsidiary 75%
Prime Gold Exploration Ltd Exploration Tanzania Subsidiary 75%
Kasubuya Exploration Company Ltd Exploration Tanzania Subsidiary 60%
KMCL Holdings Ltd Exploration Cayman Islands Subsidiary 100%
Bulyanhulu Gold Mine Ltd Operating Gold Mine Tanzania Subsidiary 100%
North Mara Gold Mine Ltd Operating Gold Mine Tanzania Subsidiary 100%
Pangea Goldfields Inc Holding Company Canada Subsidiary 100%
Pangea Minerals Ltd Operating Gold Mine Tanzania Subsidiary 100%
1051694 Ontario Inc Holding Company Canada Subsidiary 100%
Acacia Mining SA (Pty) Ltd Shared Services South Africa Subsidiary 100%
East Africa Gold Mines Ltd Holding Company Australia Subsidiary 100%
Tusker Gold Limited Holding Company Australia Subsidiary 100%
Indago Autan (Proprietary) Ltd 2 Holding Company Australia Subsidiary 100%
IDG Aurum Tanzania Ltd 2 Holding Company Tanzania Subsidiary 100%
IDG Aurum Holdings Ltd 2 Holding Company Tanzania Subsidiary 100%
IDG Kitongo Tanzania Ltd 2 Dormant Company Tanzania Subsidiary 100%
Vulcan Resources Tanzania Ltd 2 Dormant Company Tanzania Subsidiary 100%
Aptian Resources Tanzania Ltd 2 Dormant Company Tanzania Subsidiary 100%
Sub-Sahara Resources Tanzania Ltd 2 Exploration Tanzania Subsidiary 100%
BUK West Africa Ltd Holding Company United Kingdom Subsidiary 100%
ABG Exploration Mali SARL Exploration Mali Subsidiary 100%
African Barrick Gold Ltd Holding Company United Kingdom Subsidiary 100%
Bulyanhulu Holdings (Pty) Ltd Holding Company Tanzania Subsidiary 100%
BUK Burkina Faso Ltd Holding Company United Kingdom Subsidiary 100%
Acacia Burkina Faso Exploration SARL Exploration Burkina Faso Subsidiary 100%
Nyakafuru Project Joint Venture Exploration Tanzania Joint Venture 51%

1 Exempt from the requirements of the Companies Act relating to the audit of individual accounts by virtue of S448A of Companies Act 2006.
2 June year-end.
3 A list of registered addresses for each of these Group companies can be obtained from the Acacia Plc Office address, as stated above.

There are no restrictions on the ability of subsidiaries to transfer funds to the parent in the form of cash dividends or to repay loans or advances.
The joint ventures included in the table above are currently immaterial to the Group.

116 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

2. Significant accounting policies ––Amendments to IAS 12, “Recognition of Deferred Tax Assets for
The principal accounting policies applied in the preparation of these Unrealised Losses”. Amendments made to IAS 12 will aim to clarify
consolidated financial statements are set out below. These policies the accounting for deferred tax where an asset is measured at fair
have been consistently applied to all the years presented, unless value and that fair value is below the asset’s tax base. Effective
otherwise stated. 1 January 2017. The amendment did not have a significant impact
on the Group financial statements.
a) Basis of preparation
The Group’s consolidated financial statements have been prepared ––Amendments to IAS 7, “Disclosure Initiative”. Going forward, entities
in accordance with International Financial Reporting Standards as will be required to explain changes in their liabilities arising from
adopted by the European Union (“IFRS”), IFRS Interpretations Committee financing activities. This includes changes arising from cash flows
(“IFRIC”) interpretations and those parts of the Companies Act 2006 (e.g. drawdowns and repayments of borrowings) and non-cash changes
applicable to companies reporting under IFRS. The financial statements such as acquisitions, disposals, accretion of interest and unrealised
are prepared on a going concern basis. exchange differences. Changes in financial assets must be included in
this disclosure if the cash flows were, or will be, included in cash flows
The consolidated financial statements have been prepared under from financing activities. Effective 1 January 2017. The amendment did
the historical cost convention basis, as modified by the revaluation of not have a significant impact on the Group financial statements.
financial assets and financial liabilities (including derivative instruments)
at fair value through profit or loss. c) New and amended standards and interpretations
not yet adopted
The consolidated financial statements are presented in United States The following standards and amendments to existing standards have
dollars (“US$”) and all values are rounded to the nearest thousand been published and are mandatory for the Group’s accounting periods
US dollars except when otherwise indicated. beginning on or after 1 January 2018:
Where a change in the presentational format between the prior year ––IFRS 9 – “Financial instruments”. IFRS 9 replaces the multiple
and current year financial statements has been made during the period, classification and measurement models in IAS 39 Financial
comparative figures have been restated accordingly. No presentational instruments: Recognition and measurement with a single model that
changes were made in the current year. has initially only two classification categories: amortised cost and
The preparation of financial statements in conformity with IFRS fair value. The adoption of the new standard will not have a significant
requires the use of certain critical accounting estimates. It also requires impact on the Group.
management to exercise its judgement in the process of applying the ––IFRS 15 – “Revenue from contracts with customers”. This standard
Group’s accounting policies. The areas involving a higher degree of is a single, comprehensive revenue recognition model for all contracts
judgement or complexity, or areas where assumptions and estimates with customers to achieve greater consistency in the recognition
are significant to the consolidated financial statements, are disclosed and presentation of revenue. Revenue is recognised based on the
in Note 2d. satisfaction of performance obligations, which occurs when control
of good or service transfers to a customer. Effective 1 January 2018.
The impact of the seasonality on operations is not considered as
The adoption of the new standard will not have a significant impact
significant on the consolidated financial information.
on the Group.
In assessing the Acacia Group’s going concern status the Directors have ––IFRS 16 – “Leases”. IFRS 16 supersedes IAS 17, “Leases”, IFRIC 4,
taken into account the impact of the concentrate export ban on on-going “Determining whether an Arrangement contains a Lease”, SIC 15,
operations as well as the following factors and assumptions: the current “Operating Leases – Incentives” and SIC 27, “Evaluating the Substance
cash position; the latest mine plans, the short-term gold price, and Acacia of Transactions Involving the Legal Form of a Lease”. IFRS 16 will affect
Group’s capital expenditure and financing plans. In addition, the Directors primarily the accounting by lessees and will result in the recognition of

FINANCIAL STATEMENTS
have considered a range of scenarios around the various potential almost all leases on balance sheet. The standard removes the current
outcomes for the resolution of the current operating challenges in Tanzania distinction between operating and financing leases and requires
in the circumstances, including the cash flow impact of an extended recognition of an asset (the right to use the leased item) and a financial
concentrate export ban; and the potential impacts of the timing and final liability to pay rentals for virtually all lease contracts. Effective
terms of any comprehensive settlement which might be approved by the 1 January 2019. Management is currently evaluating the impact of the
Company which reflect key terms of the framework announcements made new standard in order to put all frameworks and systems in place.
by Barrick and the GoT in October 2017, including the lifting of the Based on initial investigation, the standard is not expected to have
concentrate export ban and staged payments of US$300 million relating a significant impact on the Group, due to majority of our existing
to historical tax matters. In addition, the Directors have assumed that the contracts either relating to service agreements or the performance
Group will not be required to settle its current outstanding borrowing obligations based on variable terms and thus not resulting in a right
obligations and will repay these in accordance with the current terms of the of use asset.
relevant agreements. After making appropriate enquiries and considering
––Amendments to IFRS 2 – “Classification and Measurement of Share-
the uncertainties described above, the Directors consider that it is
based Payment Transactions”. The amendments made to AASB 2 in
appropriate to adopt the going concern basis in preparing the consolidated
July 2016 clarify the measurement basis for cash-settled share-based
financial statement however have concluded that the combination of the
payments and the accounting for modifications that change an award
above circumstances represents a material uncertainty that may cast
from cash-settled to equity-settled. Effective 1 January 2018. The
significant doubt on the Group’s ability to continue as a going concern.
standard is not expected to have a significant impact on the Group.
The consolidated financial statement does not include any adjustments
that would result if the Group was unable to continue as a going concern ––Amendments to IFRS 10 – “Consolidated financial statements” and
should the assumptions referred to above prove not to be correct. IAS 28,”Investments in associates and joint ventures” on sale or
contribution of assets. The IASB has issued this amendment to
b) New and amended standards adopted by the Group eliminate the inconsistency between IFRS 10 and IAS 28. The IASB
The following amendments to standards are applicable and were decided to defer the application date of this amendment, until such
adopted by the Group for the first time for the financial year beginning time this is not applicable. The amendment is however not expected
1 January 2017: to have a significant impact on the Group.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 117

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

2. Significant accounting policies continued ––Judgements around the prospect, timing and final terms of any
comprehensive negotiated settlement that the Company might be able
d) Significant judgements in applying accounting policies to agree with the Government of Tanzania, including by reference to
and key sources of estimation uncertainty the key terms of the framework announcements made in October 2017
Many of the amounts included in the consolidated financial statements
by Barrick and the GoT and including judgements around the timing
require management to make judgements and/or estimates. These
and quantum of any cash outflows that might be made in respect of
judgements and estimates are continuously evaluated and are based
historical tax matters.
on management’s experience and best knowledge of the relevant facts
and circumstances, but actual results may differ from the amounts ––Judgements around the timing of Bulyanhulu’s restart and production
included in the consolidated financial statements. The life of mine ramp up.
plans are central to a number of key estimates. Information about e) Basis of consolidation
such judgements and estimations is included in the accounting policies The consolidated financial statements set out the Group’s financial
and/or notes to the consolidated financial statements, and the key position as at 31 December 2017 and 31 December 2016, and operating
areas are summarised below. Areas of judgement and key sources results and cash flows for the years then ended. The consolidated
of estimation uncertainty that have the most significant effect on the financial statements of the Group incorporate the financial statements
amounts recognised in the consolidated financial statements include: of the Company and companies controlled by the Company (its
––Estimates of the quantities of proven and probable gold and copper subsidiaries). Subsidiaries are entities to which the Company is exposed
reserves – Note 2h. or has the rights to variable returns from its involvement and has the
ability to affect those returns through its power. Control exists when
––Estimates included within the life of mine planning such as the
the Company has existing rights that give the ability to direct relevant
timing and viability of processing of long-term stockpiles – Note 2n.
activities, exposure or rights to variable returns from its involvement
––The capitalisation of production stripping costs – Note 2i. and the ability to use its power to affect the amount of returns. The
––The capitalisation of exploration and evaluation expenditures consolidated financial statements include all of the assets, liabilities,
– Notes 2l and 8. revenues, expenses and cash flows of the Company and its subsidiaries
––Review of goodwill, tangible and intangible assets’ carrying value, after eliminating intercompany transactions as noted above.
the determination of whether a trigger for an impairment review Accounting policies of subsidiaries have been changed where necessary
exists, whether these assets are impaired and the measurement of to ensure consistency with the policies adopted by the Group.
impairment charges or reversals – Notes 2o, 2p, 2q, 2r, 19 and 20.
Subsidiaries are included in the consolidated financial statements
––The estimated fair values of Cash Generating Units for impairment
from the date on which control passed to the Group, and have
tests, including estimates of future costs to produce proven and
been excluded from the date on which control transferred out of
probable reserves, future commodity prices, foreign exchange rates
the Group. For partly-owned subsidiaries, the net assets and net
and discount rates – Notes 2r and 6.
earnings attributable to non-controlling interests are presented as
––The estimated useful lives of tangible and long-lived assets and the “Equity attributable to non-controlling interests” in the consolidated
measurement of depreciation expense – Notes 2o and 19. balance sheet and “Net profit attributable to non-controlling interests”
––Property, plant and equipment held under finance leases – Notes 2o in the consolidated income statement, respectively.
and 19.
f) Business combinations
––Recognition of a provision for environmental rehabilitation and the On acquiring a business, the acquisition method of accounting is used,
estimation of the rehabilitation costs and timing of expenditure whereby the purchase consideration is allocated to the identifiable net
– Notes 2u and 27. assets on the basis of fair value at the date of acquisition. Provisional
––Whether to recognise a liability for loss contingencies and the amount fair values allocated at a reporting date are finalised within 12 months
of any such provision – Notes 2u, 27 and 33. of the acquisition date. Acquisition costs are expensed.
––Whether to recognise a provision for accounts receivable, and in When purchase consideration is contingent on future events, the initial
particular the indirect tax receivables from the Tanzanian Government, cost of the acquisition recorded includes an estimate of the fair value
a provision for obsolescence on consumables inventory and the impact of the contingent amounts expected to be payable in the future. The
of discounting the non-current element of the indirect tax receivable – cost of the acquisition is adjusted when revised estimates are made,
Notes 2n, 2z, 2w, 16, 17 and 22. with corresponding adjustments made to the income statement.
––Recognition of deferred income tax assets, amounts recorded for
When the cost of acquisition exceeds the fair values of the identifiable
uncertain tax positions, the measurement of income tax expense
net assets, the difference is treated as purchased goodwill, which
and indirect taxes – Notes 2z, 12 and 21.
is reviewed for impairment annually or when there is an indication
––Determination of the cost incurred in the productive process of of impairment. If the fair value attributable to the Group’s share of the
ore stockpiles, gold in process, gold doré/bullion and concentrate, identifiable net assets exceeds the cost of acquisition, the difference
as well as the associated net realisable value and the split between the is recognised in the income statement.
long-term and short-term portions – Notes 2n and 16.
––Determination of fair value of derivative instruments – Notes 2w and 30.
g) Foreign currency translation
The Group’s transactions are denominated in a number of different
––Determination of fair value of share options and cash-settled share- currencies (primarily US dollars, Tanzanian shillings (“shillings”), South
based payments – Notes 2v and 24. African rands (“rands”), UK pounds sterling (“pounds”) and Australian
dollars. The Group has liabilities that are primarily denominated in
US dollars. The US dollar is the Company’s (and its main subsidiaries’)
functional currency, as well as the Group’s presentation currency.

118 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Transactions in currencies other than the US dollar are translated life of the mine (or pit). For production phase stripping costs that
at the exchange rates as at the date of transaction. Monetary assets generate a future economic benefit, the current period stripping costs
and liabilities denominated in currencies other than the US dollar are are capitalised as open pit mine development costs.
translated to US dollars at year-end exchange rates. All differences
Capitalised open pit mine development costs are depreciated on a units
that arise are recorded in the income statement. Non-monetary assets
of production basis whereby the denominator is the estimated ounces
measured at historical cost in a currency other than US dollars are
of recoverable gold in proven and probable reserves and the portion
translated using the exchange rates at the date of the initial transactions.
of resources considered probable of economic extraction based on the
Where non-monetary assets are measured at fair value in a currency current life of mine plan in the components of the ore body that have
other than US dollars they are translated into US dollars using the been made more accessible through the stripping activity. Capitalised
exchange rates on the date when the fair value was determined. open pit mine development costs are depreciated once the open pit has
entered production and the future economic benefit is being derived.
The following exchange rates to the US dollar have been applied:
Average j) Revenue recognition
As at Year ended Revenue is recognised when persuasive evidence exists that all of the
31 December 31 December following criteria are met:
2017 2017
South African rand (US$:ZAR) 12.36 13.30 ––the significant risks and rewards of ownership of the product have been
Tanzanian shilling (US$:TZS) 2,230.07 2,229.00 transferred to the buyer;
Australian dollar (US$:AUD) 1.28 1.30 ––neither continuing managerial involvement to the degree usually
UK pound (US$:GBP) 0.74 0.78 associated with ownership nor effective control over the goods sold has
been retained;
Average
As at Year ended ––the amount of revenue can be measured reliably;
31 December 31 December
2016 2016 ––it is probable that the economic benefits associated with the sale
South African rand (US$:ZAR) 13.70 14.66 will flow to the Group; and
Tanzanian shilling (US$:TZS) 2,172.62 2,177.24 ––the costs incurred or to be incurred in respect of the sale can be
Australian dollar (US$:AUD) 1.38 1.34 measured reliably.
UK pound (US$:GBP) 0.81 0.74 Gold doré sales
Gold doré is unrefined gold bullion bars usually consisting of 90%
h) Determination of ore reserves gold that is refined to pure gold bullion prior to sale to our customers.
The Group estimates its ore reserves and mineral resources based Revenue from gold doré sales is recognised at the time of sale
on information compiled by Qualified Persons as defined in accordance to a third party. The sales price is based on the gold spot price
with the Canadian Securities Administrators’ National Instrument at the time of sale.
43-101 “Standards of Disclosure for Mineral Projects” requirements.
Reports to support these estimates are prepared each year. Proven and Concentrate sales
probable (“2P”) reserves, and for certain mines other mineral resources, Concentrate is a processing product containing the valuable ore mineral
determined in this way are used in the calculation of depreciation, gold, copper and silver from which most of the waste mineral has been
amortisation and impairment charges, the assessment of life of mine eliminated, that undergoes a smelting process to convert it into gold
stripping ratios and for forecasting the timing of the payments related bullion, copper and silver concentrate. Under the terms of concentrate
to the environmental rehabilitation provision. sales contracts with independent smelting companies, gold, copper and
silver in concentrate is sold at trailing monthly average spot prices based
In assessing the life of a mine for accounting purposes, mineral

FINANCIAL STATEMENTS
on contract quotational periods.
resources are only taken into account where there is a high degree
of confidence of economic extraction. Revenue is recorded at the shipped on board date, which is also when
risks and rewards pass to the smelting companies, using market prices
There are numerous uncertainties inherent in estimating ore reserves, on the expected date that final sales prices will be fixed. Variations
and assumptions that are valid at the time of estimation may change between the price recorded at the shipment date and the actual final
significantly when new information becomes available. Changes in the price set under the smelting contracts are caused by changes in market
forecast prices of commodities, exchange rates, production costs or prices, and result in an embedded derivative in accounts receivable.
recovery rates may change the economic status of reserves and may, The embedded derivative is recorded at fair value each period until final
ultimately, result in the reserves being revised. settlement occurs, with changes in fair value classified as provisional
i) Stripping costs price adjustments and included as a component of revenue.
In open pit mining operations, it is necessary to remove overburden Co-products
and other waste materials to access ore from which minerals can be Revenue from the sale of co-products, such as copper and silver,
extracted economically. The process of mining overburden and waste contained in doré or concentrates are recognised in revenue.
materials is referred to as stripping. Stripping costs incurred in order
to provide initial access to the ore body (referred to as pre-production k) Cost of sales
stripping) are capitalised as mine development costs. Cost of sales consists of direct mining costs (which include personnel
costs, general and administrative costs, energy costs (principally diesel
Stripping costs incurred during the production stage of a pit are fuel and electricity), maintenance and repair costs, operating supplies,
accounted for as the costs of the inventory produced during the period external services, third-party smelting, refining and transport fees),
that the stripping costs were incurred, unless these costs provide a and depreciation related to sales as well as production taxes and royalty
future economic benefit to an identifiable component of the ore body. expenses for the period. Cost of sales is based on average costing for
Production phase stripping costs generate a future economic benefit contained or recoverable ounces sold as well as production taxes and
when the related stripping activity: (i) improves access to a component royalty expense for the period. All costs are net of any impairment to
of the ore body to be mined in the future; (ii) increases the fair value reduce inventory to its net realisable value.
of the mine (or pit) as access to future mineral reserves becomes less
costly; (iii) increases the productive capacity or extends the productive

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 119

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

2. Significant accounting policies continued Evaluation expenditures incurred at greenfield and brownfield sites are
expensed as incurred, unless it can be demonstrated that the related
l) Exploration and evaluation evaluation expenditures will generate a future economic benefit.
Exploration expenditures
Exploration expenditures relate to the initial search for mineral Evaluation expenditures incurred at operating mines/development
deposits with economic potential as well as expenditures incurred projects are capitalised as a component of property, plant and
for the purposes of obtaining more information about existing mineral equipment, “Mining properties and development costs”, respectively.
deposits. Exploration expenditures typically comprise costs that are
Acquired exploration and evaluation properties
directly attributable to:
Exploration and evaluation stage properties acquired either as an
––researching and analysing existing exploration data; acquisition of individual assets or as part of a business combination are
––conducting geological studies; capitalised as an intangible asset, “Acquired exploration and evaluation
properties”. Exploration and evaluation stage properties represent
––exploratory drilling and sampling for the purposes of obtaining core
interests in properties that do not have mineralised material classified
samples and the related metallurgical assay of these cores; and
within proven and probable reserves. The value of such properties
––drilling to determine the volume and grade of deposits in an area known is primarily driven by the nature and amount of mineralised material
to contain mineral resources or for the purposes of converting mineral contained in such properties, including value attributable to the rights
resources into proven and probable reserves. to explore or develop: i) a property containing mineralised material
Exploration expenditures incurred at greenfield sites (sites where classified as a measured, indicated or inferred resource; or ii) a
the Group does not have any mineral deposits that are already being prospective greenfield property with significant exploration potential.
mined or developed) are typically expensed as incurred, unless it can Exploration and evaluation expenditures incurred on such properties
be demonstrated that the related evaluation expenditures will generate subsequent to their acquisition are expensed as incurred until the
a future economic benefit. Exploration expenditures incurred at technical and commercial viability of developing the property has been
brownfield sites (sites that are adjacent to a mineral deposit that is demonstrated under the same criteria described above for exploration
classified within proven and probable reserves and are already being and evaluation expenditures.
mined or developed) are capitalised if the following criteria are met: m) Earnings per share
––the drilling is being done in an inferred or measured and indicated Basic earnings per share is computed by dividing net profit for the period
resource; and attributable to the owners of the Company by the weighted average
number of Ordinary Shares outstanding for the period. Diluted earnings
––there is an existing proven and probable reserve that is contiguous
per share reflect the potential dilution that could occur if additional
or adjacent to where the drilling is being done; and
Ordinary Shares are assumed to be issued under securities that entitle
––it is probable that the resource will be converted to a proven and their holders to obtain Ordinary Shares in the future. For share options,
probable reserve. the number of additional shares for inclusion in diluted earnings per
The assessment of probability is based on the following factors: share calculations is determined using the treasury share method.
results from previous drill programmes; results from a geological study; Under this method, share options, whose exercise price is less than
results from a mine scoping study confirming economic viability of the the average market price of our Ordinary Shares, are assumed to be
resource; and preliminary estimates of the volume and grade of the exercised and the proceeds are used to repurchase Ordinary Shares
deposit, and the net cash flows expected to be generated from its at the average market price for the period. The incremental number
development. Costs incurred at brownfield sites that meet the above of Ordinary Shares issued under share options and repurchased from
criteria are capitalised as a component of property, plant and equipment proceeds is included in the calculation of diluted earnings per share.
(“mine development costs”) pursuant to IAS 16, “Property, Plant and n) Inventories
Equipment”. All other drilling and related exploration costs incurred Material extracted from the Group’s mines is classified as either
at these sites are expensed as mine site exploration. Exploration ore or waste. Ore represents material that, at the time of extraction,
expenditures incurred for the purposes of determining additional is expected to be processed into a saleable form and sold at a profit.
information on a mineral deposit that is classified within proven and Waste represents material that is required to be removed to access
probable reserves or for the purposes of extending an existing mineral ore bodies. Ore stockpiles are classified within inventory as material
deposit that is classified within proven and probable reserves and is is extracted from the open pit or underground mine. Ore is accumulated
already being mined or developed are also capitalised as mine in stockpiles that are subsequently processed into gold in a saleable
development costs. form under a mine plan that takes into consideration optimal scheduling
Evaluation expenditures of production of our reserves, present plant capacity, and the market
Evaluation expenditures arise from a detailed assessment of deposits price of gold and copper. Work in process inventory represents gold,
or other projects that have been identified as having economic potential copper and silver in the processing circuit that has not completed the
in order to determine their technical feasibility and commercial viability. production process, and is not yet in a saleable form. Finished goods
They typically include costs directly attributable to: inventory represents gold in saleable form that has not yet been shipped.
Mine operating supplies represent commodities and other raw materials
––detailed engineering studies; consumed in the production process, as well as spare parts and other
––examination and testing of extraction methods and metallurgical/ maintenance supplies that are not classified as capital items. Inventories
treatment processes; are valued at the lower of cost and net realisable value, with cost being
––surveying transportation and infrastructure requirements; determined on a weighted average cost basis. Average costs
are calculated by reference to the cost of inventory at the beginning
––permitting activities; and
of the period together with the cost of inventory produced in a period.
––detailed economic evaluations to determine whether development
of the reserves is commercially justified, including the preparation
of scoping, pre-feasibility and final feasibility studies.

120 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Gold, copper and silver ore contained in stockpiles is measured by Plant and equipment
estimating the number of tonnes added and removed from the stockpile, Plant and equipment is recorded at cost, less accumulated depreciation
and the associated estimate of gold contained therein (based on assay and applicable impairment losses. Cost includes all expenditures
data) and applying estimated metallurgical recovery rates (based on incurred to prepare an asset for its intended use including: the
the expected processing method). Stockpile ore tonnages are verified purchase price; brokers’ commissions; and installation costs including
by periodic surveys. Costs are allocated to ore stockpiles based on architectural, design and engineering fees, legal fees, survey costs,
quantities of material stockpiled using current mining costs incurred site preparation costs, freight charges, transportation insurance costs,
up to the point of stockpiling the ore and include: direct labour costs; duties and borrowing cost.
materials and contractor expenses which are directly attributable to the
Costs that extend the productive capacity or useful economic life of an
extraction of ore, including an allocation of stripping costs attributable
asset are capitalised. Costs incurred that do not extend the productive
to current period production; an allocation of mine site overhead costs;
capacity or useful economic life of an asset are considered repairs and
and depreciation of mining properties and property, plant and equipment
maintenance and expensed as incurred.
used in the extraction of ore, reduced by an allocation of capitalised
stripping costs. As ore is processed, costs are removed based on The Group enters into leasing arrangements and arrangements that
recoverable quantities of gold and the stockpile’s average cost per unit. are in substance leasing arrangements. The determination of whether
Ore that is not expected to be processed in the 12 months following an arrangement is, or contains, a lease is based on the substance
the balance sheet date is classified as non-current. of the arrangement at inception date, including whether the fulfilment
of the arrangement is dependent on the use of a specific asset or
Costs capitalised in process and finished goods inventory include:
assets or whether the arrangement conveys a right to use the asset.
the cost of stockpiles processed; the cost of commodities and raw
A reassessment after inception is only made in specific circumstances.
materials consumed in the production process; direct labour; repair
Leasing arrangements that transfer substantially all the risks and
and maintenance costs; energy costs; depreciation of property, plant
rewards of ownership of the asset to the Group are classified as
and equipment used in the production process; and an allocation
finance leases.
of mine site overhead costs. Costs are removed from finished goods
inventory and recorded in cost of sales based on the average cost Finance leases are recorded as an asset with a corresponding liability
per ounce of gold, copper and silver sold in the period. at an amount equal to the lower of the fair value of the leased property
and the present value at the beginning of the lease term of the minimum
Cost of mine operating supplies is the purchase cost, including allocated
lease payments over the term of the lease. Each lease payment is
freight costs where applicable.
allocated between the liability and finance costs using the effective
Provisions are recorded to reduce ore stockpiles, work in process and interest method, whereby a constant rate of interest expense is
finished goods inventory to net realisable value where the net realisable recognised on the balance of the liability outstanding. The interest
value of the inventory is lower than its cost at each balance sheet date. element of the lease is charged to the income statement as a finance
Net realisable value is determined with reference to relevant market expense. The property, plant and equipment assets acquired under
prices less applicable variable selling expenses. Provisions recorded also finance leases are depreciated over the shorter of the useful life of the
reflect an estimate of the remaining costs of completion to bring the asset and the lease term. All other leases are classified as operating
inventory into its saleable form. Provisions are recorded to reduce mine leases. Operating lease payments are recognised as an expense in
operating supplies to net realisable value, which is generally calculated the income statement on a straight-line basis over the lease term.
by reference to its salvage or scrap value, when it is determined that the
Assets under construction
supplies are slow moving and/or obsolete. Provisions are reversed to
Assets in the course of construction at both our development projects
reflect subsequent recoveries in net realisable value where the inventory
and operating mines are capitalised in the “assets under construction”
is still on hand at the balance sheet date.
account. The cost of assets under construction comprises its purchase

FINANCIAL STATEMENTS
o) Property, plant and equipment price and any costs directly attributable to bringing it into working
Mineral properties and mine development costs condition for its intended use, at which point it is transferred to property,
Mineral properties and mine development costs are stated at cost, plant and equipment and depreciation commences. Development
less accumulated depreciation and applicable accumulated impairment projects are recorded at cost, less applicable accumulated impairment
losses. The acquisition cost of a mineral property is the estimated losses. Development projects represent interests in properties that
fair value of proven and probable reserves and measured, indicated contain proven and probable reserves and where development activities
and inferred resources acquired as a result of a business combination are on-going. The cost of development projects is composed of: the
or asset acquisition. Where the asset is acquired separately, the estimated fair value of development stage assets acquired as a result
cost is given the fair value of the consideration given. Capitalised mine of a business combination or an asset acquisition; and costs associated
development costs include: pre-production stripping costs; production with the construction of tangible assets, such as processing plants,
stripping costs that result in a future economic benefit (refer to Note 2i permanent housing facilities and other tangible infrastructure associated
for capitalisation criteria for stripping costs); costs incurred to access with the project. Assets under construction also contain deposits
reserves at underground mining operations; and exploration and on long lead items. The capitalised cost of closure and rehabilitation
evaluation expenditures that result in a probable future economic activities is initially included in assets under construction and
benefit (refer to Note 2i for capitalisation criteria for exploration and subsequently transferred to Mineral Properties. Assets under
evaluation expenditures). construction are not depreciated.

Development costs incurred at underground mines to build new shafts,
drifts and ramps that provide physical access to the underground ore
are capitalised as incurred. These costs can be incurred throughout
the life of the underground mine.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 121

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

2. Significant accounting policies continued Goodwill is not amortised; rather it is tested annually for impairment
in accordance with accounting policy (Note 2r). Goodwill impairments
Depreciation

are not reversible.
Property, plant and equipment is depreciated, net of residual value,
over its useful life, or over the remaining life of the mine if shorter, on a q) Intangible assets
straight-line basis. For mineral properties and mine development costs, Intangible assets acquired by way of an asset acquisition or business
the economic benefits of the assets are consumed in a pattern which combination are recognised if the asset is separable or arises from
is linked to the production level. Such assets are depreciated on a unit contractual or legal rights and the fair value can be measured reliably on
of production basis. Depreciation commences when assets are available initial recognition. On acquisition of a mineral property in the exploration
for their intended use. In applying the units of production method, stage, we prepare an estimate of the fair value attributable to the
depreciation is normally calculated using the quantity of gold, copper exploration potential, including mineral resources, if any, of that property.
and silver extracted from the mine (or pit) in the period as a percentage The fair value of the exploration potential is recorded as an intangible
of the total quantity of material expected to be extracted in current asset (acquired exploration potential) as at the date of acquisition.
and future periods based on estimates of recoverable proven and When an exploration stage property moves into development, any
probable reserves and, for some mines, mineral resources. Such acquired exploration intangible asset balance attributable to that
non-reserve material may be included in the depreciation calculations property is transferred to non-depreciable mining interests within
where there is a high degree of confidence in its economic extraction property, plant and equipment.
and the production of the non-reserve material is reflected in the life
Impairment testing and the reversal of impairments are conducted
of mine plan.
in accordance with accounting policy (Note 2r).
Development costs that relate to a discrete section of an ore body and
which only provide benefit over the life of those reserves are depreciated
r) Impairment of non-current assets
Goodwill is reviewed for impairment annually or at any time during the
over the recoverable proven and probable reserves of that discrete
year if an indicator of impairment is considered to exist. We review
section. Discrete sections include capitalised underground development
and test the carrying amounts of intangible assets when events or
costs or production stripping costs incurred for the purposes of providing
changes in circumstances suggest that the carrying amount may
access to specific ore blocks or areas of the mine and which only provide
not be recoverable.
an economic benefit over the period of mining that ore block or area.
Development costs incurred which benefit the entire ore body are Property, plant and equipment is reviewed for impairment if there is
depreciated over the recoverable proven and probable reserves of the any indication that the carrying amount may not be recoverable.
entire ore body.
An impairment loss shall be recognised for a CGU if, and only if, the
The expected depreciation rates of the major categories of assets are recoverable amount of the unit is less than the carrying amount of the
as follows: unit. The impairment loss shall first be allocated to goodwill and then to
the other assets of the unit pro rata on the basis of the carrying amount
Mineral properties and development costs UOP1 of each asset in the unit.
Plant and equipment 4% – 25% An impairment loss recognised in prior years for non-financial assets
Underground mobile equipment 14.3% – 20% other than goodwill shall be reversed if, and only if, there has been
Light vehicles and other mobile equipment 33.3% – 50% change in the estimates used to determine the asset’s recoverable
Furniture, computer and office equipment 33.3% – 50% amount since the last impairment loss was recognised. This reversal
is recognised in the consolidated statement of income and is limited
1 UOP indicates assets which are depreciated on the basis of units of production
(“UOP”), in this case ounces of gold, copper and silver produced in a period divided by to the carrying amount that would have been determined, net of any
the total recoverable reserves and resources of gold, copper and silver expected to depreciation, had no impairment been recognised in prior years. After
be mined based on the current life of mine plans.
such a reversal, any depreciation charge is adjusted prospectively.
Each asset’s estimated residual value and useful life is reviewed,
The recoverable amount of an asset is assessed by reference to the
and adjusted if appropriate, on an annual basis. The estimate of
higher of value in use (“VIU”) being the net present value (“NPV”)
residual value and useful life is based on the physical condition and
of future cash flows expected to be generated by the asset, and fair
life limitations of buildings, plant and equipment and the present
value less costs to dispose (“FVLCD”). Impairment assessments are
assessment of economically recoverable reserves of the mine for the
conducted at the level of CGUs, which is the lowest level for which
mining property and development cost asset. Changes to the estimated
identifiable cash flows are largely independent of the cash flows of other
residual values or useful lives are accounted for prospectively.
assets. Each operating mine and development project represents a
p) Goodwill CGU for impairment testing purposes. An impairment loss is recognised
Goodwill represents the excess of the cost of acquisition over the fair for any excess of carrying amount of a CGU over its recoverable amount.
value of the identifiable assets, liabilities and contingent liabilities
The FVLCD of a CGU is based on an estimate of the amount that
acquired at the date of acquisition. Goodwill is initially determined based
the Group may obtain in a sale transaction on an arm’s length basis.
on provisional fair values. Fair values are finalised within 12 months of
There is no active market for the Group’s CGUs. Consequently, FVLCD
the acquisition date. For non-wholly-owned subsidiaries, non-controlling
is derived using discounted cash flow techniques (NPV of expected future
interests are initially recorded based on the minorities’ proportion of the
cash flows of a CGU), which incorporate market participant assumptions.
fair values for the assets and liabilities recognised at acquisition.
Cost to sell is based on management’s best estimates of future selling
Goodwill that is acquired through business combinations is allocated costs at the time of calculating FVLCD. Costs attributable to the sale
to Cash Generating Units (“CGUs”), or groups of CGUs, that are expected of a CGU are not considered significant.
to benefit from the synergies of the business combination. Each of the
Group’s CGUs that has an allocation of goodwill is also an operating
segment as defined by IFRS 8. Consequently, goodwill is tested for
impairment at the individual CGU level.

122 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

The expected future cash flows utilised in the NPV model are derived s) Other reserves
from estimates of projected future revenues, future cash costs of The Company did not exist until 12 January 2010, and did not become
production and capital expenditures contained in the life of mine (“LOM”) the parent company for the Group until 22 February 2010 when
plan for each CGU, which are updated on an annual basis. The Group’s the transfer of the members of the Group pursuant to the Pre-IPO
LOM plans reflect proven and probable reserves and convertible Reorganisation was completed. As part of the IPO Reorganisation in
resources and are based on detailed research, analysis and modelling 2010 a distributable reserve was created following a capital reduction.
to optimise the internal rate of return for each CGU. As such, these plans
t) Share capital
consider the optimal level of investment, overall production levels and
Ordinary Shares are classified as equity. Incremental costs directly
sequence of extraction taking into account all relevant characteristics
attributable to the issue of new shares or options are shown in equity
of the ore body, including waste-to-ore tonnes ratios, ore grades,
as a deduction from the proceeds.
haul distances, chemical and metallurgical properties impacting process
recoveries and capacities of available extraction, haulage and processing u) Provisions
equipment. Projected future revenues reflect the forecasted future Provisions are recognised when the Group has a present obligation
production levels at each CGU as detailed in the LOM plans. Included (legal or constructive) as a result of a past event, it is probable that
in these forecasts is the production of some mineral resources that an outflow of resources will be required to settle the obligation and
do not currently qualify for inclusion in proven and probable ore reserves a reliable estimate can be made of the amount of the obligation. If the
where there is a high degree of confidence in their economic extraction. effect of the time value of money is material, provisions are determined
This is consistent with the approach that a market participant would by discounting the expected future cash flows at a pre-tax rate that
utilise in preparing a forecast of expected production levels. Projected reflects current market assessments of the time value of money and,
future revenues also reflect the Group’s estimate of long-term gold where appropriate, the risks specific to the liability. Where discounting
prices, which is determined based on current prices, an analysis of is used, the increase in the provision due to the passage of time is
the expected total production costs of producers and forward pricing recognised as a finance cost.
curves and forecasts of expected long-term prices prepared by research
Rehabilitation costs
analysts. These estimates often differ from current price levels, but
The mining, extraction and processing activities of the Group
this methodology is consistent with how a market participant would
normally give rise to obligations for environmental rehabilitation.
assess long-term gold prices.
Rehabilitation works can include facility decommissioning and dismantling,
The estimates of future cash costs of production and capital removal or treatment of waste materials and site and land rehabilitation.
expenditures are derived from the LOM plans for each CGU. Costs The extent of work required and the associated costs are based on legal
incurred in currencies other than the US dollar are translated to US and constructive requirements and dependent on the requirements of
dollars using expected long-term exchange rates based on the relevant relevant authorities and the Group’s environmental policies.
forward pricing curve for that currency. Oil prices are a significant
Provisions for the cost of each rehabilitation programme are recognised
component, both directly and indirectly, of the expected cash costs
at the time that environmental disturbance occurs. When the extent
of production. Estimates for long-term oil prices used in the LOM plans
of disturbance increases over the life of an operation, the provision
are based on the spot price at the time, the forward pricing curve and
is increased accordingly. The major parts of the carrying amount of
long-term oil price forecasts prepared by analysts.
provisions relate to tailings pond closure/rehabilitation; demolition
The discount rate applied to present value is based upon the real of buildings/mine facilities; on-going water treatment; and on-going
weighted average cost of capital applicable to the CGU. The discount care and maintenance of closed mines. Costs included in the provision
rate reflects equity risk premiums over the risk-free rate, the impact encompass all closure and rehabilitation activity expected to occur
of the remaining economic life of the CGU and the risks associated progressively over the life of the operation and at the time of closure
with the relevant cash flows based on the country in which the CGU in connection with disturbances at the reporting date. Estimated costs

FINANCIAL STATEMENTS
is located. These risk adjustments are based on observed equity risk included in the determination of the provision reflect the risks and
premiums, historical country risk premiums and average credit default probabilities of alternative estimates of cash flows required to settle
swap spreads for the period. the obligation at each particular operation. Routine operating costs that
may impact the ultimate closure and rehabilitation activities, such as
In determining FVLCD, a market multiple is applied to the NPV of each
waste material handling conducted as an integral part of a mining or
CGU. Gold companies typically trade at a market capitalisation that
production process, are not included in the provision. Costs arising
is based on a multiple of their underlying NPV. Consequently, a market
from unforeseen circumstances, such as the contamination caused by
participant would generally apply an NPV multiple when estimating
unplanned discharges, are recognised as an expense and liability when
the fair value of a gold property. The NPV multiple utilised in the
the event occurs that gives rise to an obligation and reliable estimates
determination of the FVLCD of a CGU considers the NPV multiples
of the required rehabilitation costs can be made.
observed on comparable companies. These observed multiples
are primarily derived from research analyst reports and take into The timing of the actual rehabilitation expenditure is dependent upon a
consideration the following: i) estimate of underlying NPV prepared by number of factors such as the life and nature of the asset, the operating
the analyst; ii) estimate of target market capitalisation prepared by the licence conditions and the environment in which the mine operates.
analyst; iii) market capitalisation on the date of the analyst report; and Expenditure may occur before and after closure and can continue for
iv) market capitalisation on the date of the impairment test. The NPV an extended period of time depending on rehabilitation requirements.
multiple applied also takes into consideration the remaining economic The majority of the expenditure is expected to be paid over periods
life of the CGU. For CGUs with a remaining economic life of five years or of up to 30 years with some payments into perpetuity. Rehabilitation
less, an NPV multiple on the lower end of the observed multiple range is provisions are measured at the expected value of future cash flows,
utilised. For other CGUs, the median observed NPV multiple is utilised. discounted to their present value using a current, market-based estimate
of the real risk-free pre-tax discount rates. The unwinding of the discount
The VIU of a CGU is generally lower than its FVLCD, due primarily to
is included in finance expense and results in an increase in the amount
the inclusion of future, as yet unapproved, capital expenditure when
of the provision. Provisions are updated each reporting period for the
determining its FVLCD. Consequently, the recoverable amount of a CGU
effect of a change in the discount rate and the change in estimate is
for impairment testing purposes is determined based on its FVLCD.
added or deducted from the related asset and depreciated prospectively
over the asset’s useful life.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 123

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

2. Significant accounting policies continued Long-term incentive plans

Significant judgements and estimates are involved in forming The Company has a cash-settled, Restricted Share Unit (“RSU”) plan for
expectations of future activities and the amount and timing of the select employees. Under the terms of the RSU plan, selected employees
associated cash flows. Those expectations are formed based on existing are granted RSUs where each RSU has a value equal to one Ordinary
environmental and regulatory requirements or, if more stringent, Group Share of the Company. RSUs granted to Executive Directors and the
environmental policies which give rise to a constructive obligation. other members of the Executive Leadership Team vest based on the
Company’s total shareholder return (“TSR”) performance against the
When provisions for closure and rehabilitation are initially recognised,
market cap-weighted TSR of a comparator group of companies over
the corresponding cost is capitalised as an asset, representing part
the vesting period (referred to as Performance RSUs). RSUs vest over
of the cost of acquiring the future economic benefits of the operation.
a two-and-a-half or three-year period and are settled in cash. Additional
The capitalised cost of closure and rehabilitation activities is recognised
RSUs are credited to reflect dividends paid on Ordinary Shares of the
in property, plant and equipment and depreciated accordingly.
Company during the vesting period with a corresponding charge to the
It is possible that management’s estimates of provisions could change compensation expense. A liability for RSUs is measured at fair value on
as a result of changes in regulations, the extent of rehabilitation required, the grant date and is recognised on a straight-line basis over the vesting
and the means of reclamation or cost estimates. Rehabilitation period, with a corresponding charge to the compensation expense.
provisions are adjusted as a result of changes in estimates. Those At the grant date the fair value of the awards is determined from the
adjustments are accounted for as a change in the corresponding value market value of the shares at the date of award and adjusted for any
of the related asset, except where a reduction in the provision is greater market based vesting conditions attached to the award e.g. relative
than the remaining net book value of the related assets, in which case TSR performance. Changes in the fair value of the RSU liability, due to
the value is reduced to nil and the remaining adjustment is recognised in changes in the price of Ordinary Shares of the Company, are recorded
the income statement. In the case of closed sites, changes to estimated each period, with a corresponding charge to the compensation expense.
costs are recognised immediately in the income statement. Changes
Compensation expenses recognised for RSUs incorporate an estimate
to the capitalised cost result in an adjustment to future depreciation
for expected forfeiture rates. The expected forfeiture is estimated based
and finance expense. On an annual basis, the Group reviews for changes
on historical forfeiture rates of the Group and expectations of future
in cost estimates, discount rates or life of operations.
forfeiture rates. Adjustments to compensation expense are recognised
v) Employee benefits in periods where the actual forfeiture rate differs from the expected rate.
The Group operates an equity-settled, share-based compensation
LTIP deferred share units
plan (the “Share Option Plan”), a long-term incentive plan (the “LTIP”),
Under the Deferred Share Unit (“DSU”) plan, the Non-Executive Directors
a legacy restricted share unit plan (the “Legacy RSU Plan”) and
can elect to receive all or part of their annual director fees in DSUs. Each
a deferred share unit plan (the “DSU” Plan).
DSU has the same value as one Acacia Ordinary Share. DSUs must be
Share-based payments retained until the Director leaves the Board, at which time the cash value
Share options of the DSU is paid out. Additional DSUs are credited to reflect dividends
Share options can be granted under either the Company LTIP or the paid on Acacia Ordinary Shares. A liability for DSUs is measured at
Share Option Plan. The Company receives services from employees fair value on the grant date and is recognised on a straight-line basis
as consideration for equity instruments (options) of the Group. The fair over the vesting period, with a corresponding charge to the Directors’
value of the employee services received in exchange for the grant of the compensation expense. At the grant date the fair value of the awards
options is recognised as an expense. The total amount to be expensed is determined from the market value of the shares at the date of award.
is determined by reference to the fair value of the options granted: Changes in the fair value of the DSU liability, due to changes in the price
of Ordinary Shares of the Company, are recorded each period, with
––including any market performance conditions;
a corresponding charge to the Directors’ compensation expense.
––excluding the impact of any service and non-market performance
vesting conditions (for example, profitability, sales growth targets and LTIP zero cost options
remaining an employee of the entity over a specified time period); and Members of the Executive Leadership Team are granted nil-cost options
where each option has a value equal to one Ordinary Share of the
––excluding the impact of any non-vesting conditions.
Company. Nil-cost options granted vest subject to the assessment of the
Non-market vesting conditions are included in assumptions about Company’s TSR performance against a comparator group of companies
the number of options that are expected to vest. The total expense is over the vesting period. Nil-cost options vest over a five year period and
recognised over the vesting period, which is the period over which all when exercised the Company may issue new shares, procure the transfer
of the specified vesting conditions are to be satisfied. At the end of each of existing shares to satisfy the exercise or settle the options in cash.
reporting period, the Company revises its estimates of the number A liability for nil-cost options is measured at fair value on the grant date
of options that are expected to vest based on the non-market vesting and is recognised on a straight-line basis over the vesting period, with
conditions. It recognises the impact of the revision to original estimates, a corresponding charge to the compensation expense. At the grant date
if any, in the income statement, with a corresponding adjustment to equity. the fair value of the awards is determined from the market value of the
shares at the date of award and adjusted for market based vesting
When the options are exercised, the Company may issue new shares
conditions attached to the award. Changes in the fair value of the option
or procure the transfer of existing shares to satisfy the exercise. Where
liability, due to changes in the price of Ordinary Shares of the Company,
shares are issued, the proceeds received net of any directly attributable
are recorded each period, with a corresponding charge to the
transaction costs are credited to share capital (nominal value) and share
compensation expense.
premium when the options are exercised. The grant by the Company
of options over its equity instruments to the employees of subsidiary Compensation expenses recognised for nil-cost options incorporate
undertakings in the Group is treated as a capital contribution. The fair an estimate for expected forfeiture rates. The expected forfeiture
value of employee services received, measured by reference to the grant is estimated based on historical forfeiture rates of the Group and
date fair value, is recognised over the vesting period as an increase expectations of future forfeiture rates. Adjustments to compensation
to investment in subsidiary undertakings, with a corresponding credit expense are recognised in periods where the actual forfeiture rate
to equity. differs from the expected rate.

124 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Defined contribution plan Derivatives
The Group’s Tanzanian employees are members of either the National Derivatives are initially recognised at fair value on the date a derivative
Social Security Fund (“NSSF”) or the Parastatal Pension Fund (“PPF”), contract is entered into and are subsequently re-measured at their fair
which are defined contribution plans. A defined contribution plan is value. The method of recognising the resulting gain or loss depends on
a plan under which the Group pays fixed contributions into a separate whether the derivative is designated as a hedging instrument, and if so,
entity. The Group has no legal or constructive obligation to pay further the nature of the item being hedged. The Group designates certain
contributions if the fund does not hold sufficient assets to pay all derivatives as:
employees the benefits relating to the employee service in the current
a) hedges of the fair value of recognised assets or liabilities or a firm
and prior periods. The Group and employees both contribute 10% of
commitment (fair value hedge); or
the employees’ gross salaries to the schemes. The contributions are
charged to the income statement when they are due. b) h
 edges of the income/cost of a highly probable forecast transaction
or commitment (cash flow hedge); or
Termination benefits
Termination benefits are payable when employment is terminated by c) hedges of a net investment in a foreign operation (net
the Group before the normal retirement date, or whenever an employee investment hedge).
accepts voluntary redundancy in exchange for these benefits. The Group
The Group documents at inception of the transaction the relationship
recognises termination benefits when it is demonstrably committed
between hedging instruments and hedged items, as well as its risk
to either: terminating the employment of current employees according
management objectives and strategy for undertaking various hedging
to a detailed formal plan without possibility of withdrawal; or providing
transactions. The Group also documents its assessment, both at hedge
termination benefits as a result of an offer made to encourage voluntary
inception and on an on-going basis, of whether the derivatives that are
redundancy. Benefits falling due more than 12 months after the balance
used in hedging transactions are highly effective in offsetting changes
sheet date are discounted to their present value.
in fair values or cash flows of hedged items.
Bonus plans
The fair values of various derivative instruments used for hedging
The Group recognises a liability and an expense for bonuses where it is
purposes are disclosed in Note 30. Movements in the hedging reserve
contractually obliged or where there is a past practice that has created
are shown in other comprehensive income. The full fair value of a hedging
a constructive obligation.
derivative is classified as a non-current asset or liability when the
Other entitlements remaining maturity of the hedged item is more than 12 months,
The estimated monetary liability for employees’ accrued annual and as a current asset or liability when the remaining maturity of the
leave entitlement at the balance sheet date is recognised as an hedged item is less than 12 months. Trading derivatives are classified
expense accrual. as a current asset or liability.
w) Financial instruments (a) Fair value hedge
Cash and cash equivalents Changes in the fair value of derivatives that are designated and qualify
Cash and cash equivalents are carried in the balance sheet at fair as fair value hedges are recorded in the income statement, together
value. For the purposes of the balance sheet, cash and cash equivalents with any changes in the fair value of the hedged asset or liability that are
include cash, and money market funds. For the purposes of the cash flow attributable to the hedged risk. The gain or loss relating to the effective
statement, cash and cash equivalents consist of cash and cash portion is recognised in the income statement within “finance costs”.
equivalents as defined above. The gain or loss relating to the ineffective portion is recognised in the
income statement within other charges. Changes in the fair value of
Loans and receivables
the hedge attributable to interest rate risk are recognised in the income
Loans and receivables are non-derivative financial assets with fixed or
statement within “finance costs”.

FINANCIAL STATEMENTS
determinable payments that are not quoted in an active market, do not
qualify as trading assets and have not been designated as either fair If the hedge no longer meets the criteria for hedge accounting, the
value through profit and loss or available for sale. These are initially adjustment to the carrying amount of a hedged item for which the
recognised at fair value, and are subsequently stated at amortised cost effective interest method is used is amortised to profit or loss over
using the effective interest method. They are included in current assets, the period to maturity.
except for maturities greater than 12 months after the balance sheet
(b) Cash flow hedge
date. These are classified as non-current assets, where the receivables
The effective portion of changes in the fair value of derivatives that
are discounted and held at their net present value.
are designated and qualify as cash flow hedges is recognised in other
Loans and receivables comprise trade and other receivables, other comprehensive income. The gain or loss relating to the ineffective
assets and cash and cash equivalents at the balance sheet date. portion is recognised immediately in the income statement within
“other charges”.
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 accumulated in equity are reclassified to profit or loss in the
amounts due according to the original terms of receivables. The amount periods when the hedged item affects profit or loss (for example, when
of the provision is the difference between the carrying amount and the forecast sale that is hedged takes place). The gain or loss relating
the expected cash flows discounted at the effective interest rate. The to the effective portion is recognised in the income statement. However,
carrying amount of the asset is reduced through use of an allowance when the forecast transaction that is hedged results in the recognition
account. The amount of the provision is recognised in the of a non-financial asset (for example, inventory or fixed assets), the gains
income statement. and losses previously deferred in equity are transferred from equity and
included in the initial measurement of the cost of the asset. The deferred
amounts are ultimately recognised in cost of goods sold in the case of
inventory or in depreciation in the case of property, plant and equipment.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 125

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

2. Significant accounting policies continued z) Taxes

When a hedging instrument expires or is sold, or when a hedge The tax expense for the period comprises current and deferred tax.
no longer meets the criteria for hedge accounting, any cumulative Tax is recognised in the income statement, except to the extent that
gain or loss existing in equity at that time remains in equity and is it relates to items recognised in other comprehensive income or directly
recognised when the forecast transaction is ultimately recognised in equity. In this case the tax is also recognised in other comprehensive
in the income statement. income or directly in equity, respectively.
When a forecast transaction is no longer expected to occur, the Current income tax
cumulative gain or loss that was reported in equity is immediately Current income tax assets and liabilities for the current and prior periods
transferred to the income statement within “other charges”. are measured at the amount expected to be recovered from or paid
to the taxation authorities. Management periodically evaluates positions
(c) Net investment hedge
taken in tax returns with respect to situations in which applicable tax
Hedges of net investments in foreign operations are accounted for
regulation is subject to interpretation. It establishes provisions where
similarly to cash flow hedges.
appropriate on the basis of amounts expected to be paid to the tax
Any gain or loss on the hedging instrument relating to the effective authorities. The tax rates and tax laws used to compute the amount
portion of the hedge is recognised in other comprehensive income. are those that are enacted or substantively enacted by the balance
The gain or loss relating to the ineffective portion is recognised in sheet date.
the income statement.
Deferred income tax
Gains and losses accumulated in equity are included in the income Deferred income tax is provided using the liability method on temporary
statement when the foreign operation is partially disposed of or sold. differences at the balance sheet date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting
Embedded derivatives
purposes. Deferred income tax is determined using tax rates enacted
Contracts are assessed for the existence of embedded derivatives
or substantively enacted at the balance sheet date and are expected to
at the date that the Group first becomes party to the contract, with
apply when the related deferred income tax liability is settled. Deferred
reassessment only if there is a change to the contract that significantly
income tax assets are recognised only to the extent that it is probable
modifies the cash flows. Embedded derivatives which are not clearly
that future taxable profits will be available against which the temporary
and closely related to the underlying asset, liability or transaction are
differences can be utilised.
separated and accounted for as stand-alone derivatives.
Deferred income tax liabilities are recognised for all taxable temporary
Financial liabilities
differences, except:
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost; any ––where the deferred income tax liability arises from the initial recognition
difference between the proceeds (net of transaction costs) and the of goodwill or of an asset or liability in a transaction
redemption value is recognised in the income statement over the period that is not a business combination and, at the time of transaction,
of the borrowings using the effective interest method. Fees paid on the affects neither the accounting profit nor taxable profit/loss; and
establishment of loan facilities are recognised as transaction costs ––in respect of taxable temporary differences associated with
of the loan to the extent that it is probable that some or all of the facility investments in subsidiaries where the timing of the reversal of the
will be drawn down. In this case, the fee is deferred until the draw-down temporary differences can be controlled and it is probable that the
occurs. To the extent there is no evidence that it is probable that some temporary differences will not reverse in the foreseeable future.
or all of the facility will be drawn down, the fee is capitalised as a
prepayment for liquidity services and amortised over the period of the Deferred income tax assets are recognised for all deductible temporary
facility to which it relates. Borrowings are classified as current liabilities differences, carry forward of unused tax credits and unused tax losses,
unless the Group has an unconditional right to defer settlement of to the extent that it is probable that taxable profit will be available
the liability for at least 12 months after the balance sheet date. against which the deductible temporary differences and the carry forward
of unused tax credits and unused tax losses can be utilised except:
Trade and other payables are initially recognised at fair value and
subsequently held at amortised cost using the effective interest ––where the deferred income tax asset relating to deductible temporary
rate method. differences arises from the initial recognition of an asset or liability
in a transaction that is not a business combination and, at the time
x) Finance income and finance expense of the transaction, affects neither the accounting profit nor taxable
Interest income is recognised on a time-proportion basis using the profit or loss; and
effective interest method. When a receivable is impaired, the Group
––in respect of deductible temporary differences associated with
reduces the carrying amount to its recoverable amount, being the
investments in subsidiaries deferred income tax assets are recognised
estimated future cash flow discounted at the original effective interest
only to the extent that it is probable that the temporary differences will
rate of the instrument, and continues unwinding the discount as
reverse in the foreseeable future and taxable profit will be available
interest income.
against which the temporary differences can be utilised.
Interest is recognised as a borrowing cost on a time proportion basis
The carrying amount of deferred income tax assets is reviewed at
using the effective interest method. Borrowing costs that relate directly
each balance sheet date and reduced to the extent that it is no longer
to the construction of property, plant and equipment during the time that
probable that sufficient taxable profit will be available to allow all
it is required to complete and prepare the asset for its intended use are
or part of the deferred income tax asset to be utilised.
capitalised as part of the cost of the asset.
Unrecognised deferred income tax assets are reassessed at each
y) Other income/charges balance sheet date and are recognised to the extent that it has become
Other income/charges comprises one-off credits or costs relating to
probable that future taxable profit will allow the deferred tax asset to
non-routine transactions included in profit and loss. It includes other
be recovered.
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.

126 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Deferred income tax assets and liabilities are measured at the tax rates bb) Leases
that are expected to apply to the year when the asset is realised or Leases in which a significant portion of the risks and rewards of
the liability is settled, based on tax rates (and tax laws) that have been ownership are retained by the lessor are classified as operating leases.
enacted or substantively enacted at the balance sheet date. Payments made under operating leases (net of any incentives received
from the lessor) are charged to the income statement on a straight-line
Uncertainties regarding availability of tax losses, in respect of enquiries
basis over the period of the lease.
raised and additional tax assessments issued, have been measured
using the single best estimate of likely outcome approach. The Group leases certain property, plant and equipment. Leases of
property, plant and equipment where the Group has substantially all the
Deferred income tax relating to items recognised directly in equity is
risks and rewards of ownership are classified as finance leases. Finance
recognised in equity and not in the income statement.
leases are capitalised at the lease’s commencement at the lower of the
Deferred income tax assets and deferred income tax liabilities are offset, fair value of the leased property and the present value of the minimum
if a legally enforceable right exists to set off current income tax assets lease payments.
against current income tax liabilities and the deferred income taxes
Each finance lease payment is allocated between the liability and finance
relate to the same taxable entity and the same taxation authority.
charges. The corresponding rental obligations, net of finance charges,
Indirect tax are included in other liabilities. The interest element of the finance
Indirect tax assets and liabilities for the current and prior periods are cost is charged to the income statement over the lease period so as to
measured at the amount expected to be recovered from or paid to produce a constant periodic rate of interest on the remaining balance
the taxation authorities. Management periodically evaluates positions of the liability for each period. The property, plant and equipment
taken in indirect tax returns with respect to situations in which applicable acquired under finance leases is depreciated over the shorter of the
tax regulation is subject to interpretation. It establishes provisions or useful life of the asset and the lease term.
receivables where appropriate on the basis of amounts expected to be
paid to or received from the tax authorities. The tax rates and tax laws
cc) Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as
used to compute the amount are those that are enacted or substantively
a liability in the consolidated financial statements in the period in which
enacted by the balance sheet date. If the receivable is expected
the dividends are approved by the Company’s shareholders.
to be received in more than 12 months from year-end, the receivable
is discounted and held at its present value. Amounts expected to 3. Segment reporting
be payable or receivable in more than 12 months are classified as The Group has only one primary product produced in a single geographic
non-current assets or liabilities in the balance sheet, as appropriate. location, being gold produced in Tanzania. In addition, the Group
produces copper and silver as a co-product. Reportable operating
aa) Royalties segments are based on the internal reports provided to the Chief
Royalty arrangements based on mineral production are in place at
Operating Decision Maker (“CODM”) to evaluate segment performance,
each operating mine. The primary type of royalty is a net smelter return
decide how to allocate resources and make other operating decisions.
(“NSR”) royalty. Under this type of royalty the Group pays the holder an
After applying the aggregation criteria and quantitative thresholds
amount calculated as the royalty percentage multiplied by the value of
contained in IFRS 8, the Group’s reportable operating segments were
gold production at market gold prices less third-party smelting, refining
determined to be: North Mara gold mine; Bulyanhulu gold mine; Buzwagi
and transportation costs.
gold mine; and a separate Corporate and Exploration segment, which
The North Mara mine is also subject to a land royalty (land tenements primarily consists of costs related to other charges and corporate social
(“LT”)) based on the net revenue derived from the open pit mines. responsibility expenses.
Royalty expense is recorded when revenue from the sale of gold, copper Segment results and carrying values include items directly attributable

FINANCIAL STATEMENTS
and silver production is recognised. to the segment as well as those that can be allocated on a reasonable
basis. Segment carrying values are disclosed and calculated as
The following percentages apply:
shareholders’ equity after adding back debt and inter-company liabilities,
and subtracting cash and inter-company assets. Segment liabilities are
Bulyanhulu 6% NSR1
not reported since they are not considered by the CODM as material
North Mara – Nyabirama and Nyabigena pits 6% NSR1, 1% LT to segment performance. Capital expenditures comprise additions to
North Mara – Gokona pit and underground 6% NSR1, 1.1% LT property, plant and equipment. The Group has also included segment
Buzwagi 6% NSR1, 30% NPI2 cash costs per ounce sold and all-in sustaining cost per ounce sold
1 The Group agreed to a voluntary 1% increase in the NSR royalty rate in 2012, and (non-IFRS financial performance measures). Segment information for
since early July 2017 satisfied the requirements imposed by new legislation as the reportable operating segments of the Group for the years ended
regards the increased royalty rate applicable to metallic minerals such as gold, 31 December 2017 and 31 December 2016 is set out overleaf.
copper and silver of 6% (2016: 4%), in addition to a new 1% clearing fee on mineral
exports. These payments are being made under protest, without prejudice to our legal
rights under our MDAs
2 The NPI is calculated as a percentage of profits realised from the Buzwagi mine after
all capital, exploration and development costs and interest incurred in relation to the
Buzwagi mine have been recouped and all operating costs relating to the Buzwagi
mine have been paid. No amount is currently payable.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 127

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

3. Segment reporting continued

For the year ended 31 December 2017
(in thousands of United States dollars,
except per ounce amounts) North Mara Bulyanhulu Buzwagi Other Total
Gold revenue 406,917 134,110 203,267 – 744,294
Co-product revenue 1,296 2,937 2,988 – 7,221
Total segment revenue 408,213 137,047 206,255 – 751,515
Segment cash operating cost1 (163,001) (93,521) (98,417) – (354,939)
Realised losses on gold hedges 1,294 – 1,399 – 2,693
Corporate administration (8,313) (6,314) (5,694) (6,592) (26,913)
Share-based payments 511 593 349 6,783 8,236
Exploration and evaluation costs – (571) – (24,258) (24,829)
Other charges and corporate social
responsibility expenses (13,243) (52,916) (13,605) (18,819) (98,583)
EBITDA2 225,461 (15,682) 90,287 (42,886) 257,180
Impairment charges – (837,921) – (12,261) (850,182)
Depreciation and amortisation4 (54,826) (46,531) (4,288) (556) (106,201)
EBIT2 170,635 (900,134) 85,999 (55,703) (699,203)
Finance income 1,944
Finance expense (12,407)
Profit before taxation (709,666)
Tax expense 2,272
Net profit for the year (707,394)

Capital expenditure:
Sustaining 20,927 9,033 4,338 1,259 35,557
Expansionary 10,270 1,190 – 113 11,573
Capitalised development 61,066 39,543 – – 100,609
92,263 49,766 4,338 1,372 147,739
Non-cash capital expenditure adjustments
Reclamation asset adjustment (2,951) (4,158) (1,978) – (9,087)
Total capital expenditure 89,312 45,608 2,360 1,372 138,652
Segmental cash operating cost 163,001 93,521 98,417 354,939
Deduct: co-product revenue (1,296) (2,937) (2,988) (7,221)
Total cash costs 161,705 90,584 95,429 347,718
Sold ounces 324,455 107,855 160,552 592,861
Cash cost per ounce sold2 498 840 594 587
Corporate administration charges 26 59 35 45
Share-based payments (2) (6) (2) (14)
Rehabilitation – accretion and depreciation 11 20 5 11
Corporate social responsibility expenses 11 10 8 14
Capitalised stripping/UG development 188 367 – 170
Sustaining capital expenditure 71 83 27 62
All-in sustaining cost per ounce sold2 803 1,373 667 875

Segment carrying value3 249,170 600,359 194,385 82,864 1,126,778

128 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

 For the year ended 31 December 2016
(in thousands of United States dollars,
except per ounce amounts) North Mara Bulyanhulu Buzwagi Other Total
Gold revenue 468,340 345,481 200,648 – 1,014,469
Co-product revenue 953 15,447 22,663 – 39,063
Total segment revenue 469,293 360,928 223,311 – 1,053,532
Segment cash operating cost1 (155,344) (217,226) (188,896) – (561,466)
Realised losses on gold hedges – – (1,818) – (1,818)
Corporate administration (7,954) (5,975) (4,176) (3,790) (21,895)
Share-based payments (623) (518) (470) (28,318) (29,929)
Exploration and evaluation costs (297) (3,532) – (20,191) (24,020)
Other charges and corporate social
responsibility expenses (2,295) (3,442) (723) 7,444 984
EBITDA2 302,780 130,235 27,228 (44,855) 415,388
Impairment charges – – – – –
Depreciation and amortisation4 (67,472) (82,022) (12,668) (1,634) (163,796)
EBIT2 235,308 48,213 14,560 (46,489) 251,592
Finance income 1,512
Finance expense (11,047)
Profit before taxation 242,057
Tax expense (147,113)
Net profit for the year 94,944

Capital expenditure:
Sustaining 23,558 20,231 3,582 1,416 48,787
Expansionary 2,399 1,262 – – 3,661
Capitalised development 75,609 63,082 – – 138,691
101,566 84,575 3,582 1,416 191,139
Non-cash capital expenditure adjustments
Reclamation asset adjustment 6,703 10,728 4,524 – 21,955
Total capital expenditure 108,269 95,303 8,106 1,416 213,094
Segmental cash operating cost 155,344 217,226 188,896 561,466
Deduct: co-product revenue (953) (15,447) (22,663) (39,063)
Total cash costs 154,391 201,779 166,233 522,403
Sold ounces 376,255 279,286 161,202 816,743
Cash cost per ounce sold2 410 722 1,031 640
Corporate administration charges 21 21 26 27

FINANCIAL STATEMENTS
Share-based payments 2 2 3 37
Rehabilitation – accretion and depreciation 9 7 3 7
Corporate social responsibility expenses 15 6 10 13
Capitalised stripping/UG development 201 226 – 170
Sustaining capital expenditure 75 74 22 64
All-in sustaining cost per ounce sold2 733 1,058 1,095 958

Segment carrying value3 246,175 1,231,793 97,243 82,710 1,657,921

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 171 for definitions.
3 Segment carrying values are calculated as shareholders’ equity after adding back debt and inter-company liabilities, and subtracting cash and inter-company assets and include
outside shareholder’s interest.
4 Depreciation and amortisation includes the depreciation component of the cost of inventory sold.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 129

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

4. Revenue
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Gold doré sales 720,755 739,317
Gold concentrate sales¹ 23,539 275,152
Copper concentrate sales¹ 4,001 32,658
Silver sales 3,220 6,405
Total 751,515 1,053,532
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$3.6 million for the year ended 31 December 2017 (US$7.0 million for the year ended 31 December 2016).

For the For the

year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Revenue by location of customer2
Europe
Switzerland 140,691 488,383
Germany 11,615 58,747
Asia
India 582,943 253,881
China 437 176,143
Japan 15,829 76,378
Total revenue 751,515 1,053,532
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 2017 are sales to six major customers. Revenues of approximately US$739 million (2016:
US$913 million) arose from sales to four of the Group’s largest customers.

5. Cost of sales
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Direct mining costs 299,591 479,022
Third-party smelting costs 9,675 25,588
Depreciation1 106,201 163,796
Realised losses on economic hedges 743 9,619
Realised (gains)/losses on gold hedges (2,693) 1,818
Royalty expense 44,930 47,237
Total2 458,447 727,080
1 Depreciation includes the depreciation component relating to the cost of inventory sold.
2 Cost of sales less depreciation equals cash operating costs.

6. Impairment
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.
Acacia has identified triggers for impairment testing of the carrying value of its assets, including but not limited to the challenges experienced in the
operating environment in Tanzania, the announcement of new legislation by the GoT in respect of the natural resources sector and Acacia’s decision
to reduce operations at Bulyanhulu (in light of the deterioration in operating environment)..
As a result, the Group has undertaken a carrying value assessment of its affected Cash Generating Units (“CGUs”) and long life intangible assets.
The assessment compared the recoverable amount of CGU to the carrying value of the CGUs 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.

130 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

For the purpose of carrying value assessments in accordance with applicable accounting standards, Acacia has based its calculation of future cash
flows of the affected CGUs by reference to key terms of the framework announcements by Barrick and by the GoT in October 2017. Based on Barrick’s
announcements and its discussions and exchanges with Acacia, it is Barrick’s belief that it will be able to agree with the GoT a detailed proposal
for a comprehensive settlement of the situation, and that this will be in a form that Barrick could recommend to Acacia for review and approval. Key
assumptions applied in these calculations include a 50% economic share of future economic benefits for the GoT in the form of taxes, royalties and a
16% free carry interest in the CGUs, as well as a US$300 million payment in relation to historical tax claims paid in instalments as concentrate sales
recommence. In addition, the framework announcements provided for Acacia to contribute certain monies to fund specific projects in Tanzania. For
the purposes of the carrying value assessments, Acacia has assumed that concentrate sales will resume from 1 July 2018 and Bulyanhulu will return
to full operation towards the end of 2019, VAT refunds will recommence and historic carried forward tax losses will continue to be available to offset
against future taxable profits. Barrick has previously announced that it is targeting H1 2018 for agreement of the detailed terms and documentation
for a comprehensive settlement reflecting the key terms of the framework announcements.
Acacia continues to provide support to Barrick in its discussions with the GoT, Acacia has not yet received for review and approval a detailed proposal
that has been agreed between Barrick and the GoT, and no conclusions can be made by Acacia as to whether any particular terms of settlement
would be approved by Acacia. In the meantime, Acacia continues to reserve its rights included under our Mine and Development Agreements, the
disputes between Acacia and the GoT have not yet been resolved, and PML and BGML remain in international arbitration with the GoT. Acacia
continues to prefer a negotiated resolution, but believes that there remain a range of potential outcomes to the current situation.
Acacia considers that, in conducting the review of carrying values in accordance with applicable accounting standards as at 31 December 2017,
the discount rate should be increased to (a) reflect the uncertainty around the final terms of any comprehensive settlement that might be agreed or
whether settlement will be reached at all, and (b) to best reflect the potential reduction in value as a result of the proposed 16% free carry interest
for the GoT which cannot otherwise be included in calculations of value at a CGU level conducted on a 100% basis. Therefore, for the purposes of
the carrying value review of the affected CGUs, we have used a discount rate of 11% compared to Acacia’s updated calculated weighted average
cost of capital of 6.5% (2016: 5%).
The key economic assumptions used in the reviews during 2017 and 2016 were:
For the For the
year ended year ended
31 December 31 December
2017 2016
Gold price per ounce US$1,200 US$1,200
Copper price per pound US$2.75 US$2.25
British Pound (US$:GBP) 0.76 0.74
Tanzanian Shilling (US$:TZS) 2,250 2,150
Long-term oil price per barrel US$60 US$60
WACC 6.5% 5%
Discount rate used in carrying value review 11% 5%
NPV multiples 1 1

The carrying value assessment demonstrates a reduction in value at all three CGUs, however, based on these assumptions Buzwagi and North Mara
have headroom above their current carrying values. At Bulyanhulu, the impact of the changes was greater, due to the long life of the mine and the
delay to a return to positive cash generation due to the move to reduced operations. Acacia has recorded a net impairment of US$632.0 million for

FINANCIAL STATEMENTS
Bulyanhulu, which includes a pre-tax write-down of US$122 million for goodwill. In addition we have recorded an impairment charge of US$12.3
million for the Nyanzaga Project to reflect the impact of the new Mining Laws on the carrying value of the project, which now stands at US$34 million.
The adjusted carrying value for the Group is now approximately US$1.1 billion, made up of US$0.6 billion for Bulyanhulu, US$0.2 billion for North
Mara, US$0.2 billion for Buzwagi and US$0.1 billion for exploration and other.
The impairment charges recognised in the income statement for the year ended 31 December comprise the following:
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Bulyanhulu 837,921 –
Nyanzaga exploration property1 12,261 –
Gross impairment charge 850,182 –
Comprising:
Impairment of goodwill 121,546 –
Impairment of property, plant and equipment 686,375 –
Impairment of supplies inventory 30,000 –
Impairment of intangible assets 12,261 –
Gross impairment charge, before tax 850,182 –
Deferred income tax (205,912) –
Total impairment charge 644,270 –
1 The Nyanzaga exploration property is located in Tanzania. Acquired mineral interests /exploration and evaluation assets are classified as intangible assets and have indefinite
useful lives.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 131

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

6. Impairment continued
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 impairment charge.
Management’s view is that the recoverable values are most sensitive to changes in the assumptions around gold prices, discount rates and the
timing of the resolution of the export ban. As a result, sensitivity calculations were performed for these for each of the CGUs. The sensitivity analysis
is based on a decrease in the long-term gold price of US$100 per ounce, and an increase in the discount rate of 1%, and a delay of resolution by
12 months.
Under these scenarios, a reasonably possible decrease in the gold price assumption of US$100 per ounce would result in an additional impairment
charge, net of tax, relating to Bulyanhulu of approximately US$172 million, while a similar increase in gold price would result in a reduction in the
impairment charge of similar value. In addition, given limited headroom, a similar decrease would result in an impairment charge of US$43 million
at Buzwagi, whilst at North Mara headroom would be maintained.
Under the assumptions as set out above, a further delay in the resolution of the export ban will result in an additional impairment charge of
US$56 million for Bulyanhulu, while headroom is maintained for North Mara and Buzwagi.
A reasonably possible increase in discount rate of 1% would result in an additional impairment relating to Bulyanhulu of US$63 million, with a
reasonably possible decrease in discount rate of 1% resulting in a reduction in impairment charges of similar value. Buzwagi and North Mara
would not be affected.
A reasonably possible adverse change in any of the assumptions set out above will result in an additional impairment relating to Nyanzaga.
Should a negotiated resolution of the current situation not eventuate, the recoverable values of the identified CGUs may be further impacted,
and these will be reviewed at such time.

7. Employee benefits
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Wages and salaries 67,400 68,335
Pension and social security costs 8,722 7,729
Other employee benefits1 59,045 45,509
Share-based compensation charge2 (7,655) 34,575
Total 127,512 156,148
1 Other employee benefits include bonuses, leave pay, pensions, medical expenses, severance costs (2017: US$22.0 million; 2016: US$4.5 million) and other benefits.
2 Share-based compensation charges include costs incorporated in corporate administration, cost of sales and other charges as applicable to the relevant employees. Further
details of the Group’s share options and other share-based compensation plans are provided in note 24.

For the For the

year ended year ended
31 December 31 December
Average number of employees per month 2017 2016
Operations 2,495 2,927
Exploration 43 38
Administration 210 140
Total average headcount 2,748 3,105

8. Exploration and evaluation costs

The following represents a summary of exploration and evaluation expenditures incurred at each mine site.
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Expensed during the year:
North Mara – 297
Bulyanhulu 571 3,532
Kenya 12,208 10,582
West Africa 11,119 7,544
Other1 931 2,065
Total expensed 24,829 24,020
Capitalised during the year:
North Mara 10,270 2,399
Total 35,099 26,419
1 Included in “other” are the exploration activities conducted through ABG Exploration Limited. All primary greenfield exploration and evaluation activities are conducted in this
company.


132 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

9. Other charges/(income)
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Other expenses
Restructuring costs 25,077 7,689
Discounting of indirect tax receivables 13,276 –
Bulyanhulu reduced operations costs1 24,804 –
Foreign exchange losses 2,710 –
Legal costs 14,421 2,641
One off legal settlement 5,083 –
Project development costs 1,485 1,123
Inventory write-downs 1,500 –
Other 5,573 4,583
Total 93,929 16,036

Other income
Bad debts recovered – (54)
Discounting of indirect tax receivables – (9,719)
Profit on disposal of property, plant and equipment – (289)
Unrealised non-hedge derivative gains (200) (13,031)
Foreign exchange gains – (1,137)
Insurance proceeds – (3,455)
Other (3,359) –
Total (3,559) (27,685)

Total other (income)/charges 90,370 (11,649)

1 Includes US$13.9 million of non-sustaining operating costs allocated, US$4.9 million of contract exit costs and US$6 million of inventory written down as a result of moving to
reduced operational state.

10. Auditors’ remuneration

During the year the Group (including its subsidiaries) obtained the following services from the Company’s auditors:
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Audit fees
Fees payable to the Company’s auditors and its associates for the audit of the parent company and consolidated
financial statements 447 460

FINANCIAL STATEMENTS
Fees payable to the Company’s auditors and its associates for other services:
Audit of the Company’s subsidiaries 437 382
Audit-related assurance services 227 235
Tax compliance services 66 106
Other taxation services 214 260
Other services 10 12
Total 1,401 1,455

11. Finance income and finance expenses

a) Finance income
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Interest on time deposits 1,841 1,236
Other 103 276
Total 1,944 1,512

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 133

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

11. Finance income and finance expenses continued

b) Finance expense
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Unwinding of discount1 3,364 2,254
Revolving credit facility charges2 2,341 2,279
Interest on CIL facility 2,911 3,956
Premium on gold put options 2,113 –
Interest on finance leases 204 –
Bank charges 583 701
Other 891 1,857
Total 12,407 11,047
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.

12. Tax (credit)/expense

For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Current tax:
Current tax on profits for the year 35,667 54,508
Adjustments in respect of prior years1 172,000 36,697
Total current tax 207,667 91,205
Deferred tax:
Origination and reversal of temporary differences2 (209,939) 55,908
Total deferred tax (209,939) 55,908
Income tax (credit)/expense (2,272) 147,113
1 Included in 2017 is a provision for uncertain tax positions of US$68.5 million relating to North Mara and US$103.5 million relating to Bulyanhulu, for uncertain tax positions,
based on an estimate of the impact of a comprehensive settlement reflecting the key terms of the framework announcements made by Barrick and the GoT in October 2017.
Included in 2016 is a provision for uncertain tax positions of US$30.4 million relating to North Mara, and US$4.4 million relating to Tulawaka, following an adverse tax ruling
as reported in Q1 2016.
2 Included in 2016 is a provision for uncertain tax positions of US$35.0 million relating to Bulyanhulu following an adverse tax ruling, as reported in Q1 2016.

The tax on the Group’s (loss)/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:
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
(Loss)/Profit before tax (709,666) 242,057
Tax calculated at domestic tax rates applicable to profits in the respective countries (209,074) 73,373
Tax effects of:
Difference in tax rates in different jurisdictions (3,826) (756)
Expenses not deductible for tax purposes3 49,142 247
Tax losses for which no deferred income tax asset was recognised 9,611 76,592
Utilisation of previously unrecognised tax losses (25,594) –
Increase in provision for uncertain tax positions4 172,000 –
Other permanent differences 5.469 (2,343)
Tax (credit)/charge (2,272) 147,113
3 Relates mainly to impairment charges relating to goodwill, intangibles and supplies inventory not deductible for tax purposes. Refer Note 7 for full details.
4 Included in 2017 is a provision for uncertain tax positions of US$68.5 million relating to North Mara and US$103.5 million relating to Bulyanhulu, based on an estimate of the
impact of a comprehensive settlement reflecting the key terms of the framework announcements made by Barrick and the GoT in October 2017.

In addition to the net impairment as set out in note 7, to meet applicable accounting standards, Acacia has also raised an additional tax provision
of US$172 million relating to the estimated uncertain tax positions for its operating companies. Acacia has based its calculation on an estimate of
the impact of a comprehensive settlement reflecting the key terms of the framework announcements made by Barrick and the GoT in October 2017,
including in respect of historical tax claims. This brings total provisions for Acacia’s uncertain tax positions to US$300 million. Acacia continues to
reserve and protect all its legal rights, as noted above and including through the arbitrations commenced by BGML and PML, and no liability has
been incurred by Acacia as a result of the framework announcements. The additional provision is required, however, to meet applicable accounting
standards requiring assessment of current obligations for accounting purposes based on an assessment of relevant cash outflows from the relevant
operating companies in respect of uncertain tax positions.
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.

134 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

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.

13. (Loss)/Earnings per share

Basic earnings per share (“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 share options. The weighted average number
of shares is adjusted for the number of shares granted assuming the exercise of share options.
At 31 December 2017 and 31 December 2016, earnings per share have been calculated as follows:
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
(Loss)/Earnings
Net (loss)/profit for the year (707,394) 94,944

Weighted average number of Ordinary Shares in issue 410,085,499 410,085,499

Adjusted for dilutive effect of share options – 355,514
Weighted average number of Ordinary Shares for diluted earnings per share 410,085,499 410,441,013
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
(Loss)/Earnings per share
Basic (loss)/earnings per share (cents) (172.5) 23.2
Dilutive (loss)/earnings per share (cents) (172.5) 23.1

14. Dividend
The final dividend declared in respect of the year ended 31 December 2016 of US$34.4 million (US8.4 cents per share) was paid during 2017 and
recognised in the financial statements.
Acacia has a cash flow based dividend policy where we aim to pay a dividend of between 15-30% of our operational cash flow after sustaining
capital and capitalised development but before expansion capital and financing costs. As a result of the inability to export concentrates Acacia
has experienced negative free cash flow in 2017 and therefore the Company did not pay an interim dividend and the Board of Directors has not
recommended the payment of a final dividend.

15. Cash flow – other items

FINANCIAL STATEMENTS
a) Operating cash flows – other items
Adjustments for working capital items
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Increase in indirect tax receivable (51,703) (18,224)
Prepaid corporate tax – (20,000)
Income tax paid – Final (3,257) –
Income tax paid – Provisional (34,600) (20,876)
Indirect and corporate taxes1 (89,560) (59,100)
Other current assets2 (10,774) 695
Trade receivables 745 (4,472)
Inventories3 (172,180) (8,312)
Other liabilities4 (7,301) 33,582
Share-based payments4 (1,780) (35,966)
Trade and other payables5 (31,170) 15,931
Other working capital items6 (1,071) (855)
Total (313,091) (58,497)
1  During the year, we have made US$34.6 million (2016: US$20.0 million) corporate tax provisional payments as well as US$3.3 million final corporate tax payments relating
to North Mara’s 2016 tax assessment. This has been funded through an offset against current indirect taxes that was due for refund.
2 Other current assets include North Mara corporate tax deposits paid of US$9.5 million.
3 The inventory adjustment includes the movement in current as well as the non-current portion of inventory.
4 The other liabilities adjustment mainly relates to the revaluation of future share-based payments. During the year, share-based payments of US$1.8 million
(2016: US$36.0 million) were made.
5 The trade and other payables adjustment exclude statutory liabilities in the form of income tax payable.
6 Other working capital items include exchange losses associated with working capital.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 135

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

15. Cash flow – other items continued

Other non-cash items
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Adjustments for non-cash income statement items:
Foreign exchange losses/(gains) 2,900 (1,463)
Discounting of indirect tax receivables 13,276 (9,719)
Provisions added 7,550 –
Provisions settled – (8)
Movement in derivatives (1,495) (13,031)
Share option expense 27 77
Other non-cash items 92 36
Exchange loss on revaluation of cash balances (190) 258
Total 22,160 (23,850)

b) Investing cash flows – other items

For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Proceeds on sale of property, plant and equipment – 6,713
Other long-term receivables 194 (10)
Rehabilitation expenditure (3,106) (175)
Total (2,912) 6,528

c) Financing cash flows – Net cash reconciliation

Cash and cash Borrowings due Borrowings due

(in thousands of United States dollars) equivalents within 1 year after 1 year Total
Net cash as at 1 January 2016 233,268 (28,400) (99,400) 105,468
Cash flows 84,781 – 28,400 113,181
Net foreign exchange difference (258) – – (258)
Net cash as at 31 December 2016 317,791 (28,400) (71,000) 218,391
Cash flows (237,468) – 28,400 (209,068)
Net foreign exchange difference 190 – – 190
Net cash as at 31 December 2017 80,513 (28,400) (42,600) 9,513

16. Inventories
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016

Ore in stockpiles 22,253 8,269

Mine operating supplies1 117,946 143,610
Gold in process 5,103 10,534
Finished products:
Gold doré/bullion 7,078 8,692
Gold, copper and silver concentrate 139,500 13,208
Total current portion of inventory 291,880 184,313
Non-current ore in stockpiles2 133,550 98,936
Total 425,430 283,249
1 Mine operating supplies for 2017 includes the impairment of US$30.0 million relating to Bulyanhulu, Refer to Note 6 for further details.
2 Gold, copper and silver concentrate on hand relate to finished products at Bulyanhulu (US$88.5 million) and Buzwagi (US$51.0 million) due to the inability to export
concentrate since March 2017.

The cost of inventories recognised as an expense and included in the cost of sales amounts to US$132.2 million relating to consumables, fuel and
lubricants and credits of US$140.9 million relating to changes in gold inventory (2016: US$157.4 million and credit of US$17.9 million respectively).

136 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

17. Trade and other receivables and other current assets
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Trade and other receivables:
Amounts due from doré and concentrate sales 18 7,841
Amounts due from realised gains on gold put options 1,356 –
Amounts due from royalty income 1,453 –
Other receivables¹ 16,156 12,023
Due from related parties 40 40
Less: Provision for doubtful debt on other receivables (938) (1,074)
Total 18,085 18,830
1 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.
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Other current assets:
Current portion of indirect tax receivables2 38,285 128,423
Other receivables and advance payments3 31,870 21,095
Total 70,155 149,518
2 The current portion of indirect tax receivables includes an amount of US$31.4 million relating to North Mara as it is expected that the current portion will be recovered through
offsets against corporate income tax, as agreed under the MOS entered into in 2012, within the next year.
3 Other receivables and advance payments mainly relate to prepayments for insurance US$9.4 million (2016: US$6.5 million), corporate tax deposit paid at North Mara US$9.5
million and current amounts receivable from the NSSF of US$4.8 million (2016: US$5.0 million).

18. Cash and cash equivalents

As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Cash at bank and on hand 65,246 123,041
Money market funds 15,267 194,750
Total 80,513 317,791

FINANCIAL STATEMENTS

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 137

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

19. Property, plant and equipment

Mineral
properties
and mine
For the year ended 31 December 2017 Plant and development Assets under
(in thousands of United States dollars) equipment costs construction¹ Total
At 1 January 2017, net of accumulated depreciation and impairment 553,993 842,019 47,164 1,443,176
Additions – – 147,739 147,739
Non-cash reclamation asset adjustments (9,087) – – (9,087)
Foreign currency translation adjustments 1,212 – – 1,212
Disposals/write-downs (123) – – (123)
Impairment2 (274,608) (411,767) – (686,375)
Depreciation (71,984) (53,984) – (125,968)
Transfers between categories 46,165 109,791 (155,956) –
At 31 December 2017 245,568 486,059 38,947 770,574

At 1 January 2017
Cost 1,914,522 1,777,277 47,164 3,738,963
Accumulated depreciation and impairment (1,360,529) (935,258) – (2,295,787)
Net carrying amount 553,993 842,019 47,164 1,443,176

At 31 December 2017
Cost 1,943,643 1,887,068 38,947 3,869,658
Accumulated depreciation and impairment (1,698,075) (1,401,009) – (3,099,084)
Net carrying amount 245,568 486,059 38,947 770,574

Mineral
properties
and mine
For the year ended 31 December 2016 Plant and development Assets under
(in thousands of United States dollars) equipment costs construction¹ Total
At 1 January 2016, net of accumulated depreciation and impairment 572,877 761,592 56,244 1,390,713
Additions – – 191,139 191,139
Non-cash reclamation asset adjustments 21,955 – – 21,955
Foreign currency translation adjustments 2,203 – – 2,203
Disposals/write-downs (6,533) – – (6,533)
Depreciation (95,864) (60,437) – (156,301)
Transfers between categories 59,355 140,864 (200,219) –
At 31 December 2016 553,993 842,019 47,164 1,443,176

At 1 January 2016
Cost 1,845,234 1,636,413 56,244 3,537,891
Accumulated depreciation and impairment (1,272,357) (874,821) – (2,147,178)
Net carrying amount 572,877 761,592 56,244 1,390,713

At 31 December 2016
Cost 1,914,522 1,777,277 47,164 3,738,963
Accumulated depreciation and impairment (1,360,529) (935,258) – (2,295,787)
Net carrying amount 553,993 842,019 47,164 1,443,176
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 2017 relates to property, plant and equipment at Bulyanhulu. Refer to note 6 for further details.

138 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

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 also includes five drill rigs purchased under short-term finance leases.
The following amounts were included in property, plant and equipment where the Group was a lessee under a finance lease:
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Cost – capitalised finance leases 51,618 51,617
Accumulated depreciation and impairment (42,948) (40,925)
Net carrying amount 8,670 10,692

20. Goodwill and intangible assets

Acquired
exploration and
For the year ended 31 December 2017 evaluation
(in thousands of United States dollars) Goodwill properties1 Total
At 1 January, net of accumulated impairment 127,898 88,292 216,190
Impairment2 (121,546) (12,261) (133,807)
At 31 December 2017 6,352 76,031 82,383

At 31 December 2017
Cost 401,250 112,842 514,092
Accumulated impairment (394,898) (36,811) (431,709)
Net carrying amount 6,352 76,031 82,383
Acquired
exploration and
For the year ended 31 December 2016 evaluation
(in thousands of United States dollars) Goodwill properties1 Total
At 1 January, net of accumulated impairment 127,898 83,292 211,190
Additions3 – 5,000 5,000
At 31 December 2016 127,898 88,292 216,190

At 31 December 2016
Cost 401,250 112,842 514,092
Accumulated impairment (273,352) (24,550) (297,902)

FINANCIAL STATEMENTS
Net carrying amount 127,898 88,292 216,190
1 Exploration and evaluation assets classified as intangible assets have indefinite useful lives.
2 Impairments recognised in 2017 relate to goodwill in Bulyanhulu (US$121.5 million) and the Nyanzaga exploration property located in Tanzania (US$12.3 million). Refer to Note 6
for further detail.
3 Additions for 2016 relate to the acquisition of the remaining interests in the West Kenya Project.

Goodwill and accumulated impairment losses by operating segments:

For the year ended 31 December 2017
(in thousands of United States dollars) North Mara Bulyanhulu Other Total
At 1 January 2017 – 121,546 6,352 127,898
At 31 December 2017 – – 6,352 6,352
Cost 237,524 121,546 42,180 401,250
Accumulated impairments (237,524) (121,546) (35,828) (394,898)

For the year ended 31 December 2016

(in thousands of United States dollars) North Mara Bulyanhulu Other Total
At 1 January 2016 – 121,546 6,352 127,898
At 31 December 2016 – 121,546 6,352 127,898
Cost 237,524 121,546 42,180 401,250
Accumulated impairments (237,524) – (35,828) (273,352)

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 139

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

21. Deferred tax assets and liabilities

Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Tax losses 599,569 648,984
Total 599,569 648,984

The above tax losses, which translate into deferred tax assets of approximately US$165 million (2016: US$184 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 classification Assets Liabilities Net
(in thousands of United States dollars) 2017 2016 2017 2016 2017 2016
Property, plant and equipment – – 196,921 390,050 196,921 390,050
Provisions (8,293) (4,456) – – (8,293) (4,456)
Interest deferrals (59) (479) 542 – 483 (479)
Tusker acquisition – – 6,235 6,354 6,235 6,354
Tax loss carry-forwards (265,326) (251,510) – – (265,326) (251,510)
Net deferred tax (assets)/liabilities (273,678) (256,445) 203,698 396,404 (69,980) 139,959

Legal entities Assets Liabilities Net

(in thousands of United States dollars) 2017 2016 2017 2016 2017 2016
North Mara Gold Mine Ltd – – 91,321 77,529 91,321 77,529
Bulyanhulu Gold Mine Ltd (160,600) – – 64,539 (160,600) 64,539
Pangea Minerals Ltd (8,258) (7,504) – – (8,258) (7,504)
Other (655) (927) 8,212 6,322 7,557 5,395
Net deferred tax (assets)/liabilities (169,513) (8,431) 99,533 148,390 (69,980) 139,959

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$412 million (2016: US$411 million).
22. Other assets
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Amounts due from Government1 11,629 11,748
Operating lease prepayments – TANESCO powerlines 374 809
Prepayments – Acquisition of rights over leasehold land2 35,948 42,250
Non-current portion of indirect tax receivable3 132,405 7,945
Village housing 151 254
Deferred finance charges 201 291
Total 180,708 63,297
1 Included in this amount are amounts receivable from the NSSF of US$6.7 million (2016: US$5.4 million) as well as amounts due from TANESCO of US$1.0 million
(2016: US$3.1 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 indirect tax receivables was subject to discounting to its current value using a discount rate of 6.5% (2016: 5%). This resulted in a discounting debit
of US$13.3 million (2016: US$9.7 million credit) to the income statement (refer to Note 8).

140 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

23. Share capital and share premium
Share capital Share premium
Number £’000 US$’000 US$’000
At 1 January 2016 410,085,499 41,009 62,097 867,102
At 31 December 2016 410,085,499 41,009 62,097 867,102
At 31 December 2017 410,085,499 41,009 62,097 867,102

The nominal value of each Ordinary Share is 10 pence. No share movements have taken place in the current year.
24. Share-based compensation
a) Share options are granted to Executive Directors and to selected employees. The exercise price of the granted options is determined by the
Compensation Committee before the grant of an option provided that this price cannot be less than the average of the middle-market quotation
of such shares (as derived from the London Stock Exchange Daily Official List) for the three dealing days immediately preceding the date of grant.
All options outstanding at the end of the year ending 31 December 2017 expire in November 2018. 137,701 of the options granted were exercisable
at 31 December 2017. The vesting period of the options is four years, with an exercise period of seven years from the date of grant.
A new class of zero cost options were granted to the Executive Leadership in April 2017 however these are expected to be cash settled and have
therefore been included as part of the Employee share-based liability. Refer to section e) overleaf.
Movements in the number of options outstanding and their related weighted average exercise prices are reflected in pence as follows:

2017 2016
Average Average
exercise price exercise price
in pence in pence
For the year ended 31 December per share Options per share Options
At 1 January 295 1,328,989 332 1,602,113
Forfeited – – 513 (273,124)
Expired 539 (349,980) – –
Exercised 160 (841,308) – –
At 31 December 497 137,701 295 1,328,989

No equity-settled share options were granted during the year.

b) LTIP – Restricted Share Units
Included in other non-current liabilities are RSUs with a fair value of US$2.4 million as at 31 December 2017 (2016: US$2.8 million).
Number of Fair value
(in thousands of United States dollars) RSUs US$’000
At 1 January 2016 2,055,279 2,231
Settled for cash (849,958) (4,149)
Forfeited (444,430) (556)
Granted 720,291 609
Credits for dividends 20,777 35

FINANCIAL STATEMENTS
Change in value – 4,660
At 31 December 2016 1,501,959 2,830
Settled for cash (584,898) (847)
Forfeited (118,058) (404)
Granted 486,981 215
Credits for dividends 24,309 20
Change in value – 627
At 31 December 2017 1,310,293 2,441

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 141

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

24. Share-based compensation continued

c) LTIP – Performance Restricted Share Units (“PRSUs”)
Included in other non-current liabilities are PRSUs with a fair value of US$0.6 million as at 31 December 2017 (2016: US$8.4 million).
Number of Fair value
(in thousands of United States dollars) PRSUs US$’000
At 1 January 2016 4,012,239 11,811
Settled for cash (2,455,499) (28,291)
Forfeited (525,007) (234)
Granted 3,053,622 4,725
Credits for dividends 51,111 200
Change in value – 20,217
At 31 December 2016 4,136,466 8,428
Settled for cash (218,728) –
Forfeited (2,214,007) –
Granted 923,481 –
Credits for dividends 39,408 –
Change in value – (7,801)
At 31 December 2017 2,666,620 627

d) LTIP – Deferred Share Units

Included in other non-current liabilities are DSUs with a fair value of US$0.2 million as at 31 December 2017 (2016: US$1.1 million).
Number of Fair value
(in thousands of United States dollars) DSUs US$’000
At 1 January 2016 326,359 717
Settled for cash (80,369) (460)
Credits for dividends 2,218 6
Change in value – 854
At 31 December 2016 248,208 1,117
Settled for cash (167,964) (810)
Credits for dividends 3,723 10
Change in value – (91)
At 31 December 2017 83,967 226

e) LTIP – Zero Cost Options

A new class of zero cost options was granted to the Executive Leadership in April 2017. No zero cost options included in other non-current liabilities
as at 31 December 2017 due to the fair value being nil.
Number Fair value
(in thousands of United States dollars) of options US$’000
At 31 December 2016 – –
Granted 1,733,585 –
Forfeited (1,117,983) –
At 31 December 2017 615,602 –

25. Trade and other payables

As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Trade payables 62,610 84,294
Income tax payable 11,442 13,632
Accrued expenses 40,958 54,344
Payroll-related payables 12,185 20,182
Royalty payable 988 1,114
Provision for uncertain tax positions1 206,912 34,912
Trade payables to related parties 15,355 14,065
Total 350,450 222,543
1 Included in the 2017 amount are provisions raised for uncertain tax positions of US$68.5 million relating to North Mara and US$103.5 million relating to Bulyanhulu, based on
an estimate of the impact of a comprehensive settlement reflecting the key terms of the framework announcements made by Barrick and the GoT in October 2017. Included in the
amount for 2016 are accruals raised for uncertain tax positions in order to address the direct impact of the ruling on historic tax assessments and the potential impact this may
have on the applicability of certain deductions for prior years at North Mara and Tulawaka (US$34.8 million).

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables
are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

142 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Terms and conditions of the opposite payables liabilities:
Trade payables are non-interest bearing and are normally settled on 30-day of statement terms
Accruals and other payables are non-interest bearing and have an average term of 30–60 days.
26. 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. In common with borrowing agreements of this nature the facility includes various covenants as well as material adverse effect clauses.
The interest rate has been fixed at 3.6% through the use of an interest rate swap. The seven 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 during 2017 two payments of US$14.2 million were paid. As at 31 December 2017 the balance
owing was US$71.0 million (2016: US$99.4 million). Interest accrued to the value of US$0.5 million (2016: US$0.6 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 2017
was US$2.9 million (2016: US$4.0 million).
27. Provisions
Rehabilitation¹ Other² Total
(in thousands of United States dollars) 2017 2016 2017 2016 2017 2016
At 1 January 152,205 128,170 752 761 152,957 128,931
Change in estimate (9,087) 21,956 – – (9,087) 21,956
Utilised during the year (3,106) (175) – (9) (3,106) (184)
Unwinding of discount 3,364 2,254 – – 3,364 2,254
Additions – – 7,550 – 7,550 –
At 31 December 143,376 152,205 8,302 752 151,678 152,957
Current portion (16,348) (6,483) (8,302) (752) (24,650) (7,235)
Non-current portion 127,028 145,722 – – 127,028 145,722
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 2018 and 2041 and beyond, varying from mine site to mine site. The change in
estimate in the current year relates mainly to deferrals in estimated cash flows resulting in a lower net present value combined with slight changes in US risk free rates driving
a change in discount rate.
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 US$3.9 million (2016: US$0.7 million) as well as severance provisions mainly at Bulyanhulu as part of the reduced operations and redundancies at Buzwagi
due to mining activities coming to an end (US$4.4 million).

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 dump closure/rehabilitation; surface contouring; demolition of buildings/mine
facilities; on-going water treatment; and on-going 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 life of mine plan; changing ore characteristics that impact required

FINANCIAL STATEMENTS
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.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 143

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

28. Other liabilities

As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Employee benefit share-based liabilities 3,294 12,375
Other 3,459 3,472
Total 6,753 15,847
Current portion 1,715 148
Non-current portion 5,038 15,699

29. Financial assets and liabilities

a) Financial assets
Carrying value as at 31 December Fair value as at 31 December
(in thousands of United States dollars) 2017 2016 2017 2016
Cash and cash equivalents 80,513 317,791 80,513 317,791
Trade and other receivables 18,085 18,830 18,085 18,830
Derivative financial instruments 3,526 2,164 3,526 2,164
Total other assets excluding prepayments1 204,576 160,942 204,576 160,942
Total financial assets 306,700 499,727 306,700 499,727
Less: Current financial assets
Cash and cash equivalents (80,513) (317,791) (80,513) (317,791)
Trade and other receivables (18,085) (18,830) (18,085) (18,830)
Derivative financial instruments (2,619) (1,343) (2,619) (1,343)
Other current assets excluding prepayments (60,760) (142,981) (60,760) (142,981)
Total other non-current financial assets 144,723 18,782 144,723 18,782
1 Prepayments are excluded from other assets in the analysis as they are not a financial instrument.

The fair value of financial assets, excluding other assets, equals their carrying amount as the impact of discounting is not significant. Included in
other assets are indirect tax receivables from the Tanzanian Revenue Authority, which were subject to discounting; refer to note 22.

As at 31 December 2017
Assets at fair Derivatives
Loans and value through used for
(in thousands of United States dollars) receivables profit and loss hedging Total
Assets as per balance sheet:
Cash and cash equivalents 80,513 – – 80,513
Trade and other receivables 18,085 – – 18,085
Derivative financial instruments – 2,328 1,198 3,526
Other assets excluding prepayments 204,576 – – 204,576
Total financial assets 303,174 2,328 1,198 306,700

As at 31 December 2016
Assets at fair Derivatives
Loans and value through used for
(in thousands of United States dollars) receivables profit and loss hedging Total
Assets as per balance sheet:
Cash and cash equivalents 317,791 – – 317,791
Trade and other receivables 18,830 – – 18,830
Derivative financial instruments – 1,876 288 2,164
Other assets excluding prepayments 160,942 – – 160,942
Total financial assets 497,563 1,876 288 499,727

144 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

b) Financial liabilities
Carrying value as at 31 December Fair value as at 31 December
(in thousands of United States dollars) 2017 2016 2017 2016
Derivative financial instruments 481 614 481 614
Trade and other payables 350,450 222,543 350,450 222,543
Other liabilities 6,753 15,847 6,753 15,847
Borrowings 71,000 99,400 71,000 99,400
Total 428,684 338,404 428,684 338,404
Less: Current financial assets
Derivative financial instruments (481) (584) (481) (584)
Trade and other payables (350,450) (222,543) (350,450) (222,543)
Other current liabilities (1,715) (148) (1,715) (148)
Borrowings (28,400) (28,400) (28,400) (28,400)
Total non-current portion of financial liabilities 47,638 86,729 47,638 86,729

Other liabilities relate to cash-settled share-based plans and their valuation is based on unadjusted quoted prices in active markets for identical
financial instruments. Also included in other liabilities are the finance lease liabilities and their valuation is based on observable market data.
Derivative financial instruments are valued based upon inputs that are observable for the financial instruments which includes quoted prices
for similar instruments or identical instruments in markets which are not considered to be active or either directly or indirectly based on observable
market data.
As at 31 December 2017
Liabilities at fair Derivatives Other financial
value through used for liabilities at
(in thousands of United States dollars) profit and loss hedging amortised cost Total
Liabilities as per balance sheet:
Derivative financial instruments – 481 – 481
Trade and other payables – – 350,450 350,450
Other liabilities – – 6,753 6,753
Borrowings – – 71,000 71,000
Total financial liabilities – 481 428,203 428,684
As at 31 December 2016
Liabilities at fair Derivatives Other financial
value through used for liabilities at
(in thousands of United States dollars) profit and loss hedging amortised cost Total
Liabilities as per balance sheet:
Derivative financial instruments 541 73 – 614
Trade and other payables – – 222,543 222,543
Other liabilities – – 15,847 15,847
Borrowings – – 99,400 99,400

FINANCIAL STATEMENTS
Total financial liabilities 541 73 337,790 338,404
In common with borrowing agreements of this nature the facility includes various covenants as well as material adverse effect clauses.

Revolving credit facility

The Group has a revolving credit facility in place for a maximum aggregate amount of US$150 million, which was negotiated on 24 November 2010
with a syndicate of commercial banks, led by Citibank. The facility has been provided to service the general corporate needs of the Group and to
fund potential acquisitions. All provisions contained in the credit facility documentation have been negotiated on normal commercial and customary
terms for such finance arrangements and when drawn the spread over LIBOR will be 350 basis points. During 2016, the term of the facility was
successfully extended to 2019 at a maximum aggregate amount of US$150 million. At 31 December 2017, none of the funds were drawn under
the facility. The shares of all significant subsidiaries have been pledged as security for the loan. Costs associated with the revolving credit facility
have been included in finance expenses. In common with borrowing agreements of this nature the facility includes various covenants as well as
material adverse effect clauses.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 145

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

30. Derivative financial instruments

The tables below analyse 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 2017 and 31 December 2016.
For the year ended 31 December 2017 Assets Liabilities
(in thousands of United States dollars) Current Non-current Current Non-current
Interest contracts: Designated as cash flow hedges 531 667 481 –
Commodity contracts: Not designated as accounting hedges 2,088 240 – –
Total 2,619 907 481 –

For the year ended 31 December 2016 Assets Liabilities

(in thousands of United States dollars) Current Non-current Current Non-current
Interest contracts: Designated as cash flow hedges 33 255 73 –
Commodity contracts: Not designated as accounting hedges 1,310 566 511 30
Total 1,343 821 584 30

31. Financial risk management

The Group has exposure to the following risks through its commercial and financial operations:
a) market risk, including commodity price, foreign currency and interest rate risks;
b) credit risk; and
c) liquidity risk.
This note presents information about the Group’s exposure to each of the above risks and the Group’s objectives, policies and processes for
assessing and managing risk. Further quantitative disclosures are included throughout the financial statements.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls,
and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions
and the Group’s activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and
constructive control environment in which all employees understand their roles and obligations.
The Board of Directors has responsibility for overseeing how management monitors compliance with the Group’s risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is assisted
in its oversight role by internal audit which undertakes both regular and ad hoc reviews of risk management controls and procedures, the results
of which are reported to the Audit Committee.
a) Market risk, including commodity price, foreign currency and interest rate risks
Market risk is the risk that changes in market factors, such as commodity prices, foreign exchange rates or interest rates, will affect the Group’s
income or the value of its financial instruments.
Gold price
The market price of gold is one of the most significant factors in determining the profitability of the Group’s operations. The price of gold is subject
to volatile price movements over short periods of time, especially in the current market environment, and is affected by numerous industry and
macro-economic factors that are beyond the Group’s control. In 2017 the price ranged from US$1,159 to US$1,346 per ounce, with an average
market price of US$1,257 per ounce (2016: US$1,251 per ounce). The Group’s policy is to sell gold at prevailing market prices.
During 2017, the Group hedged 75% of North Mara and Buzwagi production for September – December 2017 and 75% for January – February 2018
to protect the downside price risk and mitigate cash outflows. This accounted for approximately 18% of the Group’s overall production in 2017.
The Group added 210,000 ounces of gold put contracts with an average strike price of US$1,300 per ounce for 2017 and 2018. At 31 December
2017, the Group had 70,000 ounces of gold put contracts outstanding that will mature in 2018 at a strike price of US$1,300 per ounce. These
transactions are economic hedges and do not qualify for hedge accounting treatment. Changes in the fair value of these options are recorded as
a component of other income/expense in the income statement.

146 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

31. Financial risk management continued
The table below summarises the impact of changes in the market price on gold. The impact is expressed in terms of the resulting change in the
Group’s profit after tax for the year or, where applicable, the change in equity. The sensitivities are based on the assumption that the market
price changes by 10% with all other variables held constant. The impact of a similar change in copper and silver is not material to the Group’s
loss after tax.
Effect on profit after tax
For the For the
year ended year ended
Gain associated with 10% increase from year-end price 31 December 31 December
(in thousands of United States dollars) 2017 2016
Gold 48,453 68,172

Co-product prices
In 2017, the copper price ranged from US$2.48 to US$3.27 per pound, with an average market price of US$2.80 per pound (2016: US$2.21 per
pound) and closing at US$3.25 per pound.
In 2017, the silver price ranged from US$15 to US$19 per ounce, with an average market price of US$17 per ounce (2016: US$17 per ounce).
The Group did not add any further copper contracts for calendar year 2017 and did not have any contracts outstanding as at 31 December 2017.
During the year, the Group had 12.9 million pounds collar contracts with an average floor price of US$2.30 per pound and ceiling of US$2.78 per
pound respectively that matured (2016: nil).
These transactions are economic hedges and do not qualify for hedge accounting treatment. Changes in the fair value of these options are recorded
as a component of other income/expense in the income statement.
Oil price
Diesel fuel is refined from crude oil and is therefore subject to the same price volatility affecting crude oil prices. The Group enters into Brent oil
option contracts to manage the impact of oil price fluctuations. In 2017, oil prices traded between US$45 and US$67 per barrel with an average
market price of US$55 (2016: US$45 per barrel).
The table below summarises the impact of changes in the market prices of crude oil. The impact is expressed in terms of the resulting change
in the Group’s profit after tax for the year ended 31 December 2017. The sensitivities are based on the assumption that the market price changes
by US$10 per barrel with all other variables held constant. The effect on profit after tax (before hedging) is calculated based on actual consumption
for the year and does not address the indirect impact of a change in the oil price on other costs.
Effect on profit after tax
For the For the
year ended year ended
Gain/loss associated with US$10 decrease/increase from year-end price 31 December 31 December
(in thousands of United States dollars) 2017 2016
Oil 2,571 3,313

The Group did not add any further Brent oil collar contracts for calendar year 2017. At 31 December 2017, the Group had a total 206,000 barrels of
Brent crude oil net purchase options outstanding. These contracts mature in 2018 and 2019 consisting of sold put options with average strike prices
of US$36 per barrel and US$40 per barrel respectively and bought call options with average strike prices of US$71 per barrel and US$66 per barrel

FINANCIAL STATEMENTS
respectively. During the year, the Group added 79,000 barrels of Brent oil collar contracts for calendar years 2018 and 2019.
These contracts are treated as accounting hedges in accordance with IAS 39. Hedged items are identified as the first stated quantity of forecasted
consumption purchased in a future month. Hedge effectiveness is assessed using linear regression utilising the concept of the hypothetical derivative
method. The effective portion of changes in intrinsic value of the commodity contracts is recorded in other comprehensive income until the forecasted
expenditure impacts earnings. These hedges did not qualify for hedge accounting treatment as a result of not meeting the hedge effectiveness criteria.
Changes in the fair value of these options were therefore recorded as a component of other income/expense in the income statement.
Risks relating to the use of derivatives
By using derivatives, in addition to credit risk, we are affected by market risk. Market risk is the risk that the fair value of a derivative might be
adversely affected by a change in commodity prices, interest rates, or currency exchange rates, and that this in turn affects our financial condition.
We manage market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.
Foreign currency risk
The Group’s transactions are denominated in a number of different currencies (primarily US dollars, Tanzanian shillings (“shillings”), South African
rands (“rands”), UK pounds sterling (“pounds”) and Australian dollars. The Group has liabilities that are primarily denominated in US dollars.
The US dollar is the Company’s (and its subsidiaries’) functional currency, as well as the Group’s presentation currency. Therefore, transactions
in currencies other than the US dollar give rise to foreign currency translation risk. The Group’s primary exposure to this risk arises from direct
mine operating costs and corporate administration costs that are transacted in shillings and rands, respectively. Consequently, fluctuations in
the US dollar/shilling/rand exchange rates increase the volatility of cost of sales, corporate administration costs and overall net earnings, which
are reported in US dollars. The vast majority of all direct mining costs and corporate administration costs are denominated and settled in US dollars.
Consequently, the effect of foreign exchange fluctuations on the Group’s reported direct mining and corporate administration costs is not significant.
The exchange rates at the end of each financial year are detailed in note 2g.
Historically, the relationship between the gold price and the value of the shilling and rand provide a natural hedge against fluctuations in the exchange
rate of these currencies against the US dollar. Generally, a strengthening of the shilling/rand, which would cause an increase in reported US dollar
operating costs, corresponds with an increase in the US dollar gold price, which results in an increase in reported US dollar revenues.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 147

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

31. Financial risk management continued

The Group does have significant financial assets denominated in a currency other than US dollars. These financial assets are as follow:
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Indirect tax receivables (denominated in Tanzanian shillings) 170,690 136,368
Total 170,690 136,368

The following sensitivity analyses give the estimated effect of a reasonably possible change in the full year closing US dollar exchange rate on the
value of the financial assets.
Effect on profit after tax
For the For the
year ended year ended
Increase/(decrease) associated with 10% change of the US dollar 31 December 31 December
(in thousands of United States dollars) 2017 2016
US dollar strengthens by 10% to the Tanzanian shilling
Increase in total indirect tax receivables 18,966 15,152
US dollar weakens by 10% to the Tanzanian shilling
Decrease in total indirect tax receivables (15,517) (12,397)

Interest rate risk

Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instruments will fluctuate due to changes
in market interest rates. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose
the Group to fair value interest rate risk. The Group is also exposed to interest rate risk on its cash and cash equivalents.
At present, available funds are held with financial institutions at variable rates and primarily denominated in US dollars; interest income is not
materially affected by changes in short-term interest rates. During 2013, the Group entered into an Export Credit Insurance Company (“ECIC”) backed
seven-year term loan facility of US$142 million to fund the construction of the CIL Process plant at Bulyanhulu. The first principal payment of US$14.2
million was paid in H2 2015 and during 2017 two payments of US$14.2 million were paid. As at 31 December 2017 the balance owing was US$71.0
million (2016: US$99.4 million). Interest is payable on the loan at LIBOR plus 250 basis points. The revolving credit facility’s spread over LIBOR will
be 350 basis points. Group debt levels are impacted by the amount of operating cash flow generated by its operating mines, as well as capital
expenditure requirements related to existing operations and development projects.
In 2013, the Group entered into interest rate swap contracts to hedge the interest on the ECIC backed loan for the Bulyanhulu CIL Process plant. The
terms of the interest rate swap contracts fix this at 3.59% versus the floating rate of LIBOR plus 2.50%. These contracts are treated as accounting
hedges in accordance with IAS 39. Hedged items are identified as the first stated quantity of rand spent during the month. Hedge effectiveness
is assessed using linear regression utilising the concept of the hypothetical derivative method. The effective portion of changes in intrinsic value
of the currency contracts is recorded in other comprehensive income until the forecasted expenditure occurs. These gains or losses have been
included as part of interest expense in the income statement.
b) Credit risk
Credit risk is the risk that a third party might fail to fulfil its performance obligations under the terms of a financial instrument. For cash and cash
equivalents and trade and other receivables, credit risk represents the carrying amount on the balance sheet, net of any overdraft positions.
Credit risk arises from cash and cash equivalents, and deposits with banks, as well as trade and other receivables. The Group’s financial assets
are held with counterparties who the Group considers have an appropriate credit rating. Location of credit risk is determined by physical location
of the bank branch, customer or counterparty. The maximum allowable term to maturity for any individual security is three months. Investment
counterparties must have a credit rating of at least “Baa1” or better by Moody’s Investor Services or “BBB+” by Standard and Poor’s. No more than
25% of the aggregate market value of the investment portfolio is maintained in any one country, with the exception of the United States of America or
the United Kingdom, or in any one industry group. Investments are primarily held in United States dollars. Cash and cash equivalents in other foreign
currencies are maintained for operational requirements. As at 31 December 2017 the Group has money market and short-term investments of
US$14.7 million (2016: US$194.7 million). All of the funds have at least a “BBB+” rating from Standard and Poor’s. The Group also has US$65.7
million (2016: US$122.9 million) of cash on hand with banks with credit ratings ranging from “A-1” to “A-2”.
With respect to other receivables, the most significant debtor is the Tanzanian Revenue Authority (“TRA”). Following the abolishment of Government
Notices regarding VAT relief and fuel duty exemption for mining companies in 2009, Acacia signed a Memorandum of Settlement during 2011 with
the TRA to address the treatment of certain outstanding indirect tax refunds in respect of fuel levies and VAT that allows Acacia to offset income
tax payable against outstanding VAT and fuel levy refunds as it becomes payable. Also, the Minister of Finance reinstated VAT relief and the fuel
exemption followed by an agreement to allow for an escrow facility in respect of fuel and road levies. Again through the Finance Act, 2012 issued
on 19 October 2012, VAT relief was abolished. Throughout the past three years, Acacia has been actively involved in discussions with the Tanzanian
Government and the TRA to resolve the issue. The amendments conflict with certain provisions contained in the Group’s existing Mineral
Development Agreements (“MDAs”) which guarantee the fiscal stability of its operations. As part of a short-term solution, the Government during
the third quarter of 2013, agreed to an escrow arrangement on VAT in relation to imported goods and services, whereby funds are restricted to
the repayment of VAT refunds. As at 31 December 2017, the discounted amounts due to the Group were approximately US$170.7 million (2016:
US$136.4 million). We received no direct refunds during 2017 (2016: US$43 million). Provisional and final corporate tax payments offset against
indirect taxes receivable amounted to US$37.9 million (2016: US$20 million) during the year under review.

148 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Group policies are aimed at minimising losses as a result of a counterparty’s failure to honour its obligations. Individual exposures are monitored
with trade customers subject to credit limits to ensure that the Group’s exposure to bad debts is not significant. The Group’s exposure to credit risk
is influenced mainly by the individual characteristics of each of the counterparties. The Group’s financial assets are with counterparties who the
Group considers have an appropriate credit rating. During the year, receivables to the value of approximately US$27 million (2016: US$135 million)
were advanced by a financial institution under two factoring agreements for two concentrate counterparties. Three agreements reduce the risk of
default of receivables.
Maximum exposure to credit risk at each reporting date is the carrying value of each class of financial assets described in note 29. The Group does
not hold collateral as security for any trade receivables. The Group does not grade the credit quality of receivables.
c) Liquidity risk
Liquidity risk is the risk of loss from not having access to sufficient funds to meet both expected and unexpected cash demands. The Group
manages its exposure to liquidity risk by ensuring that its operating and strategic liquidity levels are well above minimum internal requirements.
Prudent liquidity risk management includes maintaining sufficient cash balances, and the availability of funding from an adequate amount of
committed credit facilities. At the end of both 2017 and 2016 the Group was in a positive net cash position, as disclosed in note 18. Details
of the undrawn revolving credit facility are given in note 29.
In the ordinary course of business, the Group receives cash proceeds from its operations and is required to fund working capital and capital
expenditure requirements. The cash is managed to ensure surplus funds are invested to maximise returns while ensuring that capital is safeguarded
to the maximum extent possible by investing only with financial institutions with a strong credit rating. Insignificant uncommitted overdraft facilities
are maintained with several banking counterparties to meet the Group’s normal funding requirements. The Group’s primary source of liquidity is
operating cash flow, and over the past three years the Group has generated an average of about US$150 million per year. The principal risk factor
affecting operating cash flow is market gold prices.
The principal uses of liquidity are sustaining capital expenditures at existing operating mines, construction activities at development projects, and
interest payments. Sustaining capital expenditures, including capitalised development costs, have averaged about US$172 million per year over the
past two years. The following table outlines the expected maturity of the Group’s significant financial assets into relevant maturity groupings based
on the remaining period from the balance sheet date to the contractual maturity date. As the amounts disclosed in the table are the contractual
undiscounted cash flows, these balances may not agree with the amounts disclosed in the balance sheet.
For the year ended 31 December 2017
(in thousands of United States dollars) Less than 1 year 1 to 3 years 3 to 5 years Over 5 years Total
Cash and cash equivalents 80,513 – – – 80,513
Accounts receivable 18,085 – – – 18,085
Derivative financial instruments 2,619 907 – – 3,526
Other assets excluding prepayments1 60,760 157,092 – – 217,852
Total 161,977 157,999 – – 319,976

For the year ended 31 December 2016

(in thousands of United States dollars) Less than 1 year 1 to 3 years 3 to 5 years Over 5 years Total
Cash and cash equivalents 317,791 – – – 317,791
Accounts receivable 18,830 – – – 18,830
Derivative financial instruments 1,343 821 – – 2,164
Other assets excluding prepayments1 142,981 17,961 – – 160,942

FINANCIAL STATEMENTS
Total 480,945 18,782 – – 499,727
1 Prepayments are excluded from other assets in the analysis as they are not a financial instrument. Included in the balance for years 1 to 3 is the discounting impact of indirect
taxes receivable amountingamounting to US$13.3 million.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 149

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

31. Financial risk management continued

The following table outlines the expected maturity of the Group’s significant financial liabilities into relevant maturity groupings based on the
remaining period from the balance sheet date to the contractual maturity date. As the amounts disclosed in the table are the contractual
undiscounted cash flows, these balances may not agree with the amounts disclosed in the balance sheet.

For the year ended 31 December 2017

(in thousands of United States dollars) Less than 1 year 1 to 3 years 3 to 5 years Over 5 years Total
Derivative financial instruments 481 – – – 481
Other liabilities 1,715 1,566 3,472 – 6,753
Trade and other payables1 132,096 – – – 132,096
Borrowings 28,400 42,600 – – 71,000
Total 162,692 44,166 3,472 – 210,330

For the year ended 31 December 2016

(in thousands of United States dollars) Less than 1 year 1 to 3 years 3 to 5 years Over 5 years Total
Derivative financial instruments 584 30 – – 614
Other liabilities 148 12,227 3,472 – 15,847
Trade and other payables1 172,215 – – – 172,215
Borrowings 28,400 71,000 – – 99,400
Total 201,347 83,257 3,472 – 288,076
1 Trade and other payables exclude statutory liabilities in the form of income tax payable (including provisions made for uncertain tax positions).
Management considers that the Group has adequate current assets and forecast cash flow from operations to manage liquidity risks arising from
settlement of current liabilities and non-current liabilities.
Capital risk management
The primary objective of the Group’s capital management is to ensure that it maintains a strong balance sheet and low gearing ratio to support
its business and provide financial flexibility in order to maximise shareholder value. In order to ensure a strong balance sheet and low gearing ratio,
management thoroughly evaluates all material projects and potential acquisitions, which are approved by the Executive Leadership Team before
submission to the Board for ultimate approval, where applicable.
32. Operating lease arrangements
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Minimum lease payments under operating leases recognised in the income statement for the year 8,494 7,989
Total 8,494 7,989

At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases,
which fall due as follows:
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Within one year 4,520 7,188
In the second to fifth years inclusive 3,488 1,072
After five years – –
Total 8,008 8,260

Operating lease payments relate mainly to rental of office space by regional business units of the Group and rental of Gensets at Buzwagi.

150 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

33. 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 2017, the Group has the
following commitments and/or contingencies:
a) Legal contingencies
As at 31 December 2017, the Group was a defendant in a number of lawsuits. The plaintiffs are claiming damages and interest thereon in respect
of claims due to one or more of the following: unlawful eviction, termination of services and/or non-payment for services, defamation, negligence by
act or omission in failing to provide a safe working environment, unpaid overtime, public holiday compensation and various other commercial/project
disputes. The Group’s Legal Counsel is defending the Group’s current position. At present, Acacia considers these cases to be without merit and
therefore the likelihood of any material unfavourable outcome is remote, as a result no provision is required.
b) Tax-related contingencies
The TRA has issued a number of tax assessments to the Group related to past taxation years from 2002-onwards. The Group believes that the
majority of these assessments are incorrect and has filed objections and appeals accordingly in an attempt to resolve these matters by means of
discussions with the TRA or through the Tanzanian appeals process. Overall, it is the current assessment that the relevant assessments and claims
by the TRA are without merit. The claims include a TRA assessment to the value of US$41.3 million for withholding tax on certain historic offshore
dividend payments paid by Acacia Mining plc to its shareholders in 2010 to 2013. Acacia is appealing this assessment on the substantive grounds
that, as an English incorporated company, it is not resident in Tanzania for taxation purposes. The appeal is currently pending at the Court of Appeal.
In addition, the Company has raised certain tax provisions amounting to US$300 million in aggregate, based on the potential impact of a
comprehensive settlement of all outstanding tax disputes, including, according to Barrick, historic tax claims, reflecting the key terms of the
framework announcements by Barrick and the GoT in October 2017. Please refer to Note 10 for further information.
c) Purchase commitments
At 31 December 2017, the Group had purchase obligations for supplies and consumables of approximately US$32.5 million (2016: US$47.0 million).
d) 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$10.2 million in 2017 (2016: US$13.0 million).
34. Related party balances and transactions
The Group had the following related party balances and transactions during the years ended 31 December 2017 and 31 December 2016.
Related parties are those entities owned or controlled by BGC, which is the ultimate controlling party of the Group.
Transactions with related parties are as follows:
a) Transactions
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Provision of goods and services 97 55
Purchase of goods and services (1,373) (532)
Dividend payments (21,972) (12,545)
Total (23,248) (13,022)

FINANCIAL STATEMENTS
Provision and purchase of goods and services to/from related parties are on normal commercial terms and conditions. Provision of services relates
to cost incurred by the Group and recharged to related parties. Purchase of goods and services relates to cost incurred by related parties and
recharged to the Group. Services purchased relate mainly to insurance, software licences and professional services including legal, audit and
consulting charges. Goods purchased relate mainly to consumables and capital equipment.
b) Balances due from related parties
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Placer Dome Technical Services 37 37
Other 3 3
Total 40 40

The receivables are unsecured in nature and bear no interest. There are no provisions held against receivables from BGC.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 151

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

34. Related party balances and transactions continued

c) Balances due to related parties
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Due to holding company:
Barrick Gold Corporation 14,558 13,197
Due to fellow subsidiaries:
BIBC 5 3
Barrick Gold North America 777 771
Minera Barrick Misquichilca S.A. – 86
Other 15 8
Total 15,355 14,065

The payables to Barrick arise mainly from purchase transactions noted above. The payables are unsecured and bear no interest.
d) Remuneration of key management personnel
Key management personnel include the members of the Board of Directors and the Executive Leadership Team who receive remuneration.
Compensation for key management personnel (including Directors) was as follows:
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Short-term employee benefits 6,756 6,077
Post-employment benefits 477 540
Share-based payments 1,057 32,435
Total1 8,290 39,052
1 Also refer to the Remuneration Report on page 85 for total remuneration received by each Director for the year ending 31 December 2017.

35. Prospecting licences

The Group holds exploration mineral rights in the United Republic of Tanzania. These rights are held in the form of prospecting licences issued by the
Ministry of Energy and Minerals and are held either directly by the Group or indirectly pursuant to third-party agreements. The licences held by the Group as
at 31 December 2017 are summarised in the following table. The total commitment to exploration expenditure on these licences for 2018 is US$0.6 million.
Licences directly held by Acacia
Active prospecting licences Active prospecting licences
managed by Acacia not managed by Acacia
Number of Area in square Number of Area in square
(in thousands of United States dollars) licences kilometres licences kilometres
ABG Exploration Limited 26 130 2 3
North Mara Gold Mine Limited 13 85 – –
Nyanzaga Mining Company Limited – – 23 208
Pangea Mineral Limited 8 58 4 50
Prime Gold Exploration Limited – 34 – –
Sub-Sahara Resources (TZ) Limited – – – –
Vulcan Resources (Tanzania) Limited – – 3 21
Total 47 307 32 282

Licences indirectly held by Acacia

Number of Area in square
(in thousands of United States dollars) licences kilometres
Managed by Acacia – –
Not managed by Acacia 5 24

36. Post-balance sheet events

a) Sale of non-core mineral royalty
As previously announced, Acacia has agreed to divest a non-core royalty over the Houndé Mine in Burkina Faso for total consideration of US$45
million. The 2% net smelter royalty has been owned by Acacia and its predecessor companies since 2010. Following a competitive process the royalty
has been purchased by Sandstorm Gold Ltd, a TSX- and NYSE-listed company. The transaction has closed following all conditions being met and
monies were received by Acacia in January 2018.
b) Entry into further gold price protection measures
As previously announced, Acacia has bought additional put options covering 120,000 ounces of gold at a strike price of US$1,320 per ounce for a
cost of US$2.0 million. The options will expire in equal instalments of 30,000 ounces per month between March and June. These options, in addition
to those bought in September 2017 at a strike price of US$1,300 per ounce, provide a minimum price for the majority of the Group’s expected
production for the first half of 2018 above our budgeted gold price of US$1,200 per ounce, with full upside exposure should the gold price continue
to trade above the respective strike prices.

152 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

PARENT COMPANY INCOME STATEMENT

For the For the

year ended year ended
31 December 31 December
(in thousands of United States dollars) Notes 2017 2016
Corporate administration 3 (6,925) (5,124)
Share-based payments 4,176 (22,223)
Exploration and evaluation costs (11,185) (8,955)
Other charges 4 (12,811) (1,548)
Impairment charges (463,944) –
Finance expense 5 (13) (13)
Loss before taxation (490,702) (37,863)
Income tax 6 – –
Net loss for the year (490,702) (37,863)

PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME

For the For the

year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Net loss for the year (490,702) (37,863)
Other comprehensive income for the year – –
Total comprehensive loss for the year (490,702) (37,863)

The notes on pages 157 to 167 are an integral part of these financial statements.

FINANCIAL STATEMENTS

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 153

PARENT COMPANY BALANCE SHEET

As at As at
31 December 31 December
(in thousands of United States dollars) Notes 2017 2016
Assets
Non-current assets
Property, plant and equipment 8 – 30
Investment in subsidiaries 9 860,624 1,324,568
Non-current receivables 11 795,202 795,201
1,655,826 2,119,799
Current assets
Other receivables 10 110,584 68,380
Cash and cash equivalents 11 1,107 2,145
111,691 70,525
Total assets 1,767,517 2,190,324

Equity and liabilities

Share capital and share premium 12 929,199 929,199
Other reserves 499,844 1,025,163
Total equity 1,429,043 1,954,362

Non-current liabilities
Other non-current liabilities 1,041 5,989
1,041 5,989

Current liabilities
Provisions 170 –
Other current liabilities 15 337,263 229,973
337,433 229,973
Total liabilities 338,474 235,962
Total equity and liabilities 1,767,517 2,190,324

The notes on pages 157 to 167 are an integral part of these financial statements.
The financial statements on pages 153 to 167 were authorised for issue by the Board of Directors on 6 March 2017 and were signed on its behalf:

PETER GELETA
INTERIM CHIEF EXECUTIVE OFFICER

154 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

Other distributable Share Accumulated

(in thousands of United States dollars) Notes Share capital Share premium reserves option reserve losses Total equity
Balance at 1 January 2016 62,097 867,102 1,368,774 3,876 (290,069) 2,011,780
Loss for the year – – – – (37,863) (37,863)
Dividends to shareholders 14 – – – – (19,632) (19,632)
Share options – – – 77 – 77
Balance at 31 December 2016 62,097 867,102 1,368,774 3,953 (347,564) 1,954,362
Loss for the year – – – – (490,702) (490,702)
Dividends to shareholders 14 – – – – (34,385) (34,385)
Share options – – – (232) – (232)
Balance at 31 December 2017 62,097 867,102 1,368,774 3,721 (872,651) 1,429,043

The notes on pages 157 to 167 are an integral part of these financial statements.

FINANCIAL STATEMENTS

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 155

PARENT COMPANY CASH FLOW STATEMENT

For the For the

year ended year ended
31 December 31 December
(in thousands of United States dollars) Notes 2017 2016
Cash flows from operating activities
Net loss for the year (490,702) (37,863)
Adjustments for:
Depreciation and amortisation 8 30 57
Impairment charges 463,944
Finance items 5 13 13
Cash settlement of share options (259) –
Working capital adjustments 7 60,062 57,869
Other 7 (106) 790
Cash generated by operations before interest and tax 32,982 20,866
Finance expense 5 (13) (13)
Net cash generated by operating activities 32,969 20,853

Net cash used in investing activities – –

Cash flows from financing activities

Dividends paid 14 (34,385) (19,632)
Net cash used in financing activities (34,385) (19,632)

Net increase/(decrease) in cash and equivalents (1,416) 1,221

Net foreign exchange difference 378 (961)
Cash and cash equivalents at 1 January 2,145 1,885
Cash and cash equivalents at 31 December 1,107 2,145

The notes on pages 157 to 167 are an integral part of these financial statements.

156 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS

1. Corporate information In assessing the Company’s going concern status the Directors have
Acacia Mining plc, formerly African Barrick Gold plc, (the “Company”) was taken into account the impact of the concentrate export ban on on-going
incorporated on 12 January 2010 and re-registered as a public limited subsidiary operations as well as the following factors and assumptions:
company on 12 March 2010 under the Companies Act 2006. It is the current cash position; the latest mine plans, the short-term gold
registered in England and Wales with registered number 7123187. price, and Acacia Group’s capital expenditure and financing plans. In
addition, the Directors have considered a range of scenarios around the
On 24 March 2010 the Company’s shares were admitted to the Official
various potential outcomes for the resolution of the current operating
List of the United Kingdom Listing Authority (“UKLA”) and to trading on
challenges in Tanzania in the circumstances, including the cash flow
the main market of the London Stock Exchange, hereafter referred to
impact of an extended concentrate export ban; and the potential impacts
as the Initial Public Offering (“IPO”). The address of its registered office
of the timing and final terms of any comprehensive settlement which
is 5th Floor, 1 Cavendish Place, London, W1G 0QF, United Kingdom.
might be approved by the Company which reflect key terms of the
Barrick Gold Corporation (“BGC”) currently owns approximately 63.9% framework announcements made by Barrick and the GoT in October
of the shares of the Company and is the ultimate controlling party 2017, including the lifting of the concentrate export ban and staged
of the Group. The financial statements of BGC can be obtained from payments of US$300 million relating to historical tax matters. In addition
www.barrick.com the Directors have assumed that the Company will not be required to
settle its current outstanding borrowing obligations and will repay these
The financial statements for the year ended 31 December 2017
in accordance with the current terms of the relevant agreements.
were approved for issue by the Board of Directors of the Company
After making appropriate enquiries and considering the uncertainties
on 6 March 2018. The primary activity of the Company is as holding
described above, the Directors consider that it is appropriate to adopt
company for the Acacia Mining Group of companies.
the going concern basis in preparing the Company financial information
2. Significant accounting policies however have concluded that the combination of the above
The principal accounting policies applied in the preparation of these circumstances represents a material uncertainty that may cast
financial statements are set out below. significant doubt on the Company’s ability to continue as a going
concern. The Company financial information does not include any
a) Basis of preparation adjustments that would result if the Company was unable to continue
The Company financial statements have been prepared in accordance
as a going concern should the assumptions referred to above prove
with International Financial Reporting Standards as adopted by the
not to be correct.
European Union (“IFRS”), IFRS Interpretations Committee (“IFRIC”)
interpretations and those parts of the Companies Act 2006 applicable b) New and amended standards adopted by the Company
to companies reporting under IFRS. The financial statements are The following amendments to standards are applicable and were adopted
prepared on a going concern basis. by the Group for the first time for the financial year beginning
1 January 2017:
The consolidated financial statements have been prepared under the
historical cost convention basis, as modified by the revaluation of ––Amendments to IAS 12, “Recognition of Deferred Tax Assets for
financial assets and financial liabilities (including derivative instruments) Unrealised Losses”. Amendments made to IAS 12 will aim to clarify
at fair value through profit or loss. the accounting for deferred tax where an asset is measured at fair
value and that fair value is below the asset’s tax base. Effective
The Company financial statements are presented in United States dollars
1 January 2017. The amendment did not have a significant impact
(“US$”) and all values are rounded to the nearest thousand US dollars
on the Company financial statements.
except when otherwise indicated.
––Amendments to IAS 7, “Disclosure Initiative”. Going forward, entities
Where a change in the presentational format between the prior year and will be required to explain changes in their liabilities arising from
current year financial statements has been made during the period,

FINANCIAL STATEMENTS
financing activities. This includes changes arising from cash flows
comparative figures have been restated accordingly. No presentational (e.g. drawdowns and repayments of borrowings) and non-cash changes
changes were made in the current year. such as acquisitions, disposals, accretion of interest and unrealised
The preparation of financial statements in conformity with IFRS requires exchange differences. Changes in financial assets must be included in
the use of certain critical accounting estimates. It also requires this disclosure if the cash flows were, or will be, included in cash flows
management to exercise its judgement in the process of applying from financing activities. Effective 1 January 2017. The amendment did
accounting policies. The areas involving a higher degree of judgement not have a significant impact on the Company financial statements.
or complexity, or areas where assumptions and estimates are significant
to the consolidated financial statements, are disclosed in Note 2d.
The impact of the seasonality on operations is not considered as
significant on the condensed consolidated financial information.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 157

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED

2. Significant accounting policies continued e) Foreign currency translation

The Company’s transactions are denominated in a number of different
c) New and amended standards and interpretations currencies (primarily US dollars and UK pounds sterling). The Company
not yet adopted has liabilities that are primarily denominated in US dollars. The US
The following standards and amendments to existing standards have
dollar is the Company’s functional currency, as well as the Company’s
been published and are mandatory for the Group’s accounting periods
presentation currency. Transactions in currencies other than the US
beginning on or after 1 January 2018:
dollar are translated at the exchange rates as at the date of transaction.
––IFRS 9 – “Financial instruments”. IFRS 9 replaces the multiple Monetary assets and liabilities denominated in currencies other than
classification and measurement models in IAS 39 Financial the US dollar are translated to US dollars at year-end exchange rates.
instruments: Recognition and measurement with a single model that All differences that arise are recorded in the income statement.
has initially only two classification categories: amortised cost and fair Non-monetary assets measured at historical cost in a currency other
value. The adoption of the new standard is however not expected to than US dollars are translated using the exchange rates at the date
have a significant impact on the Company. of the initial transactions. Where non-monetary assets are measured
––IFRS 15 – “Revenue from contracts with customers”. This standard at fair value in a currency other than US dollars they are translated into
is a single, comprehensive revenue recognition model for all contracts US dollars using the exchange rates on the date when the fair value
with customers to achieve greater consistency in the recognition was determined.
and presentation of revenue. Revenue is recognised based on the The following exchange rates to the US dollar have been applied:
satisfaction of performance obligations, which occurs when control
Average Average
of good or service transfers to a customer. Effective 1 January 2018. As at Year ended As at Year ended
The adoption of the new standard is however not expected to have 31 December 31 December 31 December 31 December
a significant impact on the Company. 2017 2017 2016 2016
UK pound
––IFRS 16 – “Leases”. IFRS 16 supersedes IAS 17, “Leases”, IFRIC 4,
(US$:GBP) 0.74 0.78 0.81 0.74
“Determining whether an Arrangement contains a Lease”, SIC 15,
“Operating Leases – Incentives” and SIC 27, “Evaluating the Substance
f) Investment in subsidiaries
of Transactions Involving the Legal Form of a Lease”. IFRS 16 will affect
Subsidiaries are entities to which the Company is exposed, or has the
primarily the accounting by lessees and will result in the recognition of
rights to variable returns from its involvement and has the ability to affect
almost all leases on balance sheet. The standard removes the current
those returns through its power. Control exists when the Company has
distinction between operating and financing leases and requires
existing rights and the ability to direct relevant activities, exposure
recognition of an asset (the right to use the leased item) and a financial
or rights to variable returns from its involvement and the ability to use
liability to pay rentals for virtually all lease contracts. Effective
its power to affect the amount of returns.
1 January 2019. The adoption of the new standard is however not
expected to have a significant impact on the Company due to current At each reporting date, an assessment is made to determine whether
lease obligation not being material. there are any indicators of impairment. Where an indicator of impairment
––Amendments to IFRS2, “Classification and Measurement of Share exists, a formal estimate of the recoverable amount of the investment
based Payment Transactions”. The amendments made to AASB 2 in in a subsidiary is made, which is considered to be the higher of the fair
July 2016 clarify the measurement basis for cash-settled share-based value less costs to dispose and the value in use. Fair value is determined
payments and the accounting for modifications that change an award as the amount that would be obtained from the sale of the investment in
from cash-settled to equity-settled. Effective 1 January 2018. The an arm’s length transaction between knowledgeable and willing parties.
standard is not expected to have a significant impact on the Company. If the carrying amount of an investment exceeds the recoverable amount,
a provision is recorded in the income statement to reflect the investment
d) Significant judgements in applying accounting policies at the recoverable amount. Where an impairment charge has previously
and key sources of estimation uncertainty been recognised, an assessment is made at the end of each reporting
Many of the amounts included in the parent company financial period whether there is any indication that the impairment loss may no
statements require management to make judgements and/or estimates. longer exist or may have decreased. If any such indication exists, an
These judgements and estimates are continuously evaluated and are estimate of the recoverable amount is made. An impairment loss is
based on management’s experience and best knowledge of the relevant reversed to the income statement to the extent that the increased
facts and circumstances, but actual results may differ from the amounts carrying value of the investment in subsidiary does not exceed the
included in the parent company financial statements. Information about original carrying value.
such judgements and estimation is included in the accounting policies
and/or notes to the financial statements, and the key areas are g) Share capital
summarised below. Ordinary Shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity
Areas of judgement and key sources of estimation uncertainty that have as a deduction from the proceeds.
the most significant effect on the amounts recognised in the parent
company financial statements include:
––Whether to recognise a provision for accounts receivable – Notes 2h
and 10;
––Recognition of deferred income tax assets, amounts recorded for
uncertain tax positions, the measurement of income tax expense and
indirect taxes – Notes 2k and 6; and
––Review of property, plant and equipment and investments in
subsidiaries, the determination of whether these assets are impaired
and the measurement of impairment charges or reversals – Notes 2f,
8 and 9.

158 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

h) Financial instruments k) Taxes
Cash and cash equivalents The tax expense for the period comprises current and deferred tax.
Cash and cash equivalents are carried in the balance sheet at fair value. Tax is recognised in the income statement, except to the extent that
For the purposes of the balance sheet, cash and cash equivalents it relates to items recognised in other comprehensive income or directly
include cash, and money market funds. For the purposes of the cash flow in equity. In this case the tax is also recognised in other comprehensive
statement, cash and cash equivalents consist of cash and cash income or directly in equity, respectively.
equivalents as defined above.
Current income tax
Loans and receivables Current income tax assets and liabilities for the current period are
Loans and receivables are non-derivative financial assets with fixed or measured at the amount expected to be recovered from or paid to the
determinable payments that are not quoted in an active market, do not taxation authorities. Management periodically evaluates positions taken
qualify as trading assets and have not been designated as either fair in tax returns with respect to situations in which applicable tax regulation
value through profit and loss or available for sale. These are initially is subject to interpretation. It establishes provisions where appropriate
recognised at fair value, and are subsequently stated at amortised cost on the basis of amounts expected to be paid to the tax authorities.
using the effective interest method. They are included in current assets, The tax rates and tax laws used to compute the amount are those that
except for maturities greater than 12 months after the balance sheet are enacted or substantively enacted by the balance sheet date.
date, which are classified as non-current assets.
Deferred income tax
Loans and receivables comprise other receivables and cash and cash Unrecognised deferred income tax assets are reassessed at each balance
equivalents at the balance sheet date. sheet date and are recognised to the extent that it has become probable
that future taxable profit will allow the deferred tax asset to be recovered.
A provision for impairment of trade receivables is established when there
is objective evidence that the Company will not be able to collect all Indirect tax
amounts due according to the original terms of receivables. The carrying Indirect tax assets and liabilities for the current and prior periods
amount of the asset is reduced through use of an allowance account. are measured at the amount expected to be recovered from or paid to
The amount of the provision is recognised in the income statement. the taxation authorities. Management periodically evaluates positions
taken in indirect tax returns with respect to situations in which applicable
Financial liabilities
tax regulation is subject to interpretation. It establishes provisions
Other payables are recognised initially at fair value and subsequently
or receivables where appropriate on the basis of amounts expected
measured at amortised cost using the effective interest method.
to be paid to or received from the tax authorities. The tax rates and
i) Finance income and finance expense tax laws used to compute the amount are those that are enacted
Interest income is recognised on a time-proportion basis using the or substantively enacted by the balance sheet date. If the receivable
effective interest method. When a receivable is impaired, the Company is expected to be received in more than 12 months from year-end, the
reduces the carrying amount to its recoverable amount, being the receivable is discounted and held at its present value. Amounts expected
estimated future cash flow discounted at the original effective interest to be payable or receivable in more than 12 months are classified as
rate of the instrument, and continues unwinding the discount as non-current assets or liabilities in the balance sheet, as appropriate.
interest income.
l) Dividend distribution
j) Other income/charges Dividend distribution to the Company’s shareholders is recognised as
Other income/charges comprises one-off credits or costs relating to a liability in the Company’s financial statements in the period in which
non-routine transactions included in profit and loss. It includes other the dividends are approved by the Company’s shareholders.
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

FINANCIAL STATEMENTS
additional insight into the underlying business performance.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 159

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED

3. Corporate administration
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Salaries 3,739 3,366
Other employee benefits 3,217 1,314
Directors’ fees 1,182 1,096
Professional and consultancy fees 6,202 3,378
Foreign exchange loss/(gain) (303) 713
Travel and administration 994 776
Net management fees1 (10,850) (7,770)
Depreciation and amortisation 30 57
Audit fees 447 460
Other 2,267 1,734
Total 6,925 5,124
1 Net management fees are fees charged by the parent company to the subsidiaries.

Details of Directors’ remuneration can be found in the Remuneration Report on pages 77 to 91. Details of the auditors’ remuneration can be found
in note 10 of the consolidated financial statements.
Average number of employees
For the For the
year ended year ended
31 December 31 December
2017 2016
Administration 12 10
Total average headcount 12 10

4. Other charges
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Other expenses
Restructuring costs 711 3,725
Legal costs 11,209 179
Project development costs 1,485 1,123
Other 859 –
Total 14,264 5,027

Other income
Insurance proceeds – (3,455)
Royalty income (1,453) –
Other – (24)
Total (1,453) (3,479)
Total other charges 12,811 1,548

5. Finance expense
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Bank charges 13 13
Total 13 13

160 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

6. Income tax
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Corporation taxes – –
Total – –

The statutory income tax rate in the United Kingdom is 20% for 2017. The tax on the Company’s loss before tax differs from the theoretical amount
that would arise using the statutory tax rate as follows:
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Loss before tax 490,702 37,863
Tax calculated at statutory tax rates 98,140 7,573
Tax effects of:
Tax losses for which no deferred income tax asset was recognised (98,140) (7,573)
Tax charge – –

Deferred tax assets have not been recognised in respect of the tax losses amounting to US$142.6 million as at 31 December 2017 (2016:
US$111.5 million), as there is not sufficient certainty over future profits.

7. Cash flow – other items

Operating cash flows – other items
Adjustments for working capital items:
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Other receivables (42,205) (15,437)
Other current liabilities 107,215 78,350
Other non-current liabilities (4,948) (5,044)
Total 60,062 57,869
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Adjustments for non-cash income statement items:
Foreign exchange gains 75 (248)
Exchange (gain)/loss on revaluation of cash balances (378) 961

FINANCIAL STATEMENTS
Provisions movement 170 –
Share option expense 27 77
Total (106) 790

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 161

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED

8. Property, plant and equipment

For the year ended 31 December 2017 Furniture and
(in thousands of United States dollars) equipment Total
At 1 January 2017, net of accumulated depreciation 30 30
Depreciation (30) (30)
At 31 December 2017 – –

At 1 January 2017
Cost 767 767
Accumulated depreciation (737) (737)
Net carrying amount 30 30

At 31 December 2017, net of accumulated depreciation

Cost 767 767
Accumulated depreciation (767) (767)
Net carrying amount – –

For the year ended 31 December 2016 Furniture and

(in thousands of United States dollars) equipment Total
At 1 January 2016, net of accumulated depreciation 87 87
Depreciation (57) (57)
At 31 December 2016 30 30

At 1 January 2016
Cost 767 767
Accumulated depreciation (680) (680)
Net carrying amount 87 87

At 31 December 2016, net of accumulated depreciation

Cost 767 767
Accumulated depreciation (737) (737)
Net carrying amount 30 30

9. Investment in subsidiaries
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Opening balance 1,324,568 1,324,568
Impairment1 (463,944) –
Closing balance 860,624 1,324,568
1 The impairment in 2017 is based on the difference between the carrying amount of the individual investment and the relevant segmental recoverable amount as calculated in the
Group’s year-end carrying value assessment. Refer to Note 6 in the consolidated financial statements for further details.

The subsidiaries in which investments are held as at 31 December 2017 are as follows:
Equity interest Equity interest
Company Principal activity Country of incorporation 2017 2016
BUK Holdco Ltd2 Holding Company UK 100% 100%
1816962 Ontario Inc Holding Company Canada 100% 100%
Acacia Mining Exploration Kenya Ltd Exploration Kenya 1% 1%
2 BUK Holdco Ltd is exempt from the requirements of the Companies Act relating to the audit of individual accounts by virtue of s448A of Companies Act 2006.

162 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

10. Other receivables
As at As at
31 December 31 December
(in thousands of United States dollars) Note 2017 2016
Indirect tax receivables 1,029 290
Advance payments 359 321
Other receivables 1,664 170
Due from related parties 19 107,532 67,599
Total 110,584 68,380

At 31 December 2017, no other receivables were either past due or impaired. In determining the recoverability of a receivable, the Company performs
a risk analysis.
11. Cash and cash equivalents
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Cash at bank and on hand 1,107 2,145
Total 1,107 2,145

Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the
Company, and earn interest at the respective short-term deposit rates.
12. Share capital and share premium
Share capital Share capital Share premium
(in thousands of United States dollars) Number £’000 US$’000 US$’000
At 1 January 2016 410,085,499 41,009 62,097 867,102
At 31 December 2016 410,085,499 41,009 62,097 867,102
At 31 December 2017 410,085,499 41,009 62,097 867,102

13. Share-based compensation

Share options are granted to Executive Directors and to selected employees. The exercise price of the granted options is determined by the
Remuneration Committee before the grant of an option provided that this price cannot be less than the average of the middle-market quotation
of such shares (as derived from the London Stock Exchange Daily Official List) for the three dealing days immediately preceding the date of grant.
All options outstanding at the end of the year expire in November 2018. 54,261 of the options granted were exercisable at 31 December 2017.
The vesting period of the options is four years, with an exercise period of seven years from the date of grant.
A new class of zero cost options was granted to the Executive Leadership in April 2017 however these are expected to be cash settled and have
therefore been included as part of the Employee share-based liability.
Movements in the number of options outstanding and their related weighted average exercise prices in pence are as follows:
Average Average
exercise price exercise price

FINANCIAL STATEMENTS
in pence in pence
per share Options per share Options
For the year ended 31 December 2017 2017 2016 2016
At 1 January 222 1,020,314 261 1,180,818
Forfeited – – 507 (160,504)
Expired 519 (124,745) – –
Exercised 160 (841,308) – –
At 31 December 497 54,261 222 1,020,314

There were no options granted during the current year (2016: Nil).
14. Dividends paid
The final dividend declared in respect of the year ended 31 December 2016 of US$34.4 million (US8.4 cents per share) was paid during 2017
and recognised in the financial statements.
Acacia has a cash flow based dividend policy where we aim to pay a dividend of between 15-30% of our operational cash flow after sustaining
capital and capitalised development but before expansion capital and financing costs. As a result of the inability to export concentrates Acacia
has experienced negative free cash flow in 2017 and therefore the Board of Directors has not recommended the payment of a final dividend.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 163

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED

15. Other current liabilities

As at As at
31 December 31 December
(in thousands of United States dollars) Note 2017 2016
Trade and other payables 6,215 2,104
Accrued expenses and taxes 3,962 8,363
Payables to related parties 19 327,086 219,506
Total 337,263 229,973

16. Financial assets and liabilities

a) Financial assets
Carrying value Carrying value Fair value Fair value
as at as at as at as at
31 December 31 December 31 December 31 December
(in thousands of United States dollars) 2017 2016 2017 2016
Cash and cash equivalents 1,107 2,145 1,107 2,145
Other receivables 110,584 68,380 110,584 68,380
Non-current receivables1 795,202 795,201 795,202 795,201
Total financial assets 906,893 865,726 906,893 865,726
Less: Current financial assets
Cash and cash equivalents (1,107) (2,145) (1,107) (2,145)
Other receivables (110,584) (68,380) (110,584) (68,380)
Total non-current portion of receivables 795,202 795,201 795,202 795,201
1 Related party loans are interest-free and have no fixed repayment terms.

The fair value of financial assets equals their carrying amount as they were repayable on demand.
b) Financial liabilities
Revolving credit facility
The Group has a revolving credit facility in place for a maximum aggregate amount of US$150 million, which was negotiated on 24 November 2010
with a syndicate of commercial banks, led by Citibank. The facility has been provided to service the general corporate needs of the Group and to fund
potential acquisitions. All provisions contained in the credit facility documentation have been negotiated on normal commercial and customary terms
for such finance arrangements and when drawn the spread over LIBOR will be 350 basis points. During 2016, the term of the facility was successfully
extended to 2019 at a maximum aggregate amount of US$150 million. At 31 December 2017, none of the funds were drawn under the facility. The
shares of all significant subsidiaries have been pledged as security for the loan. Costs associated with the revolving credit facility have been included
in finance expenses.
17. Financial risk management
The Company has exposure to the following risks through its commercial and financial operations:
a) credit risk; and
b) liquidity risk.
This note presents information about the Company’s exposure to each of the above risks and the Company’s objectives, policies and processes
for assessing and managing risk. Further quantitative disclosures are included throughout the financial statements.
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.
The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in
market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain
a disciplined and constructive control environment in which all employees understand their roles and obligations.

164 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

a) Credit risk
Credit risk is the risk that a third party might fail to fulfil its performance obligations under the terms of a financial instrument. For cash and cash
equivalents and other receivables, credit risk represents the carrying amount on the balance sheet.
Credit risk arises from loans to two subsidiaries, receivables, cash and cash equivalents, and deposits with banks. The Company’s financial assets
are with counterparties whom the Company considers to have an appropriate credit rating. Location of credit risk is determined by physical location
of the bank branch, customer or counterparty. The maximum allowable term of maturity for any individual security is 12 months. Investment
counterparties must have a credit rating of at least “Baa1” or better by Moody’s Investor Services or “BBB+” by Standard and Poor’s. No more than
25% of the aggregate market value of the investment portfolio is maintained in any one country, with the exception of the United States of America,
United Kingdom and Barbados, or in any one industry group. Investments are held mainly in United States dollars and cash and cash equivalents
in other foreign currencies are maintained for operational requirements.
Company policies are aimed at minimising losses as a result of a counterparty’s failure to honour its obligations. The Company’s exposure to
credit risk is influenced mainly by the individual characteristics of each counterparty. The Company’s financial assets are with counterparties whom
the Company considers to have an appropriate credit rating. Maximum exposure to credit risk at each reporting date is the carrying value of each
class of financial assets in note 16. The Company does not hold collateral as security for any receivables. The Company does not grade the credit
quality of receivables.
b) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company monitors its risk of
a shortage of funds using projected cash flows and by monitoring the maturity of both its financial assets and liabilities.
The following table outlines the expected maturity of the Company’s significant financial liabilities into relevant maturity groupings based on
the remaining period from the balance sheet date to the contractual maturity date. As the amounts disclosed in the table are the contractual
undiscounted cash flows, these balances may not agree with the amounts disclosed in the balance sheet.

For the year ended 31 December 2017 Less than

(in thousands of United States dollars) 1 year 1 to 3 years 3 to 5 years Over 5 years Total
Other non-current liabilities – 1,041 – – 1,041
Other current liabilities 337,263 – – – 337,263
Total 337,263 1,041 – – 338,304

For the year ended 31 December 2016 Less than

(in thousands of United States dollars) 1 year 1 to 3 years 3 to 5 years Over 5 years Total
Other non-current liabilities – 5,989 – – 5,989
Other current liabilities 229,973 – – – 229,973
Total 229,973 5,989 – – 235,962

Management considers that the Company has adequate current assets and forecast cash flow from operations to manage liquidity risks arising from
settlement of current liabilities and non-current liabilities.
Capital risk management
The primary objective of the Company’s capital management is to ensure that it maintains a strong balance sheet and low gearing ratio to support

FINANCIAL STATEMENTS
its business and provide financial flexibility in order to maximise shareholder value. In order to ensure a strong balance sheet and low gearing ratio,
management thoroughly evaluates all material projects and potential acquisitions and approves them at its Executive committee before submission
to the Board for ultimate approval, where applicable.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 165

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED

18. Operating lease arrangements

For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Minimum lease payments under operating leases recognised in income for the period 429 514
Total 429 514

At the balance sheet date, the Company had outstanding commitments for future minimum lease payments under non-cancellable operating leases,
which fall due as follows:
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Within one year 421 320
In the second to fifth years inclusive 632 801
After five years – –
Total 1,053 1,121

19. Related party balances and transactions

The Company had the following related party balances and transactions during the year ended 31 December 2017. Related parties are those entities
owned or controlled by Barrick, which is the ultimate controlling party of the Company.
Transactions with related parties are as follows:
a) Transactions
For the For the
year ended year ended
31 December 31 December
(in thousands of United States dollars) 2017 2016
Management fees 10,850 7,770
Provision of goods and services 11,211 14,757
Purchase of goods and services (1,894) (665)
Dividends paid (21,972) (12,545)
Total (1,805) 9,317

Management fees relate to an allocation of cost incurred based on time spent by management for the benefit of the related party; a 5% mark-up
is applied to these costs. Provision and purchase of goods and services to/from related parties are on normal commercial terms and conditions.
Provision of services relates to costs incurred by the Company and recharged to related parties with no mark-up. Purchase of goods and services
relates to costs incurred by related parties and recharged to the Company with no mark-up. Services purchased relate mainly to insurance, software
licences and professional services including legal, audit and consulting charges.
b) Balances due from related parties
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Due from holding company:
Barrick Gold Corporation – 286
Due from subsidiaries:
Bulyanhulu Gold Mine Ltd 17,352 5,436
Pangea Minerals Ltd 452 175
North Mara Gold Mine Ltd 3,227 332
Acacia Mining SA (Pty) Ltd 34,737 23,954
ABG Exploration Limited – 11
Acacia Mining Exploration Kenya Ltd 50,606 36,448
Other 1,158 957
Total 107,532 67,599

The receivables from related parties arise mainly from the provision of goods and services. The receivables are unsecured in nature and bear
no interest. There are no provisions held against receivables from related parties.

166 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

c) Balances due to related parties
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Due to holding company:
Barrick Gold Corporation 1,046 –
Due to subsidiaries:
ABG Exploration Limited 17 –
Acacia Mining (Barbados) Corp Ltd 326,023 219,506
Total 327,086 219,506

The payables to Acacia Mining (Barbados) Corp Ltd arise mainly from operational funding transactions, noted above. Payables to Acacia Mining
(Barbados) Corp Ltd are interest free and have no fixed repayment terms.
d) Balances due from related parties (funding in nature)
As at As at
31 December 31 December
(in thousands of United States dollars) 2017 2016
Due to fellow subsidiaries:
BUK Holdco Ltd 772,706 772,705
BUK East Africa Limited 22,496 22,496
Total 795,202 795,201

Amounts due from BUK Holdco Ltd and BUK East Africa Limited are interest free and have no fixed repayment terms but are treated as long-term
loans as there is no intention to recall the loan within 12 months.
20. Post balance sheet events
Acacia has a cash flow based dividend policy where we aim to pay a dividend of between 15-30% of our operational cash flow after sustaining
capital and capitalised development but before expansion capital and financing costs. As a result of the inability to export concentrates Acacia
has experienced negative free cash flow in 2017 and did not pay an interim dividend. The Board of Directors has not recommended the payment
of a final dividend.

FINANCIAL STATEMENTS

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 167

GLOSSARY OF TERMS

The following definitions and terms are used throughout this Annual Report. In addition, specific terms and definitions relating to mineral reserves
and resources can be found on page 98.

Acacia or the Company Acacia Mining plc, a company incorporated under the Companies Act 2006 and registered in England and
Wales with registered number 7123187
Acacia Group or the Group means the Acacia corporate group of companies, including Acacia Mining plc, the UK holding and parent
company of the group; Bulyanhulu Gold Mine Limited, the owner and operator of the Bulyanhulu mine; North
Mara Gold Mine Limited, the owner and operator of the North Mara mine; and Pangea Minerals Limited, the
owner and operator of the Buzwagi mine. Further information as to the status and role of each member of
the Acacia corporate group is provided in Note 1 to the financial statements. In addition to the term “Acacia”,
in this Report “we”, “us” and “our” are also used to refer to the Company and its subsidiaries in general or
to those who work for them. These terms are also used where no useful purpose is served by identifying the
particular entity or entities. The companies in which Acacia Mining plc has a direct (or indirect) interest are
separate entities.
AGM annual general meeting
AISC has the meaning given to it under non-IFRS measures on page 171
Articles the articles of association of the Company
Assay a chemical test performed on a sample of ores or minerals to determine the amount of valuable metals
contained
Au gold
Average head grade average ore grade fed into the mill, expressed in grams per metric tonne
Average realised gold price per ounce sold has the meaning given to it under non-IFRS measures on page 171
Barrick Barrick Gold Corporation, a company existing under the laws of the Province of Ontario, Canada
Barrick Group Barrick and its subsidiary undertakings
Board or Board of Directors the Board of Directors of Acacia
Cash cost per ounce sold has the meaning given to it under non-IFRS measures on page 171
Cash cost per tonne milled has the meaning given to it under non-IFRS measures on page 171
CIL carbon in leach, a method of recovering gold and silver, in which a slurry of gold/silver bearing ore, carbon and
cyanide are mixed together. The cyanide dissolves the gold, which is subsequently absorbed by the activated
carbon whose base is usually ground coconut shells
CIM the Canadian Institute of Mining, Metallurgy and Petroleum
Code of Conduct Acacia’s Code of Business Conduct and Ethics
Companies Act 2006 the Companies Act 2006 of England and Wales, as amended
Concentrate a fine, powdery product of the milling process containing an economic percentage of gold, silver and copper
Contained ounces represents total ounces in a mineral reserve before reduction to account for ounces not able to be recovered
by the applicable metallurgical process
Co-product a secondary metal or mineral product recovered in the milling process such as copper and silver
CREST the computerised settlement system operated by Euroclear UK & Ireland Limited to facilitate the transfer of
title to shares in uncertificated form
Crushing breaking of ore from the size delivered from the mine into smaller and more uniform fragments to be then fed
to grinding mills or to a leach pad
CSR corporate social responsibility
Cu copper
Development work carried out for the purpose of opening up a mineral deposit. In an underground mine this includes shaft
sinking, crosscutting, drifting and raising. In an open pit mine, development includes the removal of overburden
Directors the Directors of Acacia for the reporting period, details of whom are set out on pages 64 to 65 of this Annual
Report
Disclosure Guidance the disclosure guidance and transparency rules made by the FCA under Part VI of FSMA
and Transparency Rules
Dollar or US$ or $ United States dollars

168 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Doré doré bullion is an impure alloy of gold and silver and is generally the final product of mining and processing;
the doré bullion will be transported to be refined to high purity metal
Drift a horizontal underground opening that follows along the length of a vein or rock formation as opposed to a
crosscut which crosses the rock formation
Drilling: core a drilling method that uses a rotating barrel and an annular-shaped, diamond-impregnated rock-cutting bit
to produce cylindrical rock cores and lift such cores to the surface, where they may be collected, examined
and assayed
Drilling: in-fill any method of drilling intervals between existing holes, used to provide greater geological detail and to help
establish reserve estimates
Drilling: reverse circulation drilling method that uses a rotating cutting bit circulation within a double-walled drill pipe and produces
rock chips rather than core. Air or water is circulated down to the bit between the inner and outer wall of the
drill pipe. The chips are forced to the surface through the centre of the drill pipe and are collected, examined
and assayed
EBITDA has the meaning given to it under non-IFRS measures on page 171
ELT or Executive Leadership Team the individuals listed on page 66
or Senior Management
Executive Director the executive director of the Company, being as at year-end Peter Geleta
Exploration prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore
Financial Conduct Authority or FCA the Financial Conduct Authority of the United Kingdom
Flotation a milling process in which valuable mineral particles are induced to become attached to bubbles and float as
others sink
Free cash flow has the meaning given to it under non-IFRS measures on page 171
FSMA the UK Financial Services and Markets Act 2000 (as amended)
Grade the amount of metal in each tonne of ore, expressed as troy ounces per tonne or grams per tonne for precious
metals and as a percentage for most other metals
g/t gram per metric tonne
IAS International Accounting Standards
IFRS International Financial Reporting Standards as adopted for use in the European Union
IPO Acacia’s initial public offering on the Main Market of the London Stock Exchange
ISO International Organization for Standardisation
koz thousand ounces
KPIs key performance indicators
Kt thousand metric tonnes
LIBOR The British Bankers’ Association Interest Settlement Rate for the relevant currency and period displayed on
the appropriate page of the Reuters’ screen
Listing Rules the rules relating to admission to the Official List made in accordance with section 73A(2) of FSMA
London Stock Exchange or LSE London Stock Exchange plc
Long-hole stoping a method of underground mining involving the drilling of holes up to 30 metres or longer into an ore bearing
zone and then blasting a slice of rock which falls into an open space. The broken rock is extracted and the
resulting open chamber may or may not be filled with supporting material
SHAREHOLDER INFORMATION

Majority shareholder Barrick

MDA a mineral development agreement
Mill a plant in which ore is treated and metals are recovered or prepared for smelting; also a revolving drum used
for the grinding of ores in preparation for treatment
Moz million ounces
Mt million metric tonnes
NGOs non-governmental organisations
NI 43-101 Canadian National Instrument 43-101

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 169

GLOSSARY OF TERMS CONTINUED

Non-Executive Directors the non-executive directors of the Company, being as at year-end Kelvin Dushnisky, Andre Falzon, Michael
Kenyon, Steve Lucas, Rachel English and Stephen Galbraith
Official List the Official List of the Financial Conduct Authority
Open pit a mine where the minerals are mined entirely from the surface. Also referred to as open-cut or open-cast mine
Operating cash flow per share has the meaning given to it under non-IFRS measures on page 171
Ordinary Shares Ordinary Shares of 10 pence each in the capital of the Company
Ore rock, generally containing metallic or non-metallic minerals, which can be mined and processed at a profit
Ore body a sufficiently large amount of ore that can be mined economically
Overburden is the material that lies above the area of economic interest, such as soil and ancillary material, that is
removed during surface mining
Oxide ore mineralised rock in which some of the original minerals have been oxidised. Oxidation tends to make the ore
more amenable to cyanide solutions so that minute particles of gold will be readily dissolved
oz troy ounce (31.1035g)
Reclamation the process by which lands disturbed as a result of mining activity are modified to support beneficial land use.
Reclamation activity may include the removal of buildings, equipment, machinery and other physical remnants
of mining, closure of tailings storage facilities, leach pads and other mine features, and contouring, covering
and re-vegetation of waste rock and other disturbed areas
Recovery rate a term used in process metallurgy to indicate the proportion of valuable material physically recovered in the
processing of ore. It is generally stated as a percentage of the material recovered compared to the total
material originally present
Refining the final stage of metal production in which impurities are removed from the molten metal
Relationship Agreement the relationship agreement between Barrick and Acacia
ROM run-of-mine, a term used loosely to describe ore of average grade
SC Sustainable Communities
Services Agreement the services agreement between Barrick and Acacia
Shaft a vertical or inclined excavation in rock for the purpose of providing access to an ore body. Usually equipped
with a hoist at the top, which lowers and raises a conveyance for handling workers and materials
Shareholders holders of Ordinary Shares
Spot or spot price the purchase price of a commodity at the current price, normally at a discount to the long-term contract price
Stripping removal of overburden or waste rock overlying an ore body in preparation for mining by open pit methods
Tailings the material that remains after all economically and technically recoverable precious metals have been
removed from the ore during processing
Tailings storage facility a natural or man-made confined area suitable for depositing the material that remains after the treatment of ore
TANESCO Tanzanian Electric Supply Company Limited
TRA Tanzanian Revenue Authority
TRIFR Total Reportable Injury Frequency Rate
TZS or TSH Tanzanian shilling
United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland
UK Corporate Governance Code the UK Corporate Governance Code issued by the UK Financial Reporting Council
United States or US the United States of America, its territories and possessions, any state of the United States of America and
the District of Columbia
VAT value-added tax
VBAs village benefit agreements
VBIAs village benefit implementation agreements
Voluntary Principles means the United Nations Voluntary Principles on Security and Human Rights

170 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Non-IFRS Measures All-in sustaining cost (AISC) is a non-IFRS financial measure. The
Acacia has identified certain measures in this report that are not measure is in accordance with the World Gold Council’s guidance
measures defined under IFRS. Non-IFRS financial measures disclosed issued in June 2013. It is calculated by taking cash cost per ounce
by management are provided as additional information to investors in sold and adding corporate administration costs, share-based payments,
order to provide them with an alternative method for assessing Acacia’s reclamation and remediation costs for operating mines, corporate
financial condition and operating results, and reflects more relevant social responsibility expenses, mine exploration and study costs,
measures for the industry in which Acacia operates. These measures realised gains and/or losses on operating hedges, capitalised stripping
are not in accordance with, or a substitute for, IFRS, and may be different and underground development costs and sustaining capital expenditure.
from or inconsistent with non-IFRS financial measures used by other This is then divided by the total ounces sold. A reconciliation between
companies. These measures are explained further below. cash cost per ounce sold and AISC for the key business segments is
presented below:
Net average realised gold price per ounce sold is a non-IFRS financial
measure which excludes from gold revenue: (US$/oz sold) Year ended 31 December 2017
Bulyanhulu North Mara Buzwagi Group*
––Unrealised gains and losses on non-hedge derivative contracts; and
Cash cost per ounce sold 840 498 594 587
––Export duties Corporate administration 59 26 35 45
It also includes realised gains and losses on gold hedge contracts Share-based payments (6) (2) (2) (14)
reported as part of cost of sales. Rehabilitation 20 11 5 11
CSR expenses 10 11 8 14
Net average realised gold price per ounce sold have been calculated
Capitalised development 367 188 – 170
as follows: Sustaining capital 83 71 27 62
Year ended Total AISC 1,373 803 667 875
(US$’000) 31 December
2017 2016 (US$/oz sold) Year ended 31 December 2016
Gold revenue 744,294 1,014,468 Bulyanhulu North Mara Buzwagi Group 1
Realised gold hedge gains (losses) 2,693 (1,818) Cash cost per ounce sold 722 410 1,031 640
Net gold revenue 746,987 1,012,651 Corporate administration 21 21 26 27
Gold sold (ounces) 592,861 816,743 Share-based payments 2 2 3 37
Net average realised gold price (US$/ounce) 1,260 1,240 Rehabilitation 7 9 3 7
CSR expenses 6 15 10 13
Cash cost per ounce sold is a non-IFRS financial measure. Cash costs
Capitalised development 226 201 – 170
include all costs absorbed into inventory, as well as royalties, and
Sustaining capital 74 75 22 64
production taxes, and exclude capitalised production stripping costs,
Total AISC 1,058 733 1,095 958
inventory purchase accounting adjustments, unrealised gains/losses
from non-hedge currency and commodity contracts, depreciation and 1 The Group total includes a credit of US$5/oz of unallocated corporate related costs in
2017, and a cost of US$43/oz in 2016.
amortisation and corporate social responsibility charges. Cash cost is
calculated net of co-product revenue. Cash cost per ounce sold is AISC is intended to provide additional information on the total sustaining
calculated by dividing the aggregate of these costs by total ounces sold. cost for each ounce sold, taking into account expenditure incurred in
The presentation of these statistics in this manner allows Acacia to addition to direct mining costs and selling costs.
monitor and manage those factors that impact production costs on a Cash cost per tonne milled is a non-IFRS financial measure. Cash costs
monthly basis. Cash costs and cash cost per ounce sold are calculated include all costs absorbed into inventory, as well as royalties, co-product
on a consistent basis for the periods presented. credits, and production taxes, and exclude capitalised production
The table below provides a reconciliation between cost of sales and total stripping costs, inventory purchase accounting adjustments, unrealised
cash cost to calculate the cash cost per ounce sold. gains/losses from non-hedge currency and commodity contracts,
depreciation and amortisation and corporate social responsibility
Year ended
(US$’000) 31 December charges. Cash cost is calculated net of co-product revenue. Cash cost
2017 2016 per tonne milled is calculated by dividing the aggregate of these costs
Total cost of sales 458,447 727,080
by total tonnes milled.
Deduct: depreciation and amortisation1 (106,201) (163,796) EBITDA is a non-IFRS financial measure. Acacia calculates EBITDA as net
Deduct: realised losses on gold hedges 2,693 (1,818) profit or loss for the period excluding:
Deduct: Co-product revenue (7,221) (39,063)
––Income tax expense;
Total cash cost 347,718 522,403
Total ounces sold 592,861 816,743 ––Finance expense;
Total cash cost per ounce sold 587 640 ––Finance income;
SHAREHOLDER INFORMATION

1 Depreciation and amortisation includes the depreciation component of the cost of ––Depreciation and amortisation; and
inventory sold
––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.

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 171

GLOSSARY OF TERMS CONTINUED

A reconciliation between net profit for the period and EBITDA is Adjusted net earnings per share is a non-IFRS financial measure and
presented below: is calculated by dividing adjusted net earnings by the weighted average
Year ended number of Ordinary Shares in issue.
(US$’000) 31 December
Free cash flow is a non-IFRS measure and represents the change in cash
2017 2016
and cash equivalents in a given period.
Net (loss)/profit for the period (707,394) 94,944
Plus income tax (credit)/expense (2,272) 147,113 Net cash is a non-IFRS measure. It is calculated by deducting total
Plus depreciation and amortisation 106,201 163,796 borrowings from cash and cash equivalents.
Plus: impairment charges1 850,182 – Mining statistical information
Plus finance expense 12,407 11,047 The following describes certain line items used in the Acacia Group’s
Less finance income (1,944) (1,512) discussion of key performance indicators:
EBITDA 257,180 415,388
––Open pit material mined – measures in tonnes the total amount of open
1 Refer to Note 7 in the financial statements.
pit ore and waste mined.
Adjusted EBITDA is a non-IFRS financial measure. It is calculated by ––Underground ore tonnes hoisted – measures in tonnes the total amount
excluding one-off costs or credits relating to non-routine transactions of underground ore mined and hoisted.
from EBITDA. It excludes other credits and charges that, individually ––Underground ore tonnes trammed – measures in tonnes the total
or in aggregate, if of a similar type, are of a nature or size that requires amount of underground ore mined and trammed.
explanation in order to provide additional insight into the underlying
business performance. EBITDA is adjusted for items (a) to (e) as ––Total tonnes mined includes open pit material plus underground
contained in the reconciliation to adjusted net earnings below. ore tonnes hoisted.
––Strip ratio – measures the ratio of waste to ore for open pit
EBIT is a non-IFRS financial measure and reflects EBITDA adjusted material mined.
for depreciation and amortisation and goodwill impairment charges.
––Ore milled – measures in tonnes the amount of ore material processed
Adjusted net earnings is a non-IFRS financial measure. It is calculated through the mill.
by excluding certain costs or credits relating to non-routine transactions ––Head grade – measures the metal content of mined ore going into
from net profit attributed to owners of the parent. It includes other credit a mill for processing.
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 ––Milled recovery – measures the proportion of valuable metal physically
insight into the underlying business performance. recovered in the processing of ore. It is generally stated as a
percentage of the metal recovered compared to the total metal
Adjusted net earnings and adjusted earnings per share have been originally present.
calculated as follows:
Year ended
(US$’000) 31 December
2017 2016
Net (loss)/earnings (707,394) 94,944
Adjusted for:
Restructuring cost (a)2 23,577 7,689
Discounting of indirect taxes (b) 13,276 (9,719)
One-off legal settlements (c) 5,083 –
Prior year tax positions recognised1 – 69,916
Reduced operational cost(d)3 11,411 –
Insurance settlements (e) – (3,455)
Impairment charges/write-offs (f)4 850,182 –
Provision for uncertain tax positions(g)1 172,000 –
Tax impact of the above (221,917) 1,646
Adjusted net earnings 146,218 161,021

1 Includes a tax provision raised of US$172.0 million for uncertain tax positions, based
on an estimate of the impact of a comprehensive settlement reflecting the key terms
of the framework announcements made by Barrick and the GoT in October 2017. For
the 12 months ended 31 December 2016, US$69.9 million represents a provision
raised for the implied impact of an adverse tax ruling made by the Tanzanian Court
of Appeal with respect to historical tax assessments of Bulyanhulu. As reported in
Q1 2016, the impact of the ruling was calculated for Bulyanhulu and extrapolated to
North Mara and Tulawaka as well and covers results up to the end of 2015. On a site
basis, US$35.1 million was raised for Bulyanhulu, US$30.4 million for North Mara
and US$4.4 million for Tulawaka.
2 Restructuring costs mainly relate to Bulyanhulu (US$16.9 million) as a result
of the transition to reduced operations and other sites (US$8.2 million).
3 Reduced operations costs not part of Bulyanhulu’s AISC cost and includes
stock obsolescence costs for 2017 (US$6 million) and contractor exit costs
(US$4.9 million).
4 Refer to Note 7 in the financial statements

172 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

Basis of preparation for the reporting of tax data Indirect taxes
This basis of preparation supports the reporting of tax data contained on These comprise VAT and other fuel levies that arise on the purchase
page 52 of this Annual Report. Generally, the references to “Tax” in this of goods and services and are paid to third parties, to be refunded
context mean any amount of money required to be paid to, or repaid by, by Governments. Typically, these taxes would form part of a sales tax
a Government. return made to Governments. Refunds received are included in the
taxes refunded category.
In overview, the key information presented as regards Tax is as follows:
Stamp duty
Taxes borne This comprises taxes that arise on transfers of assets or capital.
These are taxes that the Acacia Group is obliged to pay to a Government
Typically, these taxes would be reflected in stamp duty returns made
on its own behalf, or taxes that it is obliged to pay to a third party and
to Governments and tend to become payable, and are paid, to
that can/cannot be recovered from a Government. The main taxes that
Governments shortly after capital or assets are transferred.
we have included in this category are:
Taxes collected
Government royalties
These are taxes that a company is obliged to collect from others
These comprise payments made to Governments in the form of royalties.
and pay to Government. The main taxes that we have included in
Typically these tend to become payable, and are paid, in the year
this category are:
to which they relate. These taxes form part of our operating costs.
Employee payroll taxes
Corporate income tax
These comprise payroll and employee taxes withheld from employee
This comprises any tax on the business calculated on the basis of its
remuneration and paid to Governments, i.e. taxes collected by
profits, income or capital gains. Typically, these taxes would be reflected
Acacia and remitted to Governments on behalf of employees under
in corporate income tax returns made to Governments.
arrangements such as PAYE schemes. Typically, these taxes would
Customs duties be reflected in payroll tax returns made to Governments and tend
These comprise all customs/excise/import and export duties. Typically, to be payable, and are paid, on a regular basis (often monthly)
these taxes tend to become payable and are paid to Governments throughout the year, shortly after submission of the return.
at the point where goods are imported and exported from territories.
Withholding taxes collected from suppliers
These taxes form part of our operating and capital incurred costs.
These comprise taxes that are required to be withheld in advance on
Employer payroll taxes payments made to suppliers. Typically, these taxes would be reflected
These comprise payroll and employer taxes payable as a result of a in income tax returns made to Governments and tend to be payable,
company’s capacity as an employer. Typically, these taxes would be and are paid, on a regular basis (often monthly) throughout the year
reflected in payroll tax returns made to Governments and tend to be shortly after the submission of the return.
payable, and are paid, on a regular basis (often monthly) throughout
the year shortly after the submission of the return. These taxes form
Taxes refunded
These are taxes that are refunded by Governments to Acacia, and mostly
part of our operating costs.
comprise the following:
Environmental taxes
Indirect taxes (mainly VAT and fuel levies)
These comprise levies or other payments to Governments relating to
Typically, indirect taxes would tend to become repayable and are repaid
environmental policy. Typically, these taxes tend to be payable on an
by Governments regularly (often quarterly) throughout the year, shortly
annual basis. These taxes are also included in our operating costs.
after the submission of relevant sales tax returns. Also included are
other refunds received.

SHAREHOLDER INFORMATION

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 173

SHAREHOLDER ENQUIRIES

All enquiries concerning shareholdings including notification of change Forward-looking statements

of address or dividend payments should be made to Acacia’s registrars, This report includes “forward-looking statements” that express or imply
Computershare Investor Services PLC, whose contact details are as expectations of future events or results. Forward-looking statements
follows: are statements that are not historical facts. These statements include,
without limitation, financial projections and estimates and their underlying
Computershare Investor Services PLC
assumptions, statements regarding plans, objectives and expectations
The Pavilions
with respect to future production, operations, costs, projects, and
Bridgwater Road
statements regarding future performance. Forward-looking statements
Bristol BS99 6ZZ
are generally identified by the words “plans,” “expects,” “anticipates,”
United Kingdom
“believes,” “intends,” “estimates” and other similar expressions.
Helpline number: +44 (0) 370 707 1895
All forward-looking statements involve a number of risks, uncertainties
Computershare online enquiry service and other factors, many of which are beyond the control of Acacia, which
Computershare provides a range of services through its online
could cause actual results and developments to differ materially from
portal, Investor Centre, which can be accessed free of charge at
those expressed in, or implied by, the forward-looking statements
www.investorcentre.co.uk
contained in this report. Factors that could cause or contribute to
This service enables shareholders to check details of their shareholdings differences between the actual results, performance and achievements
or dividends, download forms to notify changes in personal details and of Acacia include, but are not limited to, changes or developments in
access other relevant information. political, economic or business conditions or national or local legislation
or regulation in countries in which Acacia conducts – or may in the future
Payment of dividends conduct – business, industry trends, competition, fluctuations in the spot
As a result of negative cash flow arising from the ban of exporting
and forward price of gold or certain other commodity prices (such as
concentrate from Tanzania, no interim dividend was paid during 2017,
copper and diesel), currency fluctuations (including the US dollar, South
in line with Acacia’s cash flow based dividend policy. The Board has
African rand, Kenyan shilling and Tanzanian shilling exchange rates),
not recommended the payment of any final dividend for the year ended
Acacia’s ability to successfully integrate acquisitions, Acacia’s ability
31 December 2017.
to recover its reserves or develop new reserves, including its ability to
Electronic communications convert its resources into reserves and its mineral potential into
Acacia has obtained shareholders’ consent to send and supply resources or reserves, and to process its mineral reserves successfully
documents and information to shareholders in electronic form and via and in a timely manner, Acacia‘s ability to complete land acquisitions
Acacia’s website, in accordance with provisions contained in Acacia’s required to support its mining activities, operational or technical
Articles of Association. difficulties which may occur in the context of mining activities, delays and
technical challenges associated with the completion of projects, risk of
Increased use of electronic communications will deliver additional
trespass, theft and vandalism, changes in Acacia‘s business strategy
savings to Acacia in terms of administration, printing and postage costs,
including, the on-going implementation of operational reviews, as well as
as well as speeding up the provision of information to shareholders.
risks and hazards associated with the business of mineral exploration,
The reduced use of paper will also have environmental benefits.
development, mining and production and risks and factors affecting the
Shareholder security gold mining industry in general. Although Acacia‘s management believes
Shareholders should be cautious of any unsolicited financial advice, that the expectations reflected in such forward-looking statements are
offers to buy shares at a discount or any other unsolicited advice reasonable, Acacia cannot give assurances that such statements will
regarding investment matters. More detailed information is provided prove to be correct. Accordingly, investors should not place reliance on
at www.fca.org.uk/consumers forward-looking statements contained in this report.
Financial calendar Any forward-looking statements in this report only reflect information
Financial year-end 31 December 2017 available at the time of preparation. Save as required under the Market
Preliminary results for 2017 12 February 2018 Abuse Regulation or otherwise under applicable law, Acacia explicitly
Annual General Meeting 19 April 2018 disclaims any obligation or undertaking publicly to update or revise any
Quarterly results Q1 2018 19 April 2018 forward-looking statements in this report, whether as a result of new
Half year report 2018 July 2018 information, future events or otherwise. Nothing in this report should
Quarterly results Q3 2018 October 2018 be construed as a profit forecast or estimate and no statement made
Production results Q4 2018 January 2019 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.

174 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

NOTES

SHAREHOLDER INFORMATION

ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017 175

NOTES

176 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2017

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Acacia Mining plc Corporate Brokers
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Phone: +44 (0) 20 7129 7150
E-mail: gblackham@acaciamining.com Auditors
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