(Refiled to fix fault with share index instrument code)
* Plans announcement on Kenyan project in Q1
* Analysts say results very positive
* Share price rises more than 6 percent
By Barbara Lewis and Sanjeeban Sarkar
LONDON/BENGALURU, Feb 14 Gold producer Acacia
Mining faces a "critical year" as it seeks to expand
across Africa and further boost output, its CEO said on Tuesday,
after reporting record production in 2016 and a near 150 percent
rise in its dividend payout.
Shares in the London-listed miner, which is majority owned
by Barrick Gold, were up 6.8 percent at 495.8 pence by
1133 GMT, when the FTSE 350 mining sector index was
After a rough 2015, the entire mining industry recovered
last year, driven by a rebound in commodity prices.
The price of gold has been lifted as investors seek shelter
from further political shocks after Britain voted to leave the
European Union and Donald Trump unexpectedly became U.S.
president, although a stronger dollar has eroded some of the
Acacia prides itself on having continued to invest when
other miners focused almost exclusively on cutting costs and
says it is seeing the results.
"2017 is going to be the critical year. We will start to see
the fruits of our contrarian exploration strategy," Chief
Executive Brad Gordon told Reuters.
In the current year, a six-month extension of mining is
expected to lead to a 40 percent increase in output at Buzwagi,
Tanzania, compared with last year's production, the company said
in a statement.
Acacia also expects to make an announcement on its West
Kenya mining project in the first quarter, which Gordon said
would just be a first step in its expansion plans.
"The Kenyan project is probably the first cab off the rank.
During the last three years, we have been putting our foot on
some of the best ground in West Africa," he said. "We expect to
see at least one (other) project emerging from West Africa over
the next three years."
Tanzania is at the heart of Acacia's African venture and the
company says it remains committed to the nation despite higher
Some of Tanzania's biggest investors have said they could
scale back their operations because of tougher tax demands.
CFO Andrew Wray said the best way was to confront the
demands and the firm had pre-paid its tax.
"At the end of the day, they're a developing economy. The
government has ambitions. We will see continued pressure," Wray
Apart from record production in 2016, Acacia cut all-in
sustaining costs by 14 percent and more than doubled its net
It has proposed a full-year dividend of 10.4 cents for 2016,
which is more than twice the total dividend for 2015 (4.2
Analysts said the results beat expectations.
"In the light of consistent production growth, cost
improvements and dividend increases, the valuation relative to
peers appears increasingly compelling," BMO Capital Markets said
in a note. It rates Acacia's shares as an 'outperform'.
(Editing by Greg Mahlich)