Does Acacia Mining PLC have more investment appeal than KAZ Minerals PLC, Centamin PLC and Fresnillo Plc after today’s results?

Is Acacia Mining PLC (LON:ACA) (ACA.L) a stronger investment opportunity than KAZ Minerals PLC (LON:KAZ) (KAZ.L), Centamin PLC (LON:CEY) (CEY.L) and Fresnillo Plc (LON:FRES) (FRES.L)?

Acacia Mining PLC
Acacia Mining PLC

Gold miner Acacia Mining PLC (LON:ACA) (ACA.L) has released full year results for 2017 today. They show that the company was able to deliver robust operational performance in what was a difficult year.

External factors caused its performance to come under pressure, with the export ban causing gold production to fall by 7% to 767,883 ounces. However, the company’s all-in sustaining costs of $875 per ounce are its lowest ever achieved and below the full year guidance range.

A net loss of $707 million for the 2017 financial year included a post-tax impairment charge of $644 million. However, in the current year is expects to return to free cash flow generation. This could be a major positive for the company in my view, with its cash balance having fallen significantly in recent months.

Efforts to reach a resolution regarding the ban on exports from Tanzania are ongoing. However, in the current year, there is expected to be a further fall in production to between 435,000 ounces and 475 ounces. In my view, this could mean that the company’s near-term performance is less appealing than some of its sector peers.

In the last year the Acacia Mining share price has fallen 62%. That’s a worse performance than other mining stocks such as KAZ Minerals PLC (LON:KAZ) (KAZ.L), Centamin PLC (LON:CEY) (CEY.L) and Fresnillo Plc (LON:FRES) (FRES.L). Centamin is down 12%, Fresnillo has dropped 20% and KAZ Minerals has risen 34% in the same time period.

As a shareholder of Centamin and Fresnillo, I’m optimistic about the prospects for the gold price. I feel in what could be an increasingly inflationary environment that the precious metal may enjoy a stronger period. However, with Acacia Mining experiencing continued challenges and set to deliver a fall in production in 2018, I believe there are better options for me elsewhere within the mining sector.








About Robert Stephens 3395 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email info@investomania.co.uk or use one of the other contact methods available on the 'Contact Us' page