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 or use one of the other contact methods available on the 'Contact Us' page