UPDATE 1-Former African Barrick Gold to go underground at North Mara

Thu Nov 27, 2014 7:36am EST
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(Adds details, CEO comments, share movement)

By Roshni Menon

Nov 27 (Reuters) - Acacia Mining Ltd, formerly African Barrick Gold Plc, said on Thursday it planned to start underground mining at its North Mara mine in Tanzania in the first half of 2015.

The open pit North Mara mine has a chequered past, with villagers illegally entering the site to scour tailings that may contain small quantities of gold, and some have been killed or injured by mine security guards and police.

"The North Mara decision to go underground ... minimises our impact on the community, reduces the opportunity for illegal miners to enter that operation, and reduces our footprint with respect to needing land to dump waste," Chief Executive Brad Gordon told Reuters on Thursday.

Acacia has been cutting mining costs, reducing its workforce and increasing output to counter the sharp drop in gold prices that has forced many gold and silver miners to shelve projects.

The company, unveiling its long-term strategy at an investor meeting in London, said the underground expansion was expected to produce 450,000 ounces of gold over a five-year mine life at an all-in sustaining cost (AISC) of under $750 per ounce.

Acacia's AISC, which includes production and exploration expenses, was $961 per ounce sold from the North Mara mine in the nine months to Sept. 30.

Gordon said Acacia expected the underground operation to produce about 50,000 ounces next year and about 100,000 ounces per year over the following four years.   Continued...