Acacia Mining Cuts 1,050 Jobs in Response to Gold Price Slump

By Alex MacDonald

LONDON--Tanzania's largest gold producer Acacia Mining PLC(ABGLY) said Thursday it is cutting 1,050 jobs, or about 27% of its workforce in an accelerated bid to cut costs and boost cashflow given a protracted slump in the price of gold.

The U.K.-listed miner, formerly known as African Barrick Gold PLC, has been restructuring its operations for several years to focus on mining more proftiable ounces of gold at a lower cost.

The company has focused on mechanizing its flagship Bulyanhulu mine and boosting the operational performance of both its North Mara and Buzwagi mines as it grapples with a gold price that has fallen to $1,051 a troy ounce as of Thursday compared with a record intraday high of $1,907 an ounce in 2011.

Acacia said the majority of the affected employees have either left or are expected to leave Acacia over the next few months through a combination of voluntary separation agreements and redundancies. The largest portion of the cuts will come from Bulyanhulu, but all its mines and offices will be affected. The company is providing support services to assit those affected.

"The steps we are announcing today are not taken lightly," said Chief Executive Brad Gordon. "These, and the other planned changes, will help to ensure that we are able to generate sustainable positive free cash flow in 2016 and beyond, and do not experience a recurrence of the unacceptable cash outflow we saw in Q3."

The restructuring is expected to lead to $25 million in annual savings, excluding a restructuring charge of about $11 million to be predominantly incurred in 2015.

Acacia, which is majority owned by Barrick Gold Corp. (ABX), is also working to further refine capital expenditure, renew discussions with contractors and major suppliers to improve their rates, rationalise corporate administration spend and ensure community spending is in line with corporate strategy and sustainable development.

-Write to Alex MacDonald at alex.macdonald@wsj.com

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(END) Dow Jones Newswires

December 03, 2015 03:27 ET (08:27 GMT)

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