November 30, 2016 / 1:46 PM / 3 years ago

Gold producer Acacia Mining raises exploration budget by 30 pct

LONDON, Nov 30 (Reuters) - Gold producer Acacia Mining will increase its exploration budget for 2017 by nearly 30 percent to expand in Africa and helped by a higher gold price, the London-listed company said on Wednesday.

Acacia, which is also listed in Tanzania, will spend $25 million in 2017 to increase drilling for new mines in Kenya, Mali, Tanzania and Burkina Faso and double expenditure for drilling around existing mines to $10 million.

The company has three mines in Tanzania.

“This is part of our long-term strategy to invest in exploration when the rest of the industry is walking away from that,” Chief Executive Brad Gordon told Reuters.

Helped by a rising gold price, Acacia’s share price has more than doubled this year and in August reported a five-fold increase in its third-quarter core profit.

A higher gold price has brought relief to struggling bullion producers which were forced to abandon projects, sell mines and cut jobs to survive.

Acacia, which is majority owned by Barrick Gold, will spend $12 million in 2017 on its West Kenya project which it now fully owns after purchasing a further 49 percent stake from platinum miner Lonmin in August.

Acacia plans to spend between $10 and $15 million a year during the project’s exploration phase, Gordon said, adding that initial drilling indicated it could be a multi-million-ounce mine.

Political unrest in Burkina Faso and Mali had not affected the company’s mining activity, Gordon said, while the Kenyan government was encouraging the development of its nascent mining industry. (Reporting by Zandi Shabalala; Editing by Greg Mahlich)

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