UNEARTHING AFRICA’S POTENTIAL ANNUAL REPORT & ACCOUNTS 2014 CREATING A STRONG BASE TO LEVERAGE FUTURE OPERATIONAL TRANSFORMATION Brad Gordon Chief Executive Officer 14 Through 2014, we successfully laid the foundations to help our business become a leading company in Africa and deliver returns to both our shareholders and stakeholder communities. We are changing the way in which we operate our assets, driving cultural 16 change and building lasting relationships which will lead to increased performance across the business. For more information, visit our website: www.acaciamining.com 18 Acacia Mining (“Acacia”), formerly African Barrick Gold, is Tanzania’s largest gold miner and one of CONTENTS the largest producers of gold in Africa. We have three producing mines, all located in north-west Tanzania: Bulyanhulu, Buzwagi and North Mara, and a portfolio of exploration projects in Tanzania, Kenya and Burkina Faso. 2 OUR Strategic report Highlights 2 Business at a glance 4 BUSINESS Chairman’s statement 6 Chief Executive’s review 8 Our strategy in action Re-engineering our mines Our business 14 Our people 16 Page 14 Our relationships 18 Key performance indicators 20 We have a leading portfolio of assets and are focused on Risk management 22 making our mines perform to their geological potential. 24 Performance review Operating review 26 Financial review 36 Sustainability review 42 OUR 46 PEOPLE Governance Governance overview 48 Board of Directors 50 Driving accountability and performance Senior Leadership Team 53 Corporate governance report 54 Page 16 Performance evaluation 58 Committee reports 59 Remuneration report 64 Driving cultural change across the workforce through a dedicated Principal risks and uncertainties 82 programme and the redesign of structures and roles. Other information 86 Directors’ responsibilities statement 91 Reserves and resources 92 96 Financial statements OUR Independent auditors’ report on the consolidated financial statements 97 Consolidated financial statements 101 RELATIONSHIPS Notes to the consolidated financial statements 106 Independent auditors’ report on the Proactive stakeholder engagement parent company financial statements 146 Parent company financial statements 148 Page 18 Notes to the parent company financial statements 152 Becoming the partner of choice for communities and Governments across Africa. 163 Shareholder information Glossary of terms 163 Shareholder enquiries 169 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2014 1 STRATEGIC REPORT HIGHLIGHTS Financial Operational Bulyanhulu, Tanzania Revenue (US$million) US$930.2m 234,786 2013: US$929.0m Ounces of gold produced A high-grade underground mine with a mine life 1,217.9 in excess of 30 years 975.0 1,011.7 929.0 930.2 We have moved to a mechanised mining method, with long hole stoping becoming the primary mining method. This will assist in the ramp up of the mine and is both safer and more cost effective than previous hand-held methods. 2010 2011 2012 2013 2014 All-in sustaining cost1,2 (US$/oz) Buzwagi, Tanzania US$1,105/oz 210,063 2013: US$1,346/oz Ounces of gold produced A single open pit bulk tonnage operation with a mine 1,585 life of five years 1,346 1,114 1,105 We have shortened the life of the mine so that we are 917 mining only profitable ounces. Our five year plan now produces positive cash flow over each year of its remaining life. 2010 2011 2012 2013 2014 1,3 EBITDA (US$million ) US$252.7m North Mara, Tanzania 2013: US$240.4m 273,803 545.5 Ounces of gold produced 419.2 336.3 A high-grade open pit operation, transitioning to a 240.4 252.7 dual open pit and underground operation with a mine life of nine years 2010 2011 2012 2013 2014 We are moving forward with the creation of an underground operation at the Gokona pit. We believe that this will be more profitable than mining this deposit via an open pit 1 These are non-IFRS measures. Refer to page 166 for definitions. 2 2013 comparative amounts have been restated to exclude Tulawaka. and has a much lower impact on the community. 3 EBITDA includes continuing and discontinued operations. 2 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2014 STRATEGIC REPORT PERFORMANCE REVIEW GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION Operational Sustainability 26 42 For more information on Bulyanhulu For more information on sustainability Education US$2.5m Amount invested in 2014 Health US$0.8m 28 Amount invested in 2014 For more information on Buzwagi Water and sanitation US$1.3m Amount invested in 2014 Infrastructure US$2.6m 30 Amount invested in 2014 For more information on North Mara ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2014 3 STRATEGIC REPORT BUSINESS We are a leading gold producer in Tanzania AT A GLANCE having produced nearly eight million ounces of gold in over a decade of operations. Our business model is designed to create a leading company in Africa. What we • A leading asset portfolio in Africa stand for • Focused on free cash flow • Disciplined capital allocation • Becoming the partner of choice • Growing our footprint Producing mines Exploration Bulyanhulu Near-mine/Brownfield Increasing • Bulyanhulu Resource Expansion shareholder value 17.3 • Bulyanhulu Regional BURKINA Total Reserves and Resources (Moz) FASO Greenfield South Houndé JV Buzwagi • West Kenya Joint Ventures • South Houndé Joint Venture 3.1 Generating Sustainable Total Reserves and Resources (Moz) During the year, US$18.3 million of exploration activities were expensed, free stakeholder North Mara with a further US$2.2 million relating KENYA West Kenya JV to exploration and evaluation activities cash flow returns being capitalised. Nyanzaga 4.8 North Mara Total Reserves and Resources (Moz) Bulyanhulu Golden Ridge Buzwagi 26 to 31 32 Developing land positions TANZANIA For more information on our For more information on our in the most geologically producing mines exploration projects prospective belts in Africa. Benefitting host countries Effective governance and risk management practices Sustainability Strong cost and capital discipline • Fostering strong, effective and experienced leadership • Developing community and Government relationships • Enhancing supply chain and inventory management • Providing for diversity • Protecting the environment • Maintaining appropriate operational cost levels • Developing sound governance structures and practices • Safeguarding safety and health in the workplace • Adopting stringent capital allocation and expenditure practices • Progressing and maintaining internal controls and risk mitigation strategies • Creating development and training opportunities for our employees • Using robust nancial management procedures • Respecting human rights 4 ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2014 STRATEGIC REPORT PERFORMANCE REVIEW GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION Continued • Enhancing life of mine planning methods development • Driving mining and processing efficiencies through improved practices of our quality • Optimising mining, development and processing rates asset base • Investing in the right exploration All of our mines are located in the Lake Victoria Greenstone Belt, one of the most prospective areas for gold mining in Africa. Increasing shareholder value BURKINA FASO South Houndé JV Generating Sustainable KENYA free stakeholder West Kenya JV cash flow returns Nyanzaga North Mara Bulyanhulu Golden Ridge Buzwagi TANZANIA Benefitting host countries Effective governance and risk management practices Sustainability Strong cost and capital discipline • Fostering strong, effective and experienced leadership • Developing community and Government relationships • Enhancing supply chain and inventory management • Providing for diversity • Protecting the environment • Maintaining appropriate operational cost levels • Developing sound governance structures and practices • Safeguarding safety and health in the workplace • Adopting stringent capital allocation and expenditure practices • Progressing and maintaining internal controls and risk mitigation strategies • Creating development and training opportunities for our employees • Using robust nancial management procedures • Respecting human rights ACACIA MINING PLC ANNUAL REPORT & ACCOUNTS 2014 5 STRATEGIC REPORT CHAIRMAN’S The changes we made to the business a year ago STATEMENT underpinned the improvement we saw in 2014, as the business delivered strong operational and financial performance and returned to positive free cash flow for the first time in three years. Kelvin Dushnisky Chairman of the Board What makes us different? • Leading asset portfolio • Proven management team • Operational delivery • Financial flexibility • Cost discipline Dear Shareholders, Change of name to Acacia Mining 2014 was an important and pleasing year for An important development in 2014 was the the Company as we reaped the benefits of change of the Company’s name to Acacia Mining strengthening the Board and Management (LSE:ACA), which our shareholders voted in team in 2013. Whilst the gold price ended the favour of in November. The decision to change year at US$1,206 per ounce, only 1.6% down on the name was made in order to reflect the new the previous year, there was significant volatility culture and strategic direction of the business. throughout 2014, with a low of US$1,142 per The Acacia tree is hardy and resilient, and ounce putting further pressure on the sector. thrives in challenging environments. We believe In spite of continued challenges in the gold that these characteristics reflect our enhanced and wider