Acacia Mining takes out gold price protection measures

Acacia Mining has bought gold put options as part of measures to mitigate cash outflows as it put one of its underground mines on care and maintenance amid Tanzania's ongoing ban on exporting mineral concentrates.

Acacia said on Wednesday that it has bought put options covering 210,000 ounces of gold at a strike price of $1,300 per ounce, with a total cost of $3.2m.

The FTSE 250 company said the securities will "provide a minimum price for the majority of the group’s expected doré production for the next six months above our budgeted gold price of $1,200 per ounce, with full upside exposure should the gold price continue to trade above $1,300 per ounce".

The options will expire in equal instalments of 35,000 ounces per month over the period.