Africa-focused gold producer Acacia Mining (LSE: ACA) released a disappointing set of final results last month for the year ending 31 December 2015. So with Acacia’s revenue falling, is it time to sell up and buy gold mining rival Centamin (LSE: CEY) instead?

Not yet gold standard

Acacia mining is one of the largest gold producers in Africa with three operating mines in Tanzania as well as exploration projects in Tanzania, Kenya, Burkina Faso and Mali. Its annual results, which were announced last month, revealed a 7% drop in revenue to $868m that was blamed mainly on the 8% lower average gold price. The company also announced a pre-tax loss of $124.16m compared to a profit of $115.19m in the previous year, and negative earnings of 48.1 cents.

Despite the loss, chief executive Brad Gordon highlighted the positives in the performance: “2015 was another year of transformation for Acacia as we continued to transition our company into a low cost producer. During the year we delivered gold production of 731,912 ounces, a third consecutive annual increase, with our continued investment in the turnaround of Bulyanhulu and the successful transition to underground operations at North Mara, leading to all-in sustaining costs remaining flat year-on-year at $1,112 per ounce.” 

Was Brad Gordon justified in his upbeat stance? Well, the board also proposed a final dividend of 2.8 cents per share bringing the total dividend to 4.2 cents for the year and the company is expected to return to profit this year with earnings earmarked at 13.97p. Added to that is a 36% increase to 19.05p expected in 2017. This puts the firm on a P/E ratio of 19 for this year and 14 in 2017.

Of course, future earnings will be highly dependent on the future price of gold, and I would suggest the stock is fairly priced. I’m sitting on the fence on this one with a neutral rating!

Too late to the party?

Fellow mid-cap gold miner Centamin also has its principal mining assets in Africa, but this time further North in Egypt. The share price has enjoyed a 55% rise over the past month, which raises the the question: is it too late to buy?

City analysts expect a 48% drop in earnings to 4.57p for the year to 31 December 2015, followed by increases of 24% and 8% in 2016 and 2017, respectively. This would suggest a P/E ratio of 20 for 2015, falling to 16 and 15 for 2016 and 2017. The share price rally over the past month means the shares are no longer in bargain territory and I can’t see any compelling reason to buy at the present time.

Both Acacia Mining and Centamin are expected to see a turnaround in fortunes in the next couple of years. However, current valuations suggest neither offers significant upside potential to warrant a buy recommendation from me. I think far better opportunities for capital growth lie elsewhere.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.