* Expects announcement on Kenyan project
* Analysts say results very positive (Adds detail, analyst comment)
LONDON, Feb 14 (Reuters) - Tanzanian-focused gold producer Acacia Mining ACAA.L said 2017 production would be lifted 40 percent by a mine life extension at Buzwagi and proposed more than doubling its dividend, reflecting a jump in net cash and record gold output in 2016.
After a rough 2105, the entire mining sector recovered strongly last year, driven by a rebound in commodity prices.
Gold has been lifted as investors sought shelter from political shocks after Britain voted to leave the European Union and Donald Trump unexpectedly became U.S. president, although a stronger dollar has eroded some of the gains. was another successful year for Acacia as we delivered record production, reduced our all-in sustaining costs by 14 percent and more than doubled our net cash position," Brad Gordon, chief executive of Acacia Mining, said.
For the coming year, the company said in a statement, a six-month extension of mining at Buzwagi will lead to a 40 percent output increase versus 2016.
It said it had proposed a full year dividend of 10.4 cents, which is at the top end of its policy and more than twice the total dividend announced for 2015 (4.2 cents).
Acacia, which delivered record output of 829,705 ounces in 2016, almost 100,000 ounces ahead of 2015, invested when other miners focused almost exclusively on cutting costs. said it expected to make an announcement on its new West Kenya Project in the first quarter.
Gordon said Acacia believed the resource was "the first step in delineating a multi-million ounce high grade resource in the Liranda Corridor in Kenya".
Analysts said the results easily beat expectations.
Hunter Hillcoat, analyst at Investec, which rates Acacia a Buy, said they should be "seen very positively".