VANCOUVER, July 31, 2014 /CNW/ - Nevsun Resources Ltd.
(TSX:NSU / NYSE MKT:NSU) (Nevsun or the Company) is pleased to
report its financial and operating results for the three and six
months ended June 30, 2014. Unless
otherwise noted, with the exception of earnings per share and
realized price and cost per pound figures, all financial results
are in millions of US dollars.
Second quarter 2014 highlights
- Produced 47.4 million pounds of copper in the quarter
- Sold 51.5 million pounds of copper, a 51% increase over Q1
2014
- Achieved C1 cash costs of $1.05
per pound with strong earnings and cash flows
- Working capital approaching $500
million
- Announced successful drilling results from Bisha regional
exploration
- Paid peer leading annualized dividend of $0.14 per share
|
Q2 2014
|
Q1 2014
|
YTD 2014
|
Revenues
|
$
169.2
|
$
99.2
|
$
268.4
|
Copper in concentrate
produced, millions of pounds
|
47.4
|
39.7
|
87.1
|
Copper in concentrate
produced, tonnes
|
21,500
|
18,000
|
39,500
|
Payable copper sold,
millions of pounds(1)
|
51.5
|
34.0
|
85.5
|
Payable copper sold,
tonnes
|
23,400
|
15,400
|
38,800
|
Copper price realized,
per payable pound sold
|
$
3.21
|
$
3.01
|
$
3.14
|
C1 cash cost per
payable pound sold (2)
|
$
1.05
|
$
0.98
|
$
1.01
|
Net income attributable
to Nevsun shareholders
|
$
30.5
|
$
15.4
|
$
45.9
|
Earnings per
share
|
$
0.15
|
$
0.08
|
$
0.23
|
|
|
June
30, 2014
|
December
31, 2013
|
Cash and cash
equivalents
|
|
$
359.2
|
$
302.7
|
Working
capital
|
|
$
497.8
|
$
419.1
|
(1)
|
Q1 2014 included 4.5
million pounds (Q4 2013 – 30.6 million pounds) of pre-commercial
production. Receipts from pre-commercial production sales were
credited against mineral property, plant and equipment, net of
costs of sale.
|
(2)
|
C1 cash cost is a
non-GAAP measure and includes mine site operating and general and
administrative costs, freight, treatment and refining charges, less
by-product credits. Royalties are excluded from the calculation of
the C1 cash cost. Non-GAAP measures do not have a standardized
meaning prescribed by International Financial Reporting Standards
(IFRS) and may not be comparable to similar measures presented by
other companies. Refer to Non-GAAP Performance Measures in the
MD&A for a reconciliation of IFRS measures to C1 cash
cost.
|
"As expected, Bisha accelerated both production and sales of
copper concentrate during Q2 2014 with 87.1 million pounds of
production year-to-date, including a record monthly production in
June 2014 of 17.8 million pounds,"
stated Cliff Davis, President and
CEO of Nevsun. "This additional truck capacity allowed us to sell
51.5 million pounds during Q2 2014, a 51% increase versus the prior
quarter."
Nevsun earned $54 million during
Q2 2014 ($31 million attributable to
Nevsun shareholders) or $0.15 per
share. "We ended Q2 with an even stronger balance sheet with
working capital approaching $0.5
billion," stated Cliff Davis.
"Our strong balance sheet allows us to comfortably maintain our
quarterly dividend and continue to build up capital for future
acquisitions or mergers."
On June 16, 2014, Bisha announced
drilling results and the regional exploration program update.
Cliff Davis commented, "We are
excited to see some early success in our 2014 exploration program
and have expanded the budget. We will be providing more updates
throughout 2014 as we further evaluate the potential of the Bisha
VMS belt."
Operations Review
Key operating
information – Bisha Mine
|
|
Mining –
copper:
|
Q2 2014
|
Q1 2014
|
YTD 2014
|
Ore mined,
tonnes(1)(2)
|
697,000
|
487,000
|
1,184,000
|
Waste mined,
tonnes
|
2,719,000
|
3,471,000
|
6,190,000
|
Strip ratio, (using
tonnes)
|
3.9
|
7.1
|
5.2
|
Processing –
copper:
|
|
|
|
Ore milled,
tonnes
|
386,000
|
353,000
|
739,000
|
Copper feed grade,
%
|
6.6
|
6.1
|
6.4
|
Recovery, % of
copper
|
84.6
|
83.5
|
84.1
|
Copper in concentrate
produced, millions of pounds
|
47.4
|
39.7
|
87.1
|
Copper in concentrate
produced, tonnes
|
21,500
|
18,000
|
39,500
|
Payable copper sold,
millions of pounds (3)
|
51.5
|
34.0
|
85.5
|
Payable copper sold,
tonnes
|
23,400
|
15,400
|
38,800
|
Copper price realized,
per payable pound sold
|
$ 3.21
|
$ 3.01
|
$ 3.14
|
(1)
|
Ore tonnes mined for
the three month period ended March 31, 2014 included 91,000 tonnes
of oxide ore including pyrite sand, 382,000 tonnes of supergene ore
and 14,000 tonnes of primary ore.
|
(2)
|
Ore tonnes mined for
the three month period ended June 30, 2014 included 126,000 tonnes
of oxide ore including pyrite sand, 531,000 tonnes of supergene ore
and 40,000 tonnes of primary ore.
|
(3)
|
Q1 2014 included 4.5
million pounds (Q4 2013 – 30.6 million pounds) of pre-commercial
production. Receipts from pre-commercial production sales were
credited against mineral property, plant and equipment, net of
costs of sale.
|
During Q2 2014, 697,000 tonnes of ore was mined, of which
531,000 tonnes was supergene ore and the remaining oxide, pyrite
sand and primary ores which were stockpiled for later processing.
The oxide and pyrite sand stockpiles are estimated to contain over
80,000 ounces of gold. Mobile equipment maintenance issues coupled
with some in- pit dewatering activities had an adverse impact on
waste mining with 2,719,000 tonnes mined in the quarter. However
the lower than expected stripping during Q2 2014 is not expected to
impact achieving copper production guidance in 2014.
Copper grades continued to exceed expectations at 6.6% in the
quarter due to a combination of positive metal reconciliation and a
variance to the original mine plan. As previously disclosed, the
copper concentrator was designed for an average 4.5% copper feed.
Accordingly, mill feeds in 2014 have been purposely reduced in
order to match the 13.2 tonnes of copper produced per operating
hour to avoid excessive copper losses to the tails management
facility. We expect grades to decrease during the second half of
2014, approaching the original design of the flotation circuit by
year-end. With lower copper feed grades, we can increase mill feed
and maintain or potentially increase recoveries during the second
half of 2014. We expect our C1 cash costs to increase during the
second half of 2014 due to anticipated lower precious metals
by-product credits and increased volumes of ore mined and
milled.
Copper concentrate grades of 27% are lower than the planned 30%
as the plant is carefully managed to ensure we meet the
specifications of our contractual commitments with our various
counterparties. Bisha will work to increase concentrate grades as
much as possible in the second half to minimize shipping and
smelting charges.
Conference call details
The Company will hold a conference call on Friday, August 1, 2014, at 8:00AM Vancouver
/ 11:00AM Toronto, New
York / 4:00 PM London, to
discuss the annual results. Please call in at least five minutes
prior to the conference call start time to ensure prompt access to
the conference. Dial in details are as follows:
North America: 1 888-390-0605 /
+1 416-764-8609 / +1 778-383-7417
UK: 0800 028 6441 (toll free)
Other International: +1 416-764-8609 / +1
778-383-7417
The conference call will be available for replay until
August 8, 2014, by calling 1
888-390-0541 / +1 416-764-8677 and entering passcode 106146.
Forward Looking Statements
This above contains forward-looking statements within the
meaning of the United States Private Securities Litigation Reform
Act of 1995 and applicable Canadian securities legislation
concerning anticipated developments in the Company's continuing and
future operations in Eritrea and
the adequacy of the Company's financial resources and financial
projections. Forward-looking statements include, but are not
limited to, statements concerning or the assumptions related to
estimates of capital and operating costs, the timing, nature and
extent of future copper and gold production, expanding exploration
licenses, the estimation of mineral reserves and resources,
methodologies and models used to prepare resource and reserve
estimates, the realization of mineral reserve estimates, the
conversion of mineral properties to reserves and resources, the
potential to expand resources, reserves and mine life, future
exploration budgets, plans, targets and work programs, capital
expenditures and objectives, anticipated timing of grant of
permits, mining and development plans and activities, construction
and production targets and timetables, grades, processing rates,
life of mine, net cash flows, metal prices, exchange rates,
reclamation costs, results of drill programs, dividend plans and
policy, litigation matters, integration or expansion of operations,
requirements for additional capital, government regulation of
mining operations, environmental risks, political risks and
uncertainties, unanticipated reclamation expenses, and other events
or conditions that may occur in the future. Forward-looking
statements are frequently, but not always, identified by words such
as "expects," "anticipates," "believes," "intends," "estimates,"
"potential," "possible," "budget" and similar expressions, or
statements that events, conditions or results "will," "may,"
"could" or "should" occur or be achieved. Information concerning
the interpretation of drill results and mineral resource and
reserve estimates also may be deemed to be forward-looking
statements, as such information constitutes a prediction of what
mineralization might be found to be present if and when a project
is actually developed, and in the case of mineral reserves, such
statements reflect the conclusion based on certain assumptions that
the mineral deposit can be economically exploited.
Forward-looking statements are statements about the future
and are inherently uncertain, and actual achievements of the
Company or other future events or conditions may differ materially
from those reflected in the forward-looking statements due to a
variety of risks, uncertainties and other factors.
Although the Company has attempted to identify important
factors that could cause actual results to differ materially from
those contained in forward-looking statements, there may be other
factors that cause results not to be as anticipated, estimated or
intended. The Company's forward-looking statements are based on the
beliefs, expectations and opinions of management on the date the
statements are made and the Company assumes no obligation to update
such forward-looking statements in the future, except as required
by law. There can be no assurance that such statements will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. For the
reasons set forth above, investors should not place undue reliance
on forward-looking statements.
Please see the Company's MD&A for the year ended
December 31, 2013, for a more
complete discussion of the risk factors associated with our
business.
About Nevsun Resources Ltd.
Nevsun Resources Ltd. is a Vancouver-based mining company with an
operating mine in Eritrea.
Nevsun's 60%- owned Bisha Mine commenced commercial copper
concentrate production in December
2013 and ranks as one of the highest grade open pit copper
mines in the world. Nevsun has a strong balance sheet and future
cash flows to grow shareholder value through exploration at Bisha
and acquisition of additional mining assets.
NEVSUN RESOURCES LTD.
"Cliff T.
Davis"
Cliff T. Davis
President & Chief Executive Officer
NSU 14-18
SOURCE Nevsun Resources Ltd.