Nevsun Announces First Quarter 2013 Results
http://www.nevsun.com/news/2013/may09/
May 10, 2013
<
http://www.nevsun.com/> Nevsun Resources Ltd.(TSX:NSU / NYSE Amex:NSU) is
pleased to report its financial and operating results for the first quarter
of 2013. Unless otherwise noted, with the exception of earnings per share
and cash cost per ounce figures, all results are in thousands of US dollars.
This release should be read in conjunction with Nevsun Resources Ltd.'s
(Nevsun or the Company) condensed consolidated interim financial statements
for the three months ended March 31, 2013, and associated Management
Discussion and Analysis (MD&A), which are available on the Company's website
at <
http://www.nevsun.com/investors/financials>
www.nevsun.com/investors/financials, on SEDAR ( <
http://www.sedar.com>
www.sedar.com) and on EDGAR ( <
http://www.sec.gov> www.sec.gov).
First quarter 2013 highlights
* Produced 42,300 ounces of gold
* Revenues of $71.1 million
* Cash cost of $563 per ounce of gold sold(1)
* Net income attributable to Nevsun shareholders was $10.6 million,
$0.05 per share
* More gold and silver bearing ore identified in the Bisha Main pit
* Copper flotation plant on schedule, on budget and nearly complete
* Paid $0.05 dividend per share on January 15, 2013
* Maintained strong balance sheet with over $400 million in working
capital
* Subsequent to quarter-end, the Company published its 2012 Corporate
Social Responsibility Report which can be accessed on the Nevsun website at
<
http://www.nevsun.com/responsibility/reporting/>
http://www.nevsun.com/responsibility/reporting/
(1) Cash cost per ounce sold includes royalties and is a non-GAAP measure;
see cautionary note regarding non-GAAP measure in the MD&A.
"The Company's performance for the first quarter of 2013 was strong,
particularly when considering that we are in the process of winding down the
gold phase and completing construction of the Bisha copper plant" stated
Cliff Davis, President and CEO of Nevsun. "While we had higher cash costs
than 2012, the Bisha Mine is still among the lowest cost mines in the
industry and the positive cash margins have continued to fund the copper
phase expansion, which is nearly complete. We maintained a very strong
balance sheet at quarter-end with $400.7 million in working capital,
including $335.2 million in cash, and no debt.
At year-end, we reported 40,000 to 60,000 tonnes of material termed "pyrite
sands", at the base of the oxide gold in the Bisha Main pit. The Company now
estimates there are approximately 250,000 tonnes of pyrite sand ore varying
from 3 to 10 grams per tonne gold and exceeding 100 grams per tonne silver,
with some pockets at even higher grades. Because the ore is pyritic, it
cannot be processed in the carbon-in-leach (CIL) gold plant. Pending ongoing
test work and economic analysis, the Company will likely concentrate some of
this material through the new copper flotation plant, prior to starting
supergene copper production. The resultant precious metals concentrate will
then either be sold directly, blended with copper concentrate or a
combination thereof.
We estimate processing pyrite sands could take six to seven weeks, possibly
pushing the start of supergene copper production into late Q3 2013, with
completion of ramp up to commercial production in Q1 2014. We see this
likely delay as a positive trade-off for the value expected to be gained
from the pyrite sands."
Operations review
Key operating information - Bisha Mine:
For the three months ended March 31,
2013
2012
Ore mined, tonnes
475,000
349,000
Waste mined, tonnes(1)
1,925,000
1,826,000
Strip ratio, (using BCMs)
5.1
6.2
Copper phase prestrip, tonnes
-
739,000
Tonnes milled
432,000
430,000
Gold grade (g/t)
4.14
6.58
Recovery, % of gold
79%
86%
Gold in doré, ounces produced
42,300
82,000
Gold ounces sold
41,500
83,100
Gold price realized per ounce
$ 1,592
$ 1,712
Cash cost per ounce sold(2)
$ 563
$ 277
(1) All waste tonnes mined reflect updated rock density estimates.
(2) Cash cost per ounce sold includes royalties and is a non-GAAP measure;
see cautionary note regarding non-GAAP measure in the MD&A.
Approximately half of the ore mined in Q1 2013 came from the Harena
satellite deposit, which is lower grade than Bisha, hence the drop in feed
grade from Q1 2012 of 6.58 g/t to 4.14 g/t in Q1 2013. Mining of the oxide
material at the Harena deposit is nearing completion. The strip ratio was
expected to be higher in Q1 2013 as compared to Q1 2012, as the plan was to
move more waste in Q1 2013 than was actually achieved. The lower than
planned waste mined resulted from a combination of equipment availabilities,
which negatively impacted the mining schedule, coupled with subgrade
mineralized waste being reclassified as ore as it was required to blend with
the high grade Bisha acid ores.
Gold recovery of 79% for Q1 2013, which was less than the 86% experienced in
Q1 2012, was as expected and was attributable to changes in ore mineralogy.
The reduction of gold ounces sold to 41,500 in Q1 2013 from the 83,100
ounces sold in Q1 2012 is due to the lower level of gold produced in Q1
2013, which was a result of the lower grades and mill recoveries. The
decrease in physical ounces produced was within the Company's expectations
and guidance.
Gold cash costs per ounce for Q1 2013 were $563 on 41,500 ounces sold, which
included $124 per ounce in silver by-product credits, an increase in cash
cost per ounce as compared with $277 in Q1 2012, including $86 per ounce in
silver by-product credits. The increase in cash operating costs in Q1 2013
compared to Q1 2012 is primarily attributable to a reduction in gold ounces
sold and the accompanying increase in mining and milling costs per ounce
produced, partly offset by higher silver by-product credits.
Financial review
Summary of financial results:
In US $000s (except per share data)
For the three months ended March 31,
2013
2012
Revenues
$ 71,130
$ 149,390
Operating income
37,779
110,628
Net income
19,503
68,763
Net income attributable to Nevsun shareholders
10,625
41,238
Earnings per share attributable to Nevsun shareholders
0.05
0.21
Working capital
400,711
337,672
Total assets
$ 854,121
$ 747,148
Details of revenue breakdown for gold and silver, operating expenses,
depreciation and depletion, and other expenses are discussed in the
Company's first quarter 2013 MD&A.
Working capital at March 31, 2013, including cash and cash equivalents, was
just over $400,000, approximately the same as at December 31, 2012. The
Company's cash and cash equivalents at March 31, 2013, of $335,168, was down
from $396,404 as a result of paying dividends ($9,949), income taxes
($44,484) and investing in copper plant and other capital ($28,422). Details
of sources and uses of cash are presented in the first quarter financial
statements and discussed in the MD&A.
Conference call details
The Company will hold a conference call on Friday, May 10, 2013, at 8:00 AM
Vancouver / 11:00 AM Toronto, New York / 4:00 PM London, to discuss the
quarterly 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: 416-340-8530 / 1 877-440-9795
UK: 00800-2787-2090 (toll free)
Other International: +1 416-340-8530
The conference call will be available for replay until May 17, 2013, by
calling +1 905-694-9451 / 1 800-408-3053 and entering passcode 4709876.
Forward Looking Statements
The above contains forward-looking statements or forward-looking information
within the meaning of the United States Private Securities Litigation Reform
Act of 1995, and applicable Canadian securities laws. Forward-looking
statements are frequently, but not always, identified by words such as
"expects," "anticipates," "believes," "intends," "estimated," "potential,"
"possible" and similar expressions, or statements that events, conditions or
results "will," "may," "could" or "should" occur or be achieved.
Forward-looking statements are statements concerning the Company's current
beliefs, plans and expectations 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,
including, without limitation, the risks that: (i) any of the assumptions in
the historical resource estimates turn out to be incorrect, incomplete, or
flawed in any respect; (ii) the methodologies and models used to prepare the
resource and reserve estimates either underestimate or overestimate the
resources or reserves due to hidden or unknown conditions, (iii) the mine
operations are disrupted or suspended due to acts of god, internal conflicts
in the country of Eritrea, unforeseen government actions or other events;
(iv) the Company experiences the loss of key personnel; (v) the Company's
mine operations are adversely affected by other political or military, or
terrorist activities; (vi) the Company becomes involved in any material
disputes with any of its key business partners, lenders, suppliers or
customers; (vii) the Company is subjected to any hostile takeover or other
unsolicited attempts to acquire control of the Company; (viii) the Company
is subject to any adverse ruling in any of the pending litigation to which
it is a party; (ix) the Company incurs unanticipated costs as a result of
the transition from the oxide phase of the Bisha mining operations to the
copper phase in 2013; or (x) the assumptions used in the current planning
for pyrite sand ore turn out to be incorrect. Other risks are more fully
described in the Company's Management Discussion and Analysis for the fiscal
year ended December 31, 2012, which is incorporated herein by reference. 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. For the reasons set forth above,
investors should not place undue reliance on the Company's forward-looking
statements.
Please see the Company's Annual Information Form for the fiscal year ended
December 31, 2012, and the Company's Management Discussion and Analysis for
the year ended December 31, 2012, 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 gold
production in February 2011 and is scheduled to transition to copper/gold
production in mid-2013. Management expects the Bisha Mine will rank as one
of the highest grade open pit base metal deposits in the world.
NEVSUN RESOURCES LTD.
Cliff T. Davis
President & Chief Executive Officer
For further information, contact:
Kin Communications
Tel: 604 684 6730
Toll free 1 866 684 6730
Email: <mailto:nsu_at_kincommunications.com> nsu_at_kincommunications.com
Website: <
http://www.nevsun.com/> www.nevsun.com
Received on Fri May 10 2013 - 13:54:29 EDT
