Nevsun Generates Strong Earnings and Cash Flow for Q3 2014
October 31, 2014
<
http://www.nevsun.com/> 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 nine months ended September 30, 2014. Unless
otherwise noted, with the exception of earnings per share and realized
copper price and cost per pound figures, all financial results are in
millions of US dollars.
Third quarter 2014 highlights
* Earnings per share of $0.13
* Cash generated from operating activities of $84 million
* Working capital of $519 million, including $380 million of cash and
$113 million in current receivables
* Produced 56.4 million pounds of copper in the quarter (19% increase
over Q2)
* Achieved industry lowest quartile C1 cash costs of $1.07 per pound
* Announced successful drilling results confirming a VMS district in
and around Bisha
* Zinc plant expansion on track for 2016 start-up
* Achieved a safety milestone of over three years without a lost time
injury
* Paid peer leading annualized dividend of $0.14 per share
(approximately 29% of earnings)
Q3 2014
Q2 2014
Q1 2014
YTD 2014
Revenues
$
147.9
$
169.2
$
99.2
$
416.3
Operating income
78.1
94.9
52.0
225.0
Net income
44.6
53.7
28.2
126.5
Net income attributable to Nevsun shareholders
25.5
30.5
15.5
71.5
Basic earnings per share attributable to Nevsun shareholders
0.13
0.15
0.08
0.36
Working capital
519.0
497.8
462.2
519.0
Copper price realized, per payable pound sold
2.98
3.21
3.01
3.08
C1 cash cost per payable pound sold (1)
$
1.07
$
1.05
$
0.98
$
1.04
(1) 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 IFRS and may not be comparable to similar measures presented
by other companies. Refer to Non-GAAP Performance Measure in the Q3 MD&A for
a reconciliation of IFRS measures to C1 cash cost.
"The team has delivered another highly profitable quarter." stated Cliff
Davis, President and CEO of Nevsun. "Nevsun earned $44.6 million during Q3
2014 ($25.5 million attributable to Nevsun shareholders) or $0.13 per share.
These results leave the Company in an even stronger position to execute its
growth objectives."
Operations Review
Key operating information - Bisha Mine
Q3 2014
Q2 2014
Q1 2014
YTD 2014
Ore mined, tonnes (1)(2)(3)
481,000
697,000
487,000
1,665,000
Waste mined, tonnes
2,707,000
2,719,000
3,471,000
8,897,000
Strip ratio, (using tonnes)
5.6
3.9
7.1
5.3
Processing - copper:
Ore milled, tonnes
477,000
386,000
353,000
1,216,000
Copper feed grade, %
6.3
6.6
6.1
6.3
Recovery, % of copper
85.6
84.6
83.5
84.7
Copper concentrate grade, %
27.2
27.1
28.8
27.6
Copper in concentrate produced, millions of pounds
56.4
47.4
39.7
143.5
Copper in concentrate produced, tonnes
25,600
21,500
18,000
65,100
Payable copper sold, millions of pounds (4)
49.8
51.5
34.0
135.3
Payable copper sold, tonnes (4)
22,600
23,400
15,400
61,400
Copper price realized per payable pound sold
$ 2.98
$ 3.21
$ 3.01
$ 3.08
C1 cash cost per payable pound sold
$ 1.07
$ 1.05
$ 0.98
$ 1.04
(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) Ore tonnes mined for the three month period ended September 30, 2014
included 1,000 tonnes of oxide ore including pyrite sand, 426,000 tonnes of
supergene ore and 54,000 tonnes of primary ore.
(4) Q1 2014 included 4.5 million pounds or 2,000 tonnes (Q4 2013 - 30.6
million pounds or 13,900 tonnes) of pre-commercial production. Receipts from
pre-commercial production sales were credited against mineral property,
plant and equipment, net of cost of sales.
Cliff Davis commented, "We are pleased to report strong performance by the
Bisha plant and in the trucking logistics as the Bisha ore body continues to
deliver continued high grade copper feed. Monetizing our working capital
including accounts receivable from our customers, the amount due from our
partner and the copper concentrate in finished goods will be our short term
objective so as to have a strong finish to the year. In the longer term,
another major focus is to ensure our zinc plant is commissioned on time and
on budget so as to capitalize on expected strong zinc prices."
Conference call details
The Company will hold a conference call on Friday, October 31, 2014, at
8:00AM Vancouver / 11:00AM Toronto, New York / 4:00 PM London, to discuss
the Q3 2014 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: 1 888-390-0546 / +1 416-764-8688 / +1 778-383-7413
UK: 0800 652 2435 (toll free)
Other International: +1 416-764-8688 / +1 778-383-7413
The conference call will be available for replay until November 8, 2014, by
calling 1 888-390-0541 / +1 416-764-8677 and entering passcode 602544.
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.
Forward Looking Statements
The 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.
NEVSUN RESOURCES LTD.
"Cliff T. Davis"
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 Oct 31 2014 - 11:39:15 EDT