http://www.mineweb.com/mineweb/content/en/mineweb-company-releases?oid=240151&sn=Detail
Nevsun Outlines Q1 Financials & Operating Results
Wednesday , 07 May 2014 Nevsun
VANCOUVER , May 6, 2014 /CNW/ - Nevsun Resources Ltd. (NSU.TO) (NYSE
MKT:NSU) (Nevsun or the Company) is pleased to report its financial and
operating results for the three months ended March 31, 2014 . Unless
otherwise noted, with the exception of earnings per share and realized
price and cost per pound figures, all financial results are in thousands of
US dollars.
First quarter 2014 highlights
Continued copper ramp up with 39.7 million pounds produced in the quarter
Achieved industry lowest quartile C1 cash costs of $0.98 per pound
Delivered strong cash flows which increased working capital from $419
million to $462 million
Paid peer leading annualized dividend of $0.14 per share
Increased indicated resource tonnes by 29% and contained copper by 22%
Published 2013 Corporate Social Responsibility report in accordance with
the Global Reporting Initiative's fourth generation framework
Achieved the following financial and production metrics:
Q1 2014 Q4 2013(3)
Revenue (millions) $99.2 $NM
Copper in concentrate produced, millions of pounds 39.7 36.0
Copper in concentrate produced, tonnes 18,007 16,374
Payable copper sold, millions of pounds(1) 34.0 30.6
Payable copper sold, tonnes 15,400 13,900
Copper price realized, per payable pound sold $3.01 $3.20
C1 cash cost per payable pound sold (2) $0.98 $NM
Net income (loss) attributable to Nevsun shareholders (millions) $15.4
$(4.2)
Earnings (loss) per share $0.08 $(0.03)
March 31,
2014 December 31,
2013
Cash and cash equivalents (millions) $337.9 $302.7
Working capital (millions) $462.2 $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 Issues
for a reconciliation of IFRS measures to C1 cash cost.
(3) The Company has not disclosed C1 cash cost during the
pre-commercial copper phase as the costs were unlikely to be comparable to
future periods and therefore not meaningful (NM). Additionally, Q1 2013
comparative information is deemed to be not meaningful and
therefore not shown as the Company was in its gold production phase at that
time.
"Bisha had a great quarter" stated Cliff Davis , President and CEO of
Nevsun. "We're especially pleased to achieve a C1 cash cost per payable
pound sold of $0.98 , well within the first quartile of copper producers,
while still ramping up production. We ended Q1 with an even stronger
balance sheet, with quarter-end working capital increasing to $462 million
, including cash of $338 million .
"We continue to optimize the copper plant and the copper concentrate
logistics. We are poised to accelerate production during Q2 2014 and
reiterate our 2014 production guidance of 180,000 to 200,000 pounds of
copper in concentrate."
"We have continued an aggressive generative exploration program on the
highly prospective Bisha property and neighbouring Mogoraib River license
and we are continuing to actively evaluate potential merger and acquisition
opportunities."
Operations Review
Key operating information - Bisha Mine(1)For the three months
ended,
Mining - copper:March 31,
2014December 31,
2013
Ore mined, tonnes 487,000 533,000
Waste mined, tonnes 3,471,000 2,664,000
Strip ratio, (using tonnes) 7.1 5.0
Processing - copper:
Ore milled, tonnes 353,000 401,000
Copper feed grade, % 6.1 5.1
Recovery, % of copper 83.5 79.7
Copper concentrate grade, % 28.8 26.0
Copper in concentrate produced, millions of pounds 39.7 36.0
Copper in concentrate produced, tonnes 18,007 16,374
Payable copper sold, millions of pounds(2) 34.0 30.6
Payable copper sold, tonnes 15,400 13,900
Copper price realized, per payable pound sold$3.01$3.20
(1) The Company achieved commercial production of the copper plant on
December 1, 2013.
(2) 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 Q1 2014, 487,000 tonnes of ore were mined, of which 382,000 tonnes
were supergene ore and the remaining oxide, pyrite sand and primary ore
were stockpiled for later processing. In order to minimise oxidation of the
supergene ore, lower levels of pre-crusher broken ore stocks were
maintained on the mine ore blending pad. Waste mining has improved
considerably from past performance with 3,471,000 tonnes mined in the
quarter with strip ratios in line with our expectations.
Ore mill feed of 353,000 tonnes was less than the prior quarter's mill feed
due to much higher copper feed grades than expected (6.1% compared with a
planned 4.6%) and the lack of room on the concentrate pad due to the
trucking logistics. Increasing mill feed rates with such high copper
grades would have resulted in lower copper recoveries and more copper
discharged to the tailings management facility. With the concentrate
trucking logistics operating only at about 85% efficiency, the plant was
required to stop for 13 days during Q1 2014. With the planned injection of
additional truck and trailer sets during Q2 2014, the increased trucking
capacity should have a positive impact on the Company's ability to achieve
its 2014 production forecast of 180 to 200 million pounds of copper
produced in concentrate.
Copper recoveries and concentrate grades are ramping up as expected
approaching 87% and 30% respectively by quarter end.
Financial review
For the three month
ended March 31,
In US $000s (except per share data)(1) 20142013
Revenues $99,151$71,130
Operating income 51,983 37,779
Net income for the period 28,180 19,503
Net income attributable to Nevsun shareholders $15,440$10,625
Earnings per share attributable to Nevsun shareholders - basic 0.08 0.05
Earnings per share attributable to Nevsun shareholders - fully diluted
0.08 0.05
(1) Copper commercial operations commenced December 1, 2013. The 2013
figures reflect only gold phase operating results and do not
include copper sales.
The Company's Q1 2014 revenues of $99,151 (Q1 2013 - $71,130 ) are
comprised of copper concentrate sales of $88,811 (Q1 2013 - $nil), copper
concentrate by-product sales of $13,616 (Q1 2013 - $nil), and other sales
of high grade precious metal pyrite ore of $5,696 (Q1 2013 - $nil).
Offsetting these sales were treatment and refining charges of $8,972 (Q1
2013 - $nil). Revenues included sales of 29.5 million pounds of payable
copper (Q1 2013 - $nil) at an average realized price of $3.01 per pound (Q1
2013 - $nil). On March 26, 2014 , the Company also shipped approximately
6.4 million payable pounds or 2,900 payable tonnes of copper for which
revenue recognition criteria had not yet been met as at March 31, 2014 .
The Company's cash and cash equivalents at March 31, 2014 were $337,900 ,
up from $302,700 as at December 31, 2013 ; working capital balances as at
March 31, 2014 , and December 31, 2013 , were approximately $462,200 and
$419,100 , respectively.
During the quarter the Company released updated resource and reserve
estimates. The copper resource estimate increased by 22% over the previous
one released in May 2012. In addition, the open pit Hambok and North West
Zone resources were added for the first time. Despite mining depletion and
cost inflation since our last reserve report, Bisha base metal mine life is
11 years, demonstrating the robust nature of the high grade Bisha Main ore
body.
Nevsun is committed to disciplined capital allocation. The growth
strategies include a mix of organic/exploration investment and mergers and
acquisitions (M&A). Bisha has an aggressive generative exploration program
on the highly prospective Bisha property and neighbouring Mogoraib River
licence and we are continuing to evaluate potential M&A opportunities.
Nevsun's approach to M&A is based on capital discipline and staying true
to our commitment of generating a financial return on our investment for
shareholders that will allow us to maintain and grow our dividend in the
future.
Conference call details
The Company will hold a conference call on Wednesday, May 7, 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 May 14, 2014 , by
calling 1 888-390-0541 / +1 416-764-8677 and entering passcode 467731.
Received on Wed May 07 2014 - 06:03:11 EDT