Date: Thu Nov 20 16:41:59 2014
<http://ceo.ca/2014/11/20/the-next-billion-dollar-mining-takeout-could-be-in
-eritrea-africa/> The next billion dollar mining takeout could be in
Eritrea, Africa
POSTED ON November 20, 2014 BY <http://ceo.ca/author/james-fraser/> James
Fraser
CATEGORY <http://ceo.ca/category/nevsun-resources> Nevsun Resources,
Caterpillar Mining Truck at the Bisha Mine in Eritrea (Image: Nevsun
Resources)
Update 9:23AM PST: <http://www.nevsun.com/news/2014/november20/> Nevsun is
not aware of a bid for the Company
Rumors are circulating this morning that the latest takeover in the mining
space will be <http://www.nevsun.com/> Nevsun Resources (NSU.T).
<http://www.bloomberg.com/news/2014-11-20/qatar-backed-qkr-said-close-to-1-b
illion-bid-for-miner-nevsun.html> Bloomberg is reporting that QKR Corp, a
mining fund backed by Qatari investors, is set to make a $1 billion bid for
Nevsun. QKR Corp is led by Lyold Pengilly, a former banker at JP Morgan.
Nevsun's stock was halted at 7:22 am (pst) and is up 13.2% on 1.9 million
shares traded giving the company a market cap of ~$956.9 million.
Representatives from both companies have refused to comment at this time.
Nevsun had $570 million in working capital ($380 million in cash) and no
debt at the end of September. The company has now transitioned from a gold
producer into a copper producer and has strong earnings and free cash flow
at current metal prices. The strong free cash flow allows Nevsun to pay a
dividend of 14 cents per share annually.
The company's Bisha mine is expected to produce 180-200 million pounds of
copper at a grade of 4% per year. In 2016 the mine will become a zinc mine.
This could be optimal timing as many analysts see a deficit in the zinc
market in the next couple years.
Nevsun owns 60% of the Bisha mine and the Eritrean government owns the other
40%.
QKR is a mining fund that was established to buy distressed mining assets
that are near or in production. The fund made its first bet earlier this
year purchasing a gold mine in Nambia from AngloGold Ashanti for $110
million.
QKR has deep pockets as it is backed by Poland's richest man Jan Kulcyzk and
Qatar's sovereign wealth fund.
Here's the Nevsun chart:
<http://ceo.ca/wp-content/uploads/2014/11/3yrchartNSU.png> 3yrchartNSU
The rumored takeover has pushed Nevsun's share price to $4.67, which is
close to a 3 year high.
It remains to be seen if the deal will close or if another offer will come
in.
Investors should also keep an eye on Sunridge Gold (SGC.V), a junior stock
with interests in Eritrea, run by former Nevsun employees. Sunridge is up
19% already this morning, and looks to be backed by some smart guys here in
Vancouver.
Symbol: NSU.T
Share price: $4.80
Shares outstanding: 199.35M
Market cap: $956.9 M
Read:
<http://www.bloomberg.com/news/2014-11-20/qatar-backed-qkr-said-close-to-1-b
illion-bid-for-miner-nevsun.html> Qatar-Backed QKR Said Close to $1 Billion
Bid for Miner Nevsun
Nevsun_Resources_Mining_Truck
(image/jpeg attachment: image001.jpg)
(image/jpeg attachment: image002.jpg)