With it Bisha mine in Eritrea now operating at full capacity, Nevsun
announced its best results yet for the third quarter and has begun work on
copper processing facilities.
Author: Kip Keen
Posted: Monday , 14 Nov 2011
HALIFAX, NS - - The full scope of Nevsun Resources' (TSX: NSU) remarkable third quarter became clearer as the Eritrea-focused miner reported its full third quarter financial and production results, pushing the envelope on cash costs, gold grade and profits.
As compared to the previous quarter, Nevsun revenue and net-income surged to $147 million and $89 million respectively, up by about 50 percent in both cases, as cash costs at its Bisha mine in Eritrea dropped over 10 percent to $264 per ounce gold. In all Nevsun produced 110,000 ounces gold - the most yet in the three quarters since it began commercial operations - and sold 108,600 ounces gold at an average $1,715 per ounce.
As Nevsun previously reported, cash and cash equivalents grew $39 million over the previous quarter to $227 million.
Of particular note, while throughput at the Bisha mine held steady at 446,000 tonnes, the milled gold grade rose to 8.45 g/t gold, up by more than a gram over the second quarter and 1.4 grams over the stated reserve grade for the gold-rich oxide portion of the Bisha deposit in which Nevsun is now mining.
That elevated gold grade explains the third quarter's blistering pace of
gold production, which, when first reported in early October, caught
analysts off guard (as reported on
*Mineweb*<http://www.mineweb.com/mineweb/view/mineweb/en/page66?oid=137015&sn=Detail>
*)*. Analysts had expected gold production to come in somewhere closer to
90,000 ounces gold.
This over achievement, in turn, has led to the inevitable question of whether Nevsun will continue to clock such reserve-busting gold grades in coming quarters.
‘Yes, the grade was higher than expected relative to reserve grade, which likely, in part, accounted for the quarter's low average cash costs," Stefan Ioannou told*Mineweb *in an email Monday after Nevsun reported its quarterly results. "It is not clear at the moment whether or not grades will continue to track higher than Bisha's oxide reserve grade."
The official answer from Nevsun is no they will probably not. "I would expect grades to be down closer to reserve grades," said Nevsun president and CEO Cliff Davis in a telephone interview with *Mineweb *on Monday.
But even then Nevsun will still churn out near 100,000 ounces gold per quarter. As Davis put it, Bisha is "pumping out a lot of gold" at the moment and, according to mining plans, will continue to do so for the next five or six quarters.
Then Nevsun will transition into copper-rich supergene ore below gold rich oxides, to which end Davis noted construction of copper processing facilities had begun. If all goes according to plan Nevsun's copper days will start in the first half of 2013.
----[Mailing List for Eritrea Related News ]---- Received on Mon Nov 14 2011 - 21:33:11 EST
This archive was generated by hypermail 2.3.0 : Mon Nov 14 2011 - 21:33:11 EST