Dallas, Texas 01/31/2014 (FINANCIALSTRENDS) – Nevsun Resources (USA) (NYSEMKT:NSU) is into mining of metals with particular emphasis on gold, silver and other base metals like copper and zinc. The Canadian company has several assets; the most lucrative one is the Bisha property and this property may yield even diamonds.
The Bisha Property:
The Bisha property is located in the politically volatile Eritrea in Africa. However, Nevsun has escaped the political uncertainty prevalent in the region. After giving 92,000 ounces of gold and 20,000 equivalent precious metal concentrate the mine is now yielding copper. It is ranked as one of the highest grade open pit copper mines across the globe. Until mid 2013, it was producing gold ore but it shifter to copper concentrate and now there are plans to expand into zinc concentrate.
The shift was well in time as gold prices nose dived as several governments tried to curtail the demand for gold. The expansion of the mine was completed well within time and costs also were within the budgeted limits. Production during the second half exceeded the company’s expectations; the company had forecsted that it would be able to mine 30 to 50 million pounds but the mine produced 48 million pounds of copper in concentrate out of which 36 million pounds was mined in the fourth quarter itself.
Land Transportation A Road Block?
Looking ahead Nevsun Resources (USA) (NYSEMKT:NSU) is confident of even ramping up the production. If we look at the December figures than the production was 190 million pounds of copper on an annualized basis. Recovery rates were 84% with copper grade of 32%. This windfall is expected to continue in 2014. Operations in the primary excavator as well as haul truck availabilities have improved though there are still doubts about the road transportation. The company will have to look at this issue very seriously. It expects to liquidate its stockpile of the metal and this would lead to a significant inward cash flow.