VANCOUVER, Oct. 26, 2017 /CNW/ - Nevsun Resources Ltd.
(TSX:NSU)(NYSE MKT:NSU) (Nevsun or the Company) is pleased to
report its financial and operating results for the three months
ended September 30, 2017.
Unless otherwise noted all financial results are in millions
of US dollars.
Third quarter 2017 highlights
- Zinc recoveries continue to improve at Bisha, averaging 74.0%
for the quarter and 82.0% for September
- Sold 43.4 million payable pounds of zinc in zinc concentrate at
C1 cash costs(1) of $0.84
per payable pound sold
- Sold 4.0 million payable pounds of copper in copper concentrate
at C1 cash costs(1) of $1.70 per payable pound sold
- Declared the third quarterly dividend of 2017 of $0.01 per share
- Ended period with cash and cash equivalents of $151 million
- Summary Timok Preliminary Economic Assessment ("PEA") results
were released on October 26,
2017
- Plan to deliver the Timok Pre-Feasibility Study ("PFS") in Q1
2018
"We remain focused on ensuring our Bisha mine delivers maximum
value and takes advantage of the current strong zinc price
environment by both continuing to improve current metallurgical
performance and increasing material movement capability in the
mine," commented Chief Executive Officer, Peter Kukielski.
Mr. Kukielski continued, "Zinc recoveries further benefitted
from the primary ore metallurgy improvement program onsite.
Additionally, several boundary material stockpile trial campaigns
resulted in strong zinc recovery at the expense of copper recovery
as portions of this material are not amenable to copper
flotation. The mobile fleet expansion at Bisha, announced in
Q2 2017 and funded entirely through operating cash flow, is
expected to be completed by the end of H1 2018."
Financial
Review
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Q3 2017
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Q2 2017
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Q1 2017
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Q4 2016
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Revenue
(millions)
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$
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71.0
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$
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66.1
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$
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71.6
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$
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36.2
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Operating income
(loss) (millions)
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12.2
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(65.1)
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11.7
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(4.9)
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Net income (loss)
(millions)
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3.1
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(70.2)
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2.9
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(8.5)
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Working capital
(millions)
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179.1
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171.1
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190.3
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201.1
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Zinc price realized,
per payable pound sold
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$
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1.44
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$
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1.16
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$
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1.28
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$
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1.17
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C1 cash cost per
payable zinc pound sold(1)
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0.84
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0.92
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0.89
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1.06
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Copper price
realized, per payable pound sold
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$
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2.99
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$
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2.65
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$
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-
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$
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-
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C1 cash cost per
payable copper pound sold(1)
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1.70
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1.59
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-
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-
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Operations
Review
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YTD 2017
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Q3 2017
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Q2 2017
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Q3 2016
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Mining
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Ore mined,
tonnes(1)
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1,688,000
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383,000
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654,000
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672,000
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Waste mined,
tonnes
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10,979,000
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4,126,000
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3,739,000
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2,446,000
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Strip ratio, (using
tonnes)
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6.5
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10.8
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5.7
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3.6
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Processing
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Ore Milled,
tonnes
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1,713,000
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524,000
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590,000
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510,000
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Zinc feed grade,
%
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6.0
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6.8
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5.3
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5.8
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Copper feed grade,
%
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0.9
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1.0
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0.8
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1.0
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Recovery, % of
zinc(2)
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67.8
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74.0
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62.2
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59.1
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Recovery, % of
copper(3)(4)
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39.2
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33.4
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51.6
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-
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Zinc concentrate
grade, %(5)
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42.1
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42.0
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41.5
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41.3
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Copper concentrate
grade, %(4)
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17.6
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17.8
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17.4
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-
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Zinc in concentrate
produced, millions of pounds
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152.7
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57.8
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43.0
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38.6
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Zinc in concentrate
produced, tonnes
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69,300
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26,300
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19,500
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17,500
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Copper in concentrate
produced, millions of pounds(4)
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13.9
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4.0
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5.7
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-
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Copper in concentrate
produced, tonnes(4)
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6,300
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1,800
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2,600
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-
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Payable zinc in
concentrate sold, millions of pounds(6)
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130.6
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43.4
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34.3
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21.2
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Payable zinc in
concentrate sold, tonnes(6)
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59,200
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19,800
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15,400
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9,600
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Payable copper in
concentrate sold, millions of pounds
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10.8
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3.1
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7.7
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Payable copper in
concentrate sold, tonnes
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4,900
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1,400
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3,500
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(1)
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Ore tonnes mined in
the three and nine months ended September 30, 2017 included 381,000
and 1,618,000 tonnes of primary ore, respectively (three months
ended September 30, 2016 – 643,000) and 2,000 and 70,000 tonnes of
supergene ore, respectively (three months ended September 30, 2016
– 29,000).
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(2)
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This represents the
overall combined zinc recovery from the zinc flotation circuit (and
when bulk concentrate is produced in the copper
circuit).
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(3)
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This represents the
copper recovery from the copper flotation circuit only, and
excludes copper recovered to bulk concentrate.
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(4)
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Operating statistics
related to recovery as a percentage of copper, copper concentrate
grade, and copper in concentrate produced, were not meaningful
during Q3 2016.
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(5)
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This represents
combined concentrate grade for both zinc and bulk
concentrates.
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(6)
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Sales of zinc in
concentrate recorded during Q3 2016 consisted entirely of
pre-commercial production. Receipts from the sales of
pre-commercial production were credited against mineral property,
plant and equipment, net of costs of sale.
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Bisha's strip ratio increased in Q3 2017 as mining benches,
walls and faces in the Bisha main pit were re-established to better
prepare for a planned increase in mining rate and a more efficient
mining schedule for 2018 onwards. This lower mining rate (compared
with previous quarters) and mining pattern schedule is expected to
continue and be finished by the end of Q4 2017.
The lower mining rate in Q3 2017 and resulting in-pit primary
ore mill feed shortfalls led to trials and campaigns of a portion
of the previously stockpiled boundary material with high zinc
quantities but with minor activated copper quantities. This
resulted in better than expected zinc recoveries and zinc
production but disappointing, although not unexpected, lower copper
production. The Company is encouraged by these recent results with
particular focus now applied to investigating approximately 30
percent of the boundary ore stockpiles for future zinc-only
processing. The Company is still uncertain if the metallurgical
performance from these recent boundary material trials can be
consistently achieved for the remaining material as these
stockpiles are not homogenous with known variations in grades and
mineralogy, and may have been subject to detrimental oxidation
during surface stockpiling.
Most importantly, the skilled team of employees and external
consultants at the Bisha Mine continue to make meaningful progress
with the primary ore metallurgy rectification program. The program
focusses on minor plant modifications, reagent trials, water
treatment options, and oxidation and grind size analyses. The
Company still expects to achieve 70% recovery of copper to copper
concentrate and 77% recovery of zinc to zinc concentrate over the
primary reserve life. The Company remains committed with
critical expert resources to upgrading the quality of its copper
and zinc concentrates to enhance marketability and to realise
better commercial terms.
Q3 2017 Results Conference Call and Webcast Details
The Company will hold a conference call and webcast on
Friday, October 27, 2017, at
8AM Vancouver / 11AM
Toronto, New York / 4PM
London, to discuss the Q3 2017
results.
Conference Call:
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 by phone until
Friday, November 3, 2017, by calling
1 888-390-0541 / +1 416-764-8677 and entering passcode 184710
#.
Webcast:
A live audio webcast of the conference call will be available on
the Company's website www.nevsun.com or by clicking
https://event.on24.com/wcc/r/1510784/2833217E5B8B257192DBAFDBC54A5E0E
About Nevsun Resources Ltd.
Nevsun Resources Ltd. is the 100% owner of the high-grade
copper-gold Timok Upper Zone and 60% owner of the Timok Lower Zone
in Serbia. Nevsun generates cashflow from its 60% owned copper-zinc
Bisha Mine in Eritrea. Nevsun is
well positioned with a strong debt-free balance sheet to grow
shareholder value through advancing Timok to production.
Forward Looking Statements
The above contains forward-looking statements or
forward-looking information within the meaning of the United States
Private Securities Litigation Reform Act of 1995, and applicable
Canadian securities laws. All statements, other than statements of
historical facts, are forward looking statements including
statements with respect to the Company's Bisha Mine in Eritrea and its intentions for its Timok Upper
Zone Project in Serbia (the "Timok Project"). The Company also
cautions the reader that the preliminary economic assessment
("PEA") on the Timok Project that supports the technical
feasibility or economic viability of the Timok Project, including
the marketability of the concentrate, mining method, costs,
processing, metal recoveries and any other technical aspects
related to the Timok Project, is preliminary in nature and there is
no certainty that the PEA will be realized.
Forward-looking statements are frequently, but not always,
identified by words such as "expects", "anticipates", "believes",
"hopes", "intends", "estimated", "potential", "possible" and
similar expressions, or statements that events, conditions or
results "will", "may", "could" or "should" occur or be achieved.
Forward-looking statements are statements concerning the Company's
current beliefs, plans and expectations about the future, including
but not limited to statements and information made concerning:
statements relating to the business, prospects and future
activities of, and development plans related to the Company,
anticipated dividends, goals, strategies, future growth,
exploration activities, the adequacy of financial resources and
other events or conditions that may occur in the future.
These forward-looking statements are based on a number of
assumptions which, while considered reasonable by the Company, are
subject to risks and uncertainties. In addition to the
assumptions contained herein, these assumptions include the
assumptions described in the Company's Annual Information Form
("AIF") and the Company's management's discussion and analysis for
the year ended December 31, 2016
("MD&A"). The Company cautions readers that forward-looking
statements involve and are subject to known and unknown risks,
uncertainties and other factors which may cause actual results,
performance or achievements to differ materially from those
expressed in or implied by such forward-looking statements and
forward-looking statements are not guarantees of future results,
performance or achievement.
These risks, uncertainties and factors include general
business, economic, competitive, political, regulatory and social
uncertainties; actual results of exploration activities and
economic evaluations; fluctuations in currency exchange rates;
changes in project parameters; changes in costs, including labour,
infrastructure, operating and production costs; future prices of
copper, gold, zinc, silver and other minerals; resource estimates
and variations of mineral grade or recovery rates; metallurgical
challenges; operating or technical difficulties in connection with
exploration; land acquisition; mining method, production profile
and mine plan; other development or mining activities, including
the failure of plant, equipment or processes to operate as
anticipated; delays in exploration, development and construction
activities; changes in government legislation and regulation; the
ability to maintain and renew existing licenses and permits and the
ability to obtain other required licences and permits in a timely
manner or at all; the ability to obtain financing on acceptable
terms and in a timely manner or at all; contests over title to
properties; employee relations and shortages of skilled personnel
and contractors; the speculative nature of, and the risks involved
in, the exploration, development and mining business; and other
factors and risks discussed in the Company's AIF and
MD&A.
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. For the reasons set forth above, investors should not
place undue reliance on the Company's forward-looking
statements.
Further information concerning risks and uncertainties
associated with these forward-looking statements and our business
can be found in our AIF for the year ended December 31, 2016, which is available on the
Company's website (www.nevsun.com), filed under our
profile on SEDAR (www.sedar.com) and on EDGAR
(www.sec.gov) under cover of Form 40-F.
NEVSUN RESOURCES LTD.
"Peter G.J. Kukielski"
Peter G.J. Kukielski
President & Chief Executive Officer
SOURCE Nevsun Resources Ltd.