Nevsun profit falls 40% despite beating Q1 production, cost guidance

TORONTO (miningweekly.com) – Eritrea-focused Canadian miner Nevsun Resources has reported a 40% decline in net income attributable to shareholders for the three months ended March 31, as metal output at its flagship Bisha mine declined and the realised copper price fell 12% year-on-year.

Net income attributable to Nevsun shareholders totalled $7.5-million, or $0.04 a share, while revenue fell 21% over the comparable period of 2015 to $92.4-million.

This was the result of a 26% drop in payable copper in concentrate produced at 34.9-million pounds, as the copper feed grade fell 1.6% year-on-year to 3.1% copper. C1 cash cost per payable pound sold totalled $1.12/lb, down $0.11/lb as its cost reduction initiatives gained traction.

Gold in concentrate sold totalled about 6 000 oz and silver totalled 226 000 oz.

"We are off to a great start to 2016 with supergene production ahead of guidance and strong demand for our gold equivalent ounces from stockpiles. The precious metal stockpiles sales confirm the marketability of this material at more favourable commercial terms than originally expected. With the strong gold and silver prices, we will prioritise shipping precious metal stockpile material over zinc concentrate to maximise earnings and cash flow,” stated president and CEO Cliff Davis.

Nevsun reported that its zinc expansion project continued to progress well, with hot ore commissioning scheduled to start later this quarter. The project was expected to be completed on time and well under budget, Davis advised, noting that Nevsun still had not committed any of its zinc offtake so as to take advantage of an expected tightening of global zinc concentrate supplies.