By Nevsun,
Nevsun Resources Ltd. (TSX:NSU / NYSE MKT:NSU) (Nevsun or the Company) is pleased to report its financial and operating results for the year ended December 31, 2013. Unless otherwise noted, with the exception of earnings per share and realized price per ounce and per pound figures, all financial results are in thousands of US dollars.
“2013 represented a transitional year with the wind-down of gold phase operations and completion of construction of the copper plant and then successfully bringing the copper operation to commercial production in December,” stated Cliff Davis, President and CEO of Nevsun.
“From a cash perspective, we started the year with almost $400 million, invested approximately $86 million and returned $24 million to shareholders. Despite these expenditures and despite spending several months bringing the copper plant to commercial production, the Company maintained a strong balance sheet, ending the year with almost $420 million in working capital and no debt.
“In 2014 the Bisha Mine expects to be in the bottom quartile of low-cost copper producers and to produce between 180 and 200 million pounds of copper. We have continued an aggressive generative exploration program on the highly prospective Bisha property and neighbouring Mogoraib River license and we are continuing to actively evaluate potential merger and acquisition opportunities.”
Full year 2013 highlights
– Exceeded 15 million hours without a lost time injury
– Completed the copper expansion project on-time and under budget
– Achieved commercial production of copper plant
– Produced 48 million pounds of copper in concentrate against guidance of 30 to 50 million pounds
– Produced 92,000 ounces of gold in doré plus 20,000 equivalent ounces in precious metals concentrate
– Revenues of $155.7 million, with average realized gold price per ounce of $1,471
– Net income of $29.3 million
– Increased annualized dividend by 40% to $0.14 per share
– Maintained strong balance sheet with approximately $420 million in working capital
Operations review
| Key operating information – Bisha Mine(1) | 2013 | 2012 |
| Oxide ore mined, tonnes | 1,187,000 | 1,591,000 |
| Supergene ore mined, tonnes | 805,000 | – |
| Waste mined, tonnes | 9,038,000 | 8,677,000 |
| Strip ratio, (using tonnes) (2) | 4.5 | 5.5 |
| Copper phase prestrip, tonnes | – | 1,220,000 |
| Processing – copper: | ||
| Tonnes milled | 767,000 | – |
| Copper feed grade, % | 3.9 | – |
| Recovery, % of copper | 73.5 | – |
| Copper in concentrate produced, millions of pounds | 48.0 | – |
| Copper in concentrate sold, millions of pounds(3) | 30.6 | – |
| Copper price realized per pound(3) | $ 3.20 | $ – |
| Processing – gold: | ||
| Tonnes milled | 887,000 | 1,807,000 |
| Gold grade (g/t) | 3.43 | 6.21 |
| Recovery, % of gold | 79.4 | 85.8 |
| Gold in doré, ounces produced | 92,000 | 313,000 |
| Gold ounces sold | 96,700 | 320,700 |
| Gold price realized per ounce | $ 1,471 | $ 1,671 |
– – – – – – –
(1) For quarterly information, refer to the Annual MD&A, key operating information.
(2) In previous disclosures, strip ratio was calculated using BCMs. As supergene ore density is nearly double that of previous oxide ore density and haul trucks are limited by tonnage, it is more appropriate to report strip ratio now by tonnes of waste to ore rather than by BCMs of waste to ore.
(3) Copper in concentrate sold in 2013 was all related to the pre-commercial production period. As a result, the proceeds associated with these sales are offset against pre-commercial production capital costs and are not recorded as revenues.
Mined ore tonnage of 1,992,000 for 2013 was up 25% from the 1,591,000 ore tonnes mined in 2012. While waste movement of 9,038,000 tonnes was up from the 8,677,000 moved in 2012, the Company did not achieve its waste mining target. The shortfall in waste movement is not expected to affect 2014 copper ore production.
Commercial production was declared for the copper plant on December 1, 2013. During 2013 the Company produced 48.0 million pounds of copper in concentrate and sold 30.6 million pounds of copper in concentrate. Pre-commercial production sales were offset against the capitalized pre-commercial production costs. Decreased gold production in 2013 of 92,000 ounces resulted from the wind-down of the gold plant through the first half of the year and its subsequent decommissioning. The results are not comparable to 2012, which saw 313,000 ounces produced with a full twelve months of commercial gold operations.
Financial review
| In US $000s (except per share data) | December 31, 2013(1) | December 31, 2012 |
| Revenues | $ 155,698 | $ 566,039 |
| Operating income | 71,395 | 405,674 |
| Net income for the year | 29,254 | 246,696 |
| Net income attributable to Nevsun shareholders | $ 12,857 | $ 145,262 |
| Earnings per share attributable to Nevsun shareholders – basic | 0.06 | 0.73 |
| Earnings per share attributable to Nevsun shareholders – fully diluted | 0.06 | 0.72 |
| Total assets | $ 870,860 | $ 873,696 |
| Total long term financial liabilities | $ 53,802 | $ 38,717 |
| Dividends declared per share | $ 0.14 | $ 0.10 |
– – – – – – – – –
(1) Copper commercial operations commenced December 1, 2013. The 2013 figures only reflect gold phase operating results and do not include copper sales.
The Company’s revenues for 2013 of $155,698 (2012 – $566,039) are comprised of revenues on gold sales of $142,241 (2012 – $535,945) and revenues on by-product silver sales of $13,457 (2012 – $30,094). Gold revenues included sales of 96,700 ounces of gold (2012 – 320,700 ounces) at an average realized price of $1,471 per ounce (2012 – $1,671 per ounce). These average realized prices per ounce of gold sold compare to the average market price per ounce (London PM Fix) of $1,411 for 2013 and $1,669 for 2012. Included in revenues are silver by-product revenues for 2013 from sales of 507,935 ounces of silver (2012 – 962,000 ounces) at an average realized price of $24.63 per ounce (2012 – $31.28 per ounce).
The Company’s cash and cash equivalents at December 31, 2013, were $302,724, down from $396,404 as at December 31, 2012; working capital as at December 31, 2013, and 2012, was approximately $420,000 and $398,000, respectively.
– – – – – – – – – – – – – – – –
