Canadian gold miner Nevsun Resources Ltd. (NSU) posted earnings of 3 cents per share in the second quarter of 2013, down 84% from 19 cents posted in the year ago quarter. The results missed the Zacks Consensus Estimate by a penny.
Revenues for the second quarter decreased 63% year over year to $54.8 million. Nevsun produced 34,900 ounces of gold compared with 87,000 ounces in the year ago quarter. The company, earlier in Jul 2013, revealed production results for the quarter. Nevsun sold 36,200 ounces in the quarter, down from 87,500 ounces a year ago due to the lower grades and mill recoveries.
Gold cash costs per ounce was $692 which included $138 per ounce in silver by-product credits compared with $253 per ounce in the second quarter of 2012 which included $89 per ounce in silver by-product credits. The year-over-year increase in gold cash cost per ounce represents reduction in gold ounces sold and the increase in mining and milling costs per ounce produced, which was partly offset by higher silver by-product credits.
Nevsun was ahead of schedule on the copper plant commissioning and also completed copper flotation plant on time and under budget.
Nevsun maintains a strong balance sheet with cash and cash equivalents of $343 million, no debt and a superior deposit. The company also announced a 40% hike in semi-annual dividend to 7 cents per share.
Despite challenges in the mining market, Nevsun remains optimistic about external growth opportunities. The company’s Bisha mine in Eritrea, East Africa, is expected to become fruitful in early 2014 and it has a supportive partner in the Government of Eritrea.
Nevsun currently retains a short-term Zacks Rank #3 (Hold).
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