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Why I Bought Nevsun Resources

Nevsun Resources is literally a cash cow. It has an incredible profit margin and also has a robust balance sheet. It’s an extremely rare mining company when it comes to profitablity and quality of its deposit

By Value Sniper,

NEVSUN Resource (NYSEMKT:NSU) is operator of the Bisha mine. It is one of the highest grade open pit copper mines in the world. The Bisha mine is located in Eritrea.

Due to its high grade, it has one of the lowest operating cash cost in the entire industry. In fact, the mine produces 196 million pounds of copper at a cash cost of only $1.05. Based on the current price of $2.8, it is possible to calculate a profit margin of almost 63%. Clearly, Nevsun will continue to stay largely profitable even if the copper price continue its downtrend.

With this incredible margin, the company has a trailing twelve months earnings per share of $0.47. It is important to mention that the firm pays a dividend of $0.16 per year. It represents an annual yield of 4.4%.  Continue reading Why I Bought Nevsun Resources