Nevsun Misses Earnings Estimates - Analyst Blog
August 20 2013 - 10:00AM
Zacks
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).
Other companies in the mining industry with favorable Zacks Rank
are Avalon Rare Metals Inc. (AVL), BHP
Billiton plc (BBL) and Denison Mines
Corp. (DNN) with all retaining a Zacks Rank #2 (Buy).
AVALON RARE MTL (AVL): Free Stock Analysis Report
BILLITON ADR (BBL): Free Stock Analysis Report
DENISON MINES (DNN): Free Stock Analysis Report
NEVSUN RESOURCS (NSU): Free Stock Analysis Report
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