Nevsun Announces First Quarter 2013 Results

Nevsun Announces First Quarter 2013 Results 
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/09/13 -- Nevsun
Resources Ltd. (TSX:NSU)(NYSE MKT:NSU) is pleased to report its
financial and operating results for the first quarter of 2013. Unless
otherwise noted, with the exception of earnings per share and cash
cost per ounce figures, all results are in thousands of US dollars. 
This release should be read in conjunction with Nevsun Resources
Ltd.'s (Nevsun or the Company) condensed consolidated interim
financial statements for the three months ended March 31, 2013, and
associated Management Discussion and Analysis (MD&A), which are
available on the Company's website at
www.nevsun.com/investors/financials, on SEDAR (www.sedar.com) and on
EDGAR (www.sec.gov).  
First quarter 2013 highlights 


 
--  Produced 42,300 ounces of gold 
--  Revenues of $71.1 million 
--  Cash cost of $563 per ounce of gold sold(1) 
--  Net income attributable to Nevsun shareholders was $10.6 million, $0.05
    per share 
--  More gold and silver bearing ore identified in the Bisha Main pit 
--  Copper flotation plant on schedule, on budget and nearly complete 
--  Paid $0.05 dividend per share on January 15, 2013 
--  Maintained strong balance sheet with over $400 million in working
    capital 
--  Subsequent to quarter-end, the Company published its 2012 Corporate
    Social Responsibility Report which can be accessed on the Nevsun website
    at http://www.nevsun.com/responsibility/reporting/

 
"The Company's performance for the first quarter of 2013 was strong,
particularly when considering that we are in the process of winding
down the gold phase and completing construction of the Bisha copper
plant" stated Cliff Davis, President and CEO of Nevsun. "While we had
higher cash costs than 2012, the Bisha Mine is still among the lowest
cost mines in the industry and the positive cash margins have
continued to fund the copper phase expansion, which is nearly
complete. We maintained a very strong balance sheet at quarter-end
with $400.7 million in working capital, including $335.2 million in
cash, and no debt. 
"At year-end, we reported 40,000 to 60,000 tonnes of material termed
'pyrite sands', at the base of the oxide gold in the Bisha Main pit.
The Company now estimates there are
 approximately 250,000 tonnes of
pyrite sand ore varying from 3 to 10 grams per tonne gold and
exceeding 100 grams per tonne silver, with some pockets at even
higher grades. Because the ore is pyritic, it cannot be processed in
the carbon-in-leach (CIL) gold plant. Pending ongoing test work and
economic analysis, the Company will likely concentrate some of this
material through the new copper flotation plant, prior to starting
supergene copper production. The resultant precious metals
concentrate will then either be sold directly, blended with copper
concentrate or a combination thereof.  
"We estimate processing pyrite sands could take six to seven weeks,
possibly pushing the start of supergene copper production into late
Q3 2013, with completion of ramp up to commercial production in Q1
2014. We see this likely delay as a positive trade-off for the value
expected to be gained from the pyrite sands." 
(1) Cash cost per ounce sold includes royalties and is a non-GAAP
measure; see cautionary note regarding non-GAAP measure in the MD&A. 
Operations review 


 
Key operating information - Bisha Mine:                                
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                                   For the three months ended March 31,
                                                 2013              2012
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Ore mined, tonnes                             475,000           349,000
Waste mined, tonnes(1)                      1,925,000         1,826,000
Strip ratio, (using BCMs)                         5.1               6.2
Copper phase prestrip, tonnes                       -           739,000
Tonnes milled                                 432,000           430,000
Gold grade (g/t)                                 4.14              6.58
Recovery, % of gold                               79%               86%
Gold in dore, ounces produced                  42,300            82,000
Gold ounces sold                               41,500            83,100
Gold price realized per ounce        $          1,592  $          1,712
Cash cost per ounce sold(2)          $            563  $            277
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(1) All waste tonnes mined reflect updated rock density estimates.     
(2) Cash cost per ounce sold includes royalties and is a non-GAAP      
 measure; see cautionary note regarding non-GAAP measure in the MD&A.  

 
Approximately half of the ore mined in Q1 2013 came from the Harena
satellite deposit, which is lower grade than Bisha, hence the drop in
feed grade from Q1 2012 of 6.58 g/t to 4.14 g/t in Q1 2013. Mining of
the oxide material at the Harena deposit is nearing completion. The
strip ratio was expected to be higher in Q1 2013 as compared to Q1
2012, as the plan was to move more waste in Q1 2013 than was actually
achieved. The lower than planned waste mined resulted from a
combination of equipment availabilities, which negatively impacted
the mining schedule, coupled with subgrade mineralized waste being
reclassified as ore as it was required to blend with the high grade
Bisha acid ores.  
Gold recovery of 79% for Q1 2013, which was less than the 86%
experienced in Q1 2012, was as expected and was attributable to
changes in ore mineralogy. The reduction of gold ounces sold to
41,500 in Q1 2013 from the 83,100 ounces sold in Q1 2012 is due to
the lower level of gold produced in Q1 2013, which was a result of
the lower grades and mill recoveries. The decrease in physical ounces
produced was within the Company's expectations and guidance. 
Gold cash costs per ounce for Q1 2013 were $563 on 41,500 ounces
sold, which included $124 per ounce in silver by-product credits, an
increase in cash cost per ounce as compared with $277 in Q1 2012,
including $86 per ounce in silver by-product credits. The increase in
cash operating costs in Q1 2013 compared to Q1 2012 is primarily
attributable to a reduction in gold ounces sold and the accompanying
increase in mining and milling costs per ounce produced, partly
offset by higher silver by-product credits.  
Financial review  


 
Summary of financial results:                                               
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In US $000s (except per share data)     For the three months ended March 31,
                                                      2013              2012
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Revenues                                  $         71,130  $        149,390
Operating income                                    37,779           110,628
Net income                                          19,503            68,763
Net income attributable to Nevsun                                           
 shareholders                                       10,625            41,238
Earnings per share attributable to                                          
 Nevsun shareholders                                  0.05              0.21
Working capital                                    400,711           337,672
Total assets                              $        854,121  $        747,148
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Details of revenue breakdown for gold and silver, operating expenses,
depreciation and depletion, and other expenses are discussed in the
Company's first quarter 2013 MD&A.  
Working capital at March 31, 2013, including cash and cash
equivalents, was just over $400,000, approximately the same as at
December 31, 2012. The Company's cash and cash equivalents at March
31, 2013, of $335,168, was down from $396,404 as a result of paying
dividends ($9,949), income taxes ($44,484) and investing in copper
plant and other capital ($28,422). Details of sources and uses of
cash are presented in the first quarter financial statements and
discussed in the MD&A.  
Conference call details 
The Company will hold a conference call on Friday, May 10, 2013, at
8:00 AM Vancouver / 11:00 AM Toronto, New York / 4:00 PM London, to
discuss the quarterly results. Please call in at least five minutes
prior to the conference call start time to ensure prompt access to
the conference. Dial in details are as follows: 


 
North America: 416-340-8530 / 1 877-440-9795                                
UK: 00800-2787-2090 (toll free)                                             
Other International: +1 416-340-8530                                        

 
The conference call will be available for replay until May 17, 2013,
by calling +1 905-694-9451 / 1 800-408-3053 and entering passcode
4709876. 
Forward-Looking Statements 
The above contains forward-looking statements or forward-looking
information within the meaning of the United States Private
Securities Litigation Reform Act of 1995, and applicable Canadian
securities laws. Forward-looking statements are frequently, but not
always, identified by words such as "expects", "anticipates",
"believes", "intends", "estimated", "potential", "possible" and
similar expressions, or statements that events, conditions or results
"will", "may", "could" or "should" occur or be achieved.
Forward-looking statements are statements concerning the Company's
current beliefs, plans and expectations about the future and are
inherently uncertain, and actual achievements of the Company or other
future events or conditions may differ materially from those
reflected in the forward-looking statements due to a variety of
risks, uncertainties and other factors, including, without
limitation, the risks that: (i) any of the assumptions in the
historical resource estimates turn out to be incorrect, incomplete,
or flawed in any respect; (ii) the methodologies and models used to
prepare the resource and reserve estimates either underestimate or
overestimate the resources or reserves due to hidden or unknown
conditions, (iii) the mine operations are disrupted or suspended due
to acts of god, internal conflicts in the country of Eritrea,
unforeseen government actions or other events; (iv) the Company
experiences the loss of key personnel; (v) the Company's mine
operations are adversely affected by other political or military, or
terrorist activities; (vi) the Company becomes involved in any
material disputes with any of its key business partners, lenders,
suppliers or customers; (vii) the Company is subjected to any hostile
takeover or other unsolicited attempts to acquire control of the
Company; (viii) the Company is subject to any adverse ruling in any
of the pending litigation to which it is a party; (ix) the Company
incurs unanticipated costs as a result of the transition from the
oxide phase of the Bisha mining operations to the copper phase in
2013; or (x) the assumptions used in the current planning for pyrite
sand ore turn out to be incorrect. Other risks are more fully
described in the Company's Management Discussion and Analysis for the
fiscal year ended December 31, 2012, which is incorporated herein by
reference. The Company's forward-looking statements are based on the
beliefs, expectations and opinions of management on the date the
statements are made and the Company assumes no obligation to update
such forward-looking statements in the future, except as required by
law. For the reasons set forth above, investors should not place
undue reliance on the Company's forward-looking statements. 
Please see the Company's Annual Information Form for the fiscal year
ended December 31, 2012, and the Company's Management Discussion and
Analysis for the year ended December 31, 2012, for a more complete
discussion of the risk factors associated with our business.  
About Nevsun Resources Ltd. 
Nevsun Resources Ltd. is a Vancouver-based mining company with an
operating mine in Eritrea. Nevsun's 60%-owned Bisha Mine commenced
commercial gold production in February 2011 and is scheduled to
transition to copper/gold production in mid-2013. Management expects
the Bisha Mine will rank as one of the highest grade open pit base
metal deposits in the world. 
NEVSUN RESOURCES LTD. 
Cliff T. Davis, President & Chief Executive Officer 
Contacts:
Kin Communications
604 684 6730 or Toll Free: 1 866 684 6730
nsu@kincommunications.com
www.nevsun.com