"We are in an enviable position to carry out our growth strategy. We are
having successes in exploration of Bisha. Early drill results were released
in mid June on two holes from Eritrea, a new area on our exploration
license near Bisha. The results included one hole of 1.4% copper and 7.8%
zinc and a second hold of 1.1% copper and 11% zinc.
We expect to have additional drill results in early August and as a sign of
our optimism, Bisha has increased the exploration budget for the second
half of the year, drilling will continue"
http://seekingalpha.com/article/2371465-nevsun-resources-nsu-ceo-cliff-davis-on-q2-2014-results-earnings-call-transcript?page=2
Nevsun Resources' (NSU) CEO Cliff Davis on Q2 2014 Results - Earnings Call
Transcript
Aug. 1, 2014 3:33 PM ET | About: Nevsun Resources Ltd (NSU)
Operator
Good morning, ladies and gentlemen. Welcome to the Nevsun Resources Q2 2014
Earnings Results Conference Call. I would now like to turn the meeting over
to Mr. Cliff Davis, President and CEO. Please go ahead, Mr. Davis.
Cliff Davis - CEO
Good morning from Vancouver. With me today is our Chief Operating Officer,
Frazer Bourchier and our Chief Financial Officer, Tom Whelan. Before I
begin, a few cautionary comments.
The following prepared statements and discussion contains forward-looking
statements regarding production forecasts, future financial results, as
well as the potential arising from exploration programs and potential M&A
activity.
Forward-looking statements are frequently but not always identified by
words such as expects, anticipates, believes and similar expressions. We
encourage all listeners to thoroughly read yesterday's news release as well
as the quarterly financial statements and the entire M&A.
Now I am going to provide my views of what we've accomplished in Q2 and
where we are headed. Then we will open up the call to your
question-and-answer period. I do not plan to reiterate the details that
included in our MD&A.
We had a very good quarter. We mined 6% copper from the Bisha open pit,
producing over 47 million pounds of copper and concentrate. We are in 30
million for our Nevsun shareholders, resulting in $0.15 earnings per share
and declared a quarterly dividend of $0.035, representing a payout of 23%
of our earnings.
Copper production is up, earnings are up and our balance sheet is even
stronger. We now have approximately $500 million in working capital and we
expect our cash flow in the next 12 months should add even more to our
balance sheet.
We are in an enviable position to carry out our growth strategy. We are
having successes in exploration of Bisha. Early drill results were released
in mid June on two holes from Eritrea, a new area on our exploration
license near Bisha. The results included one hole of 1.4% copper and 7.8%
zinc and a second hold of 1.1% copper and 11% zinc.
We expect to have additional drill results in early August and as a sign of
our optimism, Bisha has increased the exploration budget for the second
half of the year, drilling will continue.
Our second quarter demonstrated once again on our ability to deliver
results. Production increases, revenue increases, earnings increases and
cash flow increases all confirmed what we said we would do. We also had
record production in the month of June of 17.8 million pounds of copper and
that's about 8,000 tons of copper in the month. During Q2, our operating
margin was over $2 a pound or about $4,400 per ton.
All this said, mining is a tough business. It requires a lot of management
and attention to detail. The MD&A describes the challenges that are faced
and what we have done to manage such a ripper ore body to try to maximize
the financial rewards. The key drivers are to produce the highest number of
copper units, while ensuring that we comply with off-take commitments on
the concentrate.
This means we need to carefully monitor penalty elements that could crop up
in the concentrate without sacrificing recoveries and maximizing the copper
content in concentrate. As we noted in the news release, during Q2, Bisha
mined 697,000 tons of ore, 43% more than Q1 and milled 386,000 tons at 6.6%
copper with an 84.6 recovery rate produced to produce 21,500 tons of copper
or about 47 million pounds.
We increased recoveries. We accelerated production as we said we would in
our last conference call. Also during our Q1 conference call, we advised
that our trucking logistics would be fixed in Q2. This has been
successfully accomplished with the assistance from Bisha's Eritrea contract
trucking firm...
Received on Sat Aug 02 2014 - 13:07:23 EDT