Nevsun Resources (NSU-T) earns $246.69-million (U.S.) in 2012 - CIBC says $500 million in cash.
March 20, 2013 - News Release
Nevsun Resources Ltd. has released its financial and operating results for the year ended Dec. 31, 2012. Unless otherwise noted, with the exception of earnings per share and cash cost per ounce, all results are in U.S. dollars.
This release should be read in conjunction with Nevsun's consolidated financial statements for the years ended Dec. 31, 2012, and Dec. 31, 2011, and the associated management's discussion and analysis for that year, which are available on the company's website, and on SEDAR and EDGAR.
During 2012 the company:
- Operated safely and well below the industry average lost-time injury rate with no fatalities;
- Produced 313,000 ounces of gold in 2012, exceeding the top end of guidance;
- Generated revenues of $566-million, with an average realized gold price per ounce of $1,671;
- Had a cash cost of $312 per ounce of gold sold, inclusive of royalties;
- Generated $194-million in cash flow from operations;
- Had earnings of 73 cents per share attributable to Nevsun shareholders;
- Increased its mineral resource and reserve estimates from 2011/2012 drilling.
"This past year represented the second year of gold production for the company's 60-per-cent-owned Bisha mine," stated Cliff Davis, president and chief executive officer of Nevsun. "The company surpassed the top end of its production guidance, which, in turn, allowed the company to achieve record revenues, remain among the lowest-cost gold producers in the world and generate strong operating cash flows. This excellent operating performance is not only due to the fact that Bisha is one of the highest-grade open-pit deposits in the world, but also due to the dedication of our site management and employees, and the strong support we receive from the state of Eritrea. We are also pleased to report that Bisha had zero lost-time incidents during 2012, and that we strive to ensure that the company's presence has a positive social and economic impact and that mining operations are conducted in a responsible manner.
"During the year, the company invested $64-million in the copper-phase expansion, and a further $24-million between sustaining capital for the gold facilities and exploration and evaluation expenditures. The company paid $20-million in dividends, completed a $6.3-million share repurchase program, and paid in excess of $200-million of income taxes relating to 2011 and instalments for 2012. Despite these expenditures, we maintained an exceedingly strong balance sheet through 2012, ending the year with almost $400-million in cash and no debt.
"As 2013 unfolds, the transition from gold production by mid-year to a low-cost copper concentrate producer will be pivotal for Bisha. The copper expansion project remains on budget and on schedule. In excess of 80 per cent of the forecasted project expenditures of $125-million have been spent or committed. The copper production ramp-up will continue through the second half of 2013, after which we are expecting copper production in 2014 to be in the order of 200 million pounds.
"Lastly, while we have this year launched an aggressive generative exploration program on the highly prospective Bisha property, we are continuing to actively evaluate potential acquisition opportunities.
"For a more complete analysis, I encourage readers to review the company's annual information form, the 2012 annual management's discussion and analysis, and the Dec. 31, 2012, audited financial statements."
Operations review
Mined ore tonnage for 2012 of 1,591,000 was 307,000 tonnes fewer than 2011's 1,898,000 tonnes. Waste mining tonnage of 8,677,000 in 2012 increased from 7,716,000 tonnes in 2011. The increase in waste mined and decrease in ore mined resulted in an increased strip ratio of 7.4 for 2012, as compared with 5.8 for 2011. The increase in strip ratio results from the increased pit depth and newly planned shallower pit walls due to updated geotechnical assessments.
The milled tonnage for 2012 of 1,807,000 was consistent with that in 2011 of 1,806,000 tonnes. The combined decrease in average grade in 2012 to 6.21 grams per tonne from 7.55 g/t in 2011 and the decrease in recovery in 2012 to 86 per cent from 88 per cent in 2011 resulted in fewer gold ounces produced in 2012 of 313,000 (2011: 379,000 ounces) and gold ounces sold of 320,700 (2011: 369,900). The decrease in grade results from the shift to mining Harena ore for the majority of the fourth quarter of 2012. There was no mining of Harena ore in 2011.
Gold cash costs for 2012 were $312 per ounce on 320,700 ounces sold, net of $94 per ounce in silver byproduct credits, while cash costs for 2011 were $295 per ounce on 334,500 gold ounces sold, net of $14 per ounce in silver byproduct credits. The increase in full year 2012 cash operating costs compared with full year 2011 cash operating costs is attributed to fewer gold ounces sold as a result of lower grades and recoveries, which was expected, and higher fuel, mill consumables and labour costs. These increases were, however, partially offset by the increased silver byproduct credits, which were a result of significantly higher silver grades in the ore processed and higher recoveries, particularly in the fourth quarter of 2012.
Financial review |
