Mr. Cliff Davis reports
NEVSUN MEETS ZINC AND GOLD PRODUCTION GUIDANCE AND DELIVERS ON CORPORATE OBJECTIVES IN 2016
Nevsun Resources Ltd. has released its operating results for the year ending Dec. 31, 2016, and is providing a review of 2016 achievements against corporate objectives.
Performance highlights
-- 2016
-
Achieved top-quartile safety performance at Bisha with no lost-time injuries;
- Completed the acquisition of the high-grade Timok copper-gold project in Serbia;
- Successfully integrated, ramped up and is now rapidly advancing the Timok project to production;
- Completed the Bisha zinc project on time and under budget, declaring commercial production Oct. 1;
- Bisha production:
- Exceeded supergene copper guidance producing 55.8 million pounds at a C1 cash cost of $1.03 per payable pound sold;
- Achieved zinc guidance, producing 90 million pounds from primary ore;
- Achieved gold guidance, monetizing 90,000 gold-equivalent ounces from stockpiles;
- Secured Bisha district through significantly expanded exploration rights;
- Continued to pay peer-leading dividends.
Cliff Davis, Nevsun's chief executive officer, commented: "Nevsun had a strong 2016 delivering on our primary objectives as set out in February of last year. First and foremost, we maintained an incredible safety record in our operations, solidly in the top quartile in the sector. Second, we executed on our disciplined merger and acquisition strategy by acquiring the Timok copper-gold project. Finally, we had a solid year at Bisha, beating guidance on supergene copper production and delivering the Bisha zinc expansion on time and under budget.
"We enter 2017 with a strong balance sheet and the leading growth profile in the sector. The clear priority remains continuing resolution of the challenges related to the copper flotation circuit at Bisha and ensuring the high-grade Timok project remains on track to deliver a prefeasibility by September, 2017. We have a strong team focused on delivering value to our shareholders through rapidly advancing the high-grade Timok project to production."
A summary of Bisha's quarterly and full-year operating results is shown in the table.
BISHA OPERATING RESULTS
Q1 2016 Q2 2016 Q3 2016 Q4 2016 2016
Mining
Ore mined (tonnes)(1) 1,337,000 964,000 672,000 670,000 3,643,000
Waste mined (tonnes) 2,028,000 2,448,000 2,446,000 2,445,000 9,367,000
Strip ratio (using tonnes) 1.5 2.5 3.6 3.6 2.6
Processing -- supergene ore
Ore milled (tonnes)(2) 584,000 471,000 - - 1,055,000
Copper feed grade (%) 3.1 2.5 - - 2.8
Recovery (% of copper) 87.0 82.9 - - 85.2
Copper concentrate grade (%) 23.0 21.2 - - 22.2
Copper in concentrate produced (Mlb) 34.2 21.6 - - 55.8
Copper in concentrate produced (t) 15,500 9,800 - - 25,300
Payable copper in concentrate
sold (Mlb) 34.9 22.9 0.8 - 58.6
Payable copper in concentrate
sold (t) 15,900 10,300 300 - 26,500
Payable gold in concentrate
sold (oz) 6,000 4,500 200 - 10,700
Payable silver in concentrate
sold (oz) 226,000 192,000 7,000 - 425,000
Processing -- primary ore
Ore milled (t) - 134,000 510,000 579,000 1,223,000
Zinc feed grade (%) - 5.0 5.8 5.7 5.7
Copper feed grade (%) - 1.1 1.0 0.8 0.9
Recovery (% of zinc)(3) - 33.8 59.1 63.6 58.8
Zinc concentrate grade (%) - 41.4 41.3 38.8 40.0
Zinc in concentrate produced
(Mlb)(4)(5) - 5.1 38.6 46.5 90.2
Zinc in concentrate produced
(t)(4)(5) - 2,300 17,500 21,100 40,900
Payable zinc in concentrate
sold (Mlb) - - 21.2 35.2 56.4
Payable zinc in concentrate
sold (t) - - 9,600 16,000 25,600
(1) Ore tonnes mined in 2016 include 902,000 tonnes of supergene ore and 2,741,000 tonnes of
primary ore.
(2) The supergene phase of the Bisha mine ceased on June 2, 2016.
(3) This represents the overall combined zinc recovery from both the copper and zinc flotation
circuits. Copper recovery for both circuits averaged 41.2 per cent in third quarter 2016 and
60.7 per cent in fourth quarter 2016.
(4) The company as yet has not been able to produce a commercially saleable copper concentrate
due to metallurgical challenges when processing the variable primary ore. The byproduct
revenues from copper, gold and silver in the zinc concentrates have not been material during
2016
(5) The zinc in concentrate inventory at Dec. 31, 2016, was approximately 20.4 million pounds.
Outlook and guidance
-- 2017
Nevsun is currently completing its annual forecasting process at Bisha where the work on a robust geo-metallurgical resource model and the copper flotation plant metallurgy are continuing. The company expects to provide its 2017 outlook and update on the resolution to the challenges related to the copper flotation circuit in mid-February, 2017.
Financial results release date
-- 2016
The company plans to release its annual 2016 and fourth quarter 2016 financial results on Thursday, Feb. 23, 2017, after close of trading, with a conference call to follow on Friday, Feb. 24, 2017, at 8 a.m.
PT/11 a.m.
ET/4 p.m.
GMT. Conference call details follow:
North America: 1-888-390-0546/1-416-764-8688/1-778-383-7413
United Kingdom: 0800-652-2435 (toll-free)
Other international: 1-416-764-8688/1-778-383-7413
The conference call will be available for replay until March 3, 2017, by calling 1-888-390-0541/1-416-764-8677 and entering passcode 192626 followed by the pound key.
About Nevsun Resources
Nevsun Resources is the 60-per-cent owner of the high-grade Bisha mine in Eritrea. Nevsun is well positioned to grow shareholder value through advancing the high-grade copper-gold Timok project in Serbia to production.
We seek Safe Harbor.
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