Nevsun Resources Ltd. (NSU - Free Report) has performed better than its expectations by producing 87,000 ounces of gold in the second quarter. The 6% improvement in output, compared with the first quarter of 2012, stemmed from higher-than-expected grades in portions of the transitional oxide zone at its Bisha mine.
About 500,000 tons of ore were mined at the company’s flagship Bisha mine, grading at 6.04 g/t of gold. This is a substantial improvement from the first quarter, in which the company mined 349,000 tons at 4.71 g/t of gold.
For fiscal 2012, the company still expects gold production in the range of 2.4 to 2.6 million tons. During its first quarter conference call, Nevsun hiked its guidance by approximately 25% owing to unusually high gold grades encountered in April, 2012. However, it added that the guidance might be revised when it releases its full second quarter results in August, taking into account the production results in July.
Earlier this month, Nevsun was granted a mining license for the Harena deposit. The Harena deposit, located approximately 9 km south of the Bisha plant, is a satellite VMS deposit with oxide gold and base metal sulphide ores. Bisha has all the equipment on site to start mining operations at Harena.
Henceforth, Harena’s reserves and resources will be included in the Bisha figures. The Harena gold oxide ore is of a lower grade and thus will be blended with the higher grade Bisha oxide.
The company also noted that the copper plant expansion is in progress and slated for start-up in mid-2013. Orders have been placed for the equipments required to export copper concentrate by mid-2013. In addition, Nevsun is on the lookout for expansion opportunities of both copper and gold projects in Africa, the Americas and Europe.
Vancouver, Canada-based Nevsun Resources, a gold and base metal developer, together with its subsidiaries, engages in the exploration, development, extraction, processing, and reclamation of mineral properties in Africa. The company’s main focus is on its Bisha Mine in Eritrea, East Africa.
Bisha is a large precious and base metal volcanogenic massive sulphide deposit that went into commercial gold-silver production in February 2011. The Bisha Mine, with more than 12 years of current reserves, ranks as one of the highest grade open pit mines in the world.
Nevsun Resources competes with Gold Fields Ltd. (GFI - Free Report) , IAMGOLD Corp. (IAG - Free Report) and Randgold Resources Limited (GOLD - Free Report) . Shares of Nevsun Resources currently retain a Zacks #3 Rank (short-term Hold rating).