newsFeb25

A quiet morning so far on the news front. Just one story I have found interesting to investors this morning so far that being Nevsun Resources. Oil is below $46 off 2.5% this morning as the IEA says that oil supply is building and that the US oil production has yet to see any signs of slowing down. Oil investors will want to follow the rig counts due to be out today at 1pm EST/ 10 am PST. The USD dollar continues to be strong putting pressure on commodity prices.

Nevsun Resources - (NSU:TSX) -  Nevsun is out with some unfortunate news that the Bisha mine in Eritrea will be shut down for approximately two weeks. A mechanical issue has occurred with the ball mill and will need to be repaired. The company believes annual guidance will not be negatively affected. An update is expected when the mill is back on line.

Nevsun has made a successful transition to mining copper at the Bisha Mine after being a gold-silver producer until  mid 2013.  The high grade ore body has provided strong operating margins which has allowed Nevsun to grow the balance sheet to over $442 million in cash with no debt. A quarterly cash dividend of 4 cents is also paid to investors.

Nevsun participated in our Toronto Subscriber Investor Summit (SIS) the day before PDAC and provided an update to those in attendance.  My notes from the SIS are that management is  looking to grow through district exploration of which they control a large land package in Eritrea. Encouraging drill results have been seen so far at several targets.The entire Bisha orebody remains open at depth. $10 million in exploration drilling will occur this year. The goal is to find additional ore and extend the mine life. Bisha is on track to transition to a zinc producer and 2017  production will be 50/50 zinc copper exposure.

Rumours late fall had a private equity group QKR making a $1 billion dollar takeover for Nevsun. Nothing has yet to materialize since the initial rumour. Investors itself have been wondering if Nevsun will make an acquisition for a couple years now with the large cash balance. It would be nice to diversify away from the single asset Bisha Mine all though this is a fantastic asset to have.

Read: Nevsun Provides an Update on Bisha Operations or Nevsun's Bisha Mine is a cash cow

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This is not investment advice. All facts are to be checked and verified by reader. As always please do your own due diligence.