Over the weekend a number of African media outlets including Tigrai Online (an Ethiopian news source) have claimed that the Bisha mine operated by Nevsun Resources (NSU.TSX) was the target of an attack by the Ethiopian air force during two bombing raids. According to the reports, the air force also targeted an Eritrean military depot.
These reports come from in country media sources, but aren't fully verified.
The mine is 60% owned by Nevsun and 40% by the Eritrean government.
Nevsun's Bisha mine is located 180 km west of the Eritrean capital of Asmara. The mine which went into production in February 2011, is expected to produce 160 to 175 million pounds of copper in concentrate at C1 cash costs of between $1.20 and $1.40/lb.
Just moments ago, the company put out a short news release stating:
The Bisha Mine experienced an act of vandalism on March 20 during the nightshift in which minor damages were sustained to the base of the tailings thickener, resulting in the release of water into the plant area. The required repairs and cleanup from the incident were minor and are incorporated into the plant re-start later this week. Additional safeguards have been adopted to ensure site and personnel safety and security while the Eritrean and mine security forces undertake an investigation.
According to the news outlets, smoke and fire could be seen billowing from the Bisha mine.
Either the news outlets are grossly overstating the facts or the company is under reporting the events in a big way.
Regardless, I would expect Nevsun to be hammered in trading tomorrow as investors unwilling to take their chances head for the exits.
The stock is covered by 12 analysts and shareholders include Blackrock and Vanguard (who both own 19% of the company). The company is sitting on a cash hoard of over $440 million.
Recall back in November of last year, reports surfaced that Qatar-backed mining PE fund, QKR, was considering a bid for Nevsun.
Also in Eritrea is Sunridge Gold (SGC.TSXV) which could get beat up tomorrow as well. Their development-stage project is located just on the outskirts of the capital of Asmara. Craig Angus is Sunrdige's founder/Chairman and was also the founder of Nevsun.
Read: Ethiopian fighter jets hit Eritrean Bisha mine and Mai Edaga military Depot