Nevsun Resources (NSU), one of my favorite mining companies because of its huge cash balance, has released new drill results from its Harena prospect in Eritrea. These drill results are quite phenomenal with 0.96% copper, 6.57% Zinc, 0.30 g/t Gold and 30.1 g/t silver over 13.5 meters and an even longer intercept of the massive sulphide zone containing 0.85% copper, 3.96% zinc, 0.40 g/t gold and 43.6 g/t silver over 41.6 meters. If you'd calculate the rock value per tonne of the latter, you'd end up with a result close to $200/t which could be compared with a gold-equivalent grade of just over 5g/t.
And it doesn't stop there. Apart from the massive sulphide zones, Nevsun also encountered (high-grade!) mineralization from the footwall zone, where the company encountered an intercept of just over 17 meters of 0.71% copper , 0.22% zinc, 6.15 g/t gold and 241.6 g/t silver. If you'd calculate the rock value of this intercept, I'd recommend sitting down for a minute, as at the current commodity prices this would result in a rock value of $430/t which is comparable to more than 11g/t gold equivalent. Needless to say I'm very excited about these additional drill results.
As the mineralization occurs at (a reasonable) depth, this part of the Harena zone will very likely have to be mined through an underground operation. But with these grades and rock values per tonne, any underground operation at Harena should be extremely profitable. I continue to be impressed with Nevsun which is practically printing its own cash. The copper production is right on track and as the copper price continues to trade above $3/lbs, Nevsun is poised to have a great future if the political situation in Eritrea doesn't sudden change.
