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Nevsun's Bisha Mine Back On Track?


  • The good news is that the efficiency of the copper circuit at the Bisha mine has improved notably in Q2 2017.
  • The bad news is that zinc production declined significantly, due to the lower feed grades and recoveries.
  • Despite some positive developments, there is still a lot of space for further improvements at the Bisha mine.
  • Things seem to be much better in Serbia. The Timok Upper Zone PFS is still expected in September, and the Lower Zone keeps on delivering extremely long intervals of copper-gold mineralisation.
  • Shares of Nevsun Resources still provide significant upside potential.

Nevsun Resources (NYSEMKT:NSU-OLD) announced Q2 production results from its Bisha mine. Although zinc production declined compared to Q1, due to lower feed grade and recoveries, copper production increased notably. The most important news, according to Peter Kukielski, Nevsun's CEO, is that:

We continue to see gradual improvements in the plant performance. We are now producing copper concentrate consistently in the copper circuit versus the prior three quarters where bulk concentrate was being produced.

Although there is still a lot of room for more improvements, the main issue of the Bisha mine seems to have been resolved. Nevsun is finally able to produce not only zinc but also copper concentrate. However, the whole process still needs a lot of fine-tuning in order to get to the projected production volumes.

In Q2, zinc feed grade declined from 5.9% to 5.3%, or by slightly more than 10%. Copper feed grade declined from 0.9% to 0.8%, or by slightly more than 11%. However, the grades should improve in the future, as the primary ore included in the reserves contains 5.57% zinc and 1.1% copper.

(Source: Nevsun Resources)

Also, zinc recoveries experienced a decline. In Q1, recoveries of 66.6% were achieved at the Bisha mine. In Q2, recoveries declined to 62.22%. According to the company, the decline in zinc recoveries was caused by the efforts to improve copper recoveries. Copper recoveries increased rapidly, from 34% in Q1 to 51.6% in Q2. Zinc and copper concentrate grades remained almost unchanged.

(Source: Nevsun Resources)

Lower feed grades and recoveries had a negative impact on Q2 zinc production. While Nevsun was able to produce 51.9 million lb zinc in Q1, it produced only 43 million lb zinc in Q2. This represents a more than 17% decline. Copper production increased almost by 36% to 5.7 million lb. The loss of 8.9 million lb zinc can be

This article was written by

Peter Arendas profile picture
An in-depth analysis of the royalty and streaming industry

I am an associate professor at the University of Economics in Bratislava, Department of Banking and International Finance. My dissertation was focused on commodity markets and my habilitation was focused on the calendar anomalies. I have more than 15 years of investing experience. My investments mostly focus on small- and mid-cap companies in the resource sector. Since May 2019, I have been preparing regular monthly reports focused on the precious metals royalty & streaming industry. Based on positive feedbacks and numerous inquiries, I decided to launch a Marketplace Service named "Royalty & Streaming Corner", which provides an in-depth analysis of this exciting market segment, as well as investment ideas from the mining industry.

Analyst’s Disclosure: I am/we are long NSU. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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