Nevsun Resources (NSU.TO, NYSE:NSU) is keeping its promise and has declared commercial production at its copper expansion phase as it has successfully commissioned its flotation plant. The budgeted capex for the copper phase of the Bisha project was $125M, but Nevsun managed to come in on time and under budget, as it spent just $110M on capital expenditures.
The Bisha copper project has already produced in excess of 60,000 tonnes of concentrate and is still on track to produce between 30 million and 50 million pounds of copper this year. Three shipments have already left the port, and more shipments are expected before the end of this year.
As the majority of the capex has been spent and as the total Bisha copper production next year should be close to 200 million pounds at a cash cost lower than $1.25/lbs, 2014 should again be a year wherein Nevsun increases its cash balance. We expect Nevsun to end 2014 with a working capital position of close to half a billion dollar.
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Disclosure: The author holds a long position in Nevsun Resources. Please see our disclaimer for current positions.
