Nevsun Resources (NSU.TO, NYSE:NSU) announced it produced 36 million pounds of copper in the fourth quarter of 2013 which means the company has met the upper side of its production guidance as the total copper production for the year came in at 48 million pounds. The ramp-up phase of the copper expansion circuit seems to be going very well, as Nevsun produced almost 16 million pounds of copper in December alone, which results in an annualized production rate of 190 million pounds of copper.
This bodes extremely well for 2014, as Nevsun’s low cost copper operation should be able to generate at least $1.75/lbs in operating margin, and Nevsun should once again have a triple digit free cash flow in 2014 which would allow the company to increase its dividend again from the current rate of $0.14 per year. Nevsun is also looking to expand its asset base but is very selective and will only pull the trigger on an acquisition when it’s a slam-dunk project.
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Disclosure: The author holds a long position in Nevsun Resources. Please see our disclaimer for current positions.
