Investors were no doubt keeping a keen eye on Nevsun Resources (TSX:NSU,NYSEMKT:NSU) on Thursday morning. The company was up roughly 13 percent during morning trading hours, largely on news that mining fund QKR might be making a $1-billion bid for the company. Bloomberg states that QKR and Nevsun are in ongoing negotiations, according to sources with knowledge of the situation. Both Nevsun and QKR initially declined to comment on the rumor, but Nevsun later released a statement confirming that it has "recently received from various parties expressions of interest on a potential corporate transaction." However the company stressed that any discussions are preliminary and stated that "[m]anagement is not aware of a bid for the Company." Nevsun's share price shot up to $4.95 at 9:34 a.m. EST, and was up 13 percent from Wednesday's close to trade at $4.80 by 10:22. Nevun's stock was halted at 7:22 a.m. EST, and resumed at 9:15 a.m. after releasing its statement. The miner owns 60 percent of the Bisha gold-copper-zinc mine in Eritrea. As James Fraser of CEO.ca notes, Nevsun has transitioned from gold producer to copper producer, and the Bisha mine is set to transition again to a predominantly zinc operation in 2016 — an important consideration given that many in the zinc space are calling for a deficit in coming years. Backed by Qatar's sovereign wealth fund and Poland's richest man, Jan Kulcyzk, QKR is headed by former JPMorgan Chase (NYSE:JPM) banker Lloyd Pengilly. The company bought AngloGold Ashanti's (NYSE:AU) Navachab mine back in February. QKR was created largely to purchase distressed mining assets close to or in production. Certainly, investors will be keeping an eye on Nevsun to see how the situation unfolds.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. Nevsun Resources Spikes on Possible Billion-dollar Bid from Copper Investing News