Nevsun Resources (TSX:NSU,NYSEMKT:NSU)
Market cap: $950 million
Cash estimate: $520 million
Ownership: 60 percent
Historical resources: 3.2 MT @ 0.8% Cu, 3.8% Zn, 0.5 g/t Au, 27 g/t Ag (primary)
Project status: Resource drilling
Nevsun Resources announced drilling results from its 2015 drilling on the Harena VMS target, located 10 kilometres south of its operating Bisha copper/zinc/silver/gold mine in Eritrea. The close proximity to the Bisha processing facility may allow the Company to schedule incremental near term feed to the existing Bisha operation. Highlights from the step-out drilling include: 67.2 metres grading 1.66% Cu, 6.62% Zn, 0.41 g/t Au and 28 g/t Ag. Both thickness and grade in the massive sulphide mineralization appear to continue to increase with depth. The Company also announced additional mineralization from the gold rich stringer zone, which is situated between the upper and lower base metal massive sulphides zones. Drilling intersected an interval of 11.0 metres of stringer mineralization averaging 7.49 g/t Au and 171 g/t Ag. The Harena deposit has both oxide and primary resources. The small near-surface indicated oxide resource totals 20,000 tonnes at a grade of 2.5 g/t Au and 25 g/t Ag, as well as 100,000 tonnes of 4.2g/t Au and 33 g/t Ag as inferred. The primary resource estimate includes 3.2 million tonnes grading 0.8% Cu, 3.8% Zn, , 0.5 g/t Au and 27 g/t Ag in the indicated class, as well as an inferred resource of 6.4 tonnes of 1.1% Cu 3.7 % Zn, 0.6 g/t Au and 38 g/t Ag. Other similar style deposits in the area include the Northwest and Hambok deposits, both of which have NI 43-101 compliant resources. The Company is well positioned with $500 million in working capital and strong cash flow from the current copper dominated operation. As the Bisha mine continues deeper, the mine is expected to become a significant zinc producer starting in 2017.
Discovery history (April 2005): 22.95 metres @ 1.02% Cu, 2.83% Zn, 0.07% Pb, 0.5 g/t Au, 25.80 g/t Ag (H-003)
Current drilling: 67.2 metres @ 1.66% Cu, 6.62% Zn, 0.41 g/t Au, 28 g/t Ag including: 22.1 metres @ 4.61% Cu, 3.43% Zn, 0.99 g/t Au, 63 g/t Ag. 11.0 metres @ 7.49 g/t Au, 171 g/t Ag (Gold zone).