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Nevsun's Q2 zinc, copper production up YOY

Nevsun Resources Ltd. said July 26 it is on track to meet its full-year guidance, as zinc concentrate production in the second quarter increased to 51.3 million pounds, with copper concentrate output also rising to 8.6 million pounds.

Year-ago production stood at 43.0 million pounds of zinc and 5.7 million pounds of copper, while the company produced 71.6 million pounds of zinc and 8.9 million pounds of copper in the first quarter. Realized prices in the period were US$1.14 per payable pound of zinc sold and US$3.09 per payable pound of copper sold.

"Production volumes were down principally due to the processing of lower grade material, however we expect to revert to processing higher grade material through the balance of 2018," said CEO Peter Kukielski.

C1 cash cost, on a byproduct basis, stood at 71 cents per payable zinc pound sold. On a co-product basis, C1 cash cost stood at 84 cents per payable zinc pound sold and US$1.39 per payable copper pound sold.

During the quarter, the Canadian base metals miner outlined an initial resource estimate for the Timok Lower Zone in Serbia, with 14.3 million tonnes of copper and 9.6 million ounces of gold in contained metal. In addition, it plans to extend the life of the Bisha copper-zinc mine in Eritrea through 2022 with an open pit cut-back it had previously ruled out.

During the quarter ended June 30, Nevsun narrowed its attributable net loss to US$9.4 million, or 3 cents per share, from a restated US$57.9 million, or 19 cents per share, a year prior. Revenue stood at US$76.4 million, increasing from US$66.1 million previously.

Separately, Lundin Mining Corp. formally launched the offer to acquire Nevsun for C$4.75 per share. Nevsun previously called on shareholders to take no action and said it would assess a bid once it is tabled, though the C$4.75 offer ignores the "fundamental value" of the company and its assets.