TORONTO (miningweekly.com) – Vancouver-based Nevsun Resources has achieved commercial production at its Bisha mine in Eritrea, and was able to complete the project “very substantially” below its capital cost estimate of around $260-million, CEO Cliff Davis said on Tuesday.
“I'd say it was at least five per cent below,” he said in an interview.
Nevsun poured the first gold at Bisha in December and has since ramped up the plant to average about 5 250 t/d over the last 30 days, with a peak of 6 560 t/d. The operation produced around 40 000 oz of gold during the commissioning phase, and recoveries have been higher than planned, at an average of 89% over the last 30 days.
“We're now producing over 1 000 oz per day, and because of our very low costs, we are making over a million dollars a day,” Davis told Mining Weekly Online.
The company will be putting out a resource restatement in the next few weeks, remodelling the feasibility study resources using updated metals price assumptions, and will also be doing additional drilling at the Bisha property over the year.
“All of those things together should give us a very substantial change to our resources by the end of this year, for a relatively small cost,” Davis said.
The firm will also need to decide what to do with the growing cash flow it expects, now that Bisha is up and running.
“Besides the internal expansion, we are looking at a number of opportunities,” Davis said.
“We have been actively synthesising what's available in the marketplace and we are actually doing due diligence as we speak on other opportunities.”
He declined to give any more details of the assets the company is looking at, but confirmed it was more than one.
A dividend is also “not out of the question”, Davis said. “It's too early to say what our dividend guidance might be, but maybe by the third or fourth quarter we would have a better assessment of that and the need for cash for any acquisitions or expansion.”
Commercial production at Bisha was defined as greater than 90% of planned throughput and greater than 90% of planned recoveries for a period of greater than 30 days, Nevsun said.