Nevsun Resources Down 1.7%

GuruFocus.com

- By Alberto Abaterusso

Nevsun Resources Ltd. (NSU) lost 1.65% on the stock market on Friday after the release of disappointing production results at its Bisha mine in Eritrea in 2017.

Nevsun Resources closed the year ending Dec. 31, 2017. The company approached the higher limit of its guidance on zinc concentrate production, but it missed guidance regarding the production of copper.


It was impacted by the company's struggle to access completely fresh primary ore in the main pit of the Bisha mine during the second part of 2017, according to the company.

In 2017, the company produced zinc concentrate at a total volume of 207.8 million pounds and copper concentrate at a total of 18.0 million pounds. Nevsun, based on guidance, was expected to produce between 190 million and 210 million pounds of zinc in concentrate, and between 20 million and 30 million pounds of copper in concentrate.

Nevsun will publish the financial results for the last quarter and full year of 2017 on March 1 after the market closes.

Nevsun Resources is trading 46.4% below the 52-week high of $3.50 per share and approximately 22% over the 52-week low of $1.96 per share.

The stock is above the 50, 100 and 200-SMA lines:

The market capitalization is $710.702 million. The price-book (P/B) is 0.87 versus an industry median of 2.01 and the EV-to-EBITDA ratio is -39.60. The industry has an EV-to-EBITDA ratio of 10.14.

Things to watch for in 2018 include an improvement in zinc recovery and the availability of better equipment.

The stock has a recommendation rating of 2.2 out of 5. More analysts are expected to recommend the purchase of the stock as the the ranking approaches 1 out of 5.

The average target price is $3.19. This is a 33.5% growth perspective from the current valuation of the market.

(Disclosure:no positions in Nevsun Resources.)

This article first appeared on GuruFocus.