Talked with company. 15 Drills running on Timok! $20 million program, and they do have to pay for it. Part of the deal with FCX is they pay for drilling at this stage.
This means lots of news for NSU will come out, that is a huge number of drills. They are trying to expand the lower zone. The drill report this week was as I guessed, filling the holes in prior Upper Zone drilling to derisk the project, prove it was as good as indicated, which is the case.
They are drilling Bisha area as well.
As to share price they said they were as mystified as I am, and are actively trying to figure out who was selling.
Adrian Day is not one of them, he just wrote the following this week:
Nevsun Resources Ltd. (NSU.NY, 2.90) has good and not-so-good news. Bisha, its mine in Eritrea, has achieved commercial zinc production, with completion of the zinc expansion, like the original mine and the copper circuit, completed within time and under budget. This is a strong record for any mining company. The bad news, however, are metallurgical problems that have reduced the value of the ore. Nevsun hopes to solve the problem by the end of the year, and in the meantime is also mining some gold from its stockpile to partially make up for the revenue shortfall. But the uncertainty has weighed on the stock price.
The company also announced continued very strong drill results from the Cukaru Peki deposit in Serbia, recently acquired with the purchase of Resource Minerals. Nevsun has strong cash flow, solid balance sheet and pays a market-beating dividend. The Reservoir addition provides diversification away from Eritrea and excellent potential. The metallurgical problems, while important, will likely be resolved with trial and error. If we did not own Nevsun, we'd be looking at buying, at least on further pullbacks.
Who did sell was Chinese. Remember they tried to outbid NSU on Reservoir, and lost? Well that company did sell, but they are out so not the supply.
In 2 days we get the Q, that will reduce uncertainty a lot. BTW in 2017 Zinc should be about 50% of revenue.
They think the solution to the low share price is to get their story out more, so expect more PRs and conferences.
BTW since Q is Thursday, that could be it, nervous investors selling before the Q.
