A LEADING DIVERSIFIED MID-TIER MINER

Transcription

1 A LEADING DIVERSIFIED MID-TIER MINER SECOND QUARTER 2018 RESULTS WEBCAST JULY 27, 2018 TSX & NYSE NSU

2 FORWARD LOOKING STATEMENT This Presentation contains forward-looking statements or forward-looking information within the meaning of the United States Private Securities Litigation Reform Act of 1995, and applicable Canadian securities laws. All statements, other than statements of historical facts, are forward looking statements including statements with respect to the Company s continuing and future operations in Eritrea, Serbia and elsewhere that the Company has operations or business interests. Forward-looking statements are frequently, but not always, identified by words such as expects, anticipates, believes, hopes, intends, estimated, potential, possible and similar expressions, or statements that events, conditions or results will, may, could or should occur or be achieved. Forward-looking statements are statements concerning the Company s current beliefs, plans and expectations about the future, including but not limited to statements and information made concerning: statements relating to the business, prospects and future activities of, and development plans related to the Company, anticipated dividends, goals, strategies, future growth, exploration activities, the adequacy of financial resources and other events or conditions that may occur in the future. These forward-looking statements are based on a number of assumptions which, while considered reasonable by the Company, are subject to risks and uncertainties. In addition to the assumptions contained herein, these assumptions include the assumptions described in the Company s Annual Information Form ( AIF ) and the Company s management's discussion and analysis for the year ended December 31, 2017 ("MD&A"). The Company cautions readers that forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements and forwardlooking statements are not guarantees of future results, performance or achievement. These risks, uncertainties and factors include general business, economic, competitive, political, regulatory and social uncertainties; actual results of exploration activities and economic evaluations; fluctuations in currency exchange rates; changes in project parameters; changes in costs, including labour, infrastructure, operating and production costs; future prices of copper, gold, inc, silver and other minerals; resource estimates and variations of mineral grade or recovery rates; metallurgical challenges; operating or technical difficulties in connection with exploration; land acquisition; mining method, production profile and mine plan; other development or mining activities, including the failure of plant, equipment or processes to operate as anticipated; delays in exploration, development and construction activities; changes in government legislation and regulation; the ability to maintain and renew existing licenses and permits and the ability to obtain other required licences and permits in a timely manner or at all; the ability to obtain financing on acceptable terms and in a timely manner or at all; contests over title to properties; employee relations and shortages of skilled personnel and contractors; the speculative nature of, and the risks involved in, the exploration, development and mining business; and other factors and risks discussed in the Company s AIF and MD&A. The Company s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and the Company assumes no obligation to update such forward-looking statements in the future, except as required by law. For the reasons set forth above, investors should not place undue reliance on the Company s forward-looking statements. Further information concerning risks and uncertainties associated with these forward-looking statements and our business can be found in our AIF for the year ended December 31, 2017, which is available on the Company s website ( filed under our profile on SEDAR ( and on EDGAR ( under cover of Form 40-F. 2

3 MANAGEMENT SPEAKERS Peter Kukielski President and Chief Executive Officer Ryan MacWilliam Chief Financial Officer 3

4 Q ACCOMPLISHMENTS VALUATION CREATION CATALYSTS DELIVERED: Bisha Mine life extended Bisha metallurgical turn around Timok Upper Zone Exploration decline permit received Timok Lower Zone initial resource published Broke ground on the exploration decline construction 4

5 Q OPERATIONAL RESULTS Q Q Q Q Recovery, % of inc Recovery, % of copper Zinc in concentrate produced, Mlbs Copper in concentrate produced, Mlbs Total tonnes mined, Mt Q2 RESULTS IMPACTED BY: Lower inc prices Lower inc feed grades Lower plant throughput levels Improved copper recoveries ON TRACK TO MEET 2018 GUIDANCE 5

6 TIMOK: UPDATE Q ACTIVITIES COMPLETED Breaking ground on the Timok Project Exploration Decline Started regional exploration in Serbia for more UZ style deposits Initial Timok Lower Zone resource June 4, 2018: Timok Upper Zone Ground Breaking Ceremony attended by Serbian Prime Minister, the Minister of Energy & Mines and other International dignitaries as well as members of Nevsun s Board of Directors and Senior Management.! 6

7 TIMOK: LOWER ZONE Ultra-large copper-gold porphyry Inferred resource highlights: 1.7 billion tonnes at 0.86% copper and 0.18g/t gold 31.5 billion lbs contained Cu & 9.6 million ounces of Au 1 Top 30 world porphyry deposits in the world by contained metal Qualified Person ( QP ) for Inferred Resource: Gilles Arseneau, SRK Canada. See NR dated June 26, 2018 for more detailed resource information. 2. Based on data from USGS porphyry database and Freeport-McMoRan Note: Lower Zone resource at 0.2% Cu equivalent in relation to Upper Zone and proposed infrastructure (red) 7

8 TIMOK UPPER ZONE EXPLORATION Potential for additional Upper Zone deposits emanating from LZ porphyry 12.5 km drilling underway with results expected in Q3 LZ Eastern Target 2 area has highest potential: Hole TC in Target 2 returned 2.93% Cu, 2.54g/t Au over 27 m Strong additional greenfield exploration for additional lower one porphyry and associated upper one style deposits Looking North UZ 8

9 Q FINANCIAL HIGHLIGHTS % Change (Q2/18 to Q1/18) Q Q Q Q (Restated) Revenues -28% Earnings (loss) from mining operations (64.9) Net income (loss) (10.8) (84.2) Net income (loss) attributable to NSU shareholders (10.9) (4.5) (3.8) (57.9) Basic earnings (loss) per share (0.04) (0.01) (0.01) (0.19) Zinc C1 cash cost (by-product) +22% Zinc sold (payable pounds) Copper sold (payable pounds) Average realied inc price -24% Average realied copper price +3%

10 OPERATING INCOME RECONCILIATION Q vs. Q

11 CASH BALANCE RECONCILIATION Q vs. Q (1) Of the $125.1M consolidated cash balance, approximately $113M is attributable to Nevsun

12 TIMOK UPPER ZONE FINANCING Project features: Attractive features to lenders Manageable capital expenditure Front ended cash flows, under one year payback Lenders get capital returned even in very punitive downside copper price scenarios Macro features: Copper fundamentals attractive to lenders Lower geo-political risk in Serbia than other locations with top tier copper projects European banks and Development Finance institutions looking to increase balance sheet allocation to the Balkans Current cash balance ($125m) Bisha cash flows Financing Plan Mine life extended to mid-2022 Strategic investor in Nevsun (<20%) More than just capital Could include parties that bring blending or marketing capabilities, mining or project expertise, Possible decision as early as Q Project debt (50%-60% of capital) Including Commercial Banks; Export Credit Agencies; Development Finance Institutions; Equipment suppliers Parties currently working through data room, expected to be completed in

13 TIMOK PROJECT NEXT STEPS HIGH GRADE, HIGH RETURN, FULLY EXECUTABLE COPPER PROJECT UPPER ZONE NEXT STEPS Updated PEA in October 2017 Pre-feasibility study in Q Begin decline development Q Lower Zone resource mid-2018 Ongoing drilling to find more Upper Zone style deposits Final FS project configuration ( Ramp-up case ) Upper Zone feasibility study Project Financing 13

14 QUESTIONS? Peter Kukielski President and Chief Executive Officer Ryan MacWilliam Chief Financial Officer 14

15 THANK YOU Investor Relations / IR@nevsun.com Follow us on: nevsun-resources