JOHANNESBURG (miningweekly.com) – TSX- and NYSE-listed Nevsun Resources on Friday revised its 2015 production guidance downwards to 140-million to 150-million pounds of copper owing to unplanned plant stoppages during the first half of the year.

Output from the Vancouver-headquartered firm’s Bisha mine, in Eritrea, had been hit by multiple unplanned shutdowns as the mill broke down in the first quarter and experienced fuel shortages in the second quarter.

Prior to the shutdowns to undertake repairs to the mill’s gearbox and thickener in the first quarter of the year, Nevsun had initially outlined a guidance of 160-million to 175-million pounds of copper output for the full year.

During the second quarter, low fuel supply levels saw the plant only operate at 75% of expected operating capacity – less than the 79% of expected operating capacity achieved during the first quarter.

The plant had also not operated during the first 11 days of July.

“A minimum fuel supply level is maintained to ensure continuity of operations. If the fuel supply decreases to an unacceptable level, Bisha shuts down the plant, which is our largest consumer of fuel on site,” CEO Cliff Davis said in Nevsun’s second-quarter update to shareholders.

However, Nevsun was confident that the State-owned fuel supplier had resolved the supply challenges and that the State’s risk mitigation measures were sufficient to ensure a continuous stream of fuel supply.

Meanwhile, Nevsun had managed to contain its costs and maintain the C1 cash costs per pound of $1.20 to $1.40 despite the lower production.

During the three months under review, revenue contracted to $104-million, from the $169-million earned in the prior corresponding quarter.

The overall sales volume reached 33.6-million pounds of payable copper during the second quarter, in line with copper output for the quarter.

Nevsun reported operating income of $38.6-million for the quarter ended June, a significant decline on the $94.9-million generated in the corresponding quarter in 2014, owing to a lower realised copper price, which decreased by 19% year-on-year, and lower copper-in-concentrate production caused by a decreased copper feed grade.

Earnings a share dropped to $0.05 for the three months under review, compared with the $0.15 in the prior corresponding period.
Nevsun paid a quarterly dividend of $0.04 a share.