Opinions
Rick Rule
Nevsun Resources
NSU-T
TOP PICK
Mar 02, 2017
Stock price when the opinion was issued
You might be interested:
This has a company in Africa that they have operated for the last 5 years, and has been spinning off a lot of cash, and they still have about $200 million cash on the balance sheet. They went out and bought another asset, Reservoir Minerals which had a high-grade copper and gold deposit in Serbia. They are going to take the cash flow from their existing mine to help develop this new mine of zinc, and it will be a great little company. He can see this going to $5 over the next year or so. Dividend yield of 5.15%. (Analysts’ price target of $5.69.)
(A Top Pick Dec 23/15. Up 22.39%.) Part of the recent gain is since the election. A base metal producer and developer. Their historical mine Bisha in Eritrea, did quite well. They then made an acquisition of a copper exploration play in Europe, so it has become a little riskier as they are going to spend most of their cash developing this new copper project. The upside is there if you think this procyclical rally in base metals will continue.
(A Top Pick Nov 21/16. Up 5.81%.) Mining in Eritrea. Started with gold, and then copper, and now zinc. It is getting into the right metal at the right time. They also made an acquisition in Serbia of a very copper/gold rich property. They will take the proceeds from the one mine and use it to develop the next. Pays a nice dividend of 4%-5%.
The chart is very choppy. The pattern is almost a no-brainer for traders, but not necessarily great for “buy and hold” investors, unless they are paying huge dividends. As a trading stock, this should be bought somewhere around $3.50 and sold somewhere around $4.85. It is halfway between that range right now, and he wouldn’t bother buying it. If he owned it, he might even be tempted to Sell.
They had a mine in Eritrea, which was first gold, then copper, and now a very rich zinc zone. They are currently having some trouble separating the copper and zinc. However, the big asset they bought was Reservoir Minerals with a big high grade copper/gold deposit in Serbia. They slashed their dividend down to 1.61% to redirect proceeds into the next project, which a lot of investors didn’t like. The mine is going to be very profitable. (Analysts’ price target is $5.13.)
Had recommended this in the past. Had really liked it. It was a dividend payer of around 4%-5%. Unfortunately, some metallurgical issues started to come into play and were having poor recoveries from both copper and zinc. The dividend had to be eliminated. It is now a kind of “show me” story.
(A Top Pick Nov 11/16. Down 25%.) This had real, real problems delivering with regards to a copper circuit in Eritrea, and bought the Reservoir deposit. They paid for it with stock, and will get the benefit 4 or 5 years from now without higher cash flow. A combination of a bad miss in a copper recovery circuit and that they operate in Eritrea and that they increased their share count now, when they are going to benefit in 4 or 5 years, combined to wax the stock. He suspects that the stock will do very well over the next 6-12 months.
(A Top Pick March 2/17, Up 9%) Sold it, but then the stock got too cheap, so he bought it back. He was unhappy with their inability to solve metallurgical problems in Eritrea. The stock sold off because their Serbian deposit won't produce cash for a while. There were alleged human rights abuses in Eritrea.
He has owned it for a long time, buying it and selling it. It is truly a tier one deposit. The outlook is good as they solved their copper recovery problems. They are very well funded and generate a lot of cash after they reduced the dividend as they had a very lucrative mine to build. (Analysts’ target: $5.13).