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The next billion dollar mining takeout could be in Eritrea

Nevsun stocks rise amid billion dollar bid rumor

The next billion dollar mining takeout could be in Eritrea

By James Fraser,

Rumors are circulating this morning that the latest takeover in the mining space will be Nevsun Resources (NSU.T). Bloomberg is reporting that QKR Corp, a mining fund backed by Qatari investors, is set to make a $1 billion bid for Nevsun. QKR Corp is led by Lyold Pengilly, a former banker at JP Morgan.

Nevsun’s stock was halted at 7:22 am (pst) and is up 13.2% on 1.9 million shares traded giving the company a market cap of  ~$956.9 million.

Representatives from both companies have refused to comment at this time.

Nevsun had $570 million in working capital ($380 million in cash) and no debt at the end of September. The company has now transitioned from a gold producer into a copper producer and has strong earnings and free cash flow at current metal prices. The strong free cash flow allows Nevsun to pay a dividend of 14 cents per share annually.

The company’s Bisha mine is expected to produce 180-200 million pounds of copper at a grade of 4% per year. In 2016 the mine will become a zinc mine. This could be optimal timing as many analysts see a deficit in the zinc market in the next couple years.

Nevsun owns 60% of the Bisha mine and the Eritrean government owns the other 40%.

QKR is a mining fund that was established to buy distressed mining assets that are near or in production. The fund made its first bet earlier this year purchasing a gold mine in Nambia from AngloGold Ashanti for $110 million.

QKR has deep pockets as it is backed by Poland’s richest man Jan Kulcyzk and Qatar’s sovereign wealth fund.

Here’s the Nevsun chart:

The rumored takeover has pushed Nevsun’s share price to $4.67, which is close to a 3 year high.

It remains to be seen if the deal will close or if another offer will come in.

Investors should also keep an eye on Sunridge Gold (SGC.V), a junior stock with interests in Eritrea, run by former Nevsun employees. Sunridge is up 19% already this morning, and looks to be backed by some smart guys here in Vancouver.

Symbol: NSU.T
Share price: $4.80
Shares outstanding: 199.35M
Market cap: $956.9 M
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The next billion dollar mining takeout could be in Eritrea Reviewed by Admin on 12:34 PM Rating: 5


  1. It is time to expedite issuing new Eritrean ID cards, before the X-Woyane or currently registered as "Eritrean" refugees flock back to Woyane's Dubai, a.k.a Asmara.

  2. Keep on marching Eritrea. You are doing it right and let the goHaf meHaf go to hell. There was no power to stop our independence and there won't be any to detruct us from our nation building. It is happening right in fron t our eyes, The Hasad and budha all remains just that - Hasad - budha!

  3. Does anyone take the time to ask what ever happened to the 900 million worth gold mine?

  4. The total revenue to enamco so far has been 240 million since 2011. Out of this, the despot regime paid over 200 million for the 30% it acquired from bisha. In other rwods pfdj made less than 40 million from bisha. All the 900 million bullshit was bonus and exaggeration.

  5. Thé answer is simple, Hagos Kisha is getting rich and has secured his retirement in west, once the real patriotic Eritreans take back our country from Tegaru mafia in Asmara.

  6. What is the use of it when there is no tranparancy about where the income is spent. Since 2011 we have sold gold but no economic improvnment in the country, instead things are getting worst. Only the drunk president and his countryman Kisha knows how much we earn and where the money spent. They chose to spend our money on their countrymen DEMHIT instead of our people. In the last interview the dictator refused to tell to the Eritrean people about the income of gold mines in the country, no wonder that he thinks the whole country is his private property. As former Eritrean ambassador said Issayas identity problem is killing our country.

  7. stop thinking through your big mouth!!

  8. jealousy is hitting home hard!!! salivate baby salivate!!

  9. You think so. Yeah, keep fooling yourself like that ok.
    What we make is none of your business trash weyane.

  10. Ask those questions to your junta weyane

  11. Awet,
    That is what I did , but the "woyane" with other word Tegaru mafia is sitting in Asmara and is killing our country. It is not a coincidence that the inner circle of Issayas are people with identity problem, mostly more Tegaru than Eritreana. Real patriotic Eritreans like Petros Solomon, Duru etc are dying in prison.

  12. Yes Lalmba, this dear Nation & its humble People deserve the best what nature can give/offer, against all envy, slander..It's time Eritreans will say oh..temesgen against all: "tetsab ot"

  13. Fedup, haqi nezareb..don't say that..nay kardiology extention or in general Orota hospital extension worth 5 mln €? May nefhi department of technology 30 mln €? ect..Eritrean academic curricula will be revised by "Finland Partnership" it's worth other mlns?
    Being honest, i admire the Eritrean leadership of the choice or strategy, the are doing, the choice is not for a single school or college as you can experience in other nations, it's for all Eritrean school system. Congratulation. (don't miss-understand me i'm saying Eri Gov is perfect, as a young Gov. you'll allow him also a time to settle some improvements no?)

    I have a some how a wide vision of African neighbour and other countries..we're are better, or the Gov. is doing better.

  14. It is embarrassing but inescapable truth what Fedup is telling about Eritrea. Eritrea is in a complete mess in all aspects of every sector

  15. Cane, I would dare to say I completely disagree with you regarding the government we have. I respect for your firm stand with what you believe. As a matter of fact, you and Very few others are the few genuine and honest Eritreans on this forum. I understand, your claim "we are in the right path, we are progressing, developing ..... " Is based on the good will rather than reality. you are in the opposite of reality. The reality on the ground is showing something else..... To mention few- more than 1500 young people are leaving Eritreans, many innocent people are languishing in prisons, we don't have a constitution that limits the power of government, people have no right to lead their life freely, people don't have right freedom of movement, freedom of expression freely .... Without the above mentioned problems, how much oil is discovered how much diamond is dug-out or gold extracted have no significance in our life. The government doesn't need money to fix the above mentioned problems.

  16. Politically blin people like you can't see nothink

  17. In the meetings of the ypfdj i observe that the person who is assigned to keep the accounting, makes report officially to the members, explaining the all exercises. From where do you think this culture come? Don't you think that at nation level every sector this is not accomplish?
    i see some african countries put in action the so called VAT system or the receipt concept, even very disorderly. For instance in ethiopia just the last few years adopt that, means that culturally are not aware of.
    Tsebtsab kebahal culturally i know in our Country, as explained with the youth, you can deduct that their elders will do that.
    ኡፊቾ ታሳ ክባሃል ኣይትፈልጥን ዲኻ..ናይ ቐደም ታሪኽ ኢዩ..
    Then if you come to transparency, you'll forgive me to ask you tell me were do you live to understand what type of model you're referring to. ብዕላል ደይኮነስ, ብተምክሮ ናይ ካልኦት ሃገራት, ናትና የዕርዩ ይበልጽ.
    I can say they are in top of the worlds clean system.
    ናይ ስጋ ጌርዋ ከይትብለኒ ኣምበር, ብሓቒ ኢየ ዝብላካ.


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