By: Matthew Hill

TORONTO (miningweekly.com) – Nevsun Resources, the owner of the Bisha gold mine in Eritrea, on Wednesday posted second-quarter after-tax net profit of $60.6-million, compared with a $2-million loss for the same period in 2010.

Production came in at 93 000 oz at a cash cost of $301/oz, with an average realised sales price of $1 510/oz, the TSX-listed company said.

The Bisha mine reached commercial production in late February and the June quarter was the company’s first full quarter of production.

Nevsun said it had $187-million in cash at the end of June, and did not need to raise money in the near term.

In 2007, the company signed an agreement with Eritrean State-owned Eritrean National Mining Corporation allocating the government a 10% free ownership of the Bisha mine, and a 30% paid-for stake.

The companies have been negotiating on the price that Eritrea will pay for the 30% ownership, and Nevsun said it expects this to be finalised before the third quarter is through.

Nevsun had previously said the price would be decided by June 30.

Although it has started off as a gold and silver producer, Nevsun will start producing copper from Bisha in 2013, followed by zinc output a few years later.

Shares in Nevsun closed 6% higher in Toronto at C$6.30, valuing the company at C$1.2-billion.

Edited by: Creamer Media Reporter