What happened

Shares of copper miner Nevsun Resources (NYSEMKT:NSU) are up 10% as of 12:30 p.m. EDT today after the company posted earnings. Even though it fell short of estimates, the company also announced the results of a preliminary economic assessment of a potential mine.

So what

Let's get the earnings stuff out of the way first. The company posted a net loss of $0.01 per share on $71 million in revenue. Wall Street was expecting flat results for the quarter.

Mining truck

Image source: Getty Images.

Now, for the real meat driving today's rally. The company announced the results of a preliminary economic study for its Timok Upper Zone project in Serbia. The mine, if fully developed, would produce 2.1 billion pounds of copper over a 15-year lifespan. Management estimates that the facility has a net present value of $1.5 billion and could generate a 50% internal return rate. Considering that the company's current production is only 4 million pounds per quarter, it would represent a sizable boost to the company.

Now what

Before getting carried away by today's announcement, let's keep this in perspective. Nevsun Resources is a company that only generates a few million dollars a year in operating income, and it wants to build a mine that will have initial capital costs in excess of $600 million.

Speculative mining stocks like this one can garner a lot of attention when news like this hits, but the news doesn't necessarily change the investment thesis for the company. I won't say that it is impossible for the company to carry out its plans, but there are a lot of hurdles in the way. Unless investors have a real hankering for speculative stocks, this looks like one they should sit out.

Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.