Compared to its peers, Nevsun Resources' (NYSEMKT: NSU) cash costs to produce copper (98 cents per pound in Q1) are among the lowest in the world. The company is full of more good numbers, too. It pays a quarterly dividend of $0.035, shares offer a current yield of 4%, and cash reserves are equivalent to $1.69 per share. Nevsun also has over $450 million in working capital and minimal debt outstanding, and operating income from its Bisha mine was $52 million in the first quarter of 2014.

Financially sound and operationally efficient, Nevsun should have no trouble paying its dividend -- I believe we can bank on it.

Source: Nevsun

Also, I should note that the first quarter was exceptionally strong thanks to gold and silver credits. While Nevsun still has over 80,000 ounces of gold stockpiled, the $52 million operating income shouldn't be used as a baseline going forward. 

Mutually assured construction
Located in the northeast corner of Africa, bordering the Red Sea, Nevsun's Bisha mine is more than 6,700 miles away from its shareholder base in Toronto and Wall Street. From this distance, it can be difficult to gauge the political risk, especially for the retail investor.

Reports are conflicting, but Eritrea has a sketchy track record concerning human rights and freedom of the press. Admittedly, that could scare away some prospective investors. But from Nevsun's perspective, having worked in Eritrea for 16 years, it has been a safe and profitable place to call home. Through its 60/40 partnership with the Eritrean National Mining Corporation (ENAMCO), Nevsun's efforts have been strongly supported and well received. The Eritrean government and ENAMCO are keen to attracting additional foreign investment. Bisha, Eritrea's first large-scale mine, is the successful model they advertise and intend to replicate. Any negatives to Bisha, confiscation or otherwise, would slam the door on Eritrea's capital raising efforts.

By sharing the rewards and risks with ENAMCO, one could argue that Nevsun's overall risk of operating in Eritrea is actually quite low, and the market is mispricing its stock because of a country/political risk that has been exaggerated (poorly understood).

Falling for familiarity?
While the state of Arizona would be more familiar to most people than Eritrea, it doesn't necessarily make it a safer place to put your hard-earned investment dollar.

Let's compare Nevsun against Augusta Resource (NYSEMKT: AZC), whose Rosemont Copper project is located near Tucson. Augusta's market value is just over $400 million, about the same as Nevsun's after accounting for its cash reserves.

So, what do you get for the money? A someday mine. If built, Augusta could be the third largest copper producer in the U.S., supplying about 10% of this vital commodity. Trouble is, Augusta is in no financial position to build the mine, estimated to cost upwards of $1.2 billion. Already indebted by more than $100 million, Augusta is burning through $2 million per month, and it's borrowing money to make ends meet. 

Talk about opposition!
Now then, if Augusta's financing risks weren't enough, it's got significant environmental risks to overcome as well. The Forest Service was forced to delay an already delayed permitting decision after being inundated with 600 comments from 101 individuals, groups, agencies and Indian tribes that have concerns. More than eight endangered species could be affected if the Rosemont mine moves forward, including ocelots, a cute dwarf leopard. One person described the project as a "terrible, ill-conceived idea." 

Talk about opposition. So for about the same price as Nevsun, Augusta offers investors lots of potential, but no cash flow and no dividend.

At this point, Augusta shareholders are left hoping for environmental approvals, while keeping their fingers crossed that a white knight comes along with a better offer than Hudbay Minerals. There is more than one reason why it needs Hudbay Minerals.

Pound for pound, Nevsun is the leanest and best performing small-cap copper producer. Outside of a 50% collapse in copper prices or a shakeout of the Eritrean powers that be, Nevsun has plenty of financial muscle to continue paying its dividend.