http://resourceinvestingnews.com/88552-nevsun-resources-bisha-discovery-eritrea-forced-labour.html
Nevsun Resources: Good News, Bad News
Thursday June 18, 2015, 4:00pm PDT
By Teresa Matich+ - Exclusive to Copper Investing News
Nevsun Resources (TSX:NSU,NYSEMKT:NSU) has made headlines twice this
week. Once for a new discovery southwest of its Bisha mine, and once
for fresh allegations of the use of forced labor, this time from the
UN.
According to Mining Weekly, the UN Office of the High Commissioner for
Human Rights commissioned a report on Nevsun after a lawsuit was filed
against the company last November. Three former workers at Bisha filed
a civil claim against Nevsun on November 20, 2014, stating that they
were “subjected to cruel, inhuman and degrading treatment as well as
harsh working conditions including long hours, malnutrition and forced
confinement for little pay.”
Nevsun denied those claims, with Nevsun CEO Cliff Davis stating at the
time that the company has “adhered at all times to international
standards of governance, workplace conditions, and health and safety.”
Forced labour allegations
More recently, the UN has accused the government of Eritrea of
systemic, widespread and gross human rights violations. “Citing an
array of human rights violations on a scope and scale seldom witnessed
elsewhere, the report by the UN Commission of Inquiry on Human Rights
in Eritrea describes a totalitarian state bent on controlling
Eritreans through a vast security apparatus that has penetrated all
levels of society,” states a press release on the report, which warns
countries against sending refugees back to Eritrea.
Nevsun, which owns the Bisha mine in a 60-40 partnership with the
government, as per Eritrean law, is also mentioned in the report, as
the commission “collected evidence that forced labour occurred in the
context of the development and exploitation of the Bisha mine.”
For its part, Nevsun has denied such claims, with Davis calling them
“sensational and unbelievable,” and stating that the allegations were
made without visiting the mine or the country, despite efforts by
Nevsun to engage with the commission. “This brings into serious
question the methodology, process and collation of information in
their report,” he said.
New greenfield discovery
Nevsun came out with positive news on Thursday, however, announcing
yet another discovery near the Bisha mine. The company has found a new
massive sulfide discovery at its grassroots Asheli prospect on the
Mogoraib River exploration license, which lies 20 kilometers southwest
of the mine.
Highlighted intercepts from the discovery include 2.29 percent copper,
4.5 percent zinc, 0.45 g/t gold and 37 g/t silver over 22.9 meters, as
well as 1.26 percent copper, 6.08 percent zinc, 0.28 g/t gold and 26
g/t silver over 20.9 meters.
“Our new greenfield discovery at Asheli is exciting in that it shows
that the mineralizing systems on the Asheli trend are capable of
producing high grade deposits with good thicknesses of massive
sulphide,” said Davis in Tuesday’s release. “With over 4 kilometers of
untested strike length with similar geology the potential for further
discoveries on this trend looks very promising.”
Stefan Ioannou of Haywood Securities said in a note to clients that he
is pleased with the results. “Drilling to date has only tested ~1 km
of the Asheli Trend and mineralization remains open in multiple
directions,” the note reads. “Hence, we view the remaining ~4 km of
untested trend as highly prospective.”
Ioannou also notes that assay results are pending from an additional
15 holes drilled at Asheli, and that the company is planning to
continue work in the area later in 2015. Overall, Ioannou is retaining
his “buy” rating for Nevsun with a price target of $5.50 per share.
Certainly, those human rights allegations are worrying, but the market
still reacted positively to Nevsun’s latest discovery. At close of day
Thursday, Nevsun’s share price was up just under 6 percent, at $4.85.
The company’s share price has experienced a bit of a dip over the past
week or so, but is still up about 8 percent year-to-date.
Received on Fri Jun 19 2015 - 22:55:42 EDT