From: Biniam Tekle (biniamt@dehai.org)
Date: Wed Feb 17 2010 - 11:49:07 EST
Nevsun Resources
Nevsun Resources Ltd. is a gold and base metal explorer/developer with a
focus on developing mining projects in Africa. Nevsun is currently focused
on advancing its high grade gold, copper and zinc Bisha Project in Eritrea.
The Bisha volcanic-associated massive sulphide (VMS) deposit is located in a
newly discovered VMS district in western Eritrea. Nevsun completed a
feasibility study for the Bisha project in late 2006. The Bisha Mining and
Stability Agreements were signed in December 2007 and the Bisha Mining
License was awarded in January 2008. The mining license covers an area of
16.5 square kilometers (includes the Bisha Main Zone deposit and the
Northwest Zone deposit) within a mining agreement area of approximately 39
square kilometers. The Company retains an exploration license of
approximately 94.5 square kilometers which includes the Harena deposit.
Wednesday, February 17, 2010
Nevsun completes C$117m placing to finance Bisha gold mine development
*Nevsun Resources (TSX, AMEX: NSU)* confirmed that it has completed its
non-brokered private placement. The company proposed the equity-based
fund-raising on February 4th. The placing is intended to remove uncertainty
relating to previously agreed bank finance from South African and European
lenders. Nevsun issued 52m shares at C$2.25, raising C$117m.
On the 4th February, Nevsun said it had opted to fully fund the Bisha gold
project after the lenders failed to provide the required debt-based
financing in a timeframe that suited the company. The development of
Nevsun’s flagship Bisha Mine in Eritrea began in 2009, funded by a mixture
of capital raised from shareholders and the anticipated debt-facility.
Nevsun’s development partner the Eritrean National Mining Corporation
(ENAMCO), which retains a 33% interest in the project, continued to meet its
own contributing share of the financing, and that the state government had
also remained supportive of the mining industry.
The company previously said that whilst it would have preferred to have
continued with leveraged project financing, the overriding priority is to
get the mine built and for it to begin cash generation. According to Nevsun,
the equity-fundraising ensures this will remain on schedule.
The Bisha project is now nearly 50% complete. “Due to the very robust nature
of the project and assuming recent metals prices, the payback to the Company
is now expected to be under one year”, Nevsun stated.
“...the Company and ENAMCO have concluded that the debt facilities are
sufficiently unreliable and inconclusive for our project.” The project is
expected to cost $260 million in total, approximately 4% ahead of the
original estimate of $250 million.
Under the terms of the placing, the shares are subject to a hold period
which lasts until June 17th 2010.
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