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From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Sun May 01 2011 - 08:03:17 EDT
Nevsun sees Bisha reserves doubling, gold production sweetener
More gold resources could generate extra cash flow for Nevsun in the short
term while more base metals could add years to Bisha's mine life.
Author: Kip Keen
Sun, May, 01.05. 2011
HALIFAX, NS -
With heavy infill drilling underway or already completed, Nevsun Resources
(TSX: NSU) expects its reserves at the Bisha mine to grow substantially in
2011 and a satellite deposit to kick in extra gold ounces to production,
said Scott Trebilcock, Nevsun's vice president of business development.
"Our objective is to double reserves," he told Mineweb in a telephone
interview. These, which Nevsun recently updated, stand at 28 million tonnes
@ 1.78 g/t gold, 38.9 g/t silver, 1.6 percent copper and 3.15 percent zinc.
Trebilcock said most of the extra reserves will come from inferred resources
sitting below the existing open-pit design in the primary zone of the
deposit. All told, inferred resources at Bisha weigh in at 10.6 million
tonnes @ 0.67 g/t Au, 47.78 g/t Ag, 0.91 percent Cu and 5.67 percent Zn.
Meanwhile Nevsun has been defining two, smaller satellite deposits, Harena
and Northwest, that are respectively about nine and two kilometers away from
Bisha, and the Hangingwall Copper zone, which is adjacent to Bisha. None are
the subject of a resource calculation yet, but that will soon change. Nevsun
expects to have resource estimates in hand for all this year.
"We're talking pretty substantial," pronounced Trebilcock as regards the
overall impact the added reserves and new resources could have on Bisha
production. Added reserves below the current pit design could add several
years to the end of Bisha's 14-year mine life, he said.
The effect of Northwest, Hangingwall and Harena on Bisha is less certain and
depends on the outcome of resource calculations and production decisions,
but Trebilcock suggested the Northwest and Hangingwall deposits might also
add feed near the end of Bisha's mine life.
The near-term prospects for Harena are more clear, however. Nevsun is
applying for it to be added to its Bisha mining license and, pending
approval, forecasts mining its gold-rich upper oxide cap as an added stream
to Bisha's mills starting in 2012.
"It's not going to drive up analysts NAV models," Trebilcock said, as the
amount of gold it could contain in comparison to the main deposit at Bisha
would be small. But with high gold prices it could "add tens of millions" in
cash flow, leading Trebilcock to characterize it as "a nice little
sweetener."
Nevsun, which began commercial production at Bisha in February with
40-percent joint venture partner ENAMCO, Eritrea's state miner, is in the
enviable position of mining a deposit that is rich in gold near surface at
time when gold prices are at record highs. In the first two years of mining
Nevsun forecasts producing 919,000 ounces gold. In subsequent years, the
deposit is a copper-zinc story.
Beyond the main and satellite deposits at Bisha, Trevilcock said Nevsun is
scratching the ground for other volcanogenic massive sulphide deposits on
its Bisha concessions. "The only things we have gone after to date are those
that have shown up on surface," he said.
But at some point Trebilcock sees an acquisition of some kind. "We can't see
how we're going to spend all the money we're going to generate on Bisha."
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