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From: Biniam Tekle (biniamt@dehai.org)
Date: Tue Aug 23 2011 - 08:43:52 EDT
http://www.canadianbusiness.com/article/41403--nevsun-resources-sells-minority-stake-in-bisha-mine-to-eritrean-government-for-us253-5-million
Nevsun
Resources sells minority stake in Bisha mine to Eritrean government for
US253.5 million
By The Canadian Press | August 23, 2011
VANCOUVER - Nevsun Resources Ltd. (TSX:NSU), a Vancouver-based miner, says
it has finalized a deal to sell a 30 per cent stake of the Bisha gold mine
to the Eritrean National Mining Corp/ for US$253.5 million.
The gold producer said Tuesday the money will be paid from the after tax
cash flows generated by the Bisha mine.
The Eritrean mine went into production in February and is expected to
produce more than 1.14 million ounces of gold as well as silver, copper and
zinc during its expected 13-year mine life.
The Eritrean government already held a 10 per cent free carried interest in
the project under the east African country's laws.
Nevsun cautioned that the sale to the state miner, also known as Enamco, may
not reflect current market values of gold projects, with the price of the
precious metal approaching US$1,900 an ounce.
"The purchase price is not indicative of the fair market value of Bisha but
rather the outcome of a price determination process, defined in a 2007
shareholder agreement, based on parameters of the Bisha deposit as it was
understood in 2007," Nevsun said in a release.
The company also said it hopes to extend the mine's productive lifespan with
continued drilling to explore for new deposits.
Nevsun's president Cliff Davis said Enamco had been an excellent partner in
the Bisha project and the Eritrean government has "significantly contributed
to the project" through its various ministries as an early shareholders in
the mine.
"By collaborating with international companies, Eritrea is developing a
mining industry that provides direct economic benefits, skill enhancement
and supply chain expansion," Davis said.
"Through these co-operative efforts, sustainable development from the
industry can positively impact the Eritrean economy for decades to come."
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