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From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Tue Aug 23 2011 - 13:24:13 EDT
2011 Press Releases-Bisha Purchase Arrangement Finalized
August 23, 2011
<http://www.nevsun.com/> Nevsun Resources Ltd. (TSX:NSU / NYSE Amex:NSU) is
pleased to advise that it has finalized its arrangements with the State of
Eritrea regarding the purchase of 30% of the Bisha mine by the Eritrean
National Mining Corporation (Enamco). The agreed price is US$253.5 million,
which will be settled from the after tax cash flows generated by the Bisha
mine.
The purchase price determination was subject to a process involving two
independent international institutions that were mutually appointed by
Nevsun and Enamco in January 2011. It should be noted that 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.
Enamco's ownership interest will effectively pay for itself without a
separate use of government funds. A formula has been agreed whereby a
substantial portion of the cash generated by the Bisha mine that would
otherwise be paid to Enamco will go to Nevsun until the purchase price is
paid in full. The balance is expected to be settled over a period of
approximately 2 years, depending mainly upon future metals prices and output
from the Bisha mine.
While the current mine life is approximately 13 years, management looks to
increase the mine life as it continues to drill out additional
mineralization in and around the Bisha mine.
Nevsun's President Cliff Davis states "Enamco has been an excellent partner
in Bisha. The Government of Eritrea has significantly contributed to the
project, both financially and through the board of directors of Bisha Mining
Share Company, as well as through the support of the Ministry of Energy &
Mines, Ministry of Finance and various other Ministries. By collaborating
with international companies, Eritrea is developing a mining industry that
provides direct economic benefits, skill enhancement and supply chain
expansion. Through these cooperative efforts, sustainable development from
the industry can positively impact the Eritrean economy for decades to
come."
Forward Looking Statements: The above contains forward-looking statements
regarding future dividend payments, resource/reserve potential at Bisha and
ongoing cash flow. Forward-looking statements are frequently, but not
always, identified by words such as "expects", "anticipates", "believes",
"intends", "estimated", "potential", "possible" and similar expressions, or
statements that events, conditions or results "will", "may", "could" or
"should" occur or be achieved. Forward-looking statements are statements
about the future and are inherently uncertain, and actual achievements of
the Company or other future events or conditions may differ materially from
those reflected in the forward-looking statements due to a variety of risks,
uncertainties and other factors, including, without limitation, those
described in the Management Discussion and Analysis of the Company. The
Company's forward-looking statements are based on the beliefs, expectations
and opinions of management on the date the statements are made and the
Company assumes no obligation to update such forward-looking statements in
the future, other than required by law. For the reasons set forth above,
investors should not place undue reliance on forward-looking statements.
NEVSUN RESOURCES LTD.
Cliff T. Davis
President & Chief Executive Officer
For further information, please contact:
Kin Communications
Tel: 604 684 6730
Toll free 1 866 684 6730
Email: <mailto:ir@kincommunications.com> ir@kincommunications.com
Website: <http://www.nevsun.com/> www.nevsun.com
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