From: Biniam Tekle (biniamt@dehai.org)
Date: Thu Dec 24 2009 - 17:50:27 EST
Nevsun uncertain if sanctions affect Eritrea project
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By: Liezel Hill
24th December 2009
Updated 4 hours agoTEXT SIZE TORONTO (miningweekly.com) – Canada's Nevsun
Resources does not expect a United Nations Security Council resolution to
place sanctions on Eritrea will have any direct impact on the company or its
flagship project in the country, but is uncertain whether the sanctions
could indirectly affect a debt finance facility put in place for the
project.
Shares in Nevsun fell 10,7% on Thursday, to C$2,75 apiece by 12:58 in
Toronto. The exchange closed early ahead of Friday's holiday.
The sanctions placed on Eritrea, which is accused of supporting Islamist
militants in Somalia, include an embargo on arms exports and imports on the
country, and asset freezes and a travel ban on organisations and individuals
to be listed by a sanctions committee.
“The implementation of this process may take some time and the details are
not yet known,” Nevsun said in a statement on Thursday.
The Bisha gold/silver/copper/zinc mine, in which Nevsun owns 60% and the
government of Eritrea holds 40%, is scheduled to start production in the
second half of next year.
“Nevsun believes that these sanctions should not have any direct impact on
the company or its Bisha project in Eritrea as the company is focused solely
on the development of the Bisha project,” the firm said.
“It is however uncertain whether these sanctions could indirectly impact the
Bisha debt facilities.”
The company finalised a $235-million debt package in July this year,
comprising a mix of senior and subordinated loans from a lending group
consisting of seven lenders from Europe and South Africa
“The company is already in discussions with stakeholders to evaluate that
possibility and has contemplated alternative finance sources if the
sanctions do eventually negatively impact the debt facilities,” Nevsun said.
MILLS ARRIVE
Separately, the company announced on Thursday that both the SAG and ball
mill had arrived on site at Bisha in the last week, as had the primary
crusher.
Installation of the mills and crusher will begin in the New Year.
“The installation of the mills forms the critical path activity and their
timely arrival maintains the development timeline,” the firm commented.
Edited by: Liezel Hill
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