[dehai-news] (Proactiveinvestors) ERITREA: Nevsun Resources - Finance lined up to develop Bisha

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From: Biniam Haile \(SWE\) (eritrea.lave@comhem.se)
Date: Sun Nov 02 2008 - 10:46:19 EST

Monday, November 03, 2008
Nevsun Resources - Finance lined up to develop Bisha

by Sami Kiri
When most of the mining companies find it hard to raise money for
exploration Toronto and AMEX listed Nevsun Resources (TSX/AMEX: NSU) has
secured the approval for a US$89 million commitment from the Industrial
Development Corporation of South Africa ("IDC"). Funds are expected to
be utilised for the development of the Bisha Project, Eritrea. This
proves the old adage that there are always investors for good projects.
Nevsun presented in one of our investor forums in Toronto during which
we as well as our readers had an opportunity to interview the
management. John Clarke, Vice Chairman, was optimistic about their
ability to move the Bisha Project forward. Bisha is a large precious
metal and base metal-rich volcanogenic massive sulphide (VMS) deposit
located in a newly discovered VMS district in western Eritrea.
Suggested models for the deposit include felsic dominated
bimodal-siliclastic VMS and Noranda/Kuroko type deposits and a
comparison has been made to the Matagami VMS district in Quebec. Nevsun
and the Eritrean National Mining Corporation ("ENAMCO") (collectively
the "Sponsors") own the Project.
IDC is a national development finance institution established to promote
economic growth and industrial development in South Africa. Its mandate
includes the rest of the Africa continent with a primary objective to
contribute to balanced, sustainable economic growth in Africa. In
addition to IDC, several other potential lenders have also submitted
indicative terms for the remaining funds required and the Sponsors are
in the process of evaluating these proposals. Nevsun is clearly not
short of investors for Bisha.
Nevsun has also provided updated project economics for Bisha. Benefiting
from low site operating costs throughout the projected mine life, Bisha
is characterised by its high returns and quick capital payback. A
strengthening US dollar is expected to improve the economics further.
Bisha has a project Internal Rate of Return of 42% and a pay back period
of 1.6 years; impressive by any standard. These are based on
conservative assumptions such as Au $600/oz, Cu $1.50/lb, Zn $0.50/lb
and Ag $8/oz, and a Preproduction capex of $250 million. No wonder
Nevsun has financial backers!
Brisk development activities are underway at Bisha. During spring/summer
2008 Nevsun has upgraded construction camp and facilities. In August
2008 SENET, the EPCM contractor, was mobilized to site enabling site
clearance and heavy earth moving for plant construction. In September/
October 2008 Nevsun has advanced town site construction for 400 people.
The company is well on its way to get Bisha to production.
Market uncertainties may make investors nervous but attempts by the
management of resource companies to advance their projects usher
considerable confidence both on the company and projects themselves.
Nevsun's Bisha project and its continued progress is one of those few
examples where the management continues with delivering the business
plan promised, regardless of market conditions. We will continue our
readers tuned in to Nevsun story and soon will get John Clarke and his
team present Nevsun in our London forums.
About 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 project is developed with the Eritrean government as a
partner. The project has 27.2 million tonnes of measured and indicated
resource and 11.7 million tonnes of inferred resource (43-101


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