Nevsun Resources 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.
Nevsun Resources raises C$117 million after project debt lenders fail to deliver
4th Feb 2010, 9:03 pm
Toronto and New York listed Nevsun Resources (NSU) announced this afternoon that it had placed 52 million shares at a price of C$2.25 per share raising C$117 million (US$110 million) to remove uncertainty related to previously agreed bank finance from lenders in South Africa and Europe.
Nevsun Resources had initially commenced development of its flagship Bisha Mine in Eritrea with a mixture of capital raised from shareholders and bank finance. However, today the company said it had opted to fully fund the project after South African and European lenders had failed to provide the required project debt in a timeframe that suited the company.
Nevsun was also keen to point out that The Eritrean National Mining Corporation (ENAMCO) which retains a 33% interest in the project, had continued to meet its own contributing share of the financing, and that the state government had also remained supportive of the mining industry.
“The change in approach to the funding of the Bisha project is to ensure the project continues on schedule,” Nevsun stated today. “...the Company and ENAMCO have concluded that the debt facilities are sufficiently unreliable and inconclusive for our project.”
“While the Company would have preferred to stay with a leveraged project, the higher priority is to get the project built and producing cash. Due to the very robust nature of the project and assuming recent metals prices, the payback to the Company is now expected to be under one year.”
Nevsun also reported that the project is now nearly 50% complete, and is expected to cost $260 million in total, approximately 4% ahead of the original estimate of $250 million.
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