Nevsun Resources
Nevsun Resources Ltd. is currently focused on advancing its precious and base metal-rich Bisha Project in Eritrea.
Nevsun completed the final feasibility study and a Social & Environmental Impact Assessment (SEIA) as well as a draft Environmental Management Plan for the Bisha Project in Q4 2006. These documents were prepared on behalf of the Company by AMEC Americas for the purpose of licensing the Bisha Project. Subsequently, in January 2008 a mining license was issued to the company.
Nevsun Resources – Vital Statistics
Market: TSX: NSU, AMEX: NSU
Number of shares in issue: 127.9 million
Recent Share Price: C$1.55
Market Cap: C$198.2 million
1 Year trading range: C$2.94 – C$0.80
Nevsun Resources – Finance lined up to develop Bisha
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 compliant).
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