High returns and quick capital payback highlight the economic strength of the Project. Low site operating costs throughout the projected mine life result in Bisha being particularly robust and the strengthening of the US dollar will also improve the economics further regarding both capital and operating costs. Due to the volatility in metals prices over recent weeks, management presents below a low metals prices projection⁽²⁾:

Highlights of the Project:

Metal Production (Life of Mine)     -    1.06 million oz gold

(all payable)                                -    749 million lb copper

                                                  -   1,093 million lb zinc

                                                  -    9.4 million oz silver

Production Schedule                    -   +10 years open pit mine modeled at 2 Mt/year of ore production

                                                  -   years 1 and 2, average 431,000 oz Au and 702,000 oz Ag per  year

                                                  -  years 3 to 5 average approximately 170 million lb Cu per year plus precious metal credits

                                                  -  years 6 to 10 average approximately 220 million lb Zn plus 40 million lb Cu per year plus precious metal credits

CAPEX                                       -   pre-production capex approximately $250 million

                                                  -   expansion capital (funded by operations) $115 million

Operating Cost                            -   life of mine approximately $33/tonne of ore milled, excluding royalties

Note:  CAPEX and Operating Cost are updated to June 2008 and continue to be good estimates. CAPEX includes a contingency of $32 million. In addition, the recent strengthening of the US dollar has resulted in a forecast improvement in CAPEX, particularly in respect to the costs associated with South African and European supply. Approximately 20% of CAPEX has been either spent or ordered so as to fix pricing. The significant orders include major equipment and steel, including long lead order items such as the SAG and ball mills.

The SENET engineering design incorporates some positive design changes compared with the Feasibility Study. The tailings storage area has been relocated to a more favourable terrain and an additional plastic lining has been added to the design. The gold process plant has been redesigned from a carousel CIP to a standard CIL circuit.

Financial scenarios and sensitivity review (all after tax):

1. Recent metals prices scenario:

Metal prices                                          -   Au $700/oz, Cu $1.80/lb, Zn $0.50/lb, Ag $10/oz

Rate of Return                                      -   50.6%

Cumulative cash flow                         -   $ 619 million

NPV (10% discount)                           -   $ 304 million

Payback                                                 -   1.4 years    (pre-production capital payback)

2.  Lower metals prices scenario (more conservative):

Metal prices                                          -   Au $600/oz, Cu $1.50/lb, Zn $0.50/lb, Ag $8/oz

Rate of Return                                      -   42%

Cumulative cash flow                         -   $ 440 million

NPV (10% discount)                           -   $ 250 million

Payback                                                 -   1.6 years    (pre-production capital payback)

The Company effectively has a 90% interest in the net present value (NPV) of the project, 30% of which will be received shortly after the start of production (less the $25m prepayment received in January 2008).

Summary of Production

In October 2007 the Government of Eritrea indicated its strong support for the Bisha Project and for the development of a new and strong mining sector in Eritrea through its purchase of a 30% paid participating interest through the Eritrean National Mining Company (ENAMCO). For details of the Bisha Mining Share Company (“BMSC”) shareholder agreement please refer to the company's press release dated October 29th, 2007. The shareholder structure of BMSC is 60% Nevsun and 40% ENAMCO; with the ENAMCO shareholding comprising a 30% paid participating interest and a 10% free participating interest as provided by the country’s mining legislation.  In December 2007 Nevsun's Eritrean venture company, BMSC, concluded a mining agreement with the Government of the State of Eritrea. The mining agreement contains all of the normal provisions governing the future development and operations for the Bisha Project, including all substantive requirements of international financial institutions.

On behalf of the Government of Eritrea, Minister Tesfai Ghebreselassie has stated that “The success of the Bisha Mining Project has a special significance both for its economic benefits and trendsetting effects on the path of the industry we are very eager to develop in Eritrea. Therefore I would like to reiterate our Government’s commitment to do all within its means to assist Bisha Mining Share Company be a success story.” Both Nevsun and ENAMCO can now focus their attention to jointly financing the development of the Bisha Mine.

Please refer to Investor Relations/News Releases for up-to-date Bisha news.

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