2008 Press Releases
November 13, 2008
Third Quarter 2008 Financial Results
Vancouver, British Columbia - Nevsun Resources Ltd. (TSX:NSU)(AMEX:NSU) ("Nevsun") wishes to announce its results for the third quarter of 2008. Complete details of the September 30, 2008 interim financial statements and Management's Discussion and Analysis can be found on the Nevsun website at www.nevsun.com as well as on Sedar at www.sedar.com and EDGAR at http://www.sec.gov/edgar/searchedgar/webusers.htm.
The Company's cash position at September 30, 2008 was approximately US$47 million. The loss for the quarter was US$843,221 as compared to a loss of US$4.7 million for Q3 2007. The main reason for the improvement in operating results was the disposal of Nevsun's Mali assets during Q2 2008 and capitalization during 2008 of all of its Bisha project development costs in Eritrea.
In late October the Company announced the appointment of a lead banker and an $89 million debt finance commitment for the development of its Bisha Project in Eritrea. This is a substantial portion of the finance required for the $250 million project. Discussions are active with a number of other possible lenders who are at various stages of internal approvals. The Company's strong cash position, the above project debt and the financial support of the Eritrean government should allow the continued development of the Project without the issuance of any equity of the Company.
MILESTONES ACHIEVED
October 2006 |
Feasibility Study completed by AMEC Americas |
December 2006 |
Social and Environmental Impact Assessment (SEIA)
completed by AME |
January 2007 |
Tendering process for EPCM contractor initiated |
June 2007 |
EPCM contractor selected (SENET) and preliminary
engineering commenced |
October 2007 |
State participation agreed. (10% free carried plus a 30%
interest to be purchased at fair value by Eritrean
National Mining Corporation (ENAMCO |
December 2007 |
Mining and Stabilization agreements completed with Eritrean
Government |
January 2008 |
Mining license granted |
February 2008 |
$25 million received from ENAMCO as a down payment on
purchase price |
February 2008 |
Orders placed for critical equipment (long lead item ball and SAG mills) |
August 2008 |
$20 million received on sale of other Nevsun assets |
August 2008 |
SENET mobilized to site; site clearing and heavy earth
moving started |
September 2008 |
Construction camp for 400 people advanced |
October 2008 |
89 million debt finance commitment received from
Industrial Development Corporation of South Africa. |
PROJECT ECONOMICS (Low metals price assumptions)
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(1).
IRR - 42%
Payback - 1.6 years
Life of mine net after tax cash flow - $440 million.
(1) Assumptions
Low metals price scenario - Au $600, Cu $1.50, Zn $0.50, Ag $8
Preproduction capex - $250 million (June 2008, including contingency)
The Company looks forward to progressing Bisha through to production with the continued full support of the Eritrean Government.
Forward Looking Statements: The above contains forward-looking statements concerning finance commitments and requirements, strength of cash position, continued support of Eritrean government and assumptions contained within "Project Economics". Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible" and similar expressions, or statements that events, conditions or results "will", "may", "could" or "should" occur or be achieved. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those described in the Management Discussion and Analysis of the Company. The Company's forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and the Company assumes no obligation to update such forward-looking statements in the future. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.
NEVSUN RESOURCES LTD.
Cliff T. Davis
President & Chief Executive Officer
For further information, please contact:
Nevsun Resources Ltd.
John Clarke
Vice Chairman
(604) 623-4700 or 1-888-600-2200
Email: nevsuninfo@nevsun.com
Website: www.nevsun.com
