Bisha Project Gold, Copper, and Zinc Deposit Metallurgical Update

July 17, 2006

BISHA PROJECT GOLD, COPPER, AND ZINC DEPOSIT
METALLURGICAL UPDATE

Nevsun Resources Ltd. (NSU-TSX and AMEX) is very pleased to report the finalized metallurgical test work data for the three phases of the future mining planned at its Bisha Project in Eritrea. Test work to assess the metallurgical parameters and metal recoveries from the Bisha surface oxide deposit, the supergene copper deposit and the primary zinc/copper massive sulphide deposit was conducted by SGS Lakefield, Ontario, Canada. The program was managed by AMEC Americas Ltd, the consulting engineering group for the Bisha Feasibility Study.

The major metal recoveries from each of the three Bisha ores include:

• 87% gold recovery from the oxide ore
• 92% copper recovery from the copper supergene ore
• 85% copper and 83.5% zinc recovery from the primary ore.

The metallurgical characteristics and recoveries were evaluated from two distinct test programs with diamond drill programs dedicated to obtaining metallurgical test samples. Phase one of the test work was completed in 2005 and the results were reported in the Bisha Scoping Study in December 2005. A second phase of metallurgical drilling was completed in Q1 2006 as part of the Bisha Feasibility Study. Phase two focused on obtaining a better understanding of the flotation kinetics of the supergene and primary sulphide ores. The combined test programs have been successful in defining the overall ore characteristics.

The open pit Bisha Mine will commence with milling the surface oxide ores for two years, followed by three years of milling copper supergene ore, followed by a further five years of zinc/copper primary sulphide ores. The supergene copper ore lies immediately beneath the oxide gold ore and the primary sulphide ore lies immediately below the supergene ore. With the three ore types representing distinct mineralized horizons they will be able to be mined with little cross contamination. Although not addressed in the current work by AMEC, there is additional primary sulphide mineralization at depth which may be accessed by either an expansion of the open pit or by future underground development.

The mill indices for the three ore types are presented in table 1 below. Crusher and mill facilities (crusher, SAG mill, and ball mill), designed to process the oxide ore, will continue in service for the sulphide ores. Supergene and primary ore types are significantly softer than the oxide ore, hence designing the crusher and mill units for oxide ore characteristics will result in a built-in capacity for potential future mine expansions.

Table 1

Oxide ore processing is proposed through a leach and CIP plant for which the leach test work has provided the following design recoveries (Table 2) to be included in the feasibility study.

Table 2

It is anticipated that in excess of 400,000 ounces of gold will be produced each year of the first two years of mine operation.

Copper supergene ore is planned to be processed through a froth flotation circuit to provide a copper concentrate for shipping to smelter markets. After three years of processing copper supergene ore the main feed to the process plant for the next five years will be primary sulphide ore which will generate separate copper and zinc concentrates for the smelter market. Anticipated concentrate grades and metal recoveries for the supergene and primary ores are presented below (Table 3).

Table 3

The final test work has shown copper recovery from the supergene ore to be significantly improved when compared with the previously reported test work which was included in the 2005 Scoping Study (higher by 7% with the concentrate copper grade unchanged). The copper recovery from the primary ore is marginally improved at 85% (higher by 2% with the concentrate copper grades unchanged). The zinc concentrate grade from the primary ore is the same as was previously reported, although the estimated zinc recovery to the concentrate is marginally lower (lower by 1.5%). Based on the recent metallurgical test results, total copper concentrate production for the three years of supergene ore processing is projected to be 850,000 tonnes. For the subsequent five year period of processing primary ore, total copper and zinc concentrate production is projected to be  378,000 tonnes and 1,060,000 tonnes and respectively.

Nevsun management is very pleased with the final metallurgical test work results for its world class Bisha deposit.

AMEC has confirmed to the Company that the Bisha Feasibility Study is on schedule for completion by end Q3 2006.

Sean Waller, P. Eng. AMEC Project Manager, is a Qualified Person under National Instrument 43-101, and is responsible for the metallurgy and process engineering for the Bisha Feasibility Study.

Forward Looking Statements:  The above contains forward looking statements that are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements.  Factors that could case such differences include:  changes in world commodity markets, equity markets, costs and supply of materials relevant to the mining industry, change in government and changes to regulations affecting the mining industry.  Forward-looking statements in this release include statements regarding future mining schedules and production forecasts.  Although we believe the expectations reflected in our forward looking statements are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements.