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Bisha Feasibilitiy -
Technical Report
October 16, 2006
BISHA FEASIBILITY – TECHNICAL
REPORT
Nevsun Resources Ltd. (NSU-TSX and AMEX)
wishes to
advise that the 43-101 compliant Technical
Report on the Bisha Feasibility Study will
be filed by November 17, 2006. AMEC Americas
Limited has been engaged to complete this
Technical Report.
Nevsun is also pleased to
relay supporting comments from the Minister
of Energy & Mines of Eritrea who has
congratulated Nevsun in progressing its
Bisha project. Mr.
Tesfai Ghebreselassie
stated: “The
Bisha Project Feasibility Study has been
keenly awaited as an important step in the
development of a major mine; one in which
the Government of Eritrea has actively
participated to demonstrate the desire of
Eritrea to swiftly develop a significant
mining industry".
Summary details of the
Feasibility Study are noted below and more
complete information may be found in the
Company’s news release dated October 12,
2006. News releases may be found on SEDAR
and the Company’s web site at www.nevsun.com.
HIGHLIGHTS:
Metal Production
(Life of Mine)
(all payable) |
- 1.06 million oz gold
- 747 million lb copper
- 1,092 million lb zinc
- 10 million oz silver |
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Base Case Financial Analysis (after tax): |
| Rate of return |
- 26% (Au $435/oz Cu $1.44/lb prior to 2015
and $1.28 thereafter, Zn $0.57/lb, Ag $6.50/oz) |
| NPV (0% discount) |
- $356 million |
| NPV (10% discount) |
- $135 million |
| Payback |
- 2.6 years (pre-production capital
payback) |
| Capital
Cost Estimate |
- $196 million pre-production |
| Expansion
Capital Estimate |
- $61 million + $31 million in two
phases, funded from operations |
| Operating
Costs |
- $31.64/tonne ore milled through life
of mine |
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All metal prices used for the base case analysis were
independently developed and provided to AMEC by a recognized independent
minerals marketing consultant. |
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Recent Prices Case
Financial Analysis (after tax):
Utilizing recent metal prices over life of mine (Au $600/oz, Cu
$3.40/lb, Zn $1.50/lb, Ag$11/oz) |
| Rate of return |
- 62% |
| NPV (0% discount) |
- $1,857 million |
| NPV (10% discount) |
- $853 million |
| Payback |
- 1.5 years (pre-production capital
payback) |
Production Schedule |
+10 years open pit mine modeled at 2 Mt/year of ore
production
- years 1 and 2, average 447,000 oz Au per year
- years 3 to 5 average 173 million lb Cu per year plus precious metal
credits
- years 6 to 10 average 218 million lb Zn plus 39 million lb Cu per year
plus precious metal credits |
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 cause such differences include:
changes in world commodity markets, equity
markets, costs and supply of materials
relevant to the mining industry, extent of
resources actually contained in mineral
deposits, actual recoveries achieved in
processing ore, technological change,
weather conditions, change in government and
changes to regulations affecting the mining
industry. Forward-looking statements in
this release include statements regarding
future deliverables. 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.
| NEVSUN RESOURCES LTD.
“John A. Clarke”
Dr. John A. Clarke
President & Chief Executive Officer
NSU06-27 |
For further information, Contact:
Judy Baker
(604) 623-4704 or (416) 786-7860
or 1-888-600-2200
e-mail:
nevsuninfo@nevsun.com
Website:
www.nevsun.com |
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