Nevsun Resources Ltd., (NSU-TSX/AMEX) (“Nevsun”) is pleased to announce that its Eritrean venture company, Bisha Mining Share Company (“BMSC”), has 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. BMSC has further applied for the issuance of a mining license that the Government has advised will be issued soon.

In October 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 BSMC shareholder agreement please refer to the Company’s press release dated 29^th October 2007. The shareholder structure of BSMC 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.

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. The management of Nevsun Resources is very proud of the steps that it has taken through its diligent execution of its exploration success and its partnership with the Government of Eritrea to bring this exciting world class high grade gold deposit and its underlying high grade copper and zinc deposits to this stage.

The Bisha feasibility report (completed Q4 2006) shows the project to be financially robust as a result of low operating costs throughout the mine life.

The Bisha Deposit

The Bisha deposit is configured in three distinct layered zones – a 35m thick surface oxide zone having a high gold and silver content immediately overlying a 30m thick copper enriched supergene zone which itself overlies a primary sulphide zone containing both zinc and copper. Significant byproduct gold and silver are recoverable from both the supergene and primary ores.

The fully diluted proven and probable reserves mined by open pit methods for each ore type are presented below:

Processing of the three ore types will utilize a common crushing and SAG/ball grinding circuit, but will require three different extraction and processing circuits. After grinding, gold and silver will be extracted from the oxide ore by conventional cyanide leaching and recovered by the carbon in pulp process. Later in the project the supergene and primary ores will be processed by a conventional flotation process to recover copper and zinc as concentrates for direct sale to smelters. The tailing systems will be common for all three ore types.

The feasibility study envisages the mining and processing of each zone in succession starting with the surface oxide zone. Before the oxide ore is exhausted the copper flotation process equipment will be installed and commissioned so that a smooth transition can be made from oxide ore to the supergene ore treatment. Similarly, before the supergene ore is exhausted, the additional flotation equipment required to recover the zinc from the primary ore will be installed and commissioned to permit a smooth transition from supergene to primary ore.

In the first two years of production, gold and silver will be extracted together. Production of copper concentrate will begin with a minor amount in Year 2, significant quantities for Years 3 to 5, and smaller quantities in Years 6 to 10. Zinc concentrate production occurs only in Years 6 to 10.

Summary of Production Costs