Timok Project


Overview

Timok Project Location

The Timok copper-gold project consists of the Cukaru Peki Upper Zone and Lower Zone. Nevsun owns 100% of the Cukaru Peki Upper Zone. The Lower Zone is a joint venture with Freeport-McMoRan Exploration Corporation (Freeport).

Upper Zone Overview

The Timok project is located within the central zone of the Timok Magmatic Complex (TMC), in the Serbian section of the East European Carpathian-Balkan Arc. The TMC has one of the highest concentrations of copper enrichment in the Tethyan Belt.

The high sulphidation epithermal (“HSE”) mineralization in the Upper Zone comprises massive sulphide, semi-massive, and also vein, stockwork, dissemination and hydrothermal breccia matrix sulphide hosted by strongly altered (advanced argillic and argillic) andesite. The HSE mineralization forms a single coherent zone at depths ranging from 400 to over 800 metres below surface. Pyrite is the dominant sulphide mineral, and the principal copper mineral is covellite with lesser enargite, bornite and chalcocite occurring in veins, hydrothermal breccias, disseminations and replacement. Gold is associated primarily with the copper sulphides.

The Timok project comprises the Brestovac-Metovnica, Brestovac Zapad, Jasikovo-Durlan Potok and Leskovo exploration permits that are held by Rakita d.o.o., a Serbian subsidiary of Nevsun. The exploration permits cover an area of 212.58 sq. km.  The Brestovac, Jasikovo, and Leskovo Exploration Permits are subject to renewal in February 2017. The Brestovac Zapad Exploration Permit not subject to renewal until April 2018. The total area of the Timok project exploration permits is 212.58 square kilometers.

More on the Upper Zone project can be found here.

Resources

The Company released a Preliminary Economic Assessment prepared by SRK Consulting (UK) Limited (“SRK”), an independent mining and geological consulting company, in accordance with the National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators.

The Inferred Resource for the High Sulphidation Epithermal or Upper Zone is estimated to be 35 million tonnes at an average grade of 2.9% copper and 1.7 g/t gold, containing 1.0 million tonnes of copper and 1.9 million ounces of gold. Preliminary Economic Assessment of the Cukaru Peki Upper Zone DepositThe Indicated Resource for the Upper Zone is estimated to be 1.7 million tonnes at an average grade of 13.5% copper and 10.4 g/t gold, containing 0.2 million tonnes of copper and 0.6 million ounces of gold. The Resource estimate is reported above a 0.75% Cu cut-off grade.


Upper Zone Mineral Resource

(March 2016)

Category Grade Category
% CuEq
Tonnes Mt Grade Metal
% Cu g/t Au % As Cu Mt Au Moz
Indicated >10.0 1.2 15.5 12.4 0.21 0.2 0.5
1-10.0 0.5 8.2 5.1 0.27 0.04 0.08
Inferred >10.0 1.2 13.2 10.5 0.20 0.2 0.4
1-10.0 33.8 2.5 1.4 0.17 0.8 1.5
Total - Indicated 1.7 13.5 10.4 0.23 0.2 0.6
Total - Inferred 35.0 2.9 1.7 0.17 1.0 1.9

1. The cut-off grade used for the estimate is 0.75% Cu.
2. All figures are rounded to reflect the relative accuracy of the estimate.
3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
4. The Mineral Resource is given on 100% basis.

Lower Zone Overview

The Lower Zone is divided in ownership; currently, Nevsun owns 60.4% with Freeport-McMoRan Exploration Corporation (Freeport) holding the remaining 39.6%. Upon completion of a feasibility study, Nevsun will indirectly own 46% of the Lower Zone and Freeport will indirectly own 54%.

The Cukaru Peki Lower Zone porphyry-type mineralization is characterized by chalcopyrite-pyrite and occasional bornite and molybdenite occurring as disseminations and within quartz and quartz-magnetite stockwork veinlets. Anhydrite veins are common. Within the Lower Zone, porphyry-type potassic alteration is preserved locally but generally overprinted by sericite-clay, argillic and locally advanced argillic alteration. The latter overprinting also locally brings covellite-pyrite mineralization. The host rocks are predominantly volcanic andesite and andesite breccias.

The Lower Zone appears to be limited to the southwest and southeast by drilling and geological considerations, but could be reasonably expected to extend to the north, and possibly to the south beneath the Upper Zone where there are no holes extending to the depths at which the Lower Zone might be expected. The top of the Lower Zone mineralization occurs at depths below surface ranging from approximately 1400 metres in the west to 750 metres in the east. The vertical full extent of the Lower Zone is not known since several drill holes terminate in mineralization, but intervals up to 900 metres have been reported. The geometry of the Lower Zone remains to be defined by the ongoing drilling.

The underlying Lower Zone of porphyry type mineralization has not yet been modelled due to the lack of drill data and geometrical understanding, and is not included in the resource estimate.

More on the exploration potential within the Lower Zone project can be found here.

Qualified Person

The Mineral Resources and the associated Preliminary Economic Assessment (PEA) were reviewed and approved by Martin Pittuck of SRK Consulting (UK) Limited, a Qualified Person under National Instrument 43-101, details of which can be found on SEDAR. The PEA is preliminary in nature and it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that the PEA will be realized.