VANCOUVER, Oct. 4, 2016 /CNW/ - Nevsun Resources Ltd.
(TSX:NSU) (NYSE MKT:NSU) is pleased to announce that the Bisha Mine
in Eritrea has declared commercial
production for the zinc expansion with the successful commissioning
of its new zinc flotation plant effective October 1, 2016. Since commissioning commenced in
June 2016, the existing copper
circuit and the new zinc circuit have produced approximately 40,000
tonnes of commercially saleable zinc concentrate.
Nevsun's President, Cliff Davis,
stated, "We are pleased to have reached this major milestone.
The start of our zinc concentrate production coincides with the
recent rally in zinc prices in 2016 and a decline in spot treatment
charges for zinc concentrates. In terms of copper production,
we are expediting work to increase the quality of the copper
circuit product and resolve certain metallurgy challenges when
processing the highly variable primary ore materials. The
concentrate produced from the copper circuit is currently
considered "bulk con" which while saleable is not of a quality that
would normally be acceptable as a copper concentrate for most
copper smelters. The complex mineralogy of portions of the primary
ore mined from the Bisha main pit to date has prevented successful
clean separation of the copper and zinc ores on a consistent basis
so as to produce saleable copper concentrate in any meaningful
quantities. Test work with the assistance of external specialists
is on-going with continued efforts to resolve before the end of
2016."
Throughout September, the processing plant has operated
consistently in a manner intended by the Bisha Mine, achieving
targeted metrics for plant throughput, including successful
mechanical and electrical operations, with the production of
saleable bulk and zinc concentrates. As noted above, both the
existing copper and zinc circuits are producing concentrates, but
due to the high zinc content reporting to both circuits, both
products are being marketed as zinc concentrate. The
transportation logistics from the mine site to the Massawa port
continue to function well and the Bisha Mine has made three ocean
shipments of concentrate in September for sales totalling
approximately US$21 million.
Production and selling costs, offset by the associated sales
proceeds, for concentrates produced during the pre-commercial
production period will be capitalized against the build cost.
The build cost of the zinc plant was approximately US$77 million, compared to a budget of
US$100 million.
Nevsun Resources Ltd. is the 60% owner of the high grade Bisha
Mine in Eritrea. Bisha has nine years of reserve life,
generating revenue from both copper and zinc concentrates
containing gold and silver by-products. Nevsun has a strong
balance sheet, no debt and pays a peer leading quarterly dividend.
Nevsun is well positioned to grow shareholder value through
exploration at Bisha and the newly acquired Serbian assets that
include the high-grade copper-gold Timok Project.
Forward Looking Statements
The above contains forward-looking statements or
forward-looking information within the meaning of the United States
Private Securities Litigation Reform Act of 1995, and applicable
Canadian securities laws. Forward-looking statements are
frequently, but not always, identified by words such as "expects",
"anticipates", "believes", "hopes", "intends", "estimated",
"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 concerning the Company's current beliefs, plans and
expectations about the future, including but not limited to
statements and information made concerning: statements relating to
the business, prospects and future activities of, and developments
related to the Company, anticipated dividends, goals, strategies,
future growth, planned future acquisitions and explorations
activities, the adequacy of financial resources and other events or
conditions that may occur in the future, and are inherently
uncertain. The 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, the
risks that: (i) any of the assumptions in the historical resource
estimates turn out to be incorrect, incomplete, or flawed in any
respect; (ii) the methodologies and models used to prepare the
resource and reserve estimates either underestimate or overestimate
the resources or reserves due to hidden or unknown conditions,
(iii) exploration activities or the mine operations are disrupted
or suspended due to acts of god, internal conflicts in the country
of Eritrea or Serbia, unforeseen
government actions or other events; (iv) the Company experiences
the loss of key personnel; (v) the Company's operations or
exploration activities are adversely affected by other political or
military, or terrorist activities; (vi) the Company becomes
involved in any material disputes with any of its key business
partners, suppliers or customers; (vii) the Company is subjected to
any hostile takeover or other unsolicited attempts to acquire
control of the Company; (viii) the Company is subject to any
adverse ruling in any of the pending litigation to which it is a
party; (ix) the timing and success of improving the quality of the
copper circuit product by resolving the metallurgical challenges
from the variable ore materials being processed to produce
concentrate from the copper circuit; * the effect on resource or
reserve estimates due to the possible inability to resolve the
metallurgical challenges on the variable ore materials being
processed on a timely basis or at all; and other risks are more
fully described in the Company's Management Information Circulars
dated May 18, 2016 with respect to
the proposed arrangement between Reservoir Minerals Inc. and
Nevsun, and the Company's Annual Information Form for the fiscal
year ended December 31, 2015, which
are incorporated herein by reference. 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, except as required by law. For the
reasons set forth above, investors should not place undue reliance
on the Company's forward-looking statements.
Further information concerning risks and uncertainties
associated with these forward-looking statements and our business
can be found in our Annual Information Form for the year ended
December 31, 2015, which is available
on the Company's website (www.nevsun.com), filed
under our profile on SEDAR (www.sedar.com) and on
EDGAR (www.sec.gov) under cover of Form 40-F.
NEVSUN RESOURCES LTD.
"Cliff T. Davis"
Cliff T. Davis
President & Chief Executive Officer
SOURCE Nevsun Resources Ltd.