Filed by Avantafile.com - Nevsun Resources Ltd. - Exhibit 99.1
June 14, 2018
Nevsun Extends Mine Life at Bisha Zinc-Copper Mine
Vancouver, BC – Nevsun Resources Ltd. (TSX:NSU) (NYSE
AMERICAN: NSU) (“Nevsun” or the “Company”) announced today that, together with
its Eritrean partner ENAMCO, Nevsun has approved an extension to the Bisha
zinc-copper mine in Eritrea, self-funded by existing cash flows from Bisha. The
open-pit extension adds 3.3 million tonnes of high-grade ore to the mill and
extends operations through the full year 2022,
resulting in additional payable production of 470 million pounds of zinc and 52
millions pounds of copper over this time frame. In addition to incremental
production and revenue, the extension provides time for Bisha to advance
assessment of the Asheli and Harena underground deposits and to consider
further open-pit extensions.
Peter Kukielski, Nevsun CEO,
said “The Bisha team has been working hard to optimize the mine plan and reduce
the operational risk of the deeper ore from the main pit. The investment announced
today increases the long-term cashflow from Bisha, reducing requirements for
external funding for construction of our high-grade, high-return Timok project
in Serbia. The extension of the Bisha mine life,
combined with the planned ramp up of the Timok Upper Zone
in 2022 and the longer term potential of the Timok Lower
Zone, gives us confidence that Nevsun will continue to produce strong operating
cash flows for many years to come.”
Mr. Kukielski continued, “This
open pit extension is supported by the now fully implemented metallurgical
improvements at Bisha, combined with continued strength in zinc and copper
prices. We will have an additional open-pit extension to consider late next
year and are actively evaluating underground mining at Asheli and Harena. We
continue to work with our partner, ENAMCO, to maximize resource conversion to
reserves.”
In August
2017, Nevsun decided to reduce the mine life at Bisha due to the operational
risk of the original large open-pit cut-back. Since that time, Bisha has increased mining rates and significantly improved metallurgical
performance, while metal prices have remained strong, leading the
Company to re-visit the larger cut-back option. The open-pit extension accesses
a portion of the previously envisaged cut back with an additional 3.3 million
tonnes of ore over the existing reserve and assumed recoveries of 70% for
copper to copper concentrate and 80% for zinc to zinc concentrate.
Several million tonnes of additional
high-grade resource in the original pit design could also potentially be
brought back into the mine life. The Company expects to assess investment in an
additional cut-back to access this resource in late 2019. Approval will depend
on performance in delivering the cost targets and increased mining rates for
the extension announced today.
Updated
Mining Schedule
The following mining schedule
includes ore from the Bisha Main pit (current reserves plus extension) and
Harena:
| |
2018
|
2019
|
2020
|
2021
|
2022
|
2023
|
LOM Total
|
|
Bisha Main Ore Mined, Mt
|
2.3
|
2.1
|
2.0
|
2.4
|
0.3
|
|
9.2
|
|
Harena, Ore Mined, Mt
|
|
|
|
|
2.1
|
|
2.1
|
|
Waste Mined, Mt
|
20
|
30
|
24
|
14
|
6
|
|
95
|
|
Zinc grade, %
|
7.2
|
6.6
|
7.4
|
6.9
|
4.5
|
|
6.5
|
|
Copper grade, %
|
1.2
|
1.1
|
1.2
|
1.0
|
0.9
|
|
1.1
|
1
Updated
Processing Schedule
The following processing schedule
includes ore from the Bisha Main pit (current reserves plus extension), Harena
and stockpiles:
| |
2018
|
2019
|
2020
|
2021
|
2022
|
2023
|
LOM Total
|
|
Bisha Main Ore, Mt
|
2.3
|
2.2
|
2.0
|
2.4
|
0.4
|
|
9.3
|
|
Harena, Ore, Mt
|
|
|
|
|
2.0
|
0.1
|
2.1
|
|
Stockpile, Mt
|
|
0.2
|
0.4
|
|
|
|
0.6
|
|
Total Processed, Mt
|
2.3
|
2.4
|
2.4
|
2.4
|
2.2
|
0.1
|
12.0
|
Incremental
Capital Cost
In addition to the original
guidance of $15 million in sustaining capital in 2018 and the life of mine (“LOM”)
sustaining capital in the Company’s most recent technical report, the
incremental capital to deliver the Bisha Main extension is as follows:
| |
2018
|
2019
|
2020
|
2021
|
2022
|
LOM Total
|
|
Heavy Mining Equipment (“HME”),
$M
|
20.1
|
0.6
|
0.1
|
0.1
|
|
20.9
|
|
Tailing Management
Facility Lift (“TMF”), $M
|
|
|
4.5
|
|
|
4.5
|
|
Other, $M
|
6.1
|
2.6
|
2.4
|
0.7
|
2.5
|
14.3
|
|
Total, $M
|
26.2
|
3.2
|
7.0
|
0.8
|
2.5
|
39.7
|
HME capital is
primarily to purchase larger mining equipment that is expected to yield a unit
mining cost 23% lower than the existing fleet. The other costs include new
maintenance facilities for the larger trucks as well as other initiatives and
projects to deliver the mine life extension.
All financial numbers are in US dollars
unless otherwise indicated
2
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. All statements, other than statements of
historical facts, are forward looking statements including statements with
respect to Bisha zinc-copper mine in Eritrea and the Company’s Timok upper-zone
project in Serbia. 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, objectives and expectations
about the future. 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. These
risks, uncertainties and factors include general business, legal, economic,
competitive, political, regulatory and social uncertainties; actual results of
exploration activities and economic evaluations; fluctuations in currency
exchange rates; changes in project parameters; changes in costs, including
labour, infrastructure, operating and production costs; future prices of
copper, gold, zinc, silver and other minerals; resource estimates and
variations of mineral grade or recovery rates; operating or technical
difficulties in connection with exploration; extension of mine life and the
economic viability of underground deposits at Asheli and Harena and further
open pit extensions; mining method, production profile and mine plan
optimization; mine, performance and other development or mining activities, including
plant operations, equipment or processes to operate as anticipated; ability to resolve
and the metallurgical challenges and the ability to maintain the improvements
on variable ore materials being processed to produce concentrate; performance
on ore production and waste movement and improvement in mining capability;
delays in exploration, development; changes in government legislation and
regulation; the ability to maintain and renew existing licenses and permits and
the ability to obtain other required licences and permits in a timely manner or
at all; the ability to obtain financing on acceptable terms and in a timely manner
or at all; contests over title to properties; employee relations and shortages
of skilled personnel and contractors; the speculative nature of, and the risks
involved in, the exploration, development and mining business including,
without limitation, other risks that are more fully described in the Company’s
Annual Information Form for the fiscal year ended December 31, 2017 (the “AIF”)
and the Company’s management discussion and analysis for the fiscal year ended
December 31, 2017 (the “MD&A”), 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 AIF and MD&A, 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.
About Nevsun Resources Ltd.
Nevsun Resources Ltd. is the 100% owner of
the high-grade copper-gold Timok Upper Zone and 60.4% owner of the Timok Lower
Zone in Serbia. The Timok Lower Zone is a partnership with Freeport-McMoRan
Exploration Corporation (“Freeport”) which currently
owns 39.6% and upon completion of any feasibility study (on the Upper or Lower
Zone), Nevsun Resources Ltd. will own 46% and Freeport will own 54%. Nevsun
generates cash flow from its 60% owned copper-zinc Bisha Mine in Eritrea.
Nevsun is well positioned with a strong debt-free balance sheet to grow
shareholder value through advancing Timok to production.
NEVSUN RESOURCES LTD.
“Peter
Kukielski”
Peter Kukielski
President & Chief Executive Officer |
For further information, contact:
Heather Taylor
Nevsun
Investor Relations
Tel: +1 604 623 4712
Toll free: 1 888 600 2200
Email: htaylor@nevsun.com
Website:
www.nevsun.com
|
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