Nevsun Resources Ltd. (TSX:NSU / NYSE Amex: NSU) is pleased to announce that the Bisha mine in Eritrea continues to have strong operating performance since declaring commercial production in February this year. The Company also advises that Nevsun and the Eritrean National Mining Corporation (ENAMCO) have agreed to finalize the Bisha purchase price by June 30, 2011.
- Bisha purchase price to be finalized on or before June 30, 2011
- Gold production – 105,000 ounces year to date
- Safety milestone – 7 million man-hours, with only 6 lost time injuries
The Bisha Mine is subject to a Shareholders’ Agreement between Nevsun and ENAMCO regarding the purchase by ENAMCO of a 30% interest in Bisha. To allow the parties sufficient time to make a final determination of the purchase price, Nevsun and ENAMCO have agreed to have the price finalized by June 30, 2011. The parties have already agreed that the price will be settled from the after tax cash flow from the mine, which will leave Nevsun with the majority of profits until the price is fully paid.
Effectively, the ENAMCO interest in Bisha pays for itself, without a separate use of government funds.
From January to April the mine produced over 105,000 ounces of gold (around $147 Million Dollars), which includes two start-up months of early stage ramp up. Recoveries continue to exceed those planned. Without any hedges in place, the Company enjoys full exposure to metals prices and sells gold at spot prices.
Cash from operations continues to accumulate. Q1 2011 financial statements and management discussion and analysis should be released on or before May 12, 2011.
The Bisha project also achieved a significant milestone in late April when it surpassed seven million man-hours with no major injuries or fatalities amongst both employees and contractors, a remarkable achievement in a new mining jurisdiction.
Nevsun and Bisha Mining Share Company are committed to implementing processes and procedures that meet or surpass International standards for mining and industrial safety.
Cliff Davis, Nevsun CEO, commented “I am very proud of our remarkable safety record. It is a credit to the strong Bisha team and world class contractors employed in the development of the Bisha project. We have introduced to the Eritrean work place high standards for safety practices that have been properly implemented throughout our employee and contractor group.”