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Nevsun sells all interests in Mali

first_imgNevsun Resources has entered into an agreement for the sale of all of its interests in properties in Mali, including the Tabakoto kine, the Segala property and exploration properties. Avion Resources has agreed to pay Nevsun C$20 million plus a 1% net smelter return royalty on future production, subject to normal regulatory approvals and financing by Avion. Closing is scheduled for on or before May 23, 2008. Avion has agreed to a $1 million break fee if the transaction does not close on schedule.The Tabakoto mine has been running at a loss since its start of operations in mid 2006. Nevsun reviewed the operation and as a result wrote off its investment, effective December 31, 2006. It put the mine on care and maintenance. The problems, Nevsun said, were a result of the lower than expected grade of ore available for mining, the continued poor performance of the mining contractor, and the lack of reimbursement by the Government of Mali of approximately $7 million in fuel tax.The additional C$20 million will go towards Nevsun’s share of the development costs for its Bisha project in Eritrea. Bisha has a life of +10 years as an open pit mine modelled at 2 Mt/y of ore production. In years 1 and 2, it is expected to average 447,000 oz/y gold, then in years 3 to 5 it will average 173 Mlb/y of copper plus precious metal credits, and in years 6 to 10 it will average 218 Mlb/y zinc and 39 Mlb/y copper plus precious metal credits.last_img read more

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