[wikichart align="right" ticker="AMEX:NSU" showannotations="true" livequote="true" startdate="25-12-2010" enddate="25-06-2011" width="300" height="245"]

Peter Grandich the founder of Grandich.com and Grandich Publications, LCC and editor of the The Grandich Letter which was first published in 1984 explains in the Prospector Magazin if Sunridge is to follow in the footsteps of Nevsun.

The mining industry is apparently focusing hard on Eritrea again and Sunridge Gold is now positioned to be the next company to push towards production.

Sunridge’s peer company, Nevsun Resources is currently building the first modern mine in Eritrea and is nearing completion of the Bisha gold-copper-zinc VMS project. The mine construction is on schedule and the first gold pour is now expected before the end of 2010. Nevsun’s market cap is now approximately $1.17 billion.

Also, further attention was brought to the region recently by the announced Citadel takeover by Equinox for $1.25 billion. The Valuation was primarily based on the Jabal Sayis Mine in Saudi Arabia, which compares very similar in terms of production numbers to that of Sunridge’s Emba Derho deposit. Although Jabel Sayis is further along in development, the price tag further demonstrates the potential upside in Sunridge’s value.

Sunridge compares favorably to both Nevsun’s valuation and the Citadel deal as Sunridge has larger resources and the current market valuation is still only $160 million. Sunridge has recently raised $26 million and now has over $30 million to take its projects through feasibility.

Sunridge has successfully been exploring for gold and base metals on the Asmara Project in Eritrea since 2003 and has now defined three VMS deposits. Debarwa, Emba Derho, and Adi Nefas Deposits which contain an impressive combined NI 43-101 compliant Indicated Resources of:

• 1.28 billion pounds (580,000 tonnes) of copper,
• 2.5 billion pounds (1,130,000 tonnes) of zinc,
• 1.05 million ounces of gold, and
• 31.8 million ounces of silver

The Asmara Project also hosts a fourth prospect known as Gupo which contains an Inferred Resource of 189,000 ounces of gold.

The Asmara Project is approximately 800 square kilometers and is located around the capital city of Asmara. The project is located on excellent infrastructure, with paved roads and grid power over the property and the Port of Massawa is 120km away and accessible by both road and rail.

The Debarwa Deposit is located approximated 25 km south of Asmara and is currently the focus of a Feasibility Study which is expected to be complete in Q3 of 2011. Sunridge has awarded the engineering contract for the feasibility study to Senet who is a logical choice as they are currently managing the building of Nevsun’s Bisha mine in Western Eritrea.

Debarwa is made up of an oxide gold “cap” consisting of an estimated 2.44 million tonnes at an average grade of 1.71 g/t gold. Below the oxide zone the deposit contains a copper enriched supergene zone consisting of an estimated 1.336 million tonnes at an average grade of 5.36% copper with gold and silver. Underlying the supergene zone is the primary mineralized zone which is open in depth with current estimates of 699,000 tonnes at an average grade of 2.53% copper, 3.23% zinc and 0.87 g/t gold.

Debarwa DSO Zone: A high grade copper zone (greater than 15% copper) has been identified within the supergene zone. The feasibility study will examine options to begin mining operations at Debarwa by selectively mining the DSO (Direct Shipping Option) to a smelter thereby producing cash flow early in the mine life during construction of a process plant facility.

The Northern Deposits consist of the large Emba Derho copper – gold – zinc VMS deposit and 2 satellite deposits – Adi Nefas and Gupo Gold. The Northern Deposits are located approximately 15 km north of Asmara and are all within 6 km of each other.

A positive scoping study was completed in June 2009 at the Emba Derho deposit which contains a NI 43-101 compliant Indicated Resource of 62.5 million tonnes, containing 996 million pounds of copper, 1,907 million pounds of zinc and 574,000 ounces of gold and 20 million ounces of silver.

The Scoping Study provided a base case analysis and yielded an NPV of US$323.8.9 million and an Internal Rate of Return of 27.7% when applying the two year moving average of metal prices prior to June 2009.

Sunridge management feels the Scoping study at Emba Derho is far from optimized and the will be demonstrated in prefeasibility studies, which are expected to begin before the end of 2010, will include Adi Nefas, and Gupo Gold.

Adi Nefas has an Indicated Resource of 2.73 million tonnes at 1.39% copper, 8.38% zinc, 2.85 g/t gold, and 99.3 g/t silver. The feasibility study will also include the gold oxide cap at Emba Derrho which contains 95,000 oz of gold at 0.84 g/t which was treated as waste in the scoping study.

The feasibility study will also examine a steeper pit slope and the use of a dense media separation (DMS) circuit to remove 20% of internal waste material that would otherwise would be sent through the plant as ore.

Exploration: Sunridge is about to begin a drill program at the Gupo Gold deposit and the Medrizien gold target. Gupo currently has an inferred resource containing 189,000 oz of gold averaging 2.99 g/t and the objective of the program is to expand and convert to an indicated category resource. The Medrizien target is within 1 km from Emba Derho and consists of a gold mineralized zone that has been mapped at surface up to 25 meters in width and several km along strike.

Sunridge management also expects to announce expansion drilling at Adi Nefas and Debarwa and is planning extensive drill programs on new high priority VMS targets in 2011.

Sunridge also has a VMS exploration project in Madagascar called Besakoa which has demonstrated strong geological similarities to the VMS deposits on the Asmara Project and the Bisha deposit. An initial exploration drill program is being planned for spring 2011.

I think it’s time to start calling Sunridge Gold the next possible Nevsun.

http://www.theprospectornews.com/weekly_1115_02.php

VANCOUVER, BC – Nevsun Resources Ltd. (TSX:NSU) (NYSE Amex:NSU) is pleased to announce the commencement of its Resource Expansion Drill Program announced in mid September. Drilling will test the extent of mineralization in the hanging wall copper zone, which is immediately west and adjacent to the Bisha Main deposit. The program will also include infill drilling at Harena, which lies 9km SW of the Bisha Main deposit. With favorable results, both areas could add significant tonnage to the Company’s reserve, extending mine life and cash flow.

Nevsun anticipates at least 8,000m of diamond drilling, using two rigs over the next ten weeks. After which, results will be assessed and, if favorable, resource/reserve estimation will be initiated on Harena while drilling continues on the hanging wall.

Past drilling at Bisha identified appreciable amounts of relatively low-grade copper mineralization located up to several hundred meters into the hanging wall. Assays included 12.0m of 2.64% Cu (Hole B-370), 19.6m of 2.11% Cu (Hole B-369), 56.5m of 0.81% Cu (Hole B-335) and 31.5m of 0.76% Cu (Hole B-109). It is interpreted that this zone may extend for hundreds of meters in a north south direction. Although this mineralization is lower grade than the Bisha Main, it is potentially economic, which could add incremental value to the project.

The Harena deposit saw considerable drilling in 2005/06 that revealed Nevsun’s third VMS near surface deposit on the Bisha licenses, followed up by infill drilling in 2009. Harena will be a likely source of supplemental feed for Bisha’s processing plant, which could provide valuable cash flow and prolong mine life.

Darin Wasylik, P.Geo., Sr. Geologist for Nevsun, a Qualified Person as defined by National Instrument 43-101, will oversee the drill program and has reviewed the technical contents of this release.

Forward Looking Statements: The above contains forward-looking statements concerning the objectives of the drill program and potential resource and reserve expansion. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “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 about the future and are inherently uncertain, and 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, those described in the Management Discussion and Analysis of the Company. 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. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

NEVSUN RESOURCES LTD.

“Cliff T. Davis”

Cliff T. Davis

President & Chief Executive Officer

Nevsun Plant

VANCOUVER, BC – Nevsun Resources Ltd. (TSX:NSU)(NYSE Amex:NSU) has announced today that it met its target to commence plant commissioning at the Bisha Mine during Q4.

This significant milestone brings the Company one step closer to commercial production in Eritrea.

The power plant has been commissioned and is delivering power for the commissioning process. This process includes in depth testing of equipment and stress testing the plant before introducing ore. The Company intends to introduce low-grade ore in the coming month.

Bisha is on track for commercial gold production in Q1 2011. The current mine plan aims to produce 450,000 ounces of gold in the first year of commercial production at a cost of less than $250 per ounce.

Mon, 10.11.2020, by Chip Brian, (Smartrend) – Below are the top five companies in the Gold industry as measured by relative performance. This analysis was compiled based on yesterday’s trading activity as we search for stocks that have the potential to outperform.

Nevsun Resources (AMEX:NSU) ranks first with a gain of 6.77%; Aurizon Mines (AMEX:AZK) ranks second with a gain of 2.97%; and Randgold Resources (NASDAQ:GOLD) ranks third with a gain of 2.39%.

Jaguar Mining (NYSE:JAG) follows with a gain of 2.19% and Barrick Gold (NYSE:ABX) rounds out the top five with a gain of 1.82%.

SmarTrend is bullish on shares of NSU and our subscribers were alerted to Buy on February 10, 2010 at $2.40. The stock has risen 122.9% since the alert was issued.

Eritrea Mining

By Matthew Walls – The Wall Street Journal

Gold miners are expanding their focus in Africa to the northeast of the continent, a region they largely bypassed during the decade-long rally in gold prices.

Big-name gold miners such as AngloGold Ashanti Ltd. and Newmont Mining Corp. are exploring for gold in Eritrea and Egypt on a promising geological belt known as the Arabian-Nubian Shield. African Barrick Gold, Barrick Gold Corp.’s recent spinoff, is also looking at Eritrea for potential acquisitions, Chief Executive Greg Hawkins said recently.The miners’ entry marks a departure from their recent drive into western and southern Africa and could create a major new gold-mining region. Already, northeast Africa is home to a few gold deposits of a million troy ounces—a threshold size for bigger miners—that hint at its potential. “The region is pretty much under-explored compared to West Africa and Tanzania,” said geologist Michael Robertson, a consultant at Johannesburg-based MSA Geoservices. “From a prospectivity point of view, it’s a good place to be.”

For governments, a thriving gold industry would bring revenue and a better investment profile, as it has in West Africa, where the gold boom has transformed countries such as Mali and Burkina Faso into popular investment destinations for miners. The region’s gold output doubled in the ten years to 2008 and discoveries of deposits of one million troy ounces have become an annual occurrence, says U.K. investment bank Ambrian Capital.

But mining in West Africa is moving out of an early-stage exploration phase into a period of consolidation as companies merge or buy out miners that have already made discoveries. Miners such as Randgold Resources Ltd., Severstal JSC and Endeavour Financial Corp. are taking a bigger share of the region’s output. In comparison, northeast Africa remains under-explored and competition limited to small miners. Border wars between Ethiopia and Eritrea, autocratic governments and onerous mining regulations kept miners from venturing into the region in recent decades.

Those fears have not vanished, but calmer relations between Eritrea and Ethiopia, a new mining code in Eritrea and a handful of gold discoveries by smaller miners such as Centamin Egypt Ltd. have enticed those looking to find big deposits at little cost.

Centamin Egypt’s seven million troy-ounce Sukari gold deposit is in Egypt, on the Arabian-Nubian shield that ancient Egyptians mined for gold. The shield encircles the Red Sea and runs along the coastal sides of countries bordering it: Egypt, Sudan, Eritrea, Ethiopia, Saudi Arabia, Yemen, Jordan and Israel. “I think the success of Centamin Egypt peaked a lot of interest in the region,” said Leon Esterhuizen, a mining analyst at RBC Capital Markets.

AngloGold’s exploration efforts, guided by the company’s airborne electromagnetic imaging system Spectrum, are targeting Egypt, Eritrea and Saudi Arabia. The miner established a joint venture last year with the privately-held Saudi Arabian company Thani Investments. AngloGold Chief Executive Mark Cutifani told an audience at the miner’s second-quarter earnings results last month that the joint venture has found an exciting early-stage discovery in North Africa, and will deliver news on its exploration in Eritrea and Saudi Arabia next quarter.

Newmont stepped into Eritrea in July in a joint venture with Australian gold miner Chalice Gold Mines Ltd, though Chalice said Monday it wouldn’t proceed in the project.

Both AngloGold and Newmont declined to comment for this story, with Newmont citing the confidentiality of its exploration efforts.

The majors would be joining over a dozen small miners that are developing or exploring for gold. Next year, Canada’s Nevsun Resources Ltd. will open Eritrea’s first gold mine in decades at its one million ounce gold-copper-zinc deposit at Bisha, 150 kilometers (93 miles) west of the national capital of Asmara.

Despite the attractive geology, miners still face some prohibitive requirements and the possibility that governments will revise mining laws. Egypt and Sudan require that the state holds at least a 50% stake in any mine, which miners may try to renegotiate if they make a discovery. Ethiopia is considering raising royalties on gold mining to between 5% and 8%, from 2% to 4%.

“It’s been voiced by mining companies that this is very negative for mining,” said Bob Foster, CEO of Stratex International PLC, a London-listed miner that is buying up property in Ethiopia near hot springs rich with gold mineralization.

Some observers worry that a mining boom won’t benefit local populaces and revenues will be diverted by the region’s governments to military budgets or to elites. For nearly two decades, Eritrea has been run by an unelected former independence fighter and ranks among the most repressive states in the world, according to the U.S.-based group Freedom House. In Ethiopia, the ruling government has grown increasingly dictatorial and combative with opposition parties and the media. The U.S.-government funded organization United States Commission on International Religious Freedom this year urged the government to prohibit any foreign companies mining in Eritrea from raising capital or listing its equities in the U.S.

To miners, these are substantive issues. After the U.N. sanctioned Eritrea last December for instigating insurgents in Somalia, banks declined to lend to Nevsun, forcing it to issue shares to finance the Bisha mine. A Nevsun employee was killed by rebels in 2003, and tensions between rebels and autocratic governments continue to simmer across the region. Border clashes with militants in Sudan and Somalia remain common in both Eritrea and Ethiopia.

“The market is still skeptical because of the jurisdiction it’s in,” said Nevsun’s Chief Executive Cliff Davis. “But we’ve mitigated that by making sure they [the Eritrean government] have a big stake in this.”

Eritrea’s mining law allows the government a minimum 10% free-carry stake in any mine, which means the government doesn’t have to pay for the stake up front or fund exploration costs. It also holds an option to add another 20% at market prices for a maximum 30% stake, but it must fund exploration costs, a rare arrangement in any mining jurisdiction. In Nevsun’s case, the miner and the government negotiated a 40% stake for the government, above what the law stipulates, at the request of the government, said Mr. Davis. Soft loans from China’s Export-Import Bank of China have allowed the government to pay for its share of the exploration costs.

Tim Williams—whose company Andiamo Exploration Ltd. is exploring in Eritrea—praised the government for honoring its obligations, and said miners can’t worry about what a government will do with its revenues. “We’ve got to accept the laws of the country,” Mr. Williams said. “As long as the government keeps its word and you can trust it to continue to do so, then the mining industry will invest.”

But the region also presents problems of a more technical kind to gold miners. While sand cover is not an issue as it would be in Saudi Arabia, where mineral outcrops are often buried, the grounds hosting gold are typically arid. Gold mines use copious amounts of water to wash gold from the ore, and without a nearby source, pipelines would need to built to carry water, adding to costs. More worrisome, analysts said, would be conflicts with communities over water in regions with scarce water supplies.

South Boulder Mines Eritrea

By Tim Boreham, The Australian

We suggest that 99 per cent of the room wouldn’t raise their arms, and those who do are fibbers or fertiliser tragics. Given the Big Australian’s ballsy ploy, we’ll be hearing much more about the potassium-rich substance that is as crucial to growing food as phosphate.

For the uninitiated — that is, the 99 per cent — potash is the catch-all name for various potassium salts. Most fertilisers consist of three core elements — nitrogen, phosphate and potassium — with the consistency varying according to the type of crop.

Potash global consumption stands at 50 million tonnes a year and unlike most raw materials Australia doesn’t produce an ounce of it. Production is dominated by Russia’s Silvinit and Uralkali, rumoured merger partners that account for more than half of global production. Traditionally, Germany has been the leading producer.

South Boulder Mines (STB) chief Morry Hughes says there are barriers to developing potash deposits, including their depth: the last new mine started in Germany in the late 1980s. But on the plus side they’re usually uniform in quality and also extensive. Potash Corp, the biggest single producer, acts as oil’s equivalent of an OPEC swing producer, curtailing or increasing production according to demand trends.

The global potash price has been favourable, hovering at about $US340 a tonne. This compares with the average $US620 a tonne at the 2008 peak, but is well up on the $US175 a tonne level of 2006.

As with phosphate, potash pricing was meant to be immune from the global financial crisis, despite the perception that fertiliser is immune from the cycles because everyone has to eat.

In truth it is more complicated: corn and palm oil growers created a spike in demand when oil prices soared because their product was being used for biodiesel.

Locally, there are three or four resource juniors playing in potash, although not necessarily exclusively in that commodity.

South Boulder Mines has been better known for its Duketon nickel venture in Western Australia with Independence Gold, but it’s also appraising its “world class” Colluli potash project in Eritrea.

South Boulder had a tenement at Lake Disappointment, next to fellow potash hopeful Reward Minerals (RWD), but native title difficulties sent the company scouring the world.

It settled on the emerging mining province of Eritrea, where potash has been used for centuries.

“We have been involved in potash for some time, which not many people have given us credit for,” Hughes says.

But with BHP getting into potash in a humungous way there are more investors coming on board. He estimates between 20 per cent and 25 per cent of South Boulder’s share base has been attracted by potash.

In a 50-50 venture with Rum Jungle Uranium, Reward is working two exploration leases over a 150km expanse in central Australia, from Lake Amadeus to Karinga Creek.

“An analogous model would be the Great Salt Lake in Utah, the largest potassium sulphate producer in the US, [or] the Dead Sea.”

Speaking of Utah, Transit Holdings (TRH) has earned a 75 per cent interest in a tenement spanning 390sqkm, in the state’s sparsely populated southeast. The parties are aiming for an “exploration target” of 2.3 billion tonnes.

Completing our potash troika, Elemental Minerals (ELM) recently started drilling on its Sintoukola project in the Republic of Congo, part of a four-year effort to take it to bankable feasibility stage.

Eritrea

In a recent Exploration+Processing Magazine editorial, Stacy Davidson describes Eritrea with its 620 miles of coastline along the Red Sea as a historic centre of attention for various foreign powers, including the Ottoman Empire, Egypt, British Empire and Italy.

Nevertheless, Eritrea received the most attention from its larger neighbour Ethiopia, causing 30 years of oppression from the early 1960s to 1991 during the Ethiopian reign over Eritrea.

Eritrea fought a long and bitter independence war against Ethiopia and soon after the struggle had to face the challenge of rebuilding most of its shattered infrastructure and economy to serve the people of a new nation. According to Davidson, it was around this time that a Canadian gold and base metal explorer by the name of Nevsun Resources Ltd. shifted its focus towards southern Africa.

Nevsun’s history dates back to its founding year in 1965 in Vancouver as a minor exploration entity working on small mining projects geographically limited to North America. Nevsun’s expansion to markets abroad began in 1993 when it successfully started to identify properties with significant potential in Africa. The Kubi project in Ghana, under an agreement with Anglogold Ashanti, and Tabakoto mine in Mali were Nevsun’s first overseas ventures in 1999 and 2004. Both properties were sold between 2007 and 2008 as Nevsun wanted to focus solely on Eritrea, according to Nevsun CEO Cliff Davis.

In 2003 Nevsun made a discovery at Eritrea’s Bisha property, and it soon become apparent the Nevusn and the government of Eritrea would have a mutual interest to develop the property. Nevsun says that Bisha will be the first mine operating since colonial times in Eritrea and acknowledges the commitment of Eritrea’s President Isaias Afewerki to develop a mining industry to pursue Eritrea’s economic rehabilitation. The government holds a 10 percent free participating interest in the Bisha Mine and a 30 percent paid participating interest through the Eritrean National Mining Corporation (ENAMCO), which is a state owned mining company.

Eritrea’s government’s objective is to have a clean well-developed mining industry and Nevsun has not experienced any kind of corruption or underhanded dealings, says the company. “We got into Africa in 1993 and in 1997 received an enquiry about investing in Eritrea,” Nevsun CEO Cliff Davis recalls. “By 1999, we were actively engaged in Eritrea and exited about the potential we saw there.” Today Nevsun is nearly finished with the construction of the Bisha Mine and expects it to be in operation by the end of 2010. The Bisha project is a large precious and base metal-rich volcanogenic massive sulphide deposit, and it is fully financed and permitted. Nevsun says the mine will be a low cost gold producer for the first two years of its 10-plus mine life time.

The company expects to return payable metals of: 1.06 million ounces gold, 9.4 million ounces silver, 734 million pounds copper, and 1 billion pound zinc. Nevsun highlights that drill hole intersections have encountered mineralization to a maximum tested depth of 1300 feet, but further resource potential exists beyond depth and from nearby discoveries within the company’s licensed areas. Further, it believes that the mine life of Bisha could be far more than 10 years based on evidence from potential resources deep inside the Bisha mine.

Nevsun’s CEO projects that the company will employ at least 350 local employees and 50 expats when Bisha will reach full operational capability. He ads that Nevsun is employing around 600 local people and 100 expats during the current construction phase and committed to train and develop locals due to a lack of skilled human resources in the country. Nevsun has developed three scenarios of economic estimates from the mine, based on three types of metal prices:

1. With low metal prices, the company projects a 20 percent internal rate of return, payback within 2.8 years and $426 million net cash for mine’s life.
2. With medium metal prices, the company projects a 45 percent rate of return, payback within 1.6 years and $1.1 billion net cash for mine’s life.
3. If metal prices are high, it plans with 63 percent internal rate of return, payback within 1 year and $1.75 billion net cash for mine’s life.

In addition Nevsun continues to work at the nearby Harena deposit, which is within its current mining licence, to define its potential as mill feed for the Bisha plant. There are also plans to drill at other potential targets on the property, along with continued prospecting, mapping, sampling and ground geographical surveys in order to identify new targets within its license.  However, right now the company is focused on getting its Bisha plant into production according to its CEO.

By Charles Wyatt (Minesite) – Not very often we start a mining article with a combined geography/history lesson, but in this case the only way to make sense of the recent moves by a number of mining companies into Eritrea is to understand exactly where the country is, what surrounds it, and what has been going on there.

The region is described loosely as the Horn of Africa but a close look at a map shows that the real Horn juts out south of Djibouti into the Gulf of Aden and largely consists of Somalia, with Ethiopia to its west and north. Djibouti has coast along the Red Sea and Somalia has a massive coastline in the Gulf of Aden as well as the Indian Ocean. That is where the pirates lie in wait for their victims, remember?

Ethiopia, however, has no coastline at all and that is why it has for generations made a pest of itself to Eritrea which cuts it off from the Red Sea, running all the way up from Djibouti to Sudan, with Egypt a bit further to the north.

Before the Second World War Eritrea was an Italian colony, but was taken over by the British in 1941. Once the war was over, in 1952, the United Nations decided to establish it as an autonomous entity federated with Ethiopia as a compromise between Ethiopian claims for sovereignty and Eritrean aspirations for independence. Ten years later the Ethiopians tried to annex it, triggering a war which lasted for more than 30 years. The result was victory for Eritrea which declared independence in 1993, leaving Ethiopia landlocked. The two countries hardly became good neighbours, with the issues of Ethiopian access to the Eritrean ports of Massawa and Assab, and unequal trade terms, souring relations. In 1998 there was another flare-up that lasted a couple of years and again it was Ethiopia trying to get access to the Red Sea.

Since 2000 there has been an uneasy peace, with Eritrea trying to rebuild its economy after a devastating period of war. It sits, however, in a difficult area and every time there were problems in Sudan, Djibouti or Somalia near its border, Eritrea was held responsible by the UN. This culminated in the adoption of a package of sanctions against Eritrea last December.

What has to be seen in the background of all this is the dark art of US diplomacy. The US wanted its favoured candidate Ethiopia to have access to the Red Sea and found Eritrea much too independent for its liking. Eritrea is fighting its corner to get the sanctions lifted.

In the meantime, as Ambassador Tesfamicael Gerahtu pointed out in London yesterday, the country is straining every muscle to become self-dependent in food production and improve education and health services.

Anyone arriving in the capital of Asmara today could easily think the plane had been re-routed to Italy, according to Rupert Baring of gold explorer London Africa. There are wide streets, Italianate architecture and a coffee culture, with plentiful cafes.

The people he describes as proud, independent and honest and he has never seen any sign of the corruption endemic in so many parts of Africa. These are just some of the reasons why mining companies, big and small, are taking a serious look at Eritrea. The biggest reason of all, however, is the fact that the country is unexplored in modern times and underneath Eritrea, as well as under the other countries in the Horn of Africa, lies the Arabian-Nubian Shield which is an exposure of pre-Cambrian rocks on the flanks of the Red Sea. The Shield also crosses over into Jordan, Saudi Arabia, and Yemen. In the north it’s exposed as part of the Sahara Desert and Arabian Desert, and in the south in the Ethiopian Highlands.

The Arabian-Nubian Sheld was the site of some of man’s earliest geologic efforts, principally the Egyptians who extracted gold from the rocks of Egypt and north east Sudan. New gold discoveries have been made in Sudan, Eritrea, and Saudi Arabia. Last week Tim Goyder, executive chairman of the Australian gold explorer Chalice Gold Mines, was passing through London and he laid out a map which showed that his company’s Zara and Koka projects lie on the same pre-Cambrian shield as Centamin’s Sukari gold mine in the Western Desert of Egypt. For reasons of history and politics, the amount of modern gold exploration that has taken place in Egypt – Centamin apart – is modest, but none at all has taken place in Eritrea until recently. Someone has to be the original pioneer, and it appears to be the Canadian company Nevsun in this particular case. Nevsun is bringing its high grade gold, copper and zinc Bisha deposit into production later this year.

Tookie Angus, chairman of Nevsun, confirms that the Bisha project has received continuous support from the Eritrean government, which granted the mining licence in January 2008. Bisha will be the first modern-day mine in the country, with production slated to return over a million ounces of gold, 9.4 million ounces of silver, 734 million pounds of copper and more than one billion pounds of zinc during its life. The really interesting aspect, however, is the deal between Nevsun and the government of Eritrea. Under existing Eritrean mining legislation, the State of Eritrea has an automatic right to a free carried 10 per cent interest, but under an agreement with Nevsun it also has an additional 30 per cent paid participating interest. This 30 per cent contributing interest was agreed upon in October 2007, with a provisional US$25million payment made to Nevsun. The remaining balance to be paid to Nevsun will be determined by an independent valuator, and will be based on the net present value of 30 per cent of the project, as evaluated upon the first shipment of gold from the mine.

Not for Eritrea the black empowerment requirements of South Africa which so often end up with a 26 per cent stake in mining companies being effectively stolen by entities which have no intention of paying their way as partners. The Nevsun deal is straightforward stuff, with the Eritrean government setting out to get a significant stake in a project which should ensure it a satisfactory return. And it goes further than this. The Ministry of Energy and Mines is helping to organise a regional Geo-Conference in Eritrea in September which will showcase the potential for mining. It is especially interesting that Centamin has been invited from Egypt, La Mancha with its Hassai VMS mine, from Sudan, and Citadel which has the Jabel Sayed copper gold deposit, from Saudi Arabia. The whole region underlain by the Arabian-Nubian Shield is being represented, and little Eritrea is taking the lead. And that’s hardly what the UN envisaged when it put in the sanctions at the behest of the US.

There are now getting on for 20 mining companies active in the country. The Chinese are there, the Koreans are there, and now some of the big boys are following the juniors in. The country has a very sensible mining code, modelled on the Australian one. Antofagasta, one of the world’s largest copper producers is in a joint venture with the Canadian company Sunridge Gold on the Adi Rassi copper gold project within its Asmara project, and Anglo American is involved in the Thani–Ashanti Alliance. Newmont is also said to be taking a close look, which is another reason for the UN to reconsider its decision on sanctions. The Amir of Qatar not only owns the Asmara Place Hotel, where Brits and locals alike watch English football in the Green Bar, but is also building a summer home at Massawa overlooking the Red Sea. Eritrea, with a history that has precluded any exploration in modern times, is the new frontier and everyone is taking a look. The reaction from mining companies and fund managers alike has been universally positive, so this is likely to build up into a big story even if it is one that will not hit the headlines in the States.

Bisha Update & Plant Commissioning Targets

Nevsun Resources Ltd. (TSX:NSU / NYSE Amex:NSU) is pleased to provide a brief update on the Bisha project and the first quarter results.

BISHA PROJECT UPDATE

The Bisha Project is positioned to be Eritrea’s first modern day mine, with production under the current mine plan to yield payable metals of 1.06M oz gold, 734M lb copper, 1B lb zinc and 9.4M oz silver. It benefits from the continued support of the local Eritrea Government and is fully financed. Mine construction continues on schedule, with the Bisha project now approximately 60% complete. During the course of Q1 2010, the following milestones were achieved:

• Financing completed by Nevsun;
• Ball and SAG mills assembled and set in place;
• Pre-strip mining commenced;
• Cost expenditure transpired virtually as planned. At March 31, 2010, approximately $175 million had been spent, ordered or arranged and the project remains on track to come within the targeted $260 million total cost.

Pictures of the construction progress are updated regularly and can be found on the Company web site – www.nevsun.com/properties/photo_gallery .

Targets for remainder of 2010:

Q2

• SAG and Ball mills fully installed;

Q3

• Completion of structural steel and plate-work;
• Completion of plant electrical and piping;
• Completion of pre-strip and ore stockpiling;

Q4

• Completion of tails management facility;
• Plant commissioning;
• First gold production.

The Company is still on target for the commissioning of the plant in Q4 2010 and all key senior operations personnel are in place for supervision, training and commissioning purposes. Installation of the SAG and ball grinding mills is ongoing and should be completed by the end of Q2. Furthermore, the construction of the tailings facility commenced in Q4 2009 and installation of the impermeable liner is ongoing and should be completed in Q4 2010.

QUARTERLY RESULTS

The Company’s end of quarter financial position includes a healthy $113 million cash position that, together with the financial contribution by the State of Eritrea, will carry the project through to positive cash flow in Q1 2011. The estimated Bisha Project cash flow under various metals price assumptions is included in the annual MD&A and posted on the Nevsun web site – www.nevsun.com/project/highlights .

During the first quarter the Company wrote off deferred finance costs of $10.7 million associated with previous project debt arrangements as a result of switching to an all equity approach to financing the Bisha construction. As noted in our press release on February 23, 2010, the decision to finance the project by equity instead of debt has significantly enhanced the estimated cash flow through the elimination of finance costs and debt repayment. The first quarter loss of $11.5 million compares to $1.3 million for the same period last year.

Complete details of the Q1 2010 financial statements and management’s discussion and analysis can be found on the Nevsun website at www.nevsun.com as well as on Sedar at www.sedar.com and EDGAR at http://www.sec.gov/edgar/searchedgar/webusers.htm.

Forward Looking Statements:

Forward Looking Statements: The above contains forward-looking statements concerning cash position, construction progress, reserves, mine planning and project economics. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “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 about the future and are inherently uncertain, and 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, those described in the Management Discussion and Analysis of the Company. 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. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

NEVSUN RESOURCES LTD.

Cliff T. Davis

President & Chief Executive Officer

Eritrea said on Wednesday that its economy will be unaffected by the U.N. sanctions imposed on the nation, which were an international response to Asmara’s alleged support of Islamist rebel groups in Somalia.

Punitive measures including an arms embargo, travel restrictions and asset freezes for some of the country’s top officials raised fears the limitations may slow an economy reliant on financial and moral support from the diaspora.

Remittances from Europe, the United States, the Middle East and other African nations are Eritrea’s biggest source of foreign exchange. Analysts say they continue to flow because high-ranking Eritreans travel to other countries and drum up support for the Red Sea state.

Eritrea has dismissed concerns saying sanctions would not slow development.

“The sanctions should not have any impact on investment, no impact on trade, or Eritrea’s external ties with its economic partners,” Yemane Ghebremeskel, director of the Eritrean president’s office, told Reuters in an interview.

“Our development strategy is not really based on injections of development assistance anyway. There are still extensive development plans in place designed to enhance productivity and expand services in education and health,” he said.

The country would build more than 50 new schools this year, he said.

The U.N. imposed sanctions last month because Security Council members say Eritrea has given support to Islamist insurgents in Somalia who are battling the U.N.-backed transitional government. Violence in the Horn of Africa nation has killed at least 19,000 people since the start of 2007.

‘IT’S WEDDING SEASON’

Yemane said average Eritreans were disappointed in the United Nations over the sanctions but they remained fairly indifferent to the measures themselves.

“They know these sanctions have nothing to do with justice or international law. People don’t give it undue weight — it’s January, wedding season, people are getting on with their business and going to parties,” he said.

Yemane reiterated the view of President Isaias Afwerki that the sanctions are baseless and contravene international law.

“Those sanctions are not based on international law. The accusations have not been proved and Eritrea has not been given the opportunity to make its case on an independent platform.”

Last week the President told local media that no solid facts have been produced against Eritrea and no proper legal procedures have been applied to discover the truth.

“In the final analysis, the conspiracy was essentially masterminded by U.S. intelligence agencies, especially the CIA,” the President said.

Eritrea’s economy contracted sharply in 2008 while inflation surged to double digits, according to the International Monetary Fund, but better rains in 2009 could have boosted growth to about 3.5 percent. Source: (Reuters)

By James West
MidasLetter.com
Friday, December 4, 2009

Nevsun Resources Inc. (TSX, AMEX: NSU), currently 40% through construction on their Bisha Gold Project in Eritrea, Africa, has seen its future target share price steadily increasing, according to the reports of analysts who have visited the project.

Highly respected Canadian investment banks Haywood Securities based in Vancouver, British Columbia, and Toronto-based GMP Securities raised their target prices to CA$3.50 and CA$3.80 per share respectively, based on the timely progress of plant construction, and the apparent ready availability of capital to see the project completed. First gold ounces from production are expected in late 2010.

According to GMP Securities analyst Mark Smith:

“The construction of the project is 40% complete with the remaining $153m of capital to be spent over the next 12 months as the company draws down from its debt facility. The 1.4Moz of gold reserves were calculated at $400/oz and 2/g/t cut-off. There is resource (1.86Moz) : reserve conversion with the possibility of increasing the gold production.

This orebody is financially robust given the high grade. The project is expected to provide an 8 year optionality (16mt ore) as the pit shells were modeled at Cu $1.05/lb, $0.50/lb Zn. The mill throughput rates can be increased by 40% due to the softer nature of the sulphide ore. This increases the NAV (@ 12%) to C$4.42/shr up from C$3.79/shr. If we include the mining of the additional 16Mt of sulphide at $2.00/lb Cu pit shell the NAV (@12%) further increases to C$5.02/shr.

We value Nevsun using a 1.0x P/NAV to our NAV of C$3.79/shr (at 12%), up from C$3.51/shr, to derive a 12 month target of C$3.80, up from C$3.60. We rate the stock a BUY. Our 24 month view NAV is C$4.66shr.”

Haywood mining analyst Stefan Ioannou was only slightly less bullish in his assessment:

“At the end of Q3/09, Nevsun had a cash balance of US$26.8 million. The company recently closed a $32.8 million non-brokered private placement consisting of 11.5 million common shares priced at $2.85 per share. Net proceeds will be used for general working-capital purposes, including exploration and development at Nevsun’s 60% owned Bisha gold-copper-zinc project in Eritrea. \

As of September 30, 2009, Bisha Mining Share Company (BMSC), which owns 100% of the Bisha project and is in turn owned 60% by Nevsun (67% contributing) and 40% by ENAMCO (the State mining Company; 33% contributing), had spent or committed approximately US$123M on capital-cost-related items at the project. Of this amount, approximately US$95M had actually been spent; US$59M by Nevsun and US$36M by ENAMCO.

However, we note that our fully financed after-tax corporate NAV3% to 10%, and hence implied target price, would increase by approximately $0.75 per share, to $4.25 per share, with modeled production start-up in ‘late’ 2010. We plan to closely monitor construction progress at Bisha over the coming months and will adjust our modeled production start-up timeline accordingly.

With a feasibility study complete, a mining licence in hand, and project financing essentially arranged, we believe that Bisha is ‘ripe for the picking’ in a marketplace characterized by ongoing consolidation. Corporate activity aside, Nevsun is well positioned to advance Bisha given the Company’s strong balance sheet and the project’s robust economics.

With such well-heeled company as theses investment analysts, investors can still participate in the substantial upside still remaining in the share price. It doesn’t take a rocket scientist to see that the numbers being tossed around are extremely conservative in nature, and a much rosier picture could emerge sooner rather than later. Source: (Midas Letter)

Nevsun

Nevsun Resources Ltd., (NSU-TSX/NYSE AMEX) wishes to announce its recent financial position and its quarterly results for Q3 2009. All amounts are expressed in United States dollars.

The Company’s cash position at the end of September was $26.8 million, prior to raising $32.8 million during late October.

The loss for the quarter was $1.0 million compared to a loss of $843 thousand for the same quarter in 2008, with the increase mainly due to reduced interest income.

During the quarter the Company spent $21.7 million on the development of the Bisha project in Eritrea (2008 – $14.3 million). As at September 30th the project was approximately 40% complete to production and remains on budget.

Complete details of the Q3 2009 financial statements and management’s discussion and analysis can be found on the Nevsun website at www.nevsun.com as well as on Sedar at www.sedar.com and EDGAR at http://www.sec.gov/edgar/searchedgar/webusers.htm. Source: (Nevsun Resources)