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NSU Blood Gold

Poor Eritreans increasingly joining gold rush

More than a dozen foreign mining firms are now working in Eritrea, but poor villagers in the Red Sea state's remote lowlands are also increasingly using their bare hands to claim some of the riches.

National service is mandatory for young Eritreans, and when someone will be granted "demobilization" is often unknown. Some Eritreans spend most of their adult lives in national service, whether in the military, building roads or working in cafes.

Mining company officials say the groups of impoverished Eritreans who search for gold on their licences use primitive and often unconventional methods.

"Every day on site I see local Eritreans working in groups, men and women," Timothy Strong, Eritrea manager for British company London Africa, told Reuters. "They use one rock to crush, and the base of their sandals to pan for the gold."

The dangers of rudimentary, artisanal mining are well known, where no safety standards are enforced and children carry piles of rocks between deep vertical pits.

"In the more advanced areas they also use mercury to extract the gold from the rock, which kills local wildlife, and in an agricultural area it gets into the food source. It also burns your skin and the fumes send you crazy," Strong said.

 
NSU Blood Gold

UN sanctions no deterrence for Eritrean mining-Bisha

ETHICAL DILEMMA?

Asmara is accused by the United Nations and others of fuelling the chaos in Somalia -- where 18,000 people have died in violence since the start of 2007 -- by sending funds and arms to rebel groups battling the UN-backed transitional government.

Sanctions include an arms embargo, travel bans and asset freezes. They do not target the interests of mining companies operating in Eritrea, where licenses are held by groups from Australia, Canada, China, Libya and the United Kingdom.

 

Nevsun Resources Ltd.: Bisha Debt Facilities Reconfirmed

Nevsun Resources Ltd. (NSU-TSX/AMEX) is pleased to advise that the Industrial Development Corporation Limited of South Africa (“IDC”) has re-confirmed its commitment to provide $89 million in project debt facilities to the Bisha project in Eritrea.  In July 2009 the Company signed extensive loan documentation with IDC and a group European lenders for the funding of the Bisha project via debt facilities.  The Company is waiting for European lenders to also reconfirm their commitment on the balance of the facilities agreed to at that time.
 
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Sunridge Gold's 2010 Exploration Plans for Asmara Project, Eritrea

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Press Release
Source: Sunridge Gold Corp. On Tuesday December 29, 2009, 8:00 am EST

VANCOUVER, BRITISH COLUMBIA--(Marketwire - 12/29/09) - Sunridge Gold Corp. (TSX-V:SGC - News) ("Sunridge") believes that the sanctions imposed on the State of Eritrea on December 23, 2009 by the United Nations Security Council will have no affect on the Company's activities in the country. The Company is planning a significant 2010 exploration and drilling program for its Asmara Project which will begin with the commencement of drilling of the large and previously undrilled Daero Paulus target in mid- January 2010, part of the Antofagasta joint venture ground. In addition further drilling is planned at the Debarwa Deposit with the objective of increasing the size of the deposit.

   
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UPDATE 1-Eritrean turmoil weighs on Nevsun shares

* Nevsun stock tumbles more than 14 percent

TORONTO, Dec 24 (Reuters) - Nevsun Resources <NSU.TO> insisted on Thursday its Bisha gold project in Eritrea would proceed as planned despite United Nations sanctions against the African country.

Nevsun shares tumbled more than 14 percent following the sanctions, despite its assurances the U.N. actions -- including travel restrictions and asset freezes -- should not have any direct impact on the company or the project.

 
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UN Sanctions may affect Canada's Nevsun, foreign companies

(Reuters) Eritrea's most advanced project is Bisha, run by Canada's Nevsun Resources Ltd (NSU.TO: ??). Its 27 million tonnes of ore are believed to contain 1 million ounces of gold, 700-800 million pounds of copper and 1 billion pounds of zinc.

The momentum towards imposing sanctions on Eritrea for its alleged role in war-torn Somalia has grown in recent months. It remains unclear how they may effect foreign companies, but according to one analyst, any disruption to the burgeoning mining industry would put pressure on Asmara.

 
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Nevsun completes C$32.775 mln private placement for Bisha gold-copper project, Eritrea

Nevsun Resources Ltd (TSX/AMEX: NSU) said it has  completed its non-brokered private placement financing of 11.5 million common shares at C$2.85 announced last week, raising C$32.775 million.

The net proceeds from the offering will be used for general working capital purposes, including exploration and development of the Bisha high grade gold, copper and zinc project in Eritrea.

The project is developed with the Eritrean government as a partner. The project has 27.2 million tonnes of measured and indicated resource and 11.7 million tonnes of inferred resource , 43-101 compliant. The mine is expected to start producing gold in Q3 2010, with a 10 year mine life.

   
Blood Money

Eritrea readies first goldmine

"Its dictatorial ruling regime, which is in urgent need of dollars from mining, has also awarded exploration licences to eight new foreign companies eager to prospect close to Africa’s Red Sea coast."

War and government economic controls have limited the Eritrean private sector’s ability to generate foreign currency income and the country is one of the last unexplored frontiers in African mining.

In a break from its credo of self-reliance, the regime of President Isaias Afewerki has turned to foreign companies for capital and ex­pertise to develop its gold, zinc and copper deposits.

The first commercial production is due to begin in the third quarter of next year when the Bisha mine opens on a site in western Eritrea that contains nearly 1m ounces of gold, said Alem Kibreab, director-general of mines at the Ministry of Energy and Mines.

Bisha is being developed by Nevsun Resources, a junior mining company listed in Toronto, which has a 60 per cent stake in the project. The remaining 40 per cent is held by Eritrea’s state-owned mining company. Beneath its layer of gold the site has about 700m pounds of copper and 1bn pounds of zinc.

 
Blood Money

Sub-Sahara, Chalice merger to fund Eritrea project

Sub-Sahara's Zara project has an estimated 1 million ounces of gold in the west of the Red Sea state, where international prospectors expect large precious gold and base metal finds.

"The proposed merger will combine Chalice's strong cash position of over 10 million (Australian dollars) with Sub-Sahara's 69 percent interest in the high grade Zara Gold Joint Venture in Eritrea, East Africa," the companies said.

 
Simon Stocker, Director of Eurostep

EU seeds Eritrea’ dictators with blood money

The European Union’s approval of the a 122 million Euro in development aid package for Eritrea sends the wrong signal to the brutal regime in Asmara, in a country run by an oppressive dictatorship where human rights are systematically violated and its impoverished people live in constant fear it is difficult to understand the EU’s decision. Given the blatant disregard that the Eritrean regime has for the legally binding principles set out in the Cotonou Agreement Eritrea, it is in clear breach of legal obligations required to receive this.

   

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