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.

Bisha is expected to generate enough cash in the first two and a half years to both repay all debt facilities, as well as fund the copper phase mine expansion. Bisha is a high grade deposit and as such its projected operating cash costs including royalties are estimated to be less than US$230/oz Au.

In September, Nevsun announced it has secured metal sales contracts for its future gold and copper production at the Bisha mine.  Pricing for all metals will be fixed at spot rates at the time of delivery. Bisha’s gold will be refined in Switzerland and Canada by two major international companies while the copper concentrate will be shipped to major smelters in Europe and India.

Metal production within the first two years is estimated at approximately 900,000 ounces of payable gold, followed by over 500,000,000 pounds of payable copper in years 3-5, plus in years 5-10 an additional 1 billion pounds of payable zinc and 200,000,000 pounds of copper.