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  • Nevsun Resources Ltd. (NSU) Completes Acquisition Of Massive Mogoraib Exploration License Near Bisha Mine In Eretria 0 comments
    Oct 10, 2012 4:29 PM | about stocks: NSU

    Nevsun Resources, the rapidly growing mineral development firm based in Vancouver, which is sitting on the impressive, producing, high-grade, yet low cost open pit Bisha mine (gold, silver, copper, and zinc) in the East African nation of Eritrea, reported expansion of its regional license footprint today, as 60%-owned NSU subsidiary, Bisha Mining Share Company, closes the acquisition agreement announced back in August to secure the 37.6 square mile Mogoraib River exploration license. Fellow Vancouver-based NGEx Resources Inc. subsidiary, Sanu Resources, has received the $5M payment stipulated in the agreement and today's announcement marks the formal closure of this exciting deal for NSU and its shareholders, as the company has hereby added an extensive acreage position just 10 miles south of the Bisha processing plant.

    This is great long-term news for the company if we look at projections for their flagship Bisha operation, which pumped out some 379k oz Au last year and has some 12 years of payable reserves left (after 2011 - 330k oz Au, 10.3M oz Ag, 860M lbs Cu, and 1.89B lbs Zn), but will transition from low cost gold and silver production from the rich oxides to low cost copper/gold and zinc (copper expansion currently underway) from the massive sulphides in 2013 and beyond (both types of mineralization are part of an extensive volcanogenic massive sulphide deposit).

    The Mogoraib land is really close to the Bisha facilities and thus the vast Hambok copper-zinc deposit at Mogoraib, while not ideal economically as a stand-alone operation according to Nevsun, will emerge as a vital component of the company's operations in Eretria. Further exploration is expected to turn up more volcanogenic massive sulphide (VMS) targets in the area and the company is expanding strategically into a regional approach because of the strong local geology. The full-spectrum nearby logistics make the deal a winner and the Mogoraib license, in particular the Hambok deposit (a VMS), is expected to feed the Bisha plant heartily as the company plans to add a sizeable zinc flotation plant to the existing copper works starting in 2015.

    This regional strategy initiative by NSU comes after rigorous review of the broader exploration potential in the Bisha area and plans are already underway to secure additional, contiguous acreage in support of a complete regional generative exploration program. The resource estimate data on the Hambok filed in the March 27, 2009, NI 43-101 report by Sanu Resources, offers clear indicators and is based on some 57 diamond drill holes, 326 down hole surveys, and a variety of other work done by Sanu over the last two decades or so. A geologic modeling of the data from cross sections resulted in a good 3D model of the massive sulphide lenses (really one giant unit) and a breakdown of the pertinent historic estimations looks solid, making some infill drilling and the assaying to support it, a natural next step by NSU to further refine the continuity profile of high-grade intercepts (also how this will influence the overall resource calculation).

    The historic mineral resource data extracted from the 2009 technical report by qualified persons G. H. Giroux, P Eng. and C. Tucker Barrie, P.Geo., should give investors a good idea of the potential for this newest acquisition by NSU to develop into a highly successful base metal open pit operation (grades used standard block kriging, classifications are based on grade continuity with zinc cutoffs):

    Indicated
    10.7M tonnes over 0.75% cutoff - 0.98% copper, 2.25% zinc, 0.20 g/t Au, and 6.84 g/t Ag
    5.1M tonnes over 2% cutoff - 1.12% Cu, 3.24% Zn, 0.21 g/t Au, and 7.81 g/t Ag

    Inferred
    17M tonnes over 0.75% cutoff - 0.85% copper, 1.74% zinc, 0.19 g/t Au, and 5.89 g/t Ag
    5.1M tonnes over 2% cutoff - 0.96% Cu, 2.81% Zn, 0.19 g/t Au, and 6.20 g/t Ag

    Clear development vectors inherent in the historic data and the VMS mineralized shell that extends over 3,300 feet or so along strike (1,200 feet down dip and up to 250 feet thick in the center), puts Nevsun in prime development territory with the new deal and investors should be looking for exploration program activity soon.

    CEO of NSU, Cliff Davis, stressed the value of a regional strategy to shareholders and emphasized the potential for discovering additional VMS deposits in the Bisha area. Excellent roadways and access to ports, along with strong support from the Eritrean government, should keep things moving for Nevsun and it will be interesting to watch the situation progress.

    For more information on the deal, or to learn more about Nevsun Resources, take a look at the company's website: www.Nevsun.com

    Please see disclaimer on the MissionIR website http://www.missionir.com/disclaimer.html

    Stocks: NSU
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