Nevsun positive PFS sees US$574 million cap cost for Timok Upper Zone

Exploration activities at Nevsun’s Timok copper-gold project in Serbia. Source: Nevsun Resources Ltd.

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Exploration activities at Nevsun’s Timok copper-gold project in Serbia. Source: Nevsun Resources Ltd.

Nevsun Resources Ltd. [NSU-TSX; NYSE American] has announced the results of a pre-feasibility study for the Timok Upper Zone copper-gold project in Serbia, which ranks as one of the world’s best development stage copper projects.

“The PFS confirms the extraordinary value of our wholly-owned Timok Upper Zone project,” said Nevsun CEO Peter Kukielski. “This is a high-grade, high return, fully executable copper project in a supportive jurisdiction,’’ he said.

Kukielski said the PFS is an important advance over the October 2017 Preliminary Economic Assessment and further de-risks the project by improving confidence in the engineering details, metallurgical understanding, timeline to production and capital assumptions.

“As we drive toward a feasibility study in mid-2019, I am confident that we have the right team in place to bring the Timok Project into production,” he said.

Timok Upper Zone Project PFS highlights are as follows:

  • Initial Probable Mineral reserve of 27 million tonnes at 3.3% copper and 2.1 g/t gold, using a price of US$3/lb for copper and US$1,300/oz gold.
  • Pre-production capital cost of $574 million, excluding $114 million to be spent to reach a construction decision.
  • Ten-year mine life, producing over 1.7 billion pounds of payable copper, excluding inferred resources.
  • Life of mine average annual payble production of 86,000 tonnes/year at an average cash cost of US$0.92 per copper pound.
  • Average annual payable copper production of 143,000 tonnes at an average cash cost of $0.54 per copper pound over the first three full years of production.
  • Strong front-end cash flow and quick payback period of less than one year, supporting a wide range of financing opportunities and alternatives.
  • Scoping level work suggests potential to decrease initial capital by up to US$100 million through a staged ramp up from 1.6 to 3.2 million tonnes per annum while maintaining strong project economics.
  • Significant exploration potential exists through the future conversion of inferred resources and greenfield exploration.

Nevsun is a leading mid-tier base metals company. It operates Bisha, a high-grade, open pit copper-zinc mine in Eritrea and is developing the Timok Project. Timok is located in the historic Bor mining district and benefits from close proximity to existing mining infrastructure.

Timok consists of the Cukaru Peki Upper Zone and Lower Zone.  Nevsun owns 100% of the Cukaru Peki Upper Zone. The Lower Zone is a joint venture with Freeport McMoran Corp [FCX-NYSE]. The project is located in the central zone of the Timok Magmatic Complex (TMC), in the Serbian section of the East European Carpathian-Balkan Arc. TMC features high concentrations of copper enrichment.

The PFS for the Upper Zone has been released just days after Nevsun announced impressive new assay results from the recently completed $20 million exploration drilling program on the Lower Zone.

Highlights include 1.00% copper and 0.20 g/t gold (1.14% copper equivalent) over 556.8 metres, starting at 1,310 metres in drill hole TC170177.

Work is now focused on the Lower Zone resource estimate for the Serbian permitting process and the release of a National Instrument 43-101-compliant resource statement in mid-2018.


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