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March 31, 2016

Zinc Plant Expansion and Precious Metal Stockpile Sales Update

 Bisha Mining Share Company (BMSC) is pleased to provide an update on the Bisha Zinc Expansion Project and monetizing precious metal stockpiles, two key objectives for 2016.

Zinc Expansion Project Highlights

  • Nearly one million man hours with zero lost time incidents
  • Construction remains on-schedule and well under budget
  • Cold commissioning now underway and progressing well
  • Hot (ore) commissioning delayed one month due to additional supergene copper processing
  • Zinc concentrate marketing attracting significant interest
  • Forecasting top end of supergene production guidance

Precious Metal Stockpile Sales Highlights

  • Strong buyer demand generating better than plan commercial terms of sale
  • Low marine shipping rates helping drive lower than expected selling costs
  • Approximately 20,000 tonnes shipped in Q1 with ongoing shipments expected through 2016


Cliff Davis commented,  “With the zinc plant nearly complete, strong demand for products and increasing gold, silver and copper prices since December 31, 2015, we expect higher than budgeted cash flows throughout 2016”.  Cliff Davis continued, “The recent precious metal stockpile sales confirm the marketability of the material at more favourable commercial terms than originally expected.  In addition, with the likely prioritization of shipping the precious metal stockpile material, I am not expecting the first sale of zinc concentrate until late Q3 or early Q4 2016.”

Zinc Expansion Project Details

The Zinc Expansion Project enables processing of the primary copper-zinc-gold-silver ore at up to 2.4 million tonnes per year, producing both copper and zinc concentrates from the existing copper flotation and new zinc flotation plants.  Current reserve life with the completed Zinc Expansion Project is to 2025.

Bisha is one of the few new sources of zinc concentrate hitting the market in 2016.  Bisha’s zinc concentrate is expected to be high quality and is attracting significant interest from buyers.  Bisha’s zinc offtake remains completely uncommitted at this time as the zinc market is expected to continue to tighten.

With the supergene phase confirmed to extend into June, we are now forecasting the upper end of our production guidance and the lower end of our C1 cash cost guidance for supergene copper.

The forecasted total cost remains approximately $80 million, significantly under the original budget of $100M.  A project photo gallery is regularly updated to track visual progress and can be found at:  http://www.nevsun.com/projects/photogallery/zinc-expansion.html#/9/0

Precious Metal Stockpile Sales Details

Bisha continues to mine, and has historically stockpiled, a variety of highly variable precious metal materials.  In 2015 Bisha invested in equipment to screen and beneficiate portions of the materials in an effort to create saleable contiguous lots of material.  These efforts defined 90,000 tonnes varying materials assaying 20 to 30 grams per tonne gold and 800 to 900 grams per tonne silver.  Bisha continues to successfully market this material throughout 2016.

 

Bisha Mining Share Company

“Cliff T. Davis”

Cliff T. Davis
Chairman