SRK China

TSX / NYSE-listed Nevsun Resources and Zijin Mining Group have entered an agreement where Zijin will make a take-over bid to acquire all of the issued and outstanding shares of Nevsun.

The bid is valued at C$6.00 per share in cash. The offer is valued at C$1.86 billion.

The cash consideration of C$6.00 per share represents a premium of 57% over Nevsun's unaffected closing price of C$3.82 on May 7, 2018, the day Lundin Mining Corporation  first publicly announced its intention to acquire the company.

In addition, the offer is C$1.25 per Nevsun share, or 26%, more than the C$4.75 per share hostile take-over bid for Nevsun launched by Lundin on July 26, 2018.

The offer is not subject to any financing conditions.

Details of the offer will be included in a take-over bid circular that Zijin will file and mail to the company's shareholders in the coming days, but no later than September 18, 2018.

The company's board of directors unanimously recommends that its shareholders tender their shares to ACCEPT the offer.

The basis for this recommendation will be included in a directors' circular that will be filed and mailed to shareholders concurrently with the filing of the Zijin take-over bid circular.

The company's board of directors continues to recommend that shareholders REJECT the hostile take-over bid launched by Lundin on July 26, 2018 and NOT tender their shares to the Lundin offer, which will expire on November 9, 2018.

"This premium transaction is an excellent outcome for our shareholders, and the result of a rigorous and competitive global process to generate maximum value for Nevsun's outstanding assets," says Ian Pearce, chair of Nevsun's board of directors.

"The all-cash consideration of C$6.00 per share better reflects the fundamental value of the  company's mining and development assets, while also providing an appropriate change of control premium to our shareholders."

"Zijin is a proven mining industry operator with a US$10 billion market capitalization and a demonstrated track record of successfully completing international transactions. The Board unanimously recommends that shareholders tender their shares to accept this offer and receive the significant value that it represents."

Chen Jinghe, chairman of Zijin, adds, "Nevsun is an exceptional operator, with a strong focus on safe, efficient and sustainable mining practices. As the new owner we will continue that focus, and we look forward to working with stakeholders in Eritrea and Serbia to advance these mining and development assets.

"At the Bisha mine in Eritrea, our objective will be to further extend the life of the mine and explore for new deposits. At the Timok Project in Serbia we intend to rapidly develop the Upper Zone and bring it into production, and continue to advance and define the world-class potential of the Lower Zone."

The board of directors had previously rejected the hostile bid from Lundin on the grounds that it, among other reasons, ignored the fundamental value of the company's assets.

Following the launch by Lundin of its hostile bid, a special committee of Nevsun's independent directors, with the assistance of advisors, initiated a review of all value-maximizing alternatives, including, but not limited to, an acquisition of all issued and outstanding Nevsun shares.

This process has involved a number of global parties undertaking comprehensive due diligence on Nevsun.

The offer is a result of this full strategic alternative review process.

Nevsun's board of directors and the Special Committee concluded that the offer currently represents the best alternative available to Nevsun and provides Nevsun shareholders with the highest value proposition.