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Bisha gets project finance approvals

Nevsun Resources has announced that its Bisha project in Eritrea has received all required credit approvals from its project finance lenders for debt facilities totalling US$235 million. The debt package is a mix of senior and subordinated loans from a lending group comprised of seven institutions from Europe and South Africa.

Nevsun says that the government of Eritrea has provided strong written support for Bisha and the financing, fulfills a major condition for the project. In addition, after receiving its board approval at the end of June 2009, the Export Credit Insurance Corporation of South Africa is finalising a policy of insurance tied to South African supply of goods and services.

The project is now more than one third completion, and the forecast cost to complete remains on budget.

At recent metal prices, the Bisha project is expected to generate enough cash in the first two and a half years to repay all debt facilities, as well as fund the second phase, the copper phase mine expansion, during the same period. The projected operating cash costs for gold production are estimated to be less than US$230 and ounce, including royalties.

The mine is expected to start producing gold in the third quarter of 2010.