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Eritrea mining unlikely to be affected by UN sanctions

Nevsun’s Bisha
project in Eritrea
Asmara, Eritrea — MININGREVIEW.COM — 18 February 2010 – Eritrea’s fledgling mining sector is unlikely to be affected by the United Nations decision last month to impose sanctions on the Red Sea state as punishment for its alleged support of Islamist insurgents in Somalia.

This is the opinion expressed by head of the Bisha mine project Stanley Rogers, who said the industry was not feeling the heat and all eyes were on the movement of the price of gold. The Bisha project in Eritrea is run by Nevsun Resources Limited “’ a Canadian-based mining and exploration company listed on the Toronto and New York stock exchanges.

“There has been no slowdown whatsoever since the announcement, and the momentum has continued. I don’t expect anything to change with respect to our project. Our production start date remains the same. I would have thought it was the same at other projects,” he said.

“For investors, the international price of gold is a more decisive factor than sanctions imposed on a single country,” he emphasised. “External perceptions of Eritrea are at odds with the internal reality, he added. “Internally, this is a stable place to do business. My view on this hasn’t changed," he added.

Bisha is Eritrea’s most advanced mining project. Its 27 million tonnes of ore are believed to contain 1 million ounces of gold, 700-800 million pounds of copper and 1 billion pounds of zinc. Production is expected by the end of the year.

Gold, zinc and copper are the main interests in Eritrea, and more than a dozen foreign companies are now exploring or about to begin combing the country’s arid plains.

Before sanctions were imposed in December, Nevsun spent a record US$21.7 million (R162 million) on its Bisha project in the third quarter of 2009.