Drill Tracker Weekly: Nevsun Extends Eritrea-based Harena Deposit

Nevsun Resources (TSX:NSU)

Price: $3.96

Market cap: $788 million

Working capital: $500 million

Project: Bisha (Harena)

Country: Eritrea

Ownership: 60 percent

Reserves: 3.2 MT @ 0.8% Cu, 3.8% Zn, 0.5 g/t Au, 23 g/t Ag indicated

Project status: Brownfields exploration

• Nevsun Resources announced additional holes from its Harena Volcanogenic Massive Sulphide (VMS) deposit 20 kilometres to the south of its operating Bisha Mine in Eritrea.
• Highlights from the current drilling include 70.2 metres grading 1.31% Cu, 2.84% Zn, 0.35 g/t Au, 27 g/t Ag starting at 640 metres depth and 67 metres of 1.14% Cu, 2.48% Zn, 0.33 g/t Au and 23.5 g/t Ag from 691 metres. The drilling has extended the mineralized zone by 250 metres to the south and 100 to depth. The Company believes that the downhole geophysical model indicates that the mineralization may continue to depth from the current drilling.
• The Harena deposit has both oxide and primary resources. The small near-surface indicated oxide resource totals 20,000 tonnes at a grade of 2.5 g/t Au and 25 g/t Ag, as well as 100,000 tonnes of 4.2g/t Au and 33 g/t Ag as inferred. The primary resource estimate includes 3.2 million tonnes grading 0.8% Cu, 3.8% Zn, , 0.5 g/t Au and 27 g/t Ag in the indicated class , as well as an inferred resource of 6.4 tonnes of 1.1% Cu 3.7 % Zn, 6 g/t Au and 38 g/t Ag. Other similar style deposits in the area include the Northwest and Hambok deposits, both of which have NI 43-101 compliant resources as well as the recently discovered Asheli zone MRCC DT – Volume 13).
• With the discovery of a fourth significant massive sulphide occurrence on the Bisha property, the region is clearly developing into a district scale exploration camp. Including the new discovery at Asheli, there are now three satellite deposits to the Bisha Mine with 43-101 resource in the Bisha area including the Harena, Northwest, Hambok deposits. The Company is well positioned with over $500 million in working capital and strong cash flow from the current copper dominated operation. As the mine continues deeper, Bisha will become a significant zinc producer starting in 2016. The Company is one of few single asset mining companies to pay a significant dividend with a 5.3% yield.

Exploration and development history: Nevsun discovers Bisha in 2003 — 20 metres @ 1.31% Cu, 0.55% Pb, 0.60 g/t Ag

Current drilling at Harena: 70.2 metres grading 1.31% Cu, 2.84% Zn, 0.35 g/t Au, 27 g/t Ag; 67 metres of 1.13% Cu, 2.48% Zn, 0.33 g/t Au and 23.5 g/t Ag

 
Risk Analysis
Data contained in DRILL TRACKER WEEKLY is based on early stage exploration activity. The results are obtained at the very early stages of exploration and therefore, individual results may not be reproducible with additional trenching or drilling, nor may the results ultimately lead to the discovery of an economic deposit. Delineation of a resource body requires an extensive data gathering exercise according to guidelines set out in National Instrument 43-101 before investors can be reliably assured of a competent body of mineralization that may be of economic interest. DRILL TRACKER WEEKLY is designed to highlight individual trench or drill results, which stand out as being materially anomalous and are particularly worth of note – a type of early warning flag for a particular property that warrants further attention. Hence, DRILL TRACKER WEEKLY does not provide a recommendation to buy, sell or hold a specific equity – it is an information reference source to help quantify the meaning and relevance of early stage exploration results.
Relevant Disclosures Applicable to: Drill Tracker Weekly

1. The research analyst or a member of the research analyst’s household owns and/or has options to acquire shares of the subject issuer. At the date of this release the author, Wayne Hewgill, owns no shares in the companies in this report. 
2. Lake Shore Gold Corp. (LSG) is covered by Mackie Research Capital Corp. by analyst Barry Allan.

Analyst Certification
I, Wayne Hewgill certify that the information in this report is sourced through public documents that are believed to be reliable but accuracy and completeness as represented in this report cannot be guaranteed. The author has not received payment from any of the companies covered in this report. This report makes no recommendations to buy, sell or hold. Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.