The government of Eritrea has awarded a mining licence for the Bisha gold and base metals project, Vancouver-based Nevsun Resources said on Tuesday.

The company, together with the State-owned Eritrean National Mining Company, which owns 40% of the project, would now seek finance for the project, Nevsun said in a statement.

The mine is expected to cost $250-million to build, and the Bisha Share Mining Company,which owns the project, would be “actively seeking” debt finance for its development.

The licence is a key milestone for the company, which was ordered by the Eritrean government to halt exploration at the project in 2004.

The firm was allowed to resume operations in the country in early 2005, after agreeing to allow the government to buy a 30% interest in the project, on top of the free 10% interest it receives according to the country's law.

“The government of Eritrea continues to show its strong support to the redevelopment of mining as an important sector of its national economy,” Nevsun said.

Construction of the Bisha mine is expected to take 24 months, a Nevsun spokesperson said in December.

The company expects to produce 471 000 oz of gold during the first year of operation at Bisha, and 424 000 oz in the second year, at a cash cost of $150/oz.

Copper production will begin in the second year, and peak at 184-million pounds of copper in the fifth year of operation.

The mine will begin producing zinc in its sixth year.

Nevsun also owns the loss-making Tabakoto mine, in Mali, which is being placed on care-and-maintenance.

The company said in September that it was in "early discussions" with potential buyers or joint-venture partners for the mine.

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