TORONTO (miningweekly.com) – Canada's Nevsun Resources does not expect a United Nations Security Council resolution to place sanctions on Eritrea will have any direct impact on the company or its flagship project in the country, but is uncertain whether the sanctions could indirectly affect a debt finance facility put in place for the project.

Shares in Nevsun fell 10,7% on Thursday, to C$2,75 apiece by 12:58 in Toronto. The exchange closed early ahead of Friday's holiday.

The sanctions placed on Eritrea, which is accused of supporting Islamist militants in Somalia, include an embargo on arms exports and imports on the country, and asset freezes and a travel ban on organisations and individuals to be listed by a sanctions committee.

“The implementation of this process may take some time and the details are not yet known,” Nevsun said in a statement on Thursday.

The Bisha gold/silver/copper/zinc mine, in which Nevsun owns 60% and the government of Eritrea holds 40%, is scheduled to start production in the second half of next year.

“Nevsun believes that these sanctions should not have any direct impact on the company or its Bisha project in Eritrea as the company is focused solely on the development of the Bisha project,” the firm said.

“It is however uncertain whether these sanctions could indirectly impact the Bisha debt facilities.”

The company finalised a $235-million debt package in July this year, comprising a mix of senior and subordinated loans from a lending group consisting of seven lenders from Europe and South Africa

“The company is already in discussions with stakeholders to evaluate that possibility and has contemplated alternative finance sources if the sanctions do eventually negatively impact the debt facilities,” Nevsun said.

MILLS ARRIVE

Separately, the company announced on Thursday that both the SAG and ball mill had arrived on site at Bisha in the last week, as had the primary crusher.

Installation of the mills and crusher will begin in the New Year.

“The installation of the mills forms the critical path activity and their timely arrival maintains the development timeline,” the firm commented.

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