Name of the Project
Timok upper zone copper project.

Location
Serbia.

Client
Nevsun Resources.

Project Description
A preliminary economic assessment (PEA) has shown the project to be a high-grade and -return copper project.

The PEA envisages a mine with a 15.1-year mine life, producing more than 2.1-billion pounds of payable copper.

Sublevel cave mining has been proposed, with a 3.3-million-tonne-a-year conventional plant producing copper concentrate.
The underground mine will be developed in phases and includes:
• an exploration decline that will serve as the main access, egress and material haulage ramp for the mine – it will comprise twin 5 m × 5 m ramps that will be driven from 400 m to 2 800 m below the surface. Once at depth, the upper portion of the orebody will be drilled perpendicular to the current drilling and this drilling will increase geotechnical knowledge and tighten up the existing mineral resources drill density.
• mine infrastructure and development, including the first underground primary jaw crusher about halfway down the orebody that will support production for the first 7.5 years. This phase will begin on receipt of the exploitation licence from the bottom of the exploration decline.  
• sustaining mine infrastructure development, which will provide access to lower production levels, and a second jaw crusher at the bottom of the orebody that will be used for the final 7.5 years of the mine life. Life-of-mine (LoM) material will be transported to surface by a staged underground conveyor system connecting to an overland conveyor to the process plant.

The processing plant has been designed to treat an average of 8 900 t/d, equivalent to 3.25-million tonnes a year. The plant will produce a single bulk concentrate and a gold-bearing pyrite rougher concentrate, which will be stored in a dedicated pyritic tailings storage facility (TSF), a separate compartmentalised subset of the larger TSF. This tailings design preserves the potential to profitably monetise gold contained in the rougher pyrite by further processing it to either a saleable pyrite-gold concentrate or extract the contained gold at site. About two-thirds of gold contained in the mined material over the LoM reports to the rougher pyrite.

The processing flowsheet comprises primary underground crushing; underground conveyors; overland conveying to the processing plant; coarse material storage bins; a semiautogenous and ball mill comminution circuit; copper flotation comprising rougher flotation, regrind and three stages of cleaning; copper concentrate thickening and filtration; and pyrite rougher flotation. Other supporting systems to the process plant and site are included and generally comprise reagents storage and distribution; effluent treatment; water services, which include fresh, fire, service and process water systems; compressed-air services; concentrate storage and handling; grinding media storage and addition; and plant control rooms.

Though the basis of the PEA is production of a single bulk concentrate, the robust flowsheet is flexible and allows for the option to produce two copper concentrate products instead of one concentrate, with relatively minor additions of flotation equipment.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a net present value, at an 8% discount rate, of $1.43-billion and an internal rate of return of 50%, with a payback of 1.4 years.

Value
The project entails an initial capital requirement of $630-million.

Duration
The objective is to start production in 2021.

Latest Developments
Ongoing exploration drilling on the Lower Zone at Nevsun Resources’ Timok copper/gold project has expanded the footprint by about 350 m × 750 m and continues to confirm the high grade, continuity and thickness of the mineralisation, the company has said.

The Lower Zone assays reported are part of the ongoing C$20-million drilling programme with its joint venture partner Freeport-McMoRan Exploration. The company adds that recent drilling has intersected no fewer than 14 porphyry copper mineralisations with grades greater than 1% copper.

This includes 1.08% copper (Cu) and 0.27 g/t gold (Au) over 747.4 m in hole TC170168 (1.27% Cu equivalent), which also includes 2.27% Cu and 0.59 g/t Au over 90 m (2.68% Cu equivalent); 1.21% Cu and 0.21 g/t Au over 546 m (1.36% Cu equivalent); and 1.14% Cu and 0.2 g/t Au over 411.7 m (1.28% Cu equivalent) in hole TC170175, including 1.85% Cu and 0.3 g/t Au over 78 m (2.06% Cu equivalent).

The intersections are estimated to be between 50% to 60% of the true width.

The programme is expected to be complete in early 2018 and is designed to further define the large footprint of the Timok Lower Zone mineralisation. The latest drilling has further extended the porphyry deposit to the north-west, and now identifies mineralisation over a footprint of about 1 000 m by 1 500 m footprint, the company has said.

Nevsun has reported that copper equivalent grade is calculated as 1 g/t Au equals 0.7% Cu.

Further, the holes are near vertical and are intersecting a mineralised zone that is plunging to the north-west at about 50˚.

Nevsun recently reported “extremely” strong economics for its proposed Timok Upper Zone project.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Nevsun Resources investor relations, tel +1 604 623 4700 or email ir@nevsun.com.