Nevsun, Eritrea Reach Development Agreement on Bisha Project

Nevsun Resources announced in mid- December that its Eritrean venture company, Bisha Share Mining Co., concluded a mining agreement with the government of Eritrea which reportedly covers the customary provisions governing future development and operation of the Bisha goldcopper- zinc project. Nevsun also said that BMSC has applied for a mining license that the government advised would be issued soon.

According to Nevsun’s press statement, in October the government of Eritrea indicated strong support for the Bisha project and for the development of a mining sector in Eritrea by acquiring a 30% paid participating interest through the Eritrean National Mining Co. (ENAMCO). The shareholder structure of BSMC is 60% Nevsun and 40% ENAMCO, with the ENAMCO shareholding comprising a 30% paid participating interest and a 10% free participating interest as provided by the country's mining legislation.

Government Minister Tesfai Ghebreselassie stated that, “The success of the Bisha mining project has a special significance both for its economic benefits and trendsetting effects on the path of the industry we are very eager to develop in Eritrea. Therefore I would like to reiterate our government's commitment to do all within its means to assist Bisha Mining Share Company be a success story.”

The Bisha deposit is configured in three layered zones (see below): a 35-m-thick surface oxide zone having a high gold and silver content immediately overlying a 30- m-thick copper enriched supergene zone which itself overlies a primary sulphide zone containing both zinc and copper. According to the project’s feasibility study, Significant byproduct gold and silver are recoverable from both the supergene and primary ores.

The fully diluted proven and probable reserves mined by open-pit methods for each ore type are as follows:
According to the project’s 43-101 Technical Report published by Amec in November 2006, conventional open-pit mining methods will be used, utilizing heavy-duty highway trucks loaded by excavator/ loader. The milling rate will be 5,500 mt/d ore over an approximate 10-year mine life. Mining will be performed by the owner with purchased equipment. Waste stripping will vary by year, starting at 20,000 mt/d in year 1 to a maximum of 40,000 mt/d in year 7, and subsequently decreasing to 4,000 mt/d in year 10. The average waste stripping rate is 23,000 mt/d.

Processing of the three ore types will employ a common crushing and SAG/ball grinding circuit, but will require three different extraction and processing circuits. After grinding, gold and silver will be extracted from the oxide ore by conventional cyanide leaching and recovered by the carbon in pulp process. Later in the project the supergene and primary ores will be processed by conventional flotation to recover copper and zinc as concentrates for direct sale to smelters. The tailing systems will be common for all three ore types. Capital costs to develop the Bisha mine were estimated at $196 million as of October 2006.

Mining cross-section for Nevsun’s Bisha project in Eritrea.
The feasibility study envisages the mining and processing of each zone in succession starting with the surface oxide zone. Before the oxide ore is exhausted the copper flotation process equipment will be installed and commissioned so that a smooth transition can be made from oxide ore to the supergene ore treatment. Similarly, before the supergene ore is exhausted, the additional flotation equipment required to recover the zinc from the primary ore will be installed and commissioned to permit a smooth transition from supergene to primary ore.

In the first two years of production, gold and silver will be extracted together. Production of copper concentrate will begin with a minor amount in year 2, significant quantities for years 3 to 5, and smaller quantities in years 6 to 10. Zinc concentrate production occurs only in years 6 to 10.

According to the technical report, major infrastructure required to develop the property includes a power generation facility and a well farm for freshwater supply. The power generation system will consist of multiple containerized, diesel engine-driven generation units, which will be owned, operated and maintained by a third party supplier. Freshwater will be supplied from groundwater. A well farm has been proposed 6.5 km southeast of the process plant site, along the base of the slope of the adjacent mountain range. Facilities for concentrate storage and loadout will be located at the site of an existing cement production facility at the port of Massawa. The plant, adjacent to an existing jetty, is owned by the Eritrean government and will reportedly be made available by the government for use by Nevsun.

As featured in Womp 07 Vol 9 -