AFRICA — Nevsun expands reserves in Africa

Nevsun Resources (NSU-T) continues to increase reserves in Mali and Ghana, where it has established an overall primary resource of 2.5 million oz. gold.

Nevsun first ventured into West Africa in 1993, attracted by the region’s prolific greenstone belt. It now holds a majority interest in four properties: Kubi and Gemap in Ghana, and Tabakoto and Kakadian in Mali.

* Kubi — This concession covers 44 sq. km and is situated 25 km south of the Ashanti Obausi mine. Nevsun holds a 90% interest in the property, which was acquired in 1992 following Broken Hill Proprietary’s withdrawal. The government holds the remaining 10%.

Drilling has defined gold mineralization along a strike length of 1,800 metres and to a vertical depth of 600 metres. The mineralization is focused at a near-vertical, faulted contact between early Proterozoic greenstones and younger sediments. Quartz veins, pyrite-pyrrhotite stringers and zones of garnet alteration containing disseminated arsenopyrite host the yellow metal.

Weathered laterite and saprolite represent the upper oxide zone, which is typically 25 to 35 metres thick. Calculations suggest the oxide zone hosts a resource of 540,000 tonnes in the indicated category and 1.4 million tonnes inferred, with an average grade of 2.5 grams gold per tonne.

The primary sulphide zone hosts an indicated resource of 1.7 million tonnes grading 7.5 grams per tonne and an inferred resource of 1.2 million tonnes grading 9.4 grams. This translates into an overall contained resource of 902,000 oz. gold.

The central portion of the Kubi deposit is in a forest reserve, and, until recently, exploration there was not allowed. In late November 1997, the government granted the company permission to explore the area. Nevsun will delineate the resource in the forest reserve after it completes an environmental impact study. Drilling in the reserve is not anticipated for at least six months.

Meanwhile, Nevsun is trying to delineate further oxide resources south of the forest reserve. A 15,000-metre program of reverse-circulation drilling is focusing on at least 10 surface anomalies identified by earlier trenching in the Kubi Main and the Kubi South zones.

* Gemap — Nevsun has earned a 75% interest in this property, situated in central Ghana near the village of Juabo; the remainder is held by the government.

Several areas of anomalous gold have been defined. One of the potential targets is related to a granitic intrusive — an environment similar to that of Ashanti Goldfields’ nearby Ayanfuri mine. The company plans to continue its current program of soil sampling, geophysical surveys, trenching and geological mapping.

* Tabakoto — The Tabakoto project is in the Kenieba region of western Mali, which has long been the focus of small-scale artisanal mining. The area is riddled with shafts and pits, some of which extend as deep as 30 metres.

The property consists of three contiguous concessions; Tabakoto, Tabakoto East and Dioulafoundouding. Nevsun can earn a 51% interest in the Tabakoto concession by delivering a feasibility report or by spending $1.1 million on the property prior to Sept. 1, 1999. The company has also acquired a 95% stake in Tabakoto East; the remaining 5% can be earned by producing a feasibility study. Nevsun can earn a 95% interest in the Dioulafoundouding concession in return for annual exploration expenditures of $100,000 and annual cash payments of $76,000 until delivery of a bankable feasibility study. The property is also subject to a 2% net smelter return royalty.

Situated on the 8-sq.-km Tabakoto East concession is the Main zone of mineralization, which runs north-south. Exploration has delineated a mineralized structure with a strike length of 2,200 metres.

The gold is hosted in a narrow swarm of subvertical, feldspar porphyry dykes that have invaded a sequence of greywacke and shale. Mineralization occurs in tensional fractures and fault gouge within, and along, the margins of the porphyry dykes. Occasionally, silicified sediments near the intrusions are also mineralized. The dyke zones are also crosscut by high-grade quartz stringers. The gold is found as coarse free grains as well as in the sulphide minerals. Weathering has produced a 50-to-70-metre-thick laterite cap.

The Tabakoto deposit is estimated to contain an indicated and inferred resource of 5.9 million tonnes grading 7.2 grams gold, or 1.4 million contained ounces. (To arrive at this estimate, a cutoff grade of 3 grams was used.). When the low-grade envelope surrounding the deposit is included, an additional indicated resource of 3.6 million tonnes grading 1.8 grams gold per tonne (or 210,000 contained ounces) can be added to the overall estimate.

The total resource weighs in at 1.6 million contained ounces.

Currently, two diamond drill rigs and one reverse-circulation rig are spinning at Tabakoto East in an effort to test the depth of existing zones.

* Kakadian — Nevsun holds an 80% interest in the 200-sq.-km Kakadian concession, which lies 60 km north of the Tabakoto project and 20 km west of the Anglo American-operated Sadiola Hill mine. The Malian government holds the remaining 20% interest.

Kakadian covers a significant regional geochemical anomaly, and numerous native alluvial gold workings are evident on the property. Geological mapping and sampling are ongoing in an effort to define drill targets.

Over the next six to eight months, Nevsun intends to spend about US$3 million on drilling, geophysical surveys and metallurgical testing.

The company has 29.2 million shares fully diluted and working capital of $25.3 million.