Tabakoto to shut down (September 05, 2007)

Nevsun Resources (NSU-T, NSU-X) has announced it will mothball the Tabakoto gold mine in western Mali, citing low grades and poor operating performance.

Nevsun, which wrote down the carrying value of Tabakoto by US$80.9 million in its 2006 year-end financials, said that head grades at Tabakoto had not met reserve grades and the mining contractor had performed poorly. In addition, it was still trying to recover about US$7 million in fuel-tax rebates from the Malian government.

Nevsun has been trying to sell Tabakoto and the adjoining Segala property, or to deal a partial interest in the two projects. It said in a release that it would continue shopping the properties around, while paying out its obligations to the workforce and contractors “on an orderly basis” while continuing to process stockpiled ore to provide some revenue.

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