VANCOUVER, July 17, 2018 /CNW/ - Nevsun Resources Ltd. (TSX:
NSU) (NYSE MKT: NSU) (Nevsun or the Company) today acknowledged the
news release issued by Lundin Mining Corporation ("Lundin") stating
that it may make a formal offer to acquire Nevsun. Nevsun advises
shareholders that no formal offer has yet been made, and recommends
that shareholders take no action in response to Lundin's
announcement.
Said Peter Kukielski, Nevsun's
President & Chief Executive Officer: "This latest announcement
from Lundin continues to ignore the fundamental value of Nevsun and
its assets. Despite the progress we have made in enhancing Nevsun's
value, Lundin's notional takeover offer represents only a 13%
premium to Nevsun's closing trading price of C$4.21 per share on the TSX on July 16, 2018, and only a 9.1% premium to the
volume weighted average trading price of Nevsun's shares over the
30 days ended July 16, 2018."
Added Mr. Kukielski: "Since Lundin first expressed interest in
Nevsun, we have released a pre-feasibility study (PFS) for the
Timok Upper Zone with an after-tax NAV of US$1.82 billion, received a critical exploration
decline construction permit in February, began construction in May,
and in June released an initial inferred resource for the Timok
Lower Zone containing 31.5 billion pounds of copper and 9.6 million
ounces of gold. At the same time we have extended the mine life at
Bisha through 2022, adding 3.3 million tonnes of high-grade ore to
the mill, resulting in additional payable production of 470 million
pounds of zinc and 52 millions pounds of copper over this time
frame. The work we have been doing has also been noticed by several
strategic parties that have expressed an interest in participating
in the development of Timok."
Nevsun confirms that it has not received any additional
information on the proposed offer by Lundin other than what was
publicly disclosed in its press release issued on July 16, 2018. The last Lundin expression of
interest dated July 3, 2018
re-affirmed its interest in pursuing a transaction at C$5.00 per Nevsun share, funded in cash and
Lundin shares. Today's publicly announced intent to make an offer
is C$0.25 per Nevsun share (or 5%)
below this latest formal communication.
Should a formal offer be received, the special committee of
independent Nevsun directors (the "Special Committee") would
consider it with its advisors before making a recommendation to
Nevsun's Board of Directors and Nevsun's shareholders. If Lundin
makes a formal offer on July 27, 2018
(as indicated in its news release) Nevsun shareholders would have a
minimum of 105 days, or until November 9,
2018, to respond.
Nevsun reminds shareholders that Lundin has previously made
highly conditional confidential non-binding offers to Nevsun but
has never presented a binding offer to Nevsun or its shareholders.
In spite of this, the Company has, in good faith, openly and
continually engaged with Lundin. Consistent with its fiduciary
duties, Nevsun's Board of Directors remains open to any transaction
that is in the best interest of the Company.
Advisors
Counsel for Nevsun's Special Committee is Borden Ladner Gervais
LLP. The Special Committee's independent financial advisor is Citi.
Counsel for the Company is Blake, Cassels & Graydon LLP. The
Company's financial advisor is BMO Capital Markets.
Qualified Persons Statement
The technical content of this press release was previously
disclosed in a News Release by the Company dated March 28,2018 titled "Nevsun Advances Timok Upper
Zone Copper-Gold Project with Release of Robust PFS" and was
reviewed by the associated Qualified Persons ("QPs") listed below
for specific aspects of the PFS as defined by the National
Instrument 43-101.
Mining & Mineral Reserves– Jarek Jakubec SRK Vancouver
Mineral Processing – Mick Bunyard
- Hatch
TSF – Mihajlo Samoukovic, Knight
Piesold Vancouver
Infrastructure, Capital & Operating Costs- Mark Sucharda, Hatch
Economic Evaluation – Robert
Duinker, Hatch
Each of the individuals listed above are independent QPs for the
purposes of NI 43-101. All scientific and technical information in
this press release in respect of the Timok Project or the PFS is
based upon information prepared by or under the supervision of
those individuals.
As disclosed in the Company's news release dated June 26, 2018, the initial inferred resource for
the Timok Lower Zone contains 1.7 billion inferred tonnes grading
0.86% copper and 0.18g/t gold containing 31.5 billion pounds of
copper and 9.6 million ounces of gold.
Forward Looking Statements
The above contains certain statements that are deemed
forward-looking statements or forward-looking information within
the meaning of the United States Private Securities Litigation
Reform Act of 1995, and applicable Canadian securities laws.
Forward-looking statements are frequently, but not always,
identified by words such as "expects", "anticipates", "believes",
"hopes", "intends", "estimated", "potential", "possible" and
similar expressions, or statements that events, conditions or
results "will", "may", "could" or "should" occur or be achieved.
Forward-looking statements are statements concerning the Company's
current beliefs, plans and expectations about the future, including
but not limited to statements and information made concerning
whether Lundin will make a formal offer for all of the shares of
Nevsun and the terms and conditions of an such offer, the business,
prospects and future activities of, and developments related to the
Company, goals, strategies, future growth and other events or
conditions that may occur in the future, and are inherently
uncertain. The actual achievements of the Company or other future
events or conditions may differ materially from those reflected in
the forward-looking statements due to a variety of risks,
uncertainties and other factors, including, without limitation, the
risks more fully described in the Company's Annual Information Form
for the fiscal year ended December 31,
2017 (the "AIF") and the Company's management discussion and
analysis for the fiscal year ended December
31, 2017 (the "MD&A"), which are incorporated herein by
reference. The Company's forward-looking statements are based on
the beliefs, expectations and opinions of management on the date
the statements are made and the Company assumes no obligation to
update such forward-looking statements in the future, except as
required by law. For the reasons set forth above, investors should
not place undue reliance on the Company's forward-looking
statements.
Further information concerning risks and uncertainties
associated with these forward-looking statements and our business
can be found in our AIF and MD&A, which are available on the
Company's website (www.nevsun.com), filed under our
profile.
About Nevsun Resources Ltd.
Nevsun Resources Ltd. is the 100% owner of the high-grade
copper-gold Timok Upper Zone and 60.4% owner of the Timok Lower
Zone in Serbia. The Timok Lower Zone is a partnership with
Freeport-McMoRan Exploration Corporation ("Freeport"), which
currently owns 39.6% and upon completion of any feasibility study,
Nevsun Resources Ltd. will own 46% and Freeport will own 54%. Nevsun generates cash
flow from its 60% owned copper-zinc Bisha Mine in
Eritrea. Nevsun is well positioned with a strong debt-free
balance sheet to grow shareholder value through advancing Timok to
production.
NEVSUN RESOURCES LTD.
"Peter Kukielski"
Peter Kukielski
President & Chief Executive Officer
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SOURCE Nevsun Resources Ltd.