By Frik Els | for Mining.com,
Amid a down day on metals markets Nevsun Resources (TSE:NSU NYSEMKT:NSU) stock jumped 4% on Thursday after releasing new assay results from further drilling at Asheli, part of its $11 million ongoing regional exploration program at its Bisha mine in Eritrea.
By the close in New York the Nevsun shares changed hands at $3.34 affording the counter a market capitalization of $658 million. Nevsun is up 24% in value this year.
The Vancouver-based firm announced new massive and stringer sulphide intersections at Asheli which is located 21km from Bisha where the company has been mining copper and zinc containing gold and silver as by-products:
New intersections at Asheli include:
- MX-071: 13.3m @ 1.82% Cu, 9.87% Zn, 0.51g/t Au, 30g/t Ag
- MX-075: 31.3m @ 1.30% Cu, 13.98% Zn, 0.70g/t Au, 41g/t Ag, including 13.7m @ 0.91% Cu, 28.01% Zn, 0.24g/t Au, 16g/t Ag
- MX-076: 11.00m @ 1.91% Cu, 9.99% Zn, 0.36g/t Au, 33g/t Ag
- MX-082: 14.3m @ 1.43% Cu, 5.93% Zn, 0.37 g/t Au, 23 g/t Ag
- True widths are estimated to be approximately 70% of the drill intercept length
- Drilling extends Asheli down dip with increasing zinc grades
- Further expansion potential possible to the northeast
- Drill testing has begun on the numerous untested targets along the 4 kilometers of similar stratigraphy
Nevsun CEO Cliff Davis said
“the deposit is fairly compact and relatively shallow which should be advantageous for mining. There is room for growth to the northeast and strong footwall alteration is present in this area. VMS deposits rarely occur in isolation and we have now started testing other targets along the four kilometers of similar geology to the east and northeast.”
Following the results the announcement Haywood Securities commented that the Asheli trend, which is part of Nevsun’s Mogoraib River Exploration Licence, includes over 4 kilometres of untested strike length, “which stand to further define the Bisha district as a multi-deposit volcanogenic massive sulphide (VMS) camp comparable to other world-class VMS camps around the globe.”
Nevsun currently owns 60% (the Eritrean government owns the rest) of the $250 million east African mine which started operations as a gold-silver producer in 2010. Three years later Bisha underwent a $110 million expansion to switch to copper concentrate production from supergene ore.
This year the company will pivot again to expand flotation capacity to produce zinc concentrate. Zinc is the best-performing metal in 2016 rising more than 18% in price since the start of the year. Life of mine payable metals at Bisha is put at 470m pounds of copper, 1.7 billion pounds of zinc, 240,000 ounces of gold and 8.2 million ounces of silver.
Nevsun acquired Reservoir Minerals Inc. in a deal worth $365 million in April. The deal, which still has to be finalized, provides the companies 100% ownership in the upper zone of the Timok Copper Project in Serbia, which had previously been owned by Reservoir and Freeport McMoRan. Nevsun shareholders will own two-thirds of the combined company.
The Asheli deposit was discovered by Bisha Mining Share Company (BMSC) in April 2015. The initial focus of exploration was a 700 meter long section of highly sericite and chlorite altered felsic volcanics with associated small, pod-shaped surface gossans. The geology continues on-strike for five kilometers of similar geology. Limited historical drilling had intersected only narrow stringer style mineralization with minor chalcopyrite and sphalerite but no massive sulphides.
BMSC’s 2015 discovery hole MX-044 returned 8.30 meters of massive sulphide grading 1.44% Cu and 4.00% Zn. Follow-up drilling in hole MX-052 confirmed the new discovery with 22.90 meters of massive sulphide grading 2.29% Cu and 4.50% Zn and additional massive sulphide mineralization was intersected in hole MX-056 (20.90 meters grading 1.26% Cu, 6.08% Zn). Drilling was suspended in July for the rainy season in this part of Eritrea and to focus on other high priority targets elsewhere.
In April 2016, drilling resumed at Asheli with a goal of better defining the geometry of the massive sulphide deposit. Early results from the campaign included hole MX-068 which targeted the projected down plunge extension of the mineralization approximately 100 meters below the known deposit. This hole successfully intersected 44.0 meters of massive sulphide grading 1.97% Cu and 9.13% Zn.
Four additional holes have now intersected massive sulphides at the Asheli deposit. Hole MX-075 drilled 60 meters down dip of hole MX-068 intersected 31.3 meters of massive and stringer sulphides grading 1.30% Cu and 13.98% Zn. A particularly zinc rich section graded 0.91% Cu and 28.01% Zn over 13.7 meters. The deposit remains open to the northeast where it has potentially been off-set. Future drilling will target this area. A maiden resource for Asheli will be included in the annual resource update scheduled to be released in early 2017.
Drilling is now in progress targeting the 4 kilometers of similar stratigraphy to the northeast.