While Bisha does not believe that Hambok is economic as a stand-alone deposit it plans to undertake further exploration on the deposit.
Nevsun Resources Ltd. (TSX:T.NSU, Stock Forum) said that the Bisha Mining Share Company, a subsidiary of Nevsun, has entered into an agreement to acquire the Mogoraib exploration license in Eritrea.
The Mogoraib license is 97.4 square kilometers in area and includes the Hambok copper-zinc deposit. The Hambok deposit is located 16 km southwest of Nevsun's Bisha mine, which is 150 kilometres west of Asmara in Eritrea, East Africa. The 60%-owned mine commenced gold production in Feb. 2011 and is scheduled to transition to copper/gold production in 2013.
According to the press release, Hambok represents potential feed for Bisha that could impact the size and timing of the primary phase investment in a zinc flotation plant.
The Hambok massive sulphide body is a steeply east dipping, lenticular body consisting of a series of lenses. The massive sulphide body extends for over 1000m along strike, approximately 350m down dip and is up to 75m thick in the center of the lens.
Historical indicated resource estimates for Hambok have an average of 1.12% copper, 3.24% zinc, 0.21 grams per tonne gold and 7.81 grams per tonne silver.
Pursuant to the agreement, Bisha will pay Sanu Resources US$5 million on closing and potentially an additional US$7.5 million contingent upon achieving commercial production from the property.
The agreement is subject to approval of authorities in Eritrea.
Nevsun Resources Ltd. is a Vancouver-based mining company with an operating mine in Eritrea.
On Wednesday morning, Nevsun’s stock was down 5% and was trading at $3.32 a share. The company has a market cap of $663.4 million, based on 199.8 million shares outstanding. The 52-week high and low was $7.22 and $2.71 respectively.