Nevsun expects clarity on Eritrea Nevsun expects clarity on Eritrea in "near future"
Mon Sep 27, 2004 06:22 PM ET
By Nicole Mordant
DENVER, Sept. 27 (Reuters) - Nevsun Resources Ltd. (NSU.TO: Quote, Profile, Research) said Monday it expects to have clarity soon on why the Eritrean government suddenly ordered it and five other mineral exploration companies to break off all projects in the tiny East African country nearly four weeks ago.
Nevsun President John Clarke also said that he was confident that it would not be long before the small Canadian miner was back to work at drilling its key Bisha gold, copper and zinc deposit, a find some analysts regard as one of the most promising recent discoveries in the gold sector.
"I do expect to have some facts in the very near future and then to be able to tell our shareholders what is happening," Clarke told delegates at a gold conference in Denver.
His presentation drew one of the biggest crowds on the first day of the forum, which brings together the bosses of the world's biggest gold miners with their institutional shareholders and industry analysts.
Nevsun's woes in Eritrea have helped to once again turn the spotlight onto the risks miners' face doing business in far-flung regions. Last year, a company geologist was killed in the impoverished nation that has seen only brief periods of peace since a 32-year war for independence with neighboring Ethiopia ended in 1991.
The ban has cut Nevsun's stock price in half and the firm was forced to push back an exploration program that was due to start in October on two other deposits in the country on the Red Sea coast. "I still expect to drill them shortly," Clarke said.
Despite a grilling from audience members, Clarke could offer little insight into the unexpected edict. He said it was exclusively targeted at foreign mineral explorers and puzzling given Nevsun's good relationship with the Asmara government, which is its partner in the Bisha project through a 10 percent stake.
"They have obviously made a decision at cabinet level that they are pondering. They have no comment to tell us on those decisions and how they have been formulated. My last instruction was to show some patience," Clarke said.
Earlier this month an exiled opposition leader told Reuters that Eritrea's president is mobilizing his army for a fresh war with Ethiopia in the hope of galvanizing support for his autocratic government.
He said President Isayas Afewerki was feeling the heat from a virtual blockade of Eritrea by its neighbors and recurrent droughts, which have undermined the peasant economy in the country of roughly 4 million people.
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