Name of the Project
Timok upper zone copper/gold project.

Location
Bor, Serbia.

Client
Nevsun Resources.

Project Description
The Timok project is considered to be one of the world’s best development-stage copper projects.

The project has an initial probable mineral reserve of 27-million tonnes at 3.3% copper, 2.1 g/t gold and 0.17% arsenic using a price of $3/lb copper and $1 300/oz gold. There remain 13.9-million tonnes of inferred resources at 1.6% copper and 0.9 g/t gold that require additional drilling from underground to bring into the mineral reserves. 

A prefeasibility study (PFS) has confirmed a high-grade, high-return, fully executable copper project in a supportive jurisdiction, with a ten-year mine life producing more than 1.7-billion pounds of payable copper, excluding inferred resources.

The PFS is based on a sublevel cave (SLC) mining method. SLC is applicable through a wide range of geotechnical conditions and is typically used in massive, steeply dipping orebodies, with considerable strike length as at the Timok project. An added benefit is that the variable high grades near the top of the deposit are blended through the caving process.

The PFS mine design is based only on measured and indicated mineral resources. Inferred mineral resources were not used to design the updated mine design and production profile. Total life-of-mine (LoM) development consists of 24 km of lateral development, inclusive of declines, 3 km of vertical development and 40 km of operating development.

According to the October 2017 preliminary economic assessment (PEA), the underground mine will be developed in three phases.

Phase 1 includes the exploration decline, which comprises twin 5 m × 5 m ramps that will be driven straight from about 400 m to 2 800 m below the surface. This decline will serve as the main access, egress and material haulage ramp for the mine.

Phase 2 involves mine infrastructure and development, which will include the first underground primary jaw crusher about halfway down the orebody that will support production for the first five years.

Phase 3 entails sustaining mine infrastructure development, which provides access to lower production levels, and a second jaw crusher at the bottom of the orebody that will be used for the final years of the LoM.

LoM material will be transported to surface using a staged underground conveyor system connecting to an overland conveyor to the process plant. The processing flowsheet is considered conventional and consists of primary underground crushing; underground conveyors; overland conveying to the processing plant; coarse material storage bins; a semiautogenous and ball mill comminution circuit; copper flotation comprising rougher flotation, regrind and three stages of cleaning; and copper concentrate thickening and filtration.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at an 8% discount rate, of $1.82-billion and an internal rate of return of 80%, with a payback of $3.15/lb copper valued at the start of construction (July 2020).

Value
The PFS estimates a preproduction capital cost of $574-million. This excludes the $114-million to be spent to reach a construction decision.

Meanwhile, scoping level work has suggested the potential to decrease initial capital by up to $100-million through a staged ramp-up from 1.6-million tonnes a year to 3.2-million tonnes a year while maintaining strong project economics.

Duration
Production is expected in 2022.

Latest Developments
The Timok (Cukaru Peki) Lower Zone deposit, which extends above the Upper Zone on the east side, contains 31.5-billion pounds of copper and 9.6-million ounces of gold, with elevations ranging from about 500 m to just over 2 200 m below the surface.

The Timok Lower Zone – a joint venture with Freeport-McMoRan – has a porphyry copper inferred mineral resource of 1.7-billion tonnes, grading 0.86% copper and 0.18 g/t gold (0.96% copper equivalent).

The Timok Lower Zone ranks high among world porphyry deposits by tonnage and grade. With 1.1-billion tonnes grading 1.11% copper equivalent, the Timok Lower Zone benchmarks well against planned and operating block cave mines.

"We expect that Timok (Cukaru Peki) is the start of a new generation of mines in Serbia's Bor region. The Lower Zone remains open to the north and at depth. There are multiple high-grade Upper Zone-style exploration targets above the Lower Zone and our exploration licences have the potential to host entirely new porphyry systems with associated high-grade Upper Zone-style mineralisation," Nevsun CEO Peter Kukielski has said.

The Lower Zone at Timok comprises two distinct mineralisation styles:

• a typical porphyry copper style mineralisation characterised by potassic alteration and chalcopyrite with elevated molybdenum, and
• a second a high sulphidation-style mineralisation consisting of sericitic alteration with elevated arsenic and base metals (lead, zinc and bismuth).

The porphyry copper mineralisation is the most important volumetrically at more than 95% of the volume at the lower cutoff. 

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Nevsun Resources investor relations, Heather Taylor, tel +1 604 623 4700 or email ir@nevsun.com.