Nevsun eyes feed for Tabakoto

Vancouver A 5,500 metre drill program by Nevsun Resources (NSU-T) has cut encouraging gold mineralization at the Dioulafoundou zone, some 2 km south of the Tabakoto deposit in Mali, West Africa.

The latest bout of drilling, aimed at defining additional resources, tested six areas. The most promising results came from the Dioulafoundou zone where mineralization was cut over a 300 metre strike length. Highlights include:

• Hole 04 12 metres grading 7.35 grams gold per tonne;
• Hole 06 21.2 metres grading 0.63 gram gold;
• Hole 07 6 metres grading 4.9 grams gold;
• Hole 09 3 metres grading 3.35 grams gold;
• Hole 10 9 metres grading 3.74 grams gold;
• Hole 11 1.5 metres grading 9.2 grams gold; and
• Hole 12 15 metres grading 5.25 grams gold.

Moving 200 metres to the south, four holes followed up a 7 gram gold over 2.4 metre intercept hit last year. The best result came from hole 15, which yielded 10.5 metres grading 5.14 grams gold.

Mineralization is hosted in a northwest striking zone near the north-south structure that hosts the Tabakoto deposit.

At the Fougala area some 4 km west of the Tabakoto deposit, six holes tested a large coincidental geochemical-geophysical anomaly over a 400 metre strike length. The best results came from hole 05, which returned 6.76 grams gold over 1.5 metre and 19.06 gram gold over 1.5 metres.

More drilling is being planned for these zones later this year.

Nevsun also punched 4 holes into the Koutila target, but failed to cut any signifcant values.

On the Segala permit, drilling in the Dar Salam East and far Northwest areas failed to return any significant values but one hole at Moralia, intersected a dyke that assayed 6.81grams gold over 3 metres.

Nevsun picked up a 77% stake in the Segala project from Semafo (Barbados) Ltd. The price tag came in at US$9 million, of which US$1 million and 2.86 million shares represented the initial payment of US$3 million. The remaining US$6 million is payable to Semafo over three years by a combination of cash (US$3 million) and shares (valued at US$3 million). Nevsun had already acquired 3% stake by paying US$150,000 and the issuance of 56,000 shares. The remaining 20% of the property is held by the Government of Mali.

Earlier this year, the junior tabled an updated resource for the Segala deposit. The total figure, prepared by Snowden Mining Industry Consultants, is 7.6 million tonnes grading 3.36 grams gold per tonne. Of that amount, 3.3 million tonnes running 3.34 grams gold are classified as measured; the remaining 4.2 million tonnes of indicated material have an estimated grade of 3.37 grams gold. An inferred resource of 1.2 million tonnes is pegged at 2.84 grams gold.

The estimates are based on a cutoff grade of 2 grams gold. When the cutoff is halved, the measured portion climbs to 7 million tonnes running 2.34 grams gold, the indicated resource grows to 8 million tonnes averaging 2.44 grams gold, and the inferred resource more than triples to 4 million tonnes grading 1.83 grams gold.

Most of the gold (86% at the 2-gram cutoff) is in the central part of the Main zone; the rest is hosted by the Northwest zone and the lesser hangingwall and footwall zones.

So far, 586 holes have defined the deposit over a strike length of 1.2 km and to vertical depths of up to 500 metres.

An earlier feasibility study over the Tabakota project, some 4-km to the south, envisions a 650,000 tonne per year open pit operation cranking out some 105,400 oz of gold annually over a 5-year mine life. The average grade coming out of the proposed pit tallies 5.45 grams gold with a recovery rate hitting 96%. The average production cost is expected to be US$185 per oz. Preproduction costs come in at US$24 million with the project generating an internal rate of return of 35%.

Other surface resources on the property could extend the mine life of the operation by another 2 years. There is an inferred resource lying within the waste envelope of 220,000 tonnes grading 8.56 grams gold and 978,000 tonnes grading 8.48 grams gold in the northern pit extension.

The company has also been evaluating the prospects of moving to an underground operation once the open pit is depleted. The underground mining pre-feasibility envisions mining to a depth of 600 metres at a rate of 330,000 tonnes per year over a 6-year mine life. The initial capital cost for developing the underground mine is estimated at US$7 million with production averaging 75,000 oz per year. The average grade comes in at 7.5 grams gold with recoveries hitting 96%.

The pre-feasibility study was based on a total gold resource of 1.88 million ozs of gold comprising an indicated resource of 5.6 million tonnes grading 7.5 grams gold of primary material and 535,000 tonnes grading 1.8 grams gold of oxide. The inferred resource tallied 2.1 million tonnes grading 7.64 grams gold of sulphide material.

Nevsun is currently conducting a feasibility study to evaluate the combined potential of the two deposits.

The junior picked up the Dioulafoundou, Koutila and Fougala claims back in 2002 from Malian entities for 450,000 and 150,000 shares plus US$60,000, repectively.