Nevsun's Bisha gold mine on track for Nov 2010 startup

Canadian junior, Nevsun has spent $93 million of the planned $250 million to bring its Bisha gold mine in Eritrea on stream by late next year.

ASMARA (Reuters)  - 

Canada's Nevsun Resources pumped $21.7 million during the third quarter into its Eritrean Bisha project, the project's general manager said on Thursday.

Set to become the nation's first producing mine, Bisha's 27 million tonnes of ore is believed to contain 1 million ounces of gold, 700-800 million pounds of copper and 1 billion pounds of zinc.

Apart from small-scale artisanal mining and some minor extraction by Italians during the colonial era, Eritrea's mining potential is largely unexploited.

"We are by far the most advanced project in the country. November 2010 is the big drive for gold production," Stanley Rogers, Bisha general manager, told Reuters.

"In the last quarter we increased spending to a new high and doubled the number of people we have on site to 400. This is inevitable as we near production," he said.

"Actual expenditure on the Bisha project so far is $93 million, with a current budget of $250 million. It is on track and roughly half way through development," Rogers said.

The Bisha mine, which lies to the west of the capital Asmara toward the border with Sudan, was the first mine to operate in Eritrea for 70 years, Rogers said.

"We were the first to build a relationship with the government, which paved the way for other companies to follow us," he added.

The Eritrean government has a 40 percent stake in the project.

There are more than a dozen foreign companies exploring in Eritrea, with licenses held by groups from Australia, Canada, China, Libya and the United Kingdom.

 (Editing by William Hardy)

© Thomson Reuters 2009. All rights reserved.

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