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Zijin Mining Offers to acquire Nevsun Resources, operator of the Cukari Peki exploration project in Bor and Bisha Mine in Eritrea, for 1.41 billion American dollars.

Board of Directors unanimously recommends Nevsun shareholders ACCEPT the Offer, which is still subject to approval by relevant Canadian and Chinese authorities and a minimum tender requirement of 66⅔% of Nevsun’s outstanding shares.

Vancouver, BC, / Fujian, China – Nevsun Resources Ltd. (“Nevsun” or the “Company”) and Zijin Mining Group Co. Ltd. (“Zijin”) today announced that the parties have entered into a definitive agreement pursuant to which Zijin will make a take- over bid to acquire all of the issued and outstanding shares of Nevsun for 6.00 Canadian dollars per share in cash (the “Offer”). The Offer is valued at 1.86 billion Canadian dollars (1.41 billion American dollars).

Nevsun is a leading mid-tier base metals company, operating in Serbia through Rakita Exploration d.o.o. and is developing Cukaru Peki, a world-class copper project in Bor, which is of outstanding value and potential for Serbia. Nevsun also operates the copper-zinc Bisha Mine in Eritrea.

Details of the Offer will be included in a take-over bid circular that Zijin will file and mail to Nevsun shareholders in the coming days, but no later than September 18, 2018. Nevsun shareholders will have an initial period of 105 days to tender their shares. Nevsun’s Board of Directors unanimously recommends that Nevsun shareholders tender their shares to ACCEPT the Offer. Nevsun’s Board of Directors continues to recommend that Nevsun shareholders REJECT the hostile take-over bid launched by Lundin on July 26, 2018 and NOT tender their shares to the Lundin offer, which will expire on November 9, 2018.

The Offer is subject to approval under the Investment Canada Act and the Canadian Competition Act, approval by relevant authorities in China, as well as customary closing conditions. The offer is also contingent on a minimum tender requirement of 66⅔% of Nevsun’s outstanding shares. The definitive agreement provides Zijin with a right to match any competing offer which constitutes a superior proposal.

“This premium transaction is an excellent outcome for our shareholders, and the result of a rigorous and competitive global process to generate maximum value for Nevsun’s outstanding assets,” said Ian Pearce, Chair of Nevsun’s Board of Directors. “The all-cash consideration of 6.00 Canadian dollars per share better reflects the fundamental value of Nevsun’s mining and development assets, while also providing an appropriate change of control premium to our shareholders.”

“Zijin is a proven mining industry operator with a 10 billion American dollars market capitalization and a demonstrated track record of successfully completing international transactions. The Board unanimously recommends that Nevsun shareholders tender their shares to accept this offer and receive the significant value that it represents,” Pearce stated.

Chen Jinghe, Chairman of Zijin, added, “Nevsun is an exceptional operator, with a strong focus on safe, efficient and sustainable mining practices. As the new owner we will continue that focus, and we look forward to working with stakeholders in Serbia and Eritrea to advance these mining and development assets. At the Cukaru Peki Project in Serbia, we intend to rapidly develop the Upper Zone and bring it into production, and continue to advance and define the world-class potential of the Lower Zone.”

The cash consideration of 6.00 Canadian dollars per share represents a premium of 57% over Nevsun’s unaffected closing price of 3.82 Canadian dollars on May 7, 2018, the day Lundin Mining Corporation (“Lundin”) first publicly announced its intention to acquire Nevsun. In addition, the Offer is 1.25 Canadian dollars per Nevsun share, or 26%, more than the 4.75 Canadian dollars per share hostile take-over bid for Nevsun launched by Lundin on July 26, 2018. The Offer is not subject to any financing conditions.

Nevsun’s Board of Directors had previously rejected the hostile bid from Lundin on the grounds that it, among other reasons, ignored the fundamental value of Nevsun’s assets. The Zijin’s Offer is a result of this full strategic alternative review process.

Nevsun’s Board of Directors and the Special Committee concluded that the Offer currently represents the best alternative available to Nevsun and provides Nevsun shareholders with the highest value proposition.

 

About Nevsun Resources Ltd.

Nevsun Resources Ltd. is the 100% owner of the high-grade copper-gold Cukaru Peki (Timok) Upper Zone and 60.4% owner of the Cukaru Peki (Timok) Lower Zone in Serbia. The Cukaru Peki (Timok) Lower Zone is a joint venture with Freeport- McMoRan Exploration Corporation (“Freeport”) which currently owns 39.6% and upon completion of any feasibility study (on the Upper or Lower Zone), Nevsun Resources Ltd. will own 46% and Freeport will own 54%. Nevsun generates cash flow from its 60% owned copper-zinc Bisha Mine in Eritrea. Nevsun is well positioned with a strong debt-free balance sheet to grow shareholder value through advancing Cukaru Peki (Timok) to production.

 

About Zijin Mining Group Co. Ltd.

Formed in 1993, Zijin is based in Fujian, China and is a leading global mining company specializing in gold, copper, zinc and other mineral resource exploration and development. Zijin manages an extensive portfolio, primarily consisting of gold, copper, zinc, and other metals through investments in China and overseas across nine countries. Listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange, Zijin has a market capitalization of approximately 10 billion American dollars.