Nevsun 2011 Annual Financial Results

VANCOUVER, BRITISH COLUMBIA, Mar 21, 2012 (MARKETWIRE via COMTEX) -- Nevsun Resources Ltd. /quotes/zigman/17687 CA:NSU -4.01% /quotes/zigman/17672/quotes/nls/nsu NSU -3.99% -

2011 HIGHLIGHTS

        
        --  Achieved commercial gold production February 22, 2011
        --  Gold production of 379,000 ounces
        --  Earnings per share of $0.74
        --  Cash cost of $295 per ounce
        --  Declared inaugural dividend, and then increased to $0.05 per share semi-
            annually
        --  Ended year with $347 million in consolidated cash
        
        

Nevsun Resources Ltd. is pleased to report its financial and operating results for 2011. All figures are in United States dollars, unless otherwise indicated.

Annual 2011 Operating Results

In 2011 the Company recorded $548 million in revenues for the year on sales of 369,900 ounces of gold for an average realized price $1,620 per ounce. With 379,000 ounces produced, gold production averaged approximately 1,000 ounces per day with an average cash cost per ounce sold of $295. Since the Bisha Mine commenced operations in 2011, there are no comparative operating results for 2010.

The Company had after-tax income of $250 million for the year (2010 - loss $17 million), which translated to $0.74 earnings per share (2010 - $(0.07)). The Company increased its cash and cash equivalents by $297 million to $347 million (2010 - $50 million). Cash from operating activities for the year was $366 million (2010 - used $6 million).

        
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        Financial results (for a 10 month operating period in 2011):
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        In US $000s (except per
         share data)                 Q4 2011   Q3 2011   Q2 2011   Q1 2011      2011
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        Revenues                   $ 170,868 $ 186,502 $ 136,085 $  54,315 $ 547,770
        Operating income             129,254   146,944   101,947    39,638   417,783
        Net after-tax income          78,336    89,200    60,605    21,893   250,034
        Owners' earnings per share      0.23      0.27      0.18      0.06      0.74
        Total assets               $ 775,226 $ 700,769 $ 480,830 $ 392,717 $ 775,226
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The Bisha Mine achieved commercial production in late February 2011. The annual operating income contains results only from February 22, 2011 to December 31, 2011.

        
        Gold production and sales statistics(1):
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                                     Q4 2011   Q3 2011   Q2 2011   Q1 2011      2011
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        Tonnes milled                455,000   446,000   444,000   461,000 1,806,000
        Gold grade                      8.33      8.45      7.27      6.22      7.55
        Recovery % of gold               88%       89%       89%       88%       88%
        Gold in dore, ounces
         produced                    101,000   110,000    93,000    75,000   379,000
        Gold ounces sold              99,800   108,600    88,700    72,800   369,900
        Gold price realized per
         ounce                     $   1,685 $   1,715 $   1,510 $   1,405 $   1,620
        Cash cost per ounce
         sold(2)                   $     314 $     267 $     305 $     304 $     295
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        (1) Q1 gold production and sales statistics include results from the pre-
            operating period, January 1 - February 21, 2011. For accounting
            purposes, sales from ounces produced prior to February 22, 2011 are
            considered pre-production and capitalized to property, plant and
            equipment.
        (2) Cash operating cost per ounce sold includes royalties and is a non-GAAP
            measure.
        
        

Complete annual consolidated financial statements and management discussion and analysis can be found on the Company's web site at www.nevsun.com as well as on SEDAR at www.sedar.com and EDGAR at www.sec.gov/edgar/searchedgar/webusers.htm .

2011 Exploration and other highlights

The Company's 2011 significant exploration and other highlights were as follows:

        
        --  Applied for a mining license in December 2011 for the Harena deposit,
            situated 9.5 km from Bisha;
        --  Finalized its arrangement with the State owned Eritrean National Mining
            Company (ENAMCO) for the purchase by ENAMCO of a 30% paid participating
            interest in the Bisha Mine, resulting in a gain of $242 million;
        --  Completed a 16,000 metre drill program on the Bisha main deposit that
            includes a drill hole containing 88 meters of 11.8% zinc and 0.8%
            copper; and
        --  Continued the copper phase plant expansion, expending $24 million on
            terracing, other civils works and completing detailed design work.
        
        

2012 Outlook

The Company expects to achieve the following in 2012:

        
        --  Gold production between 190,000 - 210,000 ounces;
        --  Issue an updated resource and reserve statement in late Q2 / early Q3
            that will include: Harena deposit, Bisha hanging wall copper zone, and
            Bisha zinc sub-pit mineralization;
        --  Receive a mining license for and mine the oxide portion of the Harena
            deposit;
        --  Complete a 5,000 metre drill program on the Northwest Zone deposit,
            which sits on the Bisha mining license, and prepare a resource estimate
            for the deposit in late 2012; and
        --  Continue with the $100 million copper phase expansion with a target of
            mid-2013 production.
        
        

Conference call details

The Company will hold a conference call on Thursday, March 22 at 8AM Vancouver / 11AM Toronto, New York / 4PM London, to discuss the quarterly results. Dial in details are as follows:

        
        North America: 416-340-8527 / 1-877-240-9772
        UK: 800-2787-2090 (toll free)
        Other International: +1-416-340-8527