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Nevsun Resources recommends shareholders take no action

Mining News - Published on Thu, 19 Jul 2018

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Nevsun Resources Ltd acknowledged the news release issued by Lundin Mining Corporation stating that it may make a formal offer to acquire Nevsun. Nevsun advises shareholders that no formal offer has yet been made, and recommends that shareholders take no action in response to Lundin's announcement.

Mr Peter Kukielski President & Chief Executive Officer of Nevsun said that "This latest announcement from Lundin continues to ignore the fundamental value of Nevsun and its assets. Despite the progress we have made in enhancing Nevsun's value, Lundin's notional takeover offer represents only a 13% premium to Nevsun's closing trading price of CAD 4.21 per share on the TSX on July 16, 2018, and only a 9.1% premium to the volume weighted average trading price of Nevsun's shares over the 30 days ended July 16, 2018."

Mr Kukielski added that "Since Lundin first expressed interest in Nevsun, we have released a pre-feasibility study for the Timok Upper Zone with an after-tax NAV of USD 1.82 billion, received a critical exploration decline construction permit in February, began construction in May, and in June released an initial inferred resource for the Timok Lower Zone containing 31.5 billion pounds of copper and 9.6 million ounces of gold. At the same time we have extended the mine life at Bisha through 2022, adding 3.3 million tonnes of high-grade ore to the mill, resulting in additional payable production of 470 million pounds of zinc and 52 millions pounds of copper over this time frame. The work we have been doing has also been noticed by several strategic parties that have expressed an interest in participating in the development of Timok."

Nevsun confirms that it has not received any additional information on the proposed offer by Lundin other than what was publicly disclosed in its press release issued on July 16, 2018. The last Lundin expression of interest dated July 3, 2018 re-affirmed its interest in pursuing a transaction at CAD 5.00 per Nevsun share, funded in cash and Lundin shares. Today's publicly announced intent to make an offer is CAD 0.25 per Nevsun share (or 5%) below this latest formal communication.

Should a formal offer be received, the special committee of independent Nevsun directors would consider it with its advisors before making a recommendation to Nevsun's Board of Directors and Nevsun's shareholders. If Lundin makes a formal offer on July 27, 2018 Nevsun shareholders would have a minimum of 105 days, or until November 9, 2018, to respond.

Nevsun reminds shareholders that Lundin has previously made highly conditional confidential non-binding offers to Nevsun but has never presented a binding offer to Nevsun or its shareholders. In spite of this, the Company has, in good faith, openly and continually engaged with Lundin. Consistent with its fiduciary duties, Nevsun's Board of Directors remains open to any transaction that is in the best interest of the Company.

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Posted By : Rabi Wangkhem on Thu, 19 Jul 2018
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