Suncor Energy: Nevsun Resources Ltd.

Nevsun Resources Ltd. - NSU.t operates the flagship Bisha Mine in Eritrea, East Africa. The Bisha deposit is a large, high-grade volcanogenic massive sulphide (VMS) producing Gold, Silver, Copper and Zinc.

Total reserves are about 22mt giving an expected mine life into 2025.

On April 24, 2016 the company released News

Nevsun Resources and Reservoir Minerals Combine and Consolidate Timok Copper Project Ownership

Transaction Highlights

Strategic US$1.1 billion combination creates a diversified mid-tier base metals company
Transaction consolidates a 100% ownership of the high grade upper zone of the Timok Copper Project
Timok development is underpinned by Nevsun's strong balance sheet and operating cash flow
Combined company has significant exploration exposure in two prolific mining districts
Significant benefits to both Nevsun and Reservoir shareholders

Vancouver, British Columbia – Nevsun Resources Ltd. (“Nevsun”) (TSX: NSU) (NYSE MKT: NSU) and Reservoir Minerals Inc. (“Reservoir”) (TSX Venture: RMC) today announced that they have entered into a definitive agreement to combine their respective companies. The combination creates a diversified mid-tier base metals company with a cash producing operating asset in Bisha, a high grade open pit copper-zinc mine, and 100% ownership in the upper zone of the Timok Copper Project in Serbia (“Upper Zone”), a high grade copper and gold development project. The combined company will be well funded with Nevsun’s existing strong balance sheet and operating cash flow and positioned to deliver value via Nevsun’s highly successful development team.
Under the terms of the arrangement agreement announced today, Nevsun has agreed to acquire all of the outstanding common shares, and restricted share units of Reservoir on the basis of two (2) common shares and $0.001 in cash for each Reservoir common share pursuant to a Plan of Arrangement under the British Columbia Business Corporations Act for a total value of approximately US$365 million. Based on the closing price of Nevsun common shares on April 22, 2016, the consideration represents a premium of 35% to Reservoir’s 20-day volume weighted average price (VWAP). The transaction will allow both Reservoir and Nevsun shareholders to participate in the ongoing cash flow generation of the Bisha mine, the growth potential of the Timok Copper Project, and significant exploration potential at both Bisha and Timok. Upon completion of the arrangement, current Nevsun shareholders will own approximately 67% of the combined company and current Reservoir shareholders will own the remaining 33%.

Concurrently, the two companies have also entered into a funding transaction comprised of a private placement for 19.99% of Reservoir’s outstanding common shares and a loan transaction. Nevsun has subscribed for 12,174,928 common shares of Reservoir at a price of C$9.40 per share, for a total subscription price of CAD$114,444,323 (US$90,296,571), increasing Reservoir’s total shares outstanding to 60,905,093, and provided an unsecured cash loan of US$44,703,429 to Reservoir. The combined funding transaction provides US$135,000,000 in financing to enable Global Reservoir Mineral (BVI) Inc. (“Global Reservoir”), a wholly owned subsidiary of Reservoir to exercise its right of first offer (“ROFO”) in respect of its joint venture with Freeport International Holdings (BVI) Inc. (“Freeport”) in the Timok Copper Project. Upon Global Reservoir closing the exercise of the ROFO, Global Reservoir will have a 100% interest in the Upper Zone and a 60.4% interest in the lower zone of the Timok Copper Project (“Lower Zone”) under two joint venture agreements with Freeport and will become the operator of the project. Freeport may increase its ownership in the Lower Zone to 54% under the terms of the original Timok JV agreement, with Global Reservoir holding the remaining 46%. Upon completion of the combination, Global Reservoir will be a wholly owned subsidiary of the combined company.
__________________________________________