In 2015, our performance was strong, despite the turbulence in global commodity markets and unforeseen production constraints at the Bisha Mine. Production issues – including fuel and power shortages – led to reduced production of copper concentrate. The grade of copper mined was lower than in 2014 however we were successful in reducing operating costs at the time, and selling pyrite sands and other precious metal stockpiles. We continue to advance the construction of the new zinc processing facility, which has been entirely self-funded by cash from operations and is expected to be finished well below budget in 2016.
Our balance sheet remains very healthy; we carry no debt and our financial performance is strong.
Our exploration program was also successful. We continued drilling, and identified exceptionally promising results at both Harena and Asheli. In 2016, we will continue to drill in and around these areas to determine their commercial viability.
These theme for this year’s report is Positive Results. I feel strongly that we are making a significant, positive impact to the country of Eritrea, including the region surrounding the Bisha Mine. Ultimately, we will be measured by maintaining our social license to operate, which is a direct result of our collaborative approach and our ability to produce meaningful value for all of our stakeholders, inside and outside of Eritrea.
Within Eritrea, the Bisha Mine continues to play a pivotal role: in addition to the taxes and other fees that we provide, we are a major employer, and a significant customer to Eritrean suppliers of goods and services. We are a positive force in the country’s overall socio-economic structure, with our strong ethical guidelines, our focus on workplace health and safety, and our corporate objectives of maximizing local benefits wherever possible. We take all necessary steps to ensure that the Bisha Mine operations cause no harm to individuals, communities, wildlife or the environment.
In 2015, in collaboration with Eritrean National Mining Corporation (ENAMCO), we embarked on a second independent human rights impact audit. This thorough study confirmed that we have made significant progress in human rights. It also identified new measures that we should implement as the mine prepares for the transition to zinc production.
Also, in collaboration with ENAMCO, we approved formal training in the Voluntary Principles on Security and Human Rights regarding our security providers, BMSC Security and Binae Security. These principles are designed to guide companies in maintaining the safety and security of their operations in a manner that encourages respect for human rights.
In addition, Nevsun and ENAMCO approved a process to disperse monies made from the Bisha Mine to nearby communities, to support local sustainable infrastructure.
These are only a few of the positive results that come directly from our business principles: we operate a world-class mining operation that adheres to evolving international business practices, as well as follow all Eritrean laws and practices. We believe that we serve as a template for responsible international business practices in Eritrea.
In 2016, we look forward to continued drilling at Bisha, Harena and Asheli, while we move toward commercial production of zinc by mid-2016. We are also seeking growth through diversification: we are actively seeking potential global acquisition opportunities.
On behalf of myself and the Company, I would like to take this opportunity to express my gratitude to our employees, contractors, and the State of Eritrea for supporting our corporate principles of sustainability and transparency.
President and Chief Executive Officer Nevsun Resources Ltd.
May 6, 2016