Eritrea – Nevsun Resources Ltd.

FIR

Justification:
Nevsun, a Canadian mining company, won the rights to mine in Bisha region where there are notable deposits of gold, silver, copper and zinc collectively weighing approximately 20 million tons. The region has never been mined and is located in Eritrea’s Gash Barka region in west-central Eritrea. Nevsun’s plans in Eritrea represent the first steps in the country for active modern mining. The Eritrean National Mining Corporation (ENAMCO) and Nevsun came to agreement with the government purchasing a 40% stake in the Bisha mining project for US$60 million. The capital to purchase equity in the Bisha project came via a soft loan from the China Import-Export Bank. The China Im-Ex Bank signed a US$67.36 million soft loan agreement with the government, which awards Eritrea a loan at a below market-rate of interest. China is also involved in other Eritrean based projects where China will build various technical schools and colleges in Eritrea. Nevsun is a junior size gold producer (relative to its competitors) whose main operations are in Eritrea and Mali. The company’s assets in Eritrea are considerably linked to the company’s projected profits and growth. Moreover, the mining licenses were recently granted to Nevsun by the Ministry of Mining and Energy in January 2008.


Stakeholder size: Mid-size mining company with only two major projects.


Area of influence:
a.) Geographic area – Canadian based mining company with substantial projects in Eritrea and Mali. The company is based in Vancouver, British Columbia.
b.) Population subsets – N/A

Description of Organization
a.) Who are the leaders?
- John A. Clarke (President and CEO)
- Cliff T. Davis (Executive VP and CFO)
- Gerry Gauthier (COO)
- Bill Nielsen (VP Exploration)
- Judy Baker (Investor Relations)
- Pierre Matte (Manager, Mali Project)
- Stan Rogers (Manger, Bisha Project, Eritrea)


b.) How does one gain influence in the group?
People with considerable influence in the company have a background in business, finance and/or engineering and are most likely of Canadian origin. In regards to the Bisha project specifically, the company identifies major stakeholders such as select Eritrean government ministries, agro-pastoralists (who use the Bisha area as pasture) and leaders of the five villages surrounding the Bisha mine area. Nevsun is aiming to hire locals from the neighboring five villages as liaisons to facilitate dialogue with people and help identify social and environmental impacts the mine will have in the region.

c.) What issues do they care about?
The company is private and profit driven. From initial analysis the company operates and undergoes deals and matters that are most feasible considering the company’s size and capacity. Mining exploration is conducted in untapped areas, especially those in Africa are of primary interest to Nevsun.

d.) What does organizational structure look like?
The firm takes on a business approach of top-down where management controls the direction and actions of the firm. The firm’s power to conduct business in Eritrea derives from licenses approved by the Ministry of Mining and the company’s continued relationship with the Ministry.

Financial Resources (if applicable)
The company is publicly traded whereby stocks are traded on the Toronto Stock Exchange and the American Stock Exchange.