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Nevsun copper exploration project Timok Serbia Q1 2018 project update

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In Q1 2018, the Company released the results of the PFS for the Timok Upper Zone copper-gold project in Serbia. The PFS confirmed the extraordinary value of the Timok Project, a high-grade, high return, fully executable copper project in a supportive jurisdiction. The PFS reflected an after-tax NAV8% of CAD 1.8 billion and IRR of 80% at CAD 3.15 per pound copper with a payback period of less than one year based on an initial reserve of 27 million tonnes at 3.3% copper and 2.1 grams per tonne gold.

Extensive work was performed in the quarter on the project implementation schedule in collaboration with the Republic of Serbia to better understand the permitting process and requirements. As a result of this work, the Company gained valuable insights into the permitting regimen in Serbia under the terms of its mining law, and on February 27, 2018 the Company received the exploration decline permit. Through this process the Company acquired knowledge and relationships that will serve the Company well as it moves towards securing additional permits for the Timok Project. The Company is in the process of finalizing the contract tendering process to commence the decline construction activities in Q2 2018. The Company has acquired 100% of the land required for development of the decline and 53% of the required private land for construction of the project as at March 31, 2018.

At the Lower Zone, the Company completed the drilling campaign related to its CAD 20 million work commitment, which continued to demonstrate the impressive copper grade, continuity and thickness of mineralization in the Lower Zone. To date, 84 drill holes have been drilled within the Lower Zone footprint, of which 78 drill holes comprising approximately 90,571 meters have intersected the deposit or its margins. The geometry of the Lower Zone remains to be fully defined, however current dimensions of the mineralized zone are approximately 2,000 metres long by 1,100 metres wide by 1,400 metres high. The mineralization comes to within 700 metres of surface at its south-eastern margin and extends to over 2,200 metres depth to the northwest, where it remains open. Highlighted assays from the final drill holes included 1.00% Cu and 0.20g/t Au (1.14% Cu equivalent) over 556.8 metres starting at 1,310 metres in TC170177 which included 1.45% Cu, 0.32g/t Au (1.67% Cu equivalent) over 177.0 metres. The company will release a Lower Zone resource statement in Q2 2018.

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Regional drilling focused on searching for new high grade Upper Zone-style mineralization. Significant intersections of high sulphidation epithermal mineralization were made approximately 500 metres to the east of the Upper Zone in a 250 by 250 metre area, including hole TC170189 which returned 2.93% copper and 2.54 g/t gold over 27.0 metres at a depth of 396 metres. Follow up drilling will take place in 2018.

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