China Eximbank provides $80 million loan for Phase 1 of Bisha Gold Mine Project (Linked to Project ID#73371)

On October 26, 2007, the state-owned Eritrean National Mining Corporation (ENAMCO) announced that an ownership agreement for the Bisha Gold Mine had been reached with Nevsun Resources Ltd. (“Nevsun”). Under the terms of the agreement, ENAMCO agreed to purchase a 30% ownership stake in the Bisha Mining Share Company (BMSC) from Nevsun Resources Ltd., which with the Government of Eritrea’s 10% free carried interest brought ENAMCO’s total ownership stake in BMSC to 40%. Then, in November 2007, China Eximbank issued an $80 million commercial loan to the Government of Eritrea for Phase 1 of Bisha Gold Mine Project. The proceeds of this loan were use to partially fund ENAMCO’s acquisition of a 30% ownership interest in the Bisha Gold Mine. Then, on July 12, 2010, China Eximbank issued a $60 million follow-on loan to the Government of Eritrea for Phase 2 of the Bisha Gold Mine Project. The loan agreement for Phase 2 was signed by China Eximbank President Li Ruogu and the Eritrean Minister of Finance Berhane Abrehe It is unknown how the proceeds of this loan were used. The China Eximbank loan for Phase 1 is captured in Project ID#56386 and the China Eximbank loan for Phase 2 is captured in Project ID#73371. Construction of the mine began in September 2008 and was completed by 2010. The mine began the commercial production of gold in February 22, 2011, which allowed for an early payback of gold phase capital and allowed for complete funding of both the copper and zinc phase expansions. Then, the mine transitioned from gold production to copper production in late H2 2013 and commenced commercial production of copper in December 2013 and commercial production of zinc in October 2016 following the completion of the zinc expansion project. Then, on August 31, 2018, China Construction Bank Corporation (“CCBC”) issued a binding commitment letter in which it agreed to fully underwrite a $870,000,000 (approximately C$1.1 billion) loan to Gold Mountains (H.K.) International Mining Company Limited — a wholly-owned subsidiary of Zijin Mining — to facilitate the acquisition of a 55% ownership stake in Nevsun Resources Ltd. (captured via Project ID#89500). This loan carried a 5-year maturity and an interest rate of LIBOR plus an unknown margin. Bank of China Limited also committed to provide a credit facility worth up to $660,000,000 (approximately C$834 million) to Zijin Mining to facilitate the acquisition of a 55% ownership stake in Nevsun Resources Ltd (captured via Project ID#89502). Zijin Mining intended to repay all borrowings under the Bank of China loan facility and CCBC loan facility using cash flows from its operations and existing cash on hand. The two principal properties of Nevsun Resources Ltd. were the Timok Project in Serbia, which hosts the copper-gold Cukaru Peki deposit on the Brestovac-Metovnica exploration permit, and the Bisha Project in Eritrea, which hosts the copper-zinc-gold Bisha deposit and includes potential satellite VMS deposits at Harena, Northwest, Hambok and Asheli. Zijin Mining successfully completed its acquisition of a 55% ownership stake in BMSC in September 2018.

Additional details

1. This project is also known as Phase 1 of the Bisha Gold-Copper-Zinc Project. The Chinese project title is 碧沙金矿 or 特碧沙矿 or 为碧沙矿 or 厄碧沙金矿项目 or 碧沙（Bisha）铜金矿项目情况). 2. This loan is not included in the database of Chinese loan commitments that SAIS-CARI released in July 2020. 2. Some older MOFCOM sources refer to the face value of the Phase 1 loan as $60 million. However, a 2018 MOFCOM source and the World Bank’s Debtor Reporting System (DRS) the face value of the Phase 1 loan as $80 million. 3. The World Bank’s Debtor Reporting System (DRS) records the loan commitment year as 2008.

Number of official sources

18

Number of total sources

31