China Eximbank provides $60 million loan for Phase 2 of of Bisha Gold Mine Project (Linked to Record ID#56386)

Project narrative

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 Record ID#56386 and the China Eximbank loan for Phase 2 is captured in Record 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 — which was later decreased to $840,000,000 and syndicated among a Chinese-majority eleven-lender syndicate on January 9, 2019 (captured via Record ID#93820, ID#93821, ID#93822, ID#93823, ID#93824, ID#93825, ID#93826, ID#93827, and ID#93637). 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 Nevsun Resources Ltd (captured via Record 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.