----

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|   | **NEVSUN RESOURCES LTD.**

Consolidated Financial Statements

Years ended December 31, 2014 and 2013

(Expressed in United States dollars) |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

 

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**MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING**

The accompanying consolidatedfinancial statements of Nevsun Resources Ltd. are the responsibility ofmanagement.

The consolidated financialstatements have been prepared in accordance with International FinancialReporting Standards as issued by the International Accounting StandardsBoard.  These statements include amounts that are based on management’sbest estimates and judgements.  Management has determined such amounts ona reasonable basis in order to ensure that the consolidated financial statementsare presented fairly, in all material respects.  Management is alsoresponsible for ensuring that financial information used elsewhere in annualfilings is consistent with that in the financial statements.

Management is responsible forestablishing and maintaining a system of internal control over financialreporting.  Any system of internal control over financial reporting, no matterhow well designed, has inherent limitations.  Accordingly, our system ofinternal control over financial reporting provides management with reasonableassurance that the financial information is relevant, reliable and accurate andthat the Company’s assets are appropriately accounted for and adequatelysafeguarded.

The Board of Directors isresponsible for ensuring that management fulfills its responsibilities forfinancial reporting and internal control, and exercises this responsibilitythrough the Audit Committee.  The Audit Committee consists of threedirectors all of whom are independent.  This Committee meets periodicallywith management, as well as the external auditors, to satisfy itself that eachparty is properly discharging its responsibilities, and to review the quarterlyand annual consolidated financial statements and submit them to the Board ofDirectors; review the adequacy of the system of internal controls; review anyrelevant accounting, financial and security regulatory matters; recommend theappointment of external auditors; and approve the scope of the internal andexternal auditors' audit and non-audit work.  

The Company’s auditors, KPMGLLP, Registered Public Accountants, appointed by the shareholders, conduct anexamination in accordance with Canadian generally accepted auditing standardsand standards of the Public Company Accounting Oversight Board (United States)to allow them to express their opinion on the financial statements and oursystem of internal control over financial reporting.  The auditors have fulland free access to the Audit Committee and their reports are included herein.

*“Cliff T. Davis”*Cliff T. DavisChiefExecutive Officer

*“Tom Whelan”*Tom WhelanChiefFinancial Officer

February25, 2015

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|   | **KPMG LLP      Chartered Accountants**      PO Box 10426 777 Dunsmuir Street      Vancouver BC V7Y 1K3      Canada | Telephone  (604)  691-3000      Fax              (604)  691-3031      Internet     www.kpmg.ca |
|--------|---------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**INDEPENDENT  AUDITORS’ REPORT OFREGISTERED PUBLIC ACCOUNTING FIRM**

 To the Shareholders and Directors of Nevsun Resources Ltd. 

 We have audited the accompanying consolidated financial  statements of Nevsun Resources Ltd., which comprise the consolidated balance  sheets as at December 31, 2014 and December 31, 2013, and the  consolidated statements of comprehensive income, changes in equity, and cash  flows for the years then ended, and notes, comprising a summary of  significant accounting policies and other explanatory information. 

*Management's Responsibility for the Consolidated Financial  Statements*

 Management is responsible for the preparation and fair  presentation of these consolidated financial statements, in accordance with  International Financial Reporting Standards as issued by the International  Accounting Standards Board, and for such internal control as management  determines is necessary to enable the preparation of consolidated financial  statements that are free from material misstatement, whether due to fraud or  error. 

*Auditors’ Responsibility*

 Our responsibility is to express an opinion on these  consolidated financial statements based on our audits. We conducted our  audits in accordance with Canadian generally accepted auditing standards and  the standards of the Public Company Accounting Oversight Board (United  States). Those standards require that we comply with ethical requirements and  plan and perform the audit to obtain reasonable assurance about whether the  consolidated financial statements are free from material misstatement. 

 An audit involves performing procedures to obtain audit  evidence about the amounts and disclosures in the consolidated financial  statements. The procedures selected depend on our judgment, including the  assessment of the risks of material misstatement of the consolidated financial  statements, whether due to fraud or error. In making those risk assessments,  we consider internal control relevant to the entity's preparation and fair  presentation of the consolidated financial statements in order to design  audit procedures that are appropriate in the circumstances. An audit also  includes evaluating the appropriateness of accounting policies used and the  reasonableness of accounting estimates made by management, as well as  evaluating the overall presentation of the consolidated financial statements. 

 We believe that the audit evidence we have obtained in our  audits is sufficient and appropriate to provide a basis for our audit  opinion.  

|   | KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG      network of independent member firms affiliated with KPMG International Cooperative      (“KPMG International”), a Swiss entity.      KPMG Canada provides services to KPMG LLP |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Nevsun Resources Ltd.   Page 2*

*Opinion*

 In our opinion, the  consolidated financial statements present fairly, in all material respects,  the consolidated financial position of Nevsun Resources Ltd. as at December  31, 2014 and December 31, 2013, and its consolidated financial  performance and its consolidated cash flows for the years then ended, in  accordance with International Financial Reporting Standards as issued by the  International Accounting Standards Board. 

*Other Matter*

 We also have audited, in accordance with the standards of  the Public Company Accounting Oversight Board (United States), the Company’s  internal control over financial reporting as of December 31, 2014, based on the  criteria established in Internal Control – Integrated Framework  (2013) issued by the Committee of Sponsoring Organizations of the Treadway  Commission (COSO), and our report dated February 25, 2015 expressed an  unqualified opinion on the effectiveness of the Company’s internal control  over financial reporting. 

**//s//  KPMG  LLP**

 Chartered  Accountants 

 February 25,  2015  Vancouver,  Canada

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|   | **KPMG LLP      Chartered Accountants**      PO Box 10426 777 Dunsmuir Street      Vancouver BC V7Y 1K3      Canada | Telephone  (604)  691-3000      Fax              (604)  691-3031      Internet     www.kpmg.ca |
|--------|---------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**REPORT OF  INDEPENDENT REGISTERED   PUBLIC ACCOUNTING FIRM**

 To  the Shareholders and Directors of Nevsun Resources Ltd. 

 We have audited  Nevsun Resources Ltd.’s (the “Company”) internal control over financial  reporting as of December 31, 2014, based on the**criteria  established in**Internal Control – Integrated Framework (2013) issued  by the Committee of Sponsoring Organizations of the Treadway Commission  (“COSO”). The Company’s management is responsible for maintaining effective  internal control over financial reporting and for its assessment of the  effectiveness of internal control over financial reporting, under the heading *Changes in Internal Control over Financial Reporting* included in the  accompanying Management’s Discussion and Analysis. Our responsibility is to  express an opinion on the Company’s internal control over financial reporting  based on our audit. 

 We conducted our  audit in accordance with the standards of the Public Company Accounting  Oversight Board (United States). Those standards require that we plan and  perform the audit to obtain reasonable assurance about whether effective  internal control over financial reporting was maintained in all material  respects. Our audit included obtaining an understanding of internal control  over financial reporting, assessing the risk that a material weakness exists,  and testing and evaluating the design and operating effectiveness of internal  control based on the assessed risk. Our audit also included performing such  other procedures as we considered necessary in the circumstances. We believe  that our audit provides a reasonable basis for our opinion. 

 A Company’s  internal control over financial reporting is a process designed to provide  reasonable assurance regarding the reliability of financial reporting and the  preparation of financial statements for external purposes in accordance with  generally accepted accounting principles. A Company’s internal control over  financial reporting includes those policies and procedures that:   (1) pertain to the maintenance of records that, in reasonable detail,  accurately and fairly reflect the transactions and dispositions of the assets  of the Company; (2) provide reasonable assurance that transactions are  recorded as necessary to permit preparation of financial statements in  accordance with generally accepted accounting principles, and that receipts  and expenditures of the company are being made only in accordance with  authorizations of management and directors of the company; and  (3) provide reasonable assurance regarding prevention or timely detection  of unauthorized acquisition, use, or disposition of the Company’s assets that  could have a material effect on the financial statements. 

|   | KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG       network of independent member firms affiliated with KPMG International Cooperative        (“KPMG International”), a Swiss entity.        KPMG Canada provides services to KPMG LLP |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Nevsun Resources Ltd.   Page 2*

Because of its  inherent limitations, internal control over financial reporting may not  prevent or detect misstatements. Also, projections of any evaluation of  effectiveness to future periods are subject to the risk that controls may  become inadequate because of changes in conditions, or that the degree of  compliance with the policies or procedures may deteriorate. 

 In our opinion, the  Company maintained, in all material respects, effective internal control over  financial reporting as of December 31, 2014, based on the criteria  established in Internal Control – Integrated Framework (2013) issued by the  Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). 

 We also have  audited, in accordance with the standards of the Public Company Accounting  Oversight Board (United States), the consolidated balance sheets of Nevsun  Resources Ltd. as of December 31, 2014 and 2013, and the related  consolidated statements of comprehensive income, changes in equity and cash  flows for the years then ended, and our report dated February 25, 2015  expressed an unqualified opinion on those consolidated financial statements. 

**//s//   KPMG LLP**

 Chartered  Accountants  February  25, 2015

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| **NEVSUN RESOURCES LTD.**Consolidated Balance Sheets      (Expressed in thousands of United States dollars) |
|-------------------------------------------------------------------------------------------------------------|

|                                                                     | Note   |   | December 31,2014 |   |   | December 31,2013 |   |
|--------------------------------------------------------------------------|--------|--------|------------------|--------|--------|------------------|--------|
|                                                                     |   |   |                  |   |   |                  |   |
| **Assets**                                                               |   |   |                  |   |   |                  |   |
|                                                                     |   |   |                  |   |   |                  |   |
| Current assets                                                           |   |   |                  |   |   |                  |   |
|      Cash and cash equivalents                  | 6      | $      | 442,418          |   | $      | 302,724          |   |
|      Accounts receivable and prepaids           | 7      |   | 32,188           |   |   | 57,180           |   |
|      Inventories                                | 8      |   | 86,851           |   |   | 61,024           |   |
|      Due from non-controlling interest          | 9      |   | 21,211           |   |   | 46,691           |   |
|                                                                     |   |   | 582,668          |   |   | 467,619          |   |
| Non-current assets                                                       |   |   |             |   |   |             |   |
|      Due from non-controlling interest          | 9      |   | 27,272           |   |   | 36,503           |   |
|      Account receivable                         | 7      |   | 1,087            |   |   | 2,573            |   |
|      Inventories                                | 8      |   | 14,819           |   |   | 6,841            |   |
|      Mineral properties, plant and equipment    | 10     |   | 360,840          |   |   | 357,324          |   |
|                                                                     |   |   | 404,018          |   |   | 403,241          |   |
| Total assets                                                             |   | $      | 986,686          |   | $      | 870,860          |   |
|                                                                     |   |   |             |   |   |             |   |
| **Liabilities and equity**                                               |   |   |             |   |   |             |   |
|                                                                     |   |   |             |   |   |             |   |
| Current liabilities                                                      |   |   |             |   |   |             |   |
|      Accounts payable and accrued liabilities   | 11     | $      | 54,169           |   | $      | 30,787           |   |
|      Dividends payable                          |   |   | 7,986            |   |   | 13,943           |   |
|      Income taxes payable                       |   |   | 533              |   |   | 3,832            |   |
|                                                                     |   |   | 62,688           |   |   | 48,562           |   |
|                                                                     |   |   |             |   |   |             |   |
| Non-current liabilities                                                  |   |   |             |   |   |             |   |
|      Deferred income taxes                      | 12     |   | 56,906           |   |   | 30,188           |   |
|      Provision for mine closure and reclamation | 13     |   | 34,196           |   |   | 23,614           |   |
|                                                                     |   |   | 91,102           |   |   | 53,802           |   |
| Total liabilities                                                        |   |   | 153,790          |   |   | 102,364          |   |
|                                                                     |   |   |             |   |   |             |   |
| Equity                                                                   |   |   |             |   |   |             |   |
|      Share capital                              | 14     |   | 407,359          |   |   | 405,979          |   |
|      Share-based payments reserve               |   |   | 16,202           |   |   | 14,843           |   |
|      Retained earnings                          |   |   | 253,035          |   |   | 187,795          |   |
|      Equity attributable to Nevsun shareholders |   |   | 676,596          |   |   | 608,617          |   |
|                                                                     |   |   |             |   |   |             |   |
|      Non-controlling interest                   |   |   | 156,300          |   |   | 159,879          |   |
| Total equity                                                             |   |   | 832,896          |   |   | 768,496          |   |
| Total liabilities and equity                                             |   | $      | 986,686          |   | $      | 870,860          |   |

Commitments and contingencies (notes 19, 24)                  

The accompanying notes form an integral part of  these consolidated financial statements.   

|                               |
|------------------------------------|
| Approved on behalf of the Board:   |
| ***"Robert J. Gayton***" |   | Director |   | ***"R. Stuart Angus"*** |   | Director |
| Robert J. Gayton                   |   |   |   | R. Stuart Angus |   |   |

2

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| **NEVSUN RESOURCES LTD.**Consolidated Statements of Comprehensive Income      (Expressed in thousands of United States dollars, except per share amounts)      Years ended December 31, 2014 and 2013 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                     | Note   |   | 2014     |   |   | 2013    |   |
|----------------------------------------------------------|--------|--------|----------|--------|--------|---------|--------|
|                                                     |   |   |          |   |   |         |   |
| Revenues                                                 | 16     | $      | 555,012  |   | $      | 155,698 |   |
| Cost of sales                                            |   |   |     |   |   |    |   |
|      Operating expenses         | 17     |   | (194,522 | )      |   | (62,848 | )      |
|      Royalties                  |   |   | (25,072  | )      |   | (8,070  | )      |
|      Depreciation and depletion | 10     |   | (40,081  | )      |   | (13,385 | )      |
| Operating income                                         |   |   | 295,337  |   |   | 71,395  |   |
|                                                     |   |   |     |   |   |    |   |
| Administrative expenses                                  | 18     |   | (17,363  | )      |   | (14,537 | )      |
| Finance income                                           | 9      |   | 2,974    |   |   | 3,464   |   |
| Finance costs                                            | 13     |   | (1,906   | )      |   | (882    | )      |
| Income before taxes                                      |   |   | 279,042  |   |   | 59,440  |   |
|                                                     |   |   |     |   |   |    |   |
| Income taxes                                             | 12     |   | (112,477 | )      |   | (30,186 | )      |
| Net income and comprehensive income                      |   | $      | 166,565  |   | $      | 29,254  |   |
|                                                     |   |   |     |   |   |    |   |
| Net income and comprehensive income attributable to:     |   |   |     |   |   |    |   |
|      Nevsun shareholders        |   | $      | 93,394   |   | $      | 12,857  |   |
|      Non-controlling interest   |   |   | 73,171   |   |   | 16,397  |   |
|                                                     |   | $      | 166,565  |   | $      | 29,254  |   |
|                                                     |   |   |     |   |   |    |   |
| Earnings per share attributable to Nevsun shareholders:  | 14     |   |     |   |   |    |   |
|      Basic                      |   | $      | 0.47     |   | $      | 0.06    |   |
|      Diluted                    |   | $      | 0.47     |   | $      | 0.06    |   |

The accompanying notes form an integral part  of these consolidated financial statements.   

3

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| **NEVSUN RESOURCES LTD.**Consolidated Statements of Cash Flows      (Expressed in thousands of United States dollars)      Years ended December 31, 2014 and 2013 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                      | Note   |   | 2014    |   |   | 2013     |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|----------|--------|
| Operating activities                                                                                      |   |   |         |   |   |          |   |
| Net income                                                                                                |   | $      | 166,565 |   | $      | 29,254   |   |
| Items not involving the use of cash                                                                       |   |   |    |   |   |     |   |
|      Depreciation and depletion                                                  |   |   | 40,125  |   |   | 13,436   |   |
|      Income taxes                                                                |   |   | 112,477 |   |   | 30,186   |   |
|      Share based compensation                                                    | 14     |   | 2,208   |   |   | 3,137    |   |
|      Interest income on due from non-controlling  interest                       | 9      |   | (2,621  | )      |   | (3,314   | )      |
|      Provision for inventory obsolescence                                        |   |   | 2,094   |   |   | 2,808    |   |
|      Other                                                                       |   |   | (149    | )      |   | 615      |   |
|                                                                                                      |   |   |    |   |   |     |   |
|                                                                                                      |   |   | 320,699 |   |   | 76,122   |   |
| Changes in non-cash operating capital                                                                     |   |   |    |   |   |     |   |
|      Accounts receivable and prepaids                                            |   |   | (8,977  | )      |   | 12,617   |   |
|      Inventories                                                                 |   |   | (30,865 | )      |   | (25,459  | )      |
|      Accounts payable and accrued liabilities                                    |   |   | 25,623  |   |   | 12,892   |   |
|                                                                                                      |   |   |    |   |   |     |   |
| Cash generated from operating activities                                                                  |   |   | 306,480 |   |   | 76,172   |   |
|      Income taxes paid                                                           | 12     |   | (88,983 | )      |   | (60,484  | )      |
|                                                                                                      |   |   |    |   |   |     |   |
| Net cash provided by operating activities                                                                 |   |   | 217,497 |   |   | 15,688   |   |
|      Investing activities                                                        |   |   |    |   |   |     |   |
|      Expenditures on mineral properties, plant and  equipment                    |   |   | (55,118 | )      |   | (133,423 | )      |
|      Pre-commercial production copper sales receipts                             |   |   | 50,936  |   |   | 71,255   |   |
|      Loan to supplier                                                            |   |   | (2,200  | )      |   | (7,000   | )      |
|      Changes in non-cash working capital related to  investing activities        |   |   | 2,124   |   |   | (38      | )      |
|                                                                                                      |   |   |    |   |   |     |   |
| Net cash used in investing activities                                                                     |   |   | (4,258  | )      |   | (69,206  | )      |
| Financing activities                                                                                      |   |   |    |   |   |     |   |
|      Dividends paid to Nevsun shareholders                                       |   |   | (34,770 | )      |   | (23,880  | )      |
|      Distributions to non-controlling interest                                   |   |   | (76,750 | )      |   | -        |   |
|      Amounts repaid by (loaned to) non-controlling  interest, including interest | 9      |   | 37,332  |   |   | (16,750  | )      |
|      Issuance of common shares, net of issue costs                               | 14     |   | 643     |   |   | 468      |   |
|                                                                                                      |   |   |    |   |   |     |   |
| Net cash used in financing activities                                                                     |   |   | (73,545 | )      |   | (40,162  | )      |
| Increase (decrease) in cash and cash  equivalents                                                         |   |   | 139,694 |   |   | (93,680  | )      |
| Cash and cash equivalents, beginning of year                                                              |   |   | 302,724 |   |   | 396,404  |   |
| Cash and cash equivalents, end of year                                                                    |   | $      | 442,418 |   | $      | 302,724  |   |

Supplementary  cash flow information (note 6  )

The accompanying notes form an integral part of these  consolidated financial statements.   

4

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| **NEVSUN RESOURCES LTD.**Consolidated Statements of Changes in Equity       (Expressed in thousands of United States dollars)       Years ended December 31, 2014 and 2013 |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                             |   | Number ofshares(note 14) |   |   | Share capital(note 14) |   |   | Share-basedpaymentsreserve |   |   | Retainedearnings |   |   | Equity attributable to Nevsun shareholders |   |   | Non-controllinginterest |   |   | Totalequity |   |
|--------------------------------------------------|--------|--------------------------|--------|--------|------------------------|--------|--------|----------------------------|--------|--------|------------------|--------|--------|--------------------------------------------|--------|--------|-------------------------|--------|--------|-------------|--------|
| December 31, 2012                                |   | 198,982,815              |   | $      | 404,960                |   | $      | 13,145                     |   | $      | 201,698          |   | $      | 619,803                                    |   | $      | 143,482                 |   | $      | 763,285     |   |
| Exercise of stock options                        |   | 325,000                  |   |   | 468                    |   |   | -                          |   |   | -                |   |   | 468                                        |   |   | -                       |   |   | 468         |   |
| Transfer to share capital on exercise of options |   | -                        |   |   | 551                    |   |   | (24                        | )      |   | -                |   |   | 527                                        |   |   | -                       |   |   | 527         |   |
| Transfer on forfeiture of vested options         |   | -                        |   |   | -                      |   |   | (1,113                     | )      |   | 1,113            |   |   | -                                          |   |   | -                       |   |   | -           |   |
| Return to treasury of fractional shares          |   | (13                      | )      |   | -                      |   |   | -                          |   |   | -                |   |   | -                                          |   |   | -                       |   |   | -           |   |
| Share-based payments                             |   | -                        |   |   | -                      |   |   | 2,835                      |   |   | -                |   |   | 2,835                                      |   |   | -                       |   |   | 2,835       |   |
| Income for the year                              |   | -                        |   |   | -                      |   |   | -                          |   |   | 12,857           |   |   | 12,857                                     |   |   | 16,397                  |   |   | 29,254      |   |
| Dividends declared                               |   | -                        |   |   | -                      |   |   | -                          |   |   | (27,873          | )      |   | (27,873                                    | )      |   | -                       |   |   | (27,873     | )      |
| December 31, 2013                                |   | 199,307,802              |   | $      | 405,979                |   | $      | 14,843                     |   | $      | 187,795          |   | $      | 608,617                                    |   | $      | 159,879                 |   | $      | 768,496     |   |
| Exercise of stock options                        |   | 345,000                  |   |   | 1,327                  |   |   | -                          |   |   | -                |   |   | 1,327                                      |   |   | -                       |   |   | 1,327       |   |
| Transfer to share capital on exercise of options |   | -                        |   |   | 53                     |   |   | (53                        | )      |   | -                |   |   | -                                          |   |   | -                       |   |   | -           |   |
| Transfer on forfeiture of vested options         |   | -                        |   |   | -                      |   |   | (774                       | )      |   | 774              |   |   | -                                          |   |   | -                       |   |   | -           |   |
| Share-based payments                             |   | -                        |   |   | -                      |   |   | 2,186                      |   |   | -                |   |   | 2,186                                      |   |   | -                       |   |   | 2,186       |   |
| Income for the year                              |   | -                        |   |   | -                      |   |   | -                          |   |   | 93,394           |   |   | 93,394                                     |   |   | 73,171                  |   |   | 166,565     |   |
| Dividends declared                               |   | -                        |   |   | -                      |   |   | -                          |   |   | (28,928          | )      |   | (28,928                                    | )      |   | -                       |   |   | (28,928     | )      |
| Distributions to non-controlling interest        |   | -                        |   |   | -                      |   |   | -                          |   |   | -                |   |   | -                                          |   |   | (76,750                 | )      |   | (76,750     | )      |
| December 31, 2014                                |   | 199,652,802              |   | $      | 407,359                |   | $      | 16,202                     |   | $      | 253,035          |   | $      | 676,596                                    |   | $      | 156,300                 |   | $      | 832,896     |   |

The accompanying notes form an integral part of these  consolidated financial statements.   

5

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **1.** | **Description of business and nature of    operations** |
|--------|---------------------------------------------------------|

|   | Nevsun Resources Ltd. and its subsidiaries   (collectively, Nevsun or the Company) are engaged in the acquisition,   exploration, development and operation of mineral property interests.  Nevsun   is a public company which is listed on the TSX and the NYSE MKT LLC, under   the trading symbol “NSU”.  Nevsun was incorporated under the laws of the   Province of British Columbia under the Company Act (British Columbia), is   currently governed by the Business Corporations Act (British Columbia) and   maintains its head office at Suite 760 – 669 Howe Street, Vancouver, British   Columbia, Canada, V6B 0C4 and its registered and records office at 1000 – 840   Howe Street, Vancouver, British Columbia, Canada, V6Z 2M1 and its website   address is www.nevsun.com. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company’s principal operation is   the Bisha Mine, owned via the Eritrean registered corporation, Bisha Mining   Share Company (BMSC or the Bisha Mine), in which Nevsun has a 60% interest.   The remaining 40% ownership in BMSC is owned by the State-owned Eritrean   National Mining Corporation (ENAMCO), representing a non-controlling   interest.  The Bisha Mine is a gold, copper and zinc deposit.  Mining of the   gold oxide phase began in 2010 and was substantially completed by the end of   the second quarter of 2013.  Commissioning of the copper flotation   plant at the Bisha Mine commenced in late June 2013.  On   December 1, 2013, the Company determined the commissioning phase of the   copper expansion had been completed as the copper plant and facilities were   operating in the manner intended by management.  Mining of the supergene   copper ore is expected to continue until early 2016 at which time the Bisha   Mine plans to begin to process ore from the primary phase.  The primary phase   ore contains a significant amount of zinc and copper.  Construction of the   zinc plant began in 2014 with the zinc plant scheduled for commissioning in the   first half of 2016. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The consolidated financial statements of Nevsun for the   year ended December 31, 2014, were reviewed by the Audit Committee and   approved and authorized for issue by the Board of Directors on February 25,   2015. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **2.** | **Basis of preparation** |
|--------|--------------------------|

|   | These consolidated financial statements have been   prepared in accordance with International Financial Reporting Standards   (IFRS) as issued by the International Accounting Standards Board (IASB). |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | These consolidated financial statements have been   prepared on a historical cost basis except for derivative financial   instruments which have been measured at fair value.  These consolidated   financial statements are presented in US dollars and all values are rounded   to the nearest thousand, except where otherwise noted. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The significant accounting policies are presented in   Note 3 and have been applied consistently in each of the periods presented.    The critical judgements in applying accounting policies and sources of   estimation are presented in Note 5. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.** | **Summary of significant accounting policies** |
|--------|------------------------------------------------|

|   | (a) | Principles of consolidation |
|--------|-----|-----------------------------|

|   | These consolidated financial statements include the   accounts of the Company and its subsidiaries.  Subsidiaries are entities   controlled by the Company.  Control over a subsidiary is defined to exist   when the Company is exposed to variable returns from involvement with an   investee and has the ability to affect the returns through power over the   investee.  Power over an investee exists when the Company has existing rights   which gives it the ability to direct the activities that significantly affect   the investee’s returns.  This control is generally evidenced through owning   more than 50% of the voting rights of the subsidiary.  All intercompany   transactions and balances are eliminated on consolidation.  For subsidiaries   that the Company controls but does not own 100% of, the interest attributable   to non-controlling shareholders is reflected in non-controlling interest.  Adjustments   to non-controlling interests are accounted for as transactions with owners   and adjustments that do not involve the loss of control are based on a   proportionate amount of the net assets of the subsidiary. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

6

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.** | **Summary of significant accounting policies  (continued)** |
|--------|-------------------------------------------------------------|

|   | (a) | Principles   of consolidation (continued) |
|--------|-----|-------------------------------------------|

|   | Significant subsidiaries of Nevsun Resources Ltd. are as follows: |
|--------|-------------------------------------------------------------------|

|   |                             |                     |               | Nevsun’s effective interest |
|--------|----------------------------------|--------------------------|--------------------|-----------------------------------|
|   | Name                             | Country of incorporation | Principal activity | (%)                               |
|   |                             |                     |               |                              |
|   | Nevsun  (Barbados) Holdings Ltd. | Barbados                 | Holding company    | 100                               |
|   | Nevsun Africa  (Barbados) Ltd.   | Barbados                 | Holding company    | 100                               |
|   | Nevsun Resources  (Eritrea) Ltd. | Barbados                 | Holding company    | 100                               |
|   | Bisha Mining  Share Company      | Eritrea                  | Mining             | 60                                |

|   | (b) | Foreign currency translation |
|--------|-----|------------------------------|

|   | The functional and reporting currency   of the Company and all its subsidiaries is the United States dollar.    Transactions in currencies other than the functional currency are recorded at   the rate of exchange prevailing on the date of the transaction.  Monetary   assets and liabilities that are denominated in foreign currencies are   translated at the rate prevailing at each reporting date.  Non-monetary   assets and liabilities denominated in foreign currencies that are measured at   fair value are retranslated to the functional currency at the exchange rate   at the date the fair value was determined.  Non-monetary items that are   measured at historical cost in a foreign currency are translated at the   exchange rate on the date of the transaction.  Foreign currency translation   differences are recognized in profit or loss. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Revenue recognition and trade receivables |
|--------|-----|-------------------------------------------|

|   | The Company includes proceeds from the   sale of product, including by-product, in revenue.  Revenue is recognized   when the transfer of title and the risk and rewards of ownership pass to the   customer provided that collection is reasonably assured, the price can be   reliably measured, the Company has no significant continuing involvement and   the costs incurred or to be incurred in respect of the transaction can be   reliably measured. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | All sales are completed in the form of   executed sales agreements where final prices are determined by quoted market   prices on a date subsequent to the date of sale.  Revenue is recorded on a   provisional basis based on current market prices on the date of sale.    Adjustments are made to the sale price based on movements in quoted market   prices up to the date of final pricing.  The adjustment mechanism in these   sales agreements is considered an embedded derivative.  The fair value of the   final sales price adjustment is adjusted each reporting period by reference   to forward market prices and the changes in fair value are recorded as an   adjustment to revenue.  Any subsequent variations in the final determination   of metal concentrate weight and metal content are also recognized as revenue   adjustments. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Revenues received are net of treatment   and refining charges. |
|--------|----------------------------------------------------------------|

|   | (d) | Inventories |
|--------|-----|-------------|

|   | Inventories include materials and   supplies, work-in-progress and finished goods, and are valued at the lower of   weighted average cost and net realizable value.  Average costs are calculated   by reference to the cost levels experienced in the current month together   with those in opening inventory.  Cost for materials and supplies includes purchase   price and freight, and cost for work-in-progress and finished goods are the   costs of production.  For this purpose, the costs of production include: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | fuel, power, labour costs, materials and contractor expenses which   are directly attributable to the extraction and processing of ore; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | the depreciation of mineral properties and plant and equipment   used in the extraction and processing of ore; and |
|--------|------|--------------------------------------------------------------------------------------------------------------------|

|   | (iii) | production   overheads. |
|--------|-------|-------------------------|

7

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.** | **Summary of significant accounting policies  (continued)** |
|--------|-------------------------------------------------------------|

|   | (d) | Inventories (continued) |
|--------|-----|-------------------------|

|   | Work-in-progress inventory includes ore   stockpiles and other partly processed material.  Stockpiles represent ore   that has been extracted and is available for further processing.  Quantities   are assessed primarily through surveys and assays.  The non-current portion   of ore in stockpiles consists of oxide ore and primary ore not expected to be   processed in the next twelve months, and pyrite sand which may not be   monetized in the next twelve months. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Write-downs of inventories to net   realizable value and all losses of inventories are recognized as an expense   in the period in which the write-down or loss occurred. Such write-downs are   reversed in the event that there is a subsequent increase in the net   realizable value of the inventory. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Mineral properties, plant and equipment |
|--------|-----|-----------------------------------------|

|   | (i) | Exploration and evaluation |
|--------|-----|----------------------------|

|   | Once the legal rights to explore an area have been   secured, expenditures on exploration and evaluation activities are   capitalized to exploration and evaluation, and are included within mineral   properties, plant and equipment. Costs incurred prior to the   Company obtaining the legal rights are expensed.  Exploration   expenditures relate to the initial search for deposits with economic   potential and to detailed assessments of deposits or other projects that have   been identified as having economic potential.  Obligations   for removal and restoration as a result of undertaking the exploration and   evaluation are capitalized.  Management reviews the carrying value of   capitalized exploration costs at least annually.  The review is based on the   Company’s intentions for further exploration and development of the   undeveloped property.  Subsequent recovery of the resulting carrying value   depends on successful development or sale of the undeveloped project.  If a   project does not prove viable, all irrecoverable costs associated with the   project, net of any previous impairment provisions, are written off. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Development and construction in progress |
|--------|------|------------------------------------------|

|   | When economically viable reserves have been determined   and the decision to proceed with development has been approved, exploration and evaluation assets are first assessed for   impairment, then reclassified to construction-in-progress or mineral   properties.  The expenditures related to development and construction   are capitalized as construction-in-progress and are included within mineral properties,   plant and equipment.  Costs associated with the commissioning of new assets   incurred before they are operating in the way intended by management,   including directly attributable costs of testing, are capitalized.    Development expenditures are net of the proceeds of the sale of metals from   ore extracted during this phase.  When developed or   constructed assets are operating in the way intended by management,   construction-in-progress costs are reclassified to mineral properties or plant   and equipment. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The costs of removing overburden to access ore are   capitalized as pre-production stripping costs and are included within mineral   properties, plant and equipment. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Plant and equipment |
|--------|-------|---------------------|

|   | Plant and equipment is carried at cost,   less accumulated depreciation and accumulated impairment losses.  Cost   comprises the fair value of consideration given to acquire or construct an   asset and includes the direct charges associated with bringing the asset to   the location and condition necessary for putting it into use, along with the   future cost of dismantling and removing the asset. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | When parts of an item of plant and equipment have   different useful lives, they are accounted for as separate items, i.e. major   components, of plant and equipment. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

8

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.** | **Summary of significant accounting policies  (continued)** |
|--------|-------------------------------------------------------------|

|   | (e) | Mineral properties,   plant and equipment (continued) |
|--------|-----|-------------------------------------------------------|

|   | (iii) | Plant and equipment (continued) |
|--------|-------|---------------------------------|

|   | The cost of major overhauls of parts of plant and   equipment is recognized in the carrying amount of the item if it is probable   that the future economic benefits embodied within the part will flow to the   Company, and its cost can be measured reliably.  The carrying amount of the   replaced part is derecognized.  The costs of the routine servicing of plant   and equipment are recognized in profit or loss as incurred. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | Lease   arrangements |
|--------|------|----------------------|

|   | Leases that transfer substantially all of the benefits   and risks incidental to the ownership of property to the Company are   accounted for as finance leases. Assets under finance lease are originally   capitalized at the lower of the fair market value of the leased property and   the net present value of the minimum lease payments. Each lease payment is   allocated between the finance lease obligation and finance charge. The plant   and equipment acquired under finance lease is depreciated over the shorter of   the asset’s useful life and the lease term. All other leases are accounted   for as operating leases wherein rental payments are expensed as incurred.   Where a lease is prepaid, the obligation is offset against the prepayment. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company has entered into arrangements that are in   substance leasing arrangements and have been accounted for in accordance with   this policy. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | Depreciation and depletion |
|--------|-----|----------------------------|

|   | Mineral properties, plant and equipment   associated with mining operations are depreciated over the estimated useful   lives of the assets on a units-of-production basis or on a declining balance   basis at rates of 5% to 33% per annum, as appropriate.  All other equipment   is depreciated on a declining balance basis at rates of 5% to 33%, as   appropriate.  Depreciation methods and useful lives are reviewed at each   reporting date and adjusted as required. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | Stripping costs in the production phase |
|--------|------|-----------------------------------------|

|   | Where production stripping activity   does not result in inventory produced, but does provide improved access to   the ore body, the costs are deferred when the stripping activity meets the   following criteria: (1) it is probable that the future economic benefit   associated with the stripping activity will flow to the Company; (2) the   Company can identify the component of the ore body for which access has been   improved; and (3) the costs relating to the stripping activity associated   with that component can be measured reliably.  Deferred stripping costs are   capitalized to mineral properties or construction-in-progress and are   depreciated on a units-of-production basis over the expected useful life of   the identified component of the ore body to which access has been improved as   a result of the stripping activity. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | Impairment of non-financial assets |
|--------|-------|------------------------------------|

|   | Non-financial assets are evaluated at the end of each   reporting period by management for indicators that carrying value is impaired   and may not be recoverable.  When indicators of impairment are present, the   recoverable amount of an asset is evaluated at the level of a cash generating   unit (CGU), the smallest identifiable group of assets that generates cash   inflows that are largely independent of the cash inflows from other assets or   groups of assets.  The recoverable amount of a CGU is the greater of the   CGU’s fair value less costs to sell and its value in use.  An impairment loss   is recognized in profit or loss to the extent the carrying amount exceeds the   recoverable amount. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

9

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.** | **Summary of significant accounting policies  (continued)** |
|--------|-------------------------------------------------------------|

|   | (e) | Mineral properties,   plant and equipment (continued) |
|--------|-----|-------------------------------------------------------|

|   | (vii) | Impairment of non-financial assets (continued) |
|--------|-------|------------------------------------------------|

|   | In calculating the recoverable amount, the Company uses   discounted cash flow techniques to determine value in use when it is not   possible to determine fair value either by quotes from an active market or a   binding sales agreement.  The determination of discounted cash flows is   dependent on a number of factors, including future metal prices, the amount   of reserves, the cost of bringing the project into production, production   schedules, production costs, sustaining capital expenditures, and site   closure, restoration and environmental rehabilitation costs and the discount   rate used.  Additionally, the reviews take into account factors such as   political, social and legal, and environmental regulations.  These factors   may change due to changing economic conditions or the accuracy of certain assumptions   and, hence, affect the recoverable amount.  The Company uses its best efforts   to fully understand all of the aforementioned to make an informed decision   based upon historical and current facts surrounding the projects.  Discounted   cash flow techniques require management to make estimates and assumptions   concerning reserves and expected future production revenues and expenses. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | Provision for mine closure and reclamation |
|--------|-----|--------------------------------------------|

|   | The Company records a liability based on the best   estimate of costs for site closure and reclamation activities that the   Company is legally or constructively required to remediate.  The liability is   recognized at the time environmental disturbance occurs and the resulting estimated   costs are capitalized to the corresponding asset.  The provision for mine closure   and reclamation liabilities is estimated using expected cash flows based on   engineering and environmental reports prepared by third-party industry   specialists and discounted at a pre-tax rate specific to the liability.  The   capitalized amount is depreciated on the same basis as the related asset.    The liability is adjusted for the accretion of the discounted obligation and   any changes in the amount or timing of the underlying future cash flows.    Significant judgements and estimates are involved in forming expectations of   the amounts and timing of future closure and reclamation cash flows. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Additional disturbances and changes in mine   closure and reclamation estimates are accounted for as incurred with a change   in the corresponding capitalized cost.  Costs of rehabilitation projects for   which a provision has been recorded are recorded directly against the   provision as incurred, most of which are incurred at the end of the life of mine. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | Financial instruments |
|--------|-----|-----------------------|

|   | (i) | Financial assets |
|--------|-----|------------------|

|   | The Company initially recognizes loans and receivables   on the date that they originate.  All other financial assets are recognized   initially on the trade date, which is the date that the Company becomes a party   to the contractual provisions of the instrument. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company derecognizes a financial asset when the   contractual rights to the cash flows from the asset expire, or it transfers   the rights to receive the contractual cash flows in a transaction in which   substantially all the risks and rewards of ownership of the financial asset   are transferred.  Any interest in such transferred financial assets that is   created or retained by the Company is recognized as a separate asset or   liability. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company classifies its financial assets as loans and   receivables.  The classification depends on the purpose for which the   financial assets were acquired, and management determines the classification   of financial assets at recognition. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

10

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.** | **Summary of significant accounting policies  (continued)** |
|--------|-------------------------------------------------------------|

|   | (g) | Financial   instruments (continued) |
|--------|-----|-------------------------------------|

|   | (i) | Financial assets (continued) |
|--------|-----|------------------------------|

|   | Loans and receivables are non-derivative financial   assets with fixed or determinable payments that are not quoted in an active   market.  They are classified as current assets or non-current assets based on   their maturity date.  Loans and receivables are initially recognized at fair   value and subsequently carried at amortized cost less any impairment.  Loans   and receivables are comprised of cash and cash equivalents, trade and other   receivables, and loan to supplier. Included in trade receivables are   provisionally priced sales receivables measured at fair value with changes   recognized in profit or loss. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Financial liabilities |
|--------|------|-----------------------|

|   | The Company classifies all of its financial liabilities   as other financial liabilities.  Other financial liabilities are   non-derivatives and are recognized initially at fair value, net of   transaction costs incurred and are subsequently stated at amortized cost.    Any difference between the amounts originally received, net of transaction   costs, and the redemption value is recognized in profit and loss over the   period to maturity using the effective interest method. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | Income taxes |
|--------|-----|--------------|

|   | Current tax is the expected tax payable   or receivable on the taxable income or loss for the year, using tax rates enacted   or substantively enacted at the reporting date, and any adjustment to taxes   payable or receivable in respect of previous years.  The Company uses the   balance sheet method of accounting for deferred income taxes.  Under the   balance sheet method, deferred tax assets and liabilities are recognized for   the future tax consequences attributable to differences between the financial   statement carrying amounts of existing assets and liabilities and their   respective tax bases.  Deferred tax is not recognized for temporary   differences on the initial recognition of assets or liabilities in a   transaction that is not a business combination and that affects neither   accounting nor taxable profit or loss.   Deferred tax assets and liabilities   are measured using substantively enacted tax rates expected to apply to   taxable income in the years in which those temporary differences are expected   to be recovered or settled.  Deferred tax assets also result from unused loss   carry forwards, resource related pools and other deductions.  A   deferred tax asset is recognized for unused tax losses, tax credits and   deductible temporary differences to the extent that it is probable that   future taxable profits against which the deferred tax assets can be utilized   will be available.  Deferred tax assets are reviewed at each reporting date   and are reduced to the extent that it is no longer probable that the related   tax benefit will be realized. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In determining the amount of current and deferred tax   the Company takes into account the impact of uncertain tax positions and   whether additional taxes and interest may be due.  The Company believes that   its accruals for tax liabilities are adequate for all open tax years based on   its assessment of many factors, including interpretations of tax law and   prior experience.  This assessment relies on estimates and assumptions and   may involve a series of judgements about future events.  New information may   become available that causes the Company to change its judgement regarding   the adequacy of existing tax liabilities.  Such changes to tax liabilities   will impact tax expenses in the year that such a determination is made. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Deferred tax assets and liabilities are offset if there   is a legally enforceable right to offset current tax liabilities and assets,   and they relate to taxes levied by the same tax authority on the same taxable   entity, or on different tax entities, but they intend to settle current tax   liabilities and assets on a net basis or their tax assets and liabilities   will be realized simultaneously. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

11

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.** | **Summary of significant accounting policies  (continued)** |
|--------|-------------------------------------------------------------|

|   | (i) | Share-based payments |
|--------|-----|----------------------|

|   | (i) | Stock options |
|--------|-----|---------------|

|   | The Company has a stock option plan that is described in   note 14(b).  Stock options granted to employees are measured at the grant   date fair value of the instruments issued and amortized as an expense with a   corresponding increase in equity over the vesting periods. The amount   recognized as an expense is adjusted to reflect the number of awards expected   to vest. Upon the exercise of stock options, consideration received is   recorded as share capital and the related share-based payments reserve is   transferred to share capital.  Charges for options that are forfeited before   vesting are reversed from share-based payment reserve.  For those options   that expire or are forfeited after vesting, the recorded value is transferred   to retained earnings. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Stock appreciation rights (SARs) |
|--------|------|----------------------------------|

|   | SARs allow the holder to receive cash or common shares   of the Company in the amount of the underlying value of the associated stock   option.  When the holder has the option of settling in cash or shares, the fair   value of the SAR is recorded as a liability with no value assigned to an   equity component.  Changes to the fair value of the liability are recognized   in profit or loss. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Where the holder elects to take common shares instead of   cash, the value of the related liability is transferred directly to share   capital; where the holder elects to settle SARs in cash instead of common   shares, the value of the related liability is extinguished when the cash is   paid. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Restricted, performance and deferred share units   (RSUs, PSUs and DSUs) |
|--------|-------|--------------------------------------------------------------------------|

|   | RSUs, PSUs and DSUs allow the holder to receive cash in an   amount linked to the value of the Company’s shares. The RSUs, PSUs and DSUs are   recorded as a liability at fair value at period end, with changes in the fair   value of the liability recognized in profit or loss. The liability is   extinguished when the units vest and cash is paid to the holder or when the   units otherwise expire. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | RSUs vest in thirds over a three year period, beginning   one year after the grant date, and are settled in cash upon vesting. PSUs   vest in full three years after the grant date and are settled in cash upon   vesting, with payout value based on the Company’s share price performance   relative to a group of peers. Both units are valued with reference to the   Company’s current share price. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | DSUs vest either immediately or over a specified time   period, and are settled in cash when the holder of the units resigns from the   Company. DSUs are valued with reference to the Company’s current share price. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (j) | Earnings per share |
|--------|-----|--------------------|

|   | Earnings per share are calculated using the weighted   average number of common shares outstanding during the year.  Diluted   earnings per share is calculated using the treasury stock method.  The   weighted average number of common shares outstanding for the calculation of   diluted earnings per share assumes all in-the-money stock options and stock   appreciation rights are exercised at the beginning of the year and that the   proceeds to be received on their exercise are used to repurchase common   shares at the average market price during the year. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **4.** | **Accounting changes and recent accounting    pronouncements** |
|--------|----------------------------------------------------------------|

|   | In May 2013, the IASB issued IFRIC 21 - *Levies*,   which sets out the accounting treatment for an obligation to pay a levy that   is not an income tax. The interpretation defines the obligating event that   gives rise to the requirement to pay a levy and when a liability should be   recognized. IFRIC 21 is effective for annual periods beginning on or after   January 1, 2014. The application of IFRIC 21 did not have a significant   impact on the Company’s consolidated financial statements. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

12

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **4.** | **Accounting changes and recent accounting    pronouncements  (continued)** |
|--------|-----------------------------------------------------------------------------|

|   | In July 2014, the IASB published IFRS 9 - *Financial   Instruments*, which replaces IAS 39 - *Financial Instruments:   Recognition and Measurement*, the existing guidance of the same name. IFRS   9 includes revised guidance on the classification and measurement of   financial instruments, including a new expected credit loss model for   calculating impairment on financial assets, and the new general hedge   accounting requirements. It also carries forward the guidance on recognition   and derecognition of financial assets from IAS 39. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | IFRS 9 is effective for annual reporting periods beginning   on or after January 1, 2018, and is available for early adoption. The Company   will evaluate the new standard to determine the impact, if any, it may have   on its financial statements. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In May 2014, the IASB issued the final revenue standard,   IFRS 15 - *Revenue From Contracts With Customers*, which will replace   IAS 18 - *Revenue*, among other standards that do not currently affect   the Company. The new standard is effective for fiscal years beginning on or   after January 1, 2017, and is available for early adoption. The standard   contains a single model that applies to contracts with customers and two   approaches to recognizing revenue: at a point in time or over time. The   Company intends to adopt IFRS 15 in its financial statements for the annual   period beginning January 1, 2017. The Company will evaluate the new standard   to determine the impact, if any, it may have on its financial statements. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **5.** | **Use of judgements and estimates** |
|--------|-------------------------------------|

|   | In preparing these consolidated financial statements,   management has made judgements and estimates that affect the application of   the Company’s accounting policies and the reported amounts of assets,   liabilities, income and expense.  Actual amounts incurred by the Company may   differ from these values. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | Judgements |
|--------|-----|------------|

|   | The critical judgements that the   Company’s management has made in the process of applying the Company’s   accounting policies, apart from those involving estimation uncertainty (note 5(b)), that have the   most significant effect on the amounts recognized in the Company’s   consolidated financial statements are as follows: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | Achievement of commercial production |
|--------|-----|--------------------------------------|

|   | Costs incurred to construct and develop mineral properties,   plant and equipment, including directly attributable costs of testing, are   capitalized until the assets are brought into the location and condition   necessary to be capable of operating in the manner intended by management. Net   proceeds from mineral sales realized during this period are offset against   costs capitalized. Depletion of capitalized costs for mineral properties and   related plant and equipment begins when operating levels intended by   management have been reached.  The results of operations of the Company   during the years presented in these consolidated financial statements have   been impacted by management’s determination that the Bisha Mine reached the   operating levels intended by management with regards to copper production on   December 1, 2013. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Economic recoverability and probability of   future economic benefits of exploration, evaluation and development costs |
|--------|------|------------------------------------------------------------------------------------------------------------------------|

|   | Management has determined that exploration drilling,   evaluation, development and related costs incurred which have been   capitalized are economically recoverable. Management uses several criteria in   its assessments of economic recoverability and probability of future economic   benefit including geologic and metallurgic information, history of conversion   of mineral deposits to proven and probable reserves, scoping and feasibility   studies, accessible facilities, existing permits and life of mine plans. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

13

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **5.** | **Use of judgements and estimates  (continued)** |
|--------|--------------------------------------------------|

|   | (a) | Judgements (continued) |
|--------|-----|------------------------|

|   | (iii) | Functional currency |
|--------|-------|---------------------|

|   | The functional currency for each of the Company’s   subsidiaries is the currency of the primary economic environment in which the   entity operates. The Company has determined the functional currency of each   entity is the US dollar. Assessment of functional currency involves certain   judgements to determine the primary economic environment and the Company   reconsiders the functional currency of its entities if there is a change in   events and conditions which determined the primary economic environment. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Key sources of estimation uncertainty |
|--------|-----|---------------------------------------|

|   | The preparation of consolidated   financial statements requires that the Company’s management make assumptions   and estimates of effects of uncertain future events on the carrying amounts   of the Company’s assets and liabilities at the end of the reporting period.  Actual   results may differ from those estimates as the estimation process is   inherently uncertain. Actual future outcomes could differ from present   estimates and assumptions; potentially having material future effects on the   Company’s consolidated financial statements. Estimates are reviewed on an   ongoing basis and are based on historical experience and other facts and   circumstances. Revisions to estimates and the resulting effects on the   carrying amounts of the Company’s assets and liabilities are accounted for   prospectively. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The significant assumptions about the   future and other major sources of estimation uncertainty as at the end of the   reporting period that have a significant risk of resulting in a material   adjustment to the carrying amounts of the Company’s assets and liabilities   are as follows: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | Reserve estimates including life of mine plan |
|--------|-----|-----------------------------------------------|

|   | The Company estimates its ore reserves and mineral   resources based on information compiled by experts. Reserves are used in the   calculation of depreciation, impairment assessment and for forecasting the   timing of payment of mine closure, reclamation and rehabilitation costs. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | There are numerous uncertainties inherent in estimating   ore reserves, and assumptions that are valid at the time of estimation may   change significantly when new information becomes available.  Changes in the   forecasted prices of commodities, exchange rates, production costs or   recovery rates may change the economic status of reserves and may,   ultimately, result in the reserves being restated. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The carrying amounts of the Company’s mineral properties,   plant and equipment are depleted based on recoverable copper pounds, gold   ounces, and ore reserve tonnes. Changes to estimates of recoverable copper   pounds, gold ounces, ore reserve tonnes and depletable costs, including   changes resulting from revisions to the Company’s mine plans and changes in   metals prices forecasts, can result in a change to future depletion rates and   impairment analysis. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Estimated mine closure and reclamation costs |
|--------|------|----------------------------------------------|

|   | The Company’s provision for mine closure and reclamation   cost obligations represents management’s best estimate of the present value   of the future cash outflows required to settle the liability which reflects   estimates of future costs, inflation, movements in foreign exchange rates and   assumptions of risks associated with the future cash outflows, and the   applicable risk-free interest rates for discounting the future cash outflows.   Changes in the above factors can result in a change to the provision   recognized by the Company. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Changes to mine closure and reclamation cost obligations   are recorded with a corresponding change to the carrying amounts of related mineral   properties, plant and equipment for the year. Adjustments to the carrying   amounts of related mineral properties, plant and equipment can result in a   change to future depletion expense. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

14

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **5.** | **Use of judgements and estimates  (continued)** |
|--------|--------------------------------------------------|

|   | (b) | Key   sources of estimation uncertainty (continued) |
|--------|-----|-----------------------------------------------------|

|   | (iii) | Classification of current and non-current   portion of due from non-controlling interest |
|--------|-------|------------------------------------------------------------------------------------------|

|   | In determining the classification of current and   non-current portion of due from non-controlling interest, the Company makes   estimates of the future after-tax cash flows expected to be derived from the   Bisha mining operation.  Changes in metal price forecasts, estimated future   costs of production, and estimated future capital expenditures could result   in a change in the classification of the current and non-current portions of   the due from non-controlling interest. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | Fair value of embedded derivative |
|--------|------|-----------------------------------|

|   | The value of copper concentrate trade receivables is   measured using quoted forward market prices as at the balance sheet date that   correspond to the settlement date of the provisional pricing period for the   estimated metals contained within the copper concentrate.  Fluctuations in   the underlying market price of copper, metal content and concentrate weight   can cause significant changes to the ultimate final settlement value of the   receivables and the final revenue recorded can vary significantly as a result. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | Income taxes |
|--------|-----|--------------|

|   | In assessing the probability of realizing income tax   assets recognized, management makes estimates related to expectations of   future taxable income, applicable tax opportunities, expected timing of   reversals of existing temporary differences and the likelihood that tax   positions taken will be sustained upon examination by applicable tax   authorities. In making its assessments, management gives additional weight to   positive and negative evidence that can be objectively verified. Estimates of   future taxable income are based on forecasted income from operations and the   application of existing tax laws in each jurisdiction. Forecasted income from   operations is based on life of mine projections internally developed and   reviewed by management. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Importance is given to tax planning opportunities that   are within the Company’s control, and are feasible and implementable without   significant obstacles. The likelihood that tax positions taken will be   sustained upon examination by applicable tax authorities is assessed based on   individual facts and circumstances of the relevant tax position evaluated in   light of all available evidence. Where applicable tax laws and regulations   are either unclear or subject to ongoing varying interpretations, it is   reasonably possible that changes in these estimates can occur that materially   affect the amounts of income tax assets recognized. At the end of each   reporting period, the Company reassesses unrecognized income tax assets. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | Share-based payments |
|--------|------|----------------------|

|   | The factors affecting share-based payments include   estimates of when stock options might be exercised and the stock price   volatility.  The timing for exercise of options is out of the Company’s   control and will depend, among other things, upon a variety of factors   including the market value of Company shares and financial objectives of the   holders of the options.  The Company has used historical data to determine   volatility in accordance with Black-Scholes modeling, however future   volatility is inherently uncertain and the model has its limitations.  While   these estimates can have a material impact on the share-based payments   expense and hence, results of operations, there is no impact on the Company’s   financial condition or liquidity. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

15

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **6.** | **Supplemental cash information** |
|--------|-----------------------------------|

|   |                      |   | 2014    |   |   | 2013    |   |
|--------|---------------------------|--------|---------|--------|--------|---------|--------|
|   | Cash and cash equivalents |   |    |   |   |    |   |
|   | Cash                      | $      | 94,818  |   | $      | 42,224  |   |
|   | Cash equivalents          |   | 347,600 |   |   | 260,500 |   |
|   |                      | $      | 442,418 |   | $      | 302,724 |   |

|   | Cash and cash equivalents deposited with financial   institutions located outside of Africa at December 31, 2014, equal $431,678   (December 31, 2013 - $298,776). |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                             |   | 2014    |   |   | 2013   |   |
|--------|----------------------------------------------------------------------------------|--------|---------|--------|--------|--------|--------|
|   | Non-cash investing and financing  transactions                                   |   |    |   |   |   |   |
|   | Closure and reclamation increase  in mineral properties, plant and equipment     | $      | 9,379   |   | $      | 4,719  |   |
|   | Change in accounts receivable  related to pre-commercial production copper sales |   | (41,661 | )      |   | 41,661 |   |
|   | Capital assets under finance  lease                                              |   | 1,694   |   |   | 4,659  |   |
|   | Depreciation added to inventory                                                  |   | 1,039   |   |   | 3,040  |   |

| **7.** | **Accounts receivable and prepaids** |
|--------|--------------------------------------|

|   |                                                          |   | 2014   |   |   | 2013   |   |
|--------|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|   | Trade  receivables                                            | $      | 19,403 |   | $      | 43,632 |   |
|   | Advances to  vendors                                          |   | 9,873  |   |   | 11,672 |   |
|   | Loan receivable                                               |   | 1,700  |   |   | 2,698  |   |
|   | Prepaid expenses                                              |   | 1,744  |   |   | 1,435  |   |
|   | Other  receivables                                            |   | 555    |   |   | 316    |   |
|   | Total accounts  receivable and prepaids                       | $      | 33,275 |   | $      | 59,753 |   |
|   | Less:  non-current portion of loan receivable                 |   | (1,087 | )      |   | (2,573 | )      |
|   | Accounts receivable and prepaids recorded as a  current asset | $      | 32,188 |   | $      | 57,180 |   |

|   | During the year ended December 31, 2014, the Company   made a loan of $2,200 (2013 – $7,000) to a transport company for equipment   that is used in the transport of copper concentrate from mine site to port   within Eritrea.  The loans are repayable in equal instalments in the form of   credits offset against operating amounts payable to the transport company   over a five year period. A portion of the loan receivable has been recorded   as a prepayment of an associated finance lease obligation related to the   transport equipment. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **8.** | **Inventories** |
|--------|-----------------|

|   |                                            |   | 2014    |   |   | 2013   |   |
|--------|-------------------------------------------------|--------|---------|--------|--------|--------|--------|
|   | Materials and  supplies                         | $      | 59,533  |   | $      | 41,043 |   |
|   | Work-in-progress                                |   | 24,640  |   |   | 13,318 |   |
|   | Finished goods –  copper concentrate      |   | 17,497  |   |   | 13,504 |   |
|   | Total inventories                               | $      | 101,670 |   | $      | 67,865 |   |
|   | Less:  non-current portion of ore in stockpiles |   | (14,819 | )      |   | (6,841 | )      |
|   | Inventory recorded as a current assets          | $      | 86,851  |   | $      | 61,024 |   |

|   | During the year ended December 31, 2014, an inventory   obsolescence provision of $2,094 (December 31, 2013 – $2,808) was recorded in relation to slow moving inventory   (2013 - gold phase materials and supplies). The non-current portion of ore in   stockpiles is not expected to be further processed in the next twelve months   and consists of oxide ore, pyrite sand and primary ore.  Depreciation   of $5,605 is included in work-in-progress and finished goods inventories at December   31, 2014 (December 31, 2013 – $4,566). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

16

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **9.** | **Due from non-controlling interest** |
|--------|---------------------------------------|

|   | The amounts due from ENAMCO arose originally in October   2007 when the Company entered into an agreement with ENAMCO whereby the State   increased its ownership in BMSC to 40% from its previous 10% free carried   interest provided by Eritrean mining legislation.   The amount receivable   bears interest at a rate tied to the US Dollar LIBOR (December 31, 2014 – 0.5%)   plus 4%.  Interest income of $2,621 was recorded during the year ended   December 31, 2014 (2013 - $3,314). |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | During 2013 the Company loaned an additional $16,750 to   ENAMCO, which was collected in full during 2014, including interest of $682. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                |   | 2014    |   |   | 2013    |   |
|--------|---------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|
|   | Opening Balance                                                     | $      | 83,194  |   | $      | 63,130  |   |
|   |                                                                |   |    |   |   |    |   |
|   | Accrued interest on purchase  price receivable                      |   | 2,305   |   |   | 2,948   |   |
|   | Advances to non-controlling  interest                               |   | -       |   |   | 16,750  |   |
|   | Accrued interest on advances to  non-controlling interest           |   | 316     |   |   | 366     |   |
|   | Amounts received from  non-controlling interest, including interest |   | (37,332 | )      |   | -       |   |
|   | Total due from non-controlling  interest                            | $      | 48,483  |   | $      | 83,194  |   |
|   | Less: non-current portion of due  from non-controlling interest     |   | (27,272 | )      |   | (36,503 | )      |
|   | Due from non-controlling interest recorded as a current asset       | $      | 21,211  |   | $      | 46,691  |   |

| **10.** | **Mineral properties, plant and equipment** |
|---------|---------------------------------------------|

|   | The Company’s properties are   located in western Eritrea, a country located in north-eastern Africa.  The   properties under mining licenses include Bisha and Harena which together are   subject to a mining agreement with the Government of Eritrea.  The Bisha license   was granted in 2008 for an initial period of 20 years.  The Harena license   was granted in 2012 for 10 years.  The Mogoraib River exploration license is   valid until July 2, 2015, but can be extended subject to a license renewal   application. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Commercial copper production was   achieved on December 1, 2013, and construction-in-progress amounts related to   the copper phase were transferred to the appropriate categories of mineral   properties, plant and equipment. Depreciation of these assets commenced at that   time. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Costs classified as mineral properties   represent historic acquisition, exploration, evaluation and development costs   at Bisha and Harena.  Construction-in-progress at December 31, 2014,   represents costs associated with the zinc phase construction. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

17

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **10.** | **Mineral properties, plant and equipment (continued)** |
|---------|---------------------------------------------------------|

|   | Year ended  December 31, 2014                        |   | Explorationand evaluation   |   |   | Construction-in-progress   |   |   | Mineralproperties               |   |   | Plant andequipment               |   |   | Total   |   |
|--------|------------------------------------------------------|--------|-----------------------------|--------|--------|----------------------------|--------|--------|---------------------------------|--------|--------|----------------------------------|--------|--------|---------|--------|
|   | **Cost**                                             |   |                             |   |   |                            |   |   |                                 |   |   |                                  |   |   |         |   |
|   | December 31, 2013                                    | $      | 23,836                      |   | $      | 5,749                      |   | $      | 44,248                          |   | $      | 371,038                          |   | $      | 444,871 |   |
|   |        Additions            |   | 5,668                       |   |   | 18,458                     |   |   | 3,690                           |   |   | 24,307                           |   |   | 52,123  |   |
|   |        Disposals            |   | -                           |   |   | -                          |   |   | -                               |   |   | (25                              | )      |   | (25     | )      |
|   |        Transfers            |   | -                           |   |   | (7,503                     | )      |   | -                               |   |   | 71                               |   |   | (7,432  | )      |
|   | December 31, 2014                                    |   | 29,504                      |   |   | 16,704                     |   |   | 47,938                          |   |   | 395,391                          |   |   | 489,537 |   |
|   | **Accumulated  depreciation**                        |   |                        |   |   |                       |   |   |                            |   |   |                             |   |   |    |   |
|   | December 31, 2013                                    |   | -                           |   |   | -                          |   |   | 6,439                           |   |   | 81,108                           |   |   | 87,547  |   |
|   |        Charge for the year  |   | -                           |   |   | -                          |   |   | 2,633                           |   |   | 38,533                           |   |   | 41,166  |   |
|   |        Disposals            |   | -                           |   |   | -                          |   |   | -                               |   |   | (16                              | )      |   | (16     | )      |
|   | December 31, 2014                                    |   | -                           |   |   | -                          |   |   | 9,072                           |   |   | 119,625                          |   |   | 128,697 |   |
|   | Net book value      December 31, 2014 | $      | 29,504                      |   | $      | 16,704                     |   | $      |  38,866                    |   | $      |  275,766                    |   | $      | 360,840 |   |
|   |                                                 |   |                        |   |   |                       |   |   |                            |   |   |                             |   |   |    |   |
|   | Year ended  December 31, 2013                        |   | Exploration  and evaluation |   |   | Construction-  in-progress |   |   |   Mineral  properties |   |   |   Plant and  equipment |   |   | Total   |   |
|   | **Cost**                                             |   |                        |   |   |                       |   |   |                            |   |   |                             |   |   |    |   |
|   | December 31, 2012                                    | $      | 8,309                       |   | $      | 87,255                     |   | $      |  38,688                    |   | $      |  268,242                    |   | $      | 402,494 |   |
|   |        Additions            |   | 15,720                      |   |   | 34,513                     |   |   | 191                             |   |   | 28,915                           |   |   | 79,339  |   |
|   |        Disposals            |   | -                           |   |   | -                          |   |   | -                               |   |   | (263                             | )      |   | (263    | )      |
|   |        Transfers            |   | (193                        | )      |   | (116,019                   | )      |   | 5,369                           |   |   | 74,144                           |   |   | (36,699 | )      |
|   | December 31, 2013                                    |   | 23,836                      |   |   | 5,749                      |   |   | 44,248                          |   |   | 371,038                          |   |   | 444,871 |   |
|   | **Accumulated depreciation**                         |   |                        |   |   |                       |   |   |                            |   |   |                             |   |   |    |   |
|   | December 31, 2012                                    |   | -                           |   |   | -                          |   |   | 3,623                           |   |   | 58,443                           |   |   | 62,066  |   |
|   |        Charge for the year  |   | -                           |   |   | -                          |   |   | 2,816                           |   |   | 22,722                           |   |   | 25,538  |   |
|   |        Disposals            |   | -                           |   |   | -                          |   |   | -                               |   |   | (57                              | )      |   | (57     | )      |
|   | December 31, 2013                                    |   | -                           |   |   | -                          |   |   | 6,439                           |   |   | 81,108                           |   |   | 87,547  |   |
|   | Net book value      December 31, 2013 | $      | 23,836                      |   | $      | 5,749                      |   | $      |  37,809                    |   | $      |  289,930                    |   | $      | 357,324 |   |

18

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **10.** | **Mineral properties, plant and equipment (continued)** |
|---------|---------------------------------------------------------|

|   | Transfers of   construction-in-progress for the year ended December 31, 2014 and 2013, to   mineral properties, plant and equipment are comprised as follows: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                                         |   | 2014         |   |   | 2013          |   |
|--------|----------------------------------------------------------------------------------------------|--------|--------------|--------|--------|---------------|--------|
|   | Opening balance of  Construction-in-progress                                                 | $      | 5,749        |   | $      | 87,255        |   |
|   |      Additions:                                                     |   |         |   |   |          |   |
|   |           Copper phase plant and equipment |   | -            |   |   | 28,764        |   |
|   |           Tailings dam                     |   | 2,175        |   |   | 5,328         |   |
|   |           Zinc  phase construction         |   | 16,283       |   |   | 421           |   |
|   | Balance  before transfers                                                                    |   | 24,207       |   |   | 121,768       |   |
|   | Copper  phase assets transferred to Plant and equipment                                      |   | -            |   |   | (116,019      | )      |
|   | Tailings  dam assets transferred to Plant and equipment                                      |   | (7,503       | )      |   | -             |   |
|   | Closing  balance of Construction-in-progress                                                 | $      |  16,704 |   | $      |  5,749   |   |
|   |                                                                                         |   |         |   |   |          |   |
|   | Assets transferred from  Construction-in-progress to Plant and equipment                     | $      |  7,503  |   | $      |  116,019 |   |
|   | Add (deduct)                                                                                 |   |         |   |   |          |   |
|   |      Pre-commercial production sales credit                         |   | (9,725       | )      |   | (112,916      | )      |
|   |      Capitalized pre-commercial operating costs                     |   | 6,287        |   |   | 76,217        |   |
|   |      Deferred stripping transferred to mineral  properties          |   | -            |   |   | (5,176        | )      |
|   |      Operational spares transferred to inventory                    |   | (3,994       | )      |   | -             |   |
|   | Assets transferred to plant and equipment                                                    | $      |  71     |   | $      |  74,144  |   |

|   | As at December 31, 2014, plant and   equipment includes $nil (2013 - $4,532) of capitalized pre-commercial   production copper concentrate inventory, and finance leased assets with a net   book value of $4,710 (2013 - $4,271). As at December 31, 2014, the Company   had commitments to purchase property, plant and equipment of $25,765, related   primarily to the zinc phase expansion. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **11.** | **Accounts payable and accrued liabilities** |
|---------|----------------------------------------------|

|   |                    |   | 2014   |   |   | 2013   |   |
|--------|-------------------------|--------|--------|--------|--------|--------|--------|
|   | Trade accounts  payable | $      | 33,723 |   | $      | 18,705 |   |
|   | Accrued  royalties      |   | 7,201  |   |   | 4,629  |   |
|   | Accrued  liabilities    |   | 13,245 |   |   | 7,453  |   |
|   |                    | $      | 54,169 |   | $      | 30,787 |   |

|   | Included in accrued liabilities are   incentive amounts due to employees (RSUs, PSUs) of $1,364 (December 31, 2013   - $50) and directors (DSUs) of $1,999 (December 31, 2013 – nil).  The Company   recorded $1,856 (2013 - $50) for RSUs and PSUs and $1,999 (2013 – nil) for   DSUs in administrative expenses. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

19

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **12.** | **Income taxes** |
|---------|------------------|

|   | (a) | Income tax expense |
|--------|-----|--------------------|

|   | Income   tax expense was recorded for income earned in the years ended December 31,   2014 and 2013, as follows. |
|--------|------------------------------------------------------------------------------------------------------------------|

|   |                        |   | 2014           |   |   | 2013          |   |
|--------|-----------------------------|--------|----------------|--------|--------|---------------|--------|
|   | Current income tax expense  | $      | (85,759        | )      | $      | (20,702       | )      |
|   | Deferred income tax expense |   | (26,718        | )      |   | (9,484        | )      |
|   | Income tax expense          | $      |  (112,477 | )      | $      |  (30,186 | )      |

|   | (b) | Reconciliation of income taxes |
|--------|-----|--------------------------------|

|   | A reconciliation of the income tax expense to the amount   calculated using the Company’s statutory tax rate is as follows: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   |                                                |   | 2014     |   |   | 2013    |   |
|--------|-----------------------------------------------------|--------|----------|--------|--------|---------|--------|
|   | Income tax expense at statutory rate of 26.0%       | $      | (72,551  | )      | $      | (15,960 | )      |
|   | Tax effect of:                                      |   |     |   |   |    |   |
|   | Difference in tax rates of foreign jurisdictions(1) |   | (34,982  | )      |   | (8,063  | )      |
|   | Benefit of tax losses not recognized                |   | (2,331   | )      |   | (2,753  | )      |
|   | Non-deductible and other items                      |   | (2,613   | )      |   | (3,410  | )      |
|   |                                                | $      | (112,477 | )      | $      | (30,186 | )      |

|   | (1) The Eritrean statutory mining income tax rate is 38%. |
|--------|-----------------------------------------------------------|

|   | (c) | Recognized deferred tax assets and liabilities |
|--------|-----|------------------------------------------------|

|   | The tax effects of temporary differences that give rise to   deferred tax assets and liabilities are as follows: |
|--------|------------------------------------------------------------------------------------------------------------------|

|   |                                     |   | 2014    |   |   | 2013    |   |
|--------|------------------------------------------|--------|---------|--------|--------|---------|--------|
|   | Deferred tax assets                      |   |    |   |   |    |   |
|   | Losses carried forward                   | $      | 136     |   | $      | 951     |   |
|   |                                     |   |    |   |   |    |   |
|   | Deferred tax liabilities                 |   |    |   |   |    |   |
|   | Mineral  properties, plant and equipment |   | (57,042 | )      |   | (31,139 | )      |
|   | Net deferred tax liabilities             | $      | (56,906 | )      | $      | (30,188 | )      |

|   | (d) | Unrecognized tax losses and tax assets |
|--------|-----|----------------------------------------|

|   | At December 31, 2014, the Company has   available losses for income tax purposes in Canada totaling approximately $44,738   (2013 - $41,343) and losses carried forward in foreign jurisdictions of approximately   $6,874 (2013 - $6,764) which, if not utilized to reduce income in future   periods, expire through 2029.  The benefits of these available tax losses and   tax assets have not been recognized.  Access to the losses carried forward in   the future may be restricted. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Deferred tax assets have not been recognized in respect of the   following items: |
|--------|-----------------------------------------------------------------------------------|

|   |                                    |   | 2014   |   |   | 2013   |   |
|--------|-----------------------------------------|--------|--------|--------|--------|--------|--------|
|   | Mineral properties, plant and equipment | $      | 6,529  |   | $      | 5,741  |   |
|   | Tax losses carried forward              |   | 53,006 |   |   | 49,561 |   |
|   |                                    | $      | 59,535 |   | $      | 55,302 |   |

20

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **13.** | **Provision for mine closure and reclamation** |
|---------|------------------------------------------------|

|   |                        |   | 2014   |   |   | 2013   |   |
|--------|-----------------------------|--------|--------|--------|--------|--------|--------|
|   | Balance, beginning  of year | $      | 23,614 |   | $      | 18,013 |   |
|   | Accretion                   |   | 1,203  |   |   | 882    |   |
|   | Additional  liability       |   | 9,379  |   |   | 4,719  |   |
|   | Balance, end of  year       | $      | 34,196 |   | $      | 23,614 |   |

|   | The Company’s provision for mine   closure and reclamation consists of costs accrued based on the current best   estimate of mine closure and reclamation activities that will be required at   the Bisha and Harena sites upon completion of mining.  These activities   include costs for earthworks, including land re-contouring and re-vegetation,   water treatment and demolition.  The Company’s provision for future site   closure and reclamation costs is based on the level of known disturbance at   the reporting date, known legal requirements and cost estimates prepared by a   third party specialist. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | During 2012 estimates prepared by the   third-party specialist were updated to include the Harena mining license area   as well as increases in cost estimates for certain reclamation activities.  This   report was updated internally as at December 31, 2014, to reflect additional   disturbances incurred during the 2014 year.  Management used a pre-tax   discount rate of 4.57% and an inflation factor of 3.0% in preparing the   Company’s provision for mine closure and reclamation.  Although the ultimate   amount to be incurred is uncertain, based on development, legal requirements   and estimated costs as at December 31, 2014, the undiscounted   inflation-adjusted liability for provision for mine closure and reclamation   is estimated to be approximately $50,400 (December 31, 2013 – $37,000), the   increase in the obligation resulting from an increase to the impact area of   the mine as well as an increase to cost assumptions for various closure   activities.  The cash expenditures are expected to occur over a period of   time extending several years after the projected closure of the Bisha and   Harena sites. Accretion expense of $1,203 (2013 – $882) is recorded in   finance costs. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **14.** | **Share capital** |
|---------|-------------------|

|   | (a) | Authorized share capital consists of an   unlimited number of common shares without par value. |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (b) | Stock options |
|--------|-----|---------------|

|   | The Company’s ability to grant stock options under its   former stock option plan (the Former Plan) expired April 27, 2012.  A new   stock option plan (the New Plan) was approved by shareholders at a Special   Meeting on September 5, 2012.  The Former Plan remains in existence until all   outstanding options have been exercised, cancelled or otherwise expired.  As   at December 31, 2014, 6,312,500 options issued under the Former Plan remain   outstanding. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In accordance with the Company’s   intention to reduce the cost of an equity based plan to shareholders, the New   Plan is more restrictive than the Former Plan in the number of shares which   can be issued (maximum 6.75% of issued and outstanding shares, versus 10% in   the Former Plan) and the length of time before expiry (5 years, versus 10   years in the Former Plan). |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company has recorded the fair value   of all options granted using the Black-Scholes model.  Share-based payment   costs are amortized over vesting periods ranging between one and three years.    During 2014, share-based payments costs were calculated using the following   weighted average assumptions:  expected life of option 4.1 years (2013 – 3.3   years), stock price volatility 55% (2013 – 59%), dividend yield 3.8% (2013 – 4.3%)   and a risk-free interest rate yield of 1.3% (2013 – 1.3%).  The fair value is   particularly impacted by the Company’s stock price volatility. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The year ended December 31, 2014,   includes $2,185 (2013 - $2,835) in share-based payment costs related to stock   options, $2,152 (2013 - $2,825) of which were presented in administrative   expenses and $33 (2013 – $10) in operating expenses. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

21

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **14.** | **Share capital (continued)** |
|---------|-------------------------------|

|   | (b) | Stock   options (continued) |
|--------|-----|-----------------------------|

|   |                                   |   | Number of  options |   |   | Weighted  average exercise price (CAD) |   |
|--------|----------------------------------------|--------|--------------------|--------|--------|----------------------------------------|--------|
|   | Outstanding,  December 31, 2012        |   | 10,857,500         |   | $      | 4.08                                   |   |
|   | Granted                                |   | 2,006,000          |   |   | 3.44                                   |   |
|   | Exercised as stock options             |   | (325,000           | )      |   | 1.49                                   |   |
|   | Exercised as stock appreciation rights |   | (250,000           | )      |   | 3.53                                   |   |
|   | Forfeited                              |   | (1,150,000         | )      |   | 5.09                                   |   |
|   | Outstanding, December  31, 2013        |   | 11,138,500         |   |   | 3.95                                   |   |
|   | Granted                                |   | 1,853,500          |   |   | 4.18                                   |   |
|   | Exercised as stock options             |   | (345,000           | )      |   | 2.02                                   |   |
|   | Forfeited                              |   | (465,000           | )      |   | 5.09                                   |   |
|   | Outstanding, December 31, 2014         |   | 12,182,000         |   | $      | 4.00                                   |   |

|   | Type                  | Range of  exerciseprice (CAD) |   | Number of  options |   | Average  remaininglife in years |   |
|--------|-----------------------|-------------------------------|--------|--------------------|--------|---------------------------------|--------|
|   | Vested  (exercisable) | $3.14–$4.81             |   | 7,298,667          |   | 1.5                             |   |
|   | Vested  (exercisable) | $5.68–$6.34             |   | 1,862,500          |   | 1.1                             |   |
|   | Unvested              | $3.28–$4.40             |   | 3,020,833          |   | 4.4                             |   |
|   | Total                 |                          |   | 12,182,000         |   | 2.2                             |   |

|   | The weighted average share price of the   Company on the dates options were exercised in 2014 was CAD $4.18 (2013 – CAD   $3.38).  The weighted average price of options exercisable at the end of the   year was CAD $4.05 (December 31, 2013 – CAD $4.04). |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Stock appreciation rights |
|--------|-----|---------------------------|

|   | At December 31, 2014, $654 (December   31, 2013 - $1,369) was recorded in accounts payable and accrued liabilities   to account for the liability associated with cash-settled SARs.  All SARs   that were eligible to be settled in either cash or equity, at the option of   the holder, were exercised prior to their expiry in August 2014.  The   intrinsic value of vested SARs outstanding as at December 31, 2014, is $561.   During the year ended December 31,   2014, the Company recorded $23 in administrative expenses related to changes   in the fair value of the stock appreciation rights during the year (2013 – $352). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Shares reserved for issuance (fully diluted) |
|--------|-----|----------------------------------------------|

|   |                                                               |   | Number of  shares |   |
|--------|--------------------------------------------------------------------|--------|-------------------|--------|
|   | Issued and fully paid at December 31, 2014                         |   | 199,652,802       |   |
|   | Reserved for  options (note 14(b))                                 |   | 12,182,000        |   |
|   | Shares reserved for issuance (fully diluted) at  December 31, 2014 |   | 211,834,802       |   |

22

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **14.** | **Share capital (continued)** |
|---------|-------------------------------|

|   | (e) | Earnings per share |
|--------|-----|--------------------|

|   | The calculations of earnings per share is based on the following   data: |
|--------|--------------------------------------------------------------------------|

|   |                                                                                                       |   | 2014    |   |   | 2013    |   |
|--------|------------------------------------------------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|
|   | Net income attributable to Nevsun  shareholders                                                            | $      | 93,394  |   | $      | 12,857  |   |
|   | Effect of dilutive securities:                                                                             |   |    |   |   |    |   |
|   | Change in stock appreciation  rights liability                                                             |   | 175     |   |   | (616    | )      |
|   | Diluted net income attributable  to Nevsun shareholders                                                    | $      | 93,569  |   | $      | 12,241  |   |
|   | Weighted average number of common shares outstanding for the purpose  of basic earnings per share (000s)   |   | 199,469 |   |   | 199,147 |   |
|   | Dilutive options and SARs                                                                                  |   | 1,268   |   |   | 798     |   |
|   | Weighted average number of common  shares outstanding for the purpose of diluted earnings per share (000s) |   | 200,737 |   |   | 199,945 |   |
|   | Earnings per share                                                                                         |   |    |   |   |    |   |
|   |        Basic                                                                      | $      | 0.47    |   | $      | 0.06    |   |
|   |        Diluted                                                                    | $      | 0.47    |   | $      | 0.06    |   |

|   | Basic earnings per share is computed by   dividing the net income or net income attributable to Nevsun shareholders by   the weighted average number of common shares outstanding during the year.    Diluted earnings per share reflects the potential dilution of outstanding   SARs and stock options in the weighted average number of common shares   outstanding during the year, if dilutive. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **15.** | **Interest in subsidiary** |
|---------|----------------------------|

|   | The following table presents the financial position of   the Company’s 60% owned subsidiary, BMSC, as at December 31, 2014 and 2013.    The information is presented on a 100% basis. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                |   | 2014    |   |   | 2013    |   |
|--------|-----------------------------------------------------|--------|---------|--------|--------|---------|--------|
|   | Current assets                                      | $      | 156,122 |   | $      | 152,522 |   |
|   | Non-current assets                                  |   | 372,145 |   |   | 332,870 |   |
|   |                                                |   |    |   |   |    |   |
|   | Current liabilities                                 |   | (47,501 | )      |   | (32,232 | )      |
|   | Non-current liabilities                             |   | (90,017 | )      |   | (53,463 | )      |
|   | Net assets                                          | $      | 390,749 |   | $      | 399,697 |   |
|   | Net assets attributable to non-controlling interest | $      | 156,300 |   | $      | 159,879 |   |

|   | The following table   presents the financial results of BMSC for the years ended December 31, 2014 and   2013, respectively: |
|--------|------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                          |   | 2014    |   |   | 2013    |   |
|--------|-------------------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|
|   | Revenues                                                                      | $      | 555,012 |   | $      | 155,698 |   |
|   | Net income and comprehensive income                                           |   | 182,927 |   |   | 40,993  |   |
|   | Net income and comprehensive income attributable to  non-controlling interest | $      | 73,171  |   | $      | 16,397  |   |

|   | The   following table presents the summary cash flow information of BMSC for the years   ended December 31, 2014 and 2013, respectively: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                 |   | 2014     |   |   | 2013    |   |
|--------|------------------------------------------------------|--------|----------|--------|--------|---------|--------|
|   | Net cash provided by operating activities            | $      | 227,061  |   | $      | 25,702  |   |
|   | Net cash used in investing activities                |   | (2,058   | )      |   | (85,856 | )      |
|   | Net cash provided by (used in) financing  activities |   | (210,453 | )      |   | 33,250  |   |
|   | Increase (decrease) in cash and cash  equivalents    | $      | 14,550   |   | $      | (26,904 | )      |

23

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **16.** | **Revenues** |
|---------|--------------|

|   |                                 |   | 2014    |   |   | 2013    |   |
|--------|--------------------------------------|--------|---------|--------|--------|---------|--------|
|   | Copper concentrate sales             | $      | 544,232 |   | $      | -       |   |
|   | Copper concentrate by-product  sales |   | 60,323  |   |   | -       |   |
|   | Other                                |   | 5,467   |   |   | 2,008   |   |
|   | Treatment and refining charges       |   | (55,010 | )      |   | -       |   |
|   | Gold doré sales                 |   | -       |   |   | 153,690 |   |
|   |                                 | $      | 555,012 |   | $      | 155,698 |   |

|   | For the year ended December 31, 2014, copper concentrate   sales are net of provisional pricing and physical quantity adjustments of $30,522   (2013 – $nil).  As at December 31, 2014, a 10% change to the underlying   metals prices would result in a change in revenue and accounts receivable and   payable of $17,424, based on the total quantities of metals in sales   contracts for which the provisional pricing periods were not yet closed.    Provisional pricing periods are typically one to four months after shipment   (see also note 21). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Other revenue consists of high-grade precious metals ore   shipped directly to buyers. |
|--------|----------------------------------------------------------------------------------------|

|   | For the year ended December 31, 2014, the Company also recorded   pre-commercial production copper sales of $9,275 (2013 – $112,916).  When   offset by pre-commercial production operating costs of $4,803 (2013 –   $61,673), depreciation and amortization of $855 (2013 – $8,223), and   royalties of $629 (2013 – $6,321), the resultant net credit of $3,438 (2013 –   $36,699) was offset against copper phase plant and equipment costs. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **17.** | **Operating expenses** |
|---------|------------------------|

|   |                                                      |   | 2014    |   |   | 2013    |   |
|--------|-----------------------------------------------------------|--------|---------|--------|--------|---------|--------|
|   | Raw materials, consumables and  supplies                  | $      | 77,620  |   | $      | 61,669  |   |
|   | Employment,  benefits and contractors                     |   | 42,404  |   |   | 40,729  |   |
|   | Transport, port and shipping                              |   | 68,408  |   |   | 24,999  |   |
|   | Repairs and maintenance                                   |   | 11,488  |   |   | 7,039   |   |
|   | Overheads                                                 |   | 9,249   |   |   | 9,054   |   |
|   | Changes in inventories                                    |   | (9,844  | )      |   | (18,969 | )      |
|   | Pre-commercial production  operating expenses capitalized |   | (4,803  | )      |   | (61,673 | )      |
|   |                                                      | $      | 194,522 |   | $      | 62,848  |   |

| **18.** | **Administrative expenses** |
|---------|-----------------------------|

|   |                           |   | 2014   |   |   | 2013   |   |
|--------|--------------------------------|--------|--------|--------|--------|--------|--------|
|   | Salaries and employee benefits | $      | 5,912  |   | $      | 5,555  |   |
|   | Share-based payments           |   | 2,174  |   |   | 3,127  |   |
|   | Long-term incentives           |   | 3,855  |   |   | 50     |   |
|   | Business development           |   | 1,491  |   |   | 1,912  |   |
|   | Other                          |   | 3,931  |   |   | 3,893  |   |
|   |                           | $      | 17,363 |   | $      | 14,537 |   |

| **19.** | **Commitments** |
|---------|-----------------|

|   | As of December 31, 2014, the Company had the following contractual   obligations: |
|--------|-----------------------------------------------------------------------------------|

|   |                                             |   | Total   |   |   | Less than 1 year |   |   | 1-3 years |   |   | 3-5 years |   |   | Over 5 years |   |
|--------|--------------------------------------------------|--------|---------|--------|--------|------------------|--------|--------|-----------|--------|--------|-----------|--------|--------|--------------|--------|
|   | Purchase commitments and contractual obligations | $      | 45,813  |   | $      | 45,813           |   | $      | -         |   | $      | -         |   | $      | -            |   |
|   | Mine closure and reclamation                     |   | 50,400  |   |   | 600              |   |   | 1,400     |   |   | 1,200     |   |   | 47,200       |   |
|   | Minimum operating lease payments                 |   | 4,971   |   |   | 4,722            |   |   | 249       |   |   | -         |   |   | -            |   |
|   | Total contractual obligations                    | $      | 101,184 |   | $      | 51,135           |   | $      | 1,649     |   | $      | 1,200     |   | $      | 47,200       |   |

24

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **19.** | **Commitments (continued)** |
|---------|-----------------------------|

|   | The Company has arranged an annually renewable   environmental bond for the Bisha Project for $15,000 at a cost of 1% per   annum. |
|--------|------------------------------------------------------------------------------------------------------------------------------------|

| **20.** | **Segment information** |
|---------|-------------------------|

|   | The Company conducts its business as a   single operating segment being the mining business in Africa.  All mineral   properties and equipment are situated in Africa. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **21.** | **Financial instruments and risk management** |
|---------|-----------------------------------------------|

|   | Financial instruments are agreements between two parties   that result in promises to pay or receive cash or equity instruments. |
|--------|----------------------------------------------------------------------------------------------------------------------------------|

|   | The Company has exposure to the following risks from its   use of financial instruments: 
-  market risk,
- credit risk, and
- liquidity risk. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | This note presents information about the Company’s   exposure to each of the above risks, the Company’s objectives, procedures and   processes for measuring and managing risk, and the Company’s management of   capital. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Board of Directors has overall responsibility for   the establishment and oversight of the Company’s risk management framework.    The Company’s risk management procedures are established to identify and   analyze the risks faced by the Company.  The Company, through its training   and management standards and procedures, aims to develop a disciplined and   constructive control environment in which all employees understand their   roles and obligations. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company’s Audit Committee oversees how management   monitors compliance with the Company’s financial risk management procedures   and processes and reviews the adequacy of the risk management framework in   relation to the risks faced by the Company. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | Market risk |
|--------|-----|-------------|

|   | Market risk is the risk that changes in   market prices, such as foreign exchange rates, commodity prices, interest   rates, fuel prices and equity prices will affect the Company’s income or the   value of its holdings of financial instruments.  The objective of market risk   management is to manage and control market risk exposures within acceptable   parameters, while optimizing the return on capital. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | Metals price risk |
|--------|-----|-------------------|

|   | The Company is subject to price risk fluctuations in   market prices of copper, gold, and silver, and the profitability of the   Company’s operations is highly correlated to the market prices of these   metals.  Historically, copper, gold, and silver prices have fluctuated widely   and are affected by numerous factors outside the Company’s control. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company is subject to price risk from these fluctuations   for sales that have not yet settled as of the balance sheet date.  The   commodity price risk associated with financial instruments relates to changes   in fair value caused by final pricing adjustments to receivables for these   metals. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

25

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **21.** | **Financial instruments and risk management    (continued)** |
|---------|--------------------------------------------------------------|

|   | (a) | Market   risk (continued) |
|--------|-----|---------------------------|

|   | (i) | Metals price risk (continued) |
|--------|-----|-------------------------------|

|   | The   Company has not hedged any of its concentrate sales. The quantities of   payable copper, gold, and silver subject to final settlement as at December   31, 2014, and the weighted average forward prices per pound or ounce used to   value the related receivables are as follows: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                |   |  2014                        |   |
|--------|-------------------------------------|--------|-----------------------------------|--------|
|   |                                |   | Quantity(000s payable     pounds) |   |   | Weighted average    forward  price per     pound |   |
|   | Copper subject to final  settlement |   | 56,430                            |   | $ | 2.87 |   |
|   |                                |   | Quantity        (payable ounces   | )      |   |   Weighted average     forward  price per    ounce |   |
|   | Gold subject to final settlement    |   | 5,771                             |   | $ |  1,199 |   |
|   | Silver subject to final settlement  |   | 325,267                           |   | $ |  15.97 |   |

|   | Sales of copper concentrate are recognized on a   provisional pricing basis when risks and rewards, transfers and the rights   and obligations of ownership pass to the customer, which usually occurs on   shipment. However, the final pricing for the product sold and purchased is   not determined at that time as it is contractually linked to market prices on   a subsequent date. These arrangements have the characteristics of a   derivative instrument as the value of the related receivables will vary as   the price for the underlying commodity varies in the metal markets. These   pricing adjustments result in gains in a rising price environment and losses   in a declining price environment and are recorded as a change in revenue at   each balance sheet date and at final settlement. The effect on revenue and   accounts receivable and payable of a 10% change to the underlying metals   prices is disclosed in note 16. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Fuel price risk |
|--------|------|-----------------|

|   | Fuel consumption comprises a significant portion of the   Company’s operating expenses and the Company is therefore subject to fuel   price risk on fluctuations of the market price of diesel. Based on an   estimated 40 million litres of diesel fuel, a $0.10 change in the price per   litre of fuel would have a $4 million impact on earnings. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Currency risk |
|--------|-------|---------------|

|   | The Company’s functional currency is the United States   dollar (USD).  The Eritrean nakfa (ERN) is directly tied to the USD and   therefore does not present a foreign exchange risk in terms of the functional   currency.  The Company is exposed to currency risk on settlements of   purchases that were denominated in currencies other than the functional   currency.  Historically the currency exposures are primarily to the Canadian   dollar (CAD), South African rand (ZAR), Australian dollar (AUD), and Euro   (EUR). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

26

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **21.** | **Financial instruments and risk management    (continued)** |
|---------|--------------------------------------------------------------|

|   | (a) | Market   risk (continued) |
|--------|-----|---------------------------|

|   | (iii) | Currency risk (continued) |
|--------|-------|---------------------------|

|   | The   following is a break-down of financial assets and liabilities denominated in   foreign currencies to which the Company is exposed: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                     |   | 2014   |   |
|--------|------------------------------------------|--------|--------|--------|
|   |                                     |   | CAD    |   |   | ZAR |   |   | AUD |   |   | EUR |   |
|   | Cash and cash equivalents                |   | 297    |   |   | 1,870 |   |   | - |   |   | - |   |
|   | Accounts receivable                      |   | 168    |   |   | 23 |   |   | - |   |   | - |   |
|   | Payables and accruals                    |   | (8,305 | )      |   | (314 | ) |   | (203 | ) |   | (1,501 | ) |
|   | Net financial assets (liabilities)       |   | (7,840 | )      |   | 1,579 |   |   | (203 | ) |   | (1,501 | ) |
|   | USD foreign exchange rate                |   | 0.86   |   |   | 0.09 |   |   | 0.82 |   |   | 1.22 |   |
|   | Balance sheet exposure in equivalent USD |   | (6,753 | )      |   | 136 |   |   | (166 | ) |   | (1,825 | ) |
|   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|   |                                     |   | 2013   |   |
|   |                                     |   | CAD    |   |   | ZAR |   |   | AUD |   |   | EUR |   |
|   | Cash and cash equivalents                |   | 198    |   |   | 766 |   |   | - |   |   | - |   |
|   | Accounts receivable                      |   | 116    |   |   | 120 |   |   | - |   |   | - |   |
|   | Payables and accruals                    |   | (2,278 | )      |   | (2,292 | ) |   | (220 | ) |   | (135 | ) |
|   | Net financial assets (liabilities)       |   | (1,964 | )      |   | (1,406 | ) |   | (220 | ) |   | (135 | ) |
|   | USD foreign exchange rate                |   | 0.94   |   |   | 0.10 |   |   | 0.89 |   |   | 1.38 |   |
|   | Balance sheet exposure in equivalent USD |   | (1,846 | )      |   | (134 | ) |   | (195 | ) |   | (186 | ) |

|   | Currency   risk sensitivity analysis |
|--------|--------------------------------------|

|   | A 10 percent strengthening (weakening) of the US dollar   against the above currencies at December 31 would have increased (decreased) net   income by the amounts shown below.  This analysis assumes that all other   variables, in particular interest rates, remain constant: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   | 2014 |   |   | 2013 |   |
|--------|--------|--------|------|--------|--------|------|--------|
|   | CAD    | $      | 675  |   | $      | 185  |   |
|   | ZAR    |   | 14   |   |   | 13   |   |
|   | AUD    |   | 17   |   |   | 19   |   |
|   | EUR    |   | 182  |   |   | 19   |   |

|   | (b) | Credit risk |
|--------|-----|-------------|

|   | Credit risk is the risk of financial loss to the Company if a   counterparty to a financial instrument fails to meet its contractual   obligations, and arises principally from the Company’s financial assets. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | Cash equivalents |
|--------|-----|------------------|

|   | The Company limits its exposure to credit risk by only   investing in highly liquid securities and only with counterparties that have   a strong credit rating.  Given these high credit ratings, management does not   expect any counterparty to fail to meet its obligations. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Accounts receivable |
|--------|------|---------------------|

|   | The Company’s accounts receivable are due primarily from   the smelters and other customers to which the Company sells copper   concentrate and have maximum settlement periods of approximately four   months.  Management does not expect these counterparties to fail to meet   their obligations. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

27

----

 
| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **21.** | **Financial instruments and risk management    (continued)** |
|---------|--------------------------------------------------------------|

|   | (b) | Credit     risk (continued) |
|--------|-----|-----------------------------|

|   | (iii) | Due from non-controlling interest |
|--------|-------|-----------------------------------|

|   | Due from non-controlling interest is   collected from ENAMCO with collection terms based on cash flow from the Bisha   Mine with a guarantee from the State of Eritrea for any shortfall.    Management expects that Bisha Mine cash flow will be sufficient to allow   collection from the non-controlling interest. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | Exposure to credit risk |
|--------|------|-------------------------|

|   | The carrying amount of financial assets represents the   maximum credit exposure.  Cash and cash equivalents held by the Company have   contractual maturities of less than 90 days.  The maximum exposure to credit   risk at the reporting date was: |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                              |   | 2014          |   |   | 2013          |   |
|--------|-----------------------------------|--------|---------------|--------|--------|---------------|--------|
|   | Cash and cash equivalents         | $      | 442,418       |   | $      | 302,724       |   |
|   | Due from non-controlling interest |   | 48,483        |   |   | 83,194        |   |
|   | Accounts receivable               |   | 20,571        |   |   | 44,073        |   |
|   |                              | $      |  511,472 |   | $      |  429,991 |   |

|   | The Company does not have any amounts receivable that it   considers impaired or otherwise uncollectible. |
|--------|-----------------------------------------------------------------------------------------------------------|

|   | (c) | Liquidity risk |
|--------|-----|----------------|

|   | Liquidity risk is the risk that the   Company will not be able to meet its financial obligations as they fall due.    The Company’s approach to managing liquidity is to ensure, as far as   possible, that it will always have sufficient liquid funds to meet its   liabilities when due, under both normal and stressed conditions, without   incurring unacceptable losses or risking damage to the Company’s reputation. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Typically the Company ensures that it   has sufficient cash on hand to meet expected operational expenses including   the servicing of financial obligations, if any; this excludes the potential   impact of extreme circumstances that cannot reasonably be predicted, such as   natural disasters. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The contractual financial liabilities   of the Company as of December 31, 2014, equal $54,169 (December 31, 2013 -   $30,787).  The undiscounted cash flows of the liabilities are equal to their   contractual amounts.  Substantially all of the liabilities presented as   accounts payable and accrued liabilities are due within ninety days of   December 31, 2014. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Fair value versus carrying amounts |
|--------|-----|------------------------------------|

|   | The carrying amount of financial assets   and liabilities carried at amortized cost is a reasonable approximation of   fair value. |
|--------|------------------------------------------------------------------------------------------------------------------------------------|

| **22.** | **Capital management** |
|---------|------------------------|

|   | The Board’s policy is to maintain a strong capital base   so as to maintain investor, creditor and market confidence and to sustain   future development of the business.  The capital of the Company consists of   equity attributable to Nevsun shareholders and amounts related to   non-controlling interest. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company manages its capital structure and makes   adjustments in light of the changes in its economic environment and the risk   characteristics of the Company’s assets.  To effectively manage the Company’s   capital requirements, the Company has in place a planning, budgeting and   forecasting process to help determine the funds required to ensure the   Company has the appropriate liquidity to meet its operating and growth   objectives. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| **NEVSUN RESOURCES LTD.**Notes to Consolidated Financial Statements       (Expressed in thousands of United States dollars, unless otherwise stated)       Years ended December 31, 2014 and 2013 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **23.** | **Key management personnel compensation** |
|---------|-------------------------------------------|

|   | Key management personnel   consists of directors, executive officers, management at a vice president   level and the Bisha Mine General Manager. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                    |   | 2014   |   |   | 2013  |   |
|--------|---------------------------------------------------------|--------|--------|--------|--------|-------|--------|
|   | Salaries,  directors fees and other short-term benefits | $      | 5,545  |   | $      | 5,224 |   |
|   | Share-based payments                                    |   | 1,820  |   |   | 2,136 |   |
|   | Long-term incentives                                    |   | 3,980  |   |   | 50    |   |
|   | Total key management personnel compensation             | $      | 11,345 |   | $      | 7,410 |   |

| **24.** | **Contingencies** |
|---------|-------------------|

|   | (a) | The Araya Lawsuit |
|--------|-----|-------------------|

|   | A lawsuit was filed in the Supreme   Court of British Columbia against the Company (the "Araya Lawsuit")   on November 20, 2014, by three plaintiffs who claim to have once worked with   a local sub-contractor at the Bisha Mine.  The plaintiffs claim that the   Company is legally responsible for breaches of customary international law   and British Columbia law for conduct allegedly engaged in by the local   sub-contractor and the Eritrean Military.  The plaintiffs are also claiming   the right to bring the action in a representative capacity on behalf of   certain persons who they allege were forced to work at the Bisha Mine (the   “Group Members”).  The plaintiffs claim general, aggravated and punitive   damages for themselves and for the Group Members.  No amount of damages is required   to be quantified by the plaintiffs at this time.  No trial date has been set. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | It is not possible at this time to   estimate the outcome of the Araya Lawsuit.  The Company denies the   allegations and will vigorously defend itself in this matter.  No amounts   have been recorded for any potential liability arising from this matter, as   the Company cannot reasonably predict the outcome. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Putative class action complaints |
|--------|-----|----------------------------------|

|   | During May 2014 and July 2014 the   Company settled with United States and Canadian plaintiffs, respectively, two   related securities class actions initiated during 2012.  Settlement   agreements release the Company and all its related parties from any claims   described in these class actions.  The Canadian and US settlements received   final court approval on October 6, 2014 and January 22, 2015, respectively.   Both settlements were funded entirely by the Company’s insurance carriers. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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