NEVSUN RESOURCES LTD.







RENEWAL ANNUAL INFORMATION FORM





For the fiscal year ended December 31, 2004



March 24, 2005







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TABLE OF CONTENTS

|PRELIMINARY NOTES                                               | II                                                                     |   
|--------------------------------------------------------------- | ---------------------------------------------------------------------- | --
|                                                                |                                                                        |   
|INCORPORATION OF
    FINANCIAL STATEMENTS AND TECHNICAL REPORTS | II                                                                     |   
|INFORMATION
    CONCERNING PREPARATION OF RESOURCE ESTIMATES    | II                                                                     |   
|GLOSSARY AND
    DEFINED TERMS                                  | III                                                                    |   
|REPORTING
    CURRENCY                                          | IX                                                                     |   
|                                                                |                                                                        |   
|ITEM 1.                                                         | CORPORATE S TRUCTURE                                                   | 1 
|                                                                |                                                                        |   
|1.1                                                             | NAME AND
    INCORPORATION                                             | 1 
|1.2                                                             | INTERCORPORATE
    RELATIONSHIPS                                       | 1 
|                                                                |                                                                        |   
|ITEM 2.                                                         | GENERAL DEVELOPMENT OF THE BUSINESS                                    | 2 
|                                                                |                                                                        |   
|2.1                                                             | THREE
    YEAR HIST ORY                                                | 2 
|2.2                                                             | SIGNIFICANT
    ACQUISITIONS AND SIGNIFICANT DISPOSITIONS              | 3 
|                                                                |                                                                        |   
|ITEM 3.                                                         | DESCRIPTION OF THE B USINESS                                           | 3 
|                                                                |                                                                        |   
|3.1                                                             | GENERAL                                                                | 3 
|3.2                                                             | RISK
    FACTORS                                                       | 4 
|3.3                                                             | MINERAL
    PROPERTIES                                                 | 7 
|3.4                                                             | TABAKOTO, MALI                                                         | 7 
|3.5                                                             | SEGALA, MALI                                                           | 11
|3.6                                                             | BISHA, ERITREA                                                         | 15
|                                                                |                                                                        |   
|ITEM 4.                                                         | DIVIDENDS                                                              | 22
|                                                                |                                                                        |   
|ITEM 5.                                                         | DESCRIPTION OF CAPITAL STRUCTURE                                       | 22
|                                                                |                                                                        |   
|ITEM 6.                                                         | MARKET FOR SECURITIES                                                  | 22
|                                                                |                                                                        |   
|6.1                                                             | MARKET FOR
    SECURITIES                                              | 22
|                                                                |                                                                        |   
|ITEM 7.                                                         | DIRECTORS AND OFFICERS                                                 | 23
|                                                                |                                                                        |   
|7.1                                                             | NAME, OCCUPATION AND
    SECURITY HOLDING                              | 23
|7.2                                                             | CORPORATE
    CEASE TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS | 25
|7.3                                                             | CONFLICTS OF
    INTEREST                                              | 26
|7.4                                                             | AUDIT
    COMMITTEE                                                    | 26
|                                                                |                                                                        |   
|ITEM 8.                                                         | INTEREST OF MANAGEMENT                                                 | 33
|                                                                |                                                                        |   
|ITEM 9.                                                         | TRANSFER AGENTS AND REGISTRARS                                         | 33
|                                                                |                                                                        |   
|ITEM 10.                                                        | MATERIAL CONTRACTS                                                     | 33
|                                                                |                                                                        |   
|ITEM 11.                                                        | INTERESTS OF EXPERTS                                                   | 33
|                                                                |                                                                        |   
|ITEM 12.                                                        | ADDITIONAL INFORMATION                                                 | 34
|                                                                |                                                                        |   
|12.1                                                            | ADDITIONAL INFORMATION                                                 | 34





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PRELIMINARY NOTES

Incorporation of Financial Statements and Technical Reports

The following documents are incorporated by reference and form part of this annual information form (the Annual Information Form or AIF) which is prepared in accordance with Form 51-102F2. These documents may be accessed using the System for Electronic Documents Analysis and Retrieval (SEDAR) on the internet at www.sedar.com .

1.

Consolidated financial statements for the year ended December 31, 2004, together with the auditors report thereon dated February 24, 2005;

2.

Managements discussion and analysis (MD&A) for the year ended December 31, 2004;

3.

Technical Report on the Bisha Property and Resource Estimate of the Bisha Deposit, Dated October 1, 2004;

4.

Technical Report on the Bisha property, dated February 2004, as amended April 2004, (the Bisha Technical Report);

5.

Technical Report on the Segala property, dated May 17, 2004, (the Segala Technical Report);

6.

Technical Report on the Tabakoto property, dated May 17, 2004, (the Tabakoto Technical Report).

Information Concerning Preparation of Resource Estimates

All resource estimates included in this Annual Information Form have been prepared in accordance with Canadian National Instrument 43-101 and the Canadian Institute of Mining and Metallurgy Classification System. These standards differ significantly from the requirements of the United States Securities and Exchange Commission, and resource information included herein may not be comparable to similar information concerning U.S. companies. In particular, the term resource does not equate to the term reserves. Under U.S. standards, mineralization may not be classified as a reserve unless the determination has been made, that according to definition is, that part of a mineral deposit which could be economically and legally produced or extracted at the time of the reserve determination. The Securities and Exchange Commissions disclosure standards normally do not permit the inclusion of information concerning measured mineral resources, indicated mineral resources or inferred mineral resources in documents filed with the Securities and Exchange Commission, unless such information is required to be disclosed by the law of the companys jurisdiction of incorporation or of a jurisdiction in which its securities are traded. Accordingly, information concerning descriptions of mineralization and resources contained in this Annual Information Form may not be comparable to information



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made public by U.S. companies subject to the reporting and disclosure requirements of the United States Securities and Exchange Commission.

Glossary and Defined Terms

The following is a glossary of certain mining terms used in this Annual Information Form.

AEM:

Airborne electro-magnetic geophysical survey.

Albite:

Sodium plagioclase.

Alluvial:

Sedimentary accumulations often as sand or gravel deposited or formed by the action of running water, as in a stream channel or alluvial fan.

Alteration:

Refers to process of changing primary rock minerals (such as quartz, feldspar and hornblende) to secondary minerals (quartz, carbonate, and clay minerals) by hydrothermal fluids (hot water).

Airborne geophysical

Survey:

A helicopter or fixed wing operated geophysical evaluation of a property.

Anticline:

Part of the fold or the flexure that forms an arch with the older rocks occupy the core of this arch and the younger rocks the outer portion.

Argillite:

Low grade metamorphic clay rich sedimentary rock (shale, mudstone, siltstone).

Arsenopyrite:

The common arsenic mineral and principal ore of arsenic; occurs in many sulphide ore deposits, particularly those containing lead, silver, and gold.

Block model:

The representation of geologic units using three-dimensional blocks of predetermined sizes.

Breccia:

A rock in which angular fragments are surrounded by a mass of fine-grained minerals.

CIM:

Canadian Institute of Mining and Metallurgy.

Carbonatization:

The formation of carbonate minerals as calcite, dolomite, magnesite, ankerite, cerussite, malachite, etc.

Chlorite:

Light to dark-green, black; pearly, and vitreous mica whose general composition is that of a basic iron, magnesium, aluminum silicate (Mg, Fe)6(AlSi3)O13(OH)8.



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Conglomerate:

Rudaceous rocks consisting of rounded or sub-rounded fragments, implying rather more transport than breccias.

Cross section:

A representative display of geology perpendicular to the general trend of the mineralization.

Diamond drill:

A machine using diamond embedded bits to extract a known sample size from the ground.

Differential GPS:

A survey system using instruments that provides an accurate global position from known satellite positions in space.

Diorite:

A coarse-grained plutonic intermediate igneous rock, consisting essentially of intermediate plagioclase, and one or more of the ferromagnesian minerals (biotite, hornblende, augite).

Dolerite:

Fine to medium-grained gabbro, replaced in North America by diabase, usually occur as dykes.

Dyke:

A tabular igneous intrusion that cuts across the bedding or foliation of the country rock.

EM:

An instrument that measures the change in electro-magnetic conductivity of different geological units below the surface of the earth.

Feasibility study:

Group of reports that determine the economic viability of a given mineral occurrence.

Felsic:

An acronym word derived from feldspar and silica, and used to describe light-coloured silica minerals such as quartz, feldspar, and feldspathoids.

G/t or gpt:

Grams per metric tonne.

Gabbro:

A coarse-grained, plutonic basic (mafic) igneous rock consisting of basic plagioclase (labradorite to anorthosite), feldspar, Pyroxene (augite and/or hypersthene), olivine, hornblende, biotite. Equivalent extrusive basalt

Geotechnical work:

Tasks that provide representative data of the geological rock quality in a known volume.

Gossan:

An iron-bearing weathered product overlying a sulphide deposit. It is formed by the oxidation of sulphides and the leaching-out of the sulphur and most metals, leaving hydrated iron oxides and rarely sulphates.



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Graphite:

A soft black form of native carbon found in metamorphic rocks, crystalline limestones, igneous rocks, veins, and pegmatites.

Gravity:

A methodology using instrumentation allowing the accurate measuring of the difference between densities of various geological units in situ.

Greywacke:

A sedimentary rocks with fine to coarse, angular to sub-angular particles which are mainly rock fragments (lithic fragments). They are usually poorly sorted and the cementing material is generally argillaceous.

Induced Polarization (IP):

A method of ground geophysical surveying employing an electrical current to determine indications of mineralization.

Laterite:

Residual deposit formed under special climatic conditions in tropical regions, it consists essentially of hydrated iron oxides. The original rocks are mafic, ultramafic, and iron rich lithologies.

Long section:

A representative display of geology along the axis of mineralization.

Mafic:

Igneous rocks composed mostly of dark, iron- and magnesium-rich minerals.

Magnetometer:

An instrument that measures the difference in magnetic response of different geological units.

Metasediments:

Metamorphic sedimentary rocks.

Mineral Reserve:

The economically mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allowances for losses that may occur when the material is mined and processed.

The terms mineral reserve, proven mineral reserve, probable mineral reserve, and measured, indicated and inferred mineral resource used in this Annual Information Form are Canadian mining terms as defined in accordance with National Instrument 43-101  Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the CIM) Standards on Mineral Resource and Mineral Reserves Definitions and guidelines adopted by the CIM Council on August 20, 2000,
as
those definitions may be amended from time to time by CIM(the CIM Standards).



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Under United States standards, a mineral reserve is defined as a part of a mineral deposit which could be economically and legally extracted or produced at the time the mineral reserve determination is made, where:

- reserve means that part of a mineral deposit which can be economically and legally extracted or produced at the time of the reserve determination;
- economically implies that profitable extraction or production has been established or analytically demonstrated to be viable and justifiable under reasonable investment and market assumptions, and;
- while legally does not imply that all permits needed for mining and processing have been obtained or that other legal issues have been completely resolved, for a reserve to exist, there should be a reasonable certainty based on applicable laws and regulations that issuance of permits or resolution of legal issues can be accomplished in a timely manner.

Mineral reserves are categorized as follows on the basis of the degree of confidence in the estimate of the quantity and grade of the deposit.

Under United States standards, proven or measured reserves are defined as reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; (b) grade and/or quality are computed from the results of detailed sampling and (c) the sites for inspection, sampling and measurement are spaced so closely and the geographic character is so well defined that size, shape, depth and mineral content of reserves are well established.

Under United States standards, probable or indicated  reserves are defined as reserves for which quantity and grade and/or quality are computed from information similar to that of proven reserves (under United States standards), but the sites for inspection, sampling, and measurement are further apart or are otherwise less adequately spaced, and the degree of assurance, although lower than that for proven mineral reserves, is high enough to assume continuity between points of observation. The degree of assurance, although lower than that for proven mineral reserves, is high enough to assume continuity between points of observation.

Mineral Resource:

A concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the earths crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.



Inferred Mineral Resource:

That part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified,



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geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

Indicated Mineral Resource:

That part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Measured Mineral Resource:

That part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

While the terms mineral resource, measured mineral resource, indicated mineral resource, and inferred mineral resource are recognized and required by Canadian regulations, they are not defined terms under standards in the United States. As such, information contained in this report concerning descriptions of mineralization and resources under Canadian standards may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of the Securities and Exchange Commission. Indicated mineral resource and inferred mineral resource have a great amount of uncertainty as to their existence and a great uncertainty as to their economic and legal feasibility. It can not be assumed that all or any part of an indicated mineral resource or inferred mineral resource will ever be upgraded to a higher category. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.

Mineralization

An anomalous occurrence of metal or other commodity of value defined by any method of sampling (surface outcrops, drill core, underground channels). Under United States Securities and Exchange Commission standards, such a deposit does not qualify as a reserve until comprehensive evaluation, based on unit cost, grade, recoveries and other factors, concludes that the



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mineralization could be legally and economically produced or extracted at the time the reserve determination is made

Mottled clay:

Spotted clay with different colour.

Multiple indicator kriging:

The probability in the distribution of values using deciles that are transformed to 1, if equal or less than the value or 0, if greater than the value, used to determine the average of a group of values.

Ore:

Rock, generally containing metallic or non-metallic materials, which can be mined and processed at a profit.

Porphyry:

An igneous rock characterized by visible crystals in a finegrained matrix.

Pulse EM:

Ground electro-magnetic, time domain, prospecting technique.

Pyrite:

An iron sulphide mineral (FeS2), the most common naturally occurring sulphide mineral.

Quartz diorite:

Diorite with quartz as usually accessory minerals (<10%).

Return water dam:

Water collected in a storage area from a mining site.

Reverse Circulation (RC):

A type of drilling using dual-walled drill pipe in which the material drilled, water, and mud are circulated up the center pipe while the air is blown down the outside pipe.

Saprolite:

Clay and iron oxide rich weathered and altered rock.

Schist:

A medium to course grained foliated metamorphic rock the grains of which have a roughly parallel arrangement; generally developed by shearing.

Shear Zone:

A zone in which shearing has occurred on a large scale so that the rock is crushed and brecciated.

Silica:

SiO2 (quartz and chalcedony).

Sphalerite:

Zinc sulphide mineral (ZnS).

Stockwork:

A threedimensional network of closely spaced planar to irregular veinlets.

Strike:

The direction, or bearing from true north, of a vein or rock formation measured on a horizontal surface.

Sulphide (Sulfide):

A compound of sulphur (sulfur) and some other metallic element.



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Supergene:

A word suggesting an origin literally from above. It is used almost exclusively for processes involving water, with or without dissolved material, percolating down from the surface. Typical supergene processes are solution, hydration, oxidation, deposition from solution, reactions of ions in solution with ions in existing minerals (replacement or enrichment).

Syncline:

A flexure or fold in a form of a trough, the younger rocks occupy the core and the older rocks the outer portion.

Tailings:

Gangue minerals extracted from ore through various mineral processes and deposited in an enclosed ground storage area.

Tpa:

Tonnes per annum.

Trenching:

The mechanical or human excavation of ground material to expose material below surface.

VMS:

Volcanic hosted massive sulphides.

Waste rock dump:

Rock determined as having no economic value in a mining scenario that is removed to a location and deposited.

Water storage dam:

Water collected from rain or another hydrological system and trapped in a storage area.



Reporting Currency

All dollar amounts are expressed in United States dollars unless otherwise indicated.The Companys quarterly and annual financial statements are presented in United States dollars.





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ITEM 1.

CORPORATE STRUCTURE

1.1

Name and Incorporation

The head office of Nevsun Resources Ltd. (Nevsun or the Company) is located at 800-1075 West Georgia Street, Vancouver, British Columbia, V6E 3C9 and its registered and records office is located at 1000-840 Howe Street, Vancouver, British Columbia, V6Z 2M1.

The Company was incorporated in British Columbia under the Companies Act (British Columbia) on July 19, 1965, originally under the name of Hogan Mines Ltd. Since inception the Company has undergone four name changes until December 19, 1991 when it adopted the name of Nevsun Resources Ltd. The Company is now governed by the Business Corporations Act (British Columbia).

1.2

Intercorporate Relationships







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ITEM 2.

GENERAL DEVELOPMENT OF THE BUSINESS

2.1

Three Year History

The Company is a natural resource company primarily engaged in the acquisition, exploration and development of mineral properties. Currently the Companys portfolio is focussed on properties in Africa with gold and base metal (copper and zinc) resources/reserves.

The Companys principal mineral properties include the Tabakoto and Segala properties which are located in Mali, West Africa, and the Bisha property which is located in Eritrea, North-East Africa. Certain less significant exploration properties are located in Mali, Ghana and Eritrea. The following is a description of the general development of the Companys business during the past three years.

Funding of the Companys operations, together with significant mineral discoveries in Eritrea, have had a significant impact on the level of activity during this period.  In 2002 and 2003 a series of equity issues raised substantial funds aggregating to allow the advancement of its projects in Mali and Eritrea.

MaliIn Mali, after a number of years of extensive exploration on its Tabakoto property, the Company was granted a mining licence by the Government of Mali in late 1999. During 2001 and 2002 the Company carried out sufficient work to have resource and reserve reports prepared by Snowden Mining Industry Consultants of Australia (Snowden). The Snowden reports formed the basis of a feasibility study prepared by an independent engineer, Metallurgical Design & Management (Pty) Ltd. (MDM) of South Africa, which was prepared for the purpose of taking the Tabakoto property into development and production and was delivered to the Company in late 2002. Also, during 2002 the Company acquired a number of mineral properties contiguous to the initial Tabakoto licensed area and subsequently was granted an expanded mining license by the Government of Mali.

During 2002 the Company completed the acquisition of the Segala property that is contiguous to Tabakoto and is also subject to its own mining license. The value of the acquisition was approximately $10.7 million in the form of cash and shares paid and to be paid over the following three years. Subsequent to its acquisition the Company carried out an extensive exploration program that resulted in completion of a reserve report by Snowden.

During 2004 the Companys principal activity in Mali was the implementation of the start of the construction of a mine at Tabakoto. MDM was awarded the construction contract for Tabakoto in May 2004 and production start is targeted for mid year 2005. The pre-production capital cost for the mine build program is now estimated at approximately US$45 million.

EritreaThe Company originally commenced work in Eritrea during 1999, until it temporarily withdrew from active exploration from mid-2000 until mid-2002 as a result of a border conflict between Eritrea and Ethiopia.  The conflict was resolved through international assistance, including the United Nations and support from several countries.  The Government of Eritrea has provided



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additional precautionary security for the Company as a demonstration of its support for economic development.

In late 2002 a limited exploration drill program culminated in the Bisha high-grade gold, copper, zinc VMS (volcanogenic massive sulphide) discovery. During 2003 the Company extended the area of its Bisha exploration license and continued with extensive exploration on the property including drilling, an airborne geophysical survey, and EM, mag, and gravity ground geophysical surveys. By July 2004 the Company had drilled the original Bisha Main discovery to 25m centers along a 1200m strike of its extensive VMS structure. A total of 50,716 meters of diamond and reverse circulation drilling in 352 holes were completed to that date. The Bisha Main high grade gold oxide, supergene copper, and primary sulphide resources were published in October 2004.

During September 2004 a temporary stop-work order for all mineral exploration in the country was issued by the Government of Eritrea. In January 2005 the Company was requested to recommence work with full support of the Government and immediately mobilized its exploration staff and contract drill crews. Drilling resumed at Bisha and the feasibility study for the Bisha Main deposit was initiated in early February.

GhanaIn Ghana the Companys main interest is the Kubi property, which since 1999 has been under an arrangement with Anglogold Ashanti Ltd. whereby the Company transferred the surface rights to Anglogold Ashanti in exchange for cash and an ongoing royalty. Anglogold Ashanti obtained a mining license and commenced mining the property in 1999. In 2000, Anglogold Ashanti suspended operations awaiting a grant to access within a forestry reserve area. Anglogold Ashanti received permission by the Government to recommence mining of the Kubi property during 2004 and resumed surface mining before the year end.

The Company currently holds the underground rights to the Kubi property and the surface rights return to the Company in July 2005.

2.2

Significant Acquisitions and Significant Dispositions

During 2004 there were no significant acquisitions or dispositions requiring disclosure.

ITEM 3.

DESCRIPTION OF THE BUSINESS

3.1

General

A general description of the business is also contained under item 2.1 of this AIF.

During 2004 the Company has undergone a change in business through the commencement of construction of the Tabakoto mine in Mali, West Africa. As at December 31, 2004 construction is in progress, with production targeted for mid 2005.



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During 2003 the Company added management and staff to the Mali operations so as to oversee construction of the Tabakoto mine during 2004/2005 and then be prepared for production in mid 2005. At the end of 2004 the Company had eight employees in Canada plus over one hundred employees in Africa. During each year the Company employs several additional temporary project related staff and consultants in order to carry out its exploration and development programs.

3.2

Risk Factors

An investment in natural resource issuers involves a significant degree of risk.  Investment in the securities of the Company should be considered as highly speculative due to the nature of the Companys business.  The following risk factors should be given special consideration:

1.

Exploration risk. Exploration for mineral deposits involves significant risk that even a combination of careful evaluation, experience and knowledge may not eliminate.  It is impossible to ensure that the Companys exploration programs will establish economically recoverable reserves.

2.

Development risk. Mineral property development is a speculative business and involves a high degree of risk.  The marketability of natural resources that may be acquired or discovered by the Company will be affected by numerous factors beyond its control.  These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection.  The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital.

3.

Infrastructure risk.  Mining, processing, development and exploration activities depend, to some degree, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants which affect capital and operating costs.  Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Companys operations, financial condition and results of operations.

4.

Commodity price risk. The price of gold and other metals can and has experienced volatile and significant price movements over short periods of time, and is affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations (specifically, the U.S. dollar relative to other currencies), interest rates, global or regional consumption patterns, speculative activities and increased production due to improved mining and production methods.  The supply of and demand for metals are affected by various factors, including political events, economic conditions and production costs, and governmental policies.

5.

Reserve and resource estimate risk.The figures for reserves and resources presented herein are estimates, and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized.  Market fluctuations



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in the price of mineral commodities or increases in the costs to recover minerals may render the mining of ore reserves uneconomical and require the Company to take a write-down of the asset or to discontinue development or production.  Moreover, short-term operating factors relating to the reserves, such as the need for orderly development of the ore body or the processing of new or different ore grades, may cause a mining operation to be unprofitable in any particular accounting period.
Proven and probable reserves were calculated based upon a gold price of $325 per ounce and measured and indicated resources were calculated based upon a gold price of $325 per ounce.  Prolonged declines in the market price of gold may render reserves containing relatively lower grades of gold mineralization uneconomic to exploit and could reduce materially the Companys reserves and resources.  Should such reductions occur, material write downs of the Companys investment in mining properties or the discontinuation of development or production might be required, and there could be material delays in the development of new projects, increased net losses and reduced cash flow.
There are numerous uncertainties inherent in estimating quantities of mineral reserves and resources.  The estimates in this Annual Information Form are based on various assumptions relating to metal prices and exchange rates during the expected life of production, mineralization of the area to be mined, the projected cost of mining, and the results of additional planned development work.  Actual future production rates and amounts, revenues, taxes, operating expenses, environmental and regulatory compliance expenditures, development expenditures and recovery rates may vary substantially from those assumed in the estimates.  Any significant change in these assumptions, including changes that result from variances between projected and actual results, could result in material downward or upward revision of current estimates.

6.

Operating risk. Mining operations generally involve a high degree of risk.  Hazards such as unusual or unexpected formations and other conditions are involved.  The Company may become subject to liability for pollution, cave-ins or hazards against which it cannot insure or against which it may elect not to insure.  The payment of such liabilities may have a material, adverse effect on the Companys financial position.

7.

Ownership risk. There is no guarantee that title to the properties in which the Company has an interest will not be challenged or impugned.  These properties may be subject to prior unregistered agreements or transfers and title may be affected by undetected defects. There is no guarantee that any of the prospecting licences or exploration permits granted in connection with the properties will be renewed upon their normal expiry. If the Company fails to meet its contractual obligations with respect to a property, it may lose its rights or interests in the particular property.

8.

Political risk. The properties are located in Mali, Eritrea and Ghana and may be subject to sovereign risks, including political and economic instability, government regulations relating to mining, military repression, currency fluctuations and inflation, all or any of which may impede the Companys activities in those countries or may result in the impairment or loss of part or all of the Companys interest in one or all of the properties.



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9.

Funding risk. Additional future funds may be required for further exploration programs, or if such exploration programs are successful, for the development of economic ore bodies and the placing of them in commercial production. Historically the only sources for such funds has been the sale of equity capital and limited debt.  There is no assurance that sources of financing will be available on acceptable terms, or at all.

10.

Share price risk.  The market price of a publicly traded stock, particularly a junior resource issuer like the Company, is affected by many variables not directly related to the success of the company, including the market for all junior resource sector shares, the breadth of the public market for the stock, and the attractiveness of alternative investment.  The affect of these and other factors on the market price of common shares on the exchanges in which the Company trades suggests that the Companys shares will be volatile.  The Companys shares have traded in a range between Cdn$0.12 and Cdn$9.25 in the last 3 fiscal years.

11.

Foreign operation risk.  The Company conducts operations through foreign subsidiaries with operations in Barbados, Mali, Eritrea and Ghana, and substantially all of its assets are held in such entities.  Accordingly, any limitation on the transfer of cash or other assets between the parent corporation and such entities, or among such entities, could restrict the Companys ability to fund its operations efficiently.  Any such limitations, or the perception that such limitations may exist now or in the future, could have an adverse impact on the Companys valuation and stock price.

12.

Currency risk. At present all of the Companys activities are carried on outside of Canada.  Accordingly, it is subject to risks associated with fluctuations of the rate of exchange of the Canadian dollar and foreign currencies.

13.

Environmental risk. The Companys operations may be subject to environmental regulations promulgated by the governments in the countries in which it operates from time to time.  Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailings disposal areas that could result in environmental pollution.  A breach of such legislation may result in the imposition of fines and penalties.  In addition, certain types of operations require the submission and approval of environmental impact assessments.  Environmental legislation is evolving in a manner that means standards and enforcement, fines and penalties for non-compliance are more stringent.  Environmental assessments for proposed projects carry a heightened degree of responsibility for companies, directors, officers and employees.  The cost of compliance with changes in government regulations has the potential to reduce the profitability of operations.  The Company intends to fully comply with all environmental regulations in the countries in which the Company has operations and comply with prudent international standards.

14.

Key executive risk.  The Company is dependent on the services of key executives, including its President and Chief Executive Officer and a small number of highly skilled and experienced executives and personnel.  Due to the relatively small size of the Company, the loss of these persons or the Companys inability to attract and retain additional highly skilled employees may adversely affect its business and future operations.



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15.

Competition risk.  The mineral exploration and mining business is competitive in all of its phases.  The Company competes with numerous other companies and individuals, including competitors with greater financial, technical and other resources than the Company, in the search for and the acquisition of attractive mineral properties.  The ability of the Company to acquire properties in the future will depend not only on its ability to develop its present properties, but also on its ability to select and acquire suitable properties for mineral exploration or development.  There is no assurance that the Company will continue to be able to compete successfully with its competitors in acquiring such properties or prospects on terms it considers acceptable, if at all.

16.

Forward looking statements. Certain of the information contained in this AIF and in the documents incorporated by reference constitutes forward looking statements concerning the Companys plans at its Tabakoto and other mineral properties. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development or mining results will not be consistent with the Companys expectations, metal recoveries, accidents, equipment breakdowns, title matters, labour disputes or other unanticipated difficulties with or interruptions in production, the potential for delays in exploration or development activities or the completion of feasibility studies, political risks involving operations in Mali and Eritrea, the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, failure to obtain adequate financing on a timely basis and other risks and uncertainties, including those described above as well as in the Managements Discussion and Analysis.  Forward-looking statements are frequently, but not always, identified by words such as expects, anticipates, believes, intends, estimates, potential, possible and similar expressions, or statements that events, conditions or results will, may, could or should occur or be achieved.

Other than discussed above, management is not aware of any trends, commitments, events or uncertainties that would have a material effect on the Companys business, financial condition or results of operations.

3.3

Mineral Properties

The Company has three primary properties, the Tabakoto and Segala properties located in Mali and the Bisha property located in Eritrea. Technical reports on these properties are incorporated by reference in this AIF and may be accessed on SEDAR on the internet at www.sedar.com  (see Preliminary Notes at the beginning of this AIF).

3.4

Tabakoto, Mali

The following is a summary only and should be read in conjunction with the Tabakoto Technical Report.



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In September 2002, the Company commissioned MDM to undertake a feasibility study on the Tabakoto Project to demonstrate the viability of the project and identify an appropriate development strategy.  The study was completed in September 2002 and detailed in the report Tabakoto Project Bankable Feasibility Study (the FS).  Based on recommendations made in the FS, the Company completed an infill drilling program in early 2003 and commissioned Snowden to update the resource estimate contained within the FS.  An updated resource estimate was completed in March 2003 and detailed in the report Tabakoto Gold Deposit, 2003 Update to Northern Extension Area Resource.  The results of the updated resource estimate and the FS are the subject of the Tabakoto Technical Report.

The Company has carried out exploration work in the Tabakoto area of southwestern Mali, West Africa since 1993. The Tabakoto area was an area of intense local artisan mining activity for a number of years.

A number of exploration permits were converted to an exploitation permit in late 1999 and revised in 2002, and the exploitation licensed area currently consists of 60 square kilometers.

Past work has consisted of geological mapping, soil sampling, geophysical surveys, diamond drilling and reverse circulation drilling. Several resource estimates have been calculated and a pre-feasibility study was first prepared in 1998. Independent consultants have documented all of this work and reports are available at the Companys corporate office in Vancouver.

The Tabakoto gold deposit is a high grade/low volume, structurally controlled, porphyry and quartz vein associated orebody, outlined through definition drilling programs along a strike length of 1650 meters to a subsurface depth of 350 meters.

The deposit occurs within the core of a tight, upright anticline (or anticline couple), whose axial surface dips steeply (70°-85°) eastward. The folded metasediments are monotonously intermixed such that no distinct marker units exist, and the anticline is defined strictly by common sedimentary facing directions. A suite of meter to decameter scale, intermediate to felsic (+/- quartz) feldspar-porphyritic dykes cuts the folded sequence along the length of the core of the anticline. The porphyritic dykes are concentrated within two main intrusive corridors in the northern portion of the deposit, namely a western corridor (15-30 meters wide) dominated by intermediate (diorite, quartz diorite) dykes and an eastern corridor (20-75 meters wide) dominated by felsic dykes. The corridors are generally about 40 meters apart (up to 80 meters in the north) and merge into one principal corridor (50-110 meters wide) in the central part of the deposit. Brittle faults and gabbro-dolerite dykes transect the folded assembly.

The in-situ oxide zone, composed of saprolite with successive mottled clay zone and local laterite, ranges between 6-50 meters thick, and is overlain by a cap of locally lateritized alluvial material between 4-18 meters thick.

The dyke corridors and associated host rocks along the length of the anticlinal axis form the locus of preferential alteration (silicification. sericitization and/or carbonatization), intrusion of narrow (cm to dm scale) gold bearing (+/-albite, carbonate) quartz vein systems, development of quartz crackle vein and quartz flooded breccia zones, and development of fine to medium grained disseminated arsenopyrite with subordinate pyrite and free gold. Visible gold occurs



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statistically in all lithologies and gold grades range widely owing to a nugget effect. High grade zones of gold mineralization are related to the porphyritic dyke corridors, including the host metasediments, and the zones of alteration and fracturing associated with them, forming a north trending main mineralized zone ranging between 20-50 meters in width along the anticlinal axial trace. Cross and long sections depict a somewhat erratic pattern of high grade mineralization, yet infer the presence of moderately south plunging shoots or panels, likely governed by the intersection of brittle structures. NE trending cross structures, such as the major structure that transects the deposit at its south end and other zones cutting the central part of the deposit, also form the locus of porphyritic dyke injection, alteration and gold mineralization.

A mineral resource estimate for Tabakoto was prepared by Snowden using multiple indicator kriging to interpolate gold grades from composite drill hole samples into a three-dimensional grade block model constrained by solid models of the mineralization. The estimated mineral resource at Tabakoto, above a cut-off grade of 2.0 g/t, is detailed in the table below. The mineral resource estimates include ore reserves.



|Mineral resource estimate (2.0 g/t Au cut off)
|----------------------------------------------
|Category                                      
|Measured                                      
|Indicated                                     
|Measured + Indicated                          
|Inferred                                      

The current ore reserve estimate for the Tabakoto deposit is based on the earlier 2002 resource estimate as detailed in the report titled Tabakoto Gold Deposit Resource Estimation, September 2002.  The estimated Measured and Indicated resource at Tabakoto (above a cut-off grade of 2.0 g/t Au) based on the 2002 resource model was 8.1 million tonnes at a grade of 5.1 g/t Au..

For the purpose of reserve estimation, economic cut-off grades of 2.0 g/t Au for oxide ore and 2.2 g/t Au for fresh ore have been applied.  The ore reserves include allowances for dilution (13% at 0.7 g/t Au) and ore loss (1.5%).  The open pit ore reserve is summarized below.



|Open Pit Ore Reserve ($325/oz)
|------------------------------
|Category                      
|                              
|Proven                        
|Probable                      
|Total                         



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Only material classified as Measured and Indicated was considered as ore in the study, and the inferred material within the open pit limits was not valued.

Mine production of 3.18Mt, reaching 650,000 tonnes per annum of ore grading 5.45g/t gold to a depth of 210 meters over 5 years at a 2g/t gold cut-off grade will yield approximately 536,747 ounces of gold at an average waste to ore ratio of 15.2:1 with ore and waste totalling 52 Mt.

During 2003 the Company hired key project management and engaged MDM to complete the detailed engineering for the plant. In early 2004 the Company commenced building infrastructure required for the project.

In May 2004 the Company made the decision to proceed with the construction of the Tabakoto mine with an estimated pre-production capital cost of approximately $40 million, including pre-stripping as well as plant and infrastructure, financed out of its existing working capital. It is currently estimately that the capital cost of the project will be approximately $45 million.  With a project time schedule of fourteen months, production is expected in mid 2005.

The financial implications of the work undertaken during 2004 on the Tabakoto property is displayed in notes 4 and 5 to the audited financial statements for the year ended December 31, 2004. In addition, the Companys Management Discussion & Analysis for the year provides general descriptions of the work carried out.

1. Property Description & Location

The Tabakoto Technical Report provides detailed descriptions of the property and location.

2. Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Tabakoto Technical Report provides detailed descriptions of the accessibility, climate, local resources, infrastructure and physiography.

3. History

The Tabakoto Technical Report provides detailed descriptions of the property history.

4. Geological Setting

The Tabakoto Technical Report provides detailed descriptions of the geological setting for the property.

5. Exploration

The Tabakoto Technical Report provides detailed descriptions of the exploration carried out on the property.

6. Mineralization

The Tabakoto Technical Report provides detailed descriptions of mineralization.



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7.  Drilling

The Tabakoto Technical Report provides detailed descriptions of the drilling carried out on the property.

8. Sampling and Analysis

The Tabakoto Technical Report provides detailed descriptions of the sampling and analysis procedures carried out.

9. Security of Samples

The Tabakoto Technical Report provides detailed descriptions of the security procedures taken over the samples.

10.  Mineral Resource and Mineral Reserve Estimates

In addition to details above, the Tabakoto Technical Report includes the details of the independent resource and reserve estimates prepared by Snowden.

11. Exploration and Development

While no material exploration programs are contemplated for Tabakoto in 2005, as discussed above the Company is in the process of completing construction of the mine at Tabakoto.

3.5

Segala, Mali

The following is a summary only and should be read in conjunction with the Segala Technical Report and the Tabakoto Technical Report.

The Segala property is contiguous to the Tabakoto property and is subject to its own mining license over a 23 square kilometer area. It was acquired during 2002 at a value of approximately $10.7 million in the form of cash and shares to be paid over the following three years. Past work by former owners consisted of geological mapping, soil sampling, geophysical surveys, diamond drilling and reverse circulation drilling. Several resource estimates were calculated and a pre-feasibility study was prepared by a former owner in 1998.

The Segala gold deposit is a structurally controlled, alteration and mineralization associated deposit within the core of a tight, upright anticline trending  ESE (approx. 110°), whose axial surface dips steeply (-80°) south. The folded metasediments (greywackes and argillites) display variable intensities of alteration including chlorite, carbonate, sericite and silica. A series of quartz stringers and veins intrude this package.

Gold mineralization is associated with later, narrow iron carbonate-quartz veins and stringers that intrude the silicified and carbonatized sediments. The veins and stringers usually display somewhat bleached selvages containing coarse to fine grained arsenopyrite crystals and finer disseminated to patchy pyrite (pyrite is also seen to replace arsenopyrite). Many of these stringers and veins are parallel to local foliation but there are others that are believed to be



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oriented northeast-southwest as well as north south. To a significantly lesser degree gold is also associated with fractured felsic and intermediate feldspar porphyry dykes. Mineralization appears to plunge steeply to the east.

The Main Zone has been defined over a strike length of at least 600 meters and attains widths of up to 40 meters. Higher grade gold zones occur within the mineralized envelope.  The Northwest Zone located to the north and west of the Main Zone does not display the degree of alteration that is seen in the Main Zone. Consequently, the depth of oxidation is in the order of 40-60 meters as opposed to the Main Zone which has depths of oxidation ranging from 5 meters in the east to 25 meters in the west. The degree of iron carbonate and sericite alteration is significantly less and the mineralization associated with quartz veining is more subtle. Quartz veining and stringers are interpreted to trend both northeast, southwest and east west. The strike of the Northwest Zone appears to be parallel to the Main Zone. Northeast striking structures are suspected to play a significant role in emplacement of gold. Graphitic/carbonaceous zones are noted to carry some gold values.

The mineral resource estimate for Segala was completed by Snowden using multiple indicator kriging to interpolate gold grades from composite drill hole samples into a three-dimensional grade block model constrained by solid models of the mineralization.



The resource is reported within mineralized envelope boundaries and is classified as Measured, Indicated and Inferred according to National Instrument 43-101, as listed in the table below.  The Measured and Indicated resource estimated for the Segala deposit is 7.5 Mt at 3.36 g/t Au (based on a cut-off grade of 2.0 g/t Au).  The Inferred resource is 1.2 Mt at 2.84 g/t Au (based on a cut-off grade of 2.0 g/t Au).  The resource figures include ore reserve estimates.



Summary of Classified Segala Mineral Resource2.0g/t Au cut-offCategory
   Tonnes
   
   Au
   
   AuMt
   
   g/t
   
   kgMeasured
   3.3
   
   3.34
   
   11,132Indicated
   4.2
   
   3.37
   
   14,273Measured + Indicated.
   7.5
   
   3.36
   
   25,405Inferred
   1.2
   
   2.84
   
   3,414




The Segala ore reserve estimate by Snowden has been generated on the premise that the Segala open pit will be mined following the exhaustion of the Tabakoto open pit as an extension to the Tabakoto pit mine life.  The Segala ore reserve estimate is therefore dependent upon a Tabakoto mining operation, as discussed under section 3.4 above.



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Ore reserve estimates are based on $350/oz and $325/oz gold prices are summarized in the tables below.  The ore reserves include allowances for dilution (8% at 0.0 g/t Au) and ore loss (1.5%).  Cut-off grades of 1.65 g/t Au ($350/oz) and 1.75 g/t Au ($325/oz) have been assumed.



|Ore Reserve Estimate - $350/oz Au
|---------------------------------
|                                 
|                                 
|Category                         
|Proven                           
|Probable                         
|Total                            
|Waste                            



|Ore Reserve Estimate - $325/oz Au
|---------------------------------
|                                 
|                                 
|Category                         
|Proven                           
|Probable                         
|Total                            
|Waste                            

The reserves detailed are based on a pre-feasibility study examining the economics of the project assuming a capital investment of $1.84 M to expand the nearby Tabakoto tailings facility and upgrade the haul road between the properties.  It is planned to process Segala ore through the Tabakoto process plant at a rate of 870 Ktpa.

The reserves noted above were used to complete a life of mine schedule that in turn was used as a basis for financial analysis.  The financial analysis indicates positive project economics at gold prices in excess of $350/oz and $325/oz.

1. Property Description and Location

The Segala Technical Report includes detailed descriptions of the property description and location.

2. Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Segala Technical Report includes detailed descriptions of the accessibility, climate, local resources, infrastructure and physiography.



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3. History

The Segala Technical Report includes descriptions of the history of the property.

4. Geological Setting

The Segala Technical Report includes descriptions of thegeological setting.

5. Exploration

The Segala Technical Report includes descriptions of the exploration on the property.

6. Mineralization

The Segala Technical Report includes detailed descriptions of the mineralization of Segala.

7. Drilling

The Segala Technical Report includes descriptions of the drilling carried out on the property.

8. Sampling and Analysis

The Segala Technical Report includes detailed descriptions of the sampling and analysis procedures carried out.

9. Security of Samples

The Segala Technical Report provides detailed descriptions of the security procedures taken over the samples.

10. Mineral Resources and Mineral Reserve Estimates

In addition to details above, the Segala Technical Report provides detailed descriptions of the mineral resources and reserves as estimated by Snowden.

11. Exploration and Development

No material exploration programs are currently planned for Segala in 2005.  However, after Tabakoto is in production, the Company will evaluate the two potential development strategies of: (i) when to commence the open pit mining for processing ore through the Tabakoto plant (coincident with Tabakoto mining, 2006 forward, or after the Tabakoto surface mine has been largely depleted), and (ii) the underground potential of Segala.



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3.6

Bisha, Eritrea

The following is a summary only and should be read in conjunction with the Bisha Technical Report.

The Bisha property was originally acquired in 1998 as a prospecting permit covering an area of 100 square kilometers. This was subsequently reduced to a 49 square kilometer exploration permit in 1999. Additional exploration permits which include both the Bisha and Okreb properties were acquired in 2003. The total combined contiguous area covers 322 square kilometers.

Past work up to mid-1999 included prospecting, geological mapping, stream sediment sampling, horizontal loop electromagnetic and magnetometer surveys as well as limited soil sampling. In late 2002 a limited drilling program consisting of 6 diamond drill holes (804 meters) intersected the Bisha gold volcanogenic massive sulphide mineralization.

Subsequent exploration work has consisted of:

1.

an airborne EM and magnetometer survey flown over the entire property at 100 meter line spacing and an average altitude of 120 meters;

2.

establishing an extensive line grid over an area centered on the Bisha deposit area. The grid was established using a differential GPS unit;

3.

geophysical surveying using a Pulse EM , horizontal loop EM and magnetometer as well as detailed gravity surveys corrected for topographic effects using a differential GPS unit that has sub-centimeter accuracy;

4.

detailed geological mapping and sampling and petrographic studies on selected areas;

5.

prospecting of outside AEM defined target areas;

6.

soil sampling;

7.

limited soil pH surveys;

8.

trenching over the Main deposit area and the Northwest Zone;

9.

extensive diamond drilling and limited reverse circulation drilling on the Bisha Main Zone on sections 25 meters apart which has defined the mineralization over a strike length of 1100 meters to an average depth of approximately 200 meters, and a maximum depth of 350 meters;

10.

limited diamond drilling of the Northwest Zone where another massive sulphide deposit has been discovered;

11.

preliminary metallurgical studies;

12.

baseline environmental studies;

13.

preliminary hydrogeology studies;

14.

establishment of a permanent exploration camp.



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Exploration drilling in 2004 traced the Bisha volcanic hosted massive sulphide deposit for over 1 km of strike length in a northsouth trend. The deposit consists of one very large massive sulphide lens, which can be traced the entire length of the deposit, and two separate smaller lenses of massive sulphides occurring to the west. The large lens forms the eastern arm of an approximate 35-40 ̊ south-plunging synform, with several minor antiform-synform couples located to the west. This synform occurs within a larger antiform of regional extent. The massive sulphide deposit outcrops as a gossan in the north, becoming covered by alluvial material south of the Fereketatet River, which bisects the deposit. Nevsun has identified a separate zone of massive sulphides, the Northwest zone, which lies approximately 1.6 kilometers to the northwest of the Main Zone.

Host rocks to the deposit include a suite of bimodal pyroclastic volcanics and associated volcano-sedimentary rocks. These are generally felsic in composition, but in the immediate vicinity of the deposit grade from more mafic in the east, to intermediate-felsic, to felsic in the west. The felsic pyroclastic volcanic rocks include lapilli and ash fall tuffs, blocky tuffs, and debris flows, plus more massive units that appear to be flows. All units are cut by several generations of thin intermediate to felsic dykes.

It is unclear at this time, whether the Northwest Zone is a continuation of the Bisha horizon, or a separate lens further into the hangingwall of the Bisha Main deposit.

With respect to the resource estimate AMEC wrote,

Nevsun and AMEC completed geological modeling of the Bisha Main deposit based on 352 diamond drill and reverse circulation drill holes.  The geological model was developed using sectional spacing of 25 m for the basic interpretations that were subsequently rationalized in plan.  Solid (wireframe) models were created for each principal mineralized or geological domain and became the basis for coding the block model.

AMEC prepared the mineral resource estimate using industry standard methodologies conforming to the requirements set out in National Instrument 43-101.  The modelling was carried out using Vulcan 3D Software by Ken Brisebois, P.Eng.

The block grades were estimated within domains based on interpretation of geological parameters logged in drill holes.  Grades were estimated using Ordinary Kriging utilizing two passes and search neighbourhoods conforming to the geological trend.

Capping of extreme grades was used to remove metal at risk as derived from analyses of the assay distributions.  Calibrated in the Indicated blocks of the model, approximately 7.5% of the Au, 2.5% of the Zn, 13.5% of the Ag and 3.6% of the Cu was removed by the capping process.

Bulk density was estimated by using the average of the measurements from within the modeled zones of mineralization.  Extreme or potentially erroneous values were scrutinized or removed from the dataset.  A full discussion of bulk density values used for the resource estimate is provided in Section 11.2.7 of the Technical Report.

Variography and confidence limits analyses for grade estimation were used in conjunction with confidence in geological modelling and database integrity to develop resource classification



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criteria.  Indicated resources were defined by a nominal 25 m spaced drill sampling grid.  Inferred resources were defined to be the remainder of the material within 50 m of drilling.  Both the Indicated and Inferred material were restricted to the geologically interpreted mineralization domains.

A total of 22.75 Mt was reported as Indicated mineral resources, and an additional 5.85 Mt was also reported as Inferred mineral resources (see Table 3-1).  Table 3-2 summarizes the mineral resources of the Oxide and Supergene Zone and Table 3-3 summarizes the mineral resources of the Primary Zone.

Table
3-1Summary of the Bisha Resource Estimate (Brisebois, 2004)

CategoryZoneCut-offTonnes
(000s)Au g/tAg g/tCu %Zn %IndicatedOxides (all domains)0.5g/t Au4,984.16.5130.00.100.08Supergene Cu0.5% Cu7,644.80.4635.563.470.87Primary2.0% Zn1,711.50.7429.590.973.07Primary Zn2.0% Zn8,413.30.7658.271.129.04Total tonnes22,753.7InferredOxides (all domains)0.5g/t Au122.03.3418.20.120.07Supergene Cu0.5% Cu185.60.0930.143.261.04Primary2.0% Zn392.00.7535.201.243.03Primary Zn2.0% Zn5,150.90.7059.670.848.28Total tonnes5,850.5




Table
3-1Summary of the Oxide and Supergene Zone Resource Estimates (Brisebois, 2004)

ZoneCategoryDomainCut-off
Au g/tTonnes
(000s)Au g/tAg g/tCu %Zn %Oz
millionsOxideIndicatedFe Oxide0.53,653.46.6520.320.100.080.781OxideIndicatedAcidified0.5709.68.35108.050.090.030.190OxideIndicatedBreccia0.5621.13.629.390.090.070.072OxideIndicatedFe Oxide1.03,469.56.9720.790.100.080.778OxideIndicatedAcidified1.0683.78.63109.880.100.030.189OxideIndicatedBreccia1.0519.14.1910.650.090.070.069ZoneCategoryCut-off
% CuTonnes
(000s)Au g/tAg g/tCu %Zn %lbs Cu
millionsSupergeneIndicated0.258,105.20.4434.53.300.86589SupergeneIndicated0.57,644.80.4635.63.470.87585SupergeneIndicated1.06,453.10.5038.73.970.91564




Table
3-3Summary of the Primary and Primary Zn Resource Estimate (Brisebois, 2004)

ZoneCategoryCut-off
Zn %Tonnes
(000s)Au g/tAg g/tCu %Zn %Contained
Zn
Millions lbContained
Cu
Millions lbPrimaryIndicated2.01,711.50.7429.60.973.0711537


Primary ZnIndicated2.08,413.30.7658.31.129.041,680207.7PrimaryInferred2.0392.00.7535.21.243.03Primary ZnInferred2.05,150.90.7059.70.848.28




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The BishaMain Zone is the principal mineral resource on the Bisha Property and the focus of exploration work and current studies.  Additional drilling will be required to advance the resource estimate to a feasibility study level.  In Section 1.7 of the Technical Report, AMEC provides recommendations to advance the project towards engineering and feasibility studies.

Recent structural and geological studies confirm the geologic model and support the opportunities for further exploration success.  At the south end of the deposit the massive sulphides plunge off steeply but significant widths of mineralization containing appreciable zinc values are present at depth.

A stringer sulphide zone is located in the footwall of the primary sulphide zone.  The stringer zone contains significant base and precious metal values.  Nevsun is currently modelling this potential resource.

A widespread zone of mineralization consisting of disseminated copper sulphides in oxidized rocks has also been identified.  Holes such as B-111 that encountered 39 m grading 1.08% Cu and B-87 that intersected 31.5 m assaying 1.44% Cu are examples of this disseminated style of mineralization.  The potential resources available in this area are being assessed.

Other targets on the Bisha Property include the Northwest Zone, Harena, and the Northwest Barite Showing areas.

The Northwest Zone is interpreted to be a structural repetition of the stratigraphy hosting the Bisha Main Zone mineralization.  Mapping, geochemistry, and geophysics all support this as a good exploration target with clear anomalies.  Drilling intersected mineralization in 8 of the 14 holes drilled in this area and one of the longest intervals is from hole B-066 with a 47.5 m core length interval averaging 1.32 g/t Au, 14.96 g/t Ag, 1.52% Cu, 0.01% Pb, and 0.04% Zn (pers. comm. Nielsen, 2004).  The true width of the interval is not yet known because the interpretations are preliminary.  This zone warrants additional drilling.

The Harena Area is 9 km southwest of the Bisha Main Zone and has a gossan with associated geochemical and geophysical anomalies.  The target warrants additional exploration including drilling.

The Northwest Barite Showing has a geochemical and geophysical anomaly.  The target warrants additional exploration including drilling.

The following is quoted from AMECs report:

During the site visit and review AMEC has made several recommendations for improvements to the work being conducted on the Bisha Property.  Nevsun has already addressed many of the recommendations presented by AMEC during this study (i.e. corrections to database, change in magnetic declination, etc.).  Other items that should be addressed are as follows:





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- Implement a double data entry system or a data entry system with some form of validation of codes.  Entry of data could be direct to MS Access or a relational database with filters, limits, and data integrity checks.
- Logging code system should be simplified, standardized and a set of equivalent codes should be prepared to equate the logging to surface mapping.
- Include a commercial blank sample within the QA/QC program.  If the coarse blank material is also continued then care should be exercised during collection of the material.
- Assay a series of pulp samples (check assays) at an external laboratory (approximately 5% is a normal recommended number of check assays).  Also, continue to submit 1 in 20 samples to a second independent laboratory other than ALS
    Chemex.
- Check the relative coverage of the bulk density measurements.  If sufficient samples can be collected from earlier drilling or current drilling then assess the possibility of developing a density model for resource estimation.

AMEC considers that further drilling and engineering studies are warranted on the Bisha Property to advance the Bisha Deposit towards feasibility studies.  The recommended activities include:

- Geotechnical assessment of the potential open pit parameters.  The available geotechnical data, including oriented core should be reviewed and
    modelled.  Geotechnical data collection involving drilling into the walls of the potential open pit will be required.  A geotechnical engineer should provide the coordinates for geotechnical drilling and a series of procedures for logging and sampling of geotechnical information.
- Metallurgical samples should be collected and tested.  The suite of samples must be representative of the mineralized domains and consider the specialized testwork required for each area of the deposit.  Sample collection will require large diameter core (PQ - 85 mm diameter) for metallurgical samples.  A metallurgical testwork program should be designed to assess process options and provide sufficient information for preliminary and/or feasibility studies.  A reputable metallurgical testing facility needs to be retained to complete and report on this work.
- Baseline environmental studies, including social and archaeological studies (underway), in preparation for an Environmental Impact Assessment
    (EIA).
- Socio-economic assessment (underway).
- Hydrological studies (underway).





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- Tailings containment system design (underway).
- Waste and tailings acid generation assessment (underway).
- Complete drilling to infill the near-surface resources of the Bisha Main Deposit.  Nevsun estimates that this will involve approximately 1,500 m of core drilling.  To improve drill recoveries in the gossan area the holes should start with PQ-sized core and subsequently reduce to HQ and NQ as the competency of the rock increases with depth and the effects of surface weathering and oxidation diminish.
- Complete closer-spaced drilling on sections 12.5 m apart to provide improved confidence and advance a significant portion of the resources to the Measured category.
- Review the model and prepare an updated resource estimate including the mineralization in the stockwork and disseminated zones.
- Improve the roads and basic infrastructure in the immediate Bisha area.

All drilling and exploration work should include the QAQC programs and practices that are already in place.  Nevsun and AMEC also consider that the following exploration activities should be completed:



- Deeper drilling on the Bisha Main Zone to determine the overall extent of the VMS deposit, i.e.:

-

Down-plunge on the south end of the Main Zone.

-

Along trend of mineralized horizon at north end of the Main Zone.

-

Down-dip of eastern limb.

- Drill the Bisha Northwest VMS Zone.
- Drill the prime exploration targets such as the coincident gravity, HLEM and soil anomalies defined on the Harena Area (SW grid).
- Model the gravity targets south of line 1715000N using available specific gravity data from various core intervals to determine the depth of any potential massive sulphide mineralization that may be present in this area.
- Conduct exploration and possible drilling in the Northwest Barite Showing area.

1. Property Description and Location

The Bisha Technical Report includes detailed descriptions of the property description and location.





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2. Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Bisha Technical Report includes detailed descriptions of the accessibility, climate, local resources, infrastructure and physiography.

3. History

The Bisha Technical Report includes descriptions of the history of the property.

4. Geological Setting

The Bisha Technical Report includes descriptions of thegeological setting.

5. Exploration

The Bisha Technical Report includes descriptions of the exploration on the property.

6. Mineralization

The Bisha Technical Report includes detailed descriptions of the mineralization.

7. Drilling

The Bisha Technical Report includes descriptions of the drilling carried out on the property.

8. Sampling and Analysis

The Bisha Technical Report includes detailed descriptions of the sampling and analysis procedures carried out.

9. Security of Samples

The Bisha Technical Report includes detailed descriptions of the security procedures taken over the samples.

10. Mineral Resources and Mineral Reserve Estimates

The Bisha Technical Report includes detailed descriptions of the resource estimate provided by AMEC in October 2004.

11. Exploration and Development

Following an Eritrean Government imposed work stoppage lasting from September 2, 2004 until mid January 2005 a significant exploration program continues on at Bisha in 2005, including a diamond drill program that commenced in late January. Extensive other procedures are planned for the exploration effort during 2005, including the continuation of a feasibility study by AMEC for a mining operation on the property.



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ITEM 4.

DIVIDENDS

The Company has not paid any dividends since incorporation and dividends are not expected to be paid by the Company in the foreseeable future.  Payment of dividends in the future is dependent upon the earnings and financial condition of the Company and other factors that the directors may deem appropriate at the time.

ITEM 5.

DESCRIPTION OF CAPITAL STRUCTURE

The Company has authorized capital of 250,000,000 Common Shares without par value, 76,636,322 of which are issued and outstanding at the date of this AIF.  All shares in the capital of the Company are of the same class and each carries the right to one vote.  The Company also has 5,292,000 stock options outstanding in accordance with its Incentive Share Option Plan, of which 4,047,000 of these are vested; each vested option is exercisable for one common share of the Company.  A total of 5,227,500 warrants that have been issued in conjunction with various private placements are currently outstanding; each warrant is exercisable for one common share of the Company.

ITEM 6.

MARKET FOR SECURITIES

6.1

Market for Securities

The Companys common shares have traded on The Toronto Stock Exchange since March 8, 1996 and on the American Stock Exchange since January 12, 2005  During the 2004 financial year, the closing price of the Companys stock ranged from Cdn$1.95 to Cdn$7.00, with monthly trading volume ranging from 3.2 million to 22.6 million shares.  There are no seasonal trends to fluctuations in volume or trading price.  The high/low closing prices and monthly volume for 2004 is as follows:



Canadian DollarsHigh
   
   Low
   
   Volume (million)January
   
   6.69
   
   4.60
   
   19.3February
   5.60
   
   4.62
   
   6.8March
   
   5.39
   
   4.55
   
   8.7April
   
   5.70
   
   3.96
   
   6.8May
   
   4.39
   
   3.07
   
   8.9June
   
   4.10
   
   3.60
   
   6.1July
   
   4.17
   
   3.37
   
   3.2August
   
   4.07
   
   3.30
   
   4.4September
   4.21
   
   2.13
   
   22.6October

   2.44
2.02
   
   8.7November
   2.70
   
   2.05
   
   7.5December
   2.36
   
   1.90
   
   9.0












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ITEM 7.

DIRECTORS AND OFFICERS

7.1

Name, Occupation and Security Holding

The following table sets forth, for each director and officer of the Company as of March 24, 2005 the name, municipality of residence, office, periods of service and the principal occupations in which each director and officer of the Company has been engaged during the immediately preceding five years.  Each director of the Company holds office until the next annual general meeting of the shareholders of the Company or until his successor is duly elected or appointed, unless his office is earlier vacated in accordance with the articles of the Company or he becomes disqualified to act as a director.  Each officer holds office at the pleasure of the Board of Directors.

Name,Municipality Of Residence and Position HeldPrincipal Occupation for the Past Five YearsDirector SinceNumber & Percentage of Shares HeldR. Stuart Angus(1)(3)Vancouver, British
Columbia
DirectorManaging Director  Mergers & Acquisitions, Endeavour Financial Ltd. from November 2003 to present, Partner of the law firm Fasken Martineau Du Moulin LLP February 2001 to October 2003; Partner of the law firm Stikeman Elliott March 1996 to January 2001January 2003NilJohn A. Clarke
West Vancouver, British Columbia
President, Chief Executive Officer & DirectorPresident and Chief Executive Officer of the CompanySeptember 1997647,700 (<1%)Clifford T. Davis 
Vancouver, British Columbia
Chief Financial Officer & DirectorChief Financial Officer of the Company from November 2002 to present & from 1997 to October 2000; Chief Executive Officer of Napier Environmental Technologies, a chemical manufacturer, from November 2000 to October 2002December 199742,000 (<1%)




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Robert J. Gayton (2)West Vancouver, British Columbia
DirectorFinancial Consultant since 1994November 20031,500 (<1%)Gary E. German(1)(2)(3)Toronto, Ontario
Director
ChairmanPresident, Falcon Strategy & Management Co., advisory services for international resource companies since September 2002; Managing Director, Kingsdale Capital Partners, November 2001 to October 2003;  Technical Advisor to the President, Saudi Arabia Mining Company, July 1998 to June  2001;April 1996105,000 (<1%)Gerard E. Munera(1)(2)(3)Greenwich, Connecticut
DirectorManaging Director, Synergex Group, investment holding company; Executive Chairman, Arcadia Inc., manufacturer of building parts, since 1995.April 1996300,000 (<1%)F. William Nielsen
Georgetown, Ontario
Vice President ExplorationVice President Exploration of the Company since January 2003; General Manager Geology of the Company from 1997 to 2002.N/A107,000 (<1%)Maureen D. Carse
Vancouver, British Columbia
Corporate SecretaryCorporate Secretary and Admin/Accounting Manager of the Company.N/A1,000 (<1%)


1 Member of the Governance Committee

2 Member of the Audit Committee

3 Member of the Human Resources Committee

As of March 24, 2005, the directors and officers of the Company, as a group, beneficially owned directly or indirectly, or exercised control or direction over 1,204,200 common shares, being approximately 1.6 % of the issued and outstanding common shares of the Company.  The same directors and officers, as a group, have been granted options to purchase up to 4,220,000 shares of the Company.





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- 25 -



Corporate Cease Trade Orders, Bankruptcies, Penalties or Sanctions

No director or officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, is, or within the 10 years before the date of this Annual Information Form has been, a director or officer of any other issuer that, while that person was acting in that capacity,

(a)

was the subject of a cease trade or similar order, or an order that denied the other issuer access to any exemption under securities legislation, for a period of more than 30 consecutive days;

(b)

was subject to an event that resulted, after the director or executive officer ceased to be a director or executive officer, in the company being the subject of a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days; or

(c)

within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, save as described below.

Robert Gayton was a director and officer of Newcoast Silver Mines Ltd. at the date of a Cease Trade Order issued by the British Columbia Securities Commission on September 30, 2003 and by the Alberta Securities Commission on October 31, 2003 for failure to file financial statements.  The orders were revoked on October 23, 2003 and March 25, 2004 respectively.

Gerard Munera was chairman of Latin American Gold Ltd. (LAG Ltd), a Bermuda company listed on the CDN, at the date of a cease trade order issued by the British Columbia Securities Commission on February 7, 1996 for failure to file its annual 1994/95 financial statements and subsequently its quarterly financial statements.  The annual and interim statements were filed shortly thereafter, and the cease trade order was lifted on May 14, 1996.

No director or officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, or a personal holding company of any such persons has, within the 10 years before the date of this Annual Information Form, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or was subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director or officer.

No director or officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, has

(a)

been subject to any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or



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- 26 -





(b)

been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

7.3

Conflicts of Interest

There are no existing or potential material conflicts of interest between the Company or a subsidiary of the Company and a director or officer of the Company or a subsidiary of the Company.





7.4

Audit Committee

(1)

Mandate

The following is a copy of the Mandate of the Audit Committee which was approved by the Board of Directors on February 21, 2005.

The Audit Committee shall consist of at least three members of the Board of Directors.  Each member of the Audit Committee shall be independent of the Company within the meaning of all applicable legal and regulatory requirements (except in the circumstances, and only to the extent, permitted by all applicable legal and regulatory requirements).  Each member of the Audit Committee shall be financially literate, which means that he or she must have the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally compatible to the breadth and complexity of the issues that can reasonably be expected to be raised by the Companys financial statements.  In addition, at least one member of the Audit Committee shall be a financial expert within the meaning of the rules and forms adopted by the U.S. Securities and Exchange Commission (except in the circumstances, and only to the extent, permitted by all applicable legal and regulatory requirements).

The overall mandate of the Audit Committee is the following:

1.

Assist the directors and management with meeting their responsibilities with respect to financial reporting;

2.

Be directly responsible for (i) the selection of a firm of external auditors to be proposed for election as the external auditors of the Company, (ii) the oversight of the work of the of the Companys external auditors, and (iii) subject to the grant by the shareholders of the authority to do so, if required, fixing the compensation of the external auditors of the Company;

3.

Ensure that at all times there are direct communication channels between the Audit Committee and the Companys external auditors;



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- 27 -





4.

Ensure the independence of the Companys external auditors;

5.

Periodically review and report to the board of directors whether management of the Company has designed and implemented an effective system of internal controls for reviewing and reporting on the Companys financial statements;

6.

Review and report to the board of directors on all financial statements (including interim financial statements) prepared by the Company and enhance the credibility and objectivity of all financial reports; and

7.

Otherwise review the Companys compliance with regulatory and statutory requirements as they relate to financial statements, taxation matters and disclosure of related material facts.

For the purposes of fulfilling its mandate, the Audit Committee will be responsible for the following:



1.

schedule meetings to take place on a regular basis;

2.

afford an opportunity periodically to the external auditors and to senior management of the Company to meet separately with the Audit Committee;

3.

keep minutes of all meetings of the Audit Committee;

4.

periodically report the results of the reviews undertaken and any associated recommendations to the board of directors;

5.

select an external auditor to be proposed by management of the Company to the shareholders for election by the shareholders as the external auditors for the Company, review and approve the terms of the external auditor's engagement, and determine the appropriateness and reasonab1eness of the proposed audit fees and any unpaid fees;

6.

review and evaluate the qualifications, performance and independence of the lead partner of the external auditors, discuss with management of the Company the timing and process for implementing the rotation of the lead audit partner and the reviewing partners of the external auditors, and all other issues related to the change of external auditor, and the planned steps for an orderly transition;

7.

obtain confirmation from the external auditors that they will report directly to the Audit Committee;

8.

obtain confirmation from the external auditors that they will report in a timely matter to the Audit Committee all critical accounting policies and practices to be used, all alternative accounting policies and practices, the ramifications of each of such accounting policies and practices and the accounting policy and practice preferred by the external auditors, for the financial information of the Company within applicable generally accepted accounting principles (GAAP) which have been discussed with management of the Company and will provide a copy of all material written



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- 28 -

communications between the external auditors and management of the Company including, without limitation, any management letter or schedule of unadjusted differences;

9.

obtain confirmation from the external auditors that they will ensure that all reports filed under the United States Securities Exchange Act of 1934, as amended, which contain financial statements required to be prepared in accordance with Canadian GAAP and/or are reconciled to, United States GAAP, reflect all material correcting adjustments identified by the external auditors of the Company;

10.

review and approve the Companys hiring policies regarding partners, employees and former partners and employees of the present and any former external auditors of the Company;

11.

review all reportab1e events, including disagreements, unresolved issues and consultations, as defined in National Instrument 51-102 of the Canadian Securities Administrators, on a routine basis;

12.

review and pre-approve any and all engagements for non-audit services to be provided to the Company or to any of its subsidiaries by the Companys external auditors or any affiliates of the external auditors, together with estimated fees, and review and approve the audit plan with the external auditor and with management;

13.

review with management and with the external auditor any  proposed changes in major accounting policies, and the presentation and impact of significant risks and uncertainties, and key estimates and judgments of management that may be material to financial reporting;

14.

assist in the preparation of any internal control report by management, which provides that management of the Company is responsible for establishing and maintaining an adequate control structure and procedures for financial reporting by the Company, assessing the effectiveness of such control structure and procedures, and ensuring that the external auditors of the Company attest to, and report on, the assessment of such control structure and procedures by management of the Company;

15.

assist the Chief Executive Officer and the Chief Financial Officer of the Company in their assessment of the effectiveness of the Companys internal control over financial reporting and in determining whether there has been any material change in the Companys internal control over financial reporting which has materially affected or could materially affect such internal control subsequent to the date of the evaluation; and

16.

assist the Chief Executive Officer and the Chief Financial Officer of the Company in identifying and addressing any significant deficiencies or material weaknesses in the design or operation of the Companys internal control over financial information and any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting





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- 29 -



17.

question management and the external auditors regarding significant financial reporting issues discussed during the fiscal period and the method of resolution;

18.

review any problems experienced by the external auditors in performing the audit, including any restrictions imposed by management or significant  accounting issues on which there was a disagreement with management;

19.

review audited annual financial statements, in conjunction with the report of the external auditor, and obtain an explanation from management of all significant variances between comparative reporting periods;

20.

review the post-audit or management letter, containing the recommendations of the external auditors and managements response and subsequent follow up to any identified weaknesses;

21.

review a1l interim unaudited financial statements before release to the public;

22.

review all public disclosure documents containing audited or unaudited financial information before release, including any prospectus, the annual report, the annual information form and managements discussion and analysis;

23.

ensure that the Company discloses in the periodic reports of the Company, as appropriate, whether at least one member of the Committee is a financial expert within the meaning of the rules and forms adopted by the U.S. Securities and Exchange Commission;

24.

ensure that all non-audit services provided by the external auditors are approved by or on behalf of the Committee and are disclosed in the periodic reports of the Company;

25.

ensure that each annual report and, to the extent required by any applicable legal or regulatory requirement, any quarterly report of the Company includes disclosure with respect to all material off-balance sheet transactions, arrangements, obligations (including contingent obligations) and other relationships of the Company with unconsolidated entities which may have a current or future effect on the Company in accordance with all applicable legal and regulatory requirements;

26.

ensure that all financial statements and other financial information, including pro forma financial information, included in any report filed by the Company with any regulatory authority or contained in any public disclosure or press release of the Company is presented in a manner which does not contain a material misstatement or omission and reconciles the pro forma information contained therein to Canadian GAAP, and if appropriate, reconciles such pro forma information contained therein to United States GAAP, and which otherwise complies with all applicable legal and regulatory requirements;

27.

review the evaluation of internal controls by the external auditors, together with managements responses;



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28.

review the appointments of the chief financia1 officer and any key financial executives involved in the financial reporting process, and

29.

establish procedures for (a) the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, or auditing matters, and (b) the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

The Audit Committee shall have the authority to determine the appropriate funding for the ordinary administrative expenses of the Audit Committee.  In addition, the Audit Committee may, in its sole discretion, retain, at the expense of the Company, and determine the compensation to be received by, such legal, financial or other advisors or consultants as it may deem necessary or advisable in order to properly and fully perform its duties and responsibilities hereunder.

(2)

Composition of the Audit Committee

The Audit Committee has three members, all of whom are independent and financially literate.  An outline of each members relevant education and experience follows:

Robert J. Gayton, Chairman

Mr. Gayton is a Chartered Accountant with a Ph.D Business from the University of California (1973).  He is a director and audit committee chairman of a number of companies, including Western Silver Corp., Bema Gold Corp., Northern Orion Resources Inc., Amerigo Resources Ltd. and Intrinsyc Software Inc.  Mr. Gayton is a current member of the Institute of Chartered Accountants of B.C.  From 1980-1987 he was a partner with the accounting firm Peat Marwick Mitchell in Mississauga, Coquitlam and Vancouver.

Gary E. German

Mr. German has over thirty five years of senior management experience in operations, development and finance of global resource projects and companies. He is currently President, Falcon Strategy & Management Co providing resource companies strategic and corporate finance direction.  Prior to this he was Senior Advisor to the President-CEO of Ma'aden, the Kingdom of Saudi Arabia's mineral resource development corporation and Chairman of the Finance Committee. Prior to being Chief Operating Officer and Director of TVX Gold Inc, a $1.5Billion marketcap producer, he was President of Bedford Intl Finance, a Toronto based merchant bank. These positions followed twenty-eight years in the Noranda Group, culminating as Senior Vice President with responsibilities that included Norandas international commodity brokerage operations and Brazilian industrial investments. Mr. German is a graduate of the University of Toronto (Bachelor of Applied Science, Industrial Engineering) and the University of Western Ontario (Diploma, International Management).

Gerard E. Munera



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- 31 -



Mr. Munera, a US citizen, is Managing Director of Synergex Group LLC, an investment holding company, and Executive Chairman of Arcadia Inc., a manufacturer of building products.  He serves on the board of Dynamic Materials Corporations (Audit Committee), Meridian Gold Inc. (Audit and Governance Committees), Si Vault Systems Inc. (Executive and Governance Committees), MagIndustries Corporation (Audit Committee) and Zaruma Resources Inc. A graduate of the French premier Ecole Polytechnique with specialization both in civil and mining engineering, Mr. Munera has a diverse background which includes engineering, economics, sales, finance, operations, mining and metals. His tenures were as CFO, CEO, Executive VP and/or Chairman, and include 20 years with Pechiney, first as CFO and then as CEO of their Argentine subsidiary, then as CEO of their US subsidiary Howmet Aluminum and then as Senior Vice President of their Ferro Alloys, Uranium and Carbon businesses in several international locations, all of which included detailed financial involvement with the company.  Other tenure include Union Miniere (CEO), Minorco USA, an affiliate of AngloAmerican (CEO) and Latin American Gold (Chairman and CEO).

(3)  Pre-Approval Policies and Procedures

The Audit Committee has adopted policies and procedures for the engagement of non-audit services, described as follows:

The Company and its subsidiaries will not engage KPMG to carry out any Prohibited Service.  The Audit Committee will consider the pre-approval of permitted services to be performed by the external auditor in each of the following broad categories.

Audit Services

Audit Related Services

Tax Services

Compliance Services, Tax Planning Services, Commodity Tax Services, Executive Tax Services

Other Services

Valuation Services, Information Technology Advisory and Risk Management Services, Actuarial Services, Forensic and Related Services, Corporate Recovery Services, Transaction Services, Corporate Finance Services, Project Risk Management Services, Operational Advisory and Risk Management Services, Regulatory and Compliance Services

For permitted services the following pre-approval policies will apply:

A.

Audit Services

The Audit Committee will pre-approve all Audit Services provided by KPMG through their recommendation of KPMG as shareholders auditors at the Companys annual meeting and through the Audit Committees review of KPMGs annual Audit Plan.



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B.

Pre-Approval of Audit Related, Tax and Other Non-Audit Services

Periodically (e.g. annually), the Audit Committee will update the attached list of Pre-Approved Services and  pre-approve services that are recurring or otherwise reasonably expected to be provided.

The Audit Committee will be subsequently informed at least annuallyof the services on the attached list for which the auditor has been actually engaged.

Any additional requests for pre-approval will be addressed on a case-by-case specific engagement basis as described in (C) below.

C.

Approval of Additional Services

The Company employee making the request will submit the request for service to the CFO.  The request for service should include a description of the service, the estimated fee, a statement that the service is not a Prohibited Service and the reason KPMG is being engaged.

Services where the aggregate fees are estimated to be less than or equal to $25,000.

Recommendations, in respect of each engagement, will be submitted by the CFO to the Chairman of the Audit Committee for consideration and approval.  The full Audit Committee will subsequently be informed of the service at its next meeting.  The engagement may commence upon approval of the Chairman of the Audit Committee.

Services where the aggregate fees are estimated to be greater than $25,000.

Recommendations, in respect of each engagement, will be submitted by the CFO to the full Audit Committee for consideration and approval, generally at its next meeting or at a special meeting called for the purpose of approving such services.  The engagement may commence upon approval of the full Committee.

(4)  External Auditor Fees

All dollar amounts in this section are expressed in Canadian currency.

The following table sets forth the aggregate fees billed to the Company for the years ended December 31, 2004 and 2003 by its independent accountants, KPMG LLP, stated in Canadian dollars:





Year
          ended
          December 31, 2004
  
        Year ended December
          31, 2003Audit
          Fees
        
        68,000
        
        60,327Audit-Related
          Fees(1)
        
        0
        
        0Tax
          Fees(2)
        
        14,500
        
        30,958All
          Other Fees(3)
        
        0
        
        3,500Total
        
        82,500
        
        94,785




(1)

Fees billed for other audit services.

(2)

Fees billed for tax services.

(3)

Fees billed for due diligence on financing and US registration services.



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ITEM 8.

INTEREST OF MANAGEMENT

No director, officer or other insider of the Company, nor any associate or affiliate of any director, officer or other insider has participated in any material transaction of the Company in the most recently completed financial year or any of the three preceding financial years.

ITEM 9.

TRANSFER AGENTS AND REGISTRARS

The Companys transfer agent is Computershare Trust Company of Canada, located in Vancouver, British Columbia.

ITEM 10.

MATERIAL CONTRACTS

There were no material contracts other than in the ordinary course of business entered into during 2004 and no such contracts from prior years having continuing effect.

ITEM 11.

INTERESTS OF EXPERTS



Names of the Qualified Persons who have prepared or are referred to in the technical reports incorporated by reference in this AIF are as follows:



Douglas Reddy, Geoscientist
Principle Geologist, Office Manager, AMEC

Technical Report on the Bisha Property and Resource Estimate of the Bisha Deposit, Dated

November 18, 2004;



Ken Brisebois, P. Eng.
Principal Engineer, AMEC

Technical Report on the Bisha Property and Resource Estimate of the Bisha Deposit, Dated

November 18, 2004



F. William Nielsen, P.Geo
Vice President Exploration, Nevsun Resources Ltd.

- Tabakoto Technical Reports, May 2004- Segala Technical Report, May 2004



Philip Morriss, BSc (Hons), MAusIMM
Manager of Engineering, Snowden Mining Industry Consultants, Australia- Tabakoto Technical Report, May 2004



Alastair Tiver, B Eng., MAusIMM
Principal Consultant, Snowden Mining Industry Consultants, Australia

- Tabakoto Technical Report, May 2004- Segala Technical Report, May 2004





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- 34 -





Christine A. Standing, B.Sc, MAusIMM, MAIG, MGAA
Principal Resource Consultant, Snowden Mining Industry Consultants, Australia- Tabakoto Technical Report, May 2004





Shaun Hackett, MAusIMM, MAIG
Senior Resource Geologist, Snowden Mining Industry Consultants, Australia- Sections of Segala Technical Report, May 2004





Gordon McCrae, B.Tech Professional Eng
Managing Director, Metallurgical Design and Management (Pty) Ltd., South Africa- Tabakoto Technical Report, May 2004





David Sidney Dodd, BSc (Hons)
Technical Director, Metallurgical Design and Management (Pty) Ltd., South Africa- Segala Technical Report, May 2004



Robin E. Chisholm, B.Sc P.Geol
President, Taiga Consultants Ltd., Canada

- Bisha Technical Report, March 2004



Thomas H. Carpenter, P.Geo
Taiga Consultants Ltd., Canada

- Bisha Technical Report, March 2004

To the best of the knowledge of the Company, none of the above mentioned experts has more than 1% interest in the securities of the Company.

ITEM 12.

ADDITIONAL INFORMATION

12.1

Additional Information

1.

The documents listed above, as well as additional information relating to the Company, may be found by using the System for Electronic Documents Analysis and Retrieval (SEDAR) on the internet at www.sedar.com.

2.

Additional information including directors' and officers' remuneration and indebtedness, principal holders of the Company's securities and options to purchase securities is contained in the Company's information circular for its most recent annual meeting of shareholders that involves the election of directors.

3.

Additional financial information is also provided in the Company's consolidated financial statements and MD&A for its most recently completed financial year.

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