Nevsun Reports Strong Second Quarter 2012 Results, Further Raises 2012 Production Outlook

VANCOUVER, BC- Nevsun Resources Ltd.  (TSX:NSU)(NYSE Amex:NSU)(NYSE MKT:NSU) today reported strong financial and operating results for the second quarter ended June 30, 2012.

This release should be read in conjunction with Nevsun Resources Ltd.'s ("Nevsun" or the "Company") 2012 second quarter Management Discussion and Analysis ("MD&A"), which can be found at www.nevsun.com/investors/financials. Unless otherwise noted, with the exception of earnings per share and cash cost per ounce figures, all results are in thousands of US dollars.

Second quarter 2012 highlights

�         Mined 500,000 tonnes of ore at 6.04 g/t gold

�         Produced 87,000 ounces of gold; 169,000 ounces for six months

�         Net income attributable to Nevsun shareholders was $39.6 million, representing earnings of $0.19 per share

�         Cash costs of $253 per ounce of gold

 Outlook

Nevsun has increased its total 2012 gold production forecast to 280,000 - 300,000 ounces from its previous target of 240,000 - 260,000 ounces, as compared to its guidance of 190,000 to 210,000 ounces provided in February 2012.

The improved outlook is attributable to continuing unusually high gold grades  encountered in a portion of the oxide zone that is the interface between the gold oxide and copper supergene zones, commonly termed the acid domain. The variable high grades, which are expected to persist until September, when mining of the acid zone will be complete, could not be fully included in the July 2012  mineral reserves update because drill hole core recovery from the acid domain was sporadic and the core was difficult to assay.

Nevsun cautions that the competency of the material in this interface zone is poor and requires sophisticated stockpile blending to facilitate successful processing and recovery of the precious metals. In addition, the combination of both a clay-like and sandy composition of the acid material leads to challenging daily ore control sampling, making it difficult to predict grades. The associated gold grade is highly variable and includes both very high and low grades.

Mining of the Harena  deposit will begin in August. Ore from Harena will be processed at the Bisha plant. Once oxide gold production is completed, the carbon-in-leach plant will be mothballed such that it can be restarted should more oxide deposits be discovered in the Bisha vicinity.

The Company completed its 13,500 meter exploration drill program at the North West Zone, which lies 3 km from the Bisha deposit, and expects to release a resource estimate in the first half of 2013.

Nevsun expects to close the Mogoraib exploration license purchase in Q4 2012.

Financial review

Tonnes milled during the three month period ended June 30, 2012 totalled 465,000, up 5% from 444,000 tonnes for the same period in 2011. The milling grade during the three month period ended June 30, 2012 averaged 6.93 grams per tonne compared to 7.27 for the same three month period in 2011. Ore tonnes mined during the second quarter of 2012 totalled 500,000, up 41% from 377,500 a year earlier. The mined grade during the second quarter of 2012 averaged 6.04 grams per tonne.

Revenues for the three month period ended June 30, 2012 were $147,713 (three month period ended June 30, 2011 - $136,085). While the 87,500 gold ounces sold in the three months ended June 30, 2012 decreased nominally compared to the 88,700 ounces sold in the same period in 2011, Q2 2012 benefitted from higher revenues as a result of a higher realized price per ounce of $1,599 (Q2 2011 - $1,510 per ounce) and an increase in silver by-product sales. The Company had silver by-product sales of $7,818 and $1,053, respectively, for the three month periods ended June 30, 2012 and 2011.

Operating costs for the three month period ended June 30, 2012 of $22,879 (three month period ended June 30, 2011 - $21,653) increased from the same period in the prior year mostly due to increases in mining expenses resulting from longer haul distances and more difficult ground conditions. Royalties for the three month periods ended June 30, 2012 and 2011 were $7,418, and $6,778, respectively. The increase in Q2 2012 royalties compared to Q2 2011 resulted from the above noted higher realized price per ounce and increase in silver sales.

Net income attributable to Nevsun shareholders for the three month period ended June 30, 2012 was $39,568, an increase of $4,281 over the same period in the prior year. Earnings per share attributable to Nevsun shareholders for the three month period ended June 30, 2012 was $0.19, an increase of $0.01 per share over the same period in 2011.

Gold cash costs per ounce sold for the three month period ended June 30, 2012 were $253, which included $89 per ounce in silver by-product credits, while gold cash costs per ounce sold for the same period in 2011 were $305, which included $13 per ounce in silver by-product credits.

The Company's cash and cash equivalents at June 30, 2012 were $369,350, up 6% from $347,582 as at December 31, 2011. The Company generated $106,325 and $111,209, respectively, from its operating activities for the three month periods ended June 30, 2012 and 2011.

During the three month period ended June 30, 2012, the Company generated $3,765 in its financing activities, up from $12,687 used in the same period in the prior year. During Q2 2012, the Company received $22,798 as partial payment on the sale of 30% of the Bisha Mine to the State-owned Eritrean National Mining Corporation. No such proceeds were received in Q2 2011.

Reserves update

On July 24, 2012 the Company announced increased base metal Canadian National Instrument 43-101 (NI 43-101) compliant mineral resources and reserves estimates. Expressed as contained metal, the copper reserves estimate increased 6% and the zinc reserves estimate increased 38% as of May 31, 2012, compared with the previous reserves estimate effective date January 1, 2011.

The total mineral reserves estimate consists of 26.5 million tonnes with the oxide portions grading 5.79 g/t gold for a total of 167,000 troy ounces of gold, the supergene portions grading 4.09% copper for a total of 579 million pounds of copper, and the primary portions grading 1.09% copper and 6.33% zinc for a total of 462 million pounds of copper and 2,680 million pounds of zinc respectively.

Exploration and development

Bisha:

The Company's 53 km²  exploration license officially expired in May 2012. The Company and Eritrean Ministry of Energy and Mines officials are working together to re-establish an exploration license or licenses that cover a larger area so that the Company may carry out a more significant regional exploration program. The Company has advised the State that it wishes to expand its exploration efforts and the State has welcomed this approach.

Harena:

In July 2012 the Company was granted a mining license for Harena, which lies 9 km southwest of the Bisha Main deposit. The Company expects to commence mining the deposit in August 2012.

Copper phase development:

The Company continued work on copper phase development activities during Q2 2012, expending $15,705 on procurement, terracing, other civils works, completing detailed design work and the beginnings of the structural steel works. Total capital for the copper phase expansion is expected to be approximately $125,000, including the copper plant, port facilities and concentrate container equipment. The Company is taking the same approach to eliminate price risk on construction that it was successfully able to accomplish during the build of the gold plant. As at June 30, 2012, $67,126 had been spent, ordered or arranged, thereby fixing over half of the expected project costs. The copper flotation plant is targeted to be operational in mid-2013. The same firm, SENET of South Africa, is the engineering, procurement, and construction management contractor. Photos of the expansion can be found at www.nevsun.com/projects/photogallery/copperphase.

Mogoraib:

On August 1, 2012 the Company announced it had entered into an agreement to acquire the Mogoraib exploration license in Eritrea, which includes the Hambok copper and zinc deposit. The purchase of the Mogoraib exploration license is expected to close in Q4 2012 and is pending approval by Eritrean State officials. Consideration for the acquisition will be $5,000 plus an additional possible $7,500 upon commencement of commercial production from the licensed area.

While management does not believe Hambok is economic as a stand-alone deposit the Company plans to undertake further exploration and, with the Bisha plant a short distance away, believes Hambok may become an extension for the Bisha base metal operations.

If additional exploration is successful and base metals reserves are identified, then the Company may consider increasing the planned capacity of the zinc and copper plant when the Bisha plant transitions from copper to zinc in 2015 or 2016.

Conference call details

The Company will hold a conference call on Thursday, August 9 at 8AM Vancouver / 11AM Toronto, New York / 4PM London, to discuss the quarterly results. Dial in details are as follows:

The conference call will be available for replay until August 23, 2012 by calling +1 905-694-9451 / 1 800-408-3053 and entering passcode 3684053.

Forward Looking Statements: The above contains forward-looking statements regarding future gold production, future gold recoveries, gold production grades, future gold cash production costs, future copper phase expansion, timing of copper production, and completion of the purchase of the Mogoraib exploration license. Forward-looking statements are frequently, but not always, identified by words such as "expects," "anticipates," "believes," "intends," "estimated," "potential," "possible" and similar expressions, or statements that events, conditions or results "will," "may," "could" or "should" occur or be achieved. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, metal price volatility, share price volatility, operational risks, uncertainties in estimating mineralization, future expenses and revenues, political and country risk, regulatory risk, production forecast risk, the securities class action recently filed against the Company and those other risks described in the Company's most recent Annual Information Form and Management Discussion and Analysis of the Company filed with Canadian securities regulators and are available at www.sedar.com, which have also been filed or submitted to the U.S. Securities and Exchange Commission on Form 40-F or Form 6-K and are available at  www.sec.gov . In addition, the Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of regulatory decisions, competitive factors in the industry in which the Company operates, prevailing economic conditions, and other factors, many of which are beyond the control of the Company. The Company's forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and the Company assumes no intention or obligation to update or revise such forward-looking statements whether as result of new information, future events or otherwise, except as required under applicable securities regulation. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

NEVSUN RESOURCES LTD.

Cliff T. Davis, President & Chief Executive Officer

To view the summarized financial and  operating results, please follow this link