Mr. Cliff Davis of Nevsun reports

NEVSUN RESOURCES AND RESERVOIR MINERALS COMBINE AND CONSOLIDATE TIMOK COPPER PROJECT OWNERSHIP

Nevsun Resources Ltd. and Reservoir Minerals Inc. have entered into a definitive agreement to combine their respective companies. The combination creates a diversified mid-tier base metals company with a cash-producing operating asset in Bisha, a high-grade open-pit copper-zinc mine, and 100-per-cent ownership in the upper zone of the Timok copper project in Serbia, a high-grade copper and gold development project. The combined company will be well financed with Nevsun's existing strong balance sheet and operating cash flow, and positioned to deliver value via Nevsun's highly successful development team.

Transaction highlights:

• Strategic $1.1-billion (U.S.) combination creates a diversified mid-tier base metals company;
• Transaction consolidates a 100-per-cent ownership of the high-grade upper zone of the Timok copper project;
• Timok development is underpinned by Nevsun's strong balance sheet and operating cash flow;
• Combined company has significant exploration exposure in two prolific mining districts;
• Significant benefits to both Nevsun and Reservoir shareholders.

Under the terms of the arrangement agreement announced today, Nevsun has agreed to acquire all of the outstanding common shares and restricted share units of Reservoir on the basis of two common shares and 0.1 cent in cash for each Reservoir common share pursuant to a plan of arrangement under the British Columbia Business Corporations Act for a total value of approximately $365-million (U.S.). Based on the closing price of Nevsun common shares on April 22, 2016, the consideration represents a premium of 35 per cent to Reservoir's 20-day volume-weighted average price. The transaction will allow both Reservoir and Nevsun shareholders to participate in the continuing cash flow generation of the Bisha mine, the growth potential of the Timok copper project, and significant exploration potential at both Bisha and Timok. Upon completion of the arrangement, current Nevsun shareholders will own approximately 67 per cent of the combined company and current Reservoir shareholders will own the remaining 33 per cent.

Concurrently, the two companies have also entered into a financing transaction comprising a private placement for 19.99 per cent of Reservoir's outstanding common shares and a loan transaction. Nevsun has subscribed for 12,174,928 common shares of Reservoir at a price of $9.40 per share for a total subscription price of $114,444,323 ($90,296,571 (U.S.)), increasing Reservoir's total shares outstanding to 60,905,093, and provided an unsecured cash loan of $44,703,429 (U.S.) to Reservoir. The combined financing transaction provides $135-million (U.S.) to enable Global Reservoir Mineral (BVI) Inc., a wholly owned subsidiary of Reservoir, to exercise its right of first offer (ROFO) in respect of its joint venture with Freeport International Holdings (BVI) Inc. in the Timok copper project. Upon Global Reservoir closing the exercise of the ROFO, Global Reservoir will have a 100-per-cent interest in the Upper zone and a 60.4-per-cent interest in the Lower zone of the Timok copper project under two joint venture agreements with Freeport and will become the operator of the project. Freeport may increase its ownership in the Lower zone to 54 per cent under the terms of the original Timok JV agreement, with Global Reservoir holding the remaining 46 per cent. Upon completion of the combination, Global Reservoir will be a wholly owned subsidiary of the combined company.

"This transaction diversifies Nevsun's asset base, putting our cash balance to work in a strategic and high-return investment that will deliver significant value to our shareholders," said Cliff Davis, Nevsun's president and chief executive officer. "The Upper zone, with its high-grade copper-gold resource and nearby infrastructure in a mining-friendly jurisdiction, adds significant growth to Nevsun. With ongoing cash flow generation from our Bisha mine, we have the financial strength and proven technical ability to move the Timok project forward in a timely manner. We look forward to working with all stakeholders and Timok's highly capable partner in bringing the project into production."

"This is an excellent outcome for Reservoir and its shareholders, delivering premium value, and most importantly will expedite the development of the Timok copper-gold project to the benefit of all stakeholders," said Dr. Simon Ingram, Reservoir's president and chief executive officer. "Reservoir's board of directors determined that this transaction is the best funding alternative for our shareholders to fund the Timok ROFO. Nevsun is a proven mine developer with the technical experience and strong balance sheet to enable Timok development. Reservoir shareholders retain exposure to the development potential of Timok and also gain exposure to the operating Bisha mine's cash flow and additional exploration potential. The combined company will be in a strong position to efficiently advance the Timok project to production."

Benefits to Reservoir shareholders:

• Expedited development of Timok -- The Timok project will be expedited to production for the benefit of all stakeholders.
• Premium value -- Based on the closing price of Nevsun common shares on April 22, 2016, the consideration represents a premium of 124 per cent over the trading price of Reservoir shares on March 2, 2016, the day prior to receiving notification of the ROFO and a 35-per-cent premium to the 20-day VWAP.
• Increases long-term exposure in Timok -- Through Nevsun's financing of Global Reservoir's ROFO, Global Reservoir will have a 100-per-cent stake and operatorship of the Upper zone.
• Strong balance sheet and cash generation to finance Timok's growth potential -- The transaction offers shareholders exposure to cash generated from the Bisha mine, a high-grade mine which generated $120-million (U.S.) of operating cash flow in 2015 and pro forma $300-million (U.S.) in cash to finance development.
• Strong operating team to advance the Timok project -- Nevsun's management team has demonstrated the ability to develop and bring a mining project into production on time and under budget. Nevsun has invested over $430-million (U.S.) in a three-phase development of the Bisha mine, all on time and under budget.
• Increased capital market profile -- Nevsun's shares are liquid with a strong institutional shareholder base. Completion of the arrangement should result in further increases in trading liquidity and a broader depth of major institutional shareholders.

Benefits to Nevsun shareholders:

• On strategy for diversification -- The transaction delivers on the company's stated goal to diversify geographically through a strategic transaction.
• Attractive deployment of capital -- The transaction puts Nevsun's cash balance and continuing-cash-flow-generation capacity to use in an attractive development project with a high projected return.
• High-quality asset -- The Upper zone, a high-grade copper-gold development project, is in a historic mining jurisdiction with excellent local and regional infrastructure.
• Increased growth potential -- The Upper zone significantly increases Nevsun's growth profile. In addition, the Lower zone, a joint venture with Freeport, represents further upside in the potential large-tonnage porphyry-style mineralization.
• Strategic partner -- The combined company forms a strategic long-term partnership with Freeport, a leading copper and gold producer.

About the Timok project joint venture

The Timok project represents four exploration permits in the highly prospective Timok magmatic complex in eastern Serbia, near the world-class Bor and Majdenpek mines. The Timok project centres on the Cukaru Peki deposit, which includes the Upper zone (characterized by massive and semi-massive sulphide mineralization) and the Lower zone (characterized by porphyry-style mineralization) (refer to Reservoir's April 19, 2016, news release announcing the results of the preliminary economic assessment on the Timok JV project and Cukaru Peki deposit). The Timok project is a joint venture with Freeport governed by a joint venture shareholders agreement.

Freeport is currently the Timok project operator and is fully financing the project. Following exercise of the ROFO, Global Reservoir will be appointed the operator until completion of the combination and, until the occurrence of certain events, will advance the development of both the Upper zone and the Lower zone in accordance with approved budgets and work programs. Global Reservoir will have the sole right to propose budgets and work programs relating to the Upper zone and for certain agreed Lower zone work, and Freeport will have the sole right to propose budgets and work programs relating to the Lower zone, subject to specified exceptions. Until the delivery of a feasibility study, Global Reservoir will finance 100 per cent of the Upper zone development costs as well as $20-million (U.S.) of agreed Lower zone work. Global Reservoir and Freeport will finance 28 per cent and 72 per cent of all other Lower zone development costs, respectively.

Additional transaction details

The directors and management of both Nevsun and Reservoir have entered into agreements pursuant to which they have committed to vote their respective common shares in favour of the arrangement. In addition, Nevsun, following completion of its subscription for Reservoir common shares, will own 19.99 per cent of Reservoir's outstanding common shares.

Major shareholders of Nevsun have expressed support for the transaction.

The arrangement has been unanimously approved by the boards of directors of both Reservoir and Nevsun.

The boards of both Nevsun and Reservoir have received fairness opinions from independent financial advisers and recommend their respective shareholders vote in favour of the arrangement.

The implementation of the arrangement is subject to certain customary closing conditions, including the approval of two-thirds of the votes cast by Reservoir's common shareholders and optionholders at a special meeting, approval by a majority of votes cast by Nevsun shareholders at a special meeting, approval of the TSX Venture Exchange, the Toronto Stock Exchange and the New York Stock Exchange, and court approval. Completion of the arrangement is also conditional on the successful exercise by Global Reservoir of its ROFO in respect of the original Timok joint venture agreement.

After closing, the Nevsun board will include two directors from Reservoir. The arrangement is expected to close late in the second quarter of 2016.

The terms and conditions of the arrangement will be disclosed in a further detail in an information circular to be mailed to Reservoir shareholders in advance of the special meeting of Reservoir common shareholders to approve the arrangement. A copy of the arrangement agreement, the information circular and related documents will be filed with the Canadian securities regulatory authorities and will be available under Reservoir's profile at SEDAR.

Advisers

Scotia Capital Inc. is acting as financial adviser to Nevsun and has provided a fairness opinion to the board of directors of Nevsun that the arrangement is fair from a financial point of view to Nevsun shareholders. Stikeman Elliott LLP is acting as legal adviser to Nevsun, and Gibson, Dunn & Crutcher LLP is advising Nevsun with respect to U.S. securities matters. Canaccord Genuity and Natural Resources Global Capital Partners are acting as financial advisers to Reservoir, and Canaccord Genuity has provided a fairness opinion to the board of directors of Reservoir that the arrangement is fair from a financial point of view to Reservoir shareholders. Blake, Cassels & Graydon LLP is acting as legal adviser to Reservoir.

Conference call

Nevsun and Reservoir will hold an investment community conference call and webcast April 25, 2016, at 6 a.m. PT/9 a.m. ET/2 p.m. GMT. Conference call details are as follows:

North America:  1-888-231-8191/1 866-865-3087/1-647-427-7450

United Kingdom:  0-800-051-7107 (toll-free)

Other international:  1-647-427-7450

Conference ID:  99383803

Webcast:  available on-line

Please call/log in 10 to 15 minutes before the conference call starts.

A presentation accompanying the conference call will be available from the Nevsun and Reservoir websites.

The conference call will be available for replay until June 30, 2016, by calling 1-855-859-2056/1-778-371-8506 and entering passcode 99383803.

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