ECONOMIC PERFORMANCE AND CONTRIBUTION FROM BISHA OPERATIONS

It is essential to our values and vision that our economic contributions and impacts are consistent with our objectives for sustainable development. These objectives provide tangible, immediate, and long-term benefits to our stakeholders. The Bisha Mine, up until 2015, was the only modern mine in Eritrea, and our economic contributions have had a positive, significant impact on the Eritrean economy by providing employment and local procurement opportunities, training, and wages.

Beyond the jobs and wages, our business activities contribute to a stronger, more sustainable economy: the Bisha Mine provides opportunities for skills development through training and our Community Assistance Program. We also represent a significant source of income for local businesses, through the mining supply chain. The Bisha Mine also provides direct revenue to the State of Eritrea through corporate income taxes, royalties, employment taxes, and distributions to ENAMCO.

The Bisha Mine represents a significant contribution to the Eritrean economy. Since the Bisha Mine began commercial operations, of our approximately $2.6 billion in economic value generated, approximately $1.3 billion* represents direct payments into the Eritrean economy. These economic benefits continue to generate many domestic economy spin-off effects. Note that some of the goods and services purchased from local suppliers are ultimately sourced from outside the country which reduces the value of the spin-off effects to far less than the gross values in the table. The largest examples would be the $183 million in fuel purchases paid to the Eritrean Petroleum Corporation and $46 million in equipment imports paid to Eriequip since the Bisha Mine began commercial operations. Revenue for 2016 decreased as compared to 2015 largely as a result of the Bisha Mine being in the commissioning phase of the newly constructed zinc expansion plant for four months of the year.

* $816 million in taxes, royalties and dividends, plus $473 million in local supply of goods and services

Our economic value and the distributions from our Bisha operations (as defined by the Global Reporting Initiative) are illustrated in the following tables. For purposes of the table, economic value approximates cash value.

Economic Value Generated Total 2016 2015 2014 2013 2012 2011
Sales and by-product income      $2,412,096          $230,705          $356,872          $555,012           $155,698          $566,039          $547,770
Pre-commercial production zinc sales            $34,313            $34,313                      —                   —   —   —   —
Pre-commercial production copper sales         $122,191                   —   —              $9,275          $112,916   —   —
Pre-commercial production gold sales            $48,613                   —   —                  —   —   —            $48,613
Total Economic Value Generated $2,617,213 $265,018 $356,872 $564,287 $268,614 $566,039 $596,383
Total Economic Value Distributed
Operating, administrative and capital outlays
(including salaries)
     $1,335,722          $175,409         $282,596          $273,319          $198,273          $217,639         $188,486
Forms of taxation          $636,111            $53,236            $53,956          $130,205            $86,635          $249,443            $62,636
Dividends to ENAMCO         $179,750           $16,000            $19,000            $76,750                    —            $68,000                    —
Dividends to Nevsun   $269,625           $24,000          $28,500         $115,125                   —         $102,000
Community assistance programs    $303                 $173                 $130                     —                    —                    —                    —
Net Economic Value Distributed     $2,421,511         $268,818          $384,182          $595,399          $284,908  $637,082          $251,122