18May201600510041

18MAY201600510041 NOTICE OF SPECIAL MEETING OF SHAREHOLDERS to be held on June 17, 2016 and MANAGEMENT INFORMATION CIRCULAR with respect to a proposed ARRANGEMENT involving NEVSUN RESOURCES LTD. and RESERVOIR MINERALS INC. May 18, 2016 These materials are important and require your immediate attention. They require shareholders of Nevsun Resources Ltd. to make important decisions. If you are in doubt as to how to make such decisions, please contact your financial, legal, tax or other professional advisors. Merrill: 16-11420-1 - 16ZBI72001 - BA72001A.;11 - Seq 1 - CL 2 18-MAY-2016 12:43:35 Comp: 18-MAY-16 12:09 Checksum: 48189 May 18, 2016 Dear Nevsun shareholder: On April 24, 2016, Nevsun Resources Ltd. (‘‘Nevsun’’) announced that it had entered into an arrangement agreement (the ‘‘Arrangement Agreement’’) with Reservoir Minerals Inc. (‘‘Reservoir’’), pursuant to which, and subject to the terms and conditions of the Arrangement Agreement, Nevsun will acquire all of the issued and outstanding common shares of Reservoir (other than any common shares of Reservoir already owned by Nevsun) pursuant to a plan of arrangement (the ‘‘Arrangement’’) under the Business Corporations Act (British Columbia). Assuming the Arrangement is completed, each Reservoir shareholder will receive two (2) Nevsun common shares plus Cdn.$0.001 in cash for each Reservoir common share. Each outstanding option to purchase Reservoir common shares that has not been exercised prior to the Effective Time (as defined in the accompanying Management Information Circular), will be deemed to be assigned and transferred by such holder to Reservoir in exchange for a cash payment from Reservoir equal to the amount by which Cdn.$9.40 exceeds the exercise price of such Reservoir option. Furthermore, all of the then issued and outstanding Reservoir restricted share units will each be redeemed for two (2) Nevsun common shares plus Cdn.$0.001 in cash. In connection with the Arrangement, Nevsun has called the special meeting of shareholders to consider a resolution to approve the issuance of the Nevsun common shares forming the consideration to be paid to Reservoir shareholders (the ‘‘Share Issuance Resolution’’), the full text of which is set forth as Schedule ‘‘A’’ to the accompanying Management Information Circular. The special meeting of Nevsun shareholders is being held concurrently with the special meeting of Reservoir shareholders and optionholders, which has been called to consider the Arrangement. THE BOARD OF DIRECTORS AFTER RECEIVING LEGAL AND FINANCIAL ADVICE AND AFTER CONSIDERATION OF AMONG OTHER THINGS, THE FAIRNESS OPINION OF SCOTIA CAPITAL INC., HAS UNANIMOUSLY DETERMINED THAT THE ARRANGEMENT IS IN THE BEST INTERESTS OF NEVSUN AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOUR OF THE SHARE ISSUANCE RESOLUTION. In order to become effective, the Share Issuance Resolution must be approved by at least a majority of the votes cast by Nevsun shareholders, either present in person or by proxy at the special meeting. The Arrangement, in order to become effective, requires, among other things, the approval of both the shareholders of Nevsun and the shareholders of Reservoir. The Arrangement is also subject to court approval, applicable stock exchange approvals and other customary closing conditions. Assuming that all of the conditions to the Arrangement are satisfied, Nevsun expects the Arrangement to become effective on or about June 23, 2016. You are requested to complete and return the enclosed form of proxy to ensure that your Nevsun common shares will be represented at the special meeting, whether or not you are personally able to attend. The accompanying Notice of Special Meeting and Management Information Circular describe the Arrangement and include certain additional information to assist you in considering how to vote on the Share Issuance Resolution. You are urged to read this information carefully, and, if you require assistance, consult your financial, legal, tax or other professional advisors. Thank you for your continued support. Sincerely, (Signed) CLIFFORD T. DAVIS Clifford T. Davis President, Chief Executive Officer and Director i Merrill: 16-11420-1 - 16ZBI72001 - BC72001A.;7 - Seq 1 - CL 2 18-MAY-2016 12:43:35 Comp: 18-MAY-16 12:09 Checksum: 52435 NEVSUN RESOURCES LTD. NOTICE OF SPECIAL MEETING OF SHAREHOLDERS NOTICE IS HEREBY GIVEN that a special meeting of shareholders (the ‘‘Meeting’’) of Nevsun Resources Ltd. (‘‘Nevsun’’) will be held at Suite 1100 – 840 Howe Street, Vancouver, British Columbia, on June 17, 2016 at 9:00 a.m. (Vancouver time), for the following purposes: 1. to consider, and if deemed advisable, to approve, with or without variation, a special resolution, the full text of which is attached as Schedule ‘‘A’’ to the accompanying management information circular (the ‘‘Circular’’) of Nevsun, approving the issuance of the Nevsun common shares (the ‘‘Nevsun Shares’’) issuable to Reservoir Minerals Inc. (‘‘Reservoir’’) securityholders pursuant to the terms of the Arrangement Agreement in connection with a court-approved plan of arrangement of Reservoir under Division 5 of Part 9 of the Business Corporations Act (British Columbia), pursuant to which Reservoir will become a wholly-owned subsidiary of Nevsun, in accordance with the arrangement agreement dated April 22, 2016, entered into between Nevsun and Reservoir, all as more particularly set forth in the Circular; and 2. to transact such other business as may properly come before the Meeting or any adjournment or postponement thereof. This Notice is accompanied by the Circular, which provides additional information relating to the matters to be dealt with at the Meeting and forms part of this Notice of Meeting. Shareholders who are unable to attend the Meeting are requested to complete, date, sign and return the enclosed form of proxy so that their shares can be voted at the Meeting. The board of directors of Nevsun has passed a resolution to fix the close of business (Vancouver time) on May 18, 2016 as the record date for the determination of the registered holders of Nevsun Shares that will be entitled to receive notice of the Meeting, and any adjournment or postponement of the Meeting, and that will be entitled to vote at the Meeting. If you are a registered shareholder, to ensure that your vote is recorded, please return the enclosed form of proxy in the envelope provided for that purpose, properly completed and duly signed, to Nevsun’s Transfer Agent, Computershare Investor Services Inc., at its Toronto office located at 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1 or vote by telephone or on the Internet, in each case in accordance with the instructions included in the form of proxy, prior to 9:00 a.m. (Vancouver time) on June 15, 2016 (or no later than 48 hours, excluding Saturday, Sundays and holidays, before any reconvened meeting if the Meeting is adjourned or postponed), whether or not you plan to attend the Meeting. The proxy deadline may be waived or extended by the Chair of the Meeting in his sole discretion without notice. If you hold your Nevsun Shares through a broker, investment dealer, bank, trust company or other intermediary, you should follow the instructions provided by your intermediary to ensure your vote is counted at the Meeting. DATED at Vancouver, British Columbia this 18th day of May, 2016. By Order of the Board of Directors (Signed) CLIFFORD T. DAVIS Clifford T. Davis ii Merrill: 16-11420-1 - 16ZBI72001 - BE72001A.;8 - Seq 1 - CL 2 18-MAY-2016 12:43:35 Comp: 18-MAY-16 12:12 Checksum: 39485 TABLE OF CONTENTS Page NOTICE TO SECURITYHOLDERS IN THE UNITED STATES .......................... 1 STATEMENTS REGARDING FORWARD-LOOKING INFORMATION ..................... 2 REPORTING CURRENCIES AND ACCOUNTING PRINCIPLES ......................... 4 CURRENCY EXCHANGE RATE INFORMATION .................................... 4 GLOSSARY OF TERMS ........................................................ 5 GENERAL PROXY INFORMATION ............................................... 13 Solicitation of Proxies ........................................................... 13 Appointment and Revocation of Proxies .............................................. 13 Voting of Proxies and Exercise of Discretion ........................................... 13 Notice to Non-Registered (Beneficial) Shareholders ..................................... 14 VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES ............ 14 BUSINESS OF THE MEETING ................................................... 15 Record Date .................................................................. 15 Outstanding Shares ............................................................. 16 THE ARRANGEMENT ......................................................... 16 Principal Steps to the Arrangement ................................................. 16 Background to the Arrangement ................................................... 16 Recommendation of the Board .................................................... 18 Reasons for the Arrangement ..................................................... 18 Fairness Opinion ............................................................... 19 Treatment of Reservoir Options and Reservoir RSUs .................................... 20 Voting Agreements ............................................................. 20 Completion of the Arrangement ................................................... 21 Procedure for Exchange of Reservoir Shares ..........................................

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