UNDERWRITING AGREEMENT

October 18, 2005

Nevsun Resources Ltd.
Suite #800, 1075 West Georgia Street
Vancouver, B.C.  V6E 3C9

Attention:

Dr. John Clarke, Chief Executive Officer

Dear Dr. Clarke:

Canaccord Capital Corporation ("Canaccord"), Blackmont Capital Inc., Haywood Securities Inc. and TD Securities Inc. (each, an "Underwriter", and together, the "Underwriters") hereby severally, in respect of the percentages set forth in section 7.1 of this Agreement, and not jointly, offer to purchase from Nevsun Resources Ltd. (the "Corporation") upon and subject to the terms hereof, an aggregate of 13,350,000 units of the Corporation (each a "Unit") at a price of $2.25 per Unit (the "Offering Price"), each Unit consisting of one common share in the capital of the Corporation (each a "Share") and one-half of one transferable common share purchase warrant of the Corporation (each whole warrant a "Warrant").  Each Warrant shall entitle the holder to subscribe for an additional common share of the Corporation (each a "Warrant Share") at a price of $3.00 per Warrant Share at any time on or before the day that is three (3) years from the Closing Date (as hereinafter defined). The Underwriters shall further be granted an option (the "Underwriters' Option") exercisable up to 48 hours prior to the Closing Date (as hereinafter defined) entitling the Underwriters to purchase a further 4,428,000 Units (each an "Additional Unit") at the Offering Price.  The offering of the Units and any Additional Units by the Corporation described in this Agreement is hereinafter referred to as the "Offering". The net proceeds of the Offering shall be used by the Corporation for exploration and development programs at the Corporation's mineral properties, and for general corporate purposes.  The Underwriters and the Corporation acknowledge that the schedules hereto form part of this Agreement.

In consideration of the Underwriters' services to be rendered in connection with the Offering, the Corporation shall pay to Canaccord, for and on behalf of all of the Underwriters, a cash fee (the "Underwriters' Fee") in an amount equal to 6% of the gross proceeds received by the Corporation from the issue and sale of the Units and Additional Units.

The Offering shall take place in the Qualifying Jurisdictions (as hereinafter defined) and in the United States, provided however that offers and sales of Units and any Additional Units in the United States or to U.S. Persons (as hereinafter defined) shall be made only on a private placement basis in accordance with United States securities laws and the provisions of Schedule "A" to this Agreement.  The Underwriters and the Corporation understand that although this Agreement is presented on behalf of the Underwriters as purchasers, all Units and Additional Units sold to persons in the United States or to U.S. Persons, if any, shall be sold to such persons as substituted purchasers ("U.S. Substituted Purchasers"), on behalf of the Corporation, in accordance with Schedule "A" hereto.  To the extent that U.S. Substituted Purchasers purchase

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Units and Additional Units on the Closing Date, the obligations of the Underwriters to do so shall be reduced by the number of Units and Additional Units purchased from the Corporation by such U.S. Substituted Purchasers.  The Offering may also take place in such other jurisdictions as may be agreed upon by the Corporation and the Underwriters.

The additional terms and conditions of this underwriting agreement (the "Agreement") are set forth below.

1.

DEFINITIONS

1.1

In this Agreement, including any schedules forming a part of this Agreement:

(a)

"Acts" means the Securities Acts or equivalent securities regulatory legislation of the Qualifying Jurisdictions and "Act" means the Securities Act or equivalent securities regulatory legislation of a specified Qualifying Jurisdiction;

(b)

"Additional Shares" means the up to 4,428,000 previously unissued common shares in the capital of the Corporation forming part of the Additional Units that will be sold if the Underwriters' Option is exercised;

(c)

"Additional Units" means the up to 4,428,000 additional Units issuable if the Underwriters' Option is exercised;

(d)

"Additional Warrants" means the up to 2,214,000 share purchase warrants of the Corporation forming part of the Additional Units that will be sold if the Underwriters' Option is exercised, such Additional Warrants having the same terms as the Warrants;

(e)

"Additional Warrant Shares" means the up to 2,214,000 previously unissued common shares in the capital of the Corporation issuable upon the exercise of any Additional Warrants;

(f)

"AMEX" means the American Stock Exchange;

(g)

"Applicable Securities Laws" means, in respect of the Offering, collectively the Acts and Regulations having application and the rules, policies, notices and orders issued by the applicable Regulatory Authorities having application;

(h)

"Beneficiaries" has the meaning given to that term in section 10.3;

(i)

"Claim" has the meaning given to that term in section 10.1;

(j)

"Closing", "Closing Date" and "Time of Closing" have the meanings given to those terms in section 9.2;

(k)

"Comfort Letter" has the meaning given to that term in subsection 5.1(k) hereto;

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(l)

"Closing Materials" has the meaning given to that term in subsection 5.1(k) hereto;

(m)

"Commissions" means the securities regulatory bodies (other than stock exchanges) of the Qualifying Jurisdictions and "Commission" means the securities regulatory body of a specified Qualifying Jurisdiction;

(n)

"common shares" means the class of shares of the Corporation designated as common shares without par value;

(o)

"Continuous Disclosure Materials" has the meaning given to that term in subsection 4.1(b) hereto;

(p)

"Corporation" means Nevsun Resources Ltd.;

(q)

"Corporation's Financial Statements" has the meaning given to that term in subsection 4.1(q) hereto;

(r)

"distribution" (or "distribute" as derived therefrom) has the meaning given to that term in the Securities Act (British Columbia);

(s)

"Exchanges" means collectively the TSX and the AMEX;

(t)

"Final Prospectus" means the final short form prospectus of the Corporation filed with the Commissions for the purpose of qualifying the distribution of the Units, the Underwriters' Option and any Additional Units, including all documents incorporated therein by reference;

(u)

"Indemnified Parties" has the meaning given to that term in subsection 10.1 hereto;

(v)

"Lead Underwriter" means Canaccord Capital Corporation;

(w)

"Legal Opinions" has the meaning given to that term in subsection 5.1(k)(ii) hereto;

(x)

"material change" has the meaning given to that term in the Securities Act (British Columbia);

(y)

"Material Contracts" has the meaning given to that term in subsection 4.1(v) hereto;

(z)

"material fact" has the meaning ascribed in the Securities Act (British Columbia);

(aa)

"misrepresentation" has the meaning given to that term in the Securities Act (British Columbia);

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(bb)

"Offering" means the offering and sale of the Units and any Additional Units pursuant to the terms and conditions of this Agreement;

(cc)

"Offering Price" means $2.25 per Unit;

(dd)

"Officers' Certificate" has the meaning given to that term in subsection 5.1(k)(v) hereto;

(ee)

"Other Subsidiaries" means the subsidiaries of the Company identified as such in Schedule "B" hereto;

(ff)

"Preliminary Prospectus" means the preliminary short form prospectus of the Corporation filed with the Commissions for the purpose of allowing the Underwriters to solicit expressions of interest for the Offering, including all documents incorporated therein by reference;

(gg)

"Principals" has the meaning given to that term in subsection 4.1(r)(i) hereto;

(hh)

"Prospectuses" means collectively the Preliminary Prospectus and the Final Prospectus;

(ii)

"Qualifying Jurisdictions" means the Canadian provinces of British Columbia, Alberta, Manitoba and Ontario, being those jurisdictions in which the Units will be offered or sold pursuant to the Offering, and "Qualifying Jurisdiction" means any one of them;

(jj)

"Regulations" means the securities rules or regulations proclaimed under the Acts and "Regulation" means the securities rules or regulations proclaimed under a specified Act;

(kk)

"Regulatory Authorities" means collectively the Commissions and the Exchanges;

(ll)

"Shares" means the 13,350,000 common shares of the Corporation being sold pursuant to the Offering and forming part of the Units, excluding any Additional Shares;

(mm)

"Subsidiaries" means collectively the Wholly Owned Subsidiaries and the Other Subsidiaries;

(nn)

"Supplementary Material" has the meaning given to that term in section 2.3 hereto;

(oo)

"trade" has the meaning given to that term in the Securities Act (British Columbia);

(pp)

"TSX" means the Toronto Stock Exchange;

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(qq)

"Underwriter" has the meaning given to that term on page 1 of this Agreement;

(rr)

"Underwriters' Expenses" has the meaning given to that term in section 6.2;

(ss)

"Underwriters' Fee" has the meaning given to that term in section 2.3;

(tt)

"Underwriters' Option" means the option to purchase the Additional Units granted to the Underwriters as set out in section 3.1 hereof;

(uu)

"United States" has the meaning given to that term in Schedule "A" hereto;

(vv)

"U.S. Person" has the meaning given to that term in Schedule "A" hereto;

(ww)

"U.S. Placement Memorandum" has the meaning given to that term in Schedule "A" hereto;

(xx)

"U.S. Substituted Purchasers" has the meaning given to that term on page 1 of this Agreement;

(yy)

"Warrant Indenture" means the common share purchase warrant indenture to be entered into between the Corporation and Computershare Trust Company of Canada in connection with the Offering;

(zz)

"Warrants" means the 6,675,000 share purchase warrants of the Corporation forming part of the Units, each whole Warrant exercisable for one Warrant Share at a price of $3.00 per Warrant Share for a period of three (3) years from the Closing Date; and

(aaa)

"Warrant Shares" means the 6,675,000 previously unissued common shares in the capital of the Corporation issuable upon the exercise of the Warrants;

(bbb)

"Wholly Owned Subsidiaries" means the subsidiaries of the Company identified as such in Schedule "B" hereto.

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