Selwyn has entered into a sale transaction with Chihong Canada Mining Ltd. to sell its 50% interest in Selwyn joint venture project in Yukon and Northwest territories, for CAD 50.0 Million. The transaction was approved by the Selwyn shareholders at the April 22, 2013 Special Meeting and is expected to be closed in early June 2013 together with the payment of the remaining CAD 40.0 Million.
Selwyn acquired ScoZinc Ltd in 2011 for CAD 10.0 Million and with a plan to re-start operation and join the “Producer group”. The time required to resume production at ScoZinc is approximately 9 months, with an estimated production of 2,500 tpd (Zinc and Lead) mine and mill operations. The Selwyn Board has indicated that it wishes to have the funds from the sale of its interest in the Selwyn Project to fund the restart of ScoZinc mine if warranted and grow of the company as a new base-precious metal producer.
Selwyn says it confirms high-grade mineralization at Don Connector target
The company’s shares were up four percent Friday morning on the back of the news, trading at 13 cents.
The results were from fourteen exploration drill holes that were completed in mid-April between the Don and Don East deposits at the project, in order to confirm the direct linkage between the two adjacent areas.
The drilling is part of an exploration program pursuing an extension of the Don deposit towards the adjacent Don East deposit to the southeast, and is being conducted by Selwyn Chihong Mining Ltd., the joint venture company equally owned by Selwyn and Chihong Canada Mining.
Highlights from the newly announced drill results include hole DON-233, which intersected 27.85 metres true thickness, grading 6.09 percent zinc and 1.87 percent lead, including 10.87 metres grading 8.95 percent zinc and 2.62 percent lead.
Hole DON-234 returned 36.38 metres true thickness, grading 5.85 percent zinc and 2.50 percent lead, including 13.72 metres grading 11.83 percent zinc and 5.70 percent lead.
In addition, hole DON-236 intersected 27.25 metres true thickness, grading 6.51 percent zinc and 1.92 percent lead, including 4.18 metres grading 24.83 percent zinc and 6.63 percent lead.
Other intercepts from 2011-2012 drilling on the Don Connector target include drill holes DON-227, DON-231, DON-232, DON-235, DON-237, and DON-238, which all host zinc-lead mineralization, Selwyn said.
The data from the definition drilling program will form the basis for a new mineral resource estimate for the Don deposit, said the company.
Selwyn noted that results from the exploration program continue to confirm the 3D geological and structural models for the Don deposit.
The current overall global mineral resource for the Don deposit is an indicated mineral resource of 36,901,600 tonnes grading 5.63 percent zinc and 2.11 percent lead.
The Selwyn project, which consists of 7,450-hectares of mineral claims, hosts large tonnages of zinc and lead mineralization that have the potential for large-scale production.
Selwyn has 19,294-hectares of mineral claims in the Yukon, and 3,373-hectares of wholly-owned claims in the Northwest Territories.
Earlier this month, the company announced it had been granted long-term tenure for a major portion of a key road that links its joint venture Selwyn project in the Yukon to the public highway system.
It was given a 30-year license of occupation for the majority portion of the Howard's Pass Access Road that is under the jurisdiction of the Aboriginal Affairs and Northern Development Canada (AANDC).
Howard's Pass is a 79 kilometre long road that links the company's Selwyn project in the Yukon with the public highway system.
Last month, the lead and zinc explorer also closed its previously announced $10 million secured debt facility. The proceeds will be used by both Selwyn and its unit ScoZinc for general corporate purposes, including activities at the company's ScoZinc mine in Nova Scotia.
The ScoZinc mine, a past producing zinc-lead mine in Nova Scotia, which the company acquired for $10 million, has a measured and indicated resource of 2.8 million tonnes grading 4.2 percent zinc and 1.9 percent lead.
Cash flow from restarting the Nova Scotia operations are intended to be used toward the development of the Selwyn project.