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 Resources gets approval for ScoZinc mine expansion
On May 18, the Nova Scotia Department of Environment issued an amended industrial approval, allowing the company to expand its existing mine to include the Southwest Expansion of the previously mined Main Pit.
"We are very pleased the Nova Scotia government has approved the Southwest Expansion at the ScoZinc Mine," said president Stephen Rea.
"With this approval in hand, Selwyn can continue its efforts for financing the restart of operations at ScoZinc."
The ScoZinc mine is a past producing zinc-lead mine in Nova Scotia, which the company acquired for $10 million. The mine has a measured and indicated resource of 2.8 million tonnes grading 4.2 percent zinc and 1.9 percent lead.
As it has now received the amended approval, Selwyn can access the balance of the $10 million debt facility established with Waterton Global Value, L.P., in April.
The proceeds will be used for general corporate purposes, including restart activities at the ScoZinc mine.
Selwyn primarily focuses on the exploration and development of its properties that make up the Selwyn project in the Yukon, which hosts large tonnages of zinc-lead mineralization.
The known deposits at the Selwyn project have the potential for large scale production, and to provide a "secure supply of zinc and lead to meet the future needs of the zinc and lead markets in Asia," the company said.
The acquisition of ScoZinc, once restarted, was meant to help provide cash flow to aid in the advancement of the Yukon project.
The company recently announced an updated mineral resource estimate for its XY West deposit at the Yukon project, highlighting the expansion of its inferred category resources to 12.75 million tonnes grading 4.42% zinc and 1.40% lead.
Selwyn noted that the XY West deposit is a key component due to its close proximity to the adjacent XY Central deposit, which has an inferred mineral resource of 44.11 million tonnes grading 4.10% zinc and 1.29% lead.
The updated 12.75 million tonne inferred estimate for XY West used a base case 2.0% zinc cut-off grade, and includes 3.27 million tonnes of higher grade zinc-lead mineralization grading 7.71% zinc and 2.23% lead at a 5% zinc cut-off grade.
The company said the global mineral inventory in the inferred category increased 4.4% as a result, corresponding to an increase of 0.94 billion pounds of zinc and 0.24 billion pounds of lead at a 2% cut-off grade.
Since acquiring the Selwyn project in 2005, the company said it has made nine major deposit discoveries that are potentially amenable to open pit and/or underground mining methods, all of which remain open for expansion.
Zinc-lead sulphide mineralization has now been defined over 37.5 kilometres of strike length with the drilling results from the 2005 through 2012 drilling campaigns, said the company.
The total indicated mineral resources at the Selwyn project are 180.69 million tonnes grading 5.25% zinc and 1.83% lead for a metal content of 20.91 billion pounds of zinc and 7.30 billion pounds of lead.
The inferred mineral resources have increased to 226.88 million tonnes grading 4.44% zinc and 1.37% lead for a metal content of 22.23 billion pounds of zinc and 6.84 billion pounds of lead.
The work program at the Yukon project is being undertaken by Selwyn Chihong Mining Ltd., the joint venture company equally owned by Selwyn and Chihong Canada Mining Ltd.
Shares were trading at 12 cents Wednesday morning.