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Selwyn Resources repays Waterton loan in full

Published: 15:18 12 Jun 2013 EDT

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Selwyn Resources (CVE:SWN) announced Wednesday the repayment of its loan with Waterton Global Value, L.P. The Waterton facility has been extinguished and all security granted under the facility has been discharged.

Accordingly, warrants to purchase 4.5 million shares of Selwyn Resources that had been held in escrow under the terms of the facility were released to Waterton. Waterton now holds 20.5 million warrants of the 25 million warrants that were issued under the facility, with 4.5 million having been cancelled in connection with earlier repayments. The warrants expire on April 11, 2017 and have an exercise price of $0.17 per share.

The news comes just days after the Vancouver-headquartered base metals and exploration and development company announced that it had completed the sale of the company's remaining interest in the Selwyn project in the Yukon to Chihong Canada Mining. Upon the transaction closing, Selwyn Resources received $40 million in cash from Chihong Canada which constituted the balance of the $50 million purchase price.

The announcement also comes the day after the company unveiled an updated and improved preliminary economics report for its ScoZinc mine in Nova Scotia, which it is now focused on restarting. Dependent on the results of the company’s annual and special meeting now scheduled for next week, the $50 million arising from the sale of the Selwyn project is earmarked to be spent on restarting production at the ScoZinc zinc-lead project.

The company has already taken the step of improving the economics of the mine ahead of the meeting, with lower operating costs and a higher net present value. 

It released the results of the preliminary economic assessment (PEA) for the Atlantic Canada mine on Tuesday, updated from the prior report released at the end of 2012. The newest report includes an expansion of the mine plan, and new metallurgical data based on additional engineering undertaken in the first quarter of 2013. 

Shares in Selwyn on the TSX Venture Exchange were holding steady from an open of 9 cents per share the day of the announcement.

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