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Tuesday, 19 February 2013
Selwyn Resources appoints new VP of exploration
Selwyn Resources (CVE:SWN) has appointed Wolfgang Schleiss as its new VP of exploration after the resignation of Jason Dunning, effective last week.
Schleiss has more than 25 years experience in both exploration and mining, and has previously managed precious and base metal exploration programs throughout North America, Europe and Russia for companies such as Tamerlane Ventures, Phelps Dodge, Unimin Corporation, and Battle Mountain Gold.
The news announced Monday comes at quite a significant time for Selwyn over the past few months. In 2012, Selwyn announced a board shake up, as part of chief executive Meade's mandate to raise working capital to advance the company's business plan and keep it on track.
Late last year, the company revealed the results of an update to its preliminary economic assessment report for the restart its ScoZinc zinc-lead project in Nova Scotia, which the company says significantly derisks the asset by showing potential for a seven-plus year mine life.
Provided that debt financing for the project can be secured by the first quarter of this year, pre-stripping is expected to begin in the second quarter, with full operation set to start in the fourth quarter of 2013.
"The improved economics are always welcome, but more importantly, the first critical five years of the cash flow model are less variable from what they were before, and this will be attractive to the debt providers from which we are interested in securing capital," CEO Dr. Harlan Meade told Proactive Investors in late November.
Since acquiring the past-producing mine in June last year, Selwyn has invested more than $8 million in infrastructure refurbishment, drilling, permitting and other improvements at the site. It also updated mineral resources at the project, increasing measured resources by 55 per cent and indicated resources by 65 per cent in August of last year.
The new resource provided the basis for a revised mine plan and economic model, which confirmed a "significant" increase in mine life for the Main and Northeast pits at the property. In the updated study, these two conventional pits are to be mined sequentially, based on an average production rate of 877,800 tonnes per year.
At a 2,500 tonne per day mill processing rate, the project pre-tax net present value is now estimated at C$69.3 million, at a discount rate of 8 per cent, with a pre-tax internal rate of return of 63.3 per cent and a payback period of 1.4 years.
After-tax, the net present value is projected at $56.1 million at the same discount rate, with an IRR of 57.8 per cent.
Unit operating costs are seen at $52.89 per tonne milled for the first five years, and at $42.31 per tonne for the life-of-the mine - what Dr. Meade calls an extremely low-cost operating environment, which includes an industrial power rate of 7 cents per kilowatt hour for electricity.
Mine and mill restart capex is estimated at C$31.5 million, including contingency and working capital, with continued optimization studies expected to further reduce cash operating and equipment costs.
Going forward, Selwyn’s CEO says there is no need for a feasibility study to attract banks or make a production decision, as the PEA uses much of the historic operating information, “which is preferable to projected costs that are typical of greenfield project feasibility studies.”
Selwyn is also focused on its feasibility study for its flagship zinc-lead project in the Yukon, which is expected to be completed in late March. The Selwyn project, considered one of the largest undeveloped zinc-lead deposits out there, is run by Selwyn Chihong Mining, a joint venture formed by Selwyn and Chihong Canada Mining. Chihong Canada is a subsidiary of Yunnan Chihong Zinc & Germanium - one of China's largest zinc and lead mining and smelting companies.