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Tuesday, 14 May 2013
Selwyn project sale one step closer to completion
Selwyn Resources (CVE:SWN) announced Monday a significant step in the sale of its remaining interest in the Selwyn project to its joint venture partner, Chihong Canada Mining Ltd., as the board of directors of Yunnan Chihong Zinc & Germanium Co. Ltd., parent company to Chihong Canada Mining, approved the transaction.
Shareholders of the Vancouver-based junior exploration company approved the sale of its remaining 50 per cent interest in the Selwyn project, a zinc-lead development project located in the eastern Yukon, to partner Chihong Canada Mining, at a special meeting held in late April.
The project, composed of 259.8 square kilometers of wholly owned mineral claims and 95.6 square kilometers of mineral lands acquired from the Howard’s Pass Joint Venture, attracted a price of C$50 million for the 50 per cent interest.
Chihong Canada has advised the company that the last outstanding Chinese governmental approval is the final formal approval for the remittance of funds out of China from the State Administration of Foreign Exchange (SAFE) of Yunnan Province.
Once the SAFE approval has been obtained, all conditions to closing of the transaction will have been satisfied other than delivery of customary closing documentation and payment of the balance of the purchase price.
Selwyn advises that once it has been notified that the SAFE Approval has been obtained, it will announce the proposed closing date for the transaction. The transaction is expected to close in early June of this year, together with the payment of the remaining C$40.0 million.
Depending on the results of the company’s annual and special meeting now scheduled to be held on June 17, the proceeds of the sale are earmarked to be spent on restarting production at the ScoZinc project in Atlantic Canada, the second of the company’s two projects.
ScoZinc Ltd., acquired in mid-2011 for C$10 million, has mineral claims in Nova Scotia covering approximately 420.8 hectares square kilometers. Upon acquisition of the ScoZinc, Selwyn commenced engineering, permitting and refurbishment activities at these claims.
The company, which estimates production from the zinc-lead project to come in at about 2,500 tonnes per day from mine and mill operations, has pegged the time required to resume production at the project to be approximately 9 months. Should the ScoZinc project be restarted as forecast, the company would join the producer group as a new base-precious metal producer.
Shares in Selwyn Resources were holding steady today in trading on the TSX Venture Exchange, from an open of 9 cents per share.