Selwyn Resources Ltd.
TSX VENTURE : SWN

Selwyn Resources Ltd.

July 20, 2009 09:28 ET

Selwyn Resources Advances the Selwyn Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 20, 2009) - Selwyn Resources Ltd. (TSX VENTURE:SWN) is pleased to update shareholders on progress in advancing the Selwyn Project towards bankable feasibility and development.

Ongoing work has focused on three main objectives:

- Preparation for confirming a large, laterally extensive high-grade core zone that has been conceptualized from the projection of high-grade mineralization in the XY Central and XY West zones.

- Continued evaluation of development options for the Selwyn Project and infrastructure alternatives.

- Advancement of environmental assessment and community support for permitting of the Selwyn Project.

Overview

Selwyn has recently completed an aggregate $4.0 million of additional equity financing and expanded its Board with the addition of Mr. Yun Choi of Korea Zinc. The addition of Korea Zinc as a major shareholder, through its wholly owned Canadian subsidiary Pan-Pacific Metal Mining Corporation, is seen as an important development and provides Selwyn with a third large strategic investor that shares Selwyn's vision of the Selwyn Project becoming a major zinc-lead mine (see May 8 and July 7, 2009 news releases). These initiatives help prepare Selwyn for taking the next key steps in advancing the Selwyn Project.

Selwyn has spent an aggregate $57 million during the period July 2005 to present in establishing the Selwyn Project as one of the World's largest undeveloped zinc-lead deposits. These expenditures include more than $5.5 million in engineering, environmental studies and community consultation.

Particularly exciting for shareholders is Selwyn's ongoing success of exploration drilling in defining substantial resources of high-grade mineralization. The current NI 43-101 compliant high-grade mineral resource as estimated by John O'Donnell, P.Geo. (Non-Independent Qualified Person) in February 2009 (see February 26, 2009 news release) includes:



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Resource Category Metric Tonnes % Zinc % Lead
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Indicated 16,063,000 10.25% 4.23%
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Inferred 26,704,000 8.81% 2.81%
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There is also potential for this high-grade mineralization to be laterally extensive over a large portion of the area of known mineral resources as high-grade mineralization has been intercepted in drill holes over a length of 24 kilometres within the deposit. This expansion opportunity and long mine life potential, in combination with the ability to produce high quality zinc and lead concentrates, provides a unique opportunity for long term secure supply of zinc and lead.

Engineering and Prefeasibility Evaluation

Recent evaluation has focused on internal scoping work and pre-feasibility level studies for the development of the Selwyn Project as a high-grade underground mine followed by later expansion with addition of open pit operations. Initial scoping work on a 5,000 tonne per day production rate indicated that the project would benefit from a higher production rate. This work is being optimized with an increase in the production rate to 8,000 tonnes per day and further evaluation of multiple concentrate transport and power supply alternatives. These optimization studies are targeted at reducing operating costs and increasing mine cash flow.

Evaluation of power supply alternatives is currently focused on hydroelectric sites in both the Yukon and the Northwest Territories. Preliminary evaluation indicates attractive run-of-river hydroelectric opportunities that could generate up to 20 megawatts of power on a seasonal basis, minimizing the requirement for diesel power generation. Ongoing studies are now evaluating the feasibility of adding some water storage to extend the availability of power to the winter months. The potential peak power generation capacity from hydroelectric sources is roughly equal to the average load requirement of the proposed mine-mill facility. The addition of hydroelectric power would provide the Selwyn Project an assured supply of reasonable cost power and a significant operating cost benefit compared to many other base metal mines that are wholly dependent on diesel power.

Another recent development is the evaluation of a concentrate pipeline as an alternative means of transporting concentrates from the site. Interest in concentrate pipelines is increasing globally as an alternative to rising transportation costs. A preliminary evaluation of capital and operating costs is in progress following a favourable initial assessment. The concept provides for the pumping of concentrates through an approximate 18 centimetre diameter buried pipe to either the Robert Campbell Highway or North Canol Road to a facility where the concentrates would be de-watered and shipped onward by truck to the concentrate shipping facility. A concentrate pipeline would largely alleviate the need for a new access road to the Selwyn Project site and significantly reduce unit concentrate haulage costs.

More detailed metallurgical testwork is planned and will be focused on the characteristics of high-grade mineralization from the XY zone and the development of an optimal flowsheet for these ores. Previous testwork focused almost entirely on lower grade mineralization. The new testwork will provide better recovery and process requirement information and will evaluate a few possible enhancements to the process plan.

Selwyn is also planning geotechnical drilling in the area of the proposed initial underground development for the XY Central zone. The initial underground development is intended to provide confirmation of mining conditions and provide a platform for additional drilling. These underground workings would provide a platform for completing definition drilling of the published mineral resources and aid in detailed mine planning; however, of potential greater importance to shareholders is that the proposed underground workings will provide an ideal platform for drilling of the keel of the XY syncline over a strike length of more than 3,000 metres. Surface drilling to date has defined the continuity of high-grade mineralization over at least 1,500 metres and up to 650 metres down dip in the XY Central area. The XY West deposit is situated approximately 1,000 metres along strike from the XY Central zone and infers additional lateral continuity of the high-grade mineralization. The opportunity to further confirm continuity within the XY area is a major opportunity for rapid expansion of the high-grade mineral resource inventory.

Environmental Assessment and First Nations Consultation

Selwyn continues to make good progress in its negotiation of cooperation agreements with First Nations whose traditional territory encompasses the Selwyn Project. Completion of these negotiations forms the foundation for their participation in the social and economic benefits associated with the exploration and development of the Selwyn Project. Selwyn expects to complete these agreements before the end of the year, coincident with the timing of the company's plans to enter the environmental assessment and permitting process for the Project.

Current permitting and environmental assessment work is focused on preparing an environmental assessment report in support of an application for a B type Water Licence and work permit for undertaking initial underground development within the XY Central zone.

Recently, the Mackenzie Valley Environmental Impact Review Board concluded that Selwyn's proposed exploration activities on its mineral claims and leases in the Northwest Territories will not have a significant environmental effect. This decision clears the way for the issuance of the Land Use permits required for exploration work on the Northwest Territories portion of the Selwyn Project. This, together with renewal of the permit for an all season road from the property to Tungsten in the Northwest Territories, provides Selwyn with the access it needs to support ongoing exploration activities (see June 9, 2008 news release).

Strategic Planning Outlook

Recent progress on engineering and permitting is providing clarity to key aspects of Selwyn Project economics that are important to potential strategic partner investors. Similarly, in the past few months it is apparent that World economies appear to have bottomed and are beginning to recover. With the improvement in economic outlook, interest in commodities has strengthened and major investments in the mining sector are being sought and made. Selwyn continues to make progress in strategic partner discussions and is hopeful that with improving market conditions, it can attract the investment to advance the Selwyn Project to feasibility and a production decision.

This news release contains forward-looking statements concerning the proposed financing and the possible development alternatives for the Selwyn Project. These statements are based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of failure to complete a transaction with a strategic partner and to complete any proposed financing, failure to obtain necessary regulatory or shareholder approvals, and exploration and other risk factors beyond Selwyn's control. There can be no assurance that such forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Selwyn Resources Ltd.
    Dr. Harlan Meade
    President and CEO
    (604) 801-7240 or Toll-free: 1-888-989-9188
    or
    Selwyn Resources Ltd.
    Jasmin TamDoo
    Manager of Investor Communications
    (604) 801-7240 or Toll-free: 1-888-989-9188
    (604) 689-8355 (FAX)
    info@selwynresources.com
    www.selwynresources.com