Selwyn Resources Ltd.

Selwyn Resources Ltd.

July 22, 2009 09:28 ET

Selwyn Resources Options Vinata Property, Mexico and Plans Drilling

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 22, 2009) - Selwyn Resources Ltd. (TSX VENTURE:SWN) ("Selwyn") is pleased to announce that it has reached agreement with Savant Explorations Ltd. (TSX VENTURE:SVT) ("Savant") to acquire an interest in its Vinata Property located in the state of Chihuahua in north central Mexico. The acquisition agreement grants Selwyn an option to acquire an initial 50% interest in the Vinata Property, and upon exercising of that option, a second option for Selwyn to increase its interest to 55% by making additional expenditures. Selwyn and Savant are planning a USD$450,000 drilling program to commence in late September to test several prime targets for high grade silver-zinc-lead mineralization. The acquisition of an interest in the Vinata Property by Selwyn is subject to receipt by the parties of required regulatory approvals and to completion of final documentation.

The acquisition provides Selwyn shareholders with exploration activity at a time when Selwyn's large scale zinc-lead Selwyn Project is focused largely on environmental assessment and engineering activities related to the evaluation of development alternatives. Selwyn remains clearly focused on the development of the Selwyn Project but believes that shareholders would benefit from successful exploration activity on the Vinata Property.

The Vinata Property is located in north central Mexico in the prolific Central Mineral Belt that hosts numerous very large silver-zinc-lead mining districts at Bismark, Cinco de Mayo, Santa Eulalia, Naica, San Martin and Fresnillo. The Vinata Project is seen as providing Selwyn an exciting opportunity to participate in the exploration for a new major silver-zinc-lead deposit along trend with the Santa Eulalia and Naica mining districts. Collectively these two mining districts have produced more than 750 million ounces of silver and significant zinc and lead.

Highlights of the Vinata acquisition include:

- Vinata consists of 89 square kilometres of mineral lands in the prolific Santa Eulalia-Naica mineral trend;

- Santa Eulalia and Naica have collectively produced more than 750 million ounces of silver;

- Artisanal surface mining of manganese-silver mineralization on the Vinata property is thought to represent the upper part of a large silver-zinc-lead Santa Eulalia-type deposit that has occurred on the Vinata Property; and

- An 1,800 metre drilling program will be carried out to test the depth extension of manganese-silver mineralization for transition to high grade silver-zinc-lead mineralization.

Vinata Property

Vinata is a large property covering approximately 89 square kilometres and represents a rare opportunity to acquire a large property position associated with the surface expression of a potential new district scale discovery. The local geology and alteration show many similarities to the Santa Eulalia District, 55 kilometres to the north, which hosts numerous silver-zinc-lead deposits within Upper Cretaceous limestone.

Mining at Santa Eulalia has occurred in a number of structural trends over a strike length of approximately 3,000 metres and up to 800 metres of vertical extent. Alteration extends into the overlying Tertiary volcanic rocks and is characterized by extensive clay alteration and manganese mineralization with lesser amounts of silver, zinc and lead. Aggregate production exceeds 500 million ounces of silver.

Historic mining on the Vinata Property was focused on mining manganese-silver mineralization within a number of structurally controlled vein and breccia replacement bodies within Tertiary volcanic rocks that immediately overlie the Upper Cretaceous limestones, similar to that at Santa Eulalia. The surface mining of argentiferous manganese oxide mineralization at Vinata has occurred over a northwesterly trend of approximately 3,000 metres.

Mapping has identified well defined vein-breccia structures flanked by extensive clay altered volcanic rocks hosting highly anomalous silver, zinc and lead in micro-veinlets of carbonate. This alteration and mineralization is interpreted to be the uppermost part of a mineralizing system. An initial 1,800 metres of drilling is planned to begin in late September to test the continuity of the mineralized structures to depth and the possible occurrence of manto and chimney type mineralization. Typically the upper parts of these mineralized systems are silver rich with massive sulphides of lead and zinc. The upper parts of these mineralized bodies commonly occur in the upper part of the Cretaceous limestone strata; which at this location is covered by strongly altered Tertiary volcanic rocks and the manganese-silver mineralization that typifies mineralization at Santa Eulalia.

Acquisition Terms

Selwyn has the option to acquire an initial 50% interest in the Vinata Property through the acquisition of shares of a wholly owned subsidiary of Savant by providing USD$1,000,000 for expenditures on the Vinata Property over a period of 30 months and by making a cash payment of CAD$100,000 on completion of the earn-in expenditures. A condition of the option is that Selwyn commit to make expenditures of USD$500,000 before January 15, 2010. Upon vesting the initial 50% interest, Selwyn will have an exclusive option to acquire an additional 5% interest in the Vinata Property by providing an additional USD$500,000 for property expenditures on the Vinata Property by August 15, 2012 and by making an additional cash payment of CAD$100,000 to Savant.

In addition, Selwyn has agreed to participate as to CAD$50,000 in an equity offering that Savant is planning for its shares. Selwyn currently owns 8,196,667 shares of Savant representing 32.9% of the issued shares and has warrants to acquire an additional 1,281,667 shares.

The Vinata Property is subject to a purchase agreement between Savant and Minera Cima, S.A. De C.V. (see Savant news release of June 11, 2009) which includes aggregate cash purchase payments of USD$2,635,000 and granting of a royalty of 2% of Net Smelter Returns which can be reduced to 1% NSR upon making payments of USD$1,000,000.

Selwyn is focused on the development of the Selwyn Project in the Yukon as a major new zinc-lead mine. The Selwyn Project is advancing towards feasibility and development as a large scale mine providing a secure supply of zinc and lead to meet the future needs in Asia and beyond. The Vinata Project provides another growth opportunity for Selwyn shareholders.

This news release contains forward-looking statements concerning the Vinata Property and the development of 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 obtain necessary regulatory approvals, the failure to reach agreement on final documentation, exploration results and other risk factors that are 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
    Selwyn Resources Ltd.
    Jasmin TamDoo
    Manager of Investor Communications
    (604) 801-7240 or Toll-free: 1-888-989-9188
    (604) 689-8355 (FAX)