Selwyn Resources Ltd.
TSX VENTURE : SWN

Selwyn Resources Ltd.

April 06, 2011 08:58 ET

Selwyn Announces Scotia Mine Mineral Resources

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 6, 2011) - Selwyn Resources Ltd. (TSX VENTURE:SWN) ("Selwyn") is pleased to announce a NI 43-101 compliant mineral resource estimate for the Scotia mine (formerly known as the Gays River mine) in Nova Scotia that includes both the Main and Northeast zones. The Scotia mine is part of the mineral assets included under the purchase agreement reached with Acadian Mining Corporation ("Acadian"). Selwyn is acquiring all of the issued and outstanding shares of ScoZinc Limited ("ScoZinc"), a wholly owned subsidiary of Acadian, and thereby will also acquire all of the mineral and other assets associated with the Scotia mine (see February 8, 2011 news release).

Dr. Harlan Meade, President and CEO, notes that, "The new estimate of mineral resources of the Main zone confirms prior estimates of tonnage and grade by former operators. Additional drilling within the Main zone will provide for the conversion of Inferred mineral resources to a higher confidence level for inclusion in future engineering studies on the restart of the mine. Similarly, mineral resources in the Northeast zone require additional drilling to upgrade the confidence of the sizeable Inferred mineral resources that could be amenable to open pit mining. Overall, the results form a strong basis for completing engineering studies for the resumption of mining and milling at the Scotia mine. The recently completed Getty deposit mineral inventory also indicates the potential for open pit mining in that area, so with additional drilling and engineering studies, the mineral resources may have the potential to expand the longevity of the Scotia mine."

Highlights

  • The Main zone has a base case (1.50% zinc equivalent cutoff value)
    • Measured and Indicated mineral resources of 2,890,000 tonnes grading 4.20% zinc and 1.90% lead, and
    • Inferred mineral resource of 1,570,000 tonnes grading 3.30% zinc and 1.30% lead.
  • The Northeast zone has a base case (2.0% zinc equivalent cutoff value)
    • Indicated mineral resource of 1,580,000 tonnes grading 4.21% zinc and 2.22% lead; and
    • Inferred mineral resource of 1,880,000 tonnes grading 2.70% zinc and 1.86% lead.

The Scotia mine is located approximately 50 kilometres northeast of Halifax, the capital of and largest city in Nova Scotia. The mine is contained within Mineral Lease 90-1, which consists of 615 hectares of mineral rights, as well as five exploration licences in the general vicinity of the Scotia mine, totalling 91 claims covering 3,640 acres (1,473 hectares). These licences are located along strike from the Scotia mine and include favourable host rocks similar to that at the mine site.

Zinc-lead mineralization at the Scotia mine consists of disseminated to locally semi-massive sphalerite and galena occurring within a dolomitized carbonate reef of the Lower Carboniferous age Gays River Formation. The Scotia mine is one of a series of related zinc-lead mineralized reefs including the Getty deposit (see March 30, 2011 news release), situated 1,500 metres to the west of the Main deposit and mill facilities. Other mineralized reef structures include the Carroll's Farm and Carroll's Corner zinc-lead exploration targets located 1.5 kilometres and 2.5 kilometres west of the Getty deposit respectively. These exploration targets are also an integral part of this series of mineralized reefs and are considered highly prospective targets warranting follow-up drilling.

Mineral Resources

The estimation of mineral resources of the Main and Northeast zones of the Scotia mine is supported on information provided from 896 drill holes, totalling 75,204.40 metres, completed by prior mine operators between 1951 and 2004; 467 underground drill holes, totalling 11,985.60 metres, also completed by prior mine operators between 1979 and 1995; and 17 drill holes, totalling 1,613.50 metres completed in 2008 by ScoZinc.

Main Zone

Resource Category
Zn Eq. % Cutoff   Tonnes Zn
(%
) Pb
(%
) Zn
Eq. %
Measured 0.75   1,340,000 4.40   2.00   7.40
Indicated 0.75   1,790,000 3.60   1.60   5.90
Measured + Indicated 0.75   3,130,000 3.90   1.80   6.60
Inferred 0.75   1,740,000 3.10   1.10   4.80
Measured 1.50 * 1,250,000 4.70   2.10   7.90
Indicated 1.50 * 1,640,000 3.80   1.70   6.40
Measured + Indicated 1.50 * 2,890,000 4.20   1.90   7.00
Inferred 1.50 1,570,000 3.30   1.30   5.20
Measured 2.00   1,170,000 4.90   2.30   8.30
Indicated 2.00   1,500,000 4.00   1.90   6.80
Measured + Indicated 2.00   2,670,000 4.40   2.00   7.40
Inferred 2.00   1,340,000 3.50   1.40   5.60
Measured 7.00   540,000 7.40   3.70   12.90
Indicated 7.00   550,000 6.10   3.50   11.40
Measured + Indicated 7.00   1,090,000 6.80   3.60   12.20
Inferred 7.00   340,000 5.60   3.30   10.60
 
Notes:
  1. A three-dimensional block model was developed using Gemcom Surpac® Version 6.0.3 software.
  2. Cut-off grade for mineralized zone interpretation was 2% zinc-equivalent for the "low-grade" domain and 7% for the "high-grade" domain.
  3. Block cut-off grade for defining Mineral Resources was 0.75% zinc-equivalent.
  4. No top-cut grade was used. In the author's opinion, the use of a top cut would not have significantly affected the results.
  5. Zinc price was US$1.10/lb, lead price was US$1.15/lb. Prices were based on current and going-forward LME contract prices.
  6. Zones extended up to 50 metres down-dip from last intercept. Along strike, zones extended halfway to the next cross-section.
  7. Minimum width was 2 metres.
  8. Non-diluted.
  9. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
  10. Main Zone mineral resource estimate prepared by Tim Carew, M.Sc., P.Geo.; base case denoted by "*".
  11. Specific gravity was calculated based on zinc and lead content. There are no other sulphides or dense minerals that are present in significant quantities.
  12. Block kriging using "unfolding" was used for estimating block grades.
  13. No mineral reserves of any category were identified and were outside the parameters this study.
  14. Zinc-equivalency for lead was calculated based on relative metal prices, demonstrated processing recoveries (86% and 84% for lead and zinc, respectively), estimated smelter returns of 95% and 85% respectively for lead and zinc) and demonstrated concentration factors (75% and 65% respectively for lead and zinc).

Northeast Zone

Mineral Resources within 100 metres of surface:

Resource Category
Zn Eq. % Cutoff   Tonnes Zn
(%
) Pb
(%
) Zn
Eq. %
Indicated 0.75   1,560,000 4.00   2.00   7.00
Inferred 0.75   1,480,000 2.40   0.70   3.50
Indicated 1.50   1,490,000 4.20   2.10   7.40
Inferred 1.50   1,040,000 3.00   1.00   4.50
Indicated 2.00 1,430,000 4.30   2.20   7.60
Inferred 2.00 850,000 3.30   1.20   5.10
Indicated 7.00   500,000 7.30   4.30   13.80
Inferred 7.00   150,000 7.50   4.00   13.50
 
Mineral Resources deeper than 100 metres of surface:

Resource Category
Zn Eq. % Cutoff   Tonnes Zn
(%
) Pb
(%
) Zn
Eq. %
Indicated 2.00 150,000 3.30   2.40   6.90
Inferred 2.00 1,030,000 2.20   2.40   5.80
Indicated 7.00   50,000 4.90   4.90   12.30
Inferred 7.00   280,000 3.50   4.30   10.00
 
Aggregate Mineral Resources (2.00% zinc equivalent cutoff):

Resource Category
Zn Eq. % Cutoff   Tonnes Zn
(%
) Pb
(%
) Zn
Eq. %
Indicated 2.00 1,580,000 4.21   2.22   7.53
Inferred 2.00 1,880,000 2.70   1.86   5.48
 
Notes:
  1. Cut-off grade for mineralized zone interpretation was 0.5% zinc-equivalent for surface resources (less than 100 metres deep) and 2% at depth.
  2. Block cut-off grade for defining Mineral Resources was 0.75% zinc-equivalent for surface resources (less than 100 metres deep) and 2% at depth.
  3. No top-cut grade was used. In the author's opinion, the use of a top cut would not have significantly affected the results.
  4. Zinc price was US$1.10/lb, lead price was US$1.15/lb. Prices were based on current and going-forward LME contract prices.
  5. Zones extended up to 50 metres down-dip from last intercept.
  6. Along strike, zones extended halfway to the next cross-section.
  7. Minimum width was 2 metres.
  8. Non-diluted.
  9. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
  10. Mineral resource estimate prepared by Doug Roy, M.A.Sc., P.Eng.; base case denoted by "*".
  11. Specific gravity was calculated based on zinc and lead content. There are no other sulphides or dense minerals that are present in significant quantities.
  12. Inverse distance weighting, power of "2" ("ID2") was used for estimating block grades.
  13. Indicated mineral resources identified where sample intercept spacing was 40 metres or less (based on variography).
  14. No Measured mineral resources or mineral reserves of any category were identified.
  15. Zinc-equivalency for lead was calculated based on relative metal prices, demonstrated processing recoveries (86% and 84% for lead and zinc, respectively), estimated smelter returns (95% and 85% for lead and zinc) and demonstrated concentration factors (75% and 65% respectively for lead and zinc).

Mineral Resource Evaluation

An evaluation of mineral resources for the Scotia mine was commissioned by Selwyn as part of a re-evaluation of all mineral resources on the Scotia mine property. The mineral resource estimate for the Main zone has an effective date of April 4, 2011, and was supervised and prepared by Independent Qualified Person Mr. Doug Roy, P.Eng. and Mr. Tim Carew, P.Geo., as defined by National Instrument 43-101. Mr. Roy, P.Eng. works for MineTech International Limited ("MineTech") of Halifax, Nova Scotia, Canada, and Mr. Carew, P.Geo., provided services under contract with MineTech. The mineral resource estimate for the Northwest zone also has an effective date of April 4, 2011, and was supervised and prepared by Independent Qualified Person Mr. Doug Roy, P.Eng. In accordance with National Instrument 43-101, the Technical Report will be filed on SEDAR within 45 days. For the purposes of this news release, Mr. Jason Dunning, P.Geo., Selwyn's Vice President of Exploration is Selwyn's designated Non-Independent Qualified Person for the purposes of this study and has reviewed and approved the contents of this press release.

Selwyn's main focus remains the exploration and development of its properties that make up the Selwyn Project in the Yukon; which are being advanced by the joint venture Selwyn Chihong Mining Ltd.. The Selwyn Project has both the potential to have large scale production and to provide a secure supply of zinc and lead to meet the future needs of these metal markets in Asia and beyond. The acquisition of ScoZinc provides Selwyn with a second opportunity for growth and generation of cashflow to fund the advancement of the Selwyn Project.

Forward-Looking Statements

This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation, which is also referred to as "forward-looking statements". Wherever possible, words such as "plans", "expects", or "does not expect", "budget", "scheduled", "estimates", "forecasts", "anticipate" or "does not anticipate", "believe", "intend" and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, have been used to identify forward-looking information. In particular, this news release describes future events and conditions related to the Scotia Mine, the Getty Deposit, the Selwyn Project and Selwyn's plans for exploration and development of such. Forward-looking information is based on management's reasonable assumptions, estimates, expectations, analyses and opinions on the date of this news release. These are based on management's experience and perception of trends, current conditions and expected developments, and other factors that management believes are relevant and reasonable in the circumstances, but which may prove to be incorrect. Assumptions have been made regarding, among other things, the estimation of Mineral Resources for the Getty Deposit, Selwyn's ability to carry on exploration and development activities, the price of zinc and lead and recovery rates from milling operations at the Scotia Mine, Selwyn's ability to operate in an efficient and effective manner and Selwyn's ability to obtain financing as and when required and on reasonable terms. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Selwyn's actual results, programs and financial position could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, many of which are beyond Selwyn's control. These factors include, but are not necessarily limited to, results of exploration activities and development of mineral properties, the interpretation of drilling results and other geological data, the uncertainties of Mineral Resource estimations, receipt and security of mineral property titles, receipt of licenses to conduct mining activities, project cost overruns or unanticipated costs and expenses, the availability of funds, fluctuations in metal prices, currency fluctuations and general market and industry conditions. There is no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on this information. Selwyn does not undertake to update any forward-looking information, except as, and to the extent required by, applicable securities laws.

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
    +1 (604) 801-7240 or Toll-free: +1 (888) 989-9188
    or
    Selwyn Resources Ltd.
    Catalin Chiloflischi
    Manager of Investor Communications
    +1 (604) 801-7240 or Toll-free: +1 (888) 989-9188
    +1 (604) 689-8355 (FAX)
    info@selwynresources.com
    www.selwynresources.com