Selwyn Resources Ltd.
TSX VENTURE : SWN

Selwyn Resources Ltd.

August 13, 2012 09:00 ET

Selwyn Announces Updated Mineral Resource for Selwyn Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 13, 2012) - Selwyn Resources Ltd. (TSX VENTURE:SWN) ("Selwyn") is pleased to announce an updated mineral resource estimate for the Selwyn Project in Yukon from new exploration drilling results at the Don deposit. The updated mineral resource has been completed to National Instrument 43-101 ("NI 43-101") standards, and includes drill results from an exploration drilling program on the Don deposit that was completed in April 2012.

Jason Dunning, Vice President of Exploration, stated, "This updated Don deposit mineral resource is a very positive step for Selwyn Chihong Mining Ltd. ("SCML"). Our successful drill program in the Don Connector has demonstrated increased resources that provide flexibility to the ongoing conceptual underground mine plan in development at 3,500 tonne per day production capacity."

Highlights

  • The Don deposit has an Indicated mineral resource of 41,788,700 tonnes grading 5.35% zinc and 1.87% lead at a 2.0% zinc cut-off grade; which includes a higher-grade subset of 16,353,257 tonnes grading 7.26% zinc and 2.62% lead at a 5.5% zinc cut-off. These higher-grade subsets provide a further basis for SCML's ongoing engineering activities focused on a smaller but higher grade mine to initiate the site development and operation (see May 28, 2012 news release);
  • The Don deposit has an Inferred mineral resource of 14,749,000 tonnes grading 5.13% zinc and 1.59% lead at a base case 2.0% zinc cut-off grade that includes a higher-grade subset of 4,159,900 tonnes grading 6.68% zinc and 2.08% lead;
  • 13.2% increase in Indicated mineral resources for the Don deposit reflects the success of the exploration drilling program in expanding the 63-lens of the deposit (see August 15, 2011 news release);
  • The Selwyn Project global mineral inventory for Indicated mineral resources has increased by 2.60% at a base case 2.0% zinc cut-off grade;
  • The Selwyn Project global mineral inventory for Inferred mineral resources has increased by 4.84% at a base case 2.0% zinc cut-off grade.

Recently Completed Exploration Drilling

This updated mineral resource estimate focuses on the Don deposit, and is based on the recent drilling program which occurred between November 2011 and April 2012. Drilling consisted of 14 drill holes totalling 10,638.5 metres on the Don deposit. The drilling was undertaken by Selwyn Chihong Mining Ltd. ("SCML"), the joint venture company equally owned by Selwyn and Chihong Canada Mining Ltd., a wholly owned subsidiary of Yunnan Chihong Zinc and Germanium Co., Ltd. The location of the drill holes can be found on drill plan maps available at www.selwynresources.com. This release is being released by Selwyn on behalf of the joint venture company.

SCML undertook the most recent exploration drilling at Don deposit in order to test the potential for higher-grade zinc-lead mineralization and an extension of the 63-lens for purposes of ongoing engineering studies.

Zinc and lead mineralization hosted within the favourable strata of Selwyn Project has been traced by drilling over a continuous strike length of 37.5 kilometres; which includes the Don deposit. Over that strike length, fourteen deposits and zones have been defined by SCML and former operators. Each deposit is isolated within its own structural panel because of faulting which segments the continuity of the mineralization. It is important to note that if not for faulting into discrete structural panels, the zinc-lead mineralization and favourable strata could be defined as continuous with common hanging wall and footwall rocks.

Don Deposit

The Don deposit was the second major discovery made in 2005 (see September 6, 2005 news release) as part of Selwyn's first major exploration program on Selwyn Project. Initial targeting for zinc-lead mineralization in the Don Valley was driven by a combination of following-up on historical base metal geochemical anomalies over interpreted favourable strata in the structural panel adjacent to the Anniv East deposit that had been defined by former project operators in the 1970's.

The discovery of the Don deposit was a pivotal event in the evolution of the Selwyn Project. The discovery laid the foundation for additional drilling between the Anniv East and XY Central deposits that led to the identification of higher-grade zinc-lead mineralization that is now the focus of SCML's engineering studies at 3,500 tonnes per day conceptual production capacity (see May 28, 2012 news release).

The October 2011 mineral resource estimate to NI 43-101 standards, defined the Don deposit as containing an Indicated mineral resource of 36,901,600 tonnes grading 5.63% zinc and 2.11% lead at a 2.0% zinc cut-off grade. This study was prepared by Independent Qualified Persons, Mr. Garth Kirkham, P.Geo., of Kirkham Geosystems Ltd., Burnaby, British Columbia, who undertook the 3D modeling and resource estimation; and Mr. Cliff Pearson, P.Geo., Pearson Geological Inc., Victoria, British Columbia, who undertook the detailed field evaluation of data collection protocols at the project worksite.

Currently, the Don deposit contains, using a base case 2% zinc cut-off, Indicated mineral resources of 41,788,700 tonnes grading 5.35% zinc and 1.87% lead, which includes higher-grade subsets as defined in Table 2 that could provide further basis for SCML's engineering activities (see May 28, 2012 news release). An Inferred mineral resource of 14,749,039 tonnes has been defined grading 5.13% zinc and 1.59% lead at the same 2.0% zinc cut-off. Overall, there was a 13.2% increase in the Indicated mineral resources for Don deposit, notably in the 63-lens, from the October 24, 2011 SEDAR filed mineral resource estimate to NI 43-101 standards (see September 12, 2011 news release) that included the Don deposit.

The mineral resources for the Don deposit are summarized in Table 1a at a base case 2.0% zinc cut-off, and an example of a higher-grade subset of the zinc-lead mineralization at a 5.5% cut-off is summarized in Table 1b. A summary of Indicated mineral resources for a range of cut-off grades for the Don deposit, 61-lens and 63-lens, is presented in Tables 2 and 3 respectively. A summary of Inferred mineral resources for a range of cut-off grades in the 63-lens, is presented in Table 4.

Table 1a: Don Deposit Mineral Resource Estimate at base case 2% zinc cut-off

Lens Resource Class Tonnes Zn
(%)
Pb
(%)
Zn
(Blbs)
Pb
(Blbs)
61 Indicated 22,624,700 5.25 1.99 2.62 0.99
63 Indicated 19,164,000 5.46 1.72 2.30 0.73
Total 41,788,700 5.35 1.87 4.92 1.72
61 Inferred - - - - -
63 Inferred 10,980,000 5.07 1.57 1.23 0.38
Total 10,980,000 5.07 1.57 1.23 0.38

Table 1b: Subset of the Don Deposit Mineral Resource Estimate at 5.5% zinc cut-off

Lens Resource Class Tonnes Zn
(%)
Pb
(%)
Zn
(Blbs)
Pb
(Blbs)
61 Indicated 8,641,900 6.82 2.13 1.30 0.40
63 Indicated 7,711,400 7.75 3.18 1.32 0.54
Total 16,353,300 7.26 2.62 2.62 0.95
61 Inferred - - - - -
63 Inferred 4,159,900 6.68 2.08 0.61 0.19
Total 4,159,900 6.68 2.08 0.61 0.19

The drilling work was done in the untested area between the Don and Don East deposits. Targeting for this area was based upon the detailed 3D geological model of Selwyn Project. It should be noted that this target was previously known as the Don Connector (see August 15, 2011 news release). However, the results of the drilling program show that the newly defined area of significant zinc-lead mineralization is contiguous with the 63-lens, and therefore an extension of known favourable strata hosting the Don deposit and not a new and separate deposit.

The extension of the 63-lens and subsequent delineation of a mineral resource in this deep area adjacent to the Don East deposit indicates that there may yet be synergies between these two deposits that could have positive implications for future project development by SCML. Even with significant drilling successfully completed to test favourable strata, the Don deposit remains open for expansion. The positive results of the expanding the 63-lens will provide additional resource and mining flexibility for SCML in its new path for a 3,500 tonne per day development concept for underground mining of higher-grade portions of the Don and XY Central deposit (see May 28, 2012 news release). The higher-grade portions of these two deposits are smaller subsets of the global mineral inventory for Selwyn Project.

Table 2: Don Deposit, 61-lens, Indicated Mineral Resource Estimate

Cut-off Tonnes Zn
(%)
Pb
(%)
Zn
(Blbs)
Pb
(Blbs)
0.5 23,376,700 5.13 1.94 2.64 1.00
1.0 23,300,100 5.14 1.95 2.64 1.00
1.5 23,118,000 5.17 1.96 2.64 0.99
2.0 22,624,700 5.25 1.99 2.62 0.99
2.5 21,434,200 5.41 2.06 2.56 0.97
3.0 19,910,800 5.62 2.15 2.47 0.95
3.5 17,799,400 5.90 2.28 2.31 0.89
4.0 15,323,000 6.24 2.44 2.11 0.82
4.5 12,576,700 6.68 2.65 1.85 0.73
5.0 10,027,600 7.17 2.88 1.59 0.64
5.5 7,711,400 7.75 3.18 1.32 0.54
6.0 5,902,100 8.37 3.51 1.09 0.46
6.5 4,596,800 8.97 3.86 0.91 0.39
7.0 3,516,600 9.66 4.26 0.75 0.33
8.0 2,256,900 10.90 5.01 0.54 0.25
9.0 1,506,500 12.11 5.76 0.40 0.19
10.0 995,300 13.46 6.57 0.30 0.14

Table 3: Updated Don Deposit, 63-Lens, Indicated Mineral Resource Estimate

Cut-off Tonnes Zn
(%)
Pb
(%)
Zn
(Blbs)
Pb
(Blbs)
0.5 19,284,400 5.43 1.72 2.31 0.73
1.0 19,267,300 5.43 1.72 2.31 0.73
1.5 19,230,200 5.44 1.72 2.31 0.73
2.0 19,164,000 5.46 1.72 2.30 0.73
2.5 18,930,600 5.49 1.74 2.29 0.72
3.0 18,470,000 5.56 1.76 2.26 0.72
3.5 17,451,500 5.70 1.80 2.19 0.69
4.0 15,746,400 5.90 1.86 2.05 0.65
4.5 13,704,200 6.15 1.93 1.86 0.58
5.0 11,277,100 6.45 2.02 1.60 0.50
5.5 8,641,900 6.82 2.13 1.30 0.40
6.0 6,194,000 7.25 2.24 0.99 0.31
6.5 4,432,000 7.66 2.38 0.75 0.23
7.0 3,043,100 8.08 2.51 0.54 0.17
8.0 1,278,700 9.00 2.83 0.25 0.08
9.0 480,200 9.95 3.25 0.11 0.03
10.0 184,400 10.85 3.70 0.04 0.02

Table 4: Updated Don Deposit, 63-lens, Inferred Mineral Resource Estimate

Cut-off Tonnes Zn
(%)
Pb
(%)
Zn
(Blbs)
Pb
(Blbs)
0.5 11,345,300 4.95 1.53 1.24 0.38
1.0 11,263,000 4.99 1.54 1.24 0.38
1.5 11,107,600 5.04 1.56 1.23 0.38
2.0 10,980,000 5.07 1.57 1.23 0.38
2.5 10,705,800 5.15 1.59 1.21 0.38
3.0 9,976,600 5.32 1.65 1.17 0.36
3.5 9,279,000 5.47 1.71 1.12 0.35
4.0 8,003,200 5.75 1.80 1.01 0.32
4.5 6,767,800 6.02 1.89 0.90 0.28
5.0 5,363,600 6.36 1.97 0.75 0.23
5.5 4,159,900 6.68 2.08 0.61 0.19
6.0 3,020,200 7.04 2.18 0.47 0.15
6.5 2,095,000 7.40 2.26 0.34 0.10
7.0 1,261,500 7.83 2.39 0.22 0.07
8.0 446,600 8.61 2.58 0.08 0.03
9.0 79,900 9.74 2.65 0.02 0.00
10.0 12,000 10.97 3.00 0.00 0.00

Notes to Table 1, 2, 3, 4:

  1. Mineral Resources reported above have been calculated as of August 7, 2012 in accordance with the CIM Best Practices and National Instrument 43-101.
  2. A 2% zinc grade cut-off was applied to the new mineral resource estimate.
  3. The Global Mineral Inventory uses information from 812 drill holes, totalling 208,944.1 metres, completed on the Selwyn Project over three separate periods: 1973 to 1981, 2000, and 2005 to 2012.

Selwyn Project Global Mineral Resource Inventory

Since acquiring the Selwyn Project in 2005, Selwyn has made 9 major expansions of zinc-lead mineralization through discovery across several structural panels. The Selwyn Project now contains 14 drill defined deposits and zones across contiguous favourable, zinc-lead mineralized strata separated only by fault zones over a known strike length of 37.5 kilometres. All of these deposits remain open for expansion. Table 5 summarizes the significant growth in metal content over the last six years.

The Global Mineral Inventory Indicated mineral resources for August 2012 are 185.57 million tonnes grading 5.20% zinc and 1.79% lead for a metal content of 21.26 billion pounds of zinc and 7.30 billion pounds of lead (see Table 6). The Global Mineral Inventory Inferred mineral resources are 237.86 million tonnes grading 4.47% zinc and 1.38% lead for a metal content of 23.45 billion pounds of zinc and 7.22 billion pounds of lead (see Table 6). The Inferred mineral resources are generally adjacent to the main areas of drilling in the deeper part of the mineralizing system. Areas of Inferred mineral resources require more closely spaced drill holes to improve the confidence level for their inclusion as either Measured or Indicated mineral resources.

In the context of the Global Mineral Inventory, the Indicated mineral resources of the Don deposit accounts for 20.9% of the total Indicated mineral resources for Selwyn Project. The Inferred mineral resources are a much smaller portion, representing only 6.1% of the Global Mineral Inventory's Inferred mineral resources.

Table 5: Global Mineral Resources and Contained Metal Growth From 2006 Through 2012

Year Resource Class Million Tonnes Zn
(%)
Pb
(%)
Zn
(Blbs)
Pb
(Blbs)
February 2006 Indicated 33.50 5.52 2.10 4.08 1.55
Inferred 112.91 5.40 2.14 13.44 5.31
April 2007 Indicated 86.60 4.93 1.97 9.41 3.29
Inferred 215.40 4.71 1.48 22.38 7.03
January 2008 Indicated 154.35 5.35 1.86 18.19 6.31
Inferred 231.54 4.54 1.42 23.19 7.23
February 2009 Indicated 154.35 5.35 1.86 18.19 6.31
Inferred 234.15 4.54 1.41 23.43 7.28
August 2011 Indicated 180.69 5.25 1.83 20.91 7.30
Inferred 216.04 4.47 1.38 21.29 6.57
May 2012 Indicated 180.69 5.25 1.83 20.91 7.30
Inferred 226.88 4.44 1.37 22.23 6.84
August 2012 Indicated 185.57 5.20 1.79 21.26 7.30
Inferred 237.86 4.47 1.38 23.45 7.22

Notes to Table 5:

  1. A 2% zinc grade cut-off was applied to the all above referenced mineral resource estimates.
  2. 2006 global mineral resources completed by Independent Qualified Person, Mr. John Nilsson, P.Eng., and Non-Independent Qualified Person, Mr. John J. O'Donnell, P.Geo. (see February 9, 2006 news release).
  3. 2007 to 2008 global mineral resources completed by Independent Qualified Person, Mr. Cliff Pearson, P.Geo., and Non-Independent Qualified Person, Mr. John J. O'Donnell, P.Geo. See the following news releases respectively: April 2, 2007; January 29, 2008.
  4. 2009 global mineral resources completed by Non-Independent Qualified Person, Mr. John J. O'Donnell, P.Geo. (see February 26, 2009 news release).
  5. 2011 mineral resources completed by Independent Qualified Persons, Mr. Garth Kirkham, P.Geo., and Mr. Cliff Pearson, P.Geo. (see September 12, 2011 news release).
  6. 2012 mineral resources completed by Independent Qualified Person, Mr. Garth Kirkham, P.Geo., and Non-Independent Qualified Person Mr. Jason K. Dunning, P.Geo. (see May 12, 2012 news release) and this current study.

Mineral Potential

In addition to the Indicated and Inferred mineral resources estimated in this report, the mineral potential remains unchanged from that stated in the 2009 mineral resource estimate (see February 26, 2009 news release); which contained between 245 and 255 million tonnes with an estimated grade of between 4.0 - 5.0% zinc and 1.0 - 2.0% lead. The mineral potential represents the down dip and strike extension of the Indicated and Inferred mineral resources taken from a polygonal long-section model. The mineral potential appears to represent a small portion of the interpreted extent of the rock units that host all known zinc-lead mineralization at Selwyn Project.

Zinc-lead sulphide mineralization has now been defined over 37.5 kilometres of strike length with the drilling results from the 2005 through 2012 drilling campaigns. Importantly, all drill holes that have intersected the favourable host rocks have contained zinc and lead sulphide mineralization. The possible quantity and grade of this mineral potential is conceptual in nature and should not be relied upon by any investors, as there has been insufficient drilling to define a mineral resource and therefore it is highly uncertain if additional exploration drilling will result in any of this potential being realized as a mineral resource.

Mineral Resource Evaluation

The updated mineral resource estimate was prepared by Independent Qualified Persons, Mr. Garth Kirkham, P.Geo., Kirkham Geosystems Ltd., Burnaby, British Columbia, who undertook the 3D modelling and resource estimation. Mr. Jason Dunning, P.Geo., a Non-Independent Qualified Person, has reviewed the updated mineral resource estimates and approved the contents of this news release. In accordance with NI 43-101, the Technical Report will be filed on SEDAR within 45 days.

The geologic continuity of the Selwyn Project mineralization is well established through diamond drilling and historical underground development. The NI 43-101 resource estimate was completed using a combination of relative elevation modelling and ordinary kriging in a 3D block model using Minesight™ software. The database was updated and verified followed by compositing zinc and lead at 1.5 metre intervals within mineralized zones. Classical statistical evaluation methods were applied to the database; accompanied by similar variography, and the high-grade outliers were addressed using limited search radii. Bulk densities for the mineralization were assigned on a block-by-block basis, thereby allowing for the mineral resources to be classified and reported following a thorough 3D block model validation process.

Note that all discussion of previous mineral resource estimates to NI-43-101 standards is referenced in the February 2009 NI 43-101 report for the Selwyn Project that was prepared by Non-Independent Qualified Person, John J. O'Donnell, P.Geo. In reviewing historical resources, all discussion of Indicated mineral resources that predate introduction of NI 43-101 should be considered as Inferred mineral resources. All historical Inferred mineral resources that predate NI 43-101 should be considered as areas of mineral potential requiring further definition through drilling. Historical mineral resources are referenced in the June 2005 NI 43-101 report for Selwyn Project that was prepared by Independent Qualified Person, Mr. Al Burgoyne, P.Eng. These reports can be viewed at www.sedar.com.

Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. These mineral resource estimates include Inferred mineral resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that these Inferred mineral resources will be converted to the Measured and Indicated resource categories through additional drilling, or into mineral reserves, once economic considerations are applied.

The Selwyn Project exploration program is being reviewed by Vice President of Exploration, Mr. Jason Dunning, M.Sc., P.Geo., and Mr. Wolfgang Schleiss, P.Geo., Manager of Exploration, who are responsible for on-site activities. Messrs. Dunning and Schleiss are both Qualified Persons within the meaning of NI 43-101. All assay data have undergone internal validation of quality assurance and quality control. Selwyn has established a sampling and assay control program with blind insertion of assay blanks, standards and duplicates for the Selwyn Project. A quality control and quality assurance program is also in place at ACME Analytical Laboratories Ltd. ("ACME") and includes laboratory blanks, standards and duplicates. At ACME, silver and base metal analyses are conducted by a 23-element, four-acid digestion, ore-grade ICP-AES technique.

Selwyn's primary focus remains the exploration and development of the properties that make up the Selwyn Project in the Yukon, by the joint venture comprised of Selwyn and Chihong Canada Mining Ltd. The Selwyn Project hosts large tonnages of zinc-lead mineralization which have the potential for large scale production, and could provide a secure supply of zinc and lead to meet the future needs of the markets in Asia and beyond.

This press release contains forward-looking statements concerning mineralization at and the development of the Selwyn Project.. These forward-looking statements are based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of factors beyond Selwyn's control, including the results of exploration activities, economic evaluations and engineering studies, the availability of funds in the financial markets on terms acceptable to Selwyn and the public's view of the economic value of the Selwyn Project.. Additionally, more drilling is required to confirm the potential of the new discovery areas, expansions of the current resource areas. and the extension of the higher grade deep mineralization to depth at the Selwyn Project. There is no assurance that such additional drilling will expand mineral resources or that the resources being defined can be developed as an economically attractive mine. Uncertainties associated with permitting and other factors could delay development of the Selwyn Project.. Although Selwyn has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements, and there may be other factors that cause results not to be as anticipated or intended. There is no assurance that such information will prove to be accurate, as future events could differ materially from those anticipated in such information and accordingly, there is no assurance that the Selwyn Project will be developed into a profitable mine. Readers should not place undue reliance on forward-looking statements.

Table 6: Updated Selwyn Project 2012 Mineral Resource Estimate

Deposit or Zone Resource Class Tonnes Zn
(%)
Pb
(%)
Zn
(Blbs)
Pb
(Blbs)
XY Central deposit Indicated 45,114,500 5.70 2.40 5.67 2.39
Inferred 44,112,500 4.10 1.29 3.99 1.25
XY Nose deposit Indicated
Inferred 7,320,000 4.08 2.20 0.66 0.35
XY West deposit Indicated
Inferred 12,754,400 4.44 1.40 1.25 0.39
Brodel deposit Indicated
Inferred 12,100,000 4.31 1.16 1.15 0.31
HC deposit Indicated 8,600,000 4.01 1.04 0.76 0.20
Inferred 19,370,000 3.83 1.09 1.64 0.46
HC West deposit Indicated 19,680,000 5.46 1.56 2.37 0.68
Inferred 10,220,000 5.42 1.50 1.22 0.34
Don East deposit Indicated 35,490,000 5.37 1.63 4.20 1.27
Inferred 41,770,000 5.22 1.59 4.81 1.46
Don deposit Indicated 38,152,700 5.34 1.88 4.49 1.58
Inferred 14,749,000 5.13 1.59 1.67 0.52
Anniv East deposit Indicated 16,920,000 4.15 1.20 1.55 0.45
Inferred 16,050,000 4.04 1.08 1.43 0.38
Anniv Central deposit Indicated 17,980,000 4.52 1.51 1.79 0.60
Inferred 40,120,000 4.63 1.48 4.09 1.31
West Extension Inferred 6,880,000 4.30 1.25 0.65 0.19
HP zone Indicated
Inferred 6,180,000 4.55 1.23 0.62 0.17
OP zone Indicated
Inferred 1,770,000 4.18 1.29 0.16 0.05
OP West zone Indicated
Inferred 1,380,000 2.67 0.86 0.08 0.03
Pelly North zone Indicated
Inferred 6,850,000 3.20 0.90 0.48 0.14
Total Indicated 185,573,200 5.20 1.79 21.26 7.30
Total Inferred 237,856,900 4.47 1.38 23.45 7.22

Notes to Table 6:

  1. Mineral Resources reported above have been calculated as of August 7, 2012 in accordance with the CIM Best Practices and National Instrument 43-101.
  2. A 2% zinc grade cut-off was applied to the new mineral resource estimate.
  3. The Global Mineral Inventory uses information from 812 drill holes, totalling 208,944.1 metres, completed on the Selwyn Project over three separate periods: 1973 to 1981, 2000, and 2005 to 2012.

Neither the 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
    CEO
    +1 (604) 801-7240 or Toll-free: +1 (888) 989-9188

    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