Selwyn Resources Ltd.
TSX VENTURE : SWN

Selwyn Resources Ltd.

September 12, 2011 08:00 ET

Selwyn Announces Updated Mineral Resources for Selwyn Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 12, 2011) - Selwyn Resources Ltd. (TSX VENTURE:SWN) is pleased to announce a new, upgraded mineral resource estimate for the Selwyn Project in the Yukon that has been completed to National Instrument ("NI") 43-101 standards. The 2010 and 2011 definition drilling within the XY Central and Don deposits achieved its goal of converting Inferred mineral resources to the Indicated category.

The mineral resource update focused on the global mineral resource, but the mineral resource inventory for the XY Central and Don deposits includes a higher-grade tonnage that is the foundation for the bankable feasibility study ("BFS") in progress with Wardrop Engineering Inc. ("Wardrop"). The work program associated with the mineral resource update was undertaken by Selwyn Chihong Mining Ltd. ("SCML"), the joint venture company equally owned by Selwyn and Chihong Mining Canada Ltd. Chihong Mining Canada Ltd. is a wholly owned subsidiary of Yunnan Chihong Zinc and Germanium Co. Ltd. The location of the new drill holes and lenses can be found on drill plan maps available at www.selwynresources.com.

Global Mineral Resource Highlights

  • The XY Central deposit 93, 94, and 95 lenses have an Indicated mineral resource of 29,936,000 tonnes grading 6.35% zinc and 2.69% lead at a base case 2.0% zinc cut-off grade; and

  • The Don deposit has an Indicated mineral resource of 36,901,600 tonnes grading 5.63% zinc and 2.11% lead at a base case 2.0% zinc cut-off grade;

  • Global Indicated Mineral Resources increased by 17% through conversion of existing Inferred mineral resources, which resulted in an additional 2.1 billion pounds of zinc and 1 billion pounds of lead in the Indicated category.

  • A 34 percent increase in mineral resources in the Don deposit reflects the success of step out drill holes that were part of the definition drilling program. This drilling also identified high mineral potential for significant tonnages of high grade mineralization at depth that is interpreted to connect to the Don East deposit (see August 15, 2011 news release).

Selwyn Project

The Selwyn Project is composed of 14 zinc-lead deposits and zones over a strike length of 37.50 kilometres. These zinc-lead deposits represent the expression of one continuous, large mineralized strata that are locally disrupted into discrete deposits by faulting. The zinc-lead mineralized strata of the Active Member remain largely open for expansion of their mineral potential.

The updated mineral resource estimate includes the results from an extensive drilling program consisting of 195 drill holes in 2010 and 2011, totalling 68,155.0 metres which are distributed between definition, exploration, and condemnation drilling. The global mineral resources include all 14 deposits and zones, and have been updated to provide new global mineral resources.

XY Central Deposit

The XY Central deposit is comprised of six lenses: 91, 92, 93, 94, 95, and 96; which in the January 2008 mineral resource to NI 43-101 standards included an Indicated mineral resource of 44,450,000 tonnes grading 6.17% zinc and 2.64% lead; and an Inferred mineral resource of 45,940,000 tonnes grading 4.20% zinc and 1.32% lead (see January 29, 2008 news release). This study was completed by Independent Qualified Person, Mr. Cliff Pearson, P.Geo. and Non-Independent Qualified Person, Mr. John J. O'Donnell, P.Geo.

SCML undertook definition drilling of three lenses at XY Central deposit that were the focus of mine planning and design engineering. The drilling program was designed to raise the confidence in the zinc-lead mineralization from the Inferred category to the Indicated category; which would allow their inclusion in the BFS. A total of 47 drill holes were successfully completed totalling 13,944.8 metres in the 93, 94, and 95 lenses. These drill holes resulted in a conversion of all Inferred category mineral resources into Indicated mineral resources. No drilling was completed in the 91, 92, or 96 lenses; meaning there are substantial mineral resources in those lenses that require additional drilling to better define the contained mineral resources and their classification. Using a 2% zinc cut-off, there are 29,936,000 tonnes in the Indicated category grading 6.63% zinc and 2.45% lead. A summary for all cut-off grades of zinc and lead for the XY Central deposit is presented below in Table 1.

The current overall global mineral resource for the XY Central deposit, is an Indicated mineral resource 45,114,500 tonnes grading 5.70% zinc and 2.40% lead and an Inferred mineral resource of 44,112,500 tonnes grading 4.10% zinc and 1.29% lead. The following table illustrates those mineral resources in the XY Central 93, 94 and 95 lenses only.

Table 1: Updated XY Central Deposit Indicated Mineral Resource Estimate For 93, 94, 95 Lenses.

Cut-off Tonnes Zn
(%)
Pb
(%)
Zn
(Blbs)
Pb
(Blbs)
0.5 30,190,800 6.31 2.67 4,197 1,775
1 30,179,400 6.31 2.67 4,197 1,775
1.5 30,105,500 6.32 2.67 4,195 1,774
2 29,936,000 6.35 2.69 4,188 1,772
2.5 29,505,700 6.41 2.71 4,166 1,765
3 28,796,800 6.50 2.76 4,123 1,751
3.5 27,686,600 6.63 2.83 4,044 1,725
4 25,891,800 6.82 2.94 3,895 1,675
4.5 23,287,600 7.11 3.10 3,650 1,594
5 20,325,400 7.45 3.32 3,340 1,487
5.5 17,468,800 7.82 3.56 3,010 1,371
6 14,612,800 8.22 3.86 2,649 1,242
6.5 12,079,300 8.64 4.18 2,300 1,113
7 9,840,800 9.07 4.52 1,967 981
8 6,510,500 9.89 5.15 1,420 739
9 4,135,100 10.71 5.83 976 531
10 2,514,800 11.52 6.54 639 362
Notes for Table 1:
  1. Mineral Resources reported above have been calculated as of September 12, 2011 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 Mineral Resource Estimate uses information from 786 drill holes, totalling 197,968.50 metres, completed on the Selwyn Project over three separate periods: 1973 to 1981, 2000, and 2005 to 2011

Don Deposit

The Don deposit was previously interpreted to be comprised of three lenses: 61, 62, and 63; which in the January 2008 mineral resource to NI 43-101 standards, included an Indicated mineral resource of 11,230,000 tonnes grading 5.99% zinc and 2.17% lead and an Inferred mineral resource of 16,290,000 tonnes grading 5.62% zinc and 1.99% lead (see January 29, 2008 news release). This study was done by Independent Qualified Person, Mr. Cliff Pearson, P.Geo. and Non-Independent Qualified Person, Mr. John J. O'Donnell, P.Geo.

In 2010 and 2011, SCML undertook definition drilling in order to raise the confidence in the zinc-lead mineral resources from Inferred category to Indicated category; however, SCML also undertook exploration drilling to expand the Don deposit to maximize benefits to the ongoing BFS. A total of 69 drill holes were successfully completed totalling 28,712.0 metres in the 61, 62, and 63 lenses. All remaining mineral resources in the Inferred category were converted into Indicated mineral resources.

During the 3D modeling for the mineral resource update, new drilling data showed a direct linkage between the 61 and 62 lenses; which led to a new interpretation as a single lens, thereby resulting in an increase in tonnage. Another positive development from the drill program at the Don deposit occurs at depth where drilling results suggest that the previously interpreted, near vertical dip of the 63 lens is actually shallowing. The shallow dipping 63 lens is at a similar elevation as similar zinc-lead mineralization in the adjacent Don East deposit. The shallowing of the 63 lens is the result of structural thickening that also results in an increase in tonnage potential in the area that connects the two deposits (see August 15, 2011 news release).

The current overall global mineral resource for the Don deposit, is an Indicated mineral resource of 36,901,600 tonnes grading 5.63% zinc and 2.11% lead. The mineral resources at Don deposit increased by 34% compared to those reported February 2009. A summary for all cut-off grades of the Don deposit is presented in Table 2.

Table 2: Updated Don Deposit Indicated Mineral Resource Estimate

Cut-off Tonnes Zn
(%)
Pb
(%)
Zn
(Blbs)
Pb
(Blbs)
0.5 37,844,300 5.53 2.07 4,614 1,728
1 37,748,000 5.54 2.08 4,612 1,728
1.5 37,500,700 5.57 2.09 4,605 1,725
2 36,901,600 5.63 2.11 4,582 1,718
2.5 35,494,500 5.77 2.17 4,512 1,696
3 33,596,500 5.94 2.24 4,397 1,659
3.5 30,818,100 6.18 2.34 4,197 1,592
4 27,455,400 6.47 2.48 3,919 1,498
4.5 23,759,200 6.82 2.63 3,572 1,378
5 19,876,000 7.23 2.81 3,166 1,232
5.5 16,086,600 7.69 3.03 2,728 1,075
6 12,921,800 8.17 3.26 2,328 929
6.5 10,202,500 8.69 3.51 1,954 790
7 7,987,800 9.23 3.79 1,625 668
8 4,932,500 10.32 4.35 1,122 473
9 3,063,600 11.45 4.96 773 335
10 1,862,100 12.73 5.63 522 231
Notes for Table 2:
  1. Mineral Resources reported above have been calculated as of September 12, 2011 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 Mineral Resource Estimate uses information from 786 drill holes, totalling 197,968.50 metres, successfully completed on the Selwyn Project over three separate periods: 1973 to 1981, 2000, and 2005 to 2011

Global Mineral Resource Inventory

Since acquiring the Selwyn Project in 2005, Selwyn has made 9 major deposit discoveries; noting that the Selwyn Project now contains 14 drill defined deposits and zones that include mineralization that are amenable to both open pit and underground mining methods. Table 3 summarizes the significant growth in metal content over the last five years. The global Indicated mineral resources for 2011 are 180.69 million tonnes grading 5.25% zinc and 1.83% lead for a metal content of 20.91 pounds of zinc and 7.33 billion pounds of lead (see Table 4).

The Inferred mineral resources for 2011 are 216.04 million tonnes grading 4.47% zinc and 1.38% lead for a metal content of 21.29 billion pounds of zinc and 6.57 billion pounds of lead (see Table 4). 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 Indicated mineral resources.

It should be noted that the updated global mineral resource inventory does not contain any results from recent drilling in the XY West deposit area due to assay sample results still pending from the laboratory. The mineral resources from this deposit are not being used in the BFS; however, after future evaluation, may be included at some point. A total of 58 drill holes were completed in the 2010 and 2011 drilling program for a total of 22,791 metres. Geological modeling and structural analysis of the XY West deposit is ongoing and SCML anticipates undertaking a mineral resource update later this year after all assay samples have been received, and have passed Selwyn's rigorous quality assurance and quality control procedures.

Table 3: Global Mineral Resources and Contained Metal Growth from 2006 through 2011

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 7.33
Inferred 216.04 4.47 1.38 21.29 6.57
Notes for Table 3:
  1. 2006 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. See the following news releases respectively: February 9, 2006; April 2, 2007; January 29, 2008
  2. 2009 global mineral resources completed by Non-Independent Qualified Person, Mr. John J. O'Donnell, P.Geo. (see February 26, 2009 news release).
  3. 2011 global mineral resources completed by Independent Qualified Persons Mr. Garth Kirkham, P.Geo. and Mr. Cliff Pearson, P.Geo.

Mineral Potential

In addition to the Indicated and Inferred mineral resources estimated in this report, the mineral potential remains unchanged from those stated in the 2009 mineral resource estimate (see February 26, 2009 news release); which contains 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 kilometers of strike length with the drilling results from the 2005 through 2011 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, as there has been insufficient drilling to define a mineral resource and it is uncertain if additional exploration 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., 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. 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 created 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 at 1.5 meter intervals within mineralized zones. Classical statistical evaluation methods were applied to the database; accompanied by similar, and the high-grade outliers were addressed using limited search radii. Bulk densities 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 are 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 categories through further drilling, or into mineral reserves, once economic considerations are applied.

The Selwyn Project exploration program is being reviewed by Vice President Exploration, Mr. Jason Dunning, M.Sc., P.Geo, and Mr. Wolfgang Schleiss, P.Geo., Manager of Exploration, who are responsible for on-site activities. Mr. Dunning and Mr. 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 these markets in Asia and beyond. The also recently announced acquisition of ScoZinc Limited provides Selwyn with a second opportunity for growth and the potential for production revenues in 2012.

This press release contains forward-looking statements concerning mineralization at and the development of the Selwyn Project and of the future prospects for the Scotia Mine. 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 and the Scotia Mine. 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 and of the Scotia Mine. Although Selwyn has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements, 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 or the Scotia Mine will be developed into profitable mines. Readers should not place undue reliance on forward-looking statements.

Table 4: Selwyn Project 2011 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 1,917,600 7.70 2.45 0.33 0.10
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 1.63 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 36,901,600 5.63 2.11 4.58 1.72
Inferred
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 180,686,100 5.25 1.83 20.91 7.33
Total Inferred 216,040,100 4.47 1.38 21.29 6.57
Notes for Table 4:
  1. Mineral Resources reported above have been calculated as of September 12, 2011 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 Mineral Resource Estimate uses information from 786 drill holes, totalling 197,968.50 metres, successfully completed on the Selwyn Project over three separate periods: 1973 to 1981, 2000, and 2005 to 2011

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
    +1 (604) 689-8355 (FAX)

    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