Selwyn Resources Ltd.

Selwyn Resources Ltd.

July 17, 2007 11:00 ET

Selwyn Resources Announces a $10 Million Private Placement Financing for Selwyn Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 17, 2007) -


Selwyn Resources Ltd. (TSX VENTURE:SWN) ("the Company" or "Selwyn") announces its intention to raise $10 million of equity for the continuation of the $25 million exploration program underway ("the Offering"). The $10 million financing will be led by Paradigm Capital Inc. and include Haywood Securities Inc., Blackmont Capital Inc. and Canaccord Capital Corporation ("the Agents"). The Offering will consist of Units, each comprising one of Common Share and one-half Common Share Purchase Warrant ("the Warrant"). The Units will be priced in the context of the market with each whole Warrant entitling the holder to purchase one Common Share for a period of 24 months from Closing. If at any time from 12 months after the Closing Date, the volume-weighted average trading price of the common shares of the Company on the Toronto Stock Exchange (the "TSX") is greater than a set share price for any 20 consecutive trading days, the Company may accelerate the expiry of the Warrants by providing written notice to holders of the Warrants and issuing a press release to the effect that the Warrants will expire 30 days following the date of such notice. There is a $1.0 million overallotment option exercisable two days immediately prior to closing. The Closing of the Offering is anticipated to be on or about August 9, 2007 or such other date as agreed by the Company and the lead agent.

The Units will be sold pursuant to applicable securities law exemptions in the Provinces of Ontario, British Columbia and such other provinces of Canada as the Company and the Agents mutually agree and in such jurisdictions outside of Canada, including the United States, as the Company and the lead agent mutually agree. Notwithstanding the foregoing, it is not contemplated that an offering memorandum will be prepared for the Offering. The securities will be subject to the mandatory four month hold period from the date of Closing. The Offering is subject to receipt of regulatory acceptance and approval of the Board of Selwyn Resources Ltd. The Agents will receive a cash commission equal to 6% of the gross proceeds of the Offering, payable on the Closing Date. In addition, the Company shall grant the Agents, at Closing, Compensation Options equal to 6% of the aggregate number of Units issued in the Offering entitling the Agents, for a period of 24 months from the Closing Date to acquire that number of Common Shares, at the Unit issue price.

Selwyn is continuing discussions with a select group of companies interested in making a strategic joint venture investment in the Selwyn Project. In the interim, exploration, engineering, permitting and environmental activities continue at the project.

Recent drilling success in Don Valley and the discovery of a 31.63 metre true thickness of the Active Member in drill hole Don-074 at a depth of 241.7 metres is very promising. The intercept has a grade of 10.20% zinc and 3.91% lead including 4.30 metres grading 35.97% zinc and 16.01% lead (see July 9, 2007 news release). Drilling is continuing in Don Valley with four drills defining near surface mineralization within the open pit environment and defining the extent of higher grade mineralization at depth that would be mined by underground methods. Drilling has commenced on the XY zone and two additional drills capable of deep drilling will be onsite shortly to resume expansion of deeper high grade mineralization in the XY Central zone. Confirmation of the deeper mineralization at Don and XY Central are key to developing a combined open pit and underground mine development plan for the Selwyn Project. The proposed financing will allow the completion of this year's program. The current program may be expanded if results warrant continuing drilling into late fall and winter.

Selwyn's focus is the exploration of its properties that make up the Selwyn Project in the Yukon, which hosts large tonnages of zinc-lead mineralization. The known deposits have the potential for the large scale production of zinc and lead, at a time when major new mines are needed to ensure adequate future zinc mine supply.

This press release may contain forward-looking statements based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of exploration and other risk factors beyond its control and actual results may differ materially from the expected results. Additional drilling is required to confirm the potential of the new discovery areas and expansions of the current resource areas and the extension of the higher grade deep mineralization to depth. Furthermore, there is no assurance that the resources being defined can be developed as an economically attractive mine, and there are many uncertainties associated with permitting and other factors that could delay such development.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this news release.

Contact Information

  • Selwyn Resources Ltd.
    Dr. Harlan Meade, President and CEO
    (604) 682-5474 or Toll Free: 1-877-682-5474
    International Toll Free: 1-800-8682-5474
    Selwyn Resources Ltd.
    Jasmin TamDoo, Manager of Investor Communications
    (604) 682-5474 or Toll Free: 1-877-682-5474
    International Toll Free: 1-800-8682-5474
    (604) 682-5404 (FAX)