Selwyn Resources Ltd.
TSX VENTURE : SWN

Selwyn Resources Ltd.

May 21, 2013 09:15 ET

Selwyn Resources Announces Closing Date for the Sale of Selwyn Project and Provides Information on Liquidation Proposal

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 21, 2013) - Selwyn Resources Ltd. (TSX VENTURE:SWN) ("Selwyn" or the "Company") announces that, in connection with the sale of the Company's remaining interest in the Selwyn Project (the "Transaction") to Chihong Canada Mining Ltd. ("Chihong Canada"), Chihong Canada has advised the Company that the sole outstanding Chinese governmental approval, being that of the Foreign Exchange Administration of Yunnan Province (the "SAFE Approval"), has been obtained.

With the receipt of the SAFE Approval, all conditions to closing of the Transaction, other than delivery of customary closing documentation and payment of the purchase price, have been satisfied. Accordingly, the Company announces that the Transaction is expected to close on June 3, 2013.

The Company also wishes to announce that it has retained PricewaterhouseCoopers Inc. to act as the liquidator of the Company if shareholders approve a special resolution providing for the voluntary liquidation of the Company. Shareholders will be asked to vote on this resolution at the annual and special meeting of shareholders to be held on June 17, 2013 (the "Meeting"). The information circular for the Meeting is expected to be mailed to shareholders and posted on SEDAR on or about Wednesday, May 22, 2013. Shareholders should expect to receive the information circular and proxy on or around May 30, 2013. It is important that all shareholders carefully read the information circular and follow the steps outlined in the proxy to vote your shares. If a shareholder has any questions or requires assistance in voting, please contact Laurel Hill Advisory Group 1-877-452-7184.

In advance of the Meeting, the Company will be working with PricewaterhouseCoopers Inc. to design a liquidation plan that will consider not only the sale of the ScoZinc Mine and related assets but also the sale of Selwyn as a going concern (subject to a further shareholder approval). If the proposal to liquidate the Company is approved, the current board and management of the Company will cease to exercise any powers in respect of the Company and PricewaterhouseCoopers Inc., as liquidator, will oversee a process of the orderly wind-up of the Company. In undertaking this process, the liquidator will look to maximize the distribution available for payment to the shareholders after the proper settling all of the Company's liabilities.

If shareholders authorize the liquidation of the Company, and assuming the Company cannot be sold as a whole, the Company expects that the aggregate distribution that will be made to shareholders will be between approximately $0.096 to $0.125 in cash per common share. The Company estimates that after closing the Transaction it will have cash available for distribution to shareholders of up to approximately $0.05 per common share which, if paid, would lower a future payout to between $0.046 and $0.075 per share. It is expected that the liquidation process will take 12 - 18 months. However, no assurance can be given as to the actual amount of or, as this is at the discretion of the liquidator, the timing of distributions to shareholders.

In determining its estimate of the cash available for a distribution to shareholders, the Company has taken into account working capital requirements, payments due to the liquidator, employee severance obligations, payments due after closing relating to the sale of the Selwyn Project and the repayment of the debt facility with Waterton Global Value, L.P. The low end of the distribution range has been estimated on the assumption that a buyer cannot be found for the ScoZinc Mine and the site is decommissioned instead of being sold. The high end of the distribution range has been estimated on the assumption that the ScoZinc Mine can be sold as a going concern at its book value.

For further information and details with respect to the liquidation proposal, including the estimated range of distributions to shareholders, reference should be made to the Circular which will be filed on SEDAR under the Company's profile at www.sedar.com.

Dr. Harlan Meade, the Chief Executive Officer and President of the Company, said: "In proposing the sale of our interest in the Selwyn Project, the board of directors of the Company was of the view that the best strategy for the Company was to focus on the development of the ScoZinc Mine rather than to continue to try and finance Selwyn's share of project costs and risk default of its obligations under the Selwyn Joint Venture Agreement. But it is clear that a significant group of shareholders prefers that an alternative path be considered that would result in the distribution of the proceeds of the sale to shareholders and the disposition of the ScoZinc Mine. Accordingly, the board of directors of Selwyn determined that the most equitable option would be to present the liquidation proposal to all of the shareholders of the Company and, if approved, that there be a fair and orderly wind-up of the Company."

Forward-Looking Statements

This press release contains forward-looking statements and forward-looking information (collectively referred to as "forward-looking statements") regarding the closing of the Transaction, the process and timing for the proposed liquidation, the Company's estimated assets and liabilities, the potential for the liquidator to effect a sale of the Company or the ScoZinc Mine, the possibility of the liquidator making an interim liquidation distribution and the amount of the distribution, the estimates of the amounts payable on liquidation, and Selwyn's expected financial position. 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 the results of regulatory review, dissident shareholder actions or other risk factors beyond Selwyn's control.

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, court and regulatory review and rulings, the availability of funds, fluctuations in metal prices and general market and industry conditions. There is no assurance that forward-looking statements 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 statements, except as, and to the extent required by, applicable securities laws. For more information about the risks and challenges of Selwyn's business, investors should review Selwyn's Annual Information Form dated March 28, 2013 and its management's discussion and analysis available at www.sedar.com.

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.
    Carlos Gonzalez
    Manager of Investor Communications
    (604) 801-7240 or Toll-free: 1-888-989-9188
    (604) 689-8355 (FAX)
    info@selwynresources.com
    www.selwynresources.com