Selwyn Resources Ltd.
TSX VENTURE : SWN

Selwyn Resources Ltd.

January 27, 2011 08:58 ET

Selwyn Resources Announces Intention to Make a Normal Course Issuer Bid

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 27, 2011) - The Board of Directors of Selwyn Resources Ltd. (TSX VENTURE:SWN) ("Selwyn") announces today that the TSX Venture Exchange (the "Exchange") has approved notice of Selwyn's intention to make a normal course issuer bid (the "Bid") in respect of its common shares (the "Shares").

The Bid will be carried out by Selwyn Chihong Mining Ltd. ("SCM"), which is a company owned 50% by each of Selwyn and Chihong Canada Mining Ltd. ("Chihong"). SCM is the operator of the joint venture (the "Joint Venture") between Selwyn and Chihong that was formed on August 18, 2010 to carry out exploration and development activities at the Selwyn Project located in the eastern Yukon and Northwest Territories. Chihong put up Canadian $100,000,000.00 (the "Chihong Earn-In Funds") for the purpose of earning a 50% interest in the Joint Venture.

The purpose of the Bid is to enable SCM to establish an incentive share option plan (the "Plan") for its employees under which Shares may be purchased by the employees pursuant to options ("Options") granted under the Plan. SCM will purchase the Shares through the facilities of the Exchange at the prevailing market price for the Shares. Options will be granted to employees of SCM who are not seconded employees of Selwyn and the Shares will be sold to the employees upon exercise of their Options. The exercise price under an Option will be established at the closing price for the Shares on the Exchange on the day prior to the day of grant of the Option.

Under the Bid, SCM intends to spend up to Canadian $1,000,000 to acquire Shares. These funds will come from the Chihong Earn-In Funds. The actual number of Shares that may be purchased and the timing of any such purchases will be determined by SCM, provided that SCM will not acquire more than 16,046,927 (which is 5% of the issued and outstanding Shares) over a 12-month period commencing on February 1, 2011 or acquire an aggregate of more than 2% of the total issued and outstanding Shares over any 30-day period. Canaccord Genuity Corp. will be conducting the Bid on behalf of SCM. Selwyn has not made a normal course issuer bid in the last 12 months and therefore has not acquired any Shares pursuant to a normal course issuer bid during this time.

The powers of the board of directors' of SCM were transferred through its incorporation documents to the Management Committee of the Joint Venture and accordingly, the Management Committee will administer the Plan. The Management Committee has four members, two representing Selwyn and two representing Chihong. The Shares which are purchased will be owned and held by SCM as an asset of the Joint Venture until such time as they are sold upon the exercise of Options. Under applicable corporate law, SCM may not vote the Shares held by it at meetings of the shareholders of Selwyn. SCM will hold the proceeds from the exercise of Options and use the proceeds for expenditures on the Selwyn Project and for administrative costs of SCM. The establishment of the Plan and the sale of Shares thereunder will be carried out in accordance with applicable securities laws, policies, rules, regulations and exemptions.

Selwyn's focus is the exploration and development of the Selwyn Project in the eastern Yukon and Northwest Territories with its joint venture partner Chihong Canada Mining Ltd. The Selwyn Project represents one of the largest undeveloped resources of zinc and lead in the world and is unique in that it is mostly located in the politically-attractive and stable jurisdiction of the Yukon Territory. It is therefore both a unique opportunity and a strategic asset providing a long term secure supply of zinc and lead to the Pacific Margin.

This news release contains forward-looking statements concerning the Bid and the Selwyn Project. These statements are based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of failure to obtain necessary regulatory or shareholder approvals, exploration results and other risk factors beyond Selwyn's control. There can be no assurance that such forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release.

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