Selwyn Resources Ltd.
TSX VENTURE : SWN

Selwyn Resources Ltd.

February 22, 2011 08:58 ET

Selwyn Signs Binding Agreement to Acquire ScoZinc Limited

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 21, 2011) - Further to its new release of February 8, 2011, Selwyn Resources Ltd. ("Selwyn") (TSX VENTURE:SWN) is pleased to announce that it has signed a binding Letter Agreement with Acadian Mining Corporation ("Acadian") whereby Selwyn will acquire, either directly or indirectly, all of the issued and outstanding shares of ScoZinc Limited ("ScoZinc"), a wholly owned subsidiary of Acadian, and thereby acquire all of the assets associated with the Scotia Mine located in Nova Scotia. The purchase price for ScoZinc is CAD$10 million less certain deductions related to increased bonding requirements for an amended reclamation and closure plan for the Scotia Mine. Upon completion of the Acquisition, Selwyn will own a 100% interest in the mine-mill complex and an extensive mineral claims package owned by ScoZinc, subject to a mineral royalty to government of Nova Scotia and other royalties on certain mineral interests held by ScoZinc. Reference should be made to the news release of February 8, 2011 for details related to the Scotia Mine.

Dr. Harlan Meade, President and CEO, said, "The completion of the binding Letter Agreement provides a basis for Selwyn to complete its economic evaluations and move the project through the regulatory requirements to revive production and commence securing the necessary debt and equity financing required for the re-start of the Scotia mine."

The ScoZinc acquisition is subject to the execution of a formal purchase and sale agreement and the achievement of certain conditions precedent prior to closing, including Selwyn being satisfied with the results of an environmental audit of the Scotia Mine site by an independent consulting group and Selwyn receiving an independent NI 43-101 Technical Report that confirms the Mineral Resources reported by ScoZinc. The closing of the transaction is to occur on the 10th business day after the parties have executed the purchase and sale agreement, provided that all conditions precedent to the Closing are in place at that time, and if they are not, the closing is to occur at such other time as is agreed to by the parties but by no later than May 8, 2011.

Selwyn's main focus remains the exploration and development of its 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 has both the potential to have large scale production and to provide a secure supply of zinc and lead to meet the future needs of the zinc and lead markets in Asia and beyond. The acquisition of ScoZinc will provide Selwyn with a new opportunity for growing the company, expanding its management team, building mine production experience and providing cashflow to fund growth as it advances the Selwyn Project.

This press release contains forward-looking statements concerning the acquisition of ScoZinc. These forward-looking statements are based on assumptions and judgments of management regarding the acquisition that may prove to be inaccurate due to factors beyond Selwyn's control, including the satisfaction of conditions to the closing of the acquisition. Although we have 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 acquisition of ScoZinc will be completed as anticipated. Readers should not place undue reliance on forward-looking statements.

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