Selwyn's ScoZinc (Restart) Project Delivers Robust Economic Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 30, 2011) - Selwyn Resources Ltd. (TSX VENTURE:SWN) -

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Selwyn Resources Ltd. is pleased to announce results of the ScoZinc Preliminary Economic Assessment ("PEA") Report for the restart of the ScoZinc zinc-lead project in Nova Scotia, Canada. The PEA indicates excellent potential for a seven-plus years mine life with pre-stripping beginning in the fourth quarter of 2011 and full operation in the second quarter (Q2) of 2012, provided the debt offering announced August 22, 2011 is timely completed. The full text of the report, which meets National Instrument 43-101 standards, will shortly be filed for review on www.sedar.com.

Dr. Harlan Meade, President and CEO of Selwyn Resources Ltd. ("Selwyn") states: "Much progress has been made since announcing the acquisition of ScoZinc Ltd. on February 8th, 2011. The completion of new mineral resource estimates (announced April 6^th, 2011) and the Preliminary Economic Assessment provide a strong basis for the implementation of the restart plan to return the ScoZinc mine (formerly the Scotia Mine) to production in Q2 2012. ScoZinc operations could provide near term cash flow to help the company advance its Selwyn Project in the Yukon. Ongoing and planned drilling activities, along with the continued evaluation of opportunities to reduce operating costs, are expected to provide additional operating improvements and to increase profitability of the ScoZinc mine. Selwyn is very pleased with this acquisition and looks forward to growing its mineral assets at ScoZinc."

Highlights

The PEA reports:

• 2,500 tonnes per day mill processing plan;
• Unit operating costs of $51.77 per tonne milled for the first three years ($49.16 per tonne milled for the life-of-mine);
• Mine and mill restart capital expenditures (CAPEX) of CAD $30 Million (including 15% contingency and two months of working capital);
• Base Case zinc and lead prices of US$1.10 and US$1.20/lb respectively;
• Exchange rate of 1 Canadian dollar to 1 US dollar;
• Project pre-tax NPV 8% of CAD $54.1 million (NPV 5% - CAD $63.9 million);
• Project pre-tax Internal Rate of Return (IRR) of 63.9%;
• Zinc C1 or Direct cash cost of production (after deducting credits for lead) for the first three years is CAD $0.56/lb to be optimized through ongoing studies;
• Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first three years of operations averages CAD $26.2 million per annum.

The PEA was led by independent firm Allnorth Consultants Ltd., a nationwide mineral industry consulting firm familiar with ScoZinc and having offices local to the project (qualified person and project manager, Colin Fisher, P.Eng.). The PEA considers the sequential development of three open pit operations in close proximity to the existing mill. The zinc-lead mill feed will be processed by standard flotation methods to produce clean, high-grade zinc and lead concentrates. The ScoZinc mill is currently being refurbished and modernized by Selwyn to increase the throughput to 2,500 tonnes per day. The economic evaluation is based on a mineral resource inventory from the mineral resource technical report dated July 6, 2011 (see SEDAR filing dated July 8, 2011) and production records generated as recently as 2009. It is expected that continued optimization studies will further reduce cash operating and equipment costs, while additional drilling is expected to expand potentially mineable resources and defer lower grade mineralization to later in the project's life.

The PEA provides a positive project value and an estimate of the capital and operating cost parameters for the ScoZinc operations. The capital and operating costs included in the PEA were derived by estimating detailed costs for the mill refurbishment and updating the known historical operating costs from the open pit operations conducted by the previous operators (2007 to 2009). The use of historical operating data as a basis for the PEA is considered a more accurate approach than the methods used in a typical scoping study based on a greenfield project. The PEA provides Selwyn with guidance for on-going detailed engineering work to achieve the ScoZinc mine and mill commissioning in early 2012.

Metallurgy

Selwyn proposes plant modifications including redesign and replacement of the crushing circuit and concentrate filters. These modifications, together with improved plant availability, will allow average mill feed rates of 875,000 dry metric tonnes (dmt) per annum or 2,500 dmt per day. The projected feed grades for the first three years average 3.81% zinc and 1.69% lead (projected life-of-mine mill feed grades are 2.95% zinc and 1.64% lead). The projected metallurgical performance, based on historical data, provides for a zinc concentrate grading 57% zinc at 86% recovery and a lead concentrate grading 70% lead at 88% recovery.

The production schedule contains allowances to reflect the operating inefficiencies commonly experienced during plant tune-up and crew training during the first six months of operation. No deleterious minor elements are contained in the concentrates. The products are expected to be readily marketable, given their clean, high-grade nature.

Mining

Three conventional open pits are to be mined sequentially; Main, Northeast, and Getty, each of which were optimized using Whittle software. Production scheduling is based on an average production rate of 875,000 tonnes per year (or 2,500 tonnes per day) into the mill over an average of 350 operating days per year. The average strip ratio for the life-of-mine is 20.6 to 1 (excluding pre-stripping which is included in the capital costs). Approximately 58% of the waste is readily removed without blasting, including soils that will be used for reclamation, and 11% of the waste is gypsum, which may be marketable. Mine dilution and mining losses are assumed to be 10% and 5%, respectively.

The open pits contain the life-of-mine potentially mineable resources listed in the table below with classifications following CIM guidelines.

Concentrate Marketing and Metal Prices

Based on historical concentrate data, Selwyn expects to produce readily marketable concentrates grading 57% and 70% for zinc and lead respectively, with no penalties. Previous concentrate shipments from the ScoZinc mine were shipped to Europe and Asia. Selwyn expects to confirm its marketing contracts approximately three months prior to production.

Selwyn believes the outlook for zinc and lead prices will remain positive given expected forthcoming industry macro-level supply challenges, justifying the use of $1.10/lb zinc and $1.20/lb lead as the Base Case for the PEA.

Current infrastructure provides a number of options for the shipment of ScoZinc's concentrate. The final concentrate shipment plan will be determined at a time closer to the commencement of production at the ScoZinc mine.

Infrastructure

Excellent infrastructure is in place at the ScoZinc mine. The mine has access to low-cost power and ample water supply. Paved roads lead to the mine property with nearby rail access. ScoZinc has its own storage and concentrate loading facility at Sheet Harbour with a capacity of 8,500 tonnes, or 1.5 times the expected shipment size.

Environment, Community Relations, and Permitting

Selwyn has consulted with the Nova Scotia government and local community and has received strong support for the restart of the ScoZinc mine. Permitting for the southwest extension of the Main deposit open pit is well underway and all necessary permits to re-start operations are expected in the fourth quarter of 2011. Staffing of restart operations is in progress, led by the recently hired General Manager and Manager of Mining (see August 16, 2011 news release). The mine is expected to employ approximately 120 persons upon commencement of full operations in Q2 2012.

Selwyn Resources Ltd.

Selwyn's primary focus is the exploration and development of its properties that make up the Selwyn Project in the Yukon, which is being advanced by Selwyn Chihong Mining Ltd, a company jointly owned by Selwyn and its joint venture partner Yunnan Chihong Canada Ltd. The known deposits at Selwyn Project have the potential for large-scale production, and to provide a secure supply of zinc and lead to meet the future needs of these markets in Asia and beyond. The acquisition of the assets of ScoZinc Limited provides Selwyn with a second opportunity for growth and the potential for production revenues in 2012.

This news release has been reviewed and approved by Colin Fisher, P.Eng., project manager with Allnorth Consultants Ltd., an independent Qualified Person under NI 43-101, and Joseph Ringwald, P.Eng., Vice President Mining with Selwyn Resources Ltd., a Qualified Person under NI 43-101.

Cautionary Note

The PEA is preliminary in nature and includes inferred mineral resources that are considered too geologically speculative to be subject to economic considerations that would enable them to be categorized as mineral reserves. There is no certainty that the forecast results stated in the PEA will be realized. For a full description of known risks that could materially affect potential development of the ScoZinc zinc-lead project, see Selwyn's July 8, 2011 Final Short Form Prospectus under the heading "Risk Factors" which are incorporated by reference herein and are available on www.sedar.com under the Selwyn Resources profile. In addition, Selwyn needs to raise approximately $30 million to fund the restart of the ScoZinc Mine.

Cautionary and Forward-Looking Information Comments

This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation, which is also referred to as "forward-looking statements". Wherever possible, words such as "plan", "expects", or "does not expect", "budget", "scheduled", "estimates", "forecasts", "anticipate" or "does not anticipate", "believe", "intend", and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, have been used to identify forward-looking information. In particular, this news release describes future events and conditions related to Selwyn's plans for restarting the ScoZinc Mine and further exploration and studies at the ScoZinc lead-zinc project. Forward-looking information is based on management's reasonable assumptions, estimates, expectations, analyses and opinions on the date of this news release. These are based on management's experience and perception of trends, current conditions and expected developments, and other factors that management believes are relevant and reasonable in the circumstances, but which may prove to be incorrect.

Assumptions have been made regarding, among other things, Selwyn's ability to carry on exploration and development activities, the timely receipt of required approvals, operating costs for the [ScoZinc Mine], the price of zinc and lead, Selwyn's ability to operate in a safe, efficient and effective manner and Selwyn's ability to obtain financing as and when required and on reasonable terms. 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, results of the restart program at the ScoZinc Mine, exploration and development activities, the interpretation of drilling results and other geological data, the uncertainties of resource and reserve estimations, receipt of permits to conduct mining activities, project cost overruns or unanticipated costs and expenses, the availability of funds, fluctuations in metal prices, currency fluctuations, and general market and industry conditions. There is no assurance that forward-looking information 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 information, 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 Final Short Form Prospectus dated July 8, 2011 available at www.sedar.com.