Material Change: Sale of Selwyn Joint Venture Interest
On June 3, 2013, Selwyn Resources Ltd. completed the sale of its 50 % joint venture interest in the Selwyn zinc and lead project for $50 million in cash. Selwyn proposed to use the proceeds of the transaction to finance the re-start of mining and milling operation at ScoZinc Mine in Nova Scotia when conditions are favourable. A group of shareholders have initiated actions to have the proceeds of the transaction to be distributed to shareholders and to consider the liquidation of the Company at the Annual General Meeting on June 17, 2013. Shareholders did not vote in favour of liquidation of the Company (see June 17, 2013 news release) and elected five new members to the Board (see Board of Directors).
At the present time, the new members of the Board are reviewing the Company to determine the next steps forward.
Selwyn Resources Ltd. is the successor to Pacifica Resources Ltd. that underwent a reorganization of its assets in June 2007. Pacifica's acquisition of the Howard's Pass Joint Venture lands in April 2005 consolidated ownership in the Howard's Pass District and the formation of the Selwyn Project. The unprecedented exploration success in the 2005 and 2006 and subsequent programs has produced a world class giant zinc-lead deposit of exceptional potential. In the reorganization, all of Pacifica's assets outside of the Selwyn District in the eastern Yukon were transferred to Savant Explorations Ltd. for common shares of Savant in June 2007.
In December 2009 Selwyn announced a strategic joint venture transaction with Yunnan Chihong Zinc & Germanium Co. Ltd. whereby it acquired a 50% interest in the Selwyn Project. The joint venture transaction was completed in August 2010 with the deposit of $100 million into the joint venture bank account and commencement of an approximate $85 million two-year program to advance the Selwyn Project through bankable feasibility study.
In mid February 2011, Selwyn entered into an acquisition agreement to purchase all assets of ScoZinc Limited from Acadian Mining Corporation. The assets include the Scotia Mine and 12, 256 hectares of mineral claims covering much of the prospective geology in the Windsor Basin in Central Nova Scotia.
The purchase price was $10 million less funds paid to the Nova Scotia government related to unpaid mineral taxes on former mine production and funds needed to top up the reclamation and closure bond for the Scotia Mine property.
ScoZinc has undertaken approximately $10 million of expenditures on the property to May 2013 including mine refurbishment, purchase of surface rights, permitting and engineering and exploration. A Preliminary Economic Assessment was released August 30, 2011 and updated December 20, 2012 and updated again on June 12, 2013.