The acquisition of ScoZinc provides Selwyn with a low cost entry to becoming a producing mining company. The restart of production at the Scotia Mine in Nova Scotia could provide Selwyn with both mine operations experience and early cash flow which could be strategically important to its securing financing for the Selwyn Project.
The Scotia zinc-lead mine operated from mid 2007 through early 2009 before it was shut down following a dramatic decline in zinc and lead prices during the 2008-2009 financial collapse. During its operations ScoZinc demonstrated the attractiveness of mining the zinc-lead mineralization in an open pit, confirming the potential for mining the other mineral deposits located adjacent to the Main open pit area.
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.
The purchase price is $10M less any funds paid to the Nova Scotia government related to unpaid mineral taxes on former mine production or any funds needed to top up the reclamation and closure bonds for the Scotia Mine property.
The acquisition was officially completed in June 01, 2011.
ScoZinc has undertaken approximately $8 million of expenditures on the property to the end of October 2012 including some mine refurbishment, purchase of surface rights, permitting and engineering and exploration.