Resource Inventory

Since acquiring the Selwyn Project in 2005 until 2009, Selwyn and Selwyn-Chihong have developed a detailed 3D geological model that demonstrates the strong continuity of the stratabound, zinc-lead SEDEX-type mineralization. The continuity of the Active Member has now been traced for 37.5 kilometres. The joint venture also owns another 28.5 kilometres of mineral claims thought to host the favourable strata that is relatively unexplored. The Selwyn Project now contains 14 drill defined deposits and zones that include mineralization in both the open pit and underground environments. Table 1 summarizes the significant growth in mineral resources and metal content over the last seven years.

In 2010, Selwyn Chihong Mining Ltd., the joint venture company created to advance the project, completed extensive diamond drilling in the XY Central and Don deposits to upgrade mineral resources to the measured and indicated category. It also undertook exploratory drilling in the XY West deposit to confirm the continuity and extent of the high-grade mineral resources.

Definition drilling continued into early 2011. As of Sept 12, 2011, the NI 43-101 Indicated mineral resources for the Selwyn Project now total 180.69 million tonnes of Indicated mineral resources grading 5.25% zinc and 1.83% lead for a metal content of 20.91 billion pounds of zinc and 7.33 billion pounds of lead (see Table 2). The Inferred mineral resources total 216.04 million tonnes grading 4.47% zinc and 1.38% lead for a metal content of 21.29 billion pounds of zinc and 6.57 billion pounds of lead (see Table 2 below). The Inferred mineral resources are generally adjacent to the main areas of drilling in the deeper part of the mineralized Active Member. Areas of Inferred mineral resources require more closely spaced drill holes to improve the confidence level for their inclusion in Indicated mineral resources.

The Sept 2011 updated mineral resource estimate was prepared by Independent Qualified Persons, Mr. Garth Kirkham, P.Geo., Kirkham Geosystems Ltd., Burnaby, British Columbia, who undertook the 3D modeling and resource estimation; and Mr. Cliff Pearson, P.Geo., Pearson Geological Inc, Victoria, British Columbia, who undertook the detailed field evaluation of data collection protocols at the project worksite. Mr. Jason Dunning, P.Geo., a Non-Independent Qualified Person, has reviewed the updated mineral resource estimates and approved the contents of this news release.

The global Indicated mineral resources for May 2012 are 180.69 million tonnes grading 5.25% zinc and 1.83% lead for a metal content of 20.91 pounds of zinc and 7.33 billion pounds of lead (see Table 1). The Inferred mineral resources have increased to 226.88 million tonnes grading 4.44% zinc and 1.37% lead for a contained metal content of 22.23 billion pounds of zinc and 6.84 billion pounds of lead. The new mineral resource inventory includes the May 15, 2012 updated minerak resources for the XY West deposit. An update of mineral resources in the Don Connector area at Don deposit is in progress and will result in a further update of global mineral resources. The May 2012 global mineral resources completed by Independent Qualified Person, Mr. Garth Kirkham, P.Geo.

The Global Mineral Inventory Indicated mineral resources for August 2012 are 185.57 million tonnes grading 5.20% zinc and 1.79% lead for a metal content of 21.26 billion pounds of zinc and 7.30 billion pounds of lead (see Table 6).  The Global Mineral Inventory Inferred mineral resources are 237.86 million tonnes grading 4.47% zinc and 1.38% lead for a metal content of 23.45 billion pounds of zinc and 7.22 billion pounds of lead (see Table 1). The Inferred mineral resources are generally adjacent to the main areas of drilling in the deeper part of the mineralizing system. Areas of Inferred mineral resources require more closely spaced drill holes to improve the confidence level for their inclusion as either Measured or Indicated mineral resources.

Table 1: NI 43-101 Global Mineral Resource Growth from 2006 to 2012

Table 2: Selwyn Project August 2012 Global Mineral Resource Estimate

Table 3 provides an estimate of high grade mineralization in the XY Central, XY West, Don, Don East and HC West deposits. These higher grade mineral resources are a subset of the Global Mineral Resources. These high grade mineral resources are the focus of the definition drilling completed in 2010 through 2012.

Table 3: Selwyn Project 2009 High Grade Mineral Resource Estimate (updated for May 2012)

Notes for Table 3:
1. Mineral Resources reported above have been calculated as of February 25, 2009 in accordance with the standards of the CIM and National Instrument 43-101.
2. A 2% zinc grade cut-off was applied to the new mineral resource estimate.
3. The Mineral Resource Estimate uses all 582 drill holes, totaling 126,127.2 metres, successfully completed on the Selwyn Project over three separate periods: 1973 to 1981, 2000, and 2005 to 2008.4. The high grade mineral resource for XY West, May 2012, is based on a 5% cut off grade.

Mineral Potential

In addition to the Indicated and Inferred mineral resources estimated in the Sept 12, 2011 NI 43-101 report, the mineral potential remains unchanged from those stated in the 2009 mineral resource estimate (see February 26, 2009 news release); which contains between 245 and 255 million tonnes with an estimated grade of between 4.0 - 5.0% zinc and 1.0 - 2.0% lead. The mineral potential represents the down dip and strike extension of the Indicated and Inferred mineral resources as defined from a polygonal long-section model. The mineral potential appears to represent a small portion of the interpreted extent of the rock units and the Active Member that hosts all known zinc-lead mineralization at Selwyn Project.

Zinc-lead sulphide mineralization has now been defined over 37.5 kilometers of strike length with the drilling results from the 2005 through 2011 drilling campaigns. Importantly, all drill holes that have intersected the favourable host rocks have contained zinc and lead sulphide mineralization. The quantity and grade of this mineral potential is conceptual in nature, as there has been insufficient drilling to define a mineral resource and it is uncertain if additional exploration will result in any of this potential being realized as a mineral resource.