Exploration

Selwyn undertook approximately $3.5 million in exploration during summer and fall of 2005. The program consisted of geological mapping, additional detailed target evaluation and 8,655 metres of drilling in 53 drill holes.

2005 Exploration Highlights

Major findings of the 2005 exploration program include:

• Discovery of moderate grade zinc-lead mineralization in the Brodel Zone and in Don Valley suggested that the mineralization extends between XY and Anniv zones.
• Similarity in appearance of the mineralization in the various zones over a distance of 25 kilometres suggests that Howard's Pass mineralization forms one continuous deposit that is truncated by numerous faults.
• It became apparent that drilling has tested only a small part of the favourable strata in the District. Historic and new drilling has defined several areas with potential for large tonnages of near surface mineralization within the District.
• Regional mapping suggests that all of the known deposits and mineralization occur on the west side of a major fault structure that cuts across the favourable strata. Drilling of the strata in the East Panel of the District represents a major new exploration opportunity.

The 2005 exploration provided a new basis for evaluating the potential development of the District as the world's next major zinc-lead mining district. Of the 53 drill holes completed in the 2005 program, 41 holes were completed on the Howard's Pass Joint Venture Property and 12 holes were completed on Selwyn's wholly owned, HP, Nod and Selwyn claims. Selwyn's wholly owned claims represent 62% of Selwyn's land holdings in the District.

On the Howard's Pass Property, 6 holes were drilled in the XY Central deposit, 10 holes in Anniv East , 12 holes in the Anniv Central deposit, and 3 holes in the OP zone to further define potential open pit mineral resources. Ten holes were also completed in the Brodel zone defining a new mineral resource. The Brodel deposit is located 4 kilometres northwest of the XY Central deposit and appears to be the north extension of the XY deposit. Eight holes were completed in the Don deposit defining the first of the new zones in Don Valley.

2006 Exploration Highlights

Selwyn spent $21.5 million in exploration and acquisition costs in 2006 and completed 41,000 metres of drilling in 191 drill holes. Other work included baseline environmental and preliminary engineering surveys and addition of camp and other exploration infrastructure.

The 2006 program resulted in the discovery of the OP West and Pelly North zones in the northwest end of the District and the Don East, HC and HC west deposits in Don Valley demonstrating continuity of the deposit over a strike length of at least 37.5 kilometes. Other historical information suggests that the deposit may extend a further 8 kilometres to the northwest beyond Pelly North to the Abbey target and southeast beyond the XY Central deposit to the Selwyn claims in the NWT. The continuity of the deposit is remarkable along strike but drilling is just beginning to define what the lateral distribution of mineralization might be across the basin. Drilling and geological studies have confirmed the regional geological structure of a large synclinal structure truncated by both low angle thrust faults and steeper dipping younger tear faults that offset the mineralized zones. All deposits excepting the XY Central deposit are on the northeast limb of the apparent northwest trending synclinal structure.

Of particular interest in the 2006 program is the extension of higher grade mineralization in the XY Central deposit beyond that defined by Placer in the late 1970's and evaluated by underground mining in 1979 to 1981. This program defined a mining reserve of 8.1 million tonnes grading 10.6% zinc and 5.5% lead. This mining reserve predates NI 43-101 and therefore should only be considered an Inferred mineral resource. Drilling down dip of Placer's high grade mineral resources, has extended the distribution of mineralization over an area of 1,000 by 600 metres.

Similarly, deeper drilling in the Don, Don East, HC, and Anniv Central deposits have also intersected higher grade mineralization. The transition from average grades to higher grades appears to mark the presence of a zone of higher grade mineralization within what is assumed to be the original core of the deposit. The core to the SEDEX system would appear somewhat coaxial with the core of the regional synclinal structure and represent a major exploration target.

2007 Program

Selwyn completed $21.5 million in exploration expenditures in 2007, consisting of over 37,000 metres of diamond drilling and continued engineering and baseline environmental studies. The later studies are focused on providing sufficient information to allow the commencement of permitting under the YESSA process.

The 2007 program of diamond drilling commenced in April with two drills which gradually increased to seven drills. The drilling initially focused on defining higher grade mineral resources in the Don Valley following up higher grade intercepts such as encountered in DON-044 that intersected 22.3 metres grading 8.94% zinc and 3.10% lead including 3.3 metres grading 24.21% zinc and 10.61% lead, and later expanded higher grade mineral resources defined in the XY Central deposit. Definition drilling was also undertaken on the XY Central and other deposits to define Indicated mineral resources to support a conceptual 20 year mine life of open pit ores at a production rate of 20,000 tonnes per day. The new mineral resources are expected to define resources sufficient to allow detailed mine planning and reserve determination for a hybrid mine plan and economic model that includes both open pit and underground mining.