Selwyn Resources and Yunnan Chihong Zinc & Germanium have agreed to form a joint venture to develop Selwyn’s Selwyn zinc-lead project in the Howard’s Pass district in the eastern Yukon (90%) and the Northwest Territories (10%). Selwyn will contribute its mineral and other assets to the joint venture. Chihong will contribute C$100 million and will earn its 50% interest in the joint venture when these funds have been expended on development programs. Closing of the transaction is targeted for May 2010.
The Howard’s Pass district has been explored since the 1970s across a 38-km-long mineralized trend. The current Selwyn project is the consolidation of Selwyn’s wholly owned lands and Howard’s Pass Joint Venture lands acquired by Selwyn from Placer Dome and Cygnus Mines.
Upon formation of the joint venture, Selwyn and Chihong intend to undertake initial underground development and advanced exploration on current NI 43-101 compliant mineral resources of the XY Central deposit. The underground development will provide a platform for exploration of the core of the deposit’s synclinal structure, which is known to host high-grade mineralization but which is difficult to test from surface. In addition, surface diamond drilling is planned to resume on the Don deposit.
Chihong Zinc & Germanium is an integrated Chinese lead and zinc producer, whose Qujing smelter recovers lead, zinc, and precious and rare metals. The company is listed on the Shanghai Stock Exchange. Its major shareholder is China Yunnan Metallurgical Group, a diversified resources company majority-owned by the Yunnan provincial government.