Shares in the junior explorer advanced more than 14 per cent Monday, to 4 cents as of 10:15am ET.
The Selwyn project, considered one of the largest undeveloped zinc-lead deposits out there, is run by Selwyn Chihong Mining, a joint venture formed by Selwyn and Chihong Canada Mining. Chihong Canada is a subsidiary of Yunnan Chihong Zinc & Germanium - one of China's largest zinc and lead mining and smelting companies.
Selwyn said Monday that the management committee for the project has recently confirmed a plan and budget for the feasibility study, based on the revised 3,500 tonne per day mining and milling plan it announced in August.
The new plan, which was instituted to increase profit margin per tonne and maximize the value of the project, includes a 3,500 tonne per day combined mining rate from the XY Central and Don deposits, with increased mill feed grade of 10% to 12% combined zinc and lead content.
Selwyn said it still has to finalize the mine design and production schedule, which will be undertaken by the joint venture staff, along with Denver-based Tetra Tech mine group.
The final phase of metallurgical test work also needs to be completed, which is focused on looking at opportunities to reduce energy requirements in the re-grind circuit, and improvements in lead recovery.
With the completion of the processing plan and mill design, surface facilities will be finalized, and the joint venture can file its project report with the Yukon Environmental and Socioeconomic Assessment Board, and start the environmental assessment process.
Selwyn also said today that a recent geotechnical report indicated "more favourable" ground conditions than previously determined in the initial proposed mining areas.
"With this new information, the increase in stope spans was confirmed, and the mining plan has been modified and production plan formalized," Selwyn added.
The feasibility study will be completed using the remaining funds within the joint venture bank account, which was $5.37 million as at October 1. Once these funds are used, Chihong Canada will have a vested 50 per cent interest in the joint venture.
The revised mine plan includes only the XY Central and Don deposits, representing only a small portion of the overall known indicated mineral resources for the Selwyn project, which are currently 185.6 million tonnes grading 5.20% zinc and 1.79% lead at a 2.0% zinc cut-off grade.
Selwyn said the joint venture decided to focus on a mine devleopment plan that initiates mining the largest of the known high-grade resources, which are contained in the XY Central and Don deposits.
These resources extend to depths of at least 350 metres at XY Central and 700 metres at Don, warranting underground mining. The aim is to establish a small-tonnage, high grade operation from which to expand on later.
Earlier this year, Selwyn announced a board shake up, as part of chief executive Harlan Meade's mandate to raise working capital to advance the company's buisness plan and keep it on track.
The miner appointed five new board members as part of the overhaul, as it is also on course to restart its former zinc-lead mine in Nova Scotia, called ScoZinc. In August, the company updated its mineral resource estimate for the Gays River deposit at the ScoZinc mine, increasing measured resources by 55 per cent.
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