Selwyn to expand scope of feasibility study for Yukon project, now expected in mid-2012

Nov. 08, 2011 2:33 PM ET
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Selwyn Resources (CVE:SWN) said Monday it has expanded the scope of its feasibility study for its joint venture Selwyn project in the Yukon based on recent promising drill results.

The zinc-lead property is a joint venture between Selwyn and Chihong Canada Mining, a subsidiary of Yunnan Chihong Zinc & Germanium Co that is earning a 50 percent interest in the project by spending $100 million on exploration and development.

In January last year, Wardrop was hired to undertake the engineering and technical work required for the feasibility study. Selwyn said that the initial proposed work is nearing completion, but the joint venture has decided to expand the scope of the study, with a range of additional programs now being considered.

Following recent promising drill results on the Don Connector, the area between the Don and Don East depostis, the joint venture will carry out 12,000 metres of diamond drilling  designed to confirm the presence of significant new mineral resources, and if successful, undertake preliminary work to see if the resources should be integrated into the current mine plan at the Don deposit.

The target area has dimensions of 900 metres by 250 metres, with several thick intercepts of high grade mineralization indicated from recent drilling, Selwyn said. Indeed, hole Don 192 intersected a true thickness of 54.94 metres grading 7.78% zinc and 2.84% lead, including several zones of very high-grade mineralization.

The additional new drilling is projected to be completed by March 2012, at which time, a new mineral resource estimate will be completed for the Don Connector area.

In addition to this, Selwyn Chihong will estimate mineral resources and undertake preliminary mine planning on the XY West deposit to evaluate the inclusion of new mineralization in the mine plan for the XY Deposit. In the recent major drilling program,  22,488 metres of diamond drilling was completed in 57 holes on the XY West target, with a new mineral resource estimate in progress.

"The proximity of the mineralization in the XY West deposit to the XY Central deposit, and modest pre-development requirements for accessing this mineral deposit, makes it an attractive addition to the mine plan being developed for the XY Central deposit," Selwyn said in a statement.

Moreover, the joint venture plans to look at including dense-media separation technology in the processing plan as a means of reducing mill operating costs and increasing the amount of zinc and lead to be processed through the mill. The technology was evaluated in the original Selwyn project preliminary assessment report in 2007 and its use was considered favourable, the companies said.

However, the initial report was based on the mining of several of the mineral deposits by open pit methods, whereas the new development plan focuses on the mining of the XY Central and Don deposits by underground methods.

Still, the joint venture said that preliminary information from a recent re-evaluation of the use of this technology in the crushing circuit indicates that it could provide significant reductions in overall energy consumption in the processing of the mineralization.

Using a dense-media separation circuit would mean the rejection of non-mineralized material within the ore, resulting in a reduction in material to be milled and a corresponding increase in grades of material, along with an overall reduction in power consumed for grinding.

Refinements to the feasibility study will focus on the reduction of operating costs in the mill, impacts on the mine plan and optimization of the mining sequence, the companies said. The finalization of the feasibility study is now not expected until mid 2012.

As at September 30, joint venture Selwyn Chihong Mining spent approximately $73 million of the $100 million that Chihong is required to spend to earn a 50 percent interest in the project.

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