Selwyn Resources (SWN.V) - drill results give best grades to date

Comment by Objective Capital , Jul 10, 2007
Questions? |

On 9 July, Selwyn Resources Ltd announced new drill results from the Don Valley region of its Selwyn zinc-lead project in Yukon. The current drill programme is covering a 4.2-kilometre length of a mineralised zone between the Don and HC West deposits. Assays from the latest holes continue to produce significant intersections with high grades of zinc and lead: one of the tests produced the best grades of any test on the Selwyn project to date. Hole DON-074 yielded 10.2 percent zinc and 3.91 percent lead over a true thickness of 39.6 metres, including a 4.3-metre zone with 35.97 percent zinc and 16.0 percent lead.

Selwyn have already outlined an indicated and inferred resource of just over 9.2 million tonnes, grading just over 10 percent zinc and 4.2 percent lead at depth in the XY Central zone, about 16 kilometres to the northeast. The company believes the target area within the Don deposit has the potential to contain between 20 million and 25 million tonnes of rock, with a combined zinc and lead grade varying between 6 percent and 12 percent. Further, the company now believes a higher-grade zone within the Don East deposit has the potential to contain up to 30 million tonnes of rock grading between 10 per cent and 14 percent combined zinc and lead.

Objective's view:

We view the latest drill result as providing further comfort that Selwyn will outline a significant amount of high-grade ore at depth within the Selwyn deposit. Much of this potentially higher-grade material is likely to lie beyond the projected open pit limits, calling for underground mining, but we believe the grades will ultimately warrant the inclusion of all these zones in the mine plan. Our earlier assessment projected a reasonable chance of drill success in these higher-grade zones and we are maintaining our current valuation. Should Selwyn continue to expand the dimensions of these zones and develop a formal resource in the Don Valley area, we would anticipate an upward revision in our valuation.