Selwyn Resources (SWN.V) - company has closed its strategic partnership

Update by Objective Capital , Oct 22, 2010 download full report
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Key Points:

• Selwyn has closed its joint venture agreement with Yunnan Chihong In August, Selwyn Resources and Yunnan Chihong Zinc and Germanium closed their joint venture agreement. Upon closing, Yunnan transferred C$100m into the joint venture company, which will hold title to the Selwyn zinc-lead deposit at Howard’s Pass. All development at Selwyn will take place though the joint venture company.

  As Selwyn Resources had been funding all work on the project since the tentative agreement was signed in July 2009, the company is entitled to full reimbursement of those expenses. Selwyn Resources has already received a C$5m first trance and anticipates a further final payment of between C$5m and C$7m. With these payments, Selwyn Resources should be fully funded for well over one year, negating the need for private placements at currently adverse share prices. Selwyn will, however, be responsible for raising its 50-percent share of the costs of mine development.

• The focus at Selwyn now shifts to permitting and full feasibility The Selwyn partners are currently conducting background work that will enable the joint venture company to file formal documentation pertaining to the environmental and permitting processes with the government. At this time, Selwyn Resources anticipates filing the documentation early in 2011, with receipt of all required permits potentially occurring during 2012.

  Concurrently, the joint venture company is ramping up engineering work which will be incorporated into the full, NI 43-101-compliant, feasibility study. Management anticipates this will be complete in mid-2011.