Selwyn inks deal with Chinese firm for zinc mine
Selwyn Resources Ltd. says it has signed joint venture agreements with Chinese investors aimed at opening a zinc mine on the Yukon-Northwest Territories border.
If the agreements proceed as planned, the Chinese company Yunnan Chihong Zinc Germanium will invest $100 million in developing a mine at the company's Howard's Pass site, where it says a giant lead-zinc deposit is based.
The Howard's Pass property is about 220 kilometres northwest of Watson Lake, Yukon. More than 90 per cent of the property is in the Yukon, with only the southeast end extending into the Northwest Territories, according to the company.
Selwyn Resources president Harlan Meade said Yunnan Chihong Zinc Germanium just needs to obtain final approvals from the Chinese government before the money can start to flow.
"The only issue now is timing and can we meet the closing deadlines," Meade told CBC News on Wednesday.
Money could start flowing in August
Meade said the Chinese company expects to start transferring funds around mid-August if it obtains all the necessary government approvals.
Meade said assuming that happens, Selwyn Resources might spend about $40 million to $50 million on the property this year.
The company has reopened its camp and will start geotechnical and exploration drilling shortly.
Selwyn Resources had announced a tentative deal with the Chinese company on Dec. 14, 2009, but Meade said making the joint venture official took longer than he originally thought it would.
"I think for both parties, there a lot of cultural changes and hurdles to get over," he said. "I'd say we've done a pretty good job of working out a joint venture transaction."
Meade said the $100-million investment would go toward the steps that must be completed in order to bring the mine into production, such as preparing a feasibility study and applying for environmental permits from various government agencies.
"This is one of those major economic opportunities that the Yukon has wanted to have, and finally, it looks like there's one that's actually going to go forward," he said.