NEW YORK Selwyn Resources Ltd. has agreed to sell the remaining 50-percent stake of its joint-venture zinc and lead project in Canadas Yukon.
Selwyn will sell its stake to joint-venture partner Chihong Canada Mining Ltd., a subsidiary of Chinese zinc and lead producer Yunnan Chihong Zinc & Germanium Co. Ltd., for $50 million in cash.
After the transaction is complete, Selwyn will not have an interest in the company, and the joint venture, Selwyn Chihong Mining Ltd., which was set up in July 2010, will be terminated, the Vancouver, British Columbia-based company said.
"The decision to sell Selwyns 50-percent joint-venture interest in the Selwyn project reflects the realization of the large capital requirements that will be needed to advance the Selwyn project to production and the associated risks to Selwyn shareholders," Selwyn president and chief executive officer Harlan Meade said. "At a time of reduced industry interest in underdeveloped mineral deposits, Selwyn is satisfied that the timing of this transaction and the purchase price negotiated are in the best interests of the shareholders."
Chihong Canada has paid Selwyn a $5-million cash deposit and will make a second $5-million payment in early April. It will make the remaining payments at the close of the transaction, which is expected by June.
Some of the money from the sale will be used to restart Selwyns ScoZinc Mine in Nova Scotia, the company said.