Selwyn Resources has hit a bump with its plans to build its mine near the Northwest Territories border.
In June, the company bought Nova Scotia’s ScoZinc mine, which operated from 2007 until 2009 when it shuttered during the global financial collapse.
Reopening the mine, it’s hoped, will provide a stream of cash to help finance the development of its Selwyn property at Howard’s Pass.
Selwyn hopes to see ScoZinc re-open by the summer of 2012. To this end, the company planned to raise $30 million through a bond offer.
But that deal fell apart last week.
The company’s now looking for new ways to pay for ScoZinc’s reopening.
If Selwyn were short on cash for its short-term operations, this could be a concern. But that’s not the case, said Harlan Meade, the company’s president and CEO.
The deal’s demise will have “no effect whatsoever” on Selwyn’s operations, he said.
It helps that Selwyn has a partner with deep pockets. Last year, a Chinese state-owned company paid $100 million for an equal stake in the Selwyn project, which is touted as one of the largest unexploited deposits of lead and zinc on the planet.
Selwyn has spent more than $70 million to date to prove-up the property. Advanced exploration started this summer, with the company digging two kilometres of underground passages.
Last month, the company announced it had expanded the property’s global indicated resources by 17 per cent, adding 2.1 billion pounds of zinc and 1 billion pounds of lead.
And there are more announcements to come over the next few weeks, said Meade.
Plans to build the mine remain on track, said Meade.
“We’ve almost accomplished all of our initial goals,” he said.
If Selwyn has its way, a big underground mine will open there by mid-2014.
The mine could employ up to 400 people and churn out 8,000 tonnes of concentrate per day.
Selwyn has abandoned a plan to pump ore through a 180-kilometre slurry pipeline to the Robert Campbell Highway. “It’s new technology, and we thought we’d be better off pursuing the proven and true method of truck hauling,” said Meade.
The company hasn’t settled on which port it would use to ship concentrate to Asia. The preferred choice is Skagway.
The municipality wants to upgrade its ore terminal, and Selwyn is seen as one of the new facility’s likely customers.
But for this to happen, the municipality needs to cut a new deal with White Pass and Yukon Rail, which currently holds a lease that allows it to control Skagway’s ore dock.
Municipal and company officials have haggled over the terms of a new deal for the past year, according to the Skagway News. These talks were interrupted this month by municipal elections.
“Until those issues are resolved to everyone’s satisfaction, that’s a potential impediment, because it creates uncertainty,” said Meade.
“A lot of people in Alaska would like to see the Skagway facility better used. And that would strengthen the infrastructure for the Yukon, which, of course, we have a long-term interest in seeing happen.”
Selwyn’s other option is to haul ore to Stewart, BC.
Meade couldn’t say when his company needs to decide on which port to use.
“But it’s somewhere out there in the foreseeable future.”
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