Pending final approval by the Chinese government, Chihong Canada Mining Ltd. now owns 100 per cent interest in the Selwyn zinc project in eastern Yukon.
The company bought the 50 per cent of the project for $100 million from Selwyn Resources Ltd. in 2010.
The second half went for $50 million.
“Given the state of the financial markets, Selwyn would have had a very difficult time maintaining its half of costs going forward, and as a result it just seemed to make sense that we should let Yunnan Chihong go forward with the project,” said Harlan Meade, Selwyn’s president.
The cash from the sale had been intended to fund Selwyn’s ScoZinc project in Nova Scotia, according to the company’s website.
But a group of dissident shareholders at an April meeting wanted to see the money paid out instead, said Meade.
“What happens then, nobody knows. It creates an uncertainty that would not have been there.”
Another meeting is planned for June 17, and Meade expects that it will result in more clear direction from shareholders, he said.
(Jacqueline Ronson)