Selwyn gets OK for lead-zinc mine study

The Yukon government has approved work permits to Selwyn Chihong Mining Ltd. to expand exploration work at a large lead-zinc deposit on the Yukon-Northwest Territories border.

Selwyn Resources Ltd., the Canadian partner in Selwyn Chihong Mining, says it was awarded the amended mining land use permits days after it finalized a joint venture with a major Chinese mining firm on Thursday.

Yunnan Chihong Zinc Germanium Co. Ltd. has agreed to invest $100 million into the joint venture with the Vancouver-based company. Much of that money will be spent over the next year conducting underground exploration work at its Howard's Pass property, in the hopes of confirming its mineral claims are viable enough to support a full-scale mine.

"With that money now available, we can now get various different aspects of the program going. Right now, we're drilling with two drills, soon to be three, and then to be six," Selwyn CEO Harlan Meade told CBC News on Monday, when the company announced the new permits.

"At peak this fall, I think we'll probably be in the range of 80 to 100 people, probably split between two camps," he added. "We'll spend somewhere between $80 [million] and $90 million, this year and next."

Howard's Pass is touted as having the largest known lead-zinc deposit in the world, according to the company.

Supply road on N.W.T. side

Located about 220 kilometres northwest of Watson Lake, Yukon, the property is more than 90 per cent based in Yukon, with only the southeast end extending into the N.W.T.

To date, all the company's drills and other supplies have been airlifted to Howard's Pass, Meade said.

Once a few bridges and culverts are replaced, Meade said the company will begin refurbishing an old access road from Tungsten, N.W.T., to the Howard's Pass site, making it the main supply road.

"If you're brave and ingenious you can probably get a quad to the property, but otherwise it's impassable," Meade said.

"Having said that, most of the road bed's in pretty good shape. It simply needs these upgrades."

The joint venture will also have to expand its mining camp to house at least 100 workers through the winter.

Should the exploration work confirm the viability of a mine at Howard's Pass, Meade said Selwyn Chihong will need to secure more financing for construction.

"It's a significant number, somewhere between $600 [million] and $800 million," he said.

The permit for Selwyn Chihong's exploration work is good for a 10-year period and includes a $410,000 security deposit with the Yukon government.