Yukon site could be the world’s largest undeveloped zinc deposit

1 of 7Core library on Don Camp. — Photo courtesy of Selwyn Chihong Mining, Ltd.

2 of 7The office complex on Don Camp in the winter. Don Camp is one of Selwyn’s main camps in Don Valley. — Photo courtesy of Selwyn Chihong Mining, Ltd.

3 of 7Selwyn’s new management team. From left to right: Doug Reeve, Permitting & Regulatory Affairs Manager; Kevin (Luogang) Chen, Chief Financial Officer; Richard (Shilin) Li, Chief Executive Officer; Michael Cunningham, Community Affairs Manager; Maurice Albert, Vice President-External Affairs; Jelle De Bruyckere, Exploration Manager; Chao Huang, Administration Manager; Eric Yang, Camp Supporting Manager. — Photo courtesy of Selwyn Chihong Mining, Ltd.

4 of 7Selwyn’s fishery biologist studying local stream flows for environmental assessment. — Photo courtesy of Selwyn Chihong Mining, Ltd.

5 of 7Drilling technicians are taking out core samples out from drilling cords. — Photo courtesy of Selwyn Chihong Mining, Ltd.

6 of 7Equipment working on Howard’s Pass Access Road near the Selwyn deposit in Yukon. — Photo courtesy of Selwyn Chihong Mining, Ltd.

7 of 7Chief Mike Matou and CEO Richard Li following signing of Co-operation Agreement in Nahanni Butte, NWT. — Photo courtesy of Selwyn Chihong Mining, Ltd.

Nearly $100 million has gone into exploring the Selwyn Project near Howard’s Pass in eastern Yukon, and another $56 million is on the table for 2014. The project, which has only seen exploration of approximately a quarter of its resources, represents one of the largest undeveloped zinc-lead deposits in the world.

China’s Yunnan Chihong Zinc and Germanium Co., Ltd. signed a joint venture agreement with Selwyn Resources Ltd. in 2010, with a promise to invest $100 million into developing the project.

The Selwyn project underwent an $85-million exploration and development program between 2005 and 2012. Then in June 2013 Chihong Canada Mining Ltd. became the project’s sole owner.

The current operating company is called Selwyn Chihong Mining, Ltd., and with a new team and new CEO, Richard (Shilin) Li, the project is set to plunge full force into 2014.

The previous development team was proposing to develop the project with a 3,500- tonnes-per-day mill fed by an underground mining operation. Following an internal scoping study, the new management is now proposing a 25,000-tonnes-per-day mill fed by an open-pit mining operation. Additional work is ongoing to further expand the size of the mine.

“Step by step we are moving toward construction and production,” said Li. “This year we are going to have the Howard’s Pass access road reconstructed, with completion scheduled for the fall. We are also planning on infill drilling and an exploration program of 50,000 metres for this year.

“The third thing will be to undertake some trade-off studies that will be required for our feasibility study.”

A major focus for 2014 is preparing for permitting. This will require Selwyn Chihong to address three major infrastructure requirements: the selection of a port, a source of energy, and the transportation corridor and mode of delivery for the concentrate.

“These require significant consultation with our First Nations partners and government,” said Maurice Albert, VP of external affairs. “In terms of energy, the site is too far from the Yukon grid, which wouldn’t supply the necessary capacity in any case. We are looking at a few options like diesel or LNG.”

The access road under reconstruction was originally built in the 1970s to service the mine. It requires structural capacity improvements to function as a year-round service road.

“We are also going to start on assessing or changing the permitting on that road to make it a haul road,” said Albert.

There are three ports within striking distance: Haines and Skagway, Alaska, and Stewart, B.C.

“Each has its advantages and disadvantages,” said Albert, “primarily distance and port capacity. No one has the capacity to handle our volume, so that is one reason we are striking out early—to do our assessment and speak with owners, because whoever is selected will require some increased capacity.”

Selwyn might be the world’s largest undeveloped zinc and lead deposit. The resources in one quarter of the area are estimated at 400 million tonnes, and exploration has yet to proceed on the other three-fourths.

“So basically this year we will have $56 million to invest, so this is our major focus this year,” said Li. “To succeed in this business for the future we commit ourselves to maintaining the best international standards of safety and environmental protection and to working with local companies and First Nations.

“In the most recent 10 to 15 years there has been hundreds of billions of dollars invested by Chinese mineral or mining companies around the world, and not many of them have reported success,” said Li. “Our team will run the business as a Canadian company based on international standards.”

If all goes as planned, the Selwyn project will be the largest mining project in the Yukon’s history, with an approximate construction cost of $1.8 billion.