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Selwyn Resources Announces Receipt of Second $5 Million Purchase Price from Chihong Canada

Apr 9 2013 12:00AM

Marketwire

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VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 04/09/13 -- Further to its March 4, 2013 news release, Selwyn Resources Ltd. (TSX VENTURE: SWN) ("Selwyn" or the "Company") announces that, in connection with the agreement to sell its remaining 50% interest in the Selwyn Project, the second $5 million deposit has been released from escrow and has been received by the Company.

Under the terms of the transaction, Selwyn has agreed to sell its interest in the Selwyn Project to its joint venture partner, Chihong Canada Mining Ltd. ("Chihong Canada") for a total purchase price of $50 million (the "Transaction"). Selwyn has now received a total of $10 million as a deposit toward the purchase price. The remaining $40 million will be paid to Selwyn at the closing of the Transaction.

The completion of the Transaction is subject to the satisfaction of certain conditions, including the following:

-- the approval of the Transaction by at least 66 2/3% of the votes cast by Selwyn shareholders at the annual general and special meeting of shareholders to be held on April 22, 2013;-- approval of the board of directors of Yunnan Chihong Zinc & Germanium Co., Ltd. (parent company of Chihong Canada) and certain Chinese governmental approvals;-- holders of no more than 10% of the issued and outstanding Selwyn common shares having exercised dissent rights in respect of the Transaction; and-- the fulfillment or waiver of certain customary closing conditions set out in the purchase agreement for the Transaction.



The TSX Venture Exchange has conditionally approved the Transaction, subject to Selwyn shareholder approval. Based on the expected timeline for receipt of relevant approvals, the Company and Chihong Canada expect the Transaction to close no later than early June 2013. If the Transaction does not close, the deposits must be refunded to Chihong Canada, except where the failure to close the Transaction is the result of the failure of Chihong Canada to (i) comply with the terms of the purchase agreement, or (ii) obtain its necessary parent and Chinese governmental approvals for the Transaction. The refund of the deposits, if necessary and if not promptly paid in cash, will be carried out by Chihong Canada converting the outstanding deposit amount into a corresponding increase in its interest in the Selwyn Project joint venture. If the entire $10 million of deposit funds are converted, Chihong Canada's interest in the joint venture would increase to 60%, and Selwyn's interest would decrease to 40%.

The net proceeds from the Transaction, after repayment of the Company's outstanding debt, will be used toward restarting the Company's ScoZinc Mine and for general corporate purposes. The restart of the ScoZinc Mine is an important near term strategic objective in advancing Selwyn to becoming a producing company.

Meeting materials for the Company's annual general and special meeting of shareholders to be held on April 22, 2013 were mailed to shareholders of the Company in late March. Chihong Canada has entered into support and voting agreements with certain significant shareholders of Selwyn who hold, in aggregate, approximately 42% of Selwyn's outstanding common shares.

This press release contains forward-looking statements and forward-looking information (collectively referred to as "forward-looking statements") regarding the expected timeline for holding the meeting of Selwyn shareholders, receipt of necessary approvals and completion of transaction, as well as the expected use of proceeds from the transaction and the advancement of the ScoZinc Mine. These forward-looking statements are based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of the ability to obtain shareholder and regulatory approvals, market conditions for securities, commodities prices, the results of exploration activities and engineering studies, the availability of capital on terms acceptable to Selwyn, and other risk factors beyond Selwyn's control.

Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Selwyn's actual results, programs and financial position could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, many of which are beyond Selwyn's control. These factors include, but are not necessarily limited to, shareholder approval and regulatory review, Chinese governmental regulatory matters, results of the restart program at the ScoZinc Mine, exploration and development activities, the interpretation of drilling results and other geological data, the uncertainties of resource and reserve estimations, receipt of permits to conduct mining activities, project cost overruns or unanticipated costs and expenses, the availability of funds, fluctuations in metal prices, currency fluctuations, and general market and industry conditions. There is no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on this information. Selwyn does not undertake to update any forward-looking statements, except as, and to the extent required by, applicable securities laws. For more information about the risks and challenges of Selwyn's business, investors should review Selwyn's Annual Information Form dated March 28, 2013 and its management's discussion and analysis available at www.sedar.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



Contacts:
Selwyn Resources Ltd.
Dr. Harlan Meade, President and CEO
(604) 801-7240 or Toll-free: 1-888-989-9188
International Toll-free: 800-7581-2133

Selwyn Resources Ltd.
Carlos Gonzalez, Manager of Investor Communications
(604) 801-7240 or Toll-free: 1-888-989-9188
International Toll-free: 800-7581-2133
(604) 689-8355 (FAX)
info@selwynresources.com
www.selwynresources.com





Source: Marketwire


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