Developer plans giant mine at Selwyn

HOWARD'S PASS, Yukon Territory - Here at the Selwyn Project, Vancouver-based Selwyn Chihong Mining Ltd. is moving forward with year-round exploration and development that began in June 2013. The company is building a 35,000-metric-ton-per-day zinc-lead mine (roughly 3.5 times the size of the Red Dog Mine in Northwest Alaska) with completion anticipated in 2020.

A colossal undertaking, the proposed mine is singlehandedly expected to double Yukon Territory's gross domestic product. It will have a capex of C$2.12 billion, 500 permanent employees and a life span of more than 10 years. Production is anticipated to exceed 480,000 metric tons of zinc in bulk concentrate and 120,000 metric tons of lead in bags annually. Moreover, further exploration on the 316-square-kilometer (122 square miles) property is anticipated to show potential for multiple stages of expansion and longer mine life.

Selwyn Chihong, which is owned by China-based Yunan Chihong Zinc & Germanium Co. Ltd., budgeted C$65 million for work on the project in 2014. With five drills turning and two rigs on standby during the first week of August, the company was operating the project at full capacity with 85 people housed on site at the Don and XY camps.

The company plans to spend C$22.4 million this year to drill an initial 50,000 meters, averaging 200 meters per hole, for more than 250 holes to meet the requirements of geotechnical, hydrological and metallurgical programs as well as upgrade inferred resources to indicated resources.

Selwyn Chihong also chose a site for a processing plant, roughly in the middle of more than 25 kilometers (16 miles) of mineralized zones targeted for initial development. The company is also negotiating with a local First Nation to purchase additional land as a site for its tailings facility primarily because all 67 kilometers of the project's existing acreage hosts significant zinc-lead occurrences.

"This thing is the most giving property I've ever worked," enthused J. J. O'Donnell, Selwyn Chihong's vice president of exploration.

Selwyn Chihong aims to complete a preliminary economic assessment for the Selwyn project by September, a pre-feasibility study by May 2015 and a feasibility study by December 2015.

"We picked the best deposits to get us over the feasibility study," O'Donnell said. "Since March, we're about 40 percent done, and we're moving the rigs every third day. My deadline is to get all the infill drilling done this year."

O'Donnell told Mining News that Selwyn-Chihong's parent company, Yunan Chihong Zinc & Germanium Co. Ltd., wants to bring the project into production as soon as possible. As a result, the company is spending money at the Selwyn camp at a rate of C$3 million per month, of which C$1.5 million is going to transportation costs.

The company is also spending C$15 million this year to complete construction of an 80-kilometer (50 miles) all-season access road to the project, having completed the installation of eight bridges across the Selwyn property and moving on to road reconstruction, scheduled for completion by the end of October.

The company also has tentatively budgeted $58 million for continued work at Selwyn in 2015.

"We are one of the few (mining) projects with a budget this big, and people are taking note of it," O'Donnell said.