VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 20, 2013) - Selwyn Resources Ltd. (News - Market indicators) ("Selwyn" or the "Company") is providing a general corporate update outlining senior management changes, a brief update on the ScoZinc Project, details pertaining to Company's intention to return a significant portion of the cash proceeds from the sale of the Company's interest in the Selwyn Project joint venture to shareholders, and plans to effect a consolidation of the number of common shares outstanding.
Senior Management Changes
The Board of Directors (the "Board") has appointed Mr. Joseph Ringwald as the Company's interim President and Chief Executive Officer and Mr. Rob Suttie as the Company's Chief Financial Officer. Mr. Ringwald replaces Dr. Harlan Meade, who served as President and Chief Executive Officer since March 2004. Mr. Suttie replaces Mr. David Kwong, who served as Chief Financial Officer since February 2006. Additionally, the employment relationship between all other officers of the Company has been concluded.
The Company thanks Dr. Meade, Mr. Kwong, and all of its Vancouver employees for their service to the Company and assistance during the review process.
Mr. Ringwald has been a mining and mineral process engineer for over 25 years with companies such as Placer Dome, Crew Gold and AMEC. Mr. Ringwald joined Selwyn in January 2011 as the Vice President, Engineering, has intimate knowledge of ScoZinc Project and was responsible for preparing two Preliminary Economic Assessments for the restart of the ScoZinc Mine. Mr. Ringwald will continue to be based in Vancouver.
Mr. Suttie currently works with Marrelli Support Services as its senior manager of financial reporting and compliance, possessing more than sixteen years of experience, ten of which were in public accounting. Mr. Suttie specializes in management advisory services, accounting and the financial disclosure needs of the group's public client base. Mr. Suttie is based in Toronto and also serves as Chief Financial Officer for a number of junior mining companies listed on the TSX and TSX Venture.
In conjunction with the senior management changes, it no longer requires a principal office in Vancouver. The Vancouver office will close upon the expiration of the current lease at the end of October. Going forward, all operating activities will be focused in Nova Scotia, which is expected to result in a substantial reduction in operating expenses.
ScoZinc Project Update
The Board has conducted an in-depth review of the ScoZinc Project, the outlook for commodity prices, and the current environment for financing mining operations. Based upon the findings of this review, the Board has determined that the ScoZinc Project continues to be a valuable asset for the Company.
In light of the current uncertain environment for metal prices and mine development financing, the Board does not believe that it is in the best interest of the Company to proceed with the restart of the ScoZinc Project at this time. The Board has authorized a small work program necessary to complete work under progress and to place the project on care and maintenance in order to preserve its value. The Board will continue to monitor market conditions for the potential restart of the ScoZinc Mine until such a time that the outlook improves.
The Board will also continue to pursue other avenues to maximize the value of the ScoZinc Project, including, but not limited to, possible sale, joint venture or other transactions with third parties. Except as required by law, the Company does not intend to disclose developments with respect to the consideration of strategic alternatives until warranted. The Company cautions that there are no assurances that any strategic alternative will be undertaken or pursued.
Return of Capital
As a result of the Company's decision to not proceed with the restart of the ScoZinc Mine, the Board has determined that the Company's current cash position is in excess of its reasonable needs. As part of the Board's overall review process for maximizing shareholder value, it has been determined that a return of the excess capital to shareholders is in order.
The Board came to this conclusion with the assistance of legal counsel, an independent accounting firm retained for this purpose, and tax advisors. A number of alternatives for returning capital to shareholders were examined and the Board has determined that the optimum course of action is to effect a return of capital ("ROC"). The Board is in the final stages of determining the exact amount of the distribution; however, it is the Board's intention to pay out as much as reasonably practical, while reserving sufficient capital to maintain the ScoZinc Project on a care and maintenance basis and cover corporate expenses.
The ROC option will require approval by shareholders at a special meeting of shareholders called for the purpose of approving the ROC. Assuming the timely completion of the necessary documentation, the Company expects to mail a Management Information Circular on, or around, October 7, 2013 with a proposed Special Meeting of Shareholders on, or around, November 4, 2013. Assuming a November 4, 2013 meeting, the Record Date would be November 13, 2013 with payment of the distribution on November 20, 2013.
Share Consolidation
If, as envisaged, the ROC may reduce the Company's net worth and market capitalization substantially. As a result, the Board intends to propose to consolidate its outstanding share capital in conjunction with the ROC. The Board will seek shareholders approval for such a share consolidation at the Special Meeting of Shareholders called to consider the ROC.
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.
Cautionary Note
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This News Release includes certain "forward-looking statements". All statements other than statements of historical fact included in this release, including without limitation statements regarding the future plans and objectives of Selwyn, are forward-looking statements that involve various risks and uncertainties. These forward-looking statements include, but are not limited to, statements with respect to mining and processing of mined ore, achieving projected recovery rates, anticipated production rates and mine life, operating efficiencies, costs and expenditures, changes in mineral resources and conversion of mineral resources to proven and probable reserves, and other information that is based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management.
Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward-looking statements." Forward-looking statements are subject to a variety of risks and uncertainties that could cause actual events or results to differ from those reflected in the forward-looking statements.
There can be no assurance that forward-looking statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Selwyn's expectations include, among others, risks related to international operations, the actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of gold and silver, as well as those factors discussed in the section entitled "Risk Factors" in Selwyn's Annual Information Form. Although Selwyn has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
