Selwyn project feas study is due out around the end of March, using up all the $100M funds in the Selwyn-Chihong bank account. Its going to be all about the operating costs - The high grade deposit is some 40MT at ~9.5%Zn and 3% Pb (I & I) and there are not many deposits like that around. At 3500 tpd its a >30 yr mine life on its own (regardless of the other 140MT of lower grade stuff) and by my calcs kicks out ~$250M/yr of NSR at $1.20 Zn and Pb.
In the absence of anything better, it we assume $125/t Op costs (same as Tulsequah Chief) and an arbitary $750M upfront capital cost, then the NPV8% is something in the order of $250M and payback is ~7 years. Not all that great.
If however, we project a Zn price of $1.50 (not too much of a stretch with likely supply/demand inbalance) then the we go up nearer to $1B NPV over a 25 mine life with payback of ~ 4 years. Thats an attractive project.
It will be very interesting to see where the actual Feas numbers come in, and what Chihong do next. Largely goes to where they see the Zn price going, as at $1-$1.20 Zn the project wont be all that great IMO. However once Century turns out the lights in 2015 or so, almost 10% of current Zn supply will be gone and this is the only project of a magnitude to start to fill that gap. $1.50 Zn may end up being pretty conservative.