VANCOUVER _ Selwyn Resources Ltd.
, Stock Forum
) has decided against restarting the ScoZinc mining project in Nova Scotia at this time, due to uncertainty over the price of zinc and other metals, and close its head office in Vancouver.
Instead of deploying money received from the sale of its interest in the Selwyn project towards the ScoZinc restart, the company plans a special cash distribution to shareholders. It's also considering options such as a sale of the company.
Selwyn said amount of the payout to shareholders has yet to be determined and will be subject to approval at a special shareholders meeting, expected to be held in November, the company announced Friday.
The company also announced Friday it has replaced both its chief executive and chief financial officer and will close its head office in Vancouver when the lease expires in October.
It didn't say how many jobs are affected by the closure. According to a regulatory filing in May, it had 18 full time employees at its head office in Vancouver, and 19 full time employees at ScoZinc, which has an idled mine 50 kilometres from Halifax near Gays River, N.S.
Joseph Ringwald has been selected as interim president and CEO, replacing Harlan Meade, who held the post since March 2004.
Ringwald, who joined Selwyn in January 2011, will continue to be based in Vancouver. As vice-president for engineering, he was responsible for preparing two preliminary economic assessments for the restart of the ScoZinc Mine.
“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,” a company statement says.
“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.”
Rob Suttie becomes CFO, replacing David Kwong, who has held the post since February 2006.
Suttie works with Marrelli Support Services, serving as chief financial officer for a number of junior mining companies, and will be based in Toronto.
Selwyn acquired ScoZinc in May 2011 for $10 million cash, of which about $2.7 million was paid to the Nova Scotia government for royalties and a reclamation bond, used as a guarantee of cleanup or shutdown costs.
Selwyn shares were unchanged at 8 cents Friday, leaving the company with a market cap of $31.5 million, based on 394.1 million shares outstanding. The 52-week range is 11 cents and 3 cents.