VANCOUVER, BRITISH COLUMBIA (TSX VENTURE: SWC.DB) today
announced results of an independent pre-feasibility study for the
expansion of the Minto copper-gold mine in the Yukon. This study
increases reserves and lays out a path for significantly increased
copper production, commencing immediately, and enhanced project
economics.
"The completion of a pre-feasibility study that incorporates the
Area 2 deposit, which was discovered and defined in 2006,
represents another significant milestone in Sherwood's relentless
pursuit of value," said Stephen Quin, President & CEO. "We have
taken an exploration concept and, within 20 months, converted it
into a reserve that supports a 45% increase in mill throughput and
a 43% increase in total project copper and gold production with
increased copper and gold production commencing immediately. Given
the very encouraging exploration in 2007, there would appear to be
excellent opportunities for further resource additions that could
potentially support additional production expansions or an
increased mine life."
Highlights
The Pre-feasibility Study technical report ("PFS") lays out the
basis for production from the Area 2 deposit at a higher mill
throughput than was defined in the 2006 detailed feasibility study
completed by Hatch Ltd. ("DFS"), the results of which were
announced on August 28, 2006. The PFS also incorporates a number of
additional post-DFS optimizations. Highlights of the PFS, as
compared to the DFS include the following:
- Processing increased to 3,500 tpd from 2,400 tpd;
- Higher metal production commences in 2008 as a result of
processing higher grades first;
- 43% increase in total copper and gold produced in
concentrates;
- 39% increase in pre-tax net present value at a 7.5% discount
rate, 75% after tax;
- 41% pre-tax IRR, 35% after tax based on $2/lb copper price
plus completed forward sales;
- 52% pre-tax IRR, 46% after tax based on forward copper price
plus completed forward sales.
The PFS represents an interim update on the Minto Project with
resource estimates as of the end of 2006 and costs as of the end of
2007. However, continued exploration success in 2007, which could
result in further reserve increases beyond those outlined in the
PFS, and other optimization opportunities, suggest that additional
value remains to be extracted from the Minto Project and Sherwood
will continue to pursue the crystallization of these value
opportunities.
Basis of Pre-feasibility Study
In 2006, Sherwood identified and defined a promising deposit,
Area 2, located immediately south of the Minto Main pit and drilled
it to NI43-101 resource standards in 2006 with 79 holes totalling
18,134 m of diamond drilling, resulting in approximately the same
drill spacing as the Minto Main deposit. The Area 2 mineral
resource was sufficiently promising to commission the independent
PFS completed under the supervision of SRK Consulting (Canada) Ltd.
("SRK"). In addition to looking at the economic potential of the
Area 2 deposit, the study was expanded to incorporate several other
concurrent Minto Project improvements that were identified
post-DFS, including:
- Implementation of coarser initial grinding in conjunction with
a regrind of rougher cell concentrates;
- Increase in mill capacity to 3,500 tonnes per day;
- Rescheduling of open pit to maximize up-front grades;
- Utilization of grid electrical power;
- Review of waste rock and tailings deposition options;
- Optimization of the pit slopes for the Main pit based on new
geotechnical data and analysis;
- Improved recoveries for partially oxidized material.
It is envisioned that, based on the results of this study, Minto
Explorations ("MintoEx") will seek amendments to its current
operating permits from the Yukon government in order to increase
production and modify operating parameters to accommodate these and
other proposed operational improvements.
Mineral Resources
Lions Gate Geological Consulting Inc. ("LGGC"), in conjunction
with SRK, conducted the mineral resource estimate for the Area 2
deposit. LGGC and SRK have reviewed pertinent geological
information in sufficient detail to support the data incorporated
into the resource estimate. SRK was actively involved during the
estimation process, provided guidance with geostatistical analyses
of copper and gold, estimation parameters to be used, and validated
the copper and gold block models. The previously disclosed mineral
resources for the main Minto and Area 2 deposits (as of March 2007)
are summarized below and are detailed in the table attached (see
news releases dated February 26, 2007 and July 10, 2006 for
additional details).
Minto Project Mineral Resource Estimate Including Reserves
(@ 0.5 %Cu cut-off)
--------------------------------------------------------------------------
In situ Grade Contained Metal
---------------------------------------------------
Class Tonnes (% Cu) (g/t Au) (g/t Ag) Cu (Mlb) Au (oz) Ag (oz)
--------------------------------------------------------------------------
Measured 10,638,000 1.84 0.68 7.20 432 231,000 2,462,000
Indicated 6,018,000 1.01 0.34 3.75 135 66,700 725,000
--------------------------------------------------------------------------
M+I 16,656,000 1.54 0.56 5.95 567 297,600 3,185,000
--------------------------------------------------------------------------
Inferred 1,471,400 1.00 0.32 2.05 33 15,600 97,000
--------------------------------------------------------------------------
Mineral Reserves
The Area 2 deposit is proposed to be developed as an open pit
following the depletion of the current Main pit. Similar to the
2006 DFS for the Main deposit, the Main/Area 2 combined mine plan
focuses on accessing and milling the high-grade ore first, with
lower grade material sent to stockpiles for blending and processing
later in the mine life.
Mine design for both pits was initiated with the development of
a Net Smelter Return ("NSR") model. The model included estimates
of: metal prices, exchange rate, mining dilution, mill recovery,
concentrate grade smelting and refining payables and costs, freight
and marketing costs and royalties. The NSR model was based on a 15m
x 15m x 3m block size for the Area 2 and Main Pit combined. The NSR
block model was then used with the MineSight Lerchs-Grossman
algorithm to determine the optimal mining shell. Detailed mine
planning and scheduling was then conducted on the optimal pit shell
and a mineral reserve was estimated as summarized below and
detailed in the table attached.
Minto Project Mineral Reserves (@ 0.62 %Cu cut-off)
--------------------------------------------------------------------------
In situ Grade Contained Metal
---------------------------------------------------
Class Tonnes (% Cu) (g/t Au) (g/t Ag) Cu (Mlb) Au (oz) Ag (oz)
--------------------------------------------------------------------------
Proven 8,552,000 1.97 0.72 7.80 371.4 197,200 2,145,000
Probable 902,000 1.22 0.46 5.06 24.3 13,400 147,000
--------------------------------------------------------------------------
Total 9,454,000 1.90 0.69 7.54 395.6 210,600 2,292,000
--------------------------------------------------------------------------
Mine Plan
During 2007, MintoEx began a process of post-DFS optimization of
its mine plan, resulting in accelerated production for the Main
pit. The accelerated PFS mine plan was implemented at the Minto
mine during the latter part of 2007, and will continue into 2008.
The post-2008 mining sequence was then divided into four phases.
The first phase sees the completion of mining in the Main pit in
approximately 2010 followed by three phases in Area 2 and is based
upon providing the required ore per period with maximum grade while
deferring stripping as long as possible. The Main and Area 2 pits
will be mined sequentially, with the stripping of the Area 2 pit
beginning after the completion of mining in the Main pit. Area 2
waste is then used to fill the Main pit. Mill feed will come from
stockpiled main pit ore during the Area 2 stripping phase. The
entire project has a life-of-mine production duration of eight
years, with one additional year required for the mill to process
the remaining stockpiles - a total of nine producing years. The
life-of-mine production schedule is shown in the table below.
Minto Project Life-of-Mine Production Schedule
-------------------------------------------------------
Year
-------------------------------------------------------
2007 2008
(i) (i) 2009 2010 2011 2012 2013 2014
----------------------- -------------------------
Parameter Units Main Pit Area 2 Pit Total
--------------------------------------------------------------------------
Ore mined Mt 0.9 1.1 1.1 3.0 0.2 1.7 0.1 1.3 9.5
Waste
mined Mt 6.6 10.2 8.2 5.5 5.6 10.8 12.2 4.7 63.8
Strip Waste:
ratio Ore 7.58 9.67 7.16 1.82 22.26 6.50 93.72 3.61 6.74
Cu grade % Cu 2.01% 2.50% 1.79% 2.09% 2.07% 1.53% 0.97% 1.51% 1.90%
Au grade Au g/t 0.61 1.01 0.49 0.79 0.99 0.61 0.35 0.59 0.70
Ag grade Ag g/t 8.00 10.33 7.23 8.81 9.58 5.53 3.34 4.85 7.53
--------------------------------------------------------------------------
(i) from Main Pit Budget (May 07 - Dec 08)
Since the date of this production schedule, additional work has
been undertaken to smooth out the production schedule and further
optimize metal production; this work will be an on-going process as
additional information is incorporated from 2007 drilling and
subsequent activities.
Processing
The Minto concentrator initiated production in May 2007 with a
design daily production rate of 1,563 tpd. A Phase 2 expansion of
the Minto concentrator to 2,400 tpd was engineered and approved for
construction at a capital cost of $15.8 million and is expected to
be complete at the end of 2007 and commissioned in January 2008.
Based on extensive metallurgical testing previously reported (see
news release dated June 12, 2007) and additional testing subsequent
to that, a Phase 3 mill expansion to 3,500 tpd has been designed
incorporating the benefits of grinding coarser and various other
process optimizations demonstrated in bench test work completed
post-DFS. One of these post-DFS optimizations may include the
installation of a gravity gold recovery plant in the grinding
circuit in order to recover any free gold that may be present,
however no benefit from this optimization has been assumed in the
PFS since the benefits of this will have to be demonstrated through
production.
Production
The following sets out the copper, gold and silver in
concentrates and estimated payable metal detailed in the PFS.
Minto Project Life-of-Mine Metal Production Forecast
---------------------------------
Year
--------------------------------------------------------------------------
Item Unit 2007 2008 2009 2010 2011
--------------------------------------------------------------------------
Copper in cons lb ('000) 10,421 59,428 53,679 84,664 44,050
Gold in cons oz ('000) 2.4 25.5 19.6 36.7 21.8
Silver in cons oz ('000) 57.5 336.8 317.9 523.5 241.1
--------------------------------------------------------------------------
Conc. Grade % Cu 33% 35% 43% 43% 43%
Payable copper lb ('000) 9,974 57,155 51,778 81,666 42,491
Payable gold oz Au ('000) 2.29 24.5 18.7 35.5 21.1
Payable silver oz Ag ('000) 43.55 262.1 262.4 436.1 195.5
--------------------------------------------------------------------------
---------------------------------
Year
--------------------------------------------------------------------------
Item Unit 2012 2013 2014 2015 Total/Ave.
--------------------------------------------------------------------------
Copper in cons lb ('000) 46,161 24,363 39,222 9,280 371,268
Gold in cons oz ('000) 20.7 9.0 15.5 2.7 154
Silver in cons oz ('000) 230.1 121.7 164.6 42.3 2,035
--------------------------------------------------------------------------
Conc. Grade % Cu 41% 43% 41% 41% 41%
Payable copper lb ('000) 44,527 23,501 37,833 8,951 357,877
Payable gold oz Au ('000) 20.0 8.7 15.0 2.6 148
Payable silver oz Ag ('000) 180.7 96.4 122.4 32.3 1,631
--------------------------------------------------------------------------
As noted above, additional smoothing of production is planned
post-PFS as part of an on-going process of open pit
optimization.
Metal Pricing
In the PFS, un-hedged pricing was maintained at the DFS
assumptions of $2.00 US/lb copper, $550 US/oz gold and $9.00 US/oz
silver (the "Base Case"). Discussions related to the
appropriateness of this price, in consideration of current copper
pricing and the debate surrounding pricing of copper futures, were
limited and satisfied by the opportunity to modify and report these
effects during the financial sensitivity analysis. Hedging of
metals and prices were applied for periods 2007 to 2011 based on
forward sales contracts in place as of Sept 25, 2007. These metal
hedging gains were included in the project cash flow and
represented undiscounted revenue of $0.18 US/lb of copper.
Summary of Metal Price Hedging
------------------------------------------------------------------------
Metal Units 2007 2008 2009 2010 2011 Total
------------------------------------------------------------------------
Copper (US$/lb) $ 3.08 $ 2.88 $ 2.49 $ 2.19 $ 2.12 $ 2.50
Gold (US$/oz) $ 648.00 $ 654.00 $ 653.00 $ 653.00 $ 720.00 $ 667.46
Silver (US$/oz) $ 11.76 $ 11.90 $ 11.90 $ 11.90 $ 13.68 $ 12.26
------------------------------------------------------------------------
In the Base Case, the foreign exchange rate was defined by
MintoEx as being 1.13 C$:US$ and did not include any allowance for
exchange rate risks that might be incurred in future years of the
project - the value of 1.13 C$:US$ was maintained for the life of
the project, as were the flat metal price assumptions noted above.
A scenario involving the current forward curve for copper, spot
prices for gold and silver and parity for the US$ was evaluated
(the "Forward Case").
Economics
The PFS costs were based on, in order of preference, actual
contract costs, Minto 2007 and 2008 budget estimates and the 2006
DFS estimates. The principal differences between the 2006 DFS, 2007
PFS are set out in the table below, which illustrates both the Base
Case and Forward Case.
Comparison of 2006 DFS and PFS (Base Case & Forward Case)
-------------------------------------------------------------------------
Pre- Pre-
August feasibility feasibility
2006 Study Study
Feasibility (Main & (Main &
Study Area 2 Area 2
(Main Deposits)- Deposits)-
Deposit Base Forward
Item Unit Only) Case Case
-------------------------------------------------------------------------
Waste mined Millions t 40.0 63.8 63.8
Ore mined Millions t 5.9 9.5 9.5
-------------------------------------------------------------------------
Copper mill head grade % Cu 2.20% 1.90% 1.90%
Gold mill head grade g/t Au 0.80 0.70 0.70
Silver mill head grade g/t Ag 9.13 7.5 7.5
-------------------------------------------------------------------------
Copper in cons Millions lb 259 371 371
Gold in cons 000's oz 108 154 154
Silver in cons 000's oz 1,470 2,035 2,035
-------------------------------------------------------------------------
Concentrate Grade % Cu 36% 41% 41%
-------------------------------------------------------------------------
Copper Price
(including hedging) US$/lb $ 2.00 $ 2.16 $ 2.75
Gold price
(including hedging) US$/oz $ 550.00 $ 592.12 $ 753.32
Silver price
(including hedging) US$/oz $ 9.00 $ 10.18 $ 13.71
-------------------------------------------------------------------------
Exchange rate US$/C$ $ 0.839 $ 0.885 $ 1.000
-------------------------------------------------------------------------
NSR C$/t milled $ 101.94 $ 88.84 $ 103
-------------------------------------------------------------------------
Unit Total OPEX
(inc royalties) C$/t milled $ 45.45 $ 47.18 $ 47.12
-------------------------------------------------------------------------
Unit operating costs
after by-product credits US$/lb Cu $ 0.73 $ 0.81 $ 0.87
-------------------------------------------------------------------------
Total Capital
(initial and sustaining) $M $ 108 $ 151 $ 151
-------------------------------------------------------------------------
NPV 7.5% pre-tax $M $ 127 $ 177 $ 275
NPV 7.5% after tax $M $ 72 $ 126 $ 210
IRR pre-tax % 37% 41% 52%
IRR after tax % 27% 35% 46%
-------------------------------------------------------------------------
As noted above, the DFS used flat metal prices throughout the
life of the study, whereas the PFS Base Case uses the same metal
prices (US$2.00/lb Cu, US$550/oz Au and US$9.00/oz Ag) for unhedged
production but actual forward contract pricing for the metal
forward sold. The Forward Case uses a conservative forward case of
the current forward copper prices (which decline over time due to
backwardation) but the current spot prices for gold and silver
(without the benefit of the contango in these commodities) for
unhedged production, actual forward contract pricing for the metal
forward sold, and a US$ at parity with the Canadian dollar.
Exploration
The 2007 exploration drilling focused mostly on nine separate
exploration target areas in addition to a small program dedicated
to geotechnical/metallurgical drilling at the Main and Area 2
deposits as part of the PFS. One hundred and two exploration and
geotechnical drill holes were completed for 23,618 metres,
including ten holes drilled for geotechnical and metallurgical
purposes; five in the Main pit and five at the Area 2 deposit.
Significant new copper-gold mineralization was discovered at Gap,
Copper Keel South and Airstrip SW, while Area 118 was expanded from
a localized historic drill occurrence to what MintoEx now believes
may be the discovery of a significant new deposit. Assays are still
pending on 34 drill holes. The remainder of the 2007 drill results
will be reported over the next month or so, as they become
available, and this information will be used to complete new
NI43-101 compliant mineral resource estimates and lay out the
priorities for a significant 2008 exploration program to follow up
on the exciting 2007 discoveries. Only geotechnical and
metallurgical technical results were incorporated into the PFS;
none of the 2007 drill assay results are incorporated into the PFS.
Final 2007 drill assay results will be incorporated into new
resource calculations to be completed by the end of Q1 2008.
Grid Power Connection
The PFS assumes that grid power will be established on site at
the end of 2008. A preliminary Power Purchase Agreement ("PPA") was
entered into and subsequently amended, as announced by MintoEx
February 12, 2007 and May 30, 2007. The rates for electrical power
supply were set out in the PPA and are expected to provide power at
an estimated $0.10 per KWh, a significant saving over the current
cost of on site diesel generation. As noted in a news release dated
December 7, 2007, MintoEx has interest only payments for three
years after completion of the grid connection, and principal and
interest payments for four years thereafter on the main line, while
the spur line has principal and interest payments commencing upon
completion of the grid connection for a seven year period. Also in
that news release, MintoEx reported that Yukon Energy had received
all approvals required for the construction of the grid extension
and spur line to the Minto Mine, and construction related field
activities have commenced.
Capital Costs
No mining capital was included in the economic analysis for the
PFS as it is assumed that the mine will continue to be serviced by
a mining contractor that will provide their own equipment fleet.
MintoEx currently uses a mining contractor with whom it has a
contract extending to the end of 2009. SRK has estimated capital
costs for the Phase 3 mill expansion at $3.2 million. The capital
cost estimate is based on the purchase of new equipment items for
the Phase 3 expansion, principally for the pebble crusher, regrind
mill and paste thickener. Construction labour and materials costs
for the installation of the Phase 3 equipment items were based on
recent construction rates experienced at Minto. Capital costs for
EPCM, indirect expenses, and spares were factored as a percentage
of the total direct construction. A 15% contingency was applied to
the direct construction costs. Other capital costs related to the
increase in mill capacity and the mining of Area 2 include a total
of $16 million for grid power, $1.5 million for various pumps and
pipelines associated with paste and in-pit slurried tailings
deposition and $2 million for additional mine closure costs. Total
project capital costs, including the current operation, includes
$52 million during pre-production in 2006 and another total of $99
million for the remainder of the project - a total of C$151
million.
Minto Mine - Summary of Life-of-mine Capital Costs
----------------------------------------------------
Period CAPEX (C$ '000)
----------------------------------------------------
Pre-production (2006) $ 51,850
2007 $ 65,499
2008 $ 25,759
2009 $ 1,500
2010 $ 1,600
2011 $ 1,000
2012 $ 1,000
2013 $ 500
2014 $ 250
2015 $ 2,000
----------------------------------------------------
Project Total $ 150,958
----------------------------------------------------
It should be noted that the above capital schedule has all
capital related to the connection to grid power expensed in 2008,
whereas the contract with Yukon Energy has payments made over time
as noted in the news releases referenced in the 'Grid Power
Connection' section above.
Operating Costs
The operating costs in the PFS come from three main sources:
- the DFS for the Main Pit;
- New supply contracts signed by MintoEx; and
- The 2008 life-of-mine budget numbers from MintoEx.
Mining costs are based on the mining contract with Pelly
Construction and the explosives contract with Dyno Nobel Canada.
The costs for these contracts are used throughout the project life.
Diesel fuel cost is assumed to be $0.85/litre delivered to site.
Unit costs are generally higher than in the DFS as a result of cost
escalation in the past two years (including diesel, labour,
explosives and consumables).
Summary of PFS Operating Costs
---------------------------------------------------------------------
UNIT OPERATING COSTS Life-of-mine
---------------------------------------------------------------------
Mining (C$/t mined) $ 2.80
---------------------------------------------------------------------
Mining (C$/t milled) $ 21.68
---------------------------------------------------------------------
Milling (C$/t milled):
- Labour $ 2.92
- Power $ 4.88
- Propane $ 0.12
- Diesel $ 0.63
- Consumables $ 3.34
- Maintenance $ 0.33
- Mobile equipment $ 2.06
- Force Accounts $ 2.32
---------------------------------------------------------------------
TOTAL MILLING (C$/t milled) $ 16.61
---------------------------------------------------------------------
Camp and catering (C$/t milled) $ 1.46
General and Administration (C$/t milled) $ 7.03
Royalties (Selkirk First Nation) (C$/t milled) $ 0.40
---------------------------------------------------------------------
Total unit operating costs (C$/t milled) $ 47.18
---------------------------------------------------------------------
Total unit operating costs (C$/lb Cu) $ 1.25
---------------------------------------------------------------------
Unit operating costs after by-product credits (C$/lb Cu) $ 0.92
---------------------------------------------------------------------
MintoEx's cost assumptions for 2008 are based on higher costs
for almost all inputs and a US$ at parity with the Canadian dollar.
Further, the Minto Mine only has limited operating experience on
which to base these estimates and will strive to see unit cost
reductions realized over the coming periods.
Concentrate Sales
Minto has an established concentrate purchase contract with MRI
Trading AG ("MRI"). Under the terms of the contract, MRI has the
obligation to buy all of Minto's concentrate production and Minto
has the obligation to sell all of its concentrate production to
MRI. The contract is in effect from July 2007 to June 2010. The MRI
contract may be extended by mutual agreement for one or more
years.
Sensitivity Analysis
The project was evaluated for sensitivity to the commodity price
of copper, operating expenses, capital expenditures, grade of Cu
and production tonnage. All sensitivities were assessed for the
range of -15% to +15% and compared to the resulting 0% discounted
NPV. 0% discounted NPV derivations were done for both pre-tax and
after-tax cash flows.
Both the pre-tax and after taxation cash flow models show the
project is most sensitive to changes to the copper grade. This
sensitivity is somewhat mitigated in the mine plan by the
significant use of stockpiles to allow the early extraction of
higher grade ore and the ability to blend different grades to
provide a consistent mill feed.
Copper price is the variable that demonstrates the second
greatest sensitivity. In Minto's case, the Cu price is buffered by
the fact that a significant portion of its production in the first
4 years of operation has contractual price guarantees so a
reduction or increase in the market price of copper has a tempered
affect on the NPV.
Many of Minto's major operating expenses including mining,
explosives, TCs and RCs and concentrate transport are covered by
contracts and, therefore, offer considerable protection from
variances in the next 2 to 4 years. The project is relatively
sensitive to the tonnage of ore milled.
The project economics do not exhibit appreciable sensitivity to
capital costs as the Area 2 plan and Phase 3 mill expansion require
relatively little new capital. Also, all of the initial Minto Mine
construction capital has been spent and therefore has no risk of
price escalation for the main contraction.
Base Case Pre-tax NPV Summary @ 0% Discount Rate (C$ millions)
------------------------------------------------------
-15% 0 +15% Range
----------------------------------------------------------------------
Cu Price $ 162 $ 245 $ 328 $ 167
OPEX $ 309 $ 245 $ 180 $ 129
CAPEX $ 259 $ 245 $ 230 $ 29
Grade $ 146 $ 245 $ 343 $ 197
Tonnage $ 187 $ 245 $ 302 $ 115
----------------------------------------------------------------------
Permitting
The Minto Mine is currently permitted to process up to 912,500
tonnes of ore per year, or 2,500 tonnes per day. Implementation of
the PFS requires the processing rate to be increased to 3,500
tonnes per day. In addition, a new pit at Area 2 and a number of
other development approaches are outlined in the PFS that would
require amendments to existing permits. MintoEx intends to make
formal application for the required permit amendments in early 2008
and plans to work closely with Yukon Government, Selkirk First
Nation and other stakeholders through these permit amendments.
Project Opportunities
A number of project opportunities are identified in the PFS,
including: the potential to add additional reserves through
continued exploration, further optimization of the mine plan,
improved waste management to reduce costs and underground mining
potential for deeper, higher grade areas.
Project Risks
A number of project risks are outlined in the PFS, including:
the ability to obtain permit amendments in a timely manner,
external influences such as metal prices and exchange rates,
recoveries, capital cost and grade control.
Resource Estimation Methodology
Lions Gate Geological Consulting Inc. ("LGGC"), in conjunction
with SRK Consulting (Canada) Ltd. ("SRK"), conducted the Mineral
Resource estimate for the Area 2 deposit. LGGC and SRK have
reviewed pertinent geological information in sufficient detail to
support the data incorporated in the resource estimate. Ali
Shahkar, P.Eng. of LGGC is the Qualified Person under National
Instrument 43-101 responsible for the estimate. SRK was actively
involved during the estimation process, provided guidance with
geostatistical analyses of copper and gold, estimation parameters
to be used, and validated the copper and gold block model.
The estimates for copper and gold grades were completed on April
2, 2007 using Gemcom's� 3-dimensional block model commercial mine
planning software, and checked by SRK with non-commercial software.
An estimate for the silver grades was completed on June 20, 2007.
More than 98% of the value of the deposit is in copper and gold,
the remaining 2% is in silver.
Mineralization was interpreted in 5 domains (in some cases
sub-domained into separate lenses) and statistical analysis for
each metal carried out for each zone. Wireframes of these zones
were created and used to inform a 15m by 15m by 3m (vertical) block
model for resource estimation. Assays were then composited into
3.0m intervals and statistical analysis completed for each metal
and variography estimated for the mineralized domains. Ordinary
kriging was used to interpolate grades for copper and gold into the
block model. Bulk density measurements collected during core
logging were interpolated into the block model using Inverse
Distance method. Blocks were then classified into Measured,
Indicated and Inferred categories based on the number of drill
holes and the average distance of the composites used to estimate
each block. The grades and tonnages reported in this resource
estimate represent the material contained within the mineralized
portion of the classified blocks.
Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability. Mineral Resource estimates do not
account for mineability, selectivity, mining loss and dilution.
These Mineral Resource estimates include Inferred Mineral Resources
that are normally considered too speculative geologically to have
economic considerations applied to them that would enable them to
be categorized as mineral reserves. There is also no certainty that
these Inferred Mineral Resources will be converted to Measured and
Indicated categories through further drilling, or into Mineral
Reserves once economic considerations are applied.
Technical Report
A NI43-101 compliant Technical Report will be filed within the
next week on SEDAR and, once filed, can be accessed under
Sherwood's profile at www.sedar.com.
Minto Project
The Minto Mine is a high-grade open pit copper-gold deposit
located in the Yukon Territory of Canada. Sherwood acquired the
Minto Project in June 2005 and, in just two years from its
acquisition, completed a bankable feasibility study, arranged
project financing, and built a $100 million open pit copper-gold
mine. Commercial production commenced on October 1, 2007. In
parallel with these development activities, Sherwood has been
running an exceptionally successful exploration program that has
resulted in multiple discoveries of high grade copper-gold
mineralization across its Minto Mine property. Sherwood plans to
continue this "growth from within" strategy along with further
operational optimizations in its relentless pursuit of value.
Sherwood
Sherwood's successful consolidation of the ownership of the
Minto Project provides a unique investment opportunity -
participation in a high-grade, open pit copper-gold mine located in
Canada with tremendous exploration potential on the property.
Quality Assurance
The technical information in this news release has been prepared
in accordance with Canadian regulatory requirements set out in
National Instrument 43-101 and reviewed by Stephen P. Quin, P.Geo.,
President & CEO for Sherwood Copper Corporation. The following
SRK employees are QPs for this project; Marek Nowak, P.Eng. -
Resource Estimation; Andrew Ham, AUSIMM - Geology; Terry Mandziak,
P.E. (CO) - Waste dumps and Tailings Impoundments; Mike Levy, P.G.
(WY) - Geotechnical; Tom Rannelli, P.Eng. - Economic Modeling;
Gordon Doerksen, P.E. (WY) - Project Overview; Dino Pilotto, P.Eng.
- Mining and Reserves; Stephen Day, P.Geo. - Geochemistry. Ali
Shahkar, P.Eng. of LGGC is the Qualified Person under National
Instrument 43-101 responsible for the resource estimates.
Additional Information
Additional information on Sherwood and its Minto Project can be
obtained on Sherwood's website at
http://www.sherwoodcopper.com.
On behalf of the board of directors
SHERWOOD COPPER CORPORATION
Stephen P. Quin, President & CEO
This news release may contain forward looking statements which
are not historical facts, such as ore reserve estimates,
anticipated production or results, sales, revenues, costs, or
discussions of goals and exploration results, and involves a number
of risks and uncertainties that could cause actual results to
differ materially from those projected. These risks and
uncertainties include, but are not limited to, metal price
volatility, volatility of metals production, project development,
ore reserve estimates, future anticipated reserves and cost
engineering estimate risks, geological factors and exploration
results. See the Company's filings for a more detailed discussion
of factors that may impact expected results.
Minto Project Mineral Resource Estimate Including Reserves
(@ 0.5 %Cu cut-off)
--------------------------------------------------------------------------
In situ Grade Contained Metal
----------------------- -------------------------
Cu Au Ag
Class Tonnes (%Cu) (g/t Au) (g/t Ag) (Mlb) (oz) (oz)
--------------------------------------------------------------------------
Minto Main (Zones 2,4,5,8)(i)
--------------------------------------------------------------------------
Measured 7,060,000 1.98 0.71 8.07 309 160,000 1,832,000
Indicated 2,000,000 1.06 0.31 4.72 47 19,700 304,000
--------------------------------------------------------------------------
M+I 9,060,000 1.78 0.62 7.33 356 180,600 2,135,000
--------------------------------------------------------------------------
Inferred 90,400 0.81 0.21 3.81 2 600 11,000
--------------------------------------------------------------------------
Area 2
--------------------------------------------------------------------------
Measured 3,578,000 1.56 0.62 5.48 123 71,000 630,000
Indicated 4,018,000 0.99 0.36 3.26 88 47,000 421,000
--------------------------------------------------------------------------
M+I 7,596,000 1.26 0.48 4.3 211 117,000 1,050,000
--------------------------------------------------------------------------
Inferred 1,381,000 1.01 0.33 1.93 31 15,000 86,000
--------------------------------------------------------------------------
Total Minto
--------------------------------------------------------------------------
Measured 10,638,000 1.84 0.68 7.20 432 231,000 2,462,000
Indicated 6,018,000 1.01 0.34 3.75 135 66,700 725,000
--------------------------------------------------------------------------
M+I 16,656,000 1.54 0.56 5.95 567 297,600 3,185,000
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Inferred 1,471,400 1.00 0.32 2.05 33 15,600 97,000
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(i) From DFS
Minto Area 2 Mineral Resource Estimate Excluding Reserves
(@ 0.5 %Cu cut-off)
--------------------------------------------------------------------------
In situ Grade Contained Metal
----------------------- -------------------------
Cu Au Ag
Class Tonnes (%Cu) (g/t Au) (g/t Ag) (Mlb) (oz) (oz)
--------------------------------------------------------------------------
Measured 775,000 1.42 0.48 4.61 24 12,000 115,000
Indicated 3,466,000 0.95 0.35 3.06 73 39,000 341,000
--------------------------------------------------------------------------
M+I 4,241,000 1.04 0.37 3.34 97 51,000 456,000
--------------------------------------------------------------------------
Inferred 1,381,000 1.01 0.33 1.93 31 15,000 86,000
--------------------------------------------------------------------------
Minto Project Mineral Reserves (@ 0.62 %Cu cut-off)
--------------------------------------------------------------------------
In situ Grade Contained Metal
----------------------- -------------------------
Cu Au Ag
Class Tonnes (%Cu) (g/t Au) (g/t Ag) (Mlb) (oz) (oz)
--------------------------------------------------------------------------
Main Pit
Proven 5,749,000 2.15 0.75 8.82 272.5 138,600 1,630,000
Probable 350,000 1.22 0.50 5.98 9.4 5,600 67,000
--------------------------------------------------------------------------
Total 6,099,000 2.10 0.74 8.66 281.9 144,300 1,698,000
--------------------------------------------------------------------------
Area 2
Proven 2,803,000 1.60 0.65 5.71 98.9 58,600 515,000
Probable 552,000 1.22 0.44 4.48 14.8 7,800 80,000
--------------------------------------------------------------------------
Total 3,355,000 1.54 0.62 5.51 113.7 66,400 594,000
--------------------------------------------------------------------------
Total
Proven 8,552,000 1.97 0.72 7.80 371.4 197,200 2,145,000
Probable 902,000 1.22 0.46 5.06 24.3 13,400 147,000
--------------------------------------------------------------------------
Total 9,454,000 1.90 0.69 7.54 395.6 210,600 2,292,000
--------------------------------------------------------------------------
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this press
release.
Contacts: Sherwood Copper Corporation Stephen Quin President
(604) 687-7545 or 1-888-338-2200 Sherwood Copper Corporation Brad
Kopp (604) 687-7545 or 1-888-338-2200 Sherwood Copper Corporation
Kristy Reynolds (604) 687-7545 or 1-888-338-2200 (604) 689-5041
(FAX) Website: www.sherwoodcopper.com
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