Sherwood Copper Corporation

Sherwood Copper Corporation

April 12, 2007 08:00 ET

Sherwood Expands Scope of Pre-Feasibility Study on Minto Copper-Gold Mine

Study to optimize known resources and evaluate potential for production expansion

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 12, 2007) - Sherwood Copper Corporation (TSX VENTURE:SWC)(TSX VENTURE:SWC.DB) today announced that it has expanded the scope of its pre-feasibility study on the Minto project being undertaken by SRK Consulting (Canada) Inc. The expanded study will not only evaluate the potential to add to the mine life by converting the recently defined resources at Area 2 into reserves, but will also evaluate options to increase mill through-put and address a number of other project optimizations in process. Flexibility to accommodate further mill expansions is currently being designed into the Phase 2 mill expansion, as announced April 11, 2007.

"Given the high discount rate applied to base metal producers in the market, there is little benefit to shareholders in simply extending the project life beyond the current 7.2 years by tacking Area 2 on to the end of the current mine plan," said Stephen Quin, President & CEO of Sherwood. "Our mantra has been 'More Production Sooner' and our recent success in defining significant additional high grade copper-gold resources at Area 2 provides the opportunity to optimize the Minto Mine and maximize value to our shareholders," he said. "Hence we have decided to take this opportunity to look at options for not only increasing mine life but also bringing that production forward by evaluating options for expanding the mill to as much as 3,500 tonnes per day. The Pre-feasibility Study will also incorporate the benefits of connecting to Yukon Energy's grid power and other opportunities to reduce costs and increase production."

Expanded Pre-feasibility Study

The objective of the expanded scope of the Pre-feasibility Study is to take advantage of and quantify the impact of a number of recent developments at the Minto Mine, some of which are outlined below.

Area 2 Resources

As announced on February 26, 2007, Sherwood discovered and delineated significant additional high grade copper-gold resources at Area 2, adding approximately 60% to the overall resource at the Minto Mine. Area 2 lies immediately south of the main Minto pit, which is currently being stripped in preparation for a production start in June of this year. Initially, SRK was engaged to prepare a pre-feasibility study to incorporate the Area 2 resources into the mine plan and, where warranted, convert them to mineral reserves, thereby extending the operating life of the Minto Mine. However, given a number of other developments, an expanded scope to the Pre-feasibility Study is warranted to optimize the production potential of the Minto Mine by integrating mine plans for both the main Minto deposit and Area 2.

Coarser Grind, Increased Mill Throughput

On-going test work being undertaken at G&T Metallurgical indicates that increasing the primary grind size from 80% passing 150 microns to the 270 to 280 micron range has no negative effect on copper recoveries, and that a single stage regrind of the rougher concentrates results in directly comparable final concentrate grades being achieved. At the presently planned 150 micron grind, the Phase 2 mill design throughput is 2,400 tonnes per day. However, with a primary grind of 80% passing 280 microns, test work indicates that the same grinding circuit could process up to 3,400 to 3,500 tonnes per day, 45% more than currently planned. This higher throughput would necessitate some additions to the remainder of the mill (such as a regrind mill and filtration) but could be achieved at a significantly lower capital cost than having to expand the whole mill. Consideration of the mill expansion, and to what extent, will form a part of the Pre-feasibility Study and will depend on sufficient resources being added from Area 2 to justify an expansion. As announced April 11, 2007, the Phase 2 mill expansion is being modified to accommodate such an expansion.

Grid Power

As announced February 12, 2007, Sherwood's subsidiary, Minto Explorations, and Yukon Energy Corporation, have signed a power purchase agreement for the provision of grid power to the Minto Mine. This agreement and the power line construction are currently before the Yukon Utilities Board for approval and a decision is anticipated by mid-2007. Grid power is forecast reduce operating costs at the Minto Mine by approximately $3 million to $4 million per year (or C$0.07 to C$0.10 per pound of copper produced) and could support a reduction in cut-off grades and hence increase the overall reserve at the Minto Mine. Given the imminent timing of the Yukon Utilities Board decision, the Pre-feasibility Study will be able to evaluate the benefits of utilizing grid power at the Minto Mine and its impact on costs and mine life.

Geotechnical Optimization

One of the recommendations in the Detailed Feasibility Study, the results of which were announced August 28, 2006, was to further evaluate the geotechnical characteristics of the proposed open pit walls for the main Minto deposit and determine whether or not there were opportunities to increase pit slopes, thereby reducing waste stripping costs. SRK has been under contract to conduct a thorough geotechnical evaluation of the open pit, including the supervision of additional geotechnical drill holes. This work is nearing completion and preliminary analysis suggests that there may be opportunities to increase pit slopes. The results of this comprehensive geotechnical assessment will be used to develop an optimized mine plan for the Minto Mine in the Pre-feasibility Study.

Optimized Mine Plan

In the Detailed Feasibility Study announced August 28, 2006, the mine plan assumed commencing mining in the centre of the main Minto deposit, then mining the southern portion of the main Minto deposit and, lastly, mining the northern portion of the pit. With Area 2 providing additional resources for consideration, including some relatively near surface, high grade copper-gold mineralization, the Pre-feasibility Study will look to optimize all known mineral resources and could entail mining Area 2 in parallel with the main Minto deposit. In addition, benefits may be realized from the proximity of the Area 2 resource to the main Minto pit by reducing the overall strip ratio since pits generated individually for each area would overlap.


As a result of the expanded scope of work, the Pre-feasibility Study is now expected to be completed in the third quarter of 2007 as opposed to the second quarter.

A number of the opportunities to be considered in the Pre-feasibility Study could potentially require amendments to the existing permits for the Minto Mine but would not affect the current operating plans. The Pre-feasibility Study will provide the information needed to submit whatever amendments are required to initiate discussions and consultations with the appropriate regulators and stakeholders. Sherwood anticipates that it could take one to two years to obtain such amendments, if required, and so the Pre-feasibility Study will not consider any production beyond the current permit limit of 2,500 tonnes per day before the end of 2009.

Additional Information

Additional information on Sherwood and its Minto Project can be obtained on Sherwood's website at

On behalf of the board of directors


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.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Sherwood Copper Corporation
    Stephen Quin
    President & CEO
    (604) 687-7545 or 1-888-338-2200
    Sherwood Copper Corporation
    Investor Relations
    (604) 687-7545 or 1-888-338-2200
    (604) 689-5041 (FAX)