Sherwood Copper Corporation
TSX VENTURE : SWC
TSX VENTURE : SWC.DB

Sherwood Copper Corporation

December 07, 2007 15:20 ET

Sherwood Reports Groundwork has Commenced on Carmacks to Stewart Transmission Line

Lower Cost Grid Power scheduled for Minto Mine by the End of 2008

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 7, 2007) - Sherwood Copper Corporation (TSX VENTURE:SWC)(TSX VENTURE:SWC.DB) reports that Yukon Energy ("YEC") has received all the permits and certificates needed to proceed with the surveying, clearing and construction of Phase 1 of the Carmacks to Stewart transmission line. The access and land use permits were issued by the Selkirk and Little Salmon Carmacks First Nation governments late last month, and the Yukon government's certificates and permits came earlier this week. As a result, the high grade Minto copper-gold mine should have access to grid power by the end of 2008, significantly reducing mine operating costs and providing potential for material benefits to Yukon stakeholders.

"With all the necessary permits issued and groundwork underway on the Carmacks to Stewart transmission line, the Minto Mine is on schedule to switch from diesel to hydro electric power by the end of 2008," said Stephen P. Quin, President of Sherwood Copper. "This is a major step towards creating significant benefits to both Sherwood's shareholders and Yukon stakeholders. Shareholders will benefit from significantly reduced energy costs while Yukon stakeholders gain significant benefits from incremental energy sales, infrastructure development and taxes while reducing the generation of greenhouse gasses in the Yukon. We appreciate the hard work and support of both the Yukon and First Nation governments in making this happen."

Yukon Energy has reported that crews of Challenger Geomatics, Yukon Energy's survey contractor, have begun their work. They will spend the next few weeks marking the line route between Carmacks and Pelly Crossing. Brush clearing will begin later this week and will continue until late February or early March. Line construction is expected to start in March, and substation construction is planned for later in the spring. The transmission and spur lines should be in operation by late 2008.

As announced May 29, 2007, the Yukon Utilities Board approved the amended power purchase agreement ("PPA") between Sherwood's wholly owned subsidiary Minto Explorations Ltd. ("MintoEx") and Yukon Energy Corporation. Under the terms of the amended PPA, MintoEx has agreed to a fixed rate to the end of 2012 of 10c/kwh, which rate would escalate on an annual basis in accordance with an inflation measure, and a take-or-pay provision of $12 million over four years. Yukon Development Corporation has provided a guarantee to Yukon Energy Corporation of the financing risks related to the Minto capital contribution payments. Yukon Development Corporation will also be responsible for any risk that the amount of the Company's contribution for the main line may increase beyond $7.2 million agreed to in the PPA. As previously disclosed, YEC has advised MintoEx that the latest estimated cost to complete the spur line to the Minto Mine is now $8.8 million, versus $3.8 million previously reported. The cost increase is a result of cost escalations related to construction, material and equipment costs, as well as increasing the capacity of the spur line to accommodate a mill throughput rate of up to 4,200 mtpd. The impact of these cost increases should be somewhat mitigated by (a) increased power demand related to higher process plant throughput planned under a pre-feasibility study (see below), (b) the debt repayment structure, which 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 and (c) a potential two year extension to the spur line repayment terms.

Pre-feasibility Study

The independent pre-feasibility study being undertaken by SRK Consulting (Canada) Inc. is essentially complete and should be released early next week. Completion has been delayed by incorporation of a number of developments post-completion of the August 2006 feasibility study, including, but not limited to, (a) conversion of a portion of the Area 2 resource to reserves, (b) improved geotechnical information enhancing pit optimization, (c) conversion of the mine planning model to an NSR basis from an in situ copper grade basis, (d) increased mill throughput from 2,400 tpd to 3,500 tpd based on a coarser primary grind, (e) provision of grid power by late 2008, and (f) update of the Minto mine cost assumptions based on actual contract terms for mining services, explosives supply, concentrate trucking, concentrate off-take, etc. All components of the study are now complete and are being vetted by the appropriate Qualified Persons as required by National Instrument 43-101 prior to release.

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

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.

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.

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 Corp.
    Stephen Quin
    President
    (604) 687-7545 or 1-888-338-2200
    or
    Sherwood Copper Corp.
    Investor Relations
    (604) 687-7545 or 1-888-338-2200
    (604) 689-5041 (FAX)
    Website: www.sherwoodcopper.com