Agreement for Sherwood Copper to acquire Western Keltic

first_imgThe inclusion of Kutcho Creek would double Sherwood Copper’s resources and could double production. Sherwood Copper has entered into an agreement with Western Keltic Mines under which Sherwood has agreed to make an offer to acquire all the shares of Western Keltic. “The acquisition of Western Keltic and its Kutcho Creek copper-zinc deposit would more than double our copper resources, and offers the potential to continue Sherwood’s transformation to a significant base metal producer through the potential development of Kutcho Creek,” said Stephen P. Quin, Sherwood’s President & CEO.  “We see the opportunity to redeploy our successful mine evaluation and development team to maximise the value of the Kutcho Creek property. We aim to reassess the development plans for Kutcho Creek over the coming months to determine the most attractive development option, much as we did at Minto, with the objective of developing a robust, low cost mining operation,” he said.  “Further, the high grade Minto mine should generate significant free cash flow at current metal prices that could be re-invested in the development of a second mine at Kutcho Creek, significantly reducing overall financing needs and share dilution versus Western Keltic going it alone.”Sherwood Copper recently completed the development of Phase 1 of its high grade Minto copper-gold mine in the Yukon, ahead of schedule and on budget, and aims to complete its Phase 2 mill expansion by the end of 2007. In addition, Sherwood will shortly be announcing the results of an independent pre-feasibility study on the Minto mine that will incorporate the discovery of the Area 2 deposit in 2006 and lay out the basis for a Phase 3 mill expansion. Further, exploration successes during 2007, including four new discoveries of high grade copper-gold mineralization, indicate potential for yet more growth within the Minto property. Results from 46 of 92 exploration holes completed in 2007 are still awaiting assays.Western Keltic recently completed a prefeasibility study evaluating the potential development of the Kutcho Creek deposit, the results of which were announced on September 5, 2007. This study defined resources and reserves as set out in an amended and restated technical report filed on SEDAR on October 29, 2007. Since that time, Western Keltic has been advancing the project towards completion of a feasibility study by conducting geotechnical and environmental baseline studies, as well as advancing the permitting process for approval of production. Western Keltic has also been actively engaged in discussions with the Talhtan and Kaska First Nations, as well as other local communities to ensure there is broad based support for the development of a mine at Kutcho Creek, while taking into account the concerns of the First Nations and other stakeholders. “Based on public information and our due diligence, Sherwood believes that the Kutcho Creek deposit shares many similarities with the Minto mine; being a smaller tonnage, relatively high grade open pittable copper deposit with by-product credits,” said Quin. “These similarities suggest that our experiences, approach and skills built up over the past two years at the Minto Mine should be directly transferable to the design, construction, financing and operation of a mine at Kutcho Creek. We believe there is an opportunity to “do it again” at Kutcho Creek, while learning from the challenges and successes experienced in the development of the Minto Mine.” www.sherwoodcopper.comlast_img