Sherwood irons out the wrinkles at Minto

VANCOUVER — Less than a year after commissioning its Minto mine, Sherwood Copper (SWC-V, SWOPF-O) has already expanded mill throughput by more than 50%.

The addition of a second ball mill and increased flotation capacity has boosted mill throughput from a design daily capacity of 1,563 tonnes to 2,400 tonnes. Secondphase construction was completed only three months after the mill itself was completed. In mid-April Sherwood announced that the mill had not only achieved the new design capacity but several times exceeded it.

The commissioning success came after a few frustrating months to start 2008. Bedding down the new equipment affected mill throughput, as expected, but unexstruction pectedly so did an extended bout of unusually cold weather that affected crusher availability. Sherwood says it will modify the crusher before next winter to avoid running into the same problem.

In the first quarter of 2008, Sherwood mined 1.69 million tonnes of material containing 321,430 tonnes of ore and milled 152,370 tonnes of ore averaging 3.61% copper, 1.73 grams gold per tonne and 14.8 grams silver to produce 11.3 million lbs. copper and 63,440 oz. silver. Gold was also produced but is not assayed on site and Sherwood has not yet received the quarter’s production count.

The company plans an average mill throughput of just over 2,400 tonnes per day in order to achieve its 2008 production forecast of 55 million lbs. copper and 24,000 oz. payable gold.

But Sherwood is not done expanding Minto. The company is still drilling in expansion areas to the south and southeast of the main Minto pit.

In the fall, Sherwood completed a 101-hole drill program that further confirmed copper and gold mineralization in the gap between Area 118 and Area 2 and returned good grades from the Copper Keel South, Ridgetop East and Ridgetop West prospects.

The most advanced expansion prospect is Area 2. Sherwood recently completed a prefeasibility study for the zone, which is a few hundred metres south of the main Minto pit. Though the study did not include any of the drill intersections from 2007, it did confirm an open-pit reserve of 3.36 million tonnes grading 1.54% copper, 0.62 gram gold and 5.51 grams silver.

The study concluded that the addition of reserves from Area 2 supports a third-phase mill expansion to boost throughput to 3,500 tonnes per day. Mining the Area 2 reserves would increase total copper and gold production by 43%. The Area 2 deposit would be developed as an open pit following the depletion of the Main pit, with mining first focused on accessing high-grade ore.

The Main pit is expected to feed the mill until 2010. Area 2 would then be mined in three stages, with its waste used to fill the Main pit. During the stripping phase at Area 2, the mill would be fed from stockpiles. The entire project has an eight-year mine life, with one additional year for the mill to process the remaining stockpiles. Total project capital costs, including $99 million over the remaining life of the project, are $151 million.

In addition, at the end of March, Sherwood made its first principal repayment of $4.9 million under its project loan.

In other Sherwood news, the company closed financing agreements and is ready to move the high-grade Kutcho copper-zinc- silver property in northern B. C. towards a production decision. Sherwood acquired the Kutcho project when it purchased more than 90% of Western Keltic Mines (WKM-V, WLKTF-O) in February. Sherwood and Western Keltic recently announced an agreement whereby Sherwood will take over the other company entirely.

Sherwood is looking at redesigning the Kutcho project to make it a smaller, less capital intensive open-pit mine focused on high-grade mineralization, similar to Sherwood’s approach at Minto. To finance its work at Kutcho, Sherwood closed a $10-million revolving credit line with Macquarie Bank as well as an oversubscribed non-brokered private placement of 1.2 million flow-through shares at $6 apiece for gross proceeds of $7.23 million.