Drilling and Prestripping Continue at Minto

Vancouver — Recent exploration drilling by Sherwood Copper (SWC-V, SWOPF-O) has intersected additional high-grade mineralization at the Minto copper-gold project being advanced to production in the Yukon.

The results to date from the ongoing program have extended high-grade mineralization from Area 2 to within 200 metres of the main Minto open pit, currently being developed for production. Highlights include 8.3% copper and 2.5 grams gold per tonne over 2.5 metres, within a 7.3-metre interval of 3.8% copper and 1.5 grams gold.

The company notes that drilling at Area 2 has intersected two higher-grade zones of mineralization with comparable grades, thicknesses and depth to the main Minto deposit, with additional zones below these two horizons. Definition drilling will continue in order to support a resource estimate that could potentially extend the life of the proposed Minto copper-gold mine.

Meanwhile, Sherwood is stripping waste from the main Minto open pit in order to expose high-grade copper-gold reserves in preparation for the start of commercial production in the second quarter of 2007. The company has also completed the first round of several anticipated optimizations of a recent feasibility study.

The changes incorporated into the updated feasibility study include an optimized mine plan that removes the majority of the low-grade stockpile from the tail-end of the mine and adds additional high-grade reserves from an area where resource definition drilling was recently completed. The low-grade material will still be stockpiled and could be processed in later years, depending on project economics and metal prices at that time.

The economics of the proposed mine were also improved by incorporating a coarser grind, changing the tailings handling approach, and spreading the capital costs of refurbishing the Skagway (Alaska) ore terminal over the life of the project, rather than as an upfront capital item.

The Minto project was partially developed in the 1990s by a previous operator that spent about $10 million on mine-related facilities and infrastructure before pulling the plug because of low metal prices.

Sherwood is building a mine with capital costs of $86.7 million, plus $11.5 million of contingencies and owners costs. The exclusion of lower-grade material has reduced proven and probable reserves to 5.86 million tonnes averaging 2.02% copper, 0.8 gram gold and 9.1 grams silver per tonne from the previous estimate of 8.85 million tonnes averaging 1.68% copper, 0.6 gram gold and 6.9 grams silver.

Based on the new optimization plan, production is expected to average 41 million lbs. copper, 17,295 oz. gold and 250,000 oz. silver per year, for the first six years of operation. The previous plan estimated production of 40.7 million lbs. copper and 17,150 oz. gold. However, the life-of-mine production of 269 million lbs. copper, 113,000 oz. gold and 1.6 million oz. silver from the new plan is lower than the previously estimated 300 million lbs. copper, 122,000 oz. gold and 1.8 million oz. silver.

The optimization plan reduced production costs to US57 per lb. copper from US60 per lb., net of byproduct credits. The rate of return rose to 37.1% pretax assuming 100% equity financing, compared with the previous estimate of 34.6%.

Sherwood expects to achieve commercial production in mid-2007, or earlier. In the meantime, the company intends to continue the optimization process at Minto, focused on replacing diesel power with lower-cost hydroelectric power from the Yukon grid, improving processing and potential use of a gravity circuit to improve gold recoveries, and adding to reserves through ongoing drilling.