Sherwood still marching ahead at Minto

Vancouver – Less than a year after commissioning its Minto mine, Sherwood Copper (SWC-V) has not only expanded the mill but commissioned the expansion to increase throughput by more than 50%.

The addition of a second ball mill and increased flotation capacity has boosted mill throughput from a design capacity of 1,563 tonnes per day to a 2,400-tonne per day capacity. Phase II 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 impacted mill throughput, as expected, but unexpectedly so did an extended period of unusually cold weather that affected crusher availability. Sherwood says it plans to 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 321,431 tonnes of ore and milled 152,368 tonnes of ore averaging 3.61% copper, 1.73 grams gold per tonne, and 14.8 grams silver per tonne 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 o average mill throughput at 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 of 2007 Sherwood completed a 101-hole drill program that further confirmed copper and gold mineralization in the gap between area 118 and area two and returned good grades from the Copper Keel South prospect. 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 economic 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 Area 2s reserves supports a phase 3 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 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 will be fed from stockpiles. The entire project has an 8-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 facility.

In other Sherwood news, the company recently 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 acquired more than 90% of Western Keltic Mines (WKM-V) in February. Sherwood and Western Keltic recently announced an agreement whereby Sherwood will take over the other company entirely.

Sherwood recently started work on a preliminary assessment aimed at redesigning the Kutcho project to make it a smaller, less capital intensive open pit project focused on high grade mineralization, similar to Sherwood’s approach at Minto. To finance its work at Kutcho Sherwood closed a $10-million revolving corporate credit facility with Macquarie Bank as well as an over-subscribed non-brokered private placement of 1.2 million flow-through shares at $6 a piece for gross proceeds of $7.23 million.