A
NORTHAIR GROUP COMPANY
SUITE
860
- 625
HOWE STREET Ÿ
VANCOUVER, BC Ÿ
V6C 2T6 CANADA Ÿ TEL:
(604) 687-7545 FAX: (604) 689-5041
PRESS
RELEASE
FOR IMMEDIATE
RELEASE
November 26, 2007
#07-33
Sherwood Announces
Agreement for Acquisition of Western Keltic Mines
- Inclusion of Kutcho Creek Deposit Would Double Copper
Resources & Could Double Production
-
VANCOUVER, BRITISH COLUMBIA -
Sherwood Copper Corporation (SWC: TSX-V)
today
announced that it has entered into an agreement with Western Keltic Mines Inc.
(WKM: TSX-V) under which Sherwood has agreed to make an offer to acquire all the
shares of Western Keltic through the issuance of 0.08 of a share of Sherwood for
each share of Western Keltic.
Based on the November 23, 2007 closing price
for the Sherwood shares, this equates to an approximate price of $0.47 per
Western Keltic share. The consideration under the offer
represents a premium of 53% over Western Keltic?s closing price on November 23,
2007. Based
on 79,830,855 Western Keltic shares outstanding, this offer equates to
approximately $37 million for all of the issued and outstanding shares of
Western Keltic. Western Keltic?s board, along with its
largest registered shareholder (representing an aggregate of 26.8 million shares
of Western Keltic that are issued or issuable upon the exercise of options and
warrants) have entered into or have agreed to enter into lock-up and support
agreements in respect of the transaction.
Western Keltic?s board has unanimously approved the terms of the
agreement and recommend the shareholders of Western Keltic tender into
Sherwood?s offer when mailed.
?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 maximize the value of the Kutcho Creek property to the
combined companies? shareholders.
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 pre-feasibility 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 Mr. 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.?
Transaction
Rationale
Sherwood believes this offer provides significant
benefits for Western Keltic?s existing shareholders including, but not limited
to, the following:
v
Western Keltic shareholders will gain
immediate exposure to Sherwood?s current copper production, production growth
from planned mill expansions and the tremendous exploration results being
generated by Sherwood?s exploration team on the Minto
property;
v
Sherwood should have access to financing and
cash flow from its Minto Mine operations that could contribute funds towards the
development cost of the Kutcho Creek
deposit;
v
Sherwood has a proven track record of mine
development in the same region as Western Keltic?s Kutcho Creek
deposit;
v
Sherwood has access to the same mine
development team that successfully brought its mine into production, ahead of
schedule and on budget; and
v
Sherwood has successfully worked with the
Yukon Government and Selkirk First Nation to advance its project through feasibility, permitting, development and into production and believes it can
bring these experiences to bear on the Kutcho Creek
deposit.
Sherwood further believes that the Western Keltic
shareholders would benefit from the tax-effective combination of the two companies and that they could participate in the upside from the significantly
enhanced business platform, in addition to having greater financial flexibility
as a result of the underlying liquidity in Sherwood?s shares.
Sherwood
Offer
Sherwood anticipates that the transaction would be
structured by way of a take-over offer and would be subject to certain standard
conditions including that no less than 66 2/3% of the issued and
outstanding shares of Western Keltic be tendered to the offer. However, the parties may consider an
alternative form of transaction such as a plan of arrangement or other form of
business combination as mutually determined by Sherwood and Western Keltic.
Full details of the offer will be included in the formal
offer and take-over circular to be filed with the regulatory authorities and
mailed to Western Keltic shareholders in accordance with applicable securities
laws. The offer to shareholders of
Western Keltic will be to acquire all of the issued and outstanding shares of
Western Keltic in consideration for the issue of Sherwood shares on the basis of
0.08 Sherwood shares for every Western Keltic share. This offer represents an approximate 53%
premium to the closing stock price for the Western Keltic shares on November 23,
2007. Based on the current Western
Keltic shares outstanding, the transaction would involve the issuance of approximately 6.4 million Sherwood shares, which would equate to 12.5% of
Sherwood?s pro forma shares outstanding.
If the offer is to be made by takeover offer, the offer
will remain open for 35 days following the mailing date and will be subject to
certain conditions relating to receipt of requisite regulatory approvals, the
absence of any material changes and acceptance of the offer by Western Keltic
shareholders owning not less than two-thirds of the Western Keltic common
shares. The letter agreement also provides for usual deal protection provisions
including a break fee of $1.4 million in favour of Sherwood in the event of a
superior proposal.
Sherwood has engaged Dundee Securities Corporation as its
financial advisor and DuMoulin Black LLP as its legal advisor in respect of this
transaction.
Sherwood
Sherwood?s successful consolidation of the ownership of
the Minto Project provides a unique investment opportunity ? participation in a
fully permitted, operating, high-grade, open pit copper-gold mine located in
Canada with tremendous exploration potential on the 100% owned property. When combined with the potential
development of Western Keltic?s Kutcho Creek deposit, Sherwood offers
significant near-term and long-term growth
potential.
Additional
Information
Additional information on Sherwood and its Minto Mine can be obtained on
Sherwood?s website at http://www.sherwoodcopper.com.
Additional information on Western Keltic and its Kutcho Creek deposit is
available on Western Keltic?s website at http://www.westernkeltic.com.
On behalf of the board of
directors
SHERWOOD COPPER
CORPORATION
?Stephen P. Quin?
Stephen P. Quin
President &
CEO
For further information
please contact Stephen Quin,
President of Sherwood Copper Corp.
or Brad Kopp or Kristy
Reynolds at (604) 687-7545 or (888) 338-2200
**
INTERNET ADDRESS: www.sherwoodcopper.com **
The TSX Venture
Exchange has not reviewed and does not accept responsibility for the adequacy or
accuracy of this press release. 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.