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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
March 10, 2008
#08-12
Sherwood Completes Funding
Arrangements for Kutcho Project & Begins Work
Program
Closes C$10
Million Corporate Credit Facility and C$7.2 Million Flow Through
Financing
VANCOUVER, BRITISH
COLUMBIA - Sherwood Copper Corporation (SWC: TSX-V)
today announced that it has completed funding arrangements for the advancement
of the high-grade Kutcho copper-zinc-silver-gold project in Northern British
Columbia toward a production decision. As a result, Sherwood has commenced work
on a preliminary assessment aimed at
a re-scoped and redesigned project
that is focused on a smaller, less capital intensive high grade open pit project that could be developed
faster than previously planned by
Western Keltic Mines Inc. ("Western Keltic"), something more akin to the Minto
Mine development approach than what
had been previously proposed.
Sherwood has closed on its C$10
million revolving corporate credit facility (the ?CCF?)
with Macquarie Bank Limited ("Macquarie") that was previously announced in a
news release dated February 29, 2008.
In addition, further to its news release
dated February 15, 2008, Sherwood
has
completed an over-subscribed non-brokered
private placement of 1,205,000
flow-through shares at a price of
C$6.00 for gross proceeds of C$7.23
million in two tranches comprised of
965,000 flow-through shares and 240,000 flow-through shares respectively. The flow-through shares are subject to a
four-month hold period that expires on July 8, 2008 as to 965,000 shares and
July 11, 2008 as to 240,000 shares. The funds from the CCF and flow through
private placement are primarily to be used to advance the Kutcho Project
towards a production decision and for
closing costs related to the acquisition of Western Keltic, such as Western
Keltic?s accounts payable, severance and transaction costs. In order to permit funds to flow from
Sherwood to its 93% owned subsidiary, Western Keltic, Sherwood has entered into
funding arrangements with Western Keltic that have been approved by Western Keltic?s board of directors, which
board is independent of Sherwood.
Stephen Quin and Bruce McLeod, both of whom are
directors of Sherwood, acquired 10,000 and 7,000 flow-through shares
respectively as subscribers under the private placement. The participation by an insider in
the private placement is considered
to be a "related party transaction" as defined under Multilateral Instrument
61-101 ("MI 61-101"). The transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as
neither the fair market value of the securities being issued nor the
consideration paid exceeds 25% of Sherwood's market
capitalization.
The
securities offered have not been registered under the U.S. Securities Act of
1933, as amended, and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of the
securities in any State in which such offer, solicitation or sale would be
unlawful.
?Now that Sherwood has acquired control of
the high grade Kutcho copper-zinc-gold-silver deposit in north-western British
Columbia through its 93.0% ownership of Western Keltic, Sherwood has commenced a
preliminary assessment for a more
robust near term mine development option,? said Stephen
Quin, President & CEO of Sherwood. ?These financing arrangements
provide Sherwood with the necessary
funding to further its near term goal of in-fill drilling, re-scoping and
re-engineering the Kutcho project
until cash flow from the higher grade Minto copper-gold mine is available to
fund ongoing Kutcho project activities. Sherwood?s objective is
the rapid development of a smaller scale, lower capital cost operation at Kutcho
that is focused on higher grade base metal production,? he added.
Corporate Credit
Facility
Sherwood has closed the C$10 million revolving CCF with
Macquarie detailed in the news release dated
February 29, 2008. The CCF has a
term of one year and may be extended at Sherwood?s request for an additional
year, subject to Macquarie?s approval.
Funds may be borrowed, repaid and re-borrowed under the CCF, with the
final repayment due on the final maturity date. The CCF will bear an interest rate
equal to the Canadian dollar London Interbank Offered Rate (?LIBOR?) plus a
margin of 225 basis points (2.25%) per annum on drawn funds. There is a 60 basis
point (0.6%) commitment fee on undrawn
funds.
As part of the establishment fee for the CCF, Sherwood
will issue Macquarie two-year warrants to
purchase 755,405 common shares of Sherwood at a price of $5.25 per share, with warrants vested
proportionately to the amount
drawn.
Intercompany Loan
Agreement
Given that Sherwood owns less than 100% of Western
Keltic, Sherwood and Western Keltic have signed a Demand Promissory Note (the
?Note?) providing a mechanism whereby
Sherwood can advance funds to Western Keltic for its closing costs related to
the transaction, severance, outstanding accounts payable, funding the
advancement of the Kutcho Project and for general corporate purposes.
Advances to Western Keltic are secured by a demand
debenture issued to Sherwood by Western Keltic. Under the terms of the Note, outstanding
advances will attract an interest rate of LIBOR plus 3%. Advances can be repaid by Western Keltic
at any time, without penalty.
The Note and demand debenture were reviewed and approved by Western Keltic?s board of
directors.
Flow-through Agency
Agreement
A portion of the gross proceeds from the flow-through financing will be transferred to
its wholly owned subsidiary, Minto Explorations Ltd. ("Minto Explorations"), by
way of a back-to-back flow-through issue to Sherwood by Minto Explorations. The remainder of the gross
proceeds from the private placement will be advanced to Western Keltic
pursuant to an agency agreement entered into between Sherwood and Western Keltic
whereby such funds will be used by Western Keltic to incur Canadian exploration
expenditures as agent for
Sherwood.
Western Keltic Board and Officer
Changes
Following Sherwood?s acquisition of 93% of
Western Keltic, the board of directors of Western Keltic has been reconstituted
to comprise Stephen P. Quin,
President & CEO of Sherwood Copper, D. Bruce
McLeod, Executive Chairman of Sherwood Copper and John Hick, an
independent director continuing from the prior board.
The new board has either terminated the employment or accepted the
resignation of all Western Keltic?s officers and has appointed Stephen P. Quin
as President, Richard Godfrey as
Chief Financial Officer and Brenda
Nowak as Corporate
Secretary.
?I would like to thank all of the departing
directors and officers of Western Keltic for their contributions to Western
Keltic over the past number of years,? said Mr. Quin. ?And I further want to thank John Hick
for agreeing to stay on and ensure the interests of the minority shareholders
are represented during the transition
process to 100% ownership by
Sherwood.?
Correction as to Number of Western Keltic Shares Taken
Up
As announced
March 6, 2008, Sherwood plans to commence a second step
transaction by way of statutory arrangement, amalgamation, merger,
reorganization, consolidation, recapitalization or other transaction to acquire
all of the remaining Western Keltic common shares ("Western Keltic Shares") not
already owned by Sherwood. Sherwood
also disclosed in the March 6, 2008 press release that it had acquired a total of
76,777,214 Western Keltic Shares.
Contrary to what was reported in that news release, Sherwood has in fact
only taken up 76,445,714 Western Keltic Shares, being 331,500 shares less than
previously reported due the failure
of one party to deliver Western Keltic Shares tendered under a notice of guaranteed delivery provided to the
depositary. This revised number
still represents approximately 93% of the outstanding Western Keltic
Shares.
About Sherwood
Copper
Sherwood Copper?s current focus is profitable production of base and precious metals from high grade, open pit mines in
Canada. Sherwood?s first operating mine, the
high grade Minto copper-gold mine in Yukon, Canada, was built on budget and ahead
of schedule. The Minto Mine is one
of the highest-grade open pit copper-gold mines in the world, and is forecast to
be a low cost producer. Aggressive exploration on the Minto
property has yielded significant
success, providing Sherwood the
opportunity to ?grow from within? by expanding the resource and
reserve base, potentially leading to further production increases. To further accelerate it production growth, Sherwood intends to pursue merger
& acquisition opportunities that fit its business model and, in March 2008,
Sherwood acquired more than 93% ownership in Western Keltic Mines, owner of the
high-grade Kutcho copper-zinc-gold-silver deposit in northwestern British Columbia. Sherwood aims to repeat its successful
development of the Minto Mine at the Kutcho project.
Additional
Information
Additional information on Sherwood and its Minto Project can be obtained
on Sherwood?s website at http://www.sherwoodcopper.com.
On
behalf of the board of
directors
SHERWOOD COPPER
CORPORATION
Stephen P.
Quin
President &
CEO
Investor
Contacts:
Sherwood
Copper:
Stephen P. Quin 604.687-7545 or Brad Kopp
604-687-7545
The TSX Venture Exchange has not reviewed and does not
accept responsibility for the adequacy or accuracy of this press release.
Forward-Looking
Statements
This document may contain "forward-looking statements"
within the meaning of Canadian securities legislation and the United States
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are made as of the date of this document and the Company does not
intend, and does not assume any obligation, to update these forward-looking
statements.
Forward-looking statements relate to future events or
future performance and reflect management's expectations or beliefs regarding
future events and include, but are not limited to, statements with respect to
the estimation of mineral reserves and resources, the realization of mineral
reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining
operations, environmental risks, unanticipated reclamation expenses, title
disputes or claims and limitations on insurance coverage. In certain cases,
forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "might" or "will be taken",
"occur" or "be achieved" or the negative of these terms or comparable
terminology. By their very nature forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by the forward-looking statements.
Such factors include, among others, risks related to actual results of current
exploration activities; changes in project parameters as plans continue to be refined;
future prices of resources; possible
variations in ore reserves, grade or recovery rates; accidents, labour disputes
and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the
completion of development or construction activities; as well as those factors
detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of
which are filed and available for review on SEDAR at www.sedar.com. Although the
Company has attempted to identify important factors that could cause actual
actions, events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause actions,
events or results not to be as anticipated, estimated or intended. There can be
no assurance that forward-looking statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements.
Accordingly, readers should not place undue reliance on forward-looking
statements.