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
February 29, 2008
#08-09
Sherwood Signs Committed
Term Sheet for Corporate Credit Facility with Macquarie
Bank
Enters into Funding Arrangements with
Western Keltic Mines for Advancement of Kutcho Project
Not for
distribution to United States
newswire services or for dissemination in the United
States
VANCOUVER, BRITISH COLUMBIA -
Sherwood Copper Corporation (SWC: TSX-V)
(?Sherwood?) today announced that it has signed a committed term sheet with
Macquarie Bank Limited (?Macquarie?) for a C$10 million revolving corporate
credit facility (the ?CCF?) with an initial term of one year, renewable at
Sherwood?s option with the consent of Macquarie. Funds will primarily be used for the closing costs related to
Sherwood?s acquisition of Western Keltic Mines Inc. (?Western Keltic?), funding
for Western Keltic?s accounts payable and closing costs and to advance the
Kutcho Project toward a production
decision. In order to facilitate
the flow of funds between Sherwood and Western Keltic, Sherwood has entered into
a secured loan agreement with Western Keltic whereby, subject to certain conditions, Western Keltic can borrow funds from Sherwood in order to meet
Western Keltic?s financial obligations.
In addition, on February 15, 2008, Sherwood announced a flow through
share issue in the amount of C$7.2 million, primarily to be spent on the Kutcho Project. In order to allow the expenditure of
Sherwood?s flow through funds on the Kutcho Project, Sherwood and Western Keltic
have entered into an agency agreement whereby Sherwood can fund exploration on
Kutcho and renounce the tax benefits to the placees in its flow through share
placement. All transactions between
Sherwood and Western Keltic were reviewed and approved, on Western Keltic?s behalf, by its current
board of directors.
?Now that Sherwood has acquired 91.7% ownership of
Western Keltic, owner of the high grade Kutcho copper-zinc-gold-silver deposit
in north-western British Columbia, Sherwood has begun the process of reassessing the development options for
the deposit,? said Stephen Quin, President & CEO of Sherwood. ?Combined, the C$7.2 million flow
through issue and C$10 million revolving credit facility provide Sherwood with the necessary financing
flexibility 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 signed a committed term sheet with Macquarie for a C$10 million revolving
corporate credit facility (the ?CCF?) with a term of one year. The term 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
previously agreed to issue Macquarie two-year
warrants to purchase 755,405 common shares of Sherwood at a price of $5.25 per share, subject to regulatory
approval. Closing of the CCF is expected to
occur on or about March 7, 2008 and is subject to regulatory approval.
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, dealing with outstanding accounts payable, funding
the advancement of the Kutcho Project and for general corporate purposes.
Advances to Western Keltic will be 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.
Flow-through Agency
Agreement
Upon closing of the flow-through share private placement by Sherwood, previously announced in a press release dated February 15, 2008, a portion of
the gross proceeds from the private placement 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 to be 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..
Grant of Incentive
Options
During the past week, Sherwood has granted a total of
650,000 incentive stock options at prices ranging from $5.35 to $5.57 per share,
including a maximum of 210,000 incentive options at $5.57 to officers of Sherwood and directors of Sherwood?s wholly owned subsidiary, Minto Explorations
Ltd.
Sherwood
Sherwood Copper?s primary 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 February
2008, Sherwood acquired more than 90% 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 success with the Minto project 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?
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 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.