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By Rose Ragsdale
For Mining News 

Sherwood: More at Minto, less at Kutcho

Copper producer says Yukon mine just gets better and better, while newly acquired property will benefit from scaled-down approach


Last updated 6/29/2008 at Noon

Sometimes less can be more and then other times, more is just plain more.

That's the word from Sherwood Copper Corp.

The company posted a major jump in mineral resource estimates June 17 for its Minto Mine in central Yukon, based on results of 101 new holes drilled across four deposits - Area 118, Ridgetop, Main Minto and Area 2 deposits - in 2007.

Sherwood said the net result of all adjustments produced a 50 percent increase in contained copper and a 40 percent hike in precious metals in Minto's latest mineral resource estimate, which complies with requirements of Canada's regulation governing such calculations.

The Vancouver, B.C.-based producer said Minto's overall resource is 604.7 million pounds of contained copper, 320,000 ounces of gold and 3.3 million ounces of silver in the measured and indicated mineral categories, using a 0.5 percent copper cutoff, with an additional 294.4 million pounds of copper, 120,000 ounces of gold and 1.26 million ounces of silver in the inferred category at that same cutoff, reflecting 50 percent and 40 percent increases in total contained copper and gold, respectively, as well as a 38 percent boost in silver.

The higher resource estimates follow a 60 percent gain in contained copper in mineral resources based on drilling in 2006, for a total 140 percent gain in copper resources in two years.

2008 results still to come

But the news gets even better. The latest resource estimates do not include results from 2008 drilling, where more than 51 holes have already been completed and results for 16 have been made public; assays are pending for the balance. 

"While most of the gain in 2007 was in the inferred category, we are already infill drilling the two 2007 discoveries (at Area 118 and Ridgetop) to upgrade the confidence level in these areas, as well as continuing to pursue opportunities for yet further increases in resources at the Minto Mine," said Sherwood President & CEO Stephen Quin in a June 17 statement. "With these results in hand, not only are we looking to continue to increase resources, but also to take advantage of the potential to increase the throughput capacity of the Minto mill by grinding coarser, which could provide opportunities to increase production levels well beyond those currently planned.  In addition, we also plan to evaluate the resource potential at cutoffs below 0.5 percent copper, to determine the overall potential of this mineralized system."

Smaller project for Kutcho

Sherwood, meanwhile, is moving ahead with a less-is-more approach to developing the high-grade Kutcho polymetallic project it recently acquired in Northwest British Columbia. The scaled-down project it envisions is similar to the modest initial approach it used in developing the Minto Mine.

The company released results June 12 of an independent preliminary economic assessment of Kutcho, which outlined a significantly scaled-down development that would initially mine only one of three identified mineral deposits on the property.

Sherwood acquired the project through its takeover in May of Western Keltic Mines Inc. and announced its intention to develop Kutcho using its own successful Minto Mine in Yukon Territory as a model.

The new study evaluated developing 63 percent of the Main deposit at Kutcho as an open pit operation. Over a 7.3-year mine life, the pit would produce indicated resources of 10.5 million metric tons, averaging 1.73 percent copper, 2.35 percent zinc, 0.27 grams per metric ton gold, and 26.3 g/t silver, containing more than 400 million pounds of copper and 540 million pounds of zinc, 90,000 ounces of gold and 8.9 million ounces of silver, plus some minor amounts of inferred mineral resource.

Lower-cost, open-pit mine

In addition to a 2 percent net smelter royalty, Sherwood estimates the project will require about C$50 million in operating costs, C$183.3 million in capital costs versus C$299 million estimated by Western Keltic in its pre-feasibility study. The project also will need C43.1 million to lease capital equipment for 7 years.

Sherwood also estimated average unit operating costs of $52.49 per metric ton, yielding cash costs of C$1.70 to C$1.72 per pound of copper before by-product credits and $0.82 to $0.93 per pound of copper after by-product credits.

Sherwood said deeper portions of the Main deposit and all of the Sumac and Esso deposits which, combined, total more than 50 percent of total indicated resources at Kutcho remain to be evaluated in future studies.

The preliminary economic assessment also laid out several opportunities for enhanced project economics, a number of which Sherwood is already evaluating as part of its ongoing work program, the company said.

Using the new study, Sherwood said it intends to advance the Kutcho Copper project through the permitting process.


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