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 Overview
Project Overview In an effort to accelerate its production growth, in May 2008 Sherwood acquired 100% ownership in Western Keltic Mines Ltd., owner of the high grade Kutcho copper-zinc-gold-silver deposit in northwestern British Columbia. Western Keltic and a wholly-owned subsidiary of Sherwood have been amalgamated under the name "Kutcho Copper Corp." and the amalgamated company is now a wholly-owned subsidiary of Sherwood. The Kutcho project is a high grade copper-zinc-gold-silver deposit in the advanced development stage. an The deposit is located approximately 120 km east of the town of Dease Lake, and 330 km north of Smithers in northern British Columbia. Prior operators 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 below. The acquisition of Western Keltic and its Kutcho copper-zinc deposit more than doubles Sherwood's copper resources, and offers the potential to continue Sherwood's transformation to a significant base metal producer through the development of the Kutcho deposit. Sherwood is currently reassessing the development plans for the Kutcho project in order to determine the most attractive alternative to develop a robust, low cost mining operation. Sherwood's objective will be to take a more Minto-like approach to the development of Kutcho, potentially by focusing on the rapid development of a smaller scale, lower capital cost operation that is focused on high grade production up front. In order to achieve this objective, Sherwood has engaged a number of consultants to participate in the preparation of a NI43-101 compliant Preliminary Economic Assessment. This study will be based on currently available information but a re-designed project. In parallel, Sherwood aims to continue advancing the Kutcho project towards a production decision by upgrading the confidence in the resources and reserves, developing a new mine plan and conducting advanced metallurgical testing with the objective of completing a feasibility study. Sherwood began a drill program in May of 2008 to provide information necessary to support its objectives. In conjunction with these activities, the Company intends to re-commence the permitting process and to engage local First Nations and their stakeholders in a consultation process. Resource and Reserve Estimates (0.75% Cu Eq cut-off)
The resource and reserve estimate was completed by Wardrop Engineering Ltd. for inclusion in Western Keltic's September 2007 Pre-feasibility Study. Please click here for disclaimers. 2008 Exploration Program Sherwood Copper commenced a drill program on the Kutcho project in May of 2008. The program will consist of a minimum of 12,000m of HQ and NQ core utilizing two drills. The principal objectives of the drill program are to:
Resource Disclosure An independent NI 43-101 compliant mineral resource estimate was completed by Wardrop Engineering Ltd. and included all three currently known massive sulphide deposits, which comprise the Kutcho Project. The Qualified Person as defined in NI 43-101 responsible for the mineral resource estimate is Tim Carew, P.Geo. Resources were estimated by using GEMs 3-D block modeling software. Block grades were interpolated using ordinary kriging. Classification was based on both kriging variance values and mean distances to drill-hole composites, relative to strike and dip drill-hole spacing. Copper equivalent grades used for application of cut-off grade are based on five year average metal prices, anticipated metallurgical recoveries and 2004-2006 average smelter terms. Only Indicated or Measured resources have been used to establish the probable mineral reserves. Resource and reserve tonnages and grades were derived from a geological block model representing the Main, Esso, and Sumac deposits. Block models and solids for both deposits were developed from the drill data. Back In and Off Take Rights Upon receipt of a feasibility study, Barrick and AMI, or Barrick alone, have a 120 day period to provide Western Keltic written notice of its intention to earn a 50% back in interest on the Kutcho property subject to aggregate payments equal to 300% of development expenditures on the Kutcho property. This would give Barrick and AMI, or Barrick alone, a 20% interest in the Main deposit and a 50% interest in the Esso deposit, based on the property definition per the acquisition agreements and as interpreted in the September 2007 Pre-feasibility Study. In addition, Sumitomo Metal Mining Co. Ltd. have right of first refusal on the sale of concentrates from the Kutcho property subject to a 30 day written notice period from Western Keltic. Mineralization was first discovered on what is now the Kutcho property in 1968 by a joint venture exploration operated by Imperial Oil Ltd. The joint venture allowed their claims to lapse and, Sumac Mines Ltd., who had also conducted exploration in the area, staked several claims resulting in a cruciform claim outline overlying the western part of the main Kutcho sulphide deposit. Imperial Oil, later becoming Esso Minerals Canada Ltd., returned to re-stake some of the area in 1972, which resulted in a much larger area that encompassed Sumac's claims. Beginning in 1973, both Sumac and Esso carried out exploration work, and their early successes prompted additional staking which resulted in claim boundaries roughly as they are today. Diamond drilling commenced in 1974, and by 1982 three sulphide lenses had been defined. In 1983, Esso and Sumac signed a 50/50 joint venture agreement for development work on Kutcho that culminated in a pre-feasibility study being completed in 1985. In 1989, Esso sold most of its mining assets to Homestake Canada Ltd. who optioned the property to American Reserve Mining Corporation (ARMC). ARMC conducted additional exploration and engineering studies but relinquished the option in 1993 while retaining a 20% interest in Homestake's property. Homestake optioned the property to Teck Cominco Ltd. in 1992 who carried out deep penetration EM geophysical surveys. Teck dropped their option and Homestake was purchased by Barrick Gold Corp. in 2003. Western Keltic Mines Ltd. purchased the property from Barrick and Sumitomo in early 2004. Western Keltic carried out diamond drilling within the Main and Esso deposits to confirm historical results and obtain material for metallurgical studies. The Sumac deposit was also drilled in 2005 to test for higher grade zones. In September 2007, Western Keltic completed and announced the results of a pre-feasibility study evaluating the potential development of the Kutcho Creek deposit. This study defined resources and reserves as set out in an amended and restated technical report filed on SEDAR on October 29, 2007. In November 2007 Sherwood announced that it has entered into an agreement with Western Keltic 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. Prior to this announcement, Western Keltic had 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 had 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. In May of 2008 Sherwood successfully acquired 100% ownership in Western Keltic. Western Keltic and a wholly-owned subsidiary of Sherwood were amalgamated under the name "Kutcho Copper Corp." and the amalgamated company is now a wholly-owned subsidiary of Sherwood. Sherwood's first objective was to reassess the development options of the Kutcho project and, in March of 2008, 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. In June of 2008 Sherwood completed a preliminary economic assessment which demonstrated positive base case economics and outlined several opportunities for significant future enhancements. The most significant upside opportunities, which are currently being evaluated, include increasing the tonnes and grade of material to be processed and improving metallurgical recoveries beyond those assumed in the study. Sherwood began a drill program in May of 2008 to provide information necessary to support its objectives and intends to issue an updated preliminary economic assessment in the fall of 2008. MAP GALLERY Proposed Mine Site Proposed Project Layout Known Massive Sulphide Deposits, Drill Holes, and Surface Topography Kutcho Proposed phasing of open pit on Main deposit (looking south)
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