Sherwood Copper Corp Announces C$15 Million 'Bought Deal' Financing
Tuesday August 8, 8:58 am ET
Proceeds to be used to Advance the Development of high-grade Minto Copper-Gold Project in Yukon
ca.us.biz.yahoo.com
VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 8, 2006) - Sherwood Copper Corporation (TSX VENTURE:SWC - News) is pleased to announce that it has entered into an agreement with Dundee Securities Corporation and Sprott Securities Inc. which have, on behalf of themselves and a syndicate of underwriters, agreed to purchase, on a bought deal basis, 4,620,000 special warrants (the "Special Warrants") at a purchase price of $3.25 per Special Warrant for gross proceeds of $15,015,000. The net proceeds of the Special Warrants will be used for the construction of Sherwood's high-grade Minto copper-gold project in the Yukon and for general corporate purposes.
"This financing ensures that we can maintain the rapid pace of development at our high-grade Minto copper-gold project," said Stephen Quin, President & CEO of Sherwood Copper. "Debt arrangements are proceeding to completion, with closing of the project debt facility with Macquarie Bank Ltd. anticipated within a month. This equity funding, combined with recent warrant exercises, ensures we are positioned to meet our financial obligations until the debt facility is in place. In the meantime, development of the Minto project is proceeding rapidly, and we are on target to meet or beat our production start date of mid-2007."
Project Development
Development activities at the Minto Project are proceeding rapidly, with the camp expansion to a capacity of 115 persons essentially complete and fully occupied with personnel from the mining contractor, general contractor and other development related contractors. Major activities completed to date include construction of access roads to the waste dumps, airstrip and other areas of the property, rehabilitation of the airstrip, 25% of the waste pre-stripping (1.0 million BCM or approximately 2.5 million tonnes moved), completion of earthwork excavations to accommodate the camp expansion, fuel tank farm, diesel generators, explosives plant and concentrate shed expansion, upgrades to the 28km access road, and construction of mill process water pond. Major activities currently underway include continued waste pre-stripping, process mill construction and water retention dam construction.
The majority of the long lead time items required for operations have been ordered from suppliers including the crusher, conveyors, flotation tanks, concentrate filter, fuel and water tanks, fire water module, pumps, concentrate storage building, diesel power plant, and construction materials such as cement, steel and forming.
Construction Manager JDS Energy & Mining is supervising the development activities, with Hatch providing engineering and procurement services. Clark Builders have been retained as general contractors to construct the process facilities, and Pelly Construction is completing the contract mining and numerous other contractors have been engaged for specialized areas of activities.
Warrant Exercise
During the past month, approximately 520,175 warrants at a weighted average price of $1.77 per share have been exercised by warrant holders, including Sherwood's management, and a further 962,500 warrants are in the process of being exercised at a price of $2.00 per share for combined gross proceeds of approximately $2.8 million. "I am appreciative of the support from some of our largest shareholders," said Mr. Quin. "Their willingness to exercise warrants early, for no additional consideration, has helped us maintain our accelerated development schedule over the past month using our balance sheet. These funds, combined with the placement announced today, means that we are positioned to meet our equity contribution obligations in support of the bank financing currently being finalized."
As of August 8, 2006, before the offering, Sherwood had 33,342,033 shares issued, an additional 962,500 shares in the process of being issued and 4,642,997 warrants and options outstanding, for a fully diluted total of 38,947,530 shares.
Offering
As noted above, Dundee Securities Corporation and Sprott Securities Inc., on behalf of themselves and a syndicate of underwriters, have agreed to purchase, on a bought deal basis, 4,620,000 special warrants at a purchase price of $3.25 per Special Warrant for gross proceeds of $15,015,000 million. The underwriters also have the option to purchase for resale up to an additional 3,080,000 Special Warrants at the same price on the closing date, for additional proceeds of $10,100,000 million. If the over-allotment option is exercised by the underwriters, the additional proceeds would be available to reduce the amount of mezzanine debt required from Macquarie Bank Ltd. for the development of the Minto copper-gold project. A cash commission of 6% will be paid on the gross proceeds raised in the offering.
The Special Warrants to be sold under this offering will be offered to substituted purchasers by way of a private placement in the Provinces of British Columbia, Alberta, and Ontario and will also be offered in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended.
The offering is scheduled to close on August 23, 2006 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange, and other applicable securities regulatory authorities.
Sherwood has agreed to use its best efforts to file and obtain a final receipt for a short form prospectus qualifying the conversion of the Special Warrants in British Columbia, Alberta and Ontario. In the event that a final receipt for the prospectus is not obtained prior to the date that is 45 days following the Closing Date, each Special Warrant shall thereafter be exercisable into 1.1 Common Shares (in lieu of 1.0 Common Share).
Company Profile
Sherwood Copper Corporation is focused on the development of the high grade Minto copper-gold project in Yukon, Canada. A recently completed feasibility study (see news release dated July 10, 2006) indicates robust project economics and supporting Sherwood's decision to accelerate the project development schedule for a production start by mid-2007 and, in the accelerated case, during the second quarter of 2007. Over the first six years of operations, production is anticipated to exceed 40 million pounds of copper and 17,000 oz of gold per annum at a cash cost, net of by product credits, of US$0.60 per pound of copper produced. Robust cash flows should be assured by the low cash costs and Sherwood's plan to implement a price protection strategy for a significant portion of its early production, giving Sherwood a springboard for continued growth.
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. The securities have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
On behalf of the board of directors
SHERWOOD COPPER CORPORATION
"Stephen P. Quin"
Stephen P. Quin
President & CEO
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.
Contact:
Stephen Quin
Sherwood Copper Corp.
President
(604) 687-7545 or (888) 338-2200
(604) 689-5041 (FAX)
Investor Relations
Sherwood Copper Corp.
(604) 687-7545 or (888) 338-2200
(604) 689-5041 (FAX)
www.sherwoodcopper.com
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Source: Sherwood Copper Corporation |
