VANCOUVER - SHERWOOD COPPER CORP. and WESTERN KELTIC MINES have agreed to a deal that will see Western Keltic acquired by Sherwood. In the all-share deal, Sherwood will issue 0.08 of a Sherwood share for each share of Western Keltic. Based on the Nov. 23 closing prices, this represents a 53% premium over Western Keltic's price. The offer values Western Keltic at $37 million.
Western Keltic's flagship property is the Kutcho Creek copper-zinc deposit 100 km east of Dease Lake, B.C. There are three distinct areas of mineralization (Main, Esso and Sumac) with total measured and indicated resources of 17.7 million tonnes averaging 1.71% Cu, 2.36% Zn, 27.45 g/t Ag and 0.34 g/t Au. The prefeasibility study envisioned an open pit and 6,000-t/d flotation concentrator. Capital costs would be $299 million to get production started in 2010.
Sherwood Copper opened its first mine, the high-grade Minto copper-gold project 240 km north of Whitehorse, Y.T., in October 2007. It was ahead of schedule and on budget. Expansion is already underway to a 2,400 t/d level from 1,560 t/d, and a third stage of development is in the works.
"The acquisition of Western Keltic and its Kutcho Creek copper-zinc deposit would more than double our copper resources, and offers the potential to continue Sherwood's transformation to a significant base metal producer through the potential development of Kutcho Creek," said Stephen Quin, Sherwood's president & CEO. "We see the opportunity to redeploy our successful mine evaluation and development team to maximize the value of the Kutcho Creek property to the combined companies' shareholders. We aim to reassess the development plans for Kutcho Creek over the coming months to determine the most attractive development option," he said.
See either www.SherwoodCopper.com or www.WesternKeltic.com.