Sherwood Copper Corporation (TSX VENTURE: SWC)(TSX VENTURE: SWC.DB)
today announced that it has set November 14, 2008 as the date for a
special meeting of its shareholders to vote in respect of the
business combination with Capstone Mining Corp. (TSX: CS), details
of which were announced on September 8, 2008. Since the date of the
announcement, Sherwood's management has had discussions with the
majority of its shareholders, who have indicated that they intend
to support the transaction at the special meeting. Indications are
expressions of intent and do not represent firm commitments and no
lock up agreements have been entered into.
Transaction Rationale
Sherwood and Capstone also reiterated the benefits of the
business combination by noting the following combined company
attributes:
- Two high grade, low cost mining operations in pro mining
jurisdictions - Sherwood's Minto copper-gold mine and Capstone's
Cozamin copper-silver mine;
- Pro forma combined production of 37 million pounds of copper
in concentrates at total cash costs of US$0.97 per pound in the
first half of 2008 with higher production anticipated in the second
half as both operations complete their ramp up to their expanded
capacity;
- Pro forma cash flow from operations of US$75.7 million in the
first half of 2008;
- Forecast production of 85 million pounds of copper in
concentrates in 2008, increasing to 110 million pounds in 2009,
with significant by-products of gold, silver, lead and zinc;
- Forecast total cash costs of under US$1.00 per pound of
payable copper in 2008 and 2009, including all off-site costs and
net of by-product credits;
- Continued focus on organic growth through exploration at
existing mines, where resources have increased substantially over
the past three years even before incorporating the results of major
exploration programs carried out at both mines in 2008;
- Well funded pro forma combined entity, with exceptional cash
flow generating capacity, that is well positioned to fund (a)
continued growth at existing high grade Minto and Cozamin mines,
(b) the advancement of the high grade Kutcho copper project towards
a production decision, and (c) accretive merger and acquisition
opportunities;
- Significant downside protection through the combined forward
sales positions that extend into 2011 and beyond, yet with
significant upside leverage to metal prices since more than half of
the production will be delivered at spot prices during that period,
before accounting for proposed production expansions (which would
increase exposure to spot prices);
- A combined management team with complementary experience and a
proven track record of building and profitably operating mines to
create shareholder wealth, supported by a seasoned and experienced
board of directors;
- Enhanced market exposure for Sherwood's shareholders through
access to Capstone's TSX listing and increased weighting in the TSX
composite index.
Sherwood and Capstone believe that their shareholders will
benefit from the tax-effective combination of the two companies and
the creation of a significantly enhanced business platform.
The special meeting of Sherwood's shareholders will be held in
the offices of Sherwood's counsel, Dumoulin Black, on the 10th
floor of 595 Howe Street, Vancouver BC at 10:00 AM on November 14,
2008. Additional information will be provided in the information
circular to be mailed to Sherwood's shareholders in October
2008.
About Capstone Mining
Capstone is a Canadian based mining company currently operating
the 100% owned Cozamin copper-silver-lead-zinc mine located in
Zacatecas State, Mexico. The Cozamin Mine produced 6.7 million
pounds of copper at a total cash cost of US$0.90 per pound in the
three months ended June 30, 2008. Capstone has approximately 80.3
million shares outstanding and is well financed with no bank debt,
and approximately US$100 million in working capital and marketable
securities as of June 30, 2008, based on current share prices.
Additional information on Capstone Mining and its Cozamin Mine
is available on Capstone's website at
http://www.capstonemining.com.
About Sherwood Copper
Sherwood Copper's objective is the 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 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 its production
growth, Sherwood intends to pursue merger & acquisition
opportunities that fit its business model and, in May 2008,
Sherwood acquired 100% ownership in Western Keltic Mines (now
Kutcho Copper Corp.), owner of the high-grade Kutcho
copper-zinc-gold-silver deposit in northwestern British Columbia.
Sherwood expects to lever off its successful development of the
Minto Mine and rapidly advance the Kutcho project to a production
decision. Sherwood has also agreed to combine with Capstone Mining,
subject to requisite shareholder and regulatory approvals, creating
a new low cost, growth oriented copper producer with two high grade
mines and a strong balance sheet.
Additional information on Sherwood and its Minto Mine can be
obtained on Sherwood's website at
http://www.sherwoodcopper.com.
Forward-Looking Statements
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 Capstone Mining Corp. and Sherwood Copper Corp. (hereinafter
referred to as the "Companies") do not intend, and do not assume
any obligation, to update these forward-looking statements.
Forward-looking statements relate to future events or future
performance and reflect management of the Companies' 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 Companies 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 Companies' 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 Companies have 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.
Neither the TSX Venture Exchange nor the TSX any accept
responsibility for the adequacy or accuracy of this press
release.
Contacts: Capstone Mining Corp. Darren Pylot President & CEO
(604) 684-8894 or 1-866-684-8894 Capstone Mining Corp. Chris
Tomanik (604) 684-8894 or 1-866-684-8894 Capstone Mining Corp. Mark
Patchett (604) 684-8894 or 1-866-684-8894 (604) 688-2180 (FAX)
Email: info@capstonemining.com Website: www.capstonemining.com
Sherwood Copper Corporation Stephen Quin President & CEO (604)
687-7545 or 1-888-338-2200 Sherwood Copper Corporation Neil MacRae
(604) 687-7545 or 1-888-338-2200 (604) 689-5041 (FAX) Email:
info@sherwoodcopper.com Website: www.sherwoodcopper.com
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