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May 20, 2005 |
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PRESS RELEASE #05-06 |
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| Trading Symbol: SWM : TSXV | |
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VANCOUVER, BRITISH COLUMBIA - Sherwood Mining Corporation ("Sherwood") (SWM: TSXV) is pleased to announce that it has engaged Dundee Securities Corporation and Westwind Partners Inc., as co-lead agents, and First Associates Investments Inc. and Canaccord Capital Corporation, as participating agents (collectively, the “Agents”), in connection with a best efforts private placement offering of up to $10,000,000 (the “Offering”). The proceeds of the Offering will be used to replace the previously announced standby credit facility with Quest Capital Corp. arranged by Sherwood for the proposed acquisition (the “Offer”) of Minto Explorations Ltd. ("Minto Explorations"), exploration and development costs, and for general working capital purposes. As announced March 29 and May 10, 2005, Sherwood has entered into various agreements that should result in Sherwood acquiring control of Minto Explorations, owner of the advanced Minto copper-gold project in the Yukon , plus various related rights, interests and royalties (the “Minto Project”). The Minto Project is a high-grade copper-gold deposit located in the Yukon Territory that was the subject of a feasibility study in 1995, based on which ASARCO began construction of an open pit copper-gold mine in 1996. Construction was halted in 1998 and the project has been on care and maintenance since then. Upon the successful completion of the Offer, Sherwood plans to bring the resource up to current standards, explore for potential extensions to the resource and complete a new feasibility study on the development of a copper mine. The Minto Project has a current Class A water license. Offering The Offering is comprised of up to 8,000,000 Flow-Through Special Warrants ($2,000,000) and up to 32,000,000 Unit Special Warrants ($8,000,000) at a price of $0.25 per Flow-Through Special Warrant and Unit Special Warrant. Each Flow-Through Special Warrant will be exchangeable for one flow-through common share of Sherwood. Each Unit Special Warrant will be exchangeable for one unit of Sherwood ("Unit"). Each Unit will consist of one common share of Sherwood and one common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder to purchase one common share of Sherwood for a period of 24 months after the closing date at a price of $0.35. The Offering is subject to normal documentation and regulatory approval, a minimum $7 million being raised and is expected to close on or about June 2, 2005 or such other date as the Agents and Sherwood may agree upon. The securities issued under the Offering and the securities issuable upon the exchange thereof will be subject to a four month hold period after the closing date. Minto Offer As announced jointly by Sherwood and Minto Explorations on April 29, 2005, Sherwood has mailed an offer to the registered shareholders of Minto Explorations to purchase all of the outstanding common shares of Minto Explorations ("Minto Shares") on the basis of, at the election of each holder of Minto Shares, (i) $0.615 (Canadian) in cash and 1.0 preferred share of Sherwood or (ii) 2.5 common shares and 1.0 preferred share of Sherwood, for each Minto Share deposited under the Offer. The Offer is being made pursuant to a Pre-Acquisition Agreement dated April 28, 2005 pursuant to which Minto Explorations agreed to support the Offer. In connection with the Offer, 3,397,500 Minto Shares are subject to a pre-tender agreement with ASARCO LLC and 415,500 Minto Shares are subject to a pre-tender agreement with Teck Cominco Limited, representing in aggregate approximately 64.5% of the outstanding Minto Shares. The minimum bid condition for deposits of Minto Shares under the Offer is 2/3 of the outstanding Minto Shares. The arrangements between Sherwood and ASARCO LLC and Teck Cominco Limited disclosed by Sherwood in news releases dated May 2, 2005 and May 10, 2005 may constitute “collateral benefits” (as defined in Rule 61-501 of the Ontario Securities Commission) in connection the Offer. Accordingly, the foregoing Minto Shares subject to pre-tender agreements may not be counted as part of any minority shareholder approval that may be required in respect of any second stage acquisition transaction pursuant to which Sherwood will acquire Minto Shares not tendered under the Offer. Sherwood also wishes to clarify that there are no "change of control agreements" in favour of directors and officers of Minto Explorations. A copy of the notice of variation in respect of the Offer may be found under Minto Explorations' profile on the SEDAR website at www.sedar.com . Sherwood's Plans Upon the successful completion of the Offer, Sherwood intends to initiate the work required to make the resource estimates for the Minto Project compliant with National Instrument 43-101, to update the feasibility study, to apply for and obtain any necessary amendments to the current permits and, based on successful completion of these matters, to commence construction of a low cost copper-gold mining operations at the earliest reasonable date. During these activities, Sherwood would also look to evaluate several exploration opportunities to expand the historical resource estimates in areas where potential has been identified by prior exploration and drilling. Additional details on the Minto Project and the Offer are detailed in Sherwood's offer to purchase and takeover bid circular dated April 29, 2005 which is available on the Minto Explorations' profile on the SEDAR website at www.sedar.com . Not for distribution to United States newswire services or for dissemination in the United States . ON BEHALF OF THE BOARD OF DIRECTORS“D. Bruce McLeod” D. Bruce McLeod, For further information please contact Bruce McLeod, President of Sherwood at ** INTERNET ADDRESS: www.northair.com/sherwood/ ** The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release. |
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