Copper-gold deposit Yukon's next mine?

What do you get when you mix a known, high-grade copper deposit near the Yukon River plus millions of dollars of mining equipment on site with an aggressive junior mining company bent on making things happen?

Excitement, that's what.

"Minto will be the Yukon's next mine," said Stephen Quin, president and chief executive of Sherwood Copper Corp. "We've got all the permits or they are due to be extended, and we just need to update costs in the feasibility study."

Yukon Premier Dennis Fentie signed a 10-year extension of a Type A water license for the copper-gold project in September. The Type A license allows Sherwood, through its wholly owned subsidiary Minto Explorations, to construct and operate a mine at Minto. The Minto Project already has a Type B water license, which covers, among other things, access to the site.

The water permits will allow Sherwood to resume construction once a production decision is made. That decision is due early next year, and mine startup is projected for 2007. The Vancouver, B.C.-based junior mining company acquired 100 percent ownership of Minto from Falconbridge, Teck Cominco, ASARCO and others for C$8.4 million plus future considerations at a mining industry conference in Toronto this summer, Quin said.

"Sherwood was able to get all of the company representatives in one room, and they hammered out a deal," he told industry analysts in September.

Located roughly halfway between Whitehorse and Dawson, Yukon Territory near the Yukon River, Minto is a copper miner's dream. Unlike typical copper deposits that have about 20 percent of the bright metal in concentrates, Minto tests average grades of 37 percent copper.

"These kinds of concentrates are sold at a premium," Quin said. "We expect it to be quite robust."

Discovered in 1973 by ASARCO, the deposit is rather modest in size by industry standards. An independent estimate of measured and indicated resources as of June 27 was 9.2 million tons, at a grade of 1.8 percent copper, 0.016 ounces per ton gold and 0.2 ounces per ton of silver, and an additional inferred resource of 0.8 million tons grading 1.4 percent copper, 0.013 ounces per ton of gold and 0.2 ounces per ton of silver.

Sherwood believes C$22.2 million in capital will be needed to develop a 1,723 ton-per-day mining operation at Minto, largely because the previous owners sank C$10.1 million into construction before the project stalled on depressed copper prices in 1998.

During the late 1990s, mill foundations were poured, ball and SAG mills purchased and moved to the site and a mine camp constructed. Developers also connected the site to a permitted Yukon River crossing with a 29-kilometer gravel road.

Sherwood hopes to process 591,000 tons of ore per year with an initial life of 11 years. About 38,400 tons of concentrate, which will contain on average 31 million pounds of copper, 13,400 ounces of gold and 200,000 ounces of silver, will be produced per year for the first five years of operation, the company said.

Sherwood is working with the Alaska-Yukon Committee on the possibility of developing a load-out port in Skagway or Haines.

Quin said he is optimistic that a facility can be developed. "It's a question of how to get access to loading facilities within the port. The existing loading facility (at Skagway) has not been used for a number of years," he said.

Alaska Gov. Frank Murkowski, who spoke at an economic development conference in Whitehorse Sept. 21, said the ore terminal in Skagway stands ready to serve Yukon's needs. "Our governments can and will work together to examine how we can respond to your needs," he promised attendees.

Sherwood is also eyeing low-cost power produced by Yukon Energy Corp.

"We have significant excess power we want to sell, and Minto is close to the power grid, said Yukon Energy President David Morrison. "The big issue from our point of view is timing. The same is true for Sherwood. By the time Sherwood gets ready to make a decision, Yukon Energy will be ready to make our decision."