A major financial deal including guaranteed metal prices for the Minto Landing mine project has been announced by Sherwood Copper Corp.

'It was the last major milestone for Sherwood to work through before production,' Bruce McLeod, Sherwood's chairman of the board, said in an interview Wednesday from Vancouver.

McLeod emphasized something always crops up while a company is in the construction phase, preparing a mine site for production.

But solidifying the financial package announced Tuesday was essentially all that remained to give the open-pit project an unobstructed green light, he explained. Sherwood, McLeod noted, is in on track with its plans to be in production next spring.

The chairman agreed financial support from two international companies confirms the viability of the Minto project as something of a golden child for the company.

'I think Sherwood has been a textbook case of taking a project and moving it forward in a good commodity market and doing it cautiously,' McLeod said.

He pointed out the company chose to enter into debt financing rather than issue more shares to raise money, which would have diluted future returns for the existing stockholders.

Under the arrangement explained in the press release, Sherwood has secured $85 million in financing from Macquarie Bank Ltd. of Australia. It has also entered into a financial and purchase arrangement with MRI Trading AG of Switzerland.

Macquarie has agreed to lend Sherwood an initial $65 million in project financing, as well purchase 65 per cent of concentrate produced from August 2007 to April 2001.

The project financing will be loaned at an interest rate based on the internationally-recognized London Interbank Offered Rate (LIBOR), plus 2.5 per cent. The LIBOR rate was 5.5 per cent Wednesday.

Under the arrangement with Macquarie, the bank will provide an additional $20-million contingency fund, at the rate set by LIBOR, plus three per cent.

Sherwood Copper, the press release explains, has already spent $4.3 million from the contingency fund, which is scheduled to be repaid before the end of the month with a draw from the primary project loan when it becomes available.

Under a forward-sale arrangement for the 65 per cent of concentrate produced, Macquarie has agreed to purchase copper at $3.17 US per pound beginning next August.

The price will gradually decrease to $2 per pound in April 2011, explains the press release, which notes a chart is available showing the sliding scale.

Gold will be purchased by Macquarie at a constant $636.25 US per ounce from August 2007 to April 2011. Silver will be purchased at a constant $11.51 US per ounce through the same period.

The press release notes the updated feasibility study released in August indicated the mine was viable at $2 copper, $550 gold and $9 silver.

Under the deal with MRI, the smelting and refining company will handle all of the copper, gold and silver concentrate produced by the Minto mine, including the 65 per cent of production sold to Macquarie.

In return, MRI will establish a line of credit that Sherwood can draw upon, based on the amount of concentrate stored in the warehouse at the mine site, to a maximum of $20 million, the press release explains.

It's expected that all concentrate will be shipped through the port of Skagway, as the company is working through the Alaska Economic Development Council to secure the shipping arrangement, McLeod said. He noted the company already has an agreement-in-principal to use the port facility.

McLeod said there are approximately 135 people working at the site currently, with another 40 or so on days off.

There will be 80 full-time staff on site during production and another third out on rotation, he said.

McLeod said of the $33.5 million Sherwood has spent on the project since acquiring the property, $21 million has been spent in the Yukon.

Sherwood will likely open a small corporate office in Whitehorse, with just a handful of staff like the human resources personnel that will likely spend their work week between Whitehorse and the mine site, he said.

'There will not be a big corporate office in Whitehorse, but we will certainly have a presence there.'

The update feasibility study puts the Minto mine life at six years, though it does not take into account any additional ore uncovered by ongoing exploration drilling.

Sherwood is expecting that its Minto mine over the initial six years will generate an average of $61.5 million in annual revenue after operation and maintenance costs but before taxes.

McLeod said discussions with Yukon Energy are continuing regarding the possibility of extending the electrical grid from Carmacks to Pelly Crossing.

The project would create the opportunity for the mine to put in a branch-line to take advantage of what is currently surplus hydroelectric capacity.

Yukon Energy and Premier Dennis Fentie, however, are at odds over the depth of the process required to review the proposed $20-million line extension between Carmacks and Pelly Crossing.

Yukon Energy president David Morrison believes that hearings into the Crown corporation's $45-million, 20-year capital investment plan will be all that is required in terms of reviewing the four key projects outlined in the plan.

Fentie, on the other hand, emphasized prior to the Oct. 10 election that his government has been clear on its intent. Each of the four individual proposals in the 20-year-plan will be subject to its own separate reviews by the utilities board after the initial November hearings, the premier emphasized.

Yukon Electrical Co. Ltd. has told the utilities board in writing that it will not be participating in the board's November hearings because of the significant cost involved.

Rather, Yukon Electrical will save its input for the individual hearings to avoid duplication and passing on any unnecessary costs to the ratepayers, the company notes in its letter to the board.

For the first time in November, however, the Yukon's Utilities Consumers' Group will be represented by a public advocacy lawyer who specializes in utility hearings.