An agreement that would see Minto mine owner Sherwood Copper Corp. merge with Capstone Mining Corp. has positive implications for mining in the territory, says Stephen Quin, Sherwood Copper's president.

"There shouldn't be any negatives," he said in an interview Thursday.

The merger will bring more access to capital funds and possibly accelerate work the company is already doing in the Yukon, he added.

The merger was announced earlier this week, when the two companies signed a letter of agreement to combine forces to create a "well-funded, low-cost, growth-oriented copper company with two producing mines in mining-friendly jurisdictions in North America," reads a joint statement from the companies.

While Sherwood Copper has the Minto mine, Capstone runs the Cozamin mine in Zacatecas State, Mexico.

It will likely be the end of the year before the companies are merged, with a vote required by shareholders, Quin said, stressing the merger is not a case of one company taking control of another.

"It's definitely not a takeover," he said, adding the two offices will essentially continue to operate as they have in the past.

Along with benefits to the territory, the companies listed numerous other positive developments that will come out of the merger, including:

• a significant growth in production, increasing from the anticipated 85 million pounds this year to 110 million pounds in 2009, along with significant byproducts of gold, silver, lead and zinc;

• low-cost production, forecast at costs of $1 US per pound of payable copper in 2008 and 2009;

• an "aggressive, growth-oriented company" which would focus on maximizing the value of the two current mines through increases in resources, reserves and production, operation improvements, and advancing the Kutcho project in northern B.C.;

• the diversification of risks with the two mines;

• increased capital that will improve trading liquidity for shareholders;

• a focus on optimizing the mines and cost reduction with Cozamin increasing to 3,000 tonnes per day and Minto moving to 3,200 tonnes per day by the end of this year. Moving to the grid will reduce high fuel costs, it was noted;

• improvements to exploration possibilities;

• a combined management team with extensive experience;

• exposure to the Kutcho project;

• a strong balance sheet to support growth;

• more market exposure for Sherwood shareholders through access to Capstone's TSX listing; and

• a broadened research coverage for Capstone shareholders through Sherwood's coverage at nine firms across Canada.

"Capstone and Sherwood further believe that their shareholders will benefit from the tax-effective combination of the two companies and allow for participation in the upside from the significantly enhanced business platform," reads the statement.

The agreement also states that each Sherwood shareholder will receive 1,566 shares of Capstone.

Along with the shareholder vote on the merger, there are a number of regulatory procedures to go through before the deal can go through, Quin said.

He noted discussions about the merger first began in April 2007, but with the Minto mine not in production then, and Cozamin just starting up, it was decided they would wait to see if one another's efforts came to fruition before moving ahead with a merger.

Access to the mine is by ferry/barge across the Yukon River from Minto Landing, followed by a gravel road drive into the actual minesite.