Not for distribution to United States wire services or dissemination in the United States
Toronto, Ontario – 26 August 2013. – Polar Star Mining Corporation (TSX:PSR)
(“Polar Star” or the “Company”) is pleased to announce that in line with the conditions in the
Definitive Agreement (“Agreement”) signed between the Company and BHP Billiton on 13
April 2012, BHP Billiton completed a preliminary assessment of the 172,800 hectares of exploration land held by Polar Star and has informed the Company of their decision to proceed with four of the five blocks offered (First Option). In terms of acreage, this means that BHP Billiton has decided to further its exploration efforts on approximately 130,900 hectares of exploration ground owned by Polar Star.
BHP Billiton has invested in excess of the minimum commited expenditure of US$1 million on the preliminary evaluation. Ongoing results motivated an early drilling program on the Lautaro property which commenced in July 2013.
The First Option allows BHP Billiton to earn a 51% interest in each block, for which it solely funds US$3.5 million of exploration expenditures (total commitment of
US$14.0 million over the four blocks being progressed under this First Option) within
30 months commencing 13 August 2013.
Twenty meters of porphyritic intrusive was intersected in one of the holes of the initial drill campaign on the Lautaro property.
Work continues on the selected blocks with a view to defining drill targets either on a stand alone basis, or contiguous with other BHP Billiton assets
Colin Bird, President and CEO stated: “We are pleased that BHP Billiton have elected to continue with the majority of the projects and the diligent manner in which they have carried out their initial work program. The first option commitment is significant in financial terms demonstrating that BHP Billiton share our confidence in the potential of our properties ”.
The Properties are, in general, located south of Polar Star's 100% owned Montezuma
Property along approximately 360 kilometres of the Domeyko Fault System in Northern
Chile, commonly referred to as the Mega Porphyry Belt. This regional fault system also hosts the Chuquicamata and Escondida mines. During the evaluation phase all the properties
were mapped and sampled. However, the focus of the geophysics and drilling programs undertaken to date have been in the properties of Lautaro, Domeyko, Redondo and Veronica, where strong silica alteration and advanced argillic alteration lithocap indicate the presence of possible buried porphyry copper systems.
Lautaro is the most advanced of the assets in terms of exploration undertaken by BHP
Billiton to date and is located on a NW – SE trend that hosts Lomas Bayas mine. Surface geochemistry shows high values for gold, silver, molybdenum, copper, lead and zinc associated with area of alteration/lithocaps indicative of porphyry systems. Geophysics identified conductors within the same areas. BHP Billiton commenced drilling of the target areas in July 2013.
Polar Star understands that the next asset that BHP Billiton may look to advance under the current Agreement is the Domeyko project which is located 45 kilometres south of Mina
Escondida. Joint venture meetings will be held between BHP Billiton and Polar Star to discuss the work undertaken on all four blocks during each quarterly period.
Under this First Option, BHP Billiton will earn a 51% interest in each block, for which it solely funds US$3.5 million of exploration expenditures within 30 months of the date of selection. The total exploration expenditure commitment required to earn a 51% interest in the four blocks selected is therefore US$14.0 million.
Under the Second Option, which will involve the formation of a Joint Venture company for each Block being progressed, BHP Billiton may earn up to an additional 24% (to therefore reach up a 75% interest in each block) on the basis that it solely funds up to an additional
US$20 million of exploration expenditures within 54 months of formation of the respective
Joint Venture(s). As such, to earn an additional 24% and to reach a total of a 75% interest in all four blocks, BHP Billiton would be required to solely fund a total of US$80 million of additional exploration expenditures under this second option, such amounts to be in addition to any sums invested during this First Option period.
Colin Bird, is a qualified person under NI 43-101, and has reviewed and approved the technical information contained in this press release.
About Polar Star Mining Corporation
Polar Star Mining Corporation ("PSR") is a TSX listed exploration and development company with a focus on building shareholder value in Chile. The Company's strategy is to use the cash flow from its’ Chepica mine (primarily gold) to fund, in part, the exploration program at its flagship Montezuma property and to advance our large portfolio of other world class projects in Chile through joint ventures.
President, Chief Executive Officer and Director
For further information please contact:
Chief Executive Officer
Polar Star Mining Corporation.
Email: [email protected]