Polar Star corporate and strategic update
/NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/
TORONTO, Nov. 14, 2012 /CNW/ - Polar Star Mining Corporation ("Polar Star" or the Company") (TSX:PSR) is pleased to release a management update following the Company's recent fundraising and organizational and management changes.
- Successful closing of a recent $6,500,000 fundraising demonstrates strong investor support for the new executive and non-executive team.
- New Non-Executive Chairman, Chief Executive Officer and Non-Executive Director appointed to the board as part of this fundraising and restructuring.
- Significant reduction and rationalisation of corporate expenses already achieved with additional potential savings targeted in the near term.
- Chépica mine successfully increasing production and revenue. Revised Chépica mine design and production plans have been put in place intended to sustain higher production.
- Key items of capital equipment identified and being ordered to help achieve revised production targets at Chépica.
- New imminent Chépica exploration drilling program.
- Review of all current joint venture agreements and 100% owned licenses in order to minimise holding costs.
- New highly prospective copper exploration target identified north of the Melisa target at the Montezuma property.
In October 2012, the Chépica mine achieved its highest monthly revenue during Polar Star ownership. Production increases are expected to continue as the development program produces more faces for exploitation. The result of more faces will be more flexibility providing the opportunity to blend and balance input grade to the plant.
The Company intends to purchase a single boom drill rig and an additional scoop tram to meet the new production and development objectives. Similarly, the Company is placing orders for electrical transformers and an additional ball mill to meet the increased processing capability.
A surface diamond drill program will commence imminently with the initial objective of defining the next two years' production. The program will test the vein structures currently being mined and will also test other veins in the region for mining suitability. Veins closer to the processing plants will have evaluation priority and other veins within the general concession area will be explored in the mid-term.
Chépica has recently demonstrated improving production and revenues. Histograms below show monthly production and revenue increases.
A continuing review of the Montezuma exploration concessions in the major copper producing area near the town of Calama has confirmed a number of areas to be highly prospective and worthy of additional exploration. Recent prospecting work has identified an area in North Melisa where there appears to be wide veins over a considerable strike area. This is evidenced by small workings scattered along a distinct trend line. The veins are numerous and parallel. The Company intends to carry out trenching in the area with a view to assessing the mineralisation between the significant veins.
South Melisa has several defined stock work systems which are also populated with abundant previous small mine workings. As such, South Melisa also represents a short-term exploration target for the Company and future exploration work there will test for the possibility of a concealed porphyry below the stock work.
The central area of Montezuma, the Patricia target, also shows good indication for the possible discovery of a new porphyry system and information provided by the Company's previous drilling campaign will provide a basis for drill hole positioning in future programs. At the moment however this area is being subordinated to the work plan at Melisa.
The Karina target to the south shows good overall potential and detailed mapping and sampling will take place in order to decide its priority and ranking in any future drilling program.
BHP Billiton Joint Venture Agreement
Polar Star continues to liaise with BHP Billiton in relation to their joint venture agreement over 172,800 hectares of exploration land currently held by Polar Star. As previously reported, BHP Billiton has until July 13th 2013 to decide which of the five blocks currently under option it wishes to select for further investigation.
Other Exploration Areas
Other exploration areas in the Polar Star portfolio are being evaluated for prospectivity and potential contribution to the group. The Board is considering all options to generate value for its shareholders and these will include further joint venture agreements, direct exploration or possibly a spin-off of non-core assets into a new dedicated copper-gold exploration vehicle. The Board remains open minded and looks forward to announcing the results of this internal review to shareholders in due course.
The Company is pleased to announce that it has now successfully concluded its recently announced $6,500,000 equity fundraising. It was pleasing to see that most of the existing institutional shareholders participated in this offering and that a significant new institutional shareholder, Praetorian Resources Limited, also joined the share register.
The Company is in the process of implementing a significant cost cutting program at both the Toronto head office and the Chilean regional office level and this rationalisation will continue as the reorganised Board develops and executes upon the revised strategy for the group. To illustrate this, the revised aggregate cash remuneration for the Company's five person Board has fallen to approximately $100,000 per annum and a number of other non-core Company contracts and payments have either been cancelled or not renewed.
As already mentioned, as part of this equity offering there was a major overhaul of senior management. The Company is delighted to have been able to attract Kaare Foy to act as Chairman and Colin Bird to act as CEO. Mr Foy was one of the founders of Great Panther Silver Limited which subsequently listed on both the TSX and the NYSE Amex and attained a market capitalisation of over US$600 million. Mr. Bird has founded and floated several public companies in the resource sector and served on resource company boards in the UK, Canada and South Africa. In the exploration arena he founded, financed and was Chairman of Kiwara PLC, an AIM listed company, which discovered, and sold to First Quantum Minerals for $270 million, a large open pit copper project in Zambia.
The new management team is determined to continue to take a strong stance towards cost reductions to ensure every Company dollar is directed towards maximum shareholder return through the development of the Company's existing asset base. Remuneration is now significantly geared towards performance with cash payments reduced to a minimum.
This news release may contain forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. Actual events or results could differ materially from the Company's expectations and projections. Investors are cautioned that forward-looking statements involve risks and uncertainties. Accordingly, readers should not place undue reliance on forward-looking statements. When used herein, words such as "anticipate", "will", "intend" and similar expressions are intended to identify forward-looking statements. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to Polar Star's filings with Canadian securities regulators available on www.sedar.com or the Company's website at www.polarstarmining.com.
About Polar Star
Polar Star is a TSX listed exploration and development company with a focus on building shareholder value in Chile. Polar Star's flagship property, Montezuma, covers 40 kilometres of the West Fault and the cross-cutting Esperanza Fault system and is located between Codelco's Radomiro Tomic - Chuquicamata - Ministro Hales (formerly known as Mansa Mina) group of copper-molybdenum porphyry deposits, and Antofagasta PLC's El Tesoro - Esperanza - Polo Sur group of copper-gold porphyry deposits. The Company's current strategy is to use the cash flow being generated from its Chepica mine (primarily gold) to fund, in part, the exploration program at its flagship Montezuma property and to advance its large portfolio of other potentially world class projects in Chile.
Shares outstanding: 166,001,001 as at November 14, 2012.
SOURCE: Polar Star Mining CorporationFor further information:
Colin Bird, CEO
Tel: +44(0) 77-178-94394
Adam Rochacewich, CFO
Tel: (416) 368-3496