Chépica Mine Re-Opening On Budget and Schedule

Startup planned for mid-September; targeting 1,000 ounces of gold per month

/Not for distribution to United States wire services or dissemination in the United States/

TORONTO, Sept. 1, 2011 /CNW/ - Polar Star Mining Corporation (TSX: PSR) ("Polar Star" or the "Company") is pleased to provide an update on progress toward the restart of gold and copper concentrate production at the Company's Chépica Mine in Chile. Mining is scheduled to commence in mid-September 2011, and sales in October 2011, at the rate of 1,000 ounces of gold plus additional credits for copper and silver.

"The efforts and the high quality standards applied by the Chilean engineering and production team that the company has assembled at Chépica has significantly contributed to the project being on schedule and within budget," said Doug Willock, President and CEO. "This progress represents a major move forward from an exploration project to a producing mine. Planning is now underway to double production in 2012."

Chépica is an underground epithermal gold-silver-copper mine situated 280 km southwest of Santiago.  The plant and facilities were installed new in January 2009 by the previous owner, who processed sulphide ore until Polar Star became operator of the property in the fourth quarter of 2009.  At that point the plant and facilities were placed on care and maintenance pending results from the Company's Phase II exploration program.

Since Polar Star's decision, in May 2011, to restart production at Chépica, the Company has followed a three-part program:

  1. Enhance access to the mine by reconstructing an existing portal on the south side of the property and create a second entrance on the north side.  Mining is scheduled to restart in September to provide a stockpile of ore in preparation for the resumption of processing.

  2. Refurbish and upgrade the plant and equipment at the process facility, including:  improving process flow, overhauling the ball mill and flotation units, relining the tailings pond and adding a gravity recovery system to remove free gold, together with a new filter system to produce copper concentrate.

  3. SRK Consulting (Chile) SA will incorporate the Phase II drill results to update the 2009 NI 43-101 resource estimate for the property.

"We are on budget and on schedule, with full commercial operation planned for the fourth quarter of this year," said Martin Gallon, Chief Operating Officer.  "Every piece of equipment at the processing plant has been stripped down to bare bones and rebuilt." Since Mr. Gallon was appointed in May 2011 he has focused on bringing Chépica back into production.

Upon the scheduled restart in September, initial throughput is expected to be approximately 200 tonnes per day.  Production is projected to average 1,000 ounces of gold per month, with attendant silver and copper credits.

Chépica is expected to begin generating cash flow in October 2011.  Initial capital and working capital estimates for the project totals are below the US$2 million originally budgeted.  Operating costs are estimated to average US$500 per ounce of gold and capital payback at current gold prices is expected to occur during the fourth quarter.  Chépica is expected to produce net free cash flow of approximately US$1 million per month.

Future plans for the Chépica mine include:

  • Commencing development for mining on Vein 2;

  • Initiating a brownfield exploration drill program on Veins 1 through 4 to extend the current resource base and identify additional feed material for the mill;

  • Review and testing of already identified anomalies within the remainder of the 1,440 hectares of the Chépica property;

  • Designing an exploration program to discover additional vein systems for Chépica feed and/or additional stand-alone mines;

  • Immediately applying to increase the mine's permitted maximum monthly ore throughput from 5,000 tonnes to 10,000 tonnes;

  • Developing the engineering flow sheet and examining the economics of expanding the mill circuit to increase throughput to 500 tonnes/day;

  • Doubling the mine's production rate during the second quarter of 2012.

Polar Star's growth strategy calls for the restart of Chépica as its most immediate major objective.  The cash flow from Chépica is expected to provide internal funding for further onsite exploration and development, plus the ongoing exploration program at Polar Star's flagship Montezuma property and for general corporate purposes.

Photographs and commentary on the Chépica mine re-start can be found on the Company's website at:

http://www.polarstarmining.com/Theme/Polarstar/files/Chepica%20Plant%20Update%20August%202011%20v2.pdf

Forward-Looking Statements
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 Mining Corporation (TSX: PSR) is an emerging exploration company with a focus on building value in Chile through discovery and development.  Its 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.

Share Capitalization
Shares outstanding: 90,572,669 as at September 1, 2011

www.polarstarmining.com


SOURCE Polar Star Mining Corporation

For further information:

Adam Rochacewich, CFO
Tel: (416) 368-3496
Email: info@polarstarmining.com

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Polar Star Mining Corporation

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