/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
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
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
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
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
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
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
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.
PDF available at: http://stream1.newswire.ca/media/2012/11/14/20121114_C8031_DOC_EN_20607.pdf
SOURCE: Polar Star Mining Corporation
For further information:
Colin Bird, CEO
Tel: +44(0) 77-178-94394
Adam Rochacewich, CFO
Tel: (416) 368-3496