Startup planned for mid-September; targeting 1,000 ounces of gold per
/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
Since Polar Star's decision, in May 2011, to restart production at
Chépica, the Company has followed a three-part program:
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.
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.
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
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
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:
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
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.
Shares outstanding: 90,572,669 as at September 1, 2011
SOURCE Polar Star Mining Corporation
For further information:
Adam Rochacewich, CFO
Tel: (416) 368-3496