/NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/
TORONTO, Sept. 13, 2012 /CNW/ - Polar Star Mining Corporation ("Polar Star") (TSX:PSR) announces that further to its news release dated February 21, 2012, it has entered into an amended and restated option agreement (the "Amended and Restated Option Agreement") with Kairos Capital Corporation ("Kairos") to amend certain terms of the option agreement between Polar Star and Kairos dated February 16, 2012 (the "Original Option Agreement"), pursuant to which Kairos agreed to acquire an interest in certain mineral exploration properties located in Chile (the "Assets").
Pursuant to the terms of the Original Option Agreement, Kairos agreed to acquire from Polar Star a 51% interest in: (i) 16 mineral exploration concessions, known as the "Nancagua Property"; (ii) 29 exploration concessions and an option to acquire five (5) additional exploration concessions, known as the "Fortuna Property"; and/or (iii) one of Polar Star's non-core properties.
Under the terms of the Amended and Restated Option Agreement, Kairos will pay US$165,000 to Polar Star and shall have funded US$50,000 of option payments due to a third party in respect of the Fortuna Property, in exchange for which Kairos will acquire a 100% interest and a 50% interest in the Nancagua Property and the Fortuna Property, respectively.
With respect to the Fortuna Property, under the terms of the Amended and Restated Option Agreement, Kairos will have the option of increasing its interest in the Fortuna Property if Kairos:
|(i)||funds the $1,300,000 in scheduled option payments due to a third party by May 31, 2014, Kairos shall earn an additional 10% interest in the Fortuna Property;|
|(ii)||incurs additional exploration costs of $600,000 on or before March 31, 2015, Kairos shall earn an additional 5% interest in the Fortuna Property; and|
|(iii)||if Kairos completes a bankable feasibility study in respect of the Fortuna Property on or before March 31, 2023, Kairos shall earn an additional 10% interest in the Fortuna Property.|
Kairos has also selected a property known as the "Salvadora Property", which was one of Polar Star's non-core properties, comprised of 36 exploration concessions encompassing approximately 9,400 hectares.
Pursuant to the terms of the Amended and Restated Option Agreement, Kairos will have the option to earn a 51% interest in the Salvadora Property by spending $600,000 on exploration programs on the Salvadora Property on or before March 31, 2014 (the "Earning Phase"). Upon completion of the Earning Phase, Kairos shall have the option of increasing its interest in the Salvadora Property. If Kairos incurs exploration costs on the Salvadora Property of:
|(i)||an additional $1,100,000 on or before March 31, 2015, Kairos shall earn an additional 9% interest in the Salvadora Property;|
|(ii)||an additional $1,500,000 on or before March 31, 2016, Kairos shall earn an additional 5% interest in the Salvadora Property; and|
|(iii)||an additional $3,000,000 on or before March 31, 2019 or brings the Salvadora Property to production, Kairos shall earn an additional 10% interest in the Salvadora Property.|
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 an emerging exploration company with a focus on building value in Chile through discovery, development and production. The company is advancing its flagship exploration property, Montezuma, that covers 40 kilometres of the West Fault zone and the cross-cutting Esperanza Fault systems. The property is located between Codelco's Radomiro Tomic - Chuquicamata - Ministro Hales mines in the north and Antofagasta PLC's El Tesoro - Esperanza - Polo Sur mines to the south. Polar Star operates the Chépica gold/silver/copper mine located 270 kilometres south of Santiago, Chile. The head office of Polar Star is located in Toronto.
Shares outstanding: 99,276,001 as at September 13, 2012.
SOURCE: Polar Star Mining Corporation
For further information:
Adam Rochacewich, CFO
Tel: (416) 368-3496