/NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/
TORONTO, April 16, 2012 /CNW/ - Polar Star Mining Corporation (TSX: PSR) ("Polar Star" or the "Company") is pleased to announce that it has completed a Definitive Agreement (the "Agreement") with BHP Billiton regarding 172,800 hectares of exploration land held by Polar Star (see Schedule 1 and Figure 1 for property locations and map). The Properties are, in general, located south of Polar Star's 100% owned Montezuma Property along approximately 360 kilometres of the Domeyko Fault System in Northern Chile, commonly referred to as the Mega Porphyry Belt. This regional fault system also hosts the Chuquicamata and Escondida mines. Under the Agreement, BHP Billiton has the option to earn up to a 75% interest in the properties which are grouped into 5 separate blocks.
Polar Star has received a cash payment of US$250,000 and a commitment for US$1 million in reconnaissance exploration expenditures on the properties by July 13, 2013. Upon completion of the US$1 million expenditure, BHP Billiton will select up to 5 blocks for further exploration.
Under the first option, BHP Billiton will earn a 51% interest in each block for which it solely funds US$3.5 million of exploration expenditures within 30 months of the date of selection. The total exploration expenditure commitment required to earn a 51% interest in all five blocks is US$17.5 million under this first option.
Under the second option, following earn-in and formation of a Joint Venture, BHP Billiton may earn up to an additional 24% to reach up to a 75% interest in each block that it solely funds up to an additional US$20 million of exploration expenditures within 54 months of formation of the Joint Venture(s). To earn an additional 24% in all five blocks, BHP Billiton is required to solely fund a total of an additional US$100 million of exploration expenditures under this second option. Should the second option not be exercised, the parties will fund future exploration pro-rata.
Doug Willock, President and CEO of Polar Star said "Should all five blocks be selected and the maximum exploration expenditures commited to as set out above, the total funding provided would be US$117.5 million. Beyond the financial resources BHP Billiton brings, is their significant exploration, development and operating expertise in Chile which we believe will considerably increase our opportunities for exploration success."
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.
Shares outstanding: 94,956,001 as at April 16, 2012.
Polar Star Properties Under Exclusive Option to BHP Billiton
Image with caption: "Figure 1 - Map of Block Regions (CNW Group/Polar Star Mining Corporation)". Image available at: http://photos.newswire.ca/images/download/20120416_C5878_PHOTO_EN_12335.jpg
For further information:
Adam Rochacewich, CFO
Tel: (416) 368-3496
Email: [email protected]