Perth, Feb 8, 2006 AEST (ABN Newswire) - Polaris Metals NL (ASX: POL) ("Polaris") has reached an agreement with Golden State Resources Limited (ASX: GDN) ("Golden State") for Polaris to have an exclusive right to earn 70% interest in the iron ore potential of Golden State's Johnston Range Project tenements, situated near Diemals in the Yilgarn Iron Province, 160km north of Southern Cross.
Polaris will commence earning its 70% interest when the authorisation of the Minister for State Development is in hand for exploration on the tenements to include iron ore. This administrative procedure is normally completed in 1-2 months. Polaris is then committed to the expenditure of not less than $75,000 on the tenements within 12 months.
Polaris' 70% interest can be earned by sole funding iron ore exploration costs through to completion of an economic pre-feasibility study, or alternatively, through the expenditure of $1,000,000, whichever is the greater. At Golden State's option, Polaris may earn a further 10% interest through sole funding the cost of completion of a bankable feasibility study or the expenditure of an additional $1,000,000 on the tenements, whichever is the greater. Should Polaris reach an 80% interest, Golden State may elect to contribute or to be diluted pro rata; and should Polaris reach a 90% interest Golden State may elect to exchange its 10% interest for a 2.5% gross royalty.
The Yilgarn Iron Province is considered highly prospective, given its history of large-scale iron ore production, with the Koolyanobbing operation of Portman Limited currently producing at a rate of about 5Mtpa. The Portman operation, which is based on the Koolyanobbing mine and rail infrastructure 50km north of Southern Cross, also sources ore from satellite deposits about 100km north of Koolyanobbing, such as Windarling (60Mt at 63.6% Fe) and Jackson (47Mt at 60.9% Fe).
Polaris' exploration in the area is targeting a resource base sufficient for export of 2.5 million tonnes per year of iron ore. An operation would utilise the established rail link from Koolyanobbing to Kwinana.
Capital Structure:
Share Price (POL): $0.16.5
Issued Shares: 50.3m
Market Cap: $8.3m
Options 20c (POLO): 20.7m
Options 25c (Unlisted): 3.6m
Contact
Company Management:
Lewis Cross - Non executive Chairman
Kevin Schultz - Managing Director
Vernon Strange - Non executive Director
Colin McCavana - Non executive Director
Principal Office:
Level 2, 123A Colin Street
West Perth WA 6005
PO Box 670
West Perth WA 6872
Tel: 08 94813030
Fax: 08 94813031
Email: info@polarismetals.com.au
Web: www.polarismetals.com.au
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