POLAR STAR MINING CP

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Polar Star starts gold, Cu production at Chepica mine

2011-10-28 13:18 ET - News Release

Mr. Adam Rochacewich reports

POLAR STAR COMMENCES GOLD AND COPPER PRODUCTION AT CHEPICA MINE

Polar Star Mining Corp. has commenced production at its Chepica epithermal gold-silver-copper mine in central Chile.

"The start of production at Chepica is a decisive milestone for Polar Star" said Doug Willock, President and CEO. "Few mining companies are able to make the transition from exploration to production. Our ability to produce is a testament to the breadth of skills and experience in the company that will also serve us well as we continue to develop our large portfolio of world class projects in Chile. The cash flow we generate from Chepica will be used, in part, to advance exploration at Montezuma and to build our financial resources."

Since May 2011, Polar Star has been refurbishing the mine, process plant and tailings facility and has re-engineered existing equipment to improve throughput and optimize metal recoveries.

The final phase of the commissioning of the crushers, ball mill and floatation circuit commenced on October 23, 2011 and was completed two days later, when the plant commenced 24-hour operations.

During the refurbishment, modifications were made to the existing plant and flow sheet. The addition of new equipment doubled the capacity of the crushing circuit and increased the nameplate capacity of the ball mill from 200 to 250 tonnes per day.

In the recovery section, the addition of a Falcon concentrator will remove free gold, estimated at over 50% of contained gold from preliminary test work. Gold shaking tables will be used for final cleaning and the recovered free gold will be smelted onsite to produce dore. The dore will be shipped to North America for refining and sale at prevailing market prices.

Four thickeners and a filter press have been added to enhance recovery of the copper/gold concentrate. Shipments of concentrate are expected to commence the week of October 31, 2011. Arrangements have been made for the concentrate to be purchased at the mine site at prevailing spot commodity prices. The purchaser will then arrange for the concentrate to be transported by truck in 25-tonne containers for onward sale to the export market.

Martin Gallon, Polar Star's Chief Operating Officer, said, "The Polar Star team and the skilled local engineering groups did an outstanding job of bringing the project on stream in a very short period of time despite considerable challenges posed by unseasonably heavy rainfall."

The mine's initial throughput is targeted at approximately 5,000 tonnes per month, with a monthly production objective of 1,000 ounces of gold and 50,000 pounds of copper. The company plans to double production during the second half of 2012. The recent additional plant and crushing circuit modifications support that objective by saving time and reducing operating costs.

To meet ore demand from the plant, the mine operation has opened a second portal access at the north end of Vein No. 1. Company geologists are assessing the extensive network of gold/copper vein systems surrounding the refurbished process plant to identify priority targets for brownfield exploration during 2012.

Terry Walker, P. Geo and VP Exploration was issued 500,000 common shares of Polar Star in connection with the decision to re-open the Chepica mine as part of his long term compensation plan first agreed to in 2007 and previously disclosed.

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