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BHP moves to earn a 75% stake in exploration targets in northern Chile

27th August 2013

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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JOHANNESBURG (miningweekly.com) – Mining major BHP Billiton has committed $14-million to exploration activities on four of five blocks of exploration land owned by TSX-listed Canadian junior Polar Star Mining.

BHP would earn a 51% stake in each block by injecting $3.5-million into each block in the selected 130 900 ha exploration area within 30 months, starting August 13.

Following the earn-in, a second option would allow the group to raise its stake in each block to 75% by investing an additional $80-million, spread equally across the four blocks, within 54 months.

The properties are located south of Polar’s 100%-owned 50 000 ha Montezuma property, along a 360 km stretch over the Domeyko Fault system that is host to major copper deposits in Chile.

The global miner had already invested $1-million for a preliminary assessment of all five blocks covering 172 800 ha after signing a definitive agreement with Ontario-based Polar in April last year.

“We are pleased that BHP have elected to continue with the majority of the projects and the diligent manner in which they have carried out their initial work programme. The first option commitment is significant in financial terms, demonstrating that BHP Billiton share our confidence in the potential of our properties,” Polar president and CEO Colin Bird said in a statement.

The exploration and development company said work continued on the selected blocks to define drill targets either on a standalone basis or contiguous with other BHP assets.

“Polar Star understands that the next asset BHP may look to advance under the current agreement is the Domeyko project, which is located 45 km south of Mina Escondida,” Polar added.

BHP and Polar would hold “joint venture meetings” to discuss the work undertaken on all four blocks during each quarterly period.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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