Polar Star Mining has entered into a joint-venture agreement with Newmont Ventures Ltd., a subsidiary of Newmont Mining, to explore and, if appropriate, develop Polar Star’s Montezuma copper project in the Antofagasta and Calama districts of northern Chile. A three-phase earn-in amounting to $20.5 million over a seven-year period will allow Newmont to own up to a 75% interest in the concessions. Newmont will act as the manager and operator of the joint venture.
The Montezuma project is located in the Atacama desert at an elevation of 2,800 m, approximately 15 km south of the city of Calama. The property extends more than 50,000 ha within the Domyeko fault system. The Chuquicamata and Ministro Hales mines are located to the north and Mina Escondida is located to the south.
Newmont’s contribution for phase one of the earn-in is $2.5 million over 30 months to earn a 51% interest in the project. The phase-two funding requirement is $5.5 million over 30 months, which will earn Newmont an additional 14% interest in the project.
Should Newmont elect to continue to phase three, it will be required to spend an additional $12.5 million before the expiry of a further 24 months to earn a further 10%. At that stage, Newmont would hold a 75% interest in the project.
Upon Newmont reaching a 75% interest, Polar Star will have options to either finance its 25% through to mine production or alternatively accept a financing option provided by Newmont under terms provided in the agreement. Should Polar Star elect not to participate in financing after Newmont achieves a 75% interest, it may elect to retain a 0.5% net smelter royalty rather than contributing its proportionate share, with Newmont receiving the company’s 25% interest at no additional cost.