Colin Jacoby -- MINING NEWS -- Tuesday, 21 April 2009
POLARIS Metals has agreed to purchase the iron ore rights from Southern Cross Goldfields for more than 40 tenements in Western Australia’s Central Yilgarn region.
The Perth-based iron ore hopeful said the purchase would give it the potential to increase the resource base of its Yilgarn iron ore project by acquiring rights over an adjacent tenement which lies along strike to the north of its Carina iron ore resource.
Polaris will pay $A400,000 for the tenements plus a $1 per wet metric tonne royalty from the Carina Extended tenement, capped at $3 million.
The purchase payment will be staged over the next nine months.
An additional $250,000 will be paid to Southern Cross should a JORC resource exceeding 3 million tonnes at greater than 58% iron be defined within the Carina Extended tenement.
To date, the Carina Extended tenement has returned rock chip samples of 57.9-61.6% iron.
Other iron ore rights purchased are on tenements at Bullfinch North, Golden Valley and Marda.
Polaris already owns significant portions of the iron rights on some of these tenements and has moved to 100% ownership.
The company said the arrangement was an excellent outcome for both companies.
“The agreement consolidates the iron rights in the Carina-Chamaeleon corridor and simplifies both further resource definition and planned mining,” Polaris said.
In December Polaris announced an updated inferred mineral resource estimate for Carina of 27.8Mt grading 58.6% iron, 3.7% silica, 1.3% alumina, 0.09% phosphorous, 0.08% sulfur and 10.1% loss-on-ignition.
Meantime, Polaris has inked an option agreement with Mineral Resources to permit iron ore mining on Polaris’s Poondano tenements near Port Hedland in Western Australia.
The agreement grants Mineral Resources the rights to mine, process, transport and ship all iron ore deposited on the tenements.
Under the agreement, Mineral Resources will complete a feasibility study and, if successful, build, own and operate the site facilities and pay Polaris for each tonne of iron ore removed from the site.
The project is anticipated to generate several million dollars of revenue per annum for Polaris.
Shares in Polaris have gained 1c to 13.5c in late morning trade.
POL Price at posting:
14.5¢ Sentiment: Hold Disclosure: Held
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