review of operations

During the year Polaris acquired the iron ore assets of
Heron Resources Limited, delivering highly prospective
iron ore targets in the South Central and North Pilbara
Iron Provinces of Western Australia. As a consequence
there has been rapid progress towards the Company
becoming an iron ore producer, with two iron ore
production strategies:
1. Yilgarn Iron Province near Koolyanobbing (Yilgarn
Iron Ore Project) potential for long life production
in the range 5-10 million tonnes per annum
(Mtpa) commencing in 2010, major off-take
partner required.
2. Pilbara Iron Province near Port Hedland (Poondano
Project) potential for 1.25-2.5 Mtpa by 2009.
The Yilgarn Iron Ore Project has large scale direct
shipping grade mineralisation (60-70Mt) established in
the 1970s by a previous explorer, and additional
exploration potential such that there is an expectation
of a 200Mt target resource base. The Company is
targeting 5-10Mtpa export of iron ore production
through the Kwinana bulk jetty via the established
railway network.
Although smaller than the Yilgarn project, the
Poondano Project in the North Pilbara is the more
advanced and, being close to Port Hedland, is an
attractive low capital cost opportunity for Polaris to
become an iron ore producer.
In addition to iron ore, three exploration licenses
acquired from Heron, situated southwest and north of
Onslow on the northwest coast of Western Australia,
have potential for solar salt production. A solar salt
project in which Polaris will hold 50% interest, free
carried for the first A$10 million of pre-development
expenditure, is expected to proceed to feasibility
studies in 2007-2008.
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