The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News – March 1, 2024
PolarX is exploring the Alaska Range project in Alaska and the Humboldt Range project in Nevada.
PolarX Ltd. Feb. 27 announced that Northern Star Resources Ltd. has agreed to participate in a financing that would earn the Australia-based gold producer a 28.5% interest in the junior exploration company.
Both Australia-based companies have interests in Alaska – Northern Star owns and operates the high-grade Pogo gold mine, and PolarX is exploring the district-scale Alaska Range copper-gold-silver project about 100 miles (165 kilometers) southwest of Pogo.
The Pogo Mine, about 80 miles (130 kilometers) southeast of Fairbanks, Alaska, is Northern Star's first operation outside of Australia. The major gold producer with a market cap of A$14.7 billion (US$9.6 billion), however, has expressed interest in expanding its North American portfolio.
The company's growth strategy is focused on acquisitions and exploration in highly prospective geological settings within low-risk jurisdictions such as Australia and North America.
PolarX, an Australian junior exploring for gold and associated metals in Alaska and Nevada, fits within Northern Star's growth criterion.
PolarX's Alaska Range project includes the Copper Dome property and the adjacent Stellar property that hosts the Zackly deposit and several other copper-gold prospects.
PolarX's roughly 22-mile- (35 kilometers) long Alaska Range project hosts Zackly, a high-grade gold-copper-silver skarn deposit, and Caribou Dome, a high-grade carbonate-hosted copper deposit about 15 miles (24 kilometers) to the southwest.
According to a calculation completed in mid-2023, Caribou Dome hosts 7.2 million metric tons of measured, indicated, and inferred resources averaging 3.1% (224,375 metric tons) copper and 6.5 grams per metric ton (1.5 million oz) silver.
Zackly hosts an additional 4 million metric tons of indicated and inferred resources averaging 1.1% (45,000 metric tons) copper, 1.6 g/t (213,000 oz) gold, and 12.6 g/t (1.6 million oz) silver.
A scoping study completed in August outlines plans for a 750,000-metric-ton-per-year centralized mill developed next to Caribou Dome that is expected to produce 138,446 metric tons of copper, 102,577 oz of gold, and 1.46 million oz of silver over 9.5 years of mining.
This dual mine operation is estimated to generate a pre-tax net present value (7% discount) of US$201 million, an internal rate of return of 38.4%, and a capital payback period of 2.75 years.
Economic outcomes from the 2024 Alaska Range scoping study.
*The financial outcomes of this scoping study, however, were significantly bolstered with the inclusion of increased copper recoveries resulting from ongoing metallurgical studies by PolarX.
With the increased recoveries, the Alaska Range project is now expected to produce 148,155 metric tons of copper and generate a pre-tax net present value (7% discount) of US$406 million, an internal rate of return of 73.9%, and a capital payback period of 1.6 years.
These strong economic results played a key role in Northern Star's decision to support PolarX's financing.
PolarX is also exploring Humboldt Range, a gold-silver project in Nevada that lies about 20 kilometers (12 miles) north of Coeur Mining Inc.'s Rochester silver-gold mine.
Northern Star acquired an initial 10.6% stake in PolarX through participation in a financing at the end of 2022. Now, the Australian gold producer is underwriting a A$4.92 million (US$3.2 million) PolarX financing.
Northern Star's participation in the financing, and resultant interest in PolarX, will depend upon the number of shares bought by other investors. If there were no other participants, then Northern Star's stake in PolarX would rise to 28.5%. This interest will almost certainly be less as it is expected that others will join the financing being offered at a roughly 10% discount to the 10-day average of the PolarX share price.
PolarX plans to use the money raised during the financing to exercise its option to acquire an 80% interest in Caribou Dome, as well as for the upcoming exploration programs at its Alaska Range and Humboldt Range projects.
*CORRECTION: This article was updated on March 7 to include the improved results from an updated scoping study published by PolarX on Jan. 17, 2024.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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