PolarX, which was down to less than A$1 million at the start of the year, is keen to keep pushing ahead with its Alaska Range exploration project in Alaska, close to where Northern Star operates its sole overseas asset, Pogo.
PolarX has announced a plan to raise $4.92 million at 1.2c, a 10% discount to recent raising levels, with 10.6% shareholder Northern Star agreeing to underwrite the offer and potentially increase its stake again.
Executive chair Mark Bojanjac, managing director Dr Jason Berton and non-executive director Frazer Tabeart intend to subscribe for their full entitlement.
The non-renounceable offer includes a shortfall offer to both eligible shareholders and third-party investors.
Berton said the goal of the raising was to fund more work at the company’s flagship Alaska Range copper-gold project, including securing 80% ownership of the Caribou Dome VMS deposit, and for work at its Humboldt Range gold project in Nevada.
Berton said the copper grades at Caribou Dome were “globally compelling”, and his goal is to deliver a viable development after the company’s initial setbacks.
PolarX has completed three rounds of scoping studies, the first of which “hurt a bit” being completed in a higher copper price environment, but the company has been able to refine its approach the resource, eventually leading to last month’s study that doubled the net present value from $310 million, the pre-tax internal rate of return from 38.6% to 73.9% and increased average annual free cash flow over the 10-year mine life from $82 million to $120 million.
It has also improved the metallurgy, increasing recoveries from a “poor” 77% to around 88% without changing much about the circa US147 million development.
This year it will target increasing copper recoveries above 90%, while investing in drilling to increase the size of the Caribou Dome resource from 7.2Mt grading 3.1% copper and 6.5 grams per tonne gold.
A key step will be to drill around the fault that separates the resource. While the fault is problematic, some drillholes that ended in 4-5% copper have not been followed up because of the topography.
“If I can take out that bullnose, it adds around 1Mt to the resource, which ends at 300m, but we have holes going down 450m,” Berton said.
“If I can add just 2Mt to the resource it adds A$200 million to the scoping study NPV.”
Deeper drilling is a priority during the summer.
The nearby 4Mt at 1.1% copper, 1.6gpt gold and 12.6gpt silver Zackly deposit is also an open system offering “easy tonnes” at depth, while potential along strike exists.
“My target is to get this to around 15Mt before there is some decision to mine,” Berton said.
Berton wants to start closing the gap between the $20 million market capitalisation and the $625 million NPV.
Berton said Humbolt Range hasn’t been forgotten, with an IP survey last year defining a large anomaly along a known gold trend that its major shareholders are keen for it to drill later this year.
Aside from Northern Star, PolarX’s main shareholders include UK fund Ruffer Gold (11.4%), US Global (5.6%) and Canada’s Lundin Mining (3.3%).
