Lundin Mining has been issued 53.4 million shares in PolarX at 8 cents per share and has become PolarX’s largest shareholder owning 14.3% of the company.
This share subscription secures an exclusive option for Lundin Mining to enter an earn‐in joint venture on porphyry copper‐gold targets within PolarX’s Stellar Claims.
PolarX has agreed to use the proceeds of this share subscription to fund an exploration program on the Stellar Claims targets.
The exploration program is to be completed by the end of 2019, subject to extension in certain limited circumstances, and will be determined by a five‐person exploration committee (3 Lundin Mining members, 2 PolarX).
Lundin Mining will make its decision as to whether to exercise the option to commence the earn‐in on or before the later of a thirty‐day period to review results of the exploration program or 31 December 2019.
Lundin Mining can exercise the option to enter into a 3‐year earn‐in period for a joint venture at any time prior to the option exercise date, with the following earn‐in terms:
• Year 1 ‐ upfront cash payment to PolarX of US$2 million within 30 days of the option exercise date (anticipated to be 30 January 2020) plus a minimum of US$8 million exploration expenditure by the end of Year 1 to earn the right to continue.
• Year 2 ‐ upfront cash payment to PolarX of US$3 million within 30 days of the first anniversary of the option exercise date (anticipated to be 30 January 2021) plus a minimum of US$8 million exploration expenditure by the end of Year 2 to earn the right to continue.
• Year 3 ‐ upfront cash payment to PolarX of US$5 million within 30 days of the second anniversary of the option exercise date (anticipated to be 30 January 2022) plus a minimum of US$8 million exploration expenditure by the end of Year 3 to earn the right to then enter into a joint venture.
• Final cash payment of US$10 million to PolarX to exercise the right to form a joint venture initially owned 51% Lundin Mining and 49% PolarX.
Once formed, the JV will be managed by a five‐person board (3 Lundin Mining appointees, 2 PolarX appointees).
Both parties will be responsible for funding their share of future expenditure, with standard dilution provisions for non‐contributing parties.
PolarX managing director Dr. Frazer Tabeart said the strategic investment by Lundin Mining provides strong independent validation of the company’s confidence in its porphyry copper‐gold targets in the Alaska Range.
He added “We are delighted to have attracted an investor and potential project partner with the demonstrated financial, technical, commercial and operational capability that Lundin Mining provides.
“Our porphyry Cu‐Au targets at Saturn and Mars are compelling opportunities of significant scale and we look forward to a major exploration campaign in 2019 with Lundin Mining’s input.
“Conclusion of the share placement and entitlement offer means we will be fully‐funded for the 2019 exploration program.
“Our goal is to provide enough information by the end of this field season to enable Lundin Mining to exercise its option to enter the JV earn‐in phase on the Stellar Property.
“At the same time, we plan to undertake further drilling to grow the inferred resource size at our 100% owned high‐grade Zackly Cu‐Au skarn deposit, which is specifically excluded from the earn‐ in area and remains 100% owned by PolarX.”
$4.25 million entitlement offer to PolarX shareholders
PolarX also intends to raise up to an additional $4.25 million via a 1 for 7 non‐renounceable entitlement offer to eligible shareholders priced at 8 cents per share.
Funds raised through the entitlement offer will be used for exploration on the excluded Zackly Claims and the Caribou Dome Project and for general working capital.