Polar Star Mining Corporation

Polar Star Mining Corporation

April 08, 2009 15:23 ET

Polar Star Provides Shareholders With Facts in Information Update Warns Against Misleading Dissident Statements

TORONTO, ONTARIO--(Marketwire - April 8, 2009) -


Polar Star Mining Corporation (TSX VENTURE:PSR) ("Polar Star" or the "Company") today issued a letter providing updated information for shareholders to consider in voting their YELLOW proxy in time to be counted at the Company's annual meeting on April 17, 2009 in Toronto.

The letter notes the recommendation from proxy advisory firm RiskMetrics Group that Polar Star shareholders vote in favour of the management nominees at the annual meeting. It shows the startling disparity between dissident shareholder Douglas Willock's promises about the Company's Chepica project and actual resource estimates. It also warns shareholders against accepting misleading statements from Mr. Willock and his associates.

The full text of the letter from Executive Chairman Stephen G. Roman, on behalf of the management nominees to the Board of Directors, follows:

April 8, 2009

Dear Fellow Shareholders,

- Polar Star needs your support to pursue prospective targets and build value - Vote only your YELLOW proxy

- Industry leading proxy advisory firm recommends support for Management nominees

- Independent report of Chepica resource estimates validates your Board's prudent approach

- Dissident continues to mislead shareholders

Within the next few days, as shareholders of Polar Star Mining Corporation, you will make a crucial decision about the direction of your Company. I believe you will base your choice of a Board of Directors on facts and your own best interests. Therefore, I am asking you to vote your YELLOW proxy in favour of the management nominee slate of directors by 10:00am ET on April 15, 2009, to ensure your vote can be counted at the Company's annual meeting on April 17.

On behalf of the management nominees, I am providing you with this update and asking for your support to build a more valuable Polar Star.

As you know by now, your Board believes that the dissident shareholder Douglas Willock is seeking to fill the Board of Directors with his own hand-picked nominees in order to take effective control of the Company and lead it towards potential disaster. We believe his nominees would not act independently to prevent his ill-considered "vision". Unlike the management nominees for the Board, Mr. Willock's slate lacks the relevant skills and experience to guide your Company to enhanced value for all shareholders.

Consider these recent important developments as you make your decision and cast your vote:

1. Independent Endorsement of the Management Nominees: RiskMetrics Group, a leading proxy advisory firm relied upon by institutional shareholders, has recommended that Polar Star shareholders vote to support the management-nominated Board slate. RiskMetrics met with both sides and reviewed the facts. It noted: "The management nominees are highly experienced, have successful track records and appear better able to create shareholder value. Therefore support is warranted for the management nominees." It also said: "No major strategic missteps or significant abuse of shareholders' rights are apparent in the Board's actions. The Board's strategy appears reasonable and prudent in the circumstances."(i)

2. Chepica Project Report: Polar Star yesterday announced resource and grade estimates for the Chepica Project in southern Chile. The draft NI 43-101 report submitted by SRK Consulting (Chile) supported the prudent approach of management and your Board. The report included the following findings that were not unexpected by your Board - but are in stark contrast to Mr. Willock's "vision":

Mr. Willock previously stated to the Board and investors that the mill head grades would be 1.5 per cent copper and 6 grams gold per tonne and that Chepica would "generate significant cash flow and fund operations and exploration of Polar Star's other properties". In fact, the SRK report indicates the resource grade is only 0.48 per cent copper and 2.6 grams gold per tonne with only a 400,000- tonne Measured and Indicated Resource at these grades. This is totally insufficient to validate any mining scenario at Chepica.

An independent review by renowned geologist Dr. William Roscoe of Scott Wilson Roscoe Postle Associates stated that "the head grades appeared to be decreasing with depth." In addition, further independent test results from the University of La Serena show disappointingly low gold and copper recoveries of approximately 65% each, with the quality of concentrate not meeting minimum requirements for sale to ENAMI, the state-run smelter for small mining operations.

These findings prove that Chepica would be a catastrophic cash drain, not a cash generator for Polar Star. Mr. Willock`s naive expectations and inexperience led him to promote what he believed was there. He continues to propose further spending at Chepica. Despite Mr. Willock's demands, your Board insisted on a proper technical review before committing to further significant cash outlays of valuable shareholder funds. The NI 43-101 report confirms your Board's view that Chepica is not a material property to the Company. Nevertheless, the technical report will be filed by the Company, to provide shareholders with the information currently available to the Board.

3. Misleading dissident statements: Shareholders have advised us that Mr. Willock and his proxy solicitor continue their high-pressure calling campaign, making questionable statements about Mr. Willock's current shareholder support levels, the mining qualifications of his nominees, and corporate governance practices at Polar Star. As recently as today, Mr. Willock issued a press release saying "it is difficult to understand RiskMetrics support" of the management-nominated slate, and purporting that, at time of his termination, he had "majority support" from a few shareholders. The explanation is simple: this world-leading governance advisory firm had benefit of all the facts, not just Mr. Willock's self-serving representations to select shareholders. All shareholders are now seeing the whole picture.

Shareholders are advised to ignore the dissident claims and get the facts from the Management Information Circular previously issued, and updates available at the Company website www.polarstarmining.com. We urge you to focus on the facts, consider the strategy, experience and track record of the Management Nominees, and vote your YELLOW proxy now.

Polar Star is now on the right track and focused on high-potential projects. Mr. Willock's reckless spending has been stopped. Your Company has brought together an excellent, highly independent, Board and an experienced management team -- people who know the industry, have a proven track record of success, and an ambitious yet realistic plan for growth.

It is unfortunate that the Company and the shareholders have been subjected to this time-consuming, costly and unwarranted action by Mr. Willock. It is important that you cast your vote now. If you have not already voted or you have voted a blue proxy, please vote your YELLOW proxy now in support of management. Your latest dated proxy received before proxy cut-off overturns any previous ones. With your support, on Friday, April 17th, a new chapter will begin for Polar Star and we will strive to repay your confidence with results.

Thank you for your continued support and trust in our experience.

Stephen G. Roman, Executive Chairman

The Polar Star Board urges all shareholders to vote their YELLOW form of proxy in favour of the Company's nominees to the Board of Directors. Shareholders with questions or requiring assistance in completing their YELLOW form of proxy are asked to contact Polar Star's proxy solicitation agent, Laurel Hill Advisory Services, LLC toll-free at 1-888-812-9185. To be valid, proxies must be received by 10:00 a.m. (Eastern Time) on April 15, 2009.

(i)Note: Permission to quote from the RiskMetrics report was neither sought nor obtained.

About Polar Star Mining Corporation

Polar Star was created to acquire advanced stage exploration properties focusing on gold, copper, and uranium. The Corporation's material assets include 20 projects in Chile, which are 100% owned and cover approximately 146,112 hectares.

Forward-Looking Statements

This press release may contain forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. Actual events or results could differ materially from the Company's expectations and projections. Investors are cautioned that forward-looking statements involve risks and uncertainties. Accordingly, readers should not place undue reliance on forward-looking statements. When used herein, words such as "anticipate", "will", "intend" and similar expressions are intended to identify forward-looking statements. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to Polar Star Mining Corporation's filings with Canadian securities regulators available on www.sedar.com or the Company's website at www.polarstarmining.com.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release and the information contained herein.

Contact Information

  • Investors:
    Laurel Hill Advisory Services
    Polar Star Mining Corporation
    Stephen G. Roman
    Executive Chairman
    Lute & Company
    John Lute