Exploration Technical Report Los Azules Cu-Mo-Au Project, III Region, Chile For Polar Star Mining Corp.

Transcription

1 Exploration Technical Report Los Azules Cu-Mo-Au Project, III Region, Chile For Polar Star Mining Corp. Report Prepared by SRK Consulting (Chile) S.A November 2013

2 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page i Los Azules Cu-Mo-Au Project III Region, Chile Polar Star Mining Corp. 10 King Street East, Suite 500 Toronto, Ontario, MSC 1C3 Canada SRK Consulting (Chile) S.A. Av. Vitacura 2939, Piso 5º Las Condes - Santiago Chile santiago@srk.cl website: Tel: +(56-2) Fax: +(56-2) SRK Project Number November, 2013 Compiled by: George Even Principal Geologist QP MAIG, MAusIMM Peer Reviewed by: Ernesto Jaramillo Principal Consultant, SRK geven@srk.cl Author: George Even, Principal Geologist QP, SRK Consulting (Chile) S.A.

3 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page ii Table of Contents 1 Summary Introduction Scope of Work Work Program Basis of the Technical Report Qualification of SRK Acknowledgements Reliance on Other Experts and Disclaimer Property Description and Location Introduction Land Tenure Underlying Ownership Mineral Rights in Chile Accessibility, Climate, Local Resources, Infrastructure and Physiography History Geological Setting,Mineralization and Modeling Regional Geology Property Geology Mineralization Mineralization and Alteration Deposit Type Polar Star Exploration Geological Mapping and Prospecting Geophysical Surveys Surveying Polar Star Drilling 2008 and Sample Preparation, Analyses and Security Sampling and Analysis Sample Security Data Verification Mineral Processing and Metallurgical Testing Mineral Resource Estimation Adjacent Properties Other Relevant Data and Information... 30

4 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page iii 17 Interpretation and Conclusions Recommendations References List of Tables Table 4-1: Los Azules Tenements Table 10-1: Significant intercepts 2008 Drilling Table 10-2: Significant intercepts 2010 Drilling Table 10-3: Collar Coordinates 2008 and 2010 Drilling Table 18-1: Polar Star Los Azules proposed 2014 Exploration Programme List of Figures Figure 2-1: Location of the Los Azules Project... 5 Figure 4-1: Los Azules Tenement Map Figure 7-1: Regional Geology of the Los Azules area Figure 7-2: Los Azules Prospect Geology Figure 9-1: Los Azules IP Chargeability Anomaly Map Figure 10-1: Los Azules 2008 DDH Drilling Figure 10-2: Los Azules 2010 RC Drilling... 25

5 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 1 1 Summary Introduction In October 2011, Polar Star Mining Corporation (Polar Star), a TSX listed company, entered into an agreement with SRK Consulting (Chile) S.A. (SRK) to prepare the following CIM NI Technical Report (Technical Report) of its Los Azules Cu-Mo-Au exploration property located in Chile s Region III (Los Azules Property). The 3,818 hectare Los Azules Property is comprised of 21 concessions. History There are no records of recent systematic exploration in the property area, however, small scale mining has been carried out in the larger breccias pipes since at least the 1930 s whenever copper prices permitted. Currently, two of the larger breccia pipes on an adjacent property are being mined by pirquineros (small-scale independent miners) on a small scale, about tonnes per month, for copper oxide. The two main pits on the Polar Star property were mined in this manner from and approximately 7,500 tonnes of material were mined. This historical information was provided to SRK by Polar Star, but has not been independently verified by SRK and is not necessarily indicative of the mineralization to be found in other areas of the Los Azules property. Geology and Mineralization The property lies along the western edge of the Cabaca de Vaca intrusive which occurs within the Late Cretaceous Paleocene Cu-Au Metallogenic Belt of the Chilean pre-cordillera. This Late Cretaceous batholithic body of essentially tonalite to diorite composition invades lower Cretaceous andesitic to dacitic volcanics and sediments and is host to numerous post-magmatic collapse breccias. These breccias are structurally controlled within a generally north south regional fault zone which also forms the western margin of the Cabaca de Vaca intrusive. The breccias tend to occur in swarms of up to 100 bodies. These swarms are the loci of a number of copper-gold mining districts, one of the larger being the Los Azules District. The property is generally underlain by tonalite to diorite phases of the Cabaca de Vaca batholith, however, on its eastern and southern boundaries a generally sub-horizontal sequence of sub-areal epiclastic sediments and inter-bedded basaltic to andesitic flows overlies the intrusive. Numerous post-magmatic hydrothermal collapse breccia pipes cut the intrusive and to a lesser extent the sediments and are distributed in clusters throughout the property (Figure 7-2). The individual pipes, which are circular to elliptical in plan, range from 5 m to 350 m in diameter. On the property, at least four are over several hundred metres in diameter. The largest of these, the Araya Breccia, is approximately 1,100 metres long and averages 150 metres in width. The breccia pipe locations and shape are strongly controlled by intersecting and generally NNE NE and NW-NNW trending faults. The breccia pipes are also generally enveloped by zones of strong argillic alteration in the host intrusive. This feature can be a useful guide in locating blind pipes. The hydrothermal copper, gold and molybdenum mineralization occurs exclusively in the breccia pipes and may be divided into an early fragment replacement stage, followed by open-space filling. The filling stage consists of tourmaline, accompanied by specularite and followed principally by quartz, chalcopyrite, pyrite (+/- gold), molybdenite and galena. The breccia fragments are generally

6 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 2 intensely argillically altered. All the Los Azules breccia pipes appear to contain uranium, however, no uranium minerals have been identified to date. A zone of surface oxidation up to 150 metres deep has produced a blanket of readily leachable copper minerals including atacamite, chrysocolla, brocanthite, copper wad and copper pitch. Locally, an irregular zone of secondary sulphide enrichment consisting essentially of chalcocite and minor pyrite is developed at the base of the oxide zone. Exploration and Drilling During June-July 2007 Polar Star personnel conducted prospecting and reconnaissance mapping programs over the larger pipes which were also checked for uranium using an Exploranium GS135 gamma ray spectrometer. All the breccia pipes tested consistently recorded values of over 100 ppm up to highs of 550 ppm equivalent uranium. Three bulk samples of kilograms were also taken from the main pit on the Araya breccia pipe. These samples were analysed by the Chilean Institute of Mining and Metallurgy in La Serena, Chile and assayed from % total copper, % molybdenum and 106 to 1130 ppm uranium. During July 2009, geological mapping and prospecting surveys employing hand held gamma ray spectrometers were completed by Polar Star personnel over most of the company s claims east and north of the Araya breccia pipe. These surveys outlined several zones of multiple breccia pipes and alteration with associated copper oxides assaying up to 4.4 % copper, 0.08% molybdenum, 0.29 g/t gold and 250 ppm uranium. During December 2009 and May 2010, Quantec Geoscience of Santiago Chile, completed a 41 line kilometer pole-dipole IP/Resistivity survey over the Los Azules area. The survey results show a moderate to strong chargeability anomaly at least 2.9 km long and up to 1.7 km wide that underlies the breccias pipe swarms at depths of from 50 metres to over 250 metres. Within this anomaly there are four centres of strong chargeability which generally coincide with surface areas of mineralised breccias and or strong argillic alteration. During the first half of 2008 Major Drilling Chile S.A., on behalf of Polar Star, completed a 2,100 metre diamond drill (DDH) program, consisting of five fences of holes spaced at 200m intervals along the axis of the main Araya pipe. This program mainly tested the oxidised upper 150 metres of the breccia pipe and returned intercepts ranging from 42 m grading 0.67% total copper to 24 m grading 1.1% total copper as indicated in Table The principle zone of oxide mineralisation was encountered along the southeast flank of the breccia pipe over a strike length of about 800 metres and to a vertical depth of about 100 metres and is mainly confined to the matrix of the breccia. Primary sulphide mineralisation consisting of disseminated and veinlet chalcopyrite, molybdenite and minor pyrite in both breccia and altered host intrusive was intersected in hole LA which yielded 0.41% copper over 120 metres. This was the deepest hole drilled and may suggest a porphyry source below the mineralised breccia pipe. Between late October and early December 2010, Polar Star, completed a 3,693 metre, 15 hole reverse circulation (RC) drill program. This program was designed to test a variety of coincident geological, geochemical and Induced Polarization (IP) targets within a 1.5 km wide by 2 km long zone of argillic and phyllic altered porphyritic intrusives containing numerous copper-molybdenumgold and uranium bearing quartz-tourmaline breccia pipes. This area is generally underlain by a moderate to strong IP chargeability anomaly extending from 50 to over 250 metres in depth and had never been drilled before.

7 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 3 Based on geological interpretation and the results of the reconnaissance RC program, this IP anomaly appears to reflect a large body of primary, pyrite-chalcopyrite-molybdenite disseminated and veinlet mineralisation with significant gold, rhenium and uranium enrichment. Both the alterationmineralisation and IP chargeability zones are open to the northeast and at depth. Interpretation and Conclusions Polar Star s surface geological and geochemical exploration programs today have outlined a northeast elongate, approximately 8 square kilometer area containing a swarm of at least 90 quartztourmaline breccia pipes many of which contain variable amounts of copper, molybdenum, gold and uranium mineralisation. This swarm of pipes is generally enveloped by an extensive zone of argillic alteration which also is variable anomalous in copper, molybdenum, gold and uranium. Induced Polarisation geophysical surveys over this zone detected a moderate to strong chargeability anomaly at least 2.9 km long and up to 1.7 km wide that underlies the breccia swarm at depths of from 50 metres to over 250 metres. The two subsequent reconnaissance drilling programs; a) targeting the Araya Breccia pipe in 2008 and b) the stronger IP chargeability centres in the northeast half of the zone in 2010 cut significant intercepts of oxide copper, molybdenum and gold mineralisation in the Araya Breccia pipe plus disseminated and veinlet primary pyrite-chalcopyritemolybdenite mineralisation with significant gold, rhenium and uranium enrichment in strong IP centers. The latter is generally hosted by an argillic to phyllic altered feldspar porphyritic felsic intusive and associated quartz-tourmaline breccias. The style of mineralisation and alteration appears similar to low flourine copper-molydenum porphyry systems. This evidence is the primary basis for the planned future exploration by Polar Star at Los Azules, which SRK believes is a valid basis and approach for the next drill programme. Recommendations Polar Star believes that a large porphyry system is the source of the mineralization at Los Azules which lies at shallow depth below the 3 kilometre square area of alteration and mineralised breccia pipes and plans to follow up with a another drill program in the near future. SRK is of the opinion that this exploration concept has merit as evidenced by SRK s experience with other prospects in Chile where porphyry copper deposits and associated hydrothermal alteration are in close proximity to mineralised breccias pipes. SRK also recommends that a QA/QC sample and laboratory analysis programme be implemented for the next drilling campaign, inserting duplicate, blank and certified reference materials samples into the sample stream. Regular check assays at another laboratory should also be carried out. Evaluation of the results of this QA/QC programme must be done on a regular basis during the drill campaign. When QA/QC analyses are completed after the drill campaign, it can be too late for making necessary adaptations and corrections. Polar Star considers that both the Araya Breccia pipe oxide mineralisation and the primary sulphide mineralisation need to be followed up with more detailed drilling programs. A two-phase reverse circulation drilling program is proposed by Polar Star to follow up on the results of the 2008 and 2010 reconnaissance drilling programs. 1. Infill drilling on 100m sections along the southeast flank of the Araya Breccia with a view to establishing at least an inferred oxide resource and; 2. Infill and step-out drilling in the northeast sector of the IP highs.

8 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 4 SRK is in general agreement with the potential to find additional mineralization to the northeast and at depth and that additional and deeper drilling is warranted. SRK also concurs with the plan for infill and step-out drilling as mentioned above. The drilling programme outlined for 2014 should allow Polar Star to test their mineralization interpretation at Los Azules and test the continuity of the mineralization leading to a mineral resource calculation.

9 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 5 2 Introduction In November, 2007, SRK Consulting (Chile) S.A. ( SRK or SRK Chile ) was asked by Polar Star Mining (Polar Star or Client), a TSX listed company, to visit their Los Azules Cu-Mo-Au Exploration Project, located in Chile s III Region to review the drilling and sampling procedures for their first drill campaign, visit surface outcrops of the mineralised area, assess the exploration potential and prepare an NI technical report commensurate with this project in an early exploration stage. Figure 2-1: Location of the Los Azules Project

10 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 6 SRK issued the NI technical report on the Los Azules Project on February 16, No work has been conducted on the property since that date, however, in September 2013, Polar Star requested that SRK update that report to reflect that the project belongs 100% to Polar Star and that there are currently no agreements or pending agreements with other parties. This report also shows the current claim situation and the revised exploration budget for Scope of Work The scope of the work is consistent with the NI items to be developed in the technical report considering the task of producing a technical report on the exploration of the Los Azules property. The areas of development and the activities under SRK responsibility, as agreed upon in the proposal, are described as follows: 1. Make a site visit to review the drilling and sampling protocols of Polar Star, as well as view surface outcrops 2. Review the geologic information provided by Polar Star as well as the drill hole database. 3. Prepare a technical report following the guidelines of the Canadian Securities Administrators National Instrument and Form F1, and in conformity with generally accepted CIM Exploration Best Practices guidelines. 2.2 Work Program The work program involved a field visit to the Los Azules property on January 29-30, 2008 to review the diamond drilling, sampling and logging procedures employed by Polar Star during that first drill programme, as well as view surface rock outcrops. The visit was made by SRK Chile geologist, Mr. George Even, a Qualified Person (according to NI criteria). He was accompanied to the site by Polar Star personnel. Several meetings were held in the SRK Chile office with Polar staff during the course of this study. Mr. Even again visited the Los Azules property on December 29, 2011, where he verified the collar coordinates of the 15 reverse circulation holes drilled during the 2010 campaign. 2.3 Basis of the Technical Report This report is based on information collected by SRK during the site visit and on additional information provided by Polar Star. The information contained herein is based on information believed to be reliable. This technical report is based on the following sources of information: Discussions with Polar Star personnel and reports prepared by Polar Star on the Los Azules property; Personal inspection of the Los Azules project area; Inspection and review of drill core from the Los Azules Project; Review of historical exploration work conducted on the property; Additional information obtained from public domain sources.

11 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page Qualification of SRK The SRK Group comprises over 1,500 professionals, offering expertise in a wide range of resource engineering disciplines. The SRK Group s independence is ensured by the fact that it holds no equity in any project and that its ownership rests solely with its staff. This permits SRK to provide its clients with conflict-free and objective recommendations on crucial judgment issues. SRK has a demonstrated track record in undertaking independent assessments of Mineral Resources and Mineral Reserves, project evaluations and audits, technical reports and independent feasibility evaluations to bankable standards on behalf of exploration and mining companies and financial institutions worldwide. The SRK Group has also worked with a large number of major international mining companies and their projects, providing mining industry consultancy service inputs. This technical report was compiled by Mr. George Even, MAIG (#3616), MAusIMM (Geology, #228861). A site visit was made to the Los Azules property from 29 to 30 January, 2008 by SRK geologist, Mr. George Even, who was accompanied to the site by Polar personnel. This visit had as its purpose to review the data available, particularly verifying the information used in the drill hole database, as well as procedures used during the drilling campaigns. Mr. Even again visited the Los Azules property on December , where he verified the collar coordinates of the 15 reverse circulation holes drilled during the 2010 campaign. 2.5 Acknowledgements SRK would like to acknowledge the support and collaboration provided by Polar Star personnel for the preparation of this report.

12 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 8 3 Reliance on Other Experts and Disclaimer SRK s opinion contained herein and effective February 16, 2012, is based on information provided to SRK by Polar Star throughout the course of SRK s investigations, which in turn reflect various technical and economic conditions at the time of writing. Given the nature of the mining business, these conditions can change significantly over relatively short periods of time. Consequently actual results may be significantly more or less favorable. SRK is not an insider, associate or an affiliate of Polar Star Mining and neither SRK nor any affiliate has acted as advisor to Polar Star or its affiliates in connection with this project. The results of the technical review by SRK are not dependent on any prior agreements concerning the conclusions to be reached, nor are there any undisclosed understandings concerning any future business dealings. SRK has not independently researched ownership information of the Los Azules property claim title documents as these are mostly legal in nature. However, based on a detailed review by Polar Star s Chilean lawyers Carey y CIA of Santiago, all the claims appear to have been processed correctly and are currently up to date with their annual fees. The latest documents from Carey y CIA, dated January 16, 2012, were reviewed and SRK statements regarding the state of the properties are wholly based on the opinions expressed by Carey y CIA. The documents are entitled: Polar Star Mining / Azules Project Mining Properties, January 16, 2012 and Annexes I and II. SRK s reliance on the information provided by Carey y CIA applies to all of Section 4 of this report. The Los Azules project is an early stage project with exploration potential. Polar Star is continuing with exploration activities at the site. The opinions expressed in this Report have been based on the information supplied to SRK Consulting (Chile) S.A., (SRK) by Polar Star Mining Corporation (Polar Star). The opinions in this Report are provided in response to a specific request from Polar Star to do so. SRK has exercised all due care in reviewing the supplied information. Opinions presented in this report apply to the site conditions and features as they existed at the time of SRK s investigations, and those reasonably foreseeable. These opinions do not necessarily apply to conditions and features that may arise after the date of this Report, about which SRK had no prior knowledge nor had the opportunity to evaluate. SRK s reliance on information provided by Polar Star applies to all Sections of this report.

13 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 9 4 Property Description and Location 4.1 Introduction The Los Azules property consists of a group of 21 concessions, totaling 3,818 hectares (Table 4-1). It is located 65 kilometres east of Copiapó and about 600 kilometres north of Santiago. The centre of the property is located at 417,500E 6,971,000N (Figure 4-1). Access from Copiapó is by wellmaintained public roads except for the last few kilometers which is along tertiary dirt roads which is privately maintained. According to Chilean law, owners of mining claims are to be given access to perform work on those claims even though they are not the owners of the surface property. The owner of the claims would need to come to an agreement with the surface owner regarding the nature of the access, particularly if new roads are to be built, or other surface disturbance is contemplated during the exploration programme. Drilling to date has not required permits, however, if more closely spaced grid drilling is planned in future explorations, a permit would be required from the government entity, Sernageomin. A plan of operations would need to be submitted to them indicating what intervention is planned in the area showing the drill hole locations and roads to be built. The project does not lie within environmentally protected areas or indigenous reservations. The property covers part of the historic Los Azules copper-gold mining district which is periodically active during times of high metal prices. There are, however, no known current environmental liabilities. No other risks involving the property are know at this time Land Tenure Polar Star (through its wholly-owned subsidiary Minera Celeste Chile Ltda.) holds 100% title to 16 exploitation concessions totaling 2,818 hectares and 5 exploration concessions totaling 1,000 hectares, for an overall total of 3,818 hectares. The author did not complete an independent review of the Azules property claim title documents as these are mostly legal in nature. However, based on the review by Polar Star s Chilean lawyers Carey y CIA of Santiago, dated January 16, 2012 and updated information supplied in October, 2013, all the claims appear to have been processed correctly and are currently up to date with their annual fees. The following are the exploitation and exploration concessions at Los Azules.

14 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 10 Table 4-1: Los Azules Tenements ClaimName Area (hectares) Year Status Registry CBM Celeste 3, 1 to Constituted Exploitation Copiapó Celeste 4, 1 to Constituted Exploitation Copiapó Celeste 5, 1 to Constituted Exploitation Copiapó Celeste 6, 1 to Constituted Exploitation Copiapó Celeste 10, 1 to Constituted Exploitation Copiapó Celeste 11, 1 to Constituted Exploitation Copiapó Celeste 12, 1 to Constituted Exploitation Copiapó Celeste 13, 1 to Constituted Exploitation Copiapó Celeste 14, 1 to Constituted Exploitation Copiapó Celeste 15, 1 to Constituted Exploitation Copiapó Celeste 17, 1 to Constituted Exploitation Copiapó Celeste 18, 1 to Constituted Exploitation Copiapó Olvidada, 1 to Constituted Exploitation Copiapó Azulita II, 1 to In Review Exploitation Copiapó Azul IV, 1 to Constituted Exploitation Copiapó Azul 1/ Constituted Exploitation Copiapó Azulino Constituted Exploration Copiapó Azulino Constituted Exploration Copiapó Azulino Constituted Exploration Copiapó Azulino Constituted Exploration Copiapó Azulino Constituted Exploration Copiapó

15 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 11 Figure 4-1: Los Azules Tenement Map

16 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page Underlying Ownership As mentioned above in sub-section 4.1.1, Polar Star (through its wholly-owned subsidiary Minera Celeste Chile Ltda.) holds 100% title to all 21 concessions totaling 3,818 hectares. 4.3 Mineral Rights in Chile In accordance with Chilean mining legislation, there are two types of mining concessions in Chile; exploration concessions and exploitation concessions. The principal characteristics of each are the following: Exploration Concessions the titleholder of an exploration concession has the right to carry out all types of mining exploration activities within the area of the concession. Exploration concessions can overlap or be granted over the same area of land however, the rights granted by an exploration concession can only be exercised by the titleholder with the earliest dated exploration concession over a particular area. For each exploration concession the titleholder must pay an annual fee of approximately US$1 per hectare to the Chilean Treasury and exploration concessions have durations of two years. At the end of this period, they may (i) be renewed as an exploration concession for two further years in which case at least 50% of the surface area must be renounced, or (ii) be converted, totally or partially, into exploitation concessions. A titleholder with the earliest dated exploration concession has a preferential right to an exploitation concession in the area covered by the exploration concession, over any third parties with a later dated exploration concession for that area or without an exploration concession at all and must oppose any applications made by third parties for exploitation concessions within the area for the exploration concession to remain valid. Exploitation Concessions The titleholder of an exploitation concession is granted the right to explore and exploit the minerals located within the area of the concession and to take ownership of the minerals that are extracted. Exploitation concessions cannot overlap or be granted over the same area of land. Exploitation Concessions are of indefinite duration and an annual fee is payable to the Chilean Treasury in relation to each exploitation concession of approximately US$5 per hectare. Where a titleholder of an exploration concession has applied to convert the exploration concession into an exploitation concession, the application for the exploitation concession and the exploitation concession itself is back dated to the date of the exploration concession. A titleholder to an exploitation concession must apply to annul or cancel any exploitation concessions which overlap with the area covered by its exploitation concession within a certain time period in order for the exploitation concession to remain current, otherwise, the overlapping claim holder can challenge the ownership of the mining property.

17 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 13 5 Accessibility, Climate, Local Resources, Infrastructure and Physiography The Los Azules property is readily accessible year round by paved and good gravel road from the city of Copiapó 65 kilometers to the west. The property is located within the Atacama Desert region of Chile with average annual precipitation of under 10 mm. The project may be worked on year-round. The city of Copiapó, with a population of about 120,000 is an active mining centre with full services, a skilled mining workforce and several local processing plants and metallurgical plant. High tension electrical power and water are available within 15 kilometers of the property. The property covers a low dissected plateau on the edge of the Chilean pre-cordillera with a mean elevation of about 2,000 metres. Vegetation consists of sparse desert scrub and occasionally, cactus.

18 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 14 6 History There are no records of recent systematic exploration in the property area, however, small scale mining has been carried out in the larger breccias pipes since at least the 1930 s whenever copper prices permitted. Currently, two of the larger breccia pipes on an adjacent property are being mined by pirquineros (small-scale independent miners) on a small scale, about tonnes per month, for copper oxide in the 3-5% range (verbal communication from the miners). The two main pits on the Polar Star property were mined in this manner from and approximately 7,500 tonnes of material at similar grades are estimated to have been produced during this period. This information was provided to SRK by Polar Star, but has not been independently verified by SRK and is not necessarily indicative of the mineralization in other areas of the Los Azules property.

19 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 15 7 Geological Setting,Mineralization and Modeling 7.1 Regional Geology The property lies along the western edge of the Cabaca de Vaca intrusive which occurs within the Late Cretaceous Paleocene Cu-Au Metallogenic Belt of the Chilean pre-cordillera (Figure 7-1). This Late Cretaceous batholithic body of essentially tonalite to diorite composition invades lower Cretaceous andesitic to dacitic volcanics and sediments and is host to numerous post-magmatic collapse breccias. These breccias are structurally controlled within a generally north south regional fault zone which also forms the western margin of the Cabaca de Vaca intrusive. The breccias tend to occur in swarms of up to 100 bodies. These swarms are the loci of a number of copper-gold mining districts, one of the larger being the Los Azules District. The following figure shows the regional geology of the Los Azules area. The Los Azules property boundary is indicated by the orange polygon just below the name Los Azules in the figure.

20 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 16 Figure 7-1: Regional Geology of the Los Azules area

21 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page Property Geology The property is generally underlain by tonalite to diorite phases of the Cabaca de Vaca batholith, however, on its eastern and southern boundaries a generally sub-horizontal sequence of sub-areal epiclastic sediments and inter-bedded basaltic to andesitic flows overlies the intrusive. Numerous post-magmatic hydrothermal collapse breccia pipes cut the intrusive and to a lesser extent the sediments and are distributed in clusters throughout the property (Figure 7-2). The individual pipes, which are circular to elliptical in plan, range from 5 m to 350 m in diameter. On the property, at least four are over a few hundred metres in diameter. The largest of these, the Araya Breccia, is approximately 1,100 metres long and averages 150 metres in width. The breccia pipe locations and shape are strongly controlled by intersecting and generally NNE NE and NW-NNW trending faults. The breccia pipes are also generally enveloped by zones of strong argillic alteration in the host intrusive. This feature can be a useful guide in locating blind pipes. This information regarding nearby properties was provided to SRK by Polar Star, but has not been independently verified by SRK and is not necessarily indicative of the mineralization on the Los Azules property. Figure 7-2: Los Azules Prospect Geology

22 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page Mineralization Mineralization and Alteration The hydrothermal copper, gold and molybdenum mineralization occurs exclusively in the breccia pipes and may be divided into an early fragment replacement stage, followed by open-space filling. The filling stage consists of tourmaline, accompanied by specularite and followed principally by quartz, chalcopyrite, pyrite (+/- gold), molybdenite and galena. The breccia fragments are generally intensely argillically altered. All the Los Azules breccia pipes appear to contain uranium. Carnotite is the only uranium mineral that has been identified to date. A zone of surface oxidation up to 150 metres deep has produced a blanket of readily leachable copper minerals including atacamite, chrysocolla, brocanthite, copper wad and copper pitch. Locally, an irregular zone of secondary sulphide enrichment consisting essentially of chalcocite and minor pyrite is developed at the base of the oxide zone.

23 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 19 8 Deposit Type The principle deposit types identified to date on the Los Azules property are post-magmatic hydrothermal collapse breccia pipes of Late Cretaceous Paleocene age. These breccias are thought to be related to the latest phases of crystallisation of the Cabaca de Vaca pluton. The hydrothermal mineralization of the pipes may be divided into an early fragment replacement stage, followed by open-space filling. The filling stage consists of tourmaline, accompanied by specularite and followed principally by quartz, chalcopyrite, pyrite (+/- gold), molybdenite and galena. About 100 of these pipes have previously been recognized in the Los Azules District. The individual pipes, which are circular to elliptical in plan, range from 5 m to 350 m in diameter.. This information regarding nearby properties was provided to SRK by Polar Star, but has not been independently verified by SRK and is not necessarily indicative of the mineralization on the Los Azules property. Polar Star is also of the opinion that the 2010 RC drilling indicates the possibility that a coppermolybdenum (rhenium) porphyries beneath the northeast part of the IP geophysical grid survey. The style of mineralisation and alteration appears to be similar to low flourine copper-molydenum porphyry systems.

24 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 20 9 Polar Star Exploration 9.1 Geological Mapping and Prospecting During June-July 2007 Polar personnel conducted prospecting and reconnaissance mapping programs over the larger pipes (shown in Figure 9-1 by the purple areas)which were also checked for uranium using an Exploranium GS135 gamma ray spectrometer. The geochemical samples were representative composite chip samples each with an average weight of about 3 kg taken directly from visible mineralised bedrock over an area of approximately 5 square metres. The objective of these samples was to identify areas of relative enrichment in Cu, Mo and U. Sample density is relative to the exposure of bedrock outcrops and the samples were not on a regular grid. All the breccia pipes tested consistently recorded values of over 100 ppm up to highs of 550 ppm equivalent uranium. Three bulk samples of kilograms each were also taken from the northwest face of the main pit on the Araya breccia pipe. Each sample is comprised of 10 contiguous individual 3 metres long continuous chip samples. There are no known reasons to expect that these samples would be biased. The samples were analysed by the Chilean Institute of Mining and Metallurgy laboratory (CIMM) in La Serena, Chile and assayed from % totalcopper, % molybdenum and 106 to 1130 ppm uranium. The CIMM laboratory is independent of both Polar Star and RedQuest and is registered to ISO 9001:2008. During July 2009, geological mapping and prospecting surveys employing hand held gamma ray spectrometers were completed by Polar personnel over most of the company s claims east and north of the Araya breccia pipe. These surveys outlined several zones of multiple breccia pipes and alteration with associated copper oxides assaying up to 4.4 % copper, 0.08% molybdenum, 0.29 g/t gold and 250 ppm uranium. 9.2 Geophysical Surveys During December 2009 and May 2010, Quantec Geoscience of Santiago Chile, completed a 41 line kilometer pole-dipole IP/Resistivity survey over this area. The survey used 200 metre spaced NW-SE trending lines and 100m a spacings. The survey results show a moderate to strong chargeability anomaly at least 2.9 km long and up to 1.7 km wide that underlies the breccias pipe swarms at depths of from 50 metres to over 250 metres. Within this anomaly there are four centres of strong chargeability which generally coincide with surface areas of mineralised breccias and or strong argillic alteration (Figure 9-1).

25 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 21 Figure 9-1: Los Azules IP Chargeability Anomaly Map 9.3 Surveying Holes drilled at Los Azules were relatively short (only 6 of the 30 holes reached to 300m) and little deviation would be expected from those holes. SRK considers, however, that for the next drill campaign it would be recommended to survey the deviation of some of the holes to confirm that there is no significant deviation.

26 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page Polar Star Drilling 2008 and 2010 During the first half of 2008 Major Drilling Chile S.A., on behalf of Polar Star, completed a 2,100 metre diamond drill (DDH) program, consisting of five fences of holes spaced at 200m intervals along the axis of the main Araya pipe (Figure 10-1). This program mainly tested the oxidised upper 150 metres of the breccia pipe and returned intercepts ranging from 42 m grading 0.67% total copper to 24 m grading 1.1% total copper as indicated in Table The breccia bodies are interpreted to be steeply dipping and the inclination of the holes varied between -20 to -90 from the horizontal, however, the majority of the holes were designed to cut the mineralized zones obliquely to perpendicularly. The true widths of the mineralised zones cannot be interpreted confidently at this time because of a lack of more closely spaced drilling. This will be done after the next drill hole campaign when a geological model will be constructed and a resource estimation performed. The principle zone of oxide mineralization was encountered along the southeast flank of the Araya breccia pipe over a strike length of about 800 metres and to a vertical depth of about 100 metres and is mainly confined to the matrix of the breccia. Primary sulphide mineralisation consisting of disseminated and veinlet chalcopyrite, molybdenite and minor pyrite in both breccia and altered host intrusive was intersected in hole LA which yielded 0.41% copper over 120 metres. This was the deepest hole drilled and may suggest a porphyry source below the mineralised breccia pipe. Between late October and early December 2010, Geo-Operaciones Chile Ltda., on behalf of Polar Star, completed a 3,693 metre, 15 hole reverse circulation (RC) drill program. This program was designed to test a variety of coincident geological, geochemical and Induced Polarization (IP) targets within a 1.5 km wide by 2 km long zone of argillic and phyllic altered porphyritic intrusives containing numerous copper-molybdenum-gold and uranium bearing quartz-tourmaline breccia pipes (Figure 10-1). This area is generally underlain by a moderate to strong IP chargeability anomaly extending from 50 to over 250 metres in depth and has never been drilled before. Significant intercepts from this program are indicated in Table Based on geological interpretation and the results of the reconnaissance RC program, this IP anomaly appears to reflect a large body of primary, pyrite-chalcopyrite-molybdenite disseminated and veinlet mineralisation with significant gold, rhenium and uranium enrichment. Both the alterationmineralisation and IP chargeability zones are open to the northeast and at depth. The mineralisation is generally hosted by an argillic to phyllic altered feldspar porphyritic felsic intusive and associated quartz-tourmaline breccias. The style of mineralisation and alteration appears to be similar to low flourine copper-molydenum porphyry systems. Polar Star believes that a large porphyry system is the source of the mineralization and lies at shallow depth below the 3 kilometre square area of alteration and mineralised breccia pipes and plans to follow up with a another drill program in the near future (Figure 10-2).

27 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Figure 10-1: GE/dt Page 23 Los Azules 2008 DDH Drilling R_ _SRK_Polar_Star_ _Rev0 7-Nov-13

28 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 24 Table 10-1: Significant intercepts 2008 Drilling Hole # From To Intercept Cu Mo Au U (m) (m) (m) % % ppm ppm LA including including LA including including LA including LA including LA including LA LA No significant values LA LA LA LA LA LA LA No significant values LA

29 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 25 Figure 10-2: Los Azules 2010 RC Drilling

30 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 26 Table 10-2: Significant intercepts 2010 Drilling Hole Number From To Width Cu Mo Au Re U (m) (m) (m) % % ppm ppm ppm AZRC including AZRC including AZRC10-03 no significant values AZRC Anomalous in Cu, Mo, U, Re AZRC including AZRC AZRC AZRC including AZRC including AZRC AZRC Anomalous in Cu Anomalous in Mo, Re Anomalous in Cu, Mo, U, Re AZRC Anomalous in Cu, Mo, Re Anomalous in Cu, Mo, Re AZRC including AZRC including AZRC

31 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 27 Table 10-3: Collar Coordinates 2008 and 2010 Drilling DRILL HOLE UTM EAST UTM NORTH ELEV. (masl) LENGTH (m) AZIMUTH DIP AZRC AZRC AZRC AZRC AZRC AZRC AZRC AZRC AZRC AZRC AZRC AZRC AZRC AZRC AZRC LA LA LA LA LA LA LA LA LA LA LA LA LA LA LA SRK is of the opinion that there are no known factors relative to the drilling, sampling or recoveries that could materially impact the accuracy and reliability of the results.

32 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page Sample Preparation, Analyses and Security 11.1 Sampling and Analysis Outcrop samples where composite chip samples cut manually by Polar Star staff using moils and hammers. These samples were tagged, bagged and sealed at site. Individual diamond drill core samples where halved using a hydraulic core splitter, one half bagged and sealed on site for assay the other half retained on site in sealed wooden core boxes for future reference. Sampling intervals were dictated mineralogical and lithological changes within the holes. Reverse circulation drill hole cuttings samples were reduce to two splits of approximately 4 kilograms each at site using a Jones splitter. As with diamond drill core samples, one half bagged and sealed on site for assay the other half retained on site in sealed wooden core boxes for future reference. All sample preparation and analysis were carried out at ALS Patagonia Laboratories, in Coquimbo, Chile for all programs. In 2010, ALS routinely shipped pulps prepared at their Coquimbo Laboratory in Chile to their laboratory in Lima, Peru for silver and base metal analysis. Routine gold analysis was carried out in Chile on 30g sub-samples using a fire assay pre-concentration and atomic absorption spectro-photogrametric (AAS) finish. Samples with values greater than 10g/t were re-analysed by fire assay and gravimetric finish. Silver, copper, zinc and lead were also routinely analysed by ICP following hot four-acid digestion. Samples with values over 1% were re-analysed using a hydrofluoric-nitric-hypochloric acid digestion, hydrochloric acid leach and AAS finish. The ALS laboratories are internationally certified laboratories, independent of both Polar Star and RedQuest. The ALS laboratory is registered to ISO 9001:2008. SRK visited the ALS-Chemex laboratory in Coquimbo, Chile during the time of the 2008 drilling campaign and the analytical procedures used for geochemical testing were also inspected. Observed comparisons of tests done at various other ALS-Chemex laboratories in the world were noted as well as comparisons of the ALS Coquimbo laboratory with other non-als-chemex labs. According to the results shown SRK during this visit, the ALS-Chemex Coquimbo lab appears to meet industry standards for both internal and external duplicates and check assays Sample Security While still on site, all drill core samples bagged and sealed. The bagged samples are kept at the campsite, where there is always at least one person on hand, while awaiting transport to the laboratory. The core boxes and duplicate cuttings samples are kept secured and sealed at the project site. All samples ready to be transported to the ALS-Chemex Coquimbo laboratory, are sealed in sacks, marked, registered and the shipped by Pullman Cargo trucks to the laboratory to be prepared and analysed.

33 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page Data Verification SRK reviewed the drilling data supplied by Polar Star, including sample certificates (and Excel format reports) from the ALS laboratory and the compiled Polar Star Excel databases for each drill hole from both the 2008 and the 2010 campaigns. Spot checks were performed to confirm that data from the lab certificates, lab Excel reports and the Polar Star database correspond. SRK did not detect errors in this spot check which involved approximately 5% of the samples. Thus far in Polar Star s exploration programme at Los Azules, no QA/QC samples have been submitted. While the protocols and procedures for drilling sampling and logging are in accordance with industry best practices, thus far in this early stage of exploration they have not inserted duplicates, blanks or certified reference materials into the laboratory sample stream. The ALS- Chemex laboratory in Coquimbo is an internationally certified lab (registered to ISO 9001:2008 standards), and was visited personally by Mr. Even on January 30, During the visit, the ASL lab appears to be using industry standard sample preparation and analytical procedures in all their processes. SRK believes that the geochemical analysis data from the drilling campaigns are adequate for the purposes of this report, SRK strongly recommends that for the next drilling programme at Los Azules, Polar Star implement a complete and thorough QA/QC programme for the samples, as well as down the hole surveying for drill hole deviation.

34 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page Mineral Processing and Metallurgical Testing This section does not apply as the project is at an early exploration stage and no mineral and metallurgical testing has been yet performed. 14 Mineral Resource Estimation This section does not apply as the project is at an early exploration stage and no mineral resources have yet been calculated. 15 Adjacent Properties SRK does not have specific information related to properties adjacent to the Los Azules Project. 16 Other Relevant Data and Information SRK has no additional relevant data or information pertinent to the Los Azules Project.

35 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page Interpretation and Conclusions Polar Star s surface geological and geochemical exploration programs today have outlined a northeast elongate, approximately 8 square kilometer area containing a swarm of at least 90 quartztourmaline breccia pipes many of which contain variable amounts of copper, molybdenum, gold and uranium mineralisation. This swarm of pipes is generally enveloped by an extensive zone of argillic alteration which also is variable anomalous in copper, molybdenum, gold and uranium. Induced Polarisation geophysical surveys over this zone detected a moderate to strong chargeability anomaly at least 2.9 km long and up to 1.7 km wide that underlies the breccia swarm at depths of from 50 metres to over 250 metres. The two subsequent reconnaissance drilling programs; a) targeting the Araya Breccia pipe in 2008 and b) the stronger IP chargeability centres in the northeast half of the zone in 2010 cut significant intercepts of oxide copper, molybdenum and gold mineralisation in the Araya Breccia pipe plus disseminated and veinlet primary pyrite-chalcopyritemolybdenite mineralisation with significant gold, rhenium and uranium enrichment in strong IP centers. The latter is generally hosted by an argillic to phyllic altered feldspar porphyritic felsic intusive and associated quartz-tourmaline breccias. The style of mineralisation and alteration appears similar to low flourine copper-molydenum porphyry systems. This evidence is the primary basis for the planned future exploration by Polar Star at Los Azules, which SRK believes is a valid basis and approach for the next drill programme. Thus far, the early stages of exploration carried out by Polar Star at Los Azules has focused on following up on areas of anomalous surface geochemical results and favorable geological indications, namely in areas of known breccias with associated hydrothermal alteration. As such, there is insufficient data density to adequately outline and delimit the mineralized zones and assign average grades. The sizes, shapes, depths and grades of these bodies are yet undetermined. That said, the results so far indicate that the Los Azules prospect warrants a follow up drill programme to delimit the mineralization in the more prospective areas and also with an eye to confirming or not the idea of a possible copper-molybdenum porphyry system at depth associated with the shallower drilling results at the Araya Breccia in 2008 and in the northeast area with the 2010 drilling.

36 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page Recommendations Polar Star believes that a large porphyry system is the source of the mineralization at Los Azules which lies at shallow depth below the 3 kilometre square area of alteration and mineralised breccia pipes and plans to follow up with a another drill program in the near future. SRK is of the opinion that this exploration concept has merit as evidenced by SRK s experience with other prospects in Chile where porphyry copper deposits and associated hydrothermal alteration are in close proximity to mineralized breccia pipes. SRK also recommends that a QA/QC sample and laboratory analysis programme be implemented for the next drilling campaign, inserting duplicate, blank and certified reference materials samples into the sample stream. Regular check assays at another laboratory should also be carried out. Evaluation of the results of this QA/QC programme must be done on a regular basis during the drill campaign. When QA/QC analyses are completed after the drill campaign, it can be too late for making necessary adaptations and corrections. Down the hole surveys to test for drill hole deviation should also be conducted in future drill holes. Polar Star considers that both the Araya Breccia pipe oxide mineralisation and the primary sulphide mineralisation need to be followed up with more detailed drilling programs. A two-phase reverse circulation drilling program is proposed by Polar Star to follow up on the results of the 2008 and 2010 reconnaissance drilling programs. 1. Infill drilling on 100m sections along the southeast flank of the Araya Breccia with a view to establishing at least an inferred oxide resource and; 2. Infill and step-out drilling in the northeast sector of the IP highs. SRK is in general agreement with the potential to find additional mineralization to the northeast and at depth and that additional and deeper drilling is warranted. SRK also concurs with the plan for infill and step-out drilling as mentioned above. The drilling programme outlined for 2014 should allow Polar Star to test their mineralization interpretation at Los Azules and test the continuity of the mineralization leading to a mineral resource calculation. Table 18-1, below, details Polar Star s planned 2014 exploration programme at Los Azules.

37 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 33 Table 18-1: Polar Star Los Azules proposed 2014 Exploration Programme Budget Item US$ Cost Contract Drilling, 2,500 $ 200/m 500,000 Access and site preparation 20,000 Wages geologists + helpers 100,000 Assays 15,000 Field Supplies 5,000 Accommodation/Office 12,000 Total Program Costs 652,000

38 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page References The only reference used in this report is an internal report from Polar Star regarding the geology of the Los Azules project and surrounding area.

39 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 35 CERTIFICATE AND CONSENT To accompany the report entitled: Exploration Technical Report Los Azules Cu, Mo, Au Project, III Region, Chile. This qualified person certificate, dated October 30, 2013, applies to the abovementioned technical report, also dated October 30, I, George Even, residing at Vital Apoquindo 941, Las Condes, Santiago, Chile, do hereby certify that: 1) I am a Principal Geologist with the firm of SRK Consulting (Chile) S.A. (SRK) with an office at Av. Vitacura 2939 Piso 5, Las Condes, Santiago, Chile; 2) I am a graduate of San Diego State University in San Diego, California U.S.A. with a BSc. in Geology in I have practiced my profession continuously since 1972; 3) I am a Professional Geologist registered with the AusIMM of Australia (#228861) and also with the AIG (#3616) of Australia; 4) I have not received, nor do I expect to receive, any interest, directly or indirectly, in the Los Azules project or securities of Polar Star Mining. 5) That, as of the date of this certificate, to the best of my knowledge, information and belief, this technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading; 6) I have read National Instrument and Form F1 and by reason of my education and past relevant work experience, I fulfill the requirements to be a Qualified Person for the purposes of NI This technical report has been prepared in compliance with National Instrument and Form F1; 7) As a qualified person, I am independent of the issuer and also of the property and vendor, as defined in Section 1.5 of National Instrument ; 8) I am the sole author and responsible for all sections of this report; 9) I have had no prior involvement with the Los Azules property; 10) I visited the Los Azules project and surrounding area during the drilling campaign on January 29 and 30, 2008 and also a one-day visit on December 29, 2011; 11) SRK Consulting (Chile) S.A. was retained by Polar Star Mining to prepare an independent technical report for the Los Azules project. This assignment was completed using CIM Best practice and Canadian Securities Administrators National Instrument guidelines. The preceding report is based on our review of project files and discussions with Polar Star Mining personnel; 12) I consent to the filing of the Technical Report with the securities regulatory authorities. Santiago, Chile October 30, 2013 George Even Principal Geologist

40 SRK Consulting: : Exploration Technical Report Los Azules Cu-Mo_Au Project Page 36 Prepared by George Even Reviewed by Ernesto Jaramillo All data used as source material plus the text, tables, figures, and attachments of this document have been reviewed and prepared in accordance with generally accepted professional engineering and environmental practices.