PolarX Limited (ASX: PXX) - Copper/ Gold - Alaska

Full Report can be Accessed on

PolarX Limited (“PolarX” or “the Company”) is set for an active 2019 field season over the
Alaska Range Project (“the Project”), and is well cashed up with ~A$8 million in the tin.
A$4.28 million of this came from a share subscription by the C$5.3 billion TSX listed Lundin
Mining Corporation (“Lundin Mining”, TSX:LUN) as part of an exclusive option agreement to
enter into an earn-in over the porphyry targets within the Stellar claim package, and will be
used to fund the 2019 exploration over these targets. Planned work includes 5,000 m of core
drilling over the high priority Saturn (formerly Zackly SE) and possibly Mars targets. Ongoing
data interpretation has confirmed the strong potential of these targets for porphyry-style
mineralisation, with Saturn interpreted as being the source of mineralising fluids for the Zackly
The results of the 2019 field work on the porphyry targets will then be used by Lundin Mining
in a decision whether to proceed with the earn-in. Should they elect to do so Lundin Mining
will have the right to earn 51% of the claims through the staged expenditure of US$24 million
on direct exploration and staged cash payments of US$20 million to PolarX over three years.
Lundin Mining will earn no equity with an early withdrawal, however may choose to accelerate
the programmes.
Our view is that this is an excellent structure for an earn-in agreement, and will ensure, by
virtue of annual expenditure commitments, that work will be ongoing. We will not see, as
is often the case in similar agreements, the larger partner making slow progress, and thus
frustrating the junior partner and shareholders.
The Zackly claims have been excised from the Lundin Mining agreement, with much of the
work in 2018 involved in extensional drilling of the Zackly skarn, which has an initial Inferred
Mineral Resource Estimate (“MRE”) of 3.4 Mt @ 1.2% Cu, 2.0 g/t Au and 14 g/t Ag. The 2018
drilling extended the 1,050 m strike of the initial MRE by at least 850 m, with the Resource
open along strike and at depth. This is part of a global MRE for the Project (including Caribou
Dome) of 6.2 Mt @ 2.0% Cu and 2.0 g/t Au, for 127,000 tonnes of contained copper and
217,000 oz of Au.
The 2018 drilling intersected thick, shallowly dipping and shallow mineralisation in a separate
skarn zone at the eastern end of Zackly (850 m east of the MRE), showing the potential for open
pit mining and a significant MRE extension. PolarX will concentrate the 2019 Zackly drilling over
this zone, with results to be incorporated into an updated MRE. It is also planned to commence
a PEA/PFS for Zackly by the end of 2019, with the results of current and upcoming metallurgical
testwork also to be incorporated into the study.
Lundin Mining agreement: This is a key breakthrough for the Company, and has brought a
quality partner into the Project as well as onto the register - this has also ensured funding for
2019, and should the option be exercised, for the foreseeable future.
Porphyry potential enhanced: The results of work to date have further enhanced the potential
of the Project to host porphyry copper-gold mineralisation, which will be amongst the next drill
targets for the Company.
Upside and open pit potential at Zackly: The 2018 drilling has added significant size to the
Zackly Cu-Au skarn mineralisation, and also highlights the potential for appreciable open cut
Attractive mining destination: Alaska is an attractive and well regarded mining destination,
ranking 5th globally and 2nd in the United States in the 2018 Fraser Institute survey – the state
is home to a number of metal mines, as well as coal and a large oil and gas industry, with the
attractiveness of Alaska being highlighted by the 2018 purchase of the high grade (14.7 g/t Au),
4.15 Moz Pogo gold mine by ASX-listed Northern Star Minerals (ASX: NST).
Close to infrastructure: The Project is situated close to transport infrastructure, allowing for
ready vehicular access, negating the need for all activities to be helicopter supported.
Strong management and technical team: The Company has management, technical
personnel and partners with extensive experience in the junior resources sector (and in the
case of Millrock Resources, extensive Alaskan experience) and a proven history of technical
success and delivering value to shareholders; in addition key personnel and related partners
hold ~12% of the Company, thus aligning their interests with those of other shareholders.
Active exploration programmes and news flow: Given the results of the 2018 work
programme, we expect another concerted effort in 2019 (including expected drilling at Zackly,
Saturn and Mars), with all indications that this will again bring very positive news.
Leveraged to exploration success: With an EV of ~A$30 million, the Company is well leveraged
to positive exploration news with the potential to return significant value to shareholders.

Independent Investment Research
Independent Investment Research

Independent Investment Research, "IIR", is an independent investment research house based in Australia and the United States. IIR specialises in the analysis of high quality commissioned research for Brokers, Family Offices and Fund Managers. IIR distributes its research in Asia, United States and the Americas. IIR does not participate in any corporate or capital raising activity and therefore it does not have any inherent bias that may result from research that is linked to any corporate/ capital raising activity.

IIR was established in 2004 under Aegis Equities Research Group of companies to provide investment research to a select group of retail and wholesale clients. Since March 2010, IIR (the Aegis Equities business was sold to Morningstar) has operated independently from Aegis by former Aegis senior executives/shareholders to provide clients with unparalleled research that covers listed and unlisted managed investments, listed companies, structured products, and IPO's.

IIR takes great pride in the quality and independence of our analysis, underpinned by high caliber staff and a transparent, proven and rigorous research methodology.

Other Reports on these Companies
Other Reports from Independent Investment Research