The Company believes that its 100% owned Montezuma property has the potential to host a major porphyry Cu+/-Mo+/-Au deposit.

The Montezuma property covers 40 kilometres (N-S) of the West Fault and the cross-cutting Esperanza Fault system.
 
Exploration at Montezuma is at an early stage, but encouraging results have been obtained from diamond drilling in 2009, 2010 and in 2011.

Exploration has confirmed the highly prospective nature of the Montezuma property. The Company has prioritized a new zone of exploration interest to the west of the Gold Mineralized Thrust Zone. An additional 3 prospective areas for exploration have also been identified.
 
The Company believes that the results from the diamond drilling to date are indicative of at least two mineralized porphyry systems. Evidence gained from logging the core indicates that the possibility exists for a porphyry discovery to the west of the current drilling. Fragments of these porphyry systems have been logged within drilled thrust zones; indicate that the fragments have been transported from the west. At surface these thrust faults deposit barren volcanic and intrusive over potential porphyry systems, masking them from surface geochemical and geophysical techniques. The next drill campaign will be designed to test the lower plate of the thrusts where the presence of mineralized porphyry is expected.

The previous diamond drilling undertaken by Polar Star confirmed the presence low grade copper mineralization (Cu+Au+Mo+Ag) (Zone B) covering an area of at least 2.5 square kilometres. Phyllic, Propylitic and Zn-halo style alteration, all commonly identified with mineralized copper porphyry systems. The current thinking is that Zone B is on the periphery of the main mineralized porphyry system.
 
During 2012 the Company is targeting a fourth phase of drilling to test the new target area to the west, examine the strong NE – SW fault zones (known to host significant ore bodies in Chile) and continue exploration along the West Fault zone in the north of the property.

Exploration to date is insufficient to estimate resource potential. However, the Company believes that the Montezuma property, due to its geologic setting and results from the exploration work to date, including diamond drilling, which displays typical alteration mineralogy and ore grade intersections, has the potential to host significant porphyry copper and gold mineralisation.

The Company is currently reprocessing ground and airborne geophysics directed by the results from a detailed evaluation program that has extracted new structural information from the drill core and through field observation. The aim of the current program is to define drill targets for the 2nd Quarter 2012. 

The Montezuma property is located in the Sierra Limon Verde oxide copper mining district in northern Chile, 1,380 kilometres north of Santiago in the Sierra Limon Verde oxide copper mining district and is readily accessible by paved and good gravel road from the city of Calama 20 kilometres to the north, in Chile’s Region II.

The region is one of the driest in the world, with average annual precipitation of 5 millimetres.

The property is essentially a plateau and wide valley at an altitude of approximately 2,600 metres bordered to the west by low hills rising to a maximum altitude of 3,100 metres.

The project consists of four contiguous groups of exploration concessions; Montezuma, Topater, Limonal and Limon totaling 50,100 hectares owned 100% by Polar Star.

The Montezuma property consists of a contiguous group of 207 exploration concessions totalling 50,100 hectares.

The entire Montezuma Property package was staked and is 100% owned by Polar Star’s wholly owned Chilean subsidiary Minera Serena Mining Chile Limitada.

The Montezuma property is located on the West Fault, the geological structure that controls and hosts the majority of mega porphyries and major producing porphyry copper mines in Northern Chile.

Twelve of the world’s largest copper producing mines are located within a 50 km radius of the Montezuma property.

The Montezuma Property lies between the Chuquicamata and Esperanza clusters of mega-porphyies within the central sub-zone of the main Chilean porphyry belt and covers the intersection between the northerly trending West Fault and north-easterly trending Esperanza Fault systems. The Esperanza Trend, is interpreted to be a NNE extension of El Tesoro - Polo Sur copper-gold porphyry trend which includes the Antofagasta PLC Esperanza deposit.

The Montezuma property is located approximately 20 km to the south of the world’s largest copper producer, CODELCO (National Copper Corporation of Chile), the Chilean state owned copper mining company’s owned Chuquicamata, Mina Sur and Radomiro Tomic mines (collectively Codelco’s Codelco Norte division) the world’s third largest copper producer area and Codelco’s Ministro Alejandro Hales copper deposit, in development, and the Codelco’s recently discovered Toki cluster of copper porphyries. All of the Codelco copper mines and deposits in this area are geologically related to the Chuquicamata Trend of the West Fault (global resources; 18.2 billion tonnes at an average grade of 0.5% Cu).

The Company’s Montezuma property is located approximately 20 km north of the Antofagasta Plc El Tesoro, Esperanza, Telegrafo Sur and Polo Sur group of copper-gold porphyry mines and deposits (Global Resources; 2.1 billion tonnes at an average grade of 0.52% Cu and 0.16 g/t Au). The footprint of Antofagasta plc's US$ 2.3 billion Esperanza Mine's ore body (1.3 billion tonnes grading 0.45% Cu).

More specifically former is well known for the exceptional size of its associated copper-molydenum porphyry deposits such as Chuquicamata and Radomiro Tomic, and the latter for large copper-gold porphyry deposits such as El Tesoro-Polo Sur and Esperanza.

The Limon Verde hills on the west side of the property and the Montezuma hills forming the north edge of the property generally expose the same group of metamorphosed Palaeozoic intrusive, volcanic and sedimentary rocks that host the Chuquicamata porphyry deposits. The central and eastern half of the property is covered by a cap of Pliocene to recent Atacama formation gravel with thin inter-beds ignimbrite flows and andesitic to basaltic flows and fragmentals from several to several hundred metres in thickness. At the southern end of the Limon Verde hills Cretaceous volcanic and intrusive rocks are exposed similar to those hosting the Esperanza porphyry deposits.

The property lies within the central sub-zone of the main Chilean porphyry belt and covers about 40 kilometres of strike of the West Fault and associated sub-parallel and NW-SE cross-cutting ancillary faults. The hills of Sierra Limon Verde which cover the north and west half of the Montezuma claims generally expose the same group of metamorphosed Paleozoic intrusive, volcanic and sedimentary rocks that host the Chuquicamata porphyry copper deposit.

The rest of the Montezuma tenements and most of the adjacent Topater claims are covered by pediment gravels derived from the local hills.

Polar Star’s geological and geochemical surveys to date have identified several large areas of leached, hematite stained and sulphate rich caps containing minor amounts of copper wad developed along and lateral to the West Fault where it strikes through the northern claims of the Montezuma group and within the Topater group quartz-tourmaline-copper veins and stockworks of the type commonly found peripheral to porphyry systems.

Radiometric age dating of the mineralized intrusive in hole gave ages in the 38.5-39.7Ma, comfortably within the 43-37Ma range for mineralized intrusive in both the Chuquicamata and Esperanza mining districts.

Zone B

In follow-up drilling in Zone B Porphyry copper Cu±Au±Mo±Ag mineralization (Zone B) covering an area of at least 2.5 square kilometres. By comparison, this area is approximately nine times the footprint of Antofagasta plc's US$2.3 billion Esperanza Mine's ore body (1.3 billion tonnes grading 0.45% Cu).

^{*Note - Copper Equivalent (CuEq) is based on US$ metal prices of Copper - $4.39/lb, Gold - $1,441/oz, Silver - $37.78/oz and Zinc - $1.09/lb}

Disseminated and veinlet pyrite-chalcopyrite mineralization in porphyry style phyllic to potassic alteration

Of the ten holes completed in Zone B, nine holes – MODD38, MODD43-10, MODD45-10, MODD47-10, MODD49-10, MODD51-10, MODD53-10, MODD54-10 and MODD55-10 cut an extensive zone of disseminated and veinlet pyrite-chalcopyrite mineralization in porphyry style phyllic to potassic alteration up to 1,145 metres deep in Hole MODD45-10.

The mineralized porphyries in these holes occur below a cover of younger unaltered volcanic and leached cap varying in thickness from 220 metres in Hole MODD38-10 to 90 metres in Hole MODD45-10.

Typically in mineralized porphyry copper systems, the main potassic zone generally hosts the highest copper grades in porphyry systems.

The hypogene copper mineralization intersected in diamond drilling in 2010 in all the holes to date occurs primarily within the phyllic zone.

However, Holes MODD38-10 and MODD45-10 cut the outer edge of the potassic zone at depths of 950 metres and 490 metres respectively. In Hole 38 the outer potassic zone contains a 30m section of 0.37% copper plus 0.09 g/t gold.

In general the copper, gold, molybdenum and rhenium assay distribution in Hole MODD38-10 indicate that the two zones of highest hypogene copper grades have different associated element signatures i.e. the upper zone is enriched in gold with low molybdenum, the lower gold with enrichment in molybdenum and rhenium. The former is consistent with higher levels in the phyllic zone of porphyry systems the later deeper levels in the same zone and the outer margins of the potassic zone.

Zone A

Follow-up drilling in Zones C, B and A has intersected a gold-enriched [low angled] thrust over a strike North-South over a length of nine kilometres (Zones C through Zone A to Zone B). Gold mineralisation has been intersected on surface and to depths of 100 m within this thrust zone.

Of the eleven diamond drill holes completed in 2010 in Zone A, five holes – MODD31-10, MODD32-10, MODD33-10, MODD35-10, MODD37-10, MODD46-10, MODD50-10 and MODD52-10 cut a pyrite rich auriferous zone which appears to be an imbricate thrust zone separating a generally barren upper volcanic plate from an underlying altered intrusive complex. The presence of chalcopyrite rich phyllic and potassic altered intrusive clasts within the thrust suggest the presence of a porphyry system in the lower plate. The zone varies in thickness from 26 metres in Hole MODD32-10 to 258 metres in Hole MODD33-10. These eight holes test this zone over a strike length of 1.2 kilometres and to a vertical depth of 384 metres. The drill holes mineralogy and assays suggest that the zone has a copper enriched top and zinc enriched base. Re-evaluation of the prior RC drill holes in Zone A in light of this new diamond drill hole data, suggests that holes 5, 19, 20 and 24 may also have cut this structural zone. If so, its minimum strike length could be in the order of several kilometres.

Secondary chalcocite-pyrite enrichment zone

A secondary chalcocite-pyrite enrichment zone has been encountered at the leached cap – hypogene sulfide contact in Holes MODD38-10, MODD43-10, MODD45-10 and MODD53-10. This zone varies in thickness from 12 metres in Hole MODD43-10 to 70 metres in Hole MODD38-10, which contains an intercept of 44 metres averaging 0.55% copper and 0.17 g/t gold.

Holes MODD43-10 and MODD45-10 have also cut a near surface zone of exotic copper minerals, mainly copper wad and cupriferous limonite from 7 – 54 metres in depth.

Summary

Polar Star has identified six zones within its Montezuma property that are prospective for Cu and Au mineralisation: Zones A, B, C, E, F and G.

Exploration History

There are no public records of mining or exploration activity in the property area.

Phase 3 Drilling: Diamond Drilling - June 2010 – December2010

In June 2010, the Company initiated a third phase of drilling, in this case diamond drilling, on the Montezuma property. Twenty-five diamond holes were completed during the second half of 2010 using three diamond drill rigs.

The diamond drill program was designed to supplement and expand on the two previous RC drill programs in the areas of the IP anomalies in which sulphide mineralization was intersected. The program also tested additional combined chargeability, geological, and geochemical targets suggested by previous geochemical, trenching and IP/Resistivity programs. Diamond drilling was chosen for this round of exploration to obtain critical geological, mineralogical and structural data necessary to confirm the presence of porphyry copper systems.

Phase 2 Drilling: Reverse Circulation (“RC”) Drilling - December 2009 - January 2010

During December 2009 and January 2010, a second phase of widely spaced 15 RC drill holes (total of 3,754 metres) were completed. The program was designed to follow up on the areas of sulphide mineralization intersected in phase one and to test a variety of additional combined chargeability, geological, and geochemical targets suggested by subsequent geochemical, trenching and IP/Resistivity programs mentioned below. Of these RC drilling holes, 12 holes (i.e. MORC16-09 through MORC21-09, MORC24-09 through MORC28-09 and MORC30-09) cut significant lengths of copper, gold and zinc mineralization in propylitic to weakly phyllic altered porphyritic intrusive bodies similar to those hosting the Chuquicamata deposits. The mineralization style, contained metals and their value ranges plus their alteration setting, principle propylitic to phyllic, in these holes suggests they cut the outer margins and/or upper levels of several porphyry copper-gold systems. In particular; holes MORC16-09 and MORC27-09 which further tested the main IP anomaly in sub-zone B cut alteration and copper - gold values in the outer edges of a porphyry system on the Esperanza trend, holes MORC19=09, MORC20-09 and MORC24-09, which tested IP sub-zone A cut Zn, +/- Au and Cu values in dominantly propylitic alteration with grades typical of the zinc rich envelope around and above Codelco’s Mansa Mina deposit and hole MORC30-09, the first test of the new northern West Fault IP zone cut three 22 - 80 metre zones of Cu +/- Au, Mo and rhenium (“Re”) enrichment in phyllic altered intrusives similar to those at Chuquicamata.

Phase 1 Drilling: Reverse Circulation Drilling - March 2009

In March 2009, Polar Star completed a widely spaced 14 shallow RC drill hole program, (total 3,502 metre) was completed along the main trend defined by Quantec’s 2008 reconnaissance survey. Eleven of the RC holes tested a variety of combined chargeability-geology- geochemical targets within the main IP/Resistivity anomaly.

The other three were drilled into satellite anomalies on its East flank. Of the eleven holes drilled in the main anomaly five holes, MORC3-09, MORC4-09, MORC5-09, MORC7-09 and MORC8-09, cut significant lengths of copper mineralization associated with three moderate-strong chargeability/resistivity highs aligned NNE along the trace of the West Fault System.

• Hole MORC3-09 drilled on the east flank of the northern most of these highs, a 1 x 2.4 km NNE elongate feature, cut a 6m interval (22m to 28m) of exotic copper oxide mineralization, principally chrysocola and atacarmite, grading from 0.25 – 0.42%Cu.
• Holes MORC4-09 and MORC5-09 also drilled on the east flank of the central high, a 1 x 3 km NNE elongate feature and 1.5 km apart cut several 54 – 96 m intervals of pyrite-chalcopyrite mineralization ranging in value from 200 ppm to 4,400 ppm (0.44%) total copper in propylitic to phyllic altered quartz dacite.
• Holes MORC7-09 and MORC8-09 drilled on the southern high, a 1.5 x 3km feature and 1km apart, cut 50 – 170m intervals of pyrite-chalcopyrite mineralization ranging in value from 200 ppm to 1,600 ppm (0.16%) total copper also in propylitic to phyllic altered quartz dacite. The mineralization style and alteration in these holes is characteristic of the outer margins of porphyry copper systems.

Geophysical Surveys 2008 – 2009

August 2008 - June 2010: Quantec Geoscience of Santiago Chile completed four phases of IP/Resistivity surveying totalling 311 line kilometres and covering a belt some 6-9 kilometres wide along the West Fault Chuquicamata and Esperanza structural trends. These surveys detected several anomalous IP trends. In detail the main anomaly contains five 2-4 kilometre long sub-zones of higher chargeability and moderate resistivity.

During March 2009, Quantec completed an additional 47 line kilometres of infill IP/Resistivity surveying along the main trend established by their 2008 survey. Preliminary analysis of this data indicates generally good continuity of the main anomaly throughout its 25-kilometre length.

The main IP trend, which is entirely covered either by a sulphate cap or pediment gravels is 0.8 – 2.3 kilometres wide, is 23.5 kilometres long and extends to depths of at least 300-500 metres. The central anomaly straddles the West Fault but to the north and south it appears to be controlled by NNE trending splay and cross faults. This cross fault trend is very prominent to the southwest and could be a NNE extension of El Tesoro - Polo Sur copper-gold porphyry trend which includes the Antofagasta PLC Esperanza deposit. In detail the main anomaly contains five 2-4 kilometre long sub-zones of higher chargeability and moderate resistivity. One of these straddles the West Fault (Zone A). The other four occur within the Esperanza trend, two to the SW (Zones B and E) of, one to the north east (Zone C) of the West Fault and one flanks the Zone A 500 metres to the east (Zone D).

The second IP trend occurs 3 kilometres north of the main IP trend and contains two 1-2 kilometre long sub-zones of higher chargeability and moderate resistivity underlying and flanking the valley marking the West Fault trace (Zones G and F).

The enhanced satellite image clearly shows the main IP trend as a zone of pale pink, yellow and white tones reflecting iron oxide minerals i.e. hematite, jarosite and limonite and sericite-kaolinite alteration.

Surface Sampling

Preliminary assays from pit sampling showed low to moderate anomalous values of Cu, As, Mo, Au +/- Zn and Pb within both of the IP anomalies. Values, mainly from the area of holes MORC4-09 and MORC5-09, range up to 0.5% Cu, 0.03% Mo and 0.5 g/t Au.

As values increase towards the West Fault and the sub-parallel fault, which forms the eastern boundary of the satellite anomaly. At Chuquicamata, MM arsenic values increase towards the fault reflecting an increase in the copper arsenide enargite.

Detailed mapping of an old hand trench, 200-300m north of hole 7 has uncovered a 70m wide zone of copper oxides including chrysocola, atacamite, cuprite and possibly chalcocite within 20cm of surface. This showing lies on the south edge of a 1.5 sq km area of alteration and staining visible on the enhanced satellite image.

Chip assays indicate a 20 metre zone of Cu, Au and Ag enrichment, grading from a low of 0.22% to a high of 31.3% Cu, from a low of 0.08 g/t to a high of 11.75 g/t Au, and from a low of 0.5 g/t to a high of 618 g/t Ag.

Significant oxide copper mineralization has been discovered at three points along the west side of the valley .

Pre-Polar Star Exploration

There is however three groups of old drill holes of unknown origin in the central and southern part of the Montezuma property along the projection of the West Fault. Cuttings from a number of these holes show propylitic to phyllic alteration assemblages containing disseminated and veinlet pyrite plus minor chalcopyrite and bornite.