The Arrival Of Colin Bird On The Scene Could Mark The Start Of A Real Turnaround At Polar Star Mining

Colin Bird

It looks as though Colin Bird has arrived at Polar Star Mining in the nick of time.

Before Colin was appointed as chief executive back in October, the company had seemed to be teetering on the brink.

Ailing juniors on the TSX are not unusual in these days of capital drought, but Polar Star had exacerbated own problems, after an over-exuberant management team drilled too early on the company’s flagship Montezuma copper project in Chile.

“They drilled on geophysics when they shouldn’t have”, says Colin. “They reported sparse copper here and there, but conversely they made a big deal of it. So they lost a lot of credibility.”

By the time he arrived things had got so bad that the TSX was investigating whether or not Polar Star was continuing to meet its listing requirements.

Which is why the latest news release from Polar Star relates not to mining or to money, but to the TSX’s final decision that, yes, Polar Star will after all be allowed to remain as a listed entity.

It was a decision that came only after some rapid footwork from Colin, from new chairman Kaare Foy, whose biographical information describes him as a specialist in “turnarounds”, and from the guiding lights behind London-listed investment vehicle Praetorian Resources, Malcolm Burne and Richard Lockwood.

At the beginning of October, Praetorian issued a C$750,000 promissory note to Polar Star, carrying a 12 per cent coupon. That allowed the company to pay the most urgent of its bills, and to continue as an operating entity. At the same time, Doug Willock, one-time chief executive of Polar Star, finally stepped down from the board.

But in reality the knives had been out for Doug a long time, not least because the Polar Star share price had fallen from a height of nearly C$4.50 in the latter part of 2010 to around C$0.10 at the time of his resignation. He’d already stepped away from the chief executive’s role back in May, and his ultimate departure had only been a matter of time. Chairman David Seton went on 26th September.

In came Colin, Kaare, and Charlie Cannon-Brooks, a broker and fixer for Praetorian.

The next step was to inject some meaningful capital into Polar Star’s gaping coffers, and a C$6.5 million raise was duly announced, after special dispensation was granted by the TSX to allow the company to issue shares at greater than a 25 per cent discount.

In the end, C$5.4 million was duly raised at a price of C$0.10. At the same time Praetorian converted its note into shares, pocketing a nice little slug of interest along the way.

All of which left Polar Star cashed up to the tune of around C$6 million, and with a new chief executive on the ground and keen to turn things around. It was an outcome that one might well have bet against in the middle of last year, but the likes of Malcolm, Colin and Kaare had turned many a company around before.

But new capital and new management is just the start.

The next step was to fix the operations. And this may turn out to be a rewarding but time consuming affair. Minesite’s own Susie Boeckmann missed Colin at this year’s Indaba in Cape Town, where she was interested in catching up with him in regard to his African interests – principally Jubilee and Galileo – precisely because he was on the ground in Chile sorting out matters Polar Star.

His enthusiasm for the asset base is palpable. He rates Montezuma highly, and why wouldn’t he? The property extends over 50,000 hectares and lies on the same Domyeko fault that hosts Chile’s other major copper deposits. Colin himself likes copper, and previously scored a notable success with a company called Kiwara on the Copperbelt in Zambia.

Back in the previous decade he built up Kiwara from scratch, and eventually sold it for £163 million in cash and shares to First Quantum. Will he repeat the story in South America? Hard to know at this stage, but if there’s any country in the world more associated with copper than Zambia, it’s Chile, and Colin is clearly keen to have a crack.

He’s not the only one. The company is also in joint venture with BHP Billiton over 172,000 hectares of ground on the Domeyko belt in northern Chile. That ground, says Colin, is “highly prospective”.

And in the background Polar Star also has a small operating mine at Chepica, around 300 kilometres south of Santiago. Colin has expanded this using some of the capital secured in the recent raise. “Chepica is now”, he says, “beginning to generate enough cash to pay for drilling at Montezuma”.

And therein lies the germ of the recovery. As a fix largely driven by and financed out of London, the traditional London model of using a small mine to generate the cash to fund a much more ambitious blue-sky exploration programme has now been imposed. It’s a classic recovery story. But will they pull it off? Watch this space for further updates.