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Polaris Updated Orca Quarry Technical Report

December 5, 2008

Vancouver, British Columbia - Polaris Minerals Corporation (TSX: PLS) ("Polaris" or the "Company") announced today that it has filed with Canadian securities regulatory authorities an updated National Instrument 43-101 Technical Report (the "Technical Report") on Polaris' Orca Sand and Gravel Quarry, prepared by AMEC, who also prepared the earlier October 2005 Technical Report and Feasibility Study (the "2005 Report"). The Technical Report updates future expectations for pricing, volumes, costs, cash flows, capital requirements and supply and demand in Polaris' target markets. All figures are in US$ unless otherwise noted.

The Technical Report includes the following updated projections:

  • Increased sales volumes are expected to reach 9.6 million tons per year by 2015 (Project Case) through 24/7 operations, without requiring significant additional capital expenditure at the quarry. The customer relationships the Company has added since the 2005 Report and the purchase of the Long Beach terminal site are key elements of this ramp up from the previous 6 million tons projected.
  • Increased NPV by an expected 74% over the 2005 Report level to $226.7 million at a 10% discount rate (Project Case) despite more modest volume and pricing assumptions in 2009 and 2010, which reflect the current economic slowdown.
  • No significant capital investment required for new terminal construction in California until 2011.
  • Price of sand and gravel is expected to continue to increase, in real terms, beginning in 2011 due to supply shortages and the difficulty of replacing assets in the target markets. The assumptions are more modest than in the 2005 Report, and may offer additional future upside potential.
  • Positive operating cash flow is expected to be generated (before tax) annually throughout the productive life of the quarry.

Herb Wilson, Polaris' Chief Operating Officer, commented: "This independent technical report has been updated using the most current projections available, and clearly demonstrates the strong cash generation potential of the Orca Quarry. The report has incorporated the unforeseen and unprecedented reductions in demand for construction aggregates experienced in 2007 and 2008. However, our goal now is to increase sales to 9.6 million tons per year by 2015, a level we expect to achieve based on the excellent operational performance by our quarry operators to date, the projected supply/demand imbalances in our target markets and the volume capacity of our current and planned terminals. We will need to amend our mine permit to accommodate this increase over the current permitted production level, and expect that we will be able to do this in a straightforward manner when the time comes." He added: "the quarry requires only minimal additional capital to achieve this target and our next significant port development costs are not anticipated to be until 2011".

Financial modeling
The table below is a summary comparison of the Project Case and Beneficial Case projections contained in the 2005 and 2008 Technical Reports.

Summary of Results  Project Case Beneficial Case
  2005 2008 2005 2008
2009 Sales Volume (000,000 tons)  3.5 2.4 3.1 2.1
  Net Cash flow after tax (000,000's)  $16.8 $5.5 $11.5 $5.5
2015 Sales Volume (000,000 tons)  6.0 9.6 5.3 8.5
Net Cash flow after tax (000,000's) 
2024 Sales Volume (000,000 tons)  6.0 9.6 5.3 8.5
  Net Cash flow after tax (000,000's)  $35.7 $62.4 $31.3 $54.5
Life of mine production cost ($/ton)  $2.18 $2.55 $2.18 $2.55
NPV (10 percent discount) (000,000's)  $130.6 $226.7 $107.7 $208.9
Payback period (years)  5.7 6.6 5.6 6.4
IRR  21.8% 22.1% 23.8% 22.8%

Note: The financial assumptions in the Technical Report are presented in two formats: Project Case and Beneficial Case. The Project Case includes 100% of the assets and operations of Orca, including the aggregates receiving terminals in Richmond and other southern California locations, and assumes that all capital expenditures for the project will be funded by equity and does not take into account any debt financing that may be required. The Beneficial Case recognizes the beneficial interests of the Company in the Project (88%) and the aggregates receiving terminals (70%), and assumes that the future capital requirements are funded by a combination of debt and equity. The Beneficial Case also includes assumptions regarding financing arrangements of the Company's First Nation partners for their portions of the development costs of the Orca Quarry and the Richmond Terminal. Neither case includes Polaris head office costs in its assumptions. The Payback period for the 2005 Reports is from 2007 and the Payback period for the 2008 Reports is from 2009. For further details on the assumptions please see the Technical Report.

Extending the quarry life past 2025
The Technical Report assumes the Orca Quarry will reach a peak annual sales volume of 9.6 million short tons per year by 2015, a level expected to be maintained until 2025, when the East Cluxewe reserves are exhausted. The current level of proven and probable reserves at the East Cluxewe deposit remains unchanged from the 2005 Report at 134 million tons (less material mined to August 25, 2008 of 3.23 million tons). The Company is awaiting the results of its 2008 exploration program, which had the stated objective of identifying additional resources in the area surrounding the Orca Quarry that could potentially be used to extend the life of the operation past 2025. The results of the exploration program are expected in the first half of 2009.

The complete Technical Report can be viewed on SEDAR (www.sedar.com) or the Company's website at www.polarmin.com.

Conference call
The Company will host a conference call at 8 am PT on Monday, December 8, 2008. Investors and other interested parties may access the teleconference live by calling 416.644.3416 or 800.732.9307 in North America or internationally.

A live webcast of the conference call will be available through the link below:

The webcast will be archived for 90 days following the call.

The conference call will be recorded and available for replay at 11 am PT and will be available until December 22, 2008. To access the replay, dial 416.640.1917 or 877.289.8525. The access code to hear the recording is 21291704 followed by the pound sign.

Qualified Persons 
Polaris commissioned AMEC to prepare the Technical Report for Orca Sand and Gravel Ltd., Vancouver Island, British Columbia (B.C.), Canada, in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators. Greg Kulla, P.Geo., Ryan Ulansky, P.Eng., and Vlad Solodkin, P.Eng., employees of AMEC, served as "qualified persons" (as defined under NI 43-101) responsible for preparation of the Technical Report. The Qualified Persons have reviewed this press release.

Polaris Minerals Corporation is exclusively focused on the development of quarries and the production of construction aggregates on Vancouver Island, British Columbia, for marine transport to urban markets on the west coast of North America to meet growing local supply deficits. In 2007, Polaris began shipping high-quality sand and gravel from the Orca Quarry to San Francisco Bay, Vancouver, and Hawaii.

For further information, please contact:

Marco Romero, President & CEO or
Herb Wilson, Chief Operating Officer or
Mike Westerlund, Director, Corporate Development
Polaris Minerals Corporation
Tel: (604) 915-5000

The projections, forecasts, and estimates included in this press release (including those with respect to net present value) constitute "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws. Readers are urged not to place undue reliance on such forward-looking statements and information. Such information has also not been prepared with a view toward compliance with the guidelines established by the Canadian Institute of Chartered Accountants for the preparation and presentation of prospective financial information. These statements and information include estimates, forecasts, information and statements as to management's expectations with respect to, among other things the future financial or operating performance of the Company, costs and timing of the development of the construction aggregate quarry, the timing and amount of estimated future production, costs of production, capital and operating expenditures, requirements for additional capital, government regulation of quarrying operations, environmental risks, reclamation expenses, and title disputes. Often, but not always, forward-looking statements and information can be identified by the use of words such as "may", "will", "should", "plans", "expects", "intends", "anticipates", "believes", "budget", and "scheduled" or the negative thereof or variations thereon or similar terminology. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Readers are cautioned that any such forward-looking statements and information are not guarantees and there can be no assurance that such statements and information will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include the inability of the Company to secure additional sales volumes and prices projected for the Orca Quarry, the inability of the Company to develop discharge points and additional shipping volumes for its products, the Company may not meet minimum shipping contracted volumes, the quarrying industry is competitive, the Company may not secure the necessary additional financing and the Company may not acquire the additional construction aggregates resources needed. For additional factors, please refer to the disclosure under the heading "Risks and Uncertainties" in the Company's Annual Report and under the heading "Risk Factors" in the Company's Annual Information Form (AIF) in respect of its financial year-ended December 31, 2007, both of which are filed with Canadian regulators on SEDAR ( www.sedar.com ). The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements and information whether as a result of new information, future events or otherwise, expect as required by law. All written and oral forward-looking statements and information attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.