Heliostar Metals (HSTR) - Drilling Next to Silvercrest & Hungry Mills

Heliostar Metals Ltd. is a Canadian exploration and development company with projects in North and South America. The company's team specializes in recognizing mineral properties with upside exploration potential and unlocking the value of projects. The company has gold projects in Alaska and Mexico. The company's projects include the Unga gold-silver project, The La Lola project, the Cumaro Project, and the Oso Negro Project.

Matt Gordon caught up with Charles Funk, CEO, and Director, Heliostar Metals. Charles has over 14 years of experience in major and junior mining companies including Newcrest Mining and Evrim Resources, where he served as the Vice President of Exploration. He is a geologist specializing in business development for gold, silver, and copper projects from early stage to production. He has led and supported multiple discoveries in Mexico and Australia. His contributions have led to $60M in capital raises across multiple projects. 

Company Overview

Heliostar Metals is an exploration and development company engaged in the acquisition, exploration, and development of mineral properties in the Americas. The company was founded in 1983 and is headquartered in Vancouver, Canada. It is listed on the Toronto Stock Exchange (TSX-V: HSTR), the OTC Markets (OTCQX: HSTXF), and the Frankfurt Stock Exchange (FSE: RGG1). Redstar Gold (Alaska) Inc and Heliodor Metals Limited are the company's subsidiaries. 

Heliostar Metals plans to initiate drill operations at its discovery in Mexico. The company's major focus is on its Cumaro asset in Mexico along with the Unga project in Alaska. 

The company's representatives recently attended the Mines and Money Conference in London. It seeks to balance its shareholding between US groups and international investors. 

The Unga Project

The Unga Project is a high-grade gold project that covers both Unga and Popof Islands along the Aleutian Island chain of Alaska. This is the company's flagship project. Heliostar Metals anticipates the Unga Project to have a multi-million-ounce potential. The company carried out a strong drill program in 2021, leading to promising results. It has plans for a follow-up drill program in the coming months. 

Heliostar Metals found success drilling at the Old Mine. The company demonstrated district potential for the Unga Project through its Aquila discovery and expansion. It seeks to convert the resource into meters, indicating a district-scale operation. 

The exploration drilling carried out at the Unga Project has provided the company with an economic intercept of each drill target. Due to the harsh Alaska winters, running drill operations is challenging. The company plans to halt drilling in Alaska for the next 2 months and focus on its Mexican assets due to seasonality. 

The Cumaro Project

The Cumaro Project is spread across a land area of 5 square kilometers and is situated within SilverCrest's El Picacho district. The company's management has a strong understanding of Mexico's mining space. This led the company to acquire a portfolio of early-stage assets. The drill operations at the Cumaro Project have returned highly positive results so far. The 5 square kilometer area at the Cumaro project features several veins. 

This project was acquired by Heliostar Metals through a lottery system with a vision to consolidate the whole Picacho District. Heliostar Metals was founded by Charles Funk to acquire the Cumaro asset as a royalty. The company offered $200,600 in back taxes for the land package. SilverCrest  Metals paid $3M in back taxes, leading to the sharing of the district between the two companies.

The El Picacho district is divided into 2 halves, the west portion of the district features outcropping gold, while the east side features down-throwing block with projections of gold deposits at depth. 

The SilverCrest portion of the district was mined in the 80s. The company is currently running active exploration programs within the district. The El Picacho region features 3 mills, namely the Equinox Mercedes Mill, Santa Elena, and a third mill which is due for completion soon. These mills offer a low-economic hurdle, convenient trucking, and an opportunity to process mined feed from the Cumaro project. 

Heliostar Metals does not plan to bring the Cumaro asset into production. According to the company, the project offers extensive value for the nearby mills. 

Cash Position 

Heliostar Metals raised $4M in October. The company raised capital through dilution, strategizing a short-term win. This raise was done at a time when the market was at its lowest point. The company chose dilution for raising funds to advance the Mexican asset through potential discoveries. The capital raise has provided Heliostar Metals with the funding to deliver the Mexican project while maintaining a buffer. 

The company has had technical success at each target explored at both the Unga and Cumara assets. This drill success demonstrates that the assets are significantly large systems. The company anticipates that showcasing the potential of these assets will generate interest from the market. 

Targets 2021 and Beyond

In 2022, the company plans to choose between 3 strategies. First, pushing projects in both Alaska and Mexico forward. Second, split Alaska and Mexico assets, and third, monetize the Mexican assets to attain a dilution-free exploration on the Unga Project in Alaska. 

Heliostar Metals is at its core, an exploration company, relying on drill results as a measure of success. The surface results from the Mexican assets have provided good results on a consistent basis. Due to multiple drill zones, the company is able to bring down the overall capital cost. This enables the company to simultaneously push both projects forward. 

The company's Cumaro asset features multiple economic intercepts at the surface. It plans to replicate the success through resource drilling in Alaska. The company anticipates that the Unga Project has a 1Moz resource potential.

Heliostar Metals' current resource is at 384,000oz. At-surface reserves provide a lower economic hurdle for the company, leading to a significantly cheaper drill operation. The company anticipates that an inferred resource update won't be time-intensive as the deposits are at-surface. 

The company plans to test out the veins. Even a small discovery can lead to value generation that is multiples of the company's current market cap. 

The company can effectively drill up to 15,000m by utilizing the $4M capital. However, it has assigned $2M for a near-surface, shallow drilling operation. The company has high-grade gold reserves at both its Alaska and Mexico assets. It plans to deliver, re-rate, and use the added value to push both projects forward.

‍To find out more, go to the Heliostar Metals Website