Heliostar Metals (HSTR) - High Grade Gold & Silver All Year Round

We recently spoke with Charles Funk, CEO of Heliostar Metals, a Canadian junior gold and silver company. He shared with us about some of the exciting news coming out regarding their Unga Project in Alaska. 

Company Overview

Based in Vancouver, British Columbia, Heliostar is in the business of building ounces in the top-quality gold and silver jurisdictions across the Americas. The company invests in both mining and exploration opportunities. Of particular importance to the company’s management is the ability to recognize and capitalize on projects with significant upside potential. The company uses a three-pronged approach to unlock potential: 

• Does the project have upside potential?
• What is the likelihood of unlocking this potential?
• How much will this evaluation effort cost? 

These criterion are applied in the process of unlocking value for shareholder benefit. 

Leadership Team

Working with Funk on the management team are Sam Anderson, VP Exploration; Mahesh Liyanage, CFO; Karen Nanara, Corporate Manager; Sheryl Dhillon, Corporate Secretary; Stewart Harris, Exploration Manager; Rob Grey, Investor Relations Manager; and Dilshan Anthony, Corporate Accountant. A six-person board focuses on company activity and direction.

Company Projects

Heliostar has four key projects. These are the Unga Project, Alaska, and the Oso Negro, La Lola, and Cumaro Projects, Mexico. All of these are gold and silver opportunities. 

The Unga Project

The Unga Project, located in the Alaskan Aleutian Islands approximately 900 km southwest of Anchorage, is a high-grade gold project with claims covering both Unga and Popof Islands. The project includes two historic high-grade gold mines – Sitka and Apollo. These mines closed around 1922 after depleting the free-milling gold ore. 

Geologically, the gold sulphide ore is hosted within a suite of hydrothermally altered porphyries and adjacent rocks. These deposits are associated with two fault zones: the Shumagin and Apollo-Sitka trends. These structural trends control the location of the best-quality mineralization. Over 25 distinct locations exhibiting epithermal precious- and base-metal mineralization, porphyry copper-gold mineralization, and extensive areas of hydrothermally altered rocks have been mapped. 

Funk’s Overview

The big picture at Unga is that Funk believes that Heliostar has a multi-million-ounce, first-tier district on their hands.  Earlier, he had indicated that the first goal for the company was to reach 1 M oz. Some of the recent highlights toward that goal include: 

• The SH1 resource, now at 384,000 oz. coming from high-grade 13.8g/t Gold.
• The Apollo and Aquila targets, with high-grade discoveries made and exploration continuing, and
• A porphyry discovery, with two recently drilled holes containing continuous mineralization of 100m - 150m of ore having between 0.4 and 0.7 gold equivalent. 

These will likely become the backbone of a resource that Funk thinks will come up over 1 Moz. Overall, the Unga Project is twice the size of Manhattan Island and has over 40 drillable targets, many of these with gold mineralization at the surface or associated with an old mine. 

Heliostar’s Finances and Approach

Funk indicated that as of September 2021, the company had $2.4 M in its coffers. Funk is aware that this sum is not overwhelming when a company is trying to prove-up a top-tier district. Gold has pulled back in price a bit over the last few months. Last year, Heliostar raised money when gold was at $2000 per oz. It is a little tougher market for raising money now in the Fall of 2021. Going forward, Funk believes that he needs another $10M - $15M next year just to stay on track with the company’s planned evaluation program. 

Heliostar’s approach has been and continues to be clear: Build resources to contribute to a market rerating to lower the cost of capital that the company may need as it moves forward. First, it went after the high-probability targets, which it has done and been successful. From there, the company is in the process of conducting a systematic exploration program. It has already drilled over 10,000 m in the last year, which is about equal to the total footage drilled over the last 30 years. 

As a detailed example, Apollo was an old mine. In fact, it was Alaska’s first underground gold mine. Before Heliostar began evaluating it, people couldn’t tell you which way the ore-bearing vein dipped into the subsurface. The company drilled a fence-hole array pattern of systematic drilling to make a proper evaluation. This resulted in intercepts of 3m at 88g of gold, 4.5m at just short of 20g of gold, and multiple mineralization transects that are open at depth. 

Will Heliostar Bring In a Partner?

Given the limited budget, there is the possibility of bringing in a strategic partner at Unga. Funk told us that he has these types of conversations on a regular basis. At the moment, there is no rush to make a decision, but, for example, if a protracted bear market should ensue, then this is the type and scale of a district that attracts those kinds of companies. Heliostar would definitely look at those types of options.

In fact, at this point in time, Heliostar has attracted some institutional followers. Erik Sprott has a bit of money involved. Additionally, Inventa Capital is a big supporter of Heliostar.

Nevertheless, Funk believes that sticking to the company’s knitting, so to speak, is the one thing they can control.  They intend to deliver promised results. The quality of the results will serve them well in the capital arena, Funk believes. As the discoveries and ounces grow, the opportunity to preferentially attract capital and strong strategic partners will increase. 

The Next Steps

Funk believes that the company’s recent results have been impressive and that the market has noticed. Going forward, there is more news to come. Heliostar is progressing with the drilling program at Apollo and at SH1, where results will be forthcoming. A new target will be drilled later this year at Unga. 

Additionally, the company is progressing with its exploration activities in Mexico. Indeed, Funk told us that management deliberately set up the company with business in both warmer and cooler locales, in part, so that a more continuous flow of news would come out. 

Is Unga Amenable to Open-Pit Mining?

Some of the targets at Unga that have already had high-grade intercepts also have broad selvages (zones of altered rock around the periphery of another rock type) that are quite amenable to open pit development. This would raise the economics considerably, although the company has not done enough drilling to determine if that opportunity is technically amenable yet. However, if the ounces are there, Funk indicated that there is no reason why an open-pit mine couldn’t be built on Unga Island because it is uninhabited. 

In order to build an open-pit operation, the company needs to expand on conversations with the community. As a new company, Heliostar is committed to community responsibility, as well as being a robust and sound explorer. They have already got off on the right foot with the people at Sands Island, the closest inhabited island. Heliostar has also brought in an outside firm with a great deal of Alaskan experience to assist with community relationships. 

They have had some excellent initial conversations with the people at Sand Island, who are mostly fishermen and women. These people understand the concept of variable rewards in their business. Just like exploration, fishermen have good days and bad days too. They have asked some fairly sophisticated questions in a recent meeting. Funk is confident that they will have open minds should the explorations results at Unga indicate that open-pit development is a good way to proceed.

To find out more, go to the Heliostar Metals Website