| Dear Fellow Investor,
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| Some projects just need a new set of eyes to unlock their potential.
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| Where prior owners see roadblocks to production, new buyers can bring a new geological model that can completely remove those roadblocks...and completely transform a mediocre project into a world-class resource.
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| That’s certainly what appears to be happening with Heliostar Metals’ (HSTR.V; HSTXF.OTC) recently acquired Ana Paula gold project in Mexico.
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| Ana Paula had seen a good deal of work done on it before the acquisition. Indeed, it had the permits to get taken into production as a modest-grade and modest-sized open-pit deposit.
But the company that owned the project got bogged down in a capital expense explosion that occurred on a separate project in Canada.
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| As a result, Heliostar was able to swoop in and acquire Ana Paula this past March at a steep discount.
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| And, as you’re about to see, it hit the ground running with the project, determined to turn it into a high-grade, underground mine with improved economics and a clear path to production.
That achievement — and the dramatic re-rating that could accompany it — are about to be made clear for all to see.
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| Ana Paula:
A World-Class Asset At A Bargain-Bin Price
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| The bargain Heliostar Metals received when it bought Ana Paula is hard to overstate.
For a purchase price of roughly $30 million, the company got a project with 1.4 million ounces of measured and indicated gold at 2.16 g/t gold.
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| Consider this: A February 2023 prefeasibility study on the project forecast a post-tax IRR of 30.5% and a post-tax NPV of $278.6 million using a $1,600/oz. gold price.
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| The project has already been permitted in Mexico as a potential open-pit mine, and the prior operators spent in excess of $75 million on the project.
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| Resource Estimate Shows A Larger,
More Cohesive Resource
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| In assessing Ana Paula, the Heliostar geology team, led by CEO Charles Funk, saw the potential to advance the deposit more economically by recasting it as a higher-grade, underground operation.
This model called for more drilling on the high-grade panel at Ana Paula, an effort which, over the balance of 2023, has produced some of the most impressive gold intercepts in the junior space.
Highlights include:
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53.2 meters of 11.0 g/t gold
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242 meters of 9.1 g/t gold
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33 meters of 16.4 g/t gold (including 9.5 meters of 25.6 g/t gold)
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63 meters of 10.4 g/t gold (including 14.6 meters of 33.0 g/t gold)
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| In a gold bull market, those are the type of assays that would light a fire under a company’s share price, even given that they were from an existing target.
As it stands, this focused drilling has resulted in a new resource estimate for the high-grade panel, which came out just two days ago. Now consider this: The new estimate shows a measured and indicated resource of 710,920 ounces at a rich 6.60 g/t gold...plus another 447,512 ounces of inferred gold resources.
This new total resource is much greater — and the average grade is much higher — than the previous resource estimate.
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| Things Are Moving Quickly Now
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| Thanks to concurrent metallurgical work on Ana Paula (which dramatically improved the prior results and points toward vastly improved economics)...and the in-place permits for an open-pit mine...Heliostar can move fast on getting the project into production.
Whereas a typical open-pit mine in Canada can take seven-10 years to get permitted, financed and producing gold ore, Ana Paula has the potential to move into production in just three to five years.
Not only that, it will likely do so at relatively low capital costs of between just $150 million and $170 million.
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| The metallurgy on the high-grade panel has already proven it to be amenable to conventional milling techniques, and the new resource estimate on the panel points the way to mining the higher-grade material earlier in the mine’s life.
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| At the new grades from the recent resource estimate, profit margins could be far greater than most are currently expecting.
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| Aiming To Produce High-Grade Gold
In A Robust Market
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| Given the advantages it has carved out for itself at Ana Paula, Heliostar Metals is set up to become a mid-tier gold producer in a relatively short period of time.
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| Led by a team that knows how to navigate the Mexican regulatory landscape, Heliostar looks primed to bring a stranded asset across the finish line — and to do so with the kind of grades that will allow its stock to shine in the gold bull market that’s setting up right now.
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| Take the latest resource estimate as the capping achievement on a report card that started in April with the takeover of Ana Paula and the re-imagining of the deposit as an underground mine.
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| The good news for potential shareholders is that the value of the “new” Ana Paula...with a resource that stands as one of the largest and highest-grade in today’s market...has yet to be factored into Heliostar’s share price.
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| If you want to leverage a gold bull market, Heliostar Metals offers a high-grade, near-term production story that smart investors need to perform their due diligence on now.
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| CLICK HERE
To Learn More about Heliostar Metals Ltd.
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