THIS NEWS RELEASE IS NOT FORDISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITEDSTATES OR TO U.S. PERSONS
Vancouver,Canada, March 17, 2023 – Heliostar MetalsLimited (TSX.V: HSTR, OTCQX: HSTXF, FRA: RGG1) (“Heliostar” or the “Company”)is pleased to announce that further to its newsreleases dated December 5, 2022, January 17, 2023 and March 3, 2023, ithas closed its previously announced non-brokered private placement offering(the “Offering”), ofwhich the Company issued 92,727,272 units (each a “Unit”) at a price of C$0.22 per Unit for gross aggregate proceedsof approximately C$20,400,000 (US$15,000,0001). The Company is alsopleased to provide an update on its proposed acquisition (the “Transaction”) of all of the issued andoutstanding shares of Aurea Mining Inc. (“AureaMining”), a wholly owned subsidiary of Argonaut Gold Inc. (“Argonaut”), which through AureaMining’s wholly owned subsidiary Minera Aurea S.A. de C.V. (“Minera Aurea”),holds a 100% indirect interest in and to the Ana Paula Gold project (the “Ana Paula Gold Project”), as well asits option agreement (the “OptionAgreement”) with Argonaut and its wholly owned subsidiary, Compañía MineraPitalla S.A. de CV, pursuant to which the Company has been granted an option (the“Option”) to acquire a 100% interestin the San Antonio Gold project (the “San Antonio Gold Project”).
PrivatePlacement Details
EachUnit consists of one common share (each, a “Share”) in the capital of the Company and one-half of onenon-transferable Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant shall entitlesthe holder thereof to purchase one additional Share (each, a “Warrant Share”) at an exercise price ofC$0.30 per Warrant Share for a period of thirty-six (36) months following the dateof issuance (the “Date of Issue”).
Aggregatefinder’s fees of $554,700 in cash were paid and 2,521,461 non-transferablebroker warrants (each, a “BrokerWarrant”) were issued to three qualified finders. Each BrokerWarrant is exercisable into one Share (each a “Broker Warrant Share”) atan exercise price of $0.30 per Common for a period of thirty-six (36) monthsfollowing the Date of Issue.
Theproceeds from the Offering are anticipated to be used for the purchase andsubsequent exploration advancement of the Ana Paula Gold Project as well as forgeneral working capital purposes. All securities issued in connection with theOffering are subject to a four month and one-day restricted resale period.
Eachof Charles Funk (Chief Executive Officer), Sam Anderson (VP Exploration) andMahesh Liyanage (Chief Financial Officer) (collectively, the “Insiders”), participated in theOffering. Accordingly, each of their respective subscriptions constituted a “relatedparty transaction” within the meaning ofMultilateral Instrument 61-101 – Protectionof Minority Security Holders in Special Transactions (“MI 61-101”). The issuance of the Units to the Insiders, however, wasexempt from the valuation requirements of MI 61-101 by the virtue of theexemption contained in section 5.5(b) as the Shares are not listed on aspecified market and from the minority shareholder approval requirements of MI61-101 by virtue of the exemption contained in Section 5.7(1)(a) as the valueof the Units issued under the Offering did not exceed 25% of the Company’smarket capitalization.
Noneof the securities issued in the Offering will be registered under the United States Securities Act of 1933, asamended (the “1933 Act”), and noneof them may be offered or sold in the United States absent registration or anapplicable exemption from the registration requirements of the 1933 Act. This newsrelease shall not constitute an offer to sell or a solicitation of an offer tobuy nor shall there be any sale of the securities in any state where suchoffer, solicitation, or sale would be unlawful.
TransactionUpdate
By way of update, the Company and Argonaut Gold Inc. (“Argonaut”) continue to work towards theclosing of the Transaction and have met several of the conditions for theclosing of the Transaction (the “Closing”).Accordingly, Heliostar received conditional approval from the TSX VentureExchange (“TSXV”) for theTransaction on March 9, 2023. The Closing remains subject to, among otherthings, the final approval of the TSXV, as the Transaction constitutes aFundamental Acquisition as defined in TSXV Policy 5.3 – Acquisitions and Dispositions of Non-Cash Assets. Further toHeliostar’s December 5, 2022, January 17, 2023 and March 3, 2023 news releases,the Company has yet to receive conditional approval from the TSXV for the grantof the Option under the terms of the Option Agreement. The Company continues towork towards obtaining receipt of conditional approval from the TSXV for theOption, following which it may, pursuant to the terms of the Option Agreement,earn a 100% interest in and to the San Antonio Gold Project located in BajaCalifornia Sur State, Mexico.
For additional details on the Transaction, the Ana Paula Projectand the San Antonio Transaction, see the Company’s news releases dated December5, 2022, January 17, 2023 and March 3, 2023 filed under its profile on SEDAR.
Heliostaris a junior mining company with a portfolio of advanced high-grade goldprojects in Mexico and Alaska.
Uponcompletion of the Transaction, the Company intends to focus on developing the100% owned Ana Paula Project in Guerrero, Mexico. In addition, Heliostar isworking with the Mexican government to permit the San Antonio Gold Project inBaja Sur, Mexico. The Company continues efforts to expand the resource at theUnga Gold Project in Alaska, United States of America.
TheAna Paula Project deposit contains proven and probable mineral reserves of1,021,000 ounces of gold at 2.36 g/t gold and 2,254,000 ounces of silver at5.22 g/t silver.2 A Preliminary Feasibility Study was completed in2017, the asset is permitted for open-pit mining.2 The asset containssignificant existing infrastructure including a portal and 412 metre long decline.2
SanAntonio is a high-grade oxide gold deposit containing measured and indicatedmineral resources of 1,735,000 ounces of gold at 0.83 g/t gold.3 A PreliminaryEconomic Assessment for Argonaut was completed in 2012.
Ungais an advanced vein district containing the SH-1 gold deposit within a large,prospective vein field. SH-1 contains inferred minerals resources of 384,00ounces of gold at 13.8 g/t gold.
Statement of Qualified Person
StewartHarris, P.Geo., a Qualified Person, as such term is defined by NationalInstrument 43-101 – Standards ofDisclosure for Mineral Projects (“NI43-101”), has reviewed the scientific and technical information that formsthe basis for this news release and has approved the disclosure herein.Historical information contained in this news release cannot be relied upon as StewartHarris has not prepared nor verified such information.
Sources
1. $US15Mtotal based of Bank of Canada exchange rate for US$ on March 3, 2022.
2. Alio Gold Inc., Ana PaulaProject NI 43-101 Technical Report Amended Preliminary Feasibility Study witheffective date 16 May 2017.
3. Argonaut Gold Inc., NI 43-101Technical Report on Resources San Antonio Project with effective date 1September 2012.
Foradditional information please contact:
CharlesFunk
ChiefExecutive Officer
HeliostarMetals Limited
Email: charles.funk@heliostarmetals.com
RobGrey
InvestorRelations Manager
HeliostarMetals Limited
Email:rob.grey@heliostarmetals.com
Neither TSX Venture Exchange nor its Regulation Services Provider(as that term is defined in the policies of the TSX Venture Exchange) acceptsresponsibility for the adequacy or accuracy of this release.
This news release contains forward‐looking information which issubject to a variety of risks and uncertainties and other factors that couldcause actual events or results to differ from those projected in the forward‐looking statements. Forwardlooking statements in this press release include, but are not limited to,statements regarding the proposed Transaction, the anticipated use of proceedsof the Offering, the receipt of final approval for the Transaction by the TSXV,the receipt of conditional approval for the San Antonio Transaction by the TSXVand general statements regarding the potential the Transaction and the SanAntonio Transaction (together, the “Transactions”), as applicable. Theseforward‐lookingstatements are subject to a variety of risks and uncertainties and otherfactors that could cause actual events or results to differ materially fromthose projected in the forward‐lookinginformation. Risks that could change or prevent these statements from coming tofruition include, but are not limited to, the Company not being able tocomplete the Transactions, as applicable; general business, economic and socialuncertainties; litigation, legislative, environmental and other judicial,regulatory, political and competitive developments; and other risks outside ofthe Company’s control. Further, the ongoing COVID-19 pandemic, labourshortages, high energy costs, inflationary pressures, rising interest rates, theglobal financial climate and the conflict in Ukraine and surrounding regionsare some additional factors that are affecting current economic conditions andincreasing economic uncertainty, which may impact the Company’s operatingperformance, financial position, and future prospects. Collectively, thepotential impacts of this economic environment pose risks that are currentlyindescribable and immeasurable. Readers are cautioned that forward-lookingstatements are not guarantees of future performance or events and, accordingly,are cautioned not to put undue reliance on forward-looking statements due tothe inherent uncertainty of such statements. These forward-looking statementsare made as of the date of this news release and, unless required by applicablelaw, the Company assumes no obligation to update these forward-lookingstatements.
