On June 16, 2021, Heliostar Metals Ltd. (HSTR:TSX.V; RGCTF:OTC) announced that it hit 88.3 grams per tonne (g/t) gold over 3 meters and 19.3 g/t gold over 4.5 meters at the old Apollo Mine on its Unga Project in Alaska.
That's an exceptional discovery for a tiny gold explorer like Heliostar…but in this case it means a whole lot more.
You see, Apollo is a "lost gold mine." Like the kind you read about in old Western novels. Discovered in 1891, the mine production peaked between 1891 and 1904. In total, the mine produced about 107,000 ounces of gold at a grade of 12.8 g/t.
The historical reports from the mine described thick veins rich with gold and base metals. The old miners found free gold, galena (lead), sphalerite (zinc), chalcopyrite (copper) and native copper in veins. The old miners left three main zones: Apollo Shaft 1, Apollo Shaft 2 and the Sitka Mine.
Initially, the miners found gold alone in the veins. However, as they mined deeper, the ore became richer in base metals like zinc and lead. That was a problem at the turn of the last century.
At that time, miners couldn't process ore with base metals. That didn't come along until later, but it's industry standard today.
The mine finally closed in the 1920s. The people left, the town died, and Apollo became a lost gold mine.
However, much of the old information remained in dusty old historical reports from the mine. As time passed, the mine old fell into ruin.
Apollo didn't see interest again until the 1980s, when an exploration company drilled 14 holes. However, the treasure map didn't work. Those holes didn't find the veins described in the historical reports.
The property went dormant again for another forty years, until Heliostar drilled seven holes in 2020.
The Heliostar team figured something out. They realized that the historical mine drawings weren't exact. So instead of jumping into drilling, they approached the problem systematically. They did some basic exploration work on Apollo.
As they mapped the geology, they saw that the team in the 1980s missed the entire vein corridor. The map's coordinates were off. If you went solely by the old data, you drilled in barren rock!
Using information gathered from the 2020 field season, they team carefully plotted the 2021 drill locations…and found the lost gold mine.
What the Market Missed…
I love a good "Lost Gold Mine" story. It's what attracted me to Heliostar over a year ago. I dug into the story and the old geologic reports. As I read through them, I got chills…
The old miners found a lot of gold…and just left it in the ground. They left hints and clues about the rocks and the quality of the ore.
If the company could prove that these veins still existed…and that they held the metal claimed in the report…then this could be a huge discovery.
That's why this recent news is so important.
The new drilling provides ample proof that the historical reports didn't lie. The miners did hit base-metal rich veins with gold.
For example, drill hole SKRC21-03 hit 4.5 meters of rock that ran 1.9 g/t gold, 21.6 g/t silver, 1.4% lead and 5.7% zinc.
I'll bet that rock makes beautiful core, with that much metal in it!
The market reacted to the results, as you can see in the chart below:
But the true impact of these holes hasn't hit the price yet.
These early results prove that the historical veins remain. That removes a lot of exploration risk for the Heliostar team. They proved that high grade gold and base metals exist at Apollo, just like the historical reports describe.
There are another 27+ drill holes in progress right now. The Apollo trend stretches for 2 kilometers. The current drilling tested less than half that length so far.
The company's goal, as stated by Heliostar CEO Charles Funk, is simple:
"The company is undertaking a 7,000 meter, fully funded program with a goal of demonstrating the current resource (384,000 inferred ounces at 13.8 g/t gold) can grow to greater than 1,000,000 ounces of gold."
Heliostar is a C$46 million company with 31.9 million shares outstanding. It's priced like a high-risk exploration company. But it has a detailed treasure map from a lost gold mine. And this summer's drilling program should remove all doubt that the lost gold mine is found again.
--Matt Badiali
Reach Matt Badiali at www.mattbadiali.net.
Matt Badiali is a geologist and independent financial analyst. He spent fifteen years researching and writing about great investments inside the natural resources sectors. He can be reached at www.mattbadiali.net.
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