The scene of a desperate Charlie Chaplin eating his shoe is far from today’s reality for gold prospectors and explorers in Alaska. For example, at Heliostar Metals Ltd. (HSTR:TSX.V; HSTXF:OTC; RGG1:FRA) Unga property in the Aleutian Islands, Charlie could have had groceries delivered by Amazon, thanks to daily flights into the nearby Sand Point airstrip.
The Unga property is the flagship project in Heliostar’s plan to build a portfolio of projects with high-grade ounces in North America’s premier mining jurisdictions, according to CEO Charles Funk. At 250 square kilometers — twice the size of Manhattan Island — Unga has a resource of 394,000 ounces at 13.8 grams/tonne gold (g/t). The company is equally excited about its three early-stage projects in Sonora, Mexico.
“All of these properties are under-explored, and all have great potential,” Funk told Streetwise. “What’s more, unlike many exploration companies, we have proven discoverers and team members who have made money for companies like Newmont Corp. (NEM:NYSE) and Newcrest Mining Ltd. (NCM:ASX).”
Management’s experience include Funk’s lead role in the discovery of Panuco for Vizsla Resources Corp. (VZLA:TSX), and he remains a director of that company. He also was involved with Evrim Resources (now Orogen Royalties Inc. (OGN:TSX.V)) on its Ermintano West gold/silver discovery, now in production in Sonora.
Sam Anderson, Heliostar’s VP of exploration has led discoveries in Suriname for Newmont. Rob Grey, Investor Relations Manager, was involved with Extorre Gold Mines Ltd. (XG:TSX; EXGMF:OTCQX) (bought by Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE) and Exeter Resources Corp (bought by Goldcorp, now part of Newmont).
In 2019, Funk launched Heliodor, a private company that “built its portfolio in Mexico, focusing on cheap opportunities with huge upside,” he said. “But we were looking for a high-grade flagship that was more advanced to bring us closer to the mining option. We identified Unga in 2020 when it was owned by Red Star. We consolidated the capital structure, brought in a new management team, and renamed the company Heliostar.”
Alaska
Heliostar’s flagship Unga project currently has two reverse circulation drill rigs and one diamond rig turning. The primary focus is on the SH-1 target, with activity also underway at Aquila, Apollo, and Zachary Bay. Work will start at Centennial in November or December 2021.
Apollo was the site of the first underground gold mine in Alaska. It hosts a 2,000-meter-long vein with historically reported production of approximately 130,000 oz at 10g/t gold, according to Heliostar. Recent results from Unga include:
- SH-1: Resource of 384,000 oz. at 13.8 g/t gold over a drilled strike extent of 1.75 km and remains open at depth. The central portion of the vein has returned several intersections in excess of 10 g/t gold, and a few in excess of 100 g/t gold.
- Aquila: Intercepts over 475 m showing 1.77 g/t gold over 18.28 m from 4.57 m, including 3.44 g/t gold over 7.62 m from 10.67m; and .55 g/t gold over 41.15 m from 1.52m, including 5.95 g/t gold over 1.52 m from 4.57m
- Zachary Bay: Two reverse circulation holes targeted porphyry gold-copper mineralization of 0.44 g/t gold equivalent (AuEq) over 71.63 m from 30.48 m downhole, including 0.58 g/t AuEq over 16.76 m from 30.48 m and 0.69 g/t AuEq over 6.10 m from 30.48 m.
While Heliostar’s priority is high-grade gold, Funk said that “the proximity of the different deposit styles highlights the potential value creation of exploring both styles of mineralization.”
Analyst Michael Gray of Agentis recently visited the Unga project and noted five takeaways:
- Consolidated epithermal vein field, ripe for systematic exploration
- One-to three Moz. gold potential
- Plethora of targets means an array of opportunity (and opportunity cost)
- Positive ESG (environment, social, and governance) related to Alaska Native corporations and tribes
- Reasonable access (not as remote as we thought)
Regarding Unga as a whole Funk, said, “This year we built out a framework to show that this could be much bigger, and our mid -term goal is lifting the resource to rather more than a million ounces,” said Funk. “We are excited to unlock the larger district to reveal the full resource potential of a large property that has seen very little systematic exploration.
Mexico
Heliostar’s most recent results are from its 100%-owned, five-square km Cumaro project, adjacent to SilverCrest Metals’ El Picacho district (360,000 tonnes at 8.5 g/t gold and 40 g/t silver). Those veins extend from Picacho onto Cumaro, where drilling was done by Yamana, the previous operator.
Its 2021 drilling program in the Western Block of Cumaro hit multiple channels of up to 12.6 g/t gold equivalent over 5.0 meters. Funk called these results “a significant step forward. Returning so many high-grade hits on surface over a broad area is very positive.” Drilling continues in the Eastern Block of the claim.
Heliostar owns 100% of two other projects in Sonora:
- Oso Negro 40km northeast of the SilverCrest Metals Inc. (SIL:TSX.V; SILV:NYSE.American) Las Chispas deposit with similar grades and vein styles outcropping at surface. The veins include Prospector (360m long, with an average width of 1.3m and a weighted average grade of 420 g/t silver equivalent) and Tere (730m long, with an average width of 1.0m and a weighted average grade of 172 g/t silver equivalent). Heliostar also has identified new vein zones with dump samples up to 1,500g/t silver equivalent.
- La Lola a large, preserved system 20km to the west of the Silver Tiger Metals Inc. (SLVR:TSX.V; SLVTF:OTCMKTS) El Tigre project, features a 6 by 5 km zone of veining and alteration, including the 5km long La Barra vein which swells to 40m wide. Rock chips return up to 57 g/t gold and another with 424 g/t silver. In 2021, drilling encountered high grade silver: 92.0 g/t over 2.5 m.
“Having two strong strings to our bow in Alaska and Mexico gives us a lot of optionality that most small companies don't have,” he concluded.
Financials
On October 6, 2021, Heliostar announced a $4 million non-brokered private placement of up to 5,714,285 units at a price of $0.70 per unit.
Each unit will consist of one common share and one half of one common share purchase warrant in the company. Each warrant shall be exercisable for one common share at an exercise price of $1.20 for the 24-month period following the closing date.
Heliostar’s market cap is in the CA$25 to $30 million range. More than half of its shareholders are in the retail category, while management and institutions each hold approximately 14%. The Phoenix Gold Fund, K2 and US Global Investors are among the institutions that hold shares.
Disclosure:
1) Diane Fraser compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee. He/she or members of his/her household own securities of the following companies mentioned in the article: None. He/she or members of his/her household are paid by the following companies mentioned in this article: None. His/her company has a financial relationship with the following companies referred to in this article: None.
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