Heliostar resumes trading after $20.4 million placement

Heliostar Metals Ltd. [HSTR-TSXV, HSTXF-OTCQX, RGG1-FRA] rallied in active trading Wednesday after trading in the shares resumed on the TSX Venture Exchange.

The shares rose 10.4% or $0.025 to 26.5 cents on volume of 1.19 million, making Heliostar the volume leader on the TSX Venture Exchange. The shares trade in a 52-week range of 19.5 cents and 56 cents.

“This is another key milestone for shareholders of the company as we complete our transformation to become a gold developer,’’ said Heliostar CEO Charles Funk.

Heliostar is a junior company with a portfolio of advanced high-grade gold projects in Mexico.

Trading resumed after Heliostar issued a release on March 17, 2023, stating that it had closed a previously announced private placement offering that raised $20.4 million. The company also released an update on its proposed acquisition of Aurea Mining Inc., a unit of Argonaut Gold Inc. [AR-TSX], which holds a 100% interest in the Ana Paula gold project in Mexico as well as an option to acquire a 100% stake in the Antonio Gold project, which is also located in Mexico.

The private placement offering consists of 92.7 million units priced at 22 cents. Each unit consists of one common share and one half of one non-refundable share purchase warrant.  Each warrant entitles the holder to purchase one additional share at an exercise price of 30 cents per warrant share for 36 months after the issue date.

Proceeds of the offering are expected to be used for the purchase and subsequent advancement of the Ana Paula Gold project.

In the March 17, 2023 press release, Heliostar said it and Argonaut continue to work towards closing of the transaction and have met several conditions for the closing. It said closing remains subject final approval from the TSX Venture Exchange, but is expected to be completed before the end of March, 2023.

Heliostar previously said it has yet to receive conditional approval from the TSX Venture Exchange for the grant of the option related to the option agreement that would permit the company to earn a 100% interest in the San Antonio gold project.

The Ana Paula Project deposit contains proven and probable reserves of 1.02 million ounces of gold at 2.36 g/t gold and 2.25 million ounces of silver at 5.22 g/t silver. The company said a preliminary feasibility study was completed in 2017. It also said the asset is permitting for open-pit mining. Existing infrastructure at the site includes a portal and 412-metre-long decline.

San Antonio is a high-grade oxide gold deposit containing a measured and indicated resource of 1.73 million ounces of gold at 0.83 g/t gold. A preliminary economic assessment was completed in 2012.

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