High-Grade Gold Intercepts Highlight Potential at Ana Paula

Source: Streetwise Reports 12/04/2024

Heliostar Metals Ltd. (HSTR:TSX.V; HSTXF:OTC; RGG1:FRA) announced significant results from its 2024 drilling program at the Ana Paula project in Guerrero, Mexico. Find out why one analyst is calling it “one of the highest-grade gold intercepts you will ever see as a junior mining investor.”

Heliostar Metals Ltd. (HSTR:TSX.V; HSTXF:OTC; RGG1:FRA) announced significant results from its 2024 drilling program at the Ana Paula project in Guerrero, Mexico, highlighting the continued expansion of its High-Grade Panel. The company reported multiple high-grade intercepts, including Hole AP-24-317, which returned 87.8 meters grading 16.0 grams per tonne (g/t) gold, with a sub-interval of 16.1 meters grading an exceptional 71.8 g/t gold. Similarly, Hole AP-24-315 intersected 125.9 meters at 4.02 g/t gold, including 23.6 meters grading 12.5 g/t gold, further demonstrating the potential of the High-Grade Panel to deliver robust resource additions.

Heliostar’s CEO, Charles Funk, noted in the news release, “Despite regularly seeing wide, high-grade gold intercepts, Ana Paula continues to surprise us with its gold grades within the deposit. These holes grow the High Grade Panel to the north and down-dip, increase resource confidence and locally improve gold grades compared to the resource model. The current drilling program is defining the boundaries of the High Grade Panel and is attempting to convert inferred mineralization into the higher confidence indicated and measured categories. Last year the grade of the indicated resource update increased by 36%. This year’s results suggest conversion of inferred resource to indicated and measured can also result in increased gold grades.”

Notable secondary zones of mineralization were also identified in deeper regions of the project. This includes a 115.35-meter intercept grading 2.69 g/t gold in Hole AP-24-316. The company has completed eight drill holes, totaling 2,860 meters, and plans to pivot toward geotechnical and water testing activities for tailings facility planning before resuming resource drilling in 2025.

Why Gold?

Egon von Greyerz, writing on November 26 for Von Greyerz AG, described the gold sector as being in its exponential phase. He noted that global central bank gold reserves, valued at US$3.1 trillion, were dwarfed by the market capitalizations of major corporations, which he stressed highlighted the undervaluation of gold.

Von Greyerz stated, “The substantial increase in physical gold demand can only be satisfied by much higher prices,” as Eastern and Southern central banks continue to accumulate gold, replacing dollar reserves.

According to Jeff Clark from The Gold Advisor on December 2, Heliostar Metals reported what he described as “one of the highest-grade gold intercepts you will ever see as a junior mining investor.”

By November 28, Sprott Money observed shifting dynamics in gold futures markets. David Brady analyzed positioning trends. He noted that bullion banks had significantly reduced their short positions as gold prices fell from their late-October peak of US$2,802 per ounce. This reduction pointed to a possible continuation of price adjustments in the short term, as funds also cut their long positions.

According to Citizen Watch, on November 30, three major indicators were identified as signs of an upcoming revaluation of gold: skyrocketing national debt, global de-dollarization, and significant gold acquisitions by central banks. The report noted that moderate revaluation scenarios suggested gold prices could rise to US$3,000–$5,000 per ounce if central bank reserves increased significantly, reflecting a shift toward gold as a reserve asset.

Key Drivers For Heliostar

Heliostar’s ongoing success at Ana Paula is underpinned by its phased approach to developing a high-grade underground gold mine, as detailed in the company’s November 2024 investor presentation. The project’s High-Grade Panel has been a focal point of exploration, with the company targeting growth to a resource size of 1.5–2 million ounces by connecting known zones of mineralization and expanding depth potential. The project’s advanced state, including an existing decline and significant prior investment, positions it as a near-term development priority.

The Ana Paula project is complemented by Heliostar’s broader portfolio, which includes producing assets such as the San Agustin and La Colorada mines. Operating cash flows from these projects are expected to support ongoing exploration and development activities. CEO Charles Funk emphasized that Heliostar’s transformative acquisitions and operational progress over the past year have solidified its trajectory toward becoming a mid-tier precious metals producer with an annual output exceeding 150,000 ounces of gold by 2030.

Catalysts for future value creation include a planned feasibility study for Ana Paula by the fourth quarter of 2025, alongside the submission of permits to transition the project from open-pit to underground mining. Additionally, resource conversion and infill drilling efforts at Ana Paula are designed to further validate the economic potential of the deposit and position the project for construction decisions in the near term.

‘One of the Highest-Grade Gold Intercepts’

According to Jeff Clark from The Gold Advisor on December 2, Heliostar Metals reported what he described as “one of the highest-grade gold intercepts you will ever see as a junior mining investor.” The company drilled a headline hole measuring 87.8 g/t gold over 16 meters, yielding a remarkable 1,404.8 gram-meters of gold at the Ana Paula project in Mexico. Clark emphasized the significance of this result, calling it “an incredible intercept” and noting that it topped Mining Hub’s reports for the day. [OWNERSHIP_CHART-10041]

Further results from the same drill program included 23.6 meters grading 12.5 g/t gold within a broader interval of 61.5 meters at 4.04 g/t gold, underscoring the high potential of the Ana Paula deposit. Clark highlighted the company’s robust drilling program, which aims to delineate the High-Grade Panel and convert inferred mineralization into the higher-confidence indicated and measured categories.

Clark praised the company’s progress, stating, “The resource within the High-Grade Panel at Ana Paula is growing in size and increasing in grade.” He also mentioned that the resource grade increased by 36% in the indicated category during the previous year, with current results suggesting continued improvement. With more assay results pending and an additional 2,400-meter second-phase drilling program planned, Clark reiterated his optimism, recommending investors “buy on dips” as Heliostar Metals continues its aggressive trajectory toward becoming a mid-tier gold producer.

Ownership and Share Structure

According to Refinitiv, ownership for Heliostar is 30.31% for institutions, 2.31% held by management and insiders, and 1.52% with corporations. The rest is retail.

Heliostar, as of the date of this writing, has a market capitalization of CA$126.68 Million and 196.29 million free float shares.

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( Companies Mentioned: HSTR:TSX.V; HSTXF:OTC; RGG1:FRA, )