Vancouver’s Heliostar Metals Ltd. (TSX-V: HSTR) (OTCQX: HSTXF) (FRA: RGG1) has reported more high-grade gold intercepts from its project in Guerrero, Mexico following favourable results from its first holes there last month.
On Monday, the junior gold explorer announced that it had intercepted 6.0 g/t gold over 129.2 metres including 13.4 g/t over 46 metres and 17.4 g/t over 28.5 metres at the Ana Paula project.
The news follows Heliostar intercepting 11 g/t over 53.2 metres in one of the first holes drilled at Ana Paula in May. The new results further indicate the potential for developing an underground mine that will generate substantial profit.
“The key to our vision for Ana Paula’s future is to define high-grade, underground-minable gold mineralization. The current drill program’s exceptional intercepts reinforce this view,” said Heliostar’s CEO Charles Funk.
Additional new drill results from Ana Paula include the following:
New drill results from Ana Paula. Table via Heliostar Metals
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Heliostar is currently re-scoping Ana Paula’s economic feasibility as an underground operation following the acquisition of the project from Argonaut Gold Inc. (TSX: AR) in March for US$30 million. The site currently has an open-pit permit but Heliostar is more concerned with the profitability of underground development.
The re-scoping program the company is currently engaged in involves a drill program, underground mine design, a resource update and geometallurgical optimization studies that will be completed by the end of this year.
The 52,047-hectare project was initially discovered in 2005 by Goldcorp prior to its acquisition by Newmont Corporation (NYSE: NEM) (TSX: NGT) in 2019 and has had over US$75 million invested in it since that time.
A preliminary feasibility study conducted by Heliostar this year indicated that the mine would have an eight-year life going forward with capital expenditures of $257.6 million. The company aims to declare commercial production at Ana Paula within three years.
The site is located 20 kilometres northwest of the Morelos Complex Mine run by Torex Gold Resources Inc. (TSX: TXG) and 30 kilometres northwest of Equinox Gold Corp.’s (TSX: EQX) (NYSE American: EQX) Los Filos mine.
Mexico recently implemented a major overhaul to its mining regulations consisting of a set of amendments that came into effect on May 9. They include the following:
Mineral exploration activities in the country are only to be undertaken by the Mexican Geological Service unless bids for concessions are otherwise approved by the country’s Ministry of Economy.
The country has significantly shortened the term of mining concessions from 50 years, subject to a one-time renewal for an additional term of the same length to 30 years, subject to a one-time renewal for a second duration of 25 years.
All mining concessions are now to be awarded through a public bidding process rather than the “free land first applicant” basis in effect previously. The awarded bidder will be able to obtain the concession only after they have secured all applicable permits.
Mining concession titles will be granted only for specific minerals and not for the exploitation of all minerals deposited in a certain area anymore.
Heliostar shares stayed flat at $0.43 Monday on the TSX Venture Exchange.
rowan@mugglehead.com
