Heliostar Metals Ltd.

Heliostar Metals Ltd. is a junior gold producer headquartered in Vancouver, Canada, operating primarily in Mexico. The company's portfolio consists of 6 projects, comprising 2 operating mines, 3 development, and 1 advanced exploration project. Key assets include Ana Paula and Unga. The company operates as a development-stage entity focused on the acquisition, exploration, and advancement of mineral properties. Its business model is transitioning from a pure explorer, funded through equity and asset sales, to an integrated operator by acquiring producing assets. Operational characteristics include a focus on high-grade deposits and a technical approach of re-scoping major projects to optimize extraction methods, such as evaluating underground mining scenarios over previously considered open-pit plans. This involves detailed metallurgical studies, resource modeling, and geotechnical analysis to enhance project economics. A key competitive advantage is the strategic consolidation of large, underexplored land packages, which facilitates comprehensive, district-scale exploration programs. The organization manages market risks, including inflation and exchange rate volatility, through diligent monitoring and adaptive measures. This strategic shift towards production, combined with disciplined exploration, aims to create a diversified and vertically integrated business.

Strategic priorities are centered on a dual approach of organic growth and transformative acquisitions. The primary near-term objective involves advancing a wholly-owned, high-grade development project by completing a Preliminary Economic Assessment and other de-risking studies. This includes significant infill and expansion drilling programs and metallurgical test work to support a re-scoped mine plan focused on underground extraction. Concurrently, the enterprise is pursuing a significant expansion of its operational footprint through the strategic acquisition of producing mines and advanced development projects. This M&A activity is designed to accelerate the transition to a revenue-generating operator, improve the economic outlook of its core development asset by eliminating large contingent payments, and establish a multi-asset production profile. Capital allocation is dependent on access to equity markets, with recent private placements and warrant exercises funding ongoing exploration, development, and acquisition initiatives. The overarching strategy is to evolve from a single-asset developer into a multi-jurisdictional producer.

Governance framework is overseen by a Board of Directors responsible for approving key disclosures and strategic decisions. The company maintains a formal conflict of interest policy requiring directors and officers to disclose any potential conflicts and, for directors, to abstain from voting on related matters. All technical information is independently reviewed and approved by designated Qualified Persons, ensuring compliance with national disclosure standards and providing robust technical oversight. Executive compensation for key management, including the CEO, CFO, and Non-Executive Chairman, consists of senior executive fees, non-executive director fees, and performance-based incentives such as bonuses and share-based compensation. Management is tasked with establishing and maintaining adequate internal controls over financial reporting and is responsible for critical accounting judgments, including the valuation of assets, share-based payments, and contingent consideration. This structure emphasizes prudent financial oversight, regulatory compliance, and accountability in technical reporting.

In March 2023, the company completed the acquisition of 100% of the shares of Aurea Mining Inc., a transaction accounted for as an asset acquisition. This brought a key development asset under the company's control through Aurea's wholly-owned subsidiary, Minera Aurea, S.A. de C.V. A subsequent binding agreement was announced on July 17, 2024, to acquire 100% of the assets of Florida Canyon Gold Inc. for US$5 million. This transformative transaction is set to add 2 producing mines and 2 advanced development projects to the portfolio. A significant condition of the Florida Canyon Gold Inc. deal is the execution of an agreement to eliminate substantial future liabilities. This includes the cancellation of up to US$20 million in contingent milestone payments related to the Aurea Mining acquisition and the termination of an option agreement that carried up to US$150 million in conditional payments and a 2% net smelter returns royalty on a separate project. This strategic restructuring simplifies the company's balance sheet and removes major long-term financial obligations.