Highlights:

• The Ana Paula measured and indicated resource contains an average of 5,350 ounces of gold per vertical metre between 725-950 metres of elevation (immediately below surface)

• The deposit's favourable orientation, width, and shallow depth make the resource amenable to underground mining configurations

• Heliostar is currently reviewing undergound mining scenarios at multiple cut-off grades and potential throughput rates

• Potential underground mining scenerios take advantage of the existing 412 metre long, production sized, portal and decline

Vancouver, British Columbia--(Newsfile Corp. - August 3, 2023) - Heliostar Metals Ltd. (TSXV: HSTR) (OTCQX: HSTXF) (FSE: RGG1) ("Heliostar" or the "Company") is pleased to report progress on re-scoping of the current Pre-Feasibility Study ( the "PFS") at the Company's Ana Paula Project in Mexico ("Ana Paula" or the "Ana Paula Project") to evaluate potential underground mining scenarios.  The Company is evaluating three underground mining scenarios, with different cut-off grades and mining rates, that are being advanced for more detailed evaluation and comparison.  All three demonstrate the potential to deliver high grades early and throughout the mine life.  

Heliostar CEO, Charles Funk, commented, "We are quickly advancing the re-scoping of Ana Paula towards an underground mine. The High Grade Panel is shallow and wide with a favourable orientation for productive underground mining.  The Company is refining three scenarios to choose the approach that maximises the profitability of mining and shortens the timeline to production.  One of the keys to achieving this is mining high grades early in the mine life, as compared to the open pit scenario. We will choose the best outcome and work through the Feasibility Study in 2023.  We expect further improvements to the mine economics as current analysis does not include the excellent results from Heliostar's 2023 drill program."

Gold Distribution within the Resource

Ana Paula's 2023 PFS measured and indicated resource contains an average of 5,350 ounces of gold per vertical metre between 725-950 metres of elevation (immediately below surface).  The zone ranges between a maximum of 8,540 ounces per vertical metre at 775 metres of elevation and a minimum of 1,080 ounces per vertical metre at 925 metres of elevation. The ounce distribution in the open pit portion of the resource is constrained by the 2023 PFS open pit shell and in the underground portion by a 1.6 gram per tonne (g/t) gold cutoff resource shell.

Underground Mining Scenarios

Multiple potential mining scenarios are in review for Ana Paula. The project re-scoping is assessing the most applicable mining scenario with a focus on increasing project economics (NPV and IRR) while reducing initial CAPEX when compared to the open pit mining scenario proposed in the 2023 PFS.

The Company contracted JDS Energy & Mining Inc., who completed the existing decline on the property, to evaluate the options.  Currently, the engineers are assessing three scenarios with different cutoff grades and throughput rates for the Ana Paula deposit using the 2023 pre-feasibility study resource model.  The Company will refine the options upon receipt of an updated resource model and metallurgical program results, both of which rely on drilling completed in 2023.  Metallurgical results will be reported in October and an updated resource model is expected in November 2023.  

The best outcome will then be selected and taken through Feasibility Study in 2024.  

Table 1:  Weighted Average measured and indicated gold grades and total ounces by elevation from 2023 PFS Resource1.  Results may slightly vary from resource estimate due to rounding.

Statement of Qualified Person

Samuel Anderson, CPG., a Qualified Person, as such term is defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), has reviewed the scientific and technical information that forms the basis for this news release and has approved the disclosure herein.

About Heliostar Metals Ltd.

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

The Company is focused on developing the 100% owned Ana Paula Project in Guerrero, Mexico. In addition, Heliostar is working with the Mexican federal and local government to permit the San Antonio Gold Project in Baja Sur, Mexico. The Company continues efforts to explore the Unga Gold Project in Alaska, United States of America.

The Ana Paula Project deposit contains proven and probable mineral reserves of 1,081,000 ounces of gold (630,000 proven and 451,000 probable ounces) at 2.38 grams per tonne ("g/t") gold and 2,547,000 ounces of silver (1,322,000 proven and 1,226,000 probable ounces) at 5.61 g/t silver. Ana Paula hosts measured and indicated resources of 1,468,800 ounces of gold (703,800 measured and 765,000 indicated ounces) at 2.16 g/t gold and 3,600,000 ounces of silver (1,637,000 measured and 1,963,000 indicated ounces) at 5.3 g/t silver. The asset is permitted for open-pit mining and contains significant existing infrastructure including a portal and a 412-metre-long decline.

References

1. An updated prefeasibility study titled "Ana Paula Project NI 43-101 Technical Report Preliminary Feasibility Study Update" was filed on SEDAR on April 6, 2023, with an effective date of February 28, 2023, prepared for the Company by Daniel H. Neff, PE, Art S. Ibrado, PhD, PE, Richard K. Zimmerman, RG, SME-RM, Craig Gibson, PhD, CPG, Andrew Kelly, P.Eng., Gordon Zurowski, P.Eng., Paul Daigle, P.Geo., Gilberto Dominguez, PE and James A. Cremeens, PE, PG.

For additional information please contact:

Charles Funk

Chief Executive Officer
Heliostar Metals Limited
Email: charles.funk@heliostarmetals.com

Rob Grey

Investor Relations Manager
Heliostar Metals Limited
Email: rob.grey@heliostarmetals.com