Heliostar Metals’ (TSXV: HSTR) stock surged on Monday after the gold mining junior provided an updated resource estimate to its Ana Paula project in Guerrero, Mexico. The project was acquired from Argonaut Gold for $30 million earlier in the year.
Using on a cut-off grade of 2.5 grams per tonne gold, the new resource contains 710,920 measured and indicated ounces of gold grading 6.60 g/t, plus an additional 447,512 inferred ounces grading 4.24 g/t.
This represents a 58% increase in measured and 30% increase in indicated gold grades relative to the previous resource tabled in March, offsetting the decline in ounces in both categories after the latest update.
According to Heliostar, the grade growth was the result of tighter spaced drilling undertaken at the Ana Paula deposit this year, a requirement for an underground mining focused resource estimate.
At the core of the resource is a high-grade panel that measures 280 metres long, 100 metres high and 60 metres thick. Drilling in this area has supported reporting to the measured and indicated categories in the updated resource.
The company believes that the connected zone of greater than 200,000 oz. grading over 10 g/t gold within the high-grade panel can be targeted in the initial years of mining.
“At the beginning of this year Heliostar set out to transform the Ana Paula project into a deposit that will support a high-margin, underground gold mine. Today’s updated resource estimate is a major milestone on this rapid path of growth and de-risking toward production,” Heliostar’s CEO Charles Funk stated.
He also noted that these additional resources have been delivered at a cost of just $16 per gold ounce, calculated from the approximately $4.7 million spent on exploration by the company to date.
Shares of Heliostar Metals closed Monday’s session 5.3% higher at C$0.30 apiece. The Vancouver-based miner has a market capitalization of C$43.4 million ($31.9m).