Argonaut Gold to Sell Gold Projects to Heliostar Metals
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Argonaut Gold to Sell Gold Projects to Heliostar Metals

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Fernando Mares By Fernando Mares | Journalist & Industry Analyst - Thu, 12/08/2022 - 16:25

Canada-based junior company Heliostar Metals announced a recent discussion to acquire Argonaut Gold’s Ana Paula and San Antonio gold projects. Heliostar believes these acquisitions will completely transform the company into a high-margin gold company. 

The acquisition of Argonaut Gold’s assets considers two different agreements. The first one is a share purchase agreement to acquire all issued and outstanding shares of Aurea Mining, a wholly-owned subsidiary of Argonaut Gold that holds 100 percent interest in the Ana Paula gold project in Guerrero. The second acquisition consists of a binding option agreement with Argonaut and its subsidiary Compañía Minera Pitalla to acquire 100 percent of the San Antonio gold project. 

According to the first agreement, Heliostar agreed to pay US$10 million in cash, up front; US$5 million in shares upon renewing the open-pit mining permit or obtaining a new underground mining permit; US$2 million upon completion of a feasibility study or July 1, 2024, whichever comes first; US$3 million in cash and another US$2 million in cash or shares preceding the construction announcement and US$5 million plus US$3 million in cash or shares preceding the announcement of commercial production. 
Under the second agreement, Heliostar has the option to acquire 100 percent of the San Antonio project in Baja California Sur, currently owned by Compañía Minera Pitaya, making a cash payment of: 

  • US$80 million if the average gold price is below US$1,800/oz for the six months preceding Heliostar’s acquistion.
  • US$120 million if the average gold price is above US$1,800/oz.
  • US$150 million if the average gold price is above US$2,000/oz. 

Heliostar must pay a 2 percent net smelter return (NSR) to Argonaut Gold. The term of the agreement is for a three-year period. However, this term could be extended for an additional 18 months if Heliostar were to obtain an Environmental Impact Assessment from the Ministry of Environment and Natural Resources (SEMARNAT) to advance the project. 

According to Charles Funk, CEO, Heliostar, the acquisition of these assets will transform the company into a development company, with 3.2Moz of gold in the measured and indicated (M&I) categories. “The company considers Ana Paula to be significantly more capital efficient as a potential underground mine with a simple mill flowsheet focusing on high-grade core within the deposit. The company intends to re-scoping the project ahead of proceeding to a feasibility study,” Funk said. 
 

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