Heliostar Metals Ltd. (TSXV: HSTR, OTCQX: HSTXF) has finalized its acquisition of Florida Canyon Gold Inc.’s (FCGI) mining assets in Mexico, marking a significant milestone for the Vancouver-based gold producer. The transaction, valued at $5 million, grants Heliostar full ownership of several key properties, including the San Agustin mine, La Colorada mine, Cerro del Gallo project, and San Antonio project. This acquisition not only enhances Heliostar’s production capacity but also streamlines its financial obligations related to previous projects.
Heliostar Metals Ltd. has successfully acquired a 100% interest in Florida Canyon Gold Inc.’s Mexican mining assets for a cash consideration of $5 million. This acquisition grants Heliostar full ownership of several key properties, including the San Agustin mine, La Colorada mine, Cerro del Gallo project, and San Antonio project.
As part of the agreement, Heliostar and FCGI have eliminated up to $20 million in contingent payments related to the Ana Paula project, along with $150 million in conditional option payments and a 2% net smelter returns royalty associated with the San Antonio project. This financial restructuring allows Heliostar to redirect resources towards growth and development initiatives.
Heliostar’s CEO, Charles Funk, highlighted that this acquisition positions the company as a multi-asset producer with unhedged gold production from diverse sources, driving both production growth and resource development across its portfolio. Following the transaction’s completion, Heliostar plans to provide production guidance for 2024 and announce expansion plans for the La Colorada mine in the coming weeks.
The acquisition includes several key assets that will significantly enhance Heliostar’s production capabilities. The San Agustin mine, previously part of the El Castillo Complex, is expected to make a substantial contribution to the company’s gold output. The La Colorada mine, located in Sonora, is a gold-silver open-pit operation with considerable growth potential, supported by ongoing development projects aimed at increasing production. Additionally, the Cerro del Gallo project adds further diversification to Heliostar’s portfolio, enhancing its resource base. The San Antonio project, now free from contingent payments and royalties, can be developed more aggressively, allowing Heliostar to maximize its value without prior financial encumbrances. Together, these assets position Heliostar for significant operational expansion and increased profitability in the future.
This acquisition underscores Heliostar’s commitment to expanding its operational capabilities in Mexico, a region known for its rich mineral resources. By consolidating multiple producing mines and development projects under one umbrella, Heliostar not only increases its immediate production capacity but also positions itself for long-term growth.
The elimination of previous financial obligations associated with the Ana Paula project allows Heliostar to focus on maximizing value from its new assets without the burden of significant contingent liabilities. As such, this strategic move is expected to enhance shareholder value and solidify Heliostar’s status as a dynamic player in the gold mining sector. Heliostar Metals’ acquisition of Florida Canyon Gold Inc.’s Mexican mining assets represents a pivotal step in the Company’s growth strategy going forward.
