Mr. Charles Funk reports

HELIOSTAR ANNOUNCES US$12,500,000 NON-BROKERED PRIVATE PLACEMENT

Heliostar Metals Ltd. has arranged a non-brokered private placement of up to 74 million units of the company at a price of 22 cents per unit for gross aggregate proceeds of up to approximately $16.28-million ($12.5-million (U.S.)).

Each unit will consist of one common share in the capital of the company and one-half of one non-transferable common share purchase warrant. Each warrant shall entitle the holder thereof to purchase one additional common share at an exercise price of 30 cents per warrant share for a period of 36 months following the date of issuance.

The company intends to use the net proceeds from the offering to acquire and advance the Ana Paula development-stage gold project, as well as for working capital and general corporate purposes.

Acquisition summary:

• Heliostar has entered into definitive agreements with Argonaut Gold Inc. to acquire the Ana Paula gold project and option the San Antonio gold project in Mexico.
• Ana Paula is permitted for an open-pit mine with measured and indicated (M&I) mineral resources of 1.46 million ounces (Moz) gold at 2.17 g/t gold and 3.27 Moz silver at 4.8 grams per tonne (g/t) silver.
• San Antonio is a high-grade oxide resource containing M&I mineral resources of 1.73 Moz of gold grading 0.83 g/t gold.
• The purchase price for Ana Paula is $10-million (U.S.) cash. Subsequent milestone payments comprise $10-million (U.S.) of cash payments and $10-million (U.S.) of cash or share payments.

Ana Paula project:

• Proven and probable mineral reserves of 1,021,000 ounces of gold at 2.36 g/t gold and 2,254,000 ounces of silver at 5.22 g/t silver;
• High-grade gold project with potential to be an open-pit or underground mine;
• Permitted for an open-pit mine;
• Estimated $75-million (U.S.) of historic exploration and development expenses;
• Existing mine infrastructure, including a 412-metre-long decline in place;
• 142,000 metres of drilling in 333 holes.

San Antonio project:

• Measured and indicated mineral resources of 1,735,000 ounces of gold at 0.83 g/t gold;
• High-grade oxide gold project;
• Located in a historic mining district on the Baja California peninsula;
• 102,000 metres of drilling in 589 holes.

For additional information on the acquisitions of the Ana Paula and San Antonio projects, please see the company's news release dated Dec. 5, 2022, filed under Heliostar's profile on SEDAR.

Financing details

Finders' fees may be paid to eligible finders consisting as cash fees and non-transferable broker warrants in an amount up to 6 per cent of the gross process raised by such finder. Each broker warrant, if issued, shall entitle the holder thereof to purchase one additional common share at an exercise price of 30 cents per broker warrant share for a period of 24 following the date of issue.

All securities issued in connection with the offering shall be subject to a statutory hold period expiring four months and one day after the date of issue, as set out in National Instrument 45-102 (Resale of Securities).

The offering is scheduled to close on or about Feb. 24 and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange.

Acquisition update

By way of update, the company and Argonaut Gold continue to work towards the closing of the transaction and, in connection therewith, have made initial submissions to the TSX Venture Exchange. The transaction is subject to the approval of the TSX-V, as the transaction constitutes a fundamental acquisition as defined in TSX-V Policy 5.3 (Acquisitions and Dispositions of Non-Cash Assets), and, as such, the company is required to present certain financial statements of Aurea Mining Inc., the entity which holds a 100-per-cent indirect interest in and to the Ana Paula gold project, as well as an updated technical report on the property. The common shares of the company shall remain halted until such time as these items have been delivered to the TSX-V and Heliostar has received final approval of the TSX-V.

Heliostar anticipated these requirements and, in December, contracted M3 Engineering & Technology Corp. to complete an update of the non-current 2017 preliminary feasibility study on the Ana Paula gold project. The company expects completion and submission of all required documentation by the end of February and expects reinstatement of trading to occur in early March.

Statement of qualified person

Stewart Harris, PGeo, a qualified person, as such term is defined by National Instrument 43-101 (Standards of Disclosure for Mineral Projects), has reviewed the scientific and technical information that forms the basis for this news release and has approved the disclosure herein. Historical information contained in this news release cannot be relied upon as Mr. Harris has not prepared nor verified such information.

About Heliostar Metals Ltd.

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

Upon completion of the current transaction, the company will focus on developing its 100-per-cent-owned Ana Paula gold project in Guerrero, Mexico. In addition, Heliostar is working with the Mexican government to permit the San Antonio gold project in Baja Sur, Mexico. Finally, the company continues efforts to expand the resource at the Unga gold project in Alaska, United States.

We seek Safe Harbor.