Mr. Charles Funk reports

HELIOSTAR ANNOUNCES CLOSING OF C$20.4M (US$15.0M) PRIVATE PLACEMENT AND PROVIDES ANA PAULA AND SAN ANTONIO TRANSACTION UPDATES

Further to its news releases dated Dec. 5, 2022, Jan. 17, 2023, and March 3, 2023, Heliostar Metals Ltd. has closed its previously announced non-brokered private placement offering, of which the company issued 92,727,272 units at a price of 22 Canadian cents per unit for gross aggregate proceeds of approximately $20.4-million (Canadian) ($15-million (U.S.) (1)). The company has also provided an update on its proposed acquisition of all of the issued and outstanding shares of Aurea Mining Inc., a wholly owned subsidiary of Argonaut Gold Inc., which, through Aurea Mining's wholly owned subsidiary Minera Aurea SA de CV, holds a 100-per-cent indirect interest in and to the Ana Paula gold project, as well as its option agreement with Argonaut and its wholly owned subsidiary, Compania Minera Pitalla SA de CV, pursuant to which the company has been granted an option to acquire a 100-per-cent interest in the San Antonio gold project.

Private placement details

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

Aggregate finder's fees of $554,700 in cash were paid and 2,521,461 non-transferable broker warrants were issued to three qualified finders. Each broker warrant is exercisable into one share at an exercise price of 30 cents per common for a period of 36 months following the date of issue.

The proceeds from the offering are anticipated to be used for the purchase and subsequent exploration advancement of the Ana Paula gold project as well as for general working capital purposes. All securities issued in connection with the offering are subject to a four-month-and-one-day restricted resale period.

Each of Charles Funk (chief executive officer), Sam Anderson (vice-president of exploration) and Mahesh Liyanage (chief financial officer) participated in the offering. Accordingly, each of their respective subscriptions constituted a related party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The issuance of the units to the insiders, however, was exempt from the valuation requirements of MI 61-101 by the virtue of the exemption contained in Section 5.5(b) as the shares are not listed on a specified market and from the minority shareholder approval requirements of MI 61-101 by virtue of the exemption contained in Section 5.7(1)(a) as the value of the units issued under the offering did not exceed 25 per cent of the company's market capitalization.

Transaction update

By way of update, the company and Argonaut Gold continue to work toward the closing of the transaction and have met several of the conditions for the closing of the transaction. Accordingly, Heliostar received conditional approval from the TSX Venture Exchange for the transaction on March 9, 2023. The closing remains subject to, among other things, the final 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. Further to Heliostar's Dec. 5, 2022, Jan. 17, 2023, and March 3, 2023, news releases, the company has yet to receive conditional approval from the TSX-V for the grant of the option under the terms of the option agreement. The company continues to work toward obtaining receipt of conditional approval from the TSX-V for the option, following which it may, pursuant to the terms of the option agreement, earn a 100-per-cent interest in and to the San Antonio gold project located in Baja California Sur state, Mexico.

For additional details on the transaction, the Ana Paula project and the San Antonio transaction, see the company's news releases dated Dec. 5, 2022, Jan. 17, 2023, and March 3, 2023, filed under its profile on SEDAR.

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

The Ana Paula project deposit contains proven and probable mineral reserves of 1,021,000 ounces of gold at 2.36 grams per tonne gold and 2,254,000 ounces of silver at 5.22 g/t silver (2). A preliminary feasibility study was completed in 2017, the asset is permitted for open-pit mining (2). The asset contains significant existing infrastructure including a portal and 412-metre-long decline (2). San Antonio is a high-grade oxide gold deposit containing measured and indicated mineral resources of 1,735,000 ounces of gold at 0.83 g/t gold (3). A preliminary economic assessment for Argonaut was completed in 2012.

Unga is an advanced vein district containing the SH-1 gold deposit within a large, prospective vein field. SH-1 contains inferred mineral resources of 384,000 ounces of gold at 13.8 g/t gold.

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.

Sources

(1) $15-million (U.S.) total based of Bank of Canada exchange rate for U.S. dollars on March 3, 2022.

(2) Alio Gold Inc., Ana Paula project NI 43-101 technical report amended preliminary feasibility study with effective date of May 16, 2017.

(3) Argonaut Gold Inc., NI 43-101 technical report on resources San Antonio project with effective date of Sept. 1, 2012.

We seek Safe Harbor.