Highlights:

• 80.4% average gold recovery from seven composites representative of the High Grade Panel

• Gold recoveries range from 74.6 - 88.1% for these samples

• Gravity testwork suggests greater than 31% of the gold may be gravity recoverable

• Confirms the the Company's interpretation that recoveries from high-grade gold mineralization can utilize simpler, lower cost, conventional milling processes

• Metallurgical process is based on a conventional 75 micron grind size and Carbon-in-Leach (CIL) flowsheet

Vancouver, British Columbia--(Newsfile Corp. - October 3, 2023) - Heliostar Metals Ltd. (TSXV: HSTR) (OTCQX: HSTXF) (FSE: RGG1) ("Heliostar" or the "Company") is pleased to present positive preliminary metallurgical test results as part of the Rescoping Study of the Ana Paula project in Mexico ("Ana Paula" or the "Ana Paula Project").

Heliostar CEO, Charles Funk, commented, "These metallurgical results represent a significant step-change in our understanding of the Ana Paula Project. An 80.4% recovery using conventional grind sizes and recovery techniques indicates the High Grade Panel has the potential to be processed through a simple mill flowsheet. The analysis was completed on composite samples collected from a range of locations, host lithologies, and grade ranges throughout the High Grade Panel. Broadly speaking, high-grade gold mineralization has more coarse-grained gold and is easier to recover than the surrounding low-grade halo of mineralization. The High Grade Panel does not display refractory characteristics. These results will lead to additional optimization work and inform the cutoff grades for gold mineralization in next month's planned resource update."

Summary of Metallurgy Results

Heliostar submitted eight composite samples, prepared from drill holes completed in the 2023 Ana Paula drill campaign to Blue Coast Research Ltd. Seven samples were collected from the High Grade Panel and one from the footwall to the panel. Composites were generally selected from continuous intervals of similar grade and lithologies from spatially diverse areas of the deposit. Composites were then split into two workflows: the first focused on gold recoveries at various grind sizes using kinetic and carbon in leach (CIL) bottle roll testing, while the second tested the potential for gold recovery using gravity techniques.

Gold recovery averaged 80.4% for seven of the eight samples using a primary grind size of approximately 80% passing 75 microns and CIL extraction (the eighth sample was from the High Grade Panel footwall). Gold recoveries ranged from 74.6% to 88.1% for the seven samples. Gold recovery results were similar without carbon and at 45- and 20-micron primary grind sizes.

Gold recovery to gravity concentrates averaged 47% for the same seven of eight samples. During these tests, 2 kilograms (kg) of sample was ground to a primary grind size of approximately 80% passing 75µm and then passed through a laboratory scale Knelson concentrator. The Knelson concentrate was subsequently upgraded on a superpanner until the pan tip represented 0.02% to 0.05% of the original feed mass. Gold recovery to the superpanner tip ranged between 31% and 69%. This suggests the potential for gravity recovery from these samples, however future work, including Extended Gravity Recoverable Gold tests, are underway to refine the potential for gold recovery using gravity techniques.

One composite was an outlier and returned a 28% gold recovery at a 75-micron grind size using CIL extraction. This sample represents an area in the footwall to the High Grade Panel that has a lower overall grade than the other samples at 2.48 grams per tonne (g/t) gold. The cause of this lower recovery is unclear but is being further investigated with a gold deportment study, automated mineralogy, and additional assaying.

The composites samples were designed to test and provide guidance on potential recoveries from the most financially impactful ounces from the High Grade Panel. Results indicate the recoveries can be sufficiently high using conventional processing techniques. This supports continued evaluation of Ana Paula as a high-grade underground mine using conventional processing flowsheets.

Table 1: Composite identification and gold recovery by process

Metallurgy Sampling Details

As part of the Ana Paula Rescoping study, Heliostar commenced test work focusing on the metallurgical characteristics of the High Grade Panel. Historical test work was designed using an open pit mining scenario, where most of the ore tonnes (approximately 70%) were hosted in the Intrusive Suite (granodiorite lithology) domain with an average life of mine grade of 2.38 g/t gold for proven and probable reserves¹. As such, this historic test work focused on optimizing for these parameters by quantifying recoveries from these grade ranges and then optimizing potential recoveries by evaluating atmospheric oxidation. Historic test results for the High Grade Breccia Lithologic Domain (hosting much of the High Grade Panel) ranged from 62 to 68% gold recoveries for whole rock leaching. However, no further work was done to optimize recoveries using conventional milling technology or quantify recoveries within the high grade domains of the unit.

Heliostar is rescoping the Ana Paula project as a high grade underground mine using a conventional comminution, gravity, floatation, and CIL processing circuit. The Company is using previous test work as a foundation for future work while recognizing opportunities to optimize for mining scenarios and grade changes. Composite samples were created from PQ sized core drill holes that were completed early in the 2023 drill program. Coarse rejects from the selected intervals were combined to bring the total weight of each sample to approximately 25-30 kilograms.

 
Figure 1: Plan map of metallurgical composite source locations
 
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Composites range from 25.2 to 62.0 metres in length and represent continuous intervals of similar grade and lithology that are spatially distributed across the mineralized zone where feasible. In two cases, continuous interval of the same lithology were not available and smaller intervals were collected from around the High Grade Panel (Figure 1). All samples were selected from within or proximal to the High Grade Panel. Six samples represent the Polymictic Breccia, while two other samples represent Sediments/ Hornfels and Granodiorite/Intrusive.

Direct head grades of the eight composites range from 2.48 to 18.25 g/t gold and average 11.13 g/t gold. Though this grade is high, particularly in comparison to the previous metallurgical work, it should be noted that five of the eight samples represent continuous intervals of mineralization across the centre of the High Grade Panel. These were selected in such a way that that could represent gold mineralization over significant volumes for the deposit, and were not built from isolated samples based on grade.

Heliostar is focused on improving the understanding of the gold recoveries under various extraction scenarios. The results presented in this release will refine future metallurgical work to define the most effective, low cost, technically simple approach to maximise gold recoveries for an underground mining operation. This work will include combining the gravity recovery and CIL processes which has the potential to further improve overall recoveries.

Statement of Qualified Person

Andrew Kelly, P.Eng., of Blue Coast Research Ltd., a Qualified Person, as such term is defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), has reviewed and approved the results of the metallurgical test program.

Art Ibrado, PhD, PE, of Fort Lowell Consulting, a Qualified Person, as such term is defined by NI 43-101, has reviewed and approved the results of the metallurgical test program.

Samuel D. Anderson, CPG., Vice President of Projects, of Heliostar Metals Limited, a Qualified Person, as such term is defined by NI 43-101, has reviewed the scientific and technical information that forms the basis for this news release and has approved the disclosure herein.

About Heliostar Metals Ltd.

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

The Company is focused on developing the 100% owned Ana Paula Project in Guerrero, Mexico. In addition, Heliostar is working with the Mexican federal and local government to permit the San Antonio Gold Project in Baja Sur, Mexico. The Company continues to explore the Unga Gold Project in Alaska, United States of America.

The Ana Paula Project deposit contains proven and probable mineral reserves of 1,081,000 ounces of gold (630,000 proven and 451,000 probable ounces) at 2.38 grams per tonne ("g/t") gold and 2,547,000 ounces of silver (1,322,000 proven and 1,226,000 probable ounces) at 5.61 g/t silver. Ana Paula hosts measured and indicated resources of 1,468,800 ounces of gold (703,800 measured and 765,000 indicated ounces) at 2.16 g/t gold and 3,600,000 ounces of silver (1,637,000 measured and 1,963,000 indicated ounces) at 5.3 g/t silver. The asset is permitted for open-pit mining and contains significant existing infrastructure including a portal and a 412-metre-long decline.

References

1. An updated prefeasibility study titled "Ana Paula Project NI 43-101 Technical Report Preliminary Feasibility Study Update" was filed on SEDAR on April 6, 2023, with an effective date of February 28, 2023, prepared for the Company by Daniel H. Neff, PE, Art S. Ibrado, PhD, PE, Richard K. Zimmerman, RG, SME-RM, Craig Gibson, PhD, CPG, Andrew Kelly, P.Eng., Gordon Zurowski, P.Eng., Paul Daigle, P.Geo., Gilberto Dominguez, PE and James A. Cremeens, PE, PG.

For additional information please contact:

Charles Funk

Chief Executive Officer
Heliostar Metals Limited
Email: charles.funk@heliostarmetals.com

Rob Grey

Investor Relations Manager
Heliostar Metals Limited
Email: rob.grey@heliostarmetals.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release includes certain "Forward-Looking Statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" under applicable Canadian securities laws. When used in this news release, the words "anticipate", "believe", "estimate", "expect", "target", "plan", "forecast", "may", "would", "could", "schedule" and similar words or expressions, identify forward-looking statements or information. These forward-looking statements or information relate to, among other things: the exploration, development, and production at the Company's properties; permitting at the San Antonio project; the release of exploration results; and future resource and reserve estimates.

Forward-looking statements and forward-looking information relating to any future mineral production, liquidity, enhanced value and capital markets profile of the Company, future growth potential for the Company and its business, and future exploration plans are based on management's reasonable assumptions, estimates, expectations, analyses and opinions, which are based on management's experience and perception of trends, current conditions and expected developments, and other factors that management believes are relevant and reasonable in the circumstances, but which may prove to be incorrect. Assumptions have been made regarding, among other things, the price of metals; no escalation in the severity of public health crises or ongoing military conflicts; costs of exploration and development; the estimated costs of development of exploration projects; and the Company's ability to operate in a safe and effective manner and its ability to obtain financing on reasonable terms.

These statements reflect the Company's respective current views with respect to future events and are necessarily based upon a number of other assumptions and estimates that, while considered reasonable by management, are inherently subject to significant business, economic, competitive, political, and social uncertainties, and contingencies. Many factors, both known and unknown, could cause actual results, performance, or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements or forward-looking information and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: precious metals price volatility; risks associated with the conduct of the Company's mining activities in foreign jurisdictions; regulatory, consent or permitting delays; risks relating to reliance on the Company's management team and outside contractors; risks regarding exploration and mining activities; the Company's inability to obtain insurance to cover all risks, on a commercially reasonable basis or at all; currency fluctuations; risks regarding the failure to generate sufficient cash flow from operations; risks relating to project financing and equity issuances; risks and unknowns inherent in all mining projects, including the inaccuracy of reserves and resources, metallurgical recoveries and capital and operating costs of such projects; contests over title to properties, particularly title to undeveloped properties; laws and regulations governing the environment, health and safety; the ability of the communities in which the Company operates to manage and cope with the implications of public health crises; the economic and financial implications of public health crises, ongoing military conflicts and general economic factors to the Company; operating or technical difficulties in connection with mining or development activities; employee relations, labour unrest or unavailability; the Company's interactions with surrounding communities; the Company's ability to successfully integrate acquired assets; the speculative nature of exploration and development, including the risks of diminishing quantities or grades of reserves; stock market volatility; conflicts of interest among certain directors and officers; lack of liquidity for shareholders of the Company; litigation risk; and the factors identified under the caption "Risk Factors" in the Company's public disclosure documents. Readers are cautioned against attributing undue certainty to forward-looking statements or forward-looking information. Although the Company has attempted to identify key factors that could cause actual results to differ materially, there may be other factors that cause results not to be anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or forward-looking information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements or information, other than as required by applicable law.

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