Redstar raises cash buys Mexico explorer
Unga gold project in Alaska remains company's flagship asset North of 60 Mining News – August 28, 2020
Last updated 9/11/2020 at 4:57am
Redstar Gold Corp. Aug. 24 announced that it has raised C$7 million and finalized the acquisition of Heliodor Metals Ltd., an exploration company with interests in three epithermal gold and silver projects in Mexico, plus C$1.5 million in cash and no debt.
As part of the deal, Heliodor founder and President Charles Funk has been named as Redstar's CEO.
"Adding Heliodor to the Redstar group of companies will form a leading exploration company with quality high grade precious metals assets, a tight share structure and a strong financial position," said Funk. "I am excited to join Redstar and unlock the potential of the group's asset base."
The Unga gold-silver project in Alaska continues to be Redstar's flagship project and the company plans in invest up to C$5 million on up to 10,000 meters of drilling there this year.
Unga project covers roughly 93 square miles (240 square kilometers) of two islands south of the Alaska Peninsula, Unga and Popof, that have long been known for high-grade gold. Apollo, the first hard rock underground gold mine in Alaska, and the nearby Sitka mine produced roughly 150,000 ounces of gold from high-grade epithermal veins from 1886 until they were shuttered in 1922.
The veins that supplied ore to Apollo and Sitka are reported to average around three meters wide and are located on the Apollo-Sitka trend, one of two high-grade gold trends that each cut roughly six miles across Unga Island.
The Shumagin trend, which is about 2,000 meters northwest and parallel to the Apollo-Sitka trend, hosts the SH-1 zone that has been a primary target of previous Redstar exploration.
SH-1 hosts 866,015 metric tons of inferred resource averaging 13.8 g/t (384,318 oz) gold and 35.4 g/t (986,321 g/t) silver, according to an inaugural resource calculate earlier this year.
Redstar's 2020 exploration is expected to focus on four targets:
• Test for depth and strike extensions of the high-grade gold resource at SH-1.
• Drilling beneath the historic Apollo mine, where sampling in shafts and galleries has identified high-grade silver and gold.
• Drilling to test for high grade feeder zones at Centennial, a bulk tonnage target on Popov Island.
• Drilling to test an 850-meters long zone of veining with multiple high-grade gold samples at Aquilla, which is toward the southwest end of the Shumagin trend.
To fund its planned work at Unga and newly acquired properties in Mexico, Redstar has closed a C$7 million financing that involved the issuance of 87.73 million shares at C8 cents per share.
Redstar also issued 86.62 million shares to Heliodor shareholders to acquire the Mexico focused precious metal explorers.
"With approximately C$10 million in cash and investments, we now have the funds needed to commence drilling at our Unga project in Alaska and to begin exploring the Heliodor properties in Mexico," said Redstar Gold Executive Chairman Jacques Vaillancourt.