Heliostar Metals Advances Ana Paula Project with Strong Economic Outlook and Production Growth Strategy

Stonegate Capital Partners has updated its coverage on Heliostar Metals Ltd (TSXV: HSTR), highlighting the company's continued advancement of its flagship Ana Paula project in Guerrero as a high-grade underground development asset. The positive preliminary economic assessment released in early fourth quarter 2025 outlines substantial production potential, with total recovered production estimated at approximately 875,000 ounces over a nine-year mine life. The underground operation is projected to process 1,800 tonnes per day with mill feed averaging 5.37 grams per tonne gold, producing roughly 101,000 ounces annually at cash costs of approximately US$923 per ounce and all-in sustaining costs of about US$1,011 per ounce.

The economic analysis demonstrates strong financial returns, with a post-tax NPV5 of US$426 million at US$2,400 per ounce gold price, representing a 28% internal rate of return and a 2.9-year payback period. The project shows significant leverage to higher gold prices, positioning it favorably in the current market environment. Management is actively progressing engineering work, metallurgical studies, and a 15,000-meter drill program designed to upgrade inferred resources, extend the High-Grade and Parallel panels, and support a feasibility study targeted for mid-2026. First underground production remains on track for 2028, maintaining the company's development timeline.

Heliostar's producing assets at La Colorada and San Agustin continue to serve as the cash-flowing core of the company's portfolio, providing low-capital expenditure ounces to support corporate overhead, early-works spending at Ana Paula, and the broader project pipeline. Both mines, acquired in the November 2024 Florida Canyon transaction, are optimizing recoveries from existing leach pads and stockpiles while advancing mine planning for higher-grade phases. La Colorada is currently mining from the Junkyard stockpile while advancing pit expansions at Creston and Veta Madre, while San Agustin is re-leaching residual pads ahead of restarting primary mining in the Corner Area.

These operations, combined with a future project finance facility, are expected to contribute meaningfully to funding the planned approximately US$300 million initial capital expenditure at Ana Paula and the approximately US$15 million decline extension and underground early-works program scheduled for 2026. The company's growth pipeline extends beyond Ana Paula, with the Cerro del Gallo project in Guanajuato progressing through metallurgical and engineering work ahead of a planned pre-feasibility study in fourth quarter 2025. The San Antonio project in Baja California Sur remains under strategic review following its January 2025 preliminary economic assessment, while the Unga project in Alaska is expected to see follow-up drilling as part of the medium-term exploration program.

Management maintains 2025 guidance of 31-41 thousand gold equivalent ounces at cash costs of US$1,800-1,900 per ounce and all-in sustaining costs of US$1,950-2,100 per ounce. Production is expected to rise significantly to 150 thousand ounces by 2028 and 300-500 thousand ounces by 2030, representing substantial growth potential for the company. Near-term priorities include completing the 15,000-meter drill program, filing an underground permit amendment in first quarter 2026, and advancing decline extension and early works to support a potential construction decision in first half 2027. The company aims to leverage a mix of internal cash flow and project financing to minimize equity dilution while building toward its production targets. Stonegate Capital Partners' valuation analysis applies an EV/NAV range of 0.4x to 0.7x with a midpoint of 0.6x, resulting in a valuation range of $2.71 to $4.57 with a midpoint of $3.64.