Stonegate Capital Partners has updated its coverage on Heliostar Metals Ltd (TSXV: HSTR), highlighting the company's progress in developing its flagship Ana Paula project in Guerrero, Mexico as a high-grade underground development asset. The recently completed preliminary economic assessment reveals compelling economics for the project, which is expected to become the cornerstone of Heliostar's production growth strategy.
The Ana Paula PEA outlines total recovered production of approximately 875,000 ounces over a nine-year mine life, with mill feed averaging 5.37 grams per tonne gold. The proposed 1,800 tonne-per-day underground operation would produce 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. At current gold prices of US$2,400 per ounce, the project delivers a post-tax NPV5 of US$426 million, a 28% internal rate of return, and a 2.9-year payback period, demonstrating strong leverage to higher gold prices.
Management is currently advancing 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. The company is also preparing to file an underground permit amendment in the first quarter of 2026 and advancing decline extension and early works to support a potential construction decision in the first half of 2027.
Heliostar's producing assets at La Colorada and San Agustin continue to provide the cash-flowing core of the company's portfolio, generating 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. Management expects these operations, combined with a future project finance facility, to contribute significantly 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.
Beyond Ana Paula, Heliostar's growth pipeline includes the Cerro del Gallo project in Guanajuato, which continues through metallurgical and engineering work ahead of a planned pre-feasibility study in the fourth quarter of 2025. The San Antonio project in Baja California Sur remains under strategic review following its January 2025 PEA, while the Unga project in Alaska is expected to see follow-up drilling as part of the medium-term exploration program.
The company maintains its 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 150,000 ounces by 2028 and 300-500,000 ounces by 2030. Management aims to leverage a mix of internal cash flow and project financing to minimize equity dilution while building toward this substantial production growth. 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 of $2.71 to $4.57 with a midpoint of $3.64.
