Stonegate Capital Partners has updated its coverage on Heliostar Metals Ltd (TSXV: HSTR), focusing on the company's progress at its flagship Ana Paula project in Guerrero, Mexico. The update follows a positive preliminary economic assessment (PEA) released in early fourth quarter of 2025, which positions Ana Paula as a high-grade underground development asset with robust financial returns.
The 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 operation is designed as a 1,800 tonnes per day underground mine, producing roughly 101,000 ounces per year at cash costs of about US$923 per ounce and all-in sustaining costs (AISC) of approximately US$1,011 per ounce. At a gold price of US$2,400 per ounce, the study delivers a post-tax net present value (NPV5) of US$426 million, a 28% internal rate of return (IRR), and a 2.9-year payback period. The project shows strong leverage to higher gold prices, enhancing its appeal in a favorable commodity environment.
Management is advancing engineering and metallurgical work, alongside a 15,000-meter drill program aimed at upgrading Inferred resources and extending the High-Grade and Parallel panels. A feasibility study is targeted for mid-2026, with first underground production still expected in 2028. The company's producing assets, La Colorada and San Agustin, continue to generate cash flow from existing leach pads and stockpiles, supporting corporate overhead and early-stage spending at Ana Paula. These operations, acquired in the November 2024 Florida Canyon transaction, are expected to contribute meaningfully to funding the planned ~US$300 million initial capital expenditure at Ana Paula and the ~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 is undergoing 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.
Management maintains 2025 guidance of 31,000 to 41,000 gold equivalent ounces (GEOs) at cash costs of US$1,800 to US$1,900 per ounce and AISC of US$1,950 to US$2,100 per ounce. Production is expected to rise to 150,000 ounces by 2028 and 300,000 to 500,000 ounces by 2030. Near-term priorities include completing the 15,000-meter drill program, filing 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.
Stonegate Capital Partners' valuation analysis applies an EV/NAV multiple range of 0.4x to 0.7x, with a midpoint of 0.6x, resulting in a valuation range of US$2.71 to US$4.57 per share and a midpoint of US$3.64. Using an EV/Reserves method with a multiple range of 50.0x to 80.0x and a midpoint of 65.0x, the valuation ranges from US$2.36 to US$3.64, with a midpoint of US$3.00. The updated coverage underscores Heliostar's potential as a significant gold producer in the coming years, driven by the Ana Paula project and supported by existing cash-flowing assets.
