Stonegate Capital Partners Mid-Quarter Update on Heliostar Metals Ltd (HSTR) 2Q26

Stonegate Capital Partners has updated its coverage on Heliostar Metals Ltd (TSXV: HSTR) in light of recent advancements in the company's flagship Ana Paula project, located in Guerrero, Mexico. The update highlights a significant positive Preliminary Economic Assessment (PEA) released in the fourth quarter of 2025, underscoring the project's viability as a high-grade underground mining asset. The PEA forecasts total recovered production of approximately 875,000 ounces over a nine-year lifespan, with mill feed averaging 5.37 g/t gold. The operation is designed to produce roughly 101,000 ounces per year at cash costs of around US$923 per ounce, and an all-in sustaining cost (AISC) of about US$1,011 per ounce.

At a projected gold price of US$2,400 per ounce, the PEA suggests a post-tax Net Present Value (NPV5) of US$426 million, reflecting a robust internal rate of return (IRR) of 28% and a relatively quick payback period of 2.9 years, indicating strong leverage to gold price fluctuations. Heliostar's management is actively pursuing further engineering and metallurgical studies, alongside a comprehensive 15,000-meter drill program aimed at upgrading Inferred resources and expanding existing mineralization. The completion of a feasibility study is targeted for mid-2026, with the first underground production anticipated by 2028.

In addition to the Ana Paula project, the update notes the restart of mining operations at the San Agustin site, which has contributed an additional 45,000 ounces. Furthermore, a pre-feasibility study (PFS) for the Cerro del Gallo project estimates a base case NPV of $424 million. The company's ongoing drilling program for oxide targets is also progressing, with 37 holes completed and sent for analysis.

Heliostar Metals Ltd (TSXV: HSTR) presents an intriguing investment outlook following Stonegate Capital Partners' mid-quarter update. The company’s flagship Ana Paula project in Guerrero demonstrates considerable promise, boosted by a positive Preliminary Economic Assessment (PEA) released in early Q4 2025. This asset is expected to yield approximately 875,000 ounces of gold over its nine-year lifespan, leveraging a robust grade of 5.37 g/t and establishing a sustainable operational profile at 1,800 tpd.

The financial metrics from the PEA are compelling, with a post-tax NPV5 of $426 million at a gold price of $2,400/oz, an impressive internal rate of return (IRR) of 28%, and a swift payback period of just 2.9 years. These metrics highlight Heliostar's strong leverage to rising gold prices, indicating that as market conditions improve, the project's economics could enhance significantly.

Moreover, the ongoing engineering and metallurgical efforts, alongside a substantial 15,000m drill program, aim to upgrade the inferred resources and bolster the feasibility study expected mid-2026. The anticipation of first underground production by 2028 adds another layer of attractiveness for long-term investors.

Additionally, the company’s operations at the San Agustin site have resumed, contributing an additional 45,000 ounces, further diversifying its production profile. The Cerro del Gallo project also shows promise with a base case NPV of $424 million, underscoring the potential for sustained growth across its portfolio.

Investors should consider Heliostar’s capacity for strong cash flow generation and its strategic initiatives to expand resource estimates. While the mining sector often faces volatility, the current gold price environment coupled with Heliostar's operational advancements makes it a notable candidate for investment. However, investors should remain diligent and monitor ongoing developments and gold price fluctuations closely.