Creativity in Mining Drives Self-Funded Growth: Heliostar Metals

Q: Heliostar achieved 2025 production of 34,098oz AuEq, meeting its guidance of 31,000–41,000 oz AuEq. What were the key operational successes that enabled this performance?

A: An opportunity we identified very early after purchasing the mines in November 2024 was the availability of surface stockpiles at our La Colorada operation in Sonora. This material was mined as waste in the 1990s by previous operators during a very different gold price environment.

Because this material had already been drilled, blasted, and hauled to the surface, about half of the mining costs had already been incurred. It graded approximately 0.2g/t, but at a very low incremental cost, we were able to turn these stockpiles into gold by crushing the material, placing it onto the leach pad, and recovering the gold through the process plant. This was the key driver that allowed our corporate operations to achieve our production guidance. We produced just over 34,000oz AuEq last year, which was well within our guidance range of 31,000oz to 41,000oz.

Another significant factor was our strong residual leaching performance. Our San Agustin mine in Durango was in a residual leaching phase throughout 2025 until we officially restarted mining in December 2025. During that time, the team found creative ways to continue extracting gold from ore that had been previously stacked on the pad. They utilized techniques such as leaching ramps and side slopes that had either never been leached or had been leached ineffectively in the past.

As a result, San Agustin reached its full-year production guidance in just the first nine months of 2025. This was a very strong outperformance, and I give full credit to the operations team for finding ways to squeeze more gold out of the pad than we originally expected.

Q: In an industry often seen as traditional, how is Heliostar Metals proving that creative problem-solving is essential to modern mining?

A: We continue to seek non-standard solutions and ways to push the envelope. For example, at La Colorada this year, mining from stockpiles will conclude in a few weeks, as there is only a finite amount of material available on the surface.

We now have been evaluating a technology that involves drilling and injecting leach solution into various horizons within the existing leach pad. This approach allows us to unlock additional gold that we were unable to reach through standard surface re-leaching.

Again, this is a different and innovative approach for our operations. While it is still early in terms of determining the long-term effectiveness, we are seeing positive indications of success within the first few weeks of implementation. We will continue to seek these types of innovative solutions, which, unfortunately, the mining industry is not always widely known for adopting.

Q: With a preliminary cash balance of US$41 million and no debt at year-end 2025, how does Heliostar plan to leverage this strong balance sheet to fund growth initiatives, including Ana Paula and other exploration projects?

A: We intend to use the cash generated primarily by the San Agustin operation this year to continue reinvesting in our growth initiatives. As highlighted in our 2026 guidance, we plan to allocate US$27 million toward exploration across our entire portfolio. We will continue to use our cash inventory to identify additional opportunities within the assets we already own.

Furthermore, we are focusing on production growth opportunities that we have not yet discussed in as much detail. For example, we will be conducting a waste stripping campaign at the Veta Madre pit within La Colorada to unlock production for 2027. 

Our primary focus remains Ana Paula, our flagship development asset in Guerrero. It is a high-grade, bulk-tonnage underground mine located in the Guerrero Gold Belt. This year, we have committed to spending US$15 million to continue the existing underground decline to gain access to the orebody. We will also maintain our drilling programs and advance feasibility-level technical studies to release a Feasibility Study (FS) in 1H27. Additionally, we are looking at advanced engineering and placing orders for long-lead-time items. We are also initiating early works programs, such as widening and improving roads and preparing lay-down areas. All of these efforts involve reinvesting the growth that will come from bringing Ana Paula online before the end of 2028, alongside smaller initiatives across our other operations.

Based on our budget gold price of US$3,800/oz for 2026, we expect to be cash-neutral, as all cash generated from our operations will be reinvested into exploration or these growth opportunities. We anticipate exiting 2026 with a cash balance of approximately US$40 million. If gold prices remain around the US$5,000/oz mark that we recently observed, additional capital will either be reinvested in the company or added to our cash balance to fund the construction of Ana Paula in 2027.

Q: What lessons did Heliostar Metals learn from 2025, and how will the company use this knowledge throughout 2026?

A: One thing that has truly resonated with us is the importance of looking for opportunities within our own backyard. We identified significant value remaining in assets that the market and previous operators viewed as exhausted or nearing the end of their life. We have proven very quickly that this is not the case; in fact, we have only just begun to uncover the potential.

Building on that mindset, we have started exploring larger land packages beyond the immediate vicinity of our producing assets. We are looking within the areas we already own to identify new exploration opportunities. At La Colorada, for example, there are clear down-plunge extensions beneath the existing pits that demonstrate underground mining potential. Furthermore, on the broader land package, there are gold-in-soil anomalies that have never been drill-tested. These could potentially become additional deposits, extending the mine life and creating ongoing opportunities for the operation and the surrounding communities.

At Ana Paula, while our primary focus is bringing the mine into production as quickly and feasibly as possible, it is often overlooked that the project sits on the third-largest land package in the Guerrero Gold Belt. This area remains largely unexplored. We are currently conducting boots-on-the-ground exploration, including stream and soil sediment sampling and drone geophysics, to investigate this larger opportunity set. We already own this land, which is connected to the infrastructure nearby.

The key takeaway is that you do not necessarily need to search the entire world to find high-quality opportunities to grow a company; often, the best value is found within the assets you already possess.

Q: With a production target of 2028, what are the critical path items Heliostar Metals must execute over the next 18 months to ensure Ana Paula reaches its full potential?

A: The primary focus right now is our drilling program. We are finishing a 20,000m program initiated in 2H25, which is focused on infill drilling. By converting inferred resources into measured and indicated categories, we can include this material in the FS scheduled for 1H27. Based on our success at Ana Paula, we will also announce a subsequent 10,000m drill program. This next phase will target additional pods of mineralization near planned underground infrastructure, which could be integrated quickly into the mine plan.

Much of the current progress involves work that is not typically seen in press releases. An FS is a comprehensive construction document requiring advanced metallurgical testing and intense engineering design. We are specifically focused on the front end of the milling circuit because items such as ball mills or SAG mills have the longest lead times. Ordering these components early is a critical step in our timeline.

Another key objective is the permit modification. Ana Paula was previously fully permitted as a large open-pit project. Because we have refocused the design into a smaller-footprint underground mine, we must submit a modification to the existing permit. We expect the approval process to benefit from the fact that the project was already approved for a much larger and more impactful design. We aim to receive this approval within 12 months of our upcoming submission.

Regarding financing, we plan to invest approximately US$300 million into the Ana Paula project. We intend to fund about half of this amount through cash flow generated from our existing operations. For the remaining half, we will look at a project financing package. We are already bringing potential financing partners into the process to conduct due diligence alongside our technical work. This ensures that once the FS is published in 1H27, we can move directly into construction without losing time.

In terms of risk, execution is a factor in any major project. However, Ana Paula benefits from excellent infrastructure, including road access, a local workforce, and nearby power. We also have a running start because a portion of the underground decline is already in place. Labor competition is another potential challenge in a high gold-price environment, but I am sure our reputation as an employer will help us attract top-tier talent as we scale the team. Finally, while we cannot control the exact timing of government permit approvals, our successful track record at San Agustin and La Colorada, along with our positive relationship with SEMARNAT, puts us in a strong position to manage this process effectively.

Q: As we move through 1Q26, what are the specific risks that are currently top of mind for mining shareholders, especially those planning to invest in Mexican assets?
A: As it is still early in 2026, the recent volatility in the gold price has made investors more aware of market fluctuations. I would not describe them as cautious, because even the lows we have seen in the last couple of weeks remain very strong and beneficial for our business. However, volatility has become a larger part of the conversation. Investors are learning when to trim positions to re-enter at a better price during a pullback. Many have been waiting for such a pullback; after months of gold prices and equities moving upward almost daily, they want to feel confident about their entry point. Therefore, a minor correction in the market is not necessarily a negative development.

Another significant topic is the geopolitical risk that has emerged recently. The unfortunate events in Sinaloa involving a silver development company have become part of the investor dialogue. This has led to a focus on certain risks unique to Mexico. It is important to note that Heliostar Metals does not operate in Sinaloa. While that region is currently a specific hotspot, situations do arise across Mexico from time to time. Investors have become much more aware of these issues and perhaps a bit concerned.

Q: Within this investment climate, what factors do you consider make Heliostar Metals a good investment choice?

A: Part of our success stems from our track record of identifying opportunities that others have overlooked. We possess a very strong technical management team with the strength of our convictions to even pursue unpopular decisions, demonstrate why we took that road, and subsequently realize success.

As a company, we are in a unique position. I describe us not as a typical junior producer, but rather as an organically self-funded developer. While we generate strong cash flow from our existing operations, our core value proposition comes from our growth profile, the kind of growth trajectory typically seen only in single-asset development companies.

What makes Heliostar Metals unique is our ability to show this re-rating potential without having to issue equity and dilute our investors. There are perhaps only three or four other companies in the gold sector that can consider themselves our peers in this regard. This combination of self-funded growth and our technical ability to execute is truly what sets us apart.

Q: What are the key value drivers identified in Cerro del Gallo, and how do they enhance Heliostar Metals’ economics?

A: We are very encouraged by Cerro del Gallo for several reasons. First, it is a long-life asset with a substantial resource base. We identified significant upside beyond the headline figures published in our December 2025 Pre-Feasibility Study (PFS), and we are approaching this from several angles.

As a technically focused team, we took a conservative view of the metallurgy in the PFS. In areas where we lacked sufficient data to confirm that the mineralization was oxide and suitable for heap leaching, we excluded those ounces from the reserve. Our upcoming work program will include drilling to test these data-poor areas. We believe there is a high likelihood that we can expand the resource envelope by confirming the leachability of this material.

Another constraint in the current study was the property boundary. While the deposit is very large, with strong economics, the size of the open-pit was limited by the land we currently control for waste dumps and heap leach pads. This is a solvable problem. By expanding our surface footprint, we can unlock more of the total resource, which exceeds 5Moz. The project already demonstrates a strong economic case, but the potential for expansion is significant.

Cerro del Gallo also offers a unique metal mix compared to our other operations. While it remains gold-dominant, approximately 10% of the project economics comes from copper and 15% from silver, potentially more at current market prices. We remain a gold-focused company, but this diversification attracts a broader range of investors and provides excellent byproduct credits. While we do not intend to establish a separate copper division like some major producers, having this polymetallic bonus within our portfolio is a distinct advantage.

Q: What else should investors pay attention to when analyzing Heliostar Metals throughout 2026?

A: The primary driver of our value is the technical strength of our Ana Paula development project. In the PEA we released in 4Q25, we demonstrated why this asset is exceptional: it is incredibly rare to find a combination of a bulk-tonnage, high-grade underground mine. Usually, you must choose two of those three attributes, but when you have all three, the potential cash flow implications are astounding. As we continue to de-risk the project, we anticipate a significant step up when we transition Ana Paula into a producing mine.

After the initial ramp-up period, the project is expected to deliver 100,000oz/y of gold at an AISC of just US$1,000/oz. This will generate robust cash flow that we can utilize for further growth, whether through internal project development or strategic M&A. This will be the company’s primary driver for the next decade.

If we bring Ana Paula online in 2H28 as planned, we anticipate reaching a corporate run rate of 200,000oz/y with a consolidated AISC in the bottom quartile of the global cost curve. At that stage, we should be a C$3 billion-plus (US$2.1 billion)market cap company, a significant increase from our current valuation of approximately C$750 million. If we achieve this without further equity dilution, that appreciation will be reflected directly in the share price.

Beyond Ana Paula, we will be very active with the drill bit. At Ana Paula, we are targeting near-mine opportunities and eventually the blue sky down-plunge extensions of the deposit. At La Colorada, we are drilling beneath the existing pits and investigating the broader regional land package. At San Agustin, we are focused on extending the mine life beyond the current 14-month reserve. Every additional month of production there generates approximately US$6 million to US$7 million in monthly cash flow at current prices, which provides a meaningful boost to our bottom line.

Investors can expect several major catalysts in the near term. Our 1Q26 financial results will be significant, as they will demonstrate the full impact of the San Agustin restart and the cash flow it generates for reinvestment. Furthermore, the announcement of the decline restart at Ana Paula, likely in early 3Q26, will be a major milestone showing that the project is advancing rapidly toward production.

The team we have is truly incredible. It is the people on the ground at the mine sites who identified the stockpile opportunities at La Colorada. Similarly, it was our permitting and social engagement teams who successfully secured the permits to restart San Agustin. Furthermore, we have a highly creative technical team that successfully re-scoped Ana Paula into the high-value project it is today.

That combination of a talented team and high-quality opportunities makes this a rewarding company to work for. It is the collaboration across all levels of our organization that allows us to execute our strategy effectively and continue finding value where others might not.


Heliostar Metals is a Canadian-based gold and silver production and development company with a portfolio of advanced-stage projects in Mexico, including La Colorada, San Agustin, Ana Paula, and Cerro del Gallo.