Heliostar drilling strengthens Ana Paula growth case

Heliostar Metals (TSX: HSTR; US-OTC: HSTXF) has intersected gold below the planned workings of its Ana Paula project in Mexico, pointing to expansion potential as it prepares a feasibility study for an underground mine producing about 100,000 oz. a year.

Hole AP-26-411 in the Expansion Zone cut 8 metres grading 6.88 grams gold per tonne from 469 metres depth, Heliostar said Monday. Nearby hole AP-26-314A returned 9.7 metres grading 4.33 grams gold per tonne from 598.6 metres downhole.

“Infill results at the High-Grade Panel continue to show remarkably consistent mineralization, while large step-outs at the Expansion zone continue to point to growth beyond the scope of the upcoming feasibility study,” ATB Cormark mining analyst Richard Gray said Tuesday in a note.

Heliostar is preparing a feasibility study expected in the second quarter of 2027, followed by a potential construction decision in mid-2027. The company is advancing Ana Paula as an underground operation, replacing an earlier open-pit development concept for which environmental approval was granted in 2017. First gold production is targeted by the end of 2028.

Drilling shows that the Expansion Zone remains open to the south, west and at depth, providing additional targets for exploration.

Infill drilling

Hole AP-26-405 in the High-Grade Panel zone cut 52.4 metres grading 5.84 grams gold per tonne from 46.9 metres downhole, including 12.6 metres of 17.8 grams gold from 76.4 metres, Heliostar said. Hole AP-26-407 cut 24.8 metres grading 5.14 grams gold per tonne from 43 metres.

Both holes were part of an infill program designed to improve confidence in the central portion of the deposit and support its inclusion in a mine plan.

Crews have drilled 122 holes totalling 35,121 metres in the company’s 2025-26 exploration program. About 25,000 metres targeted inferred resources for potential conversion to higher-confidence categories, while 10,000 metres tested extensions beyond the mine plan.

Nine-year life

Heliostar’s current development plan for Ana Paula is based on a preliminary economic assessment released last November. It targets a nine-year mine life. Initial capital was estimated at $300 million (C$420 million).

At a $3,800 per oz. gold price and a 5% discount rate, the project has an after-tax net present value of about $1 billion and a 51% internal rate of return with a 1.9-year payback period. Ana Paula is located about 180 km southwest of Mexico City.

Heliostar acquired the property from Argonaut Gold in March 2023 for $10 million in cash, after previous owners had invested more than $100 million in exploration and development. The company subsequently shifted its focus to the deposit’s higher-grade underground mineralization.

Ana Paula is Heliostar’s most advanced project. It’s one of several assets in Mexico and the United States that the Vancouver-based miner is looking to develop as it targets production of 500,000 oz. per year by the end of the decade. Development work is being financed by cash flow from the company’s two Mexican mines, La Colorada in Sonora state and San Agustin in Durango.

Heliostar shares rose 1.6% to C$2.72 late Tuesday morning in Toronto, valuing the company at about C$705 million ($504 million). The stock has traded between C$1.54 and C$3.47 in the past year.