Stonegate Capital Partners Updates Coverage on Heliostar Metals Ltd (HSTR) 3Q26

Core Insights - Heliostar Metals Ltd is advancing its Ana Paula project in Guerrero, which is its primary development asset and a major growth source [1] - The November 2025 Preliminary Economic Assessment (PEA) indicates a nine-year underground mine with an annual production of 101.1 koz of gold, cash costs of $923/oz, and an all-in sustaining cost (AISC) of $1,011/oz [1] - At a gold price of $2,400/oz, the PEA projects an after-tax NPV5 of $426.0 million and an IRR of 28.1% [1] Development and Exploration - The company is actively engaged in reserve conversion and expansion drilling, with recent results from the Expansion Zone showing 25.45m at 8.26 g/t gold, including 8.30m at 19.99 g/t [1] - Mineralization remains open to the north, northwest, and at depth, indicating potential for further resource expansion [1] - Management is progressing with a Feasibility Study expected in the first half of 2027 and plans to continue development of the existing 412-meter decline in 2026, targeting first production in the second half of 2028 [1] Financial Overview - For 2026, the company is guiding production of 50-55 koz and expects to exit 2025 with $40.6 million in cash, alongside a $27 million exploration program funded from mine cash flow [6] - Heliostar is building multi-asset growth optionality, with Cerro del Gallo projected to have a $424 million NPV5 and a 33.1% IRR [6] - The Goldstrike project adds significant U.S. optionality, with a 2018 PEA indicating an average annual output of approximately 95 koz, initial capex of $113.2 million, an after-tax NPV5 of $129.5 million, and an IRR of 29.4% at a gold price of $1,300/oz [6]