The UK's growth plan is starting to look more than a little bit French, with rising labor costs and businesses spending on capital https://t.co/ili4MN62FD ...

Core Viewpoint - Heliostar Metals Ltd. has announced its production and cost guidance for 2026, projecting gold production of 50,000-55,000 ounces with by-product cash costs of $1,850-$1,950 per ounce and consolidated All-In Sustaining Costs (AISC) of $2,025-$2,125 per ounce. The company plans to reinvest cash generated from operations into exploration and growth initiatives, particularly focusing on the Ana Paula development project [1][5]. Production Guidance - La Colorada Mine is expected to produce 20,000-22,300 ounces of gold and 130,000-145,000 ounces of silver, with cash costs of $1,650-$1,750 per gold ounce and AISC of $1,775-$1,875 per gold ounce [2][4]. - San Agustin Mine is projected to produce 30,000-32,700 ounces of gold and 160,000-175,000 ounces of silver, with cash costs of $2,000-$2,100 per gold ounce and AISC of $2,150-$2,250 per gold ounce [2][9]. - Consolidated production for Heliostar is anticipated to include 290,000-320,000 ounces of silver sold [2]. Growth Initiatives - The company plans to commence pre-stripping of 11 million tonnes of waste at the Veta Madre open pit expansion project in early Q3 2026, aiming to access 43,000 ounces of in-situ gold [4][5]. - A $27 million exploration program will be funded from operating cash flow, focusing on resource development and exploration activities [5][8]. - The Ana Paula project will continue with a 20,000-meter infill and expansion drill program, with an additional 6,500 meters approved to upgrade inferred material [11][13]. Exploration and Development - Heliostar has budgeted $5.8 million for resource development and exploration activities at La Colorada in 2026, including drilling to investigate underground potential [8][10]. - The company plans to invest $6.6 million in resource development and regional exploration at Ana Paula, alongside $15 million for extending the decline [13]. - At Cerro del Gallo, permitting discussions and community engagement are ongoing, with a workplan to update the geologic model and conduct further metallurgical tests [14][15].

Financial Data and Key Metrics Changes - Total capital expenditures for the quarter were $190 million, with year-to-date investments at $491 million, aligning with the full-year guidance of $650 million to $680 million [5][16] - Average realized price for natural gas was $3.59 per unit, a $0.20 premium over the NYMEX average of $3.39 [16][19] - Cash operating expenses for the third quarter were $0.11 per Mcfe, consistent with previous guidance [9][32] Business Line Data and Key Metrics Changes - Production for the quarter was 2.2 Bcfe per day, with expectations to increase to approximately 2.3 Bcfe equivalent per day in Q4 and 2.6 Bcfe equivalent per day by 2027 [6][7] - The company completed over 1,000 frac stages during the quarter, achieving nearly 10 frac stages per day across all operations [9][10] - The company operated two horizontal rigs, drilling approximately 262,000 lateral feet across 16 laterals [8] Market Data and Key Metrics Changes - The U.S. exported record volumes of LNG in Q3, with new projects contributing to a total of approximately 9 Bcf per day of incremental feed gas demand [10][11] - Demand for NGLs is expected to see substantial increases, with ethane and propane benefiting from strong international demand [13][14] - The company noted a strong seasonal natural gas price differential of -$0.49 per Mcf versus the NYMEX index [14] Company Strategy and Development Direction - The company plans to maintain a flat annual capital expenditure over the next two years while adding 400 million ft³ equivalent per day of growth [8] - The focus remains on operational efficiencies, including returning to pad sites and utilizing existing infrastructure [10][32] - The company aims to play a key role in supplying U.S. markets with affordable, reliable natural gas, leveraging its high-quality inventory and financial strength [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for U.S. natural gas, driven by rising incomes and population growth [11][12] - The company anticipates a tightening gas marketing fundamental as additional LNG export capacity comes online [13] - Management highlighted the importance of infrastructure expansion in Appalachia to meet long-term energy needs [13][19] Other Important Information - Year-to-date, the company has repurchased $177 million in shares and paid nearly $65 million in dividends [17] - The company has reduced net debt by $175 million since year-end [17] - Management emphasized the resilience of free cash flow generation, enabling capital allocation options for growth and returns to shareholders [19] Q&A Session Summary Question: Can you provide insights on the work-in-progress inventory and expectations for 2026? - Management indicated that capital allocation in 2026 will focus more on completing the DUC inventory, with a linear utilization trend expected [26][29] Question: What are the expectations for operating expenses as inventory is drawn down? - Management expects cash operating expenses to remain low, with potential for slight improvements due to operational efficiencies [32][33] Question: What is the outlook for NGL demand and pricing? - Management expressed optimism for NGL demand growth, particularly for propane and ethane, supported by new export capacity and international demand [40][46] Question: What is the status of supply agreements and potential expansions? - Management noted ongoing discussions for supply agreements, primarily focused within Pennsylvania, with potential for expansion outside the state [50][53] Question: How does the company view curtailments and production modulation? - Management has utilized curtailments in the past when pricing warranted, but currently focuses on shaping production to align with market fundamentals [92][95]