Stonegate Capital Partners has updated its coverage on Heliostar Metals Ltd (TSXV: HSTR), highlighting that the company's second-quarter results have improved its forward outlook by strengthening the operating cash-flow bridge to the Ana Paula project and clarifying the earnings capacity of its producing assets. The update comes as Heliostar reported record gold production and a record cash balance, despite a sequential decline in net income that was attributed to non-operational factors.
During the quarter, Heliostar's gold production increased 26% quarter-over-quarter to a record 14,803 ounces, while revenue reached $56.5 million. Mine operating earnings were $31.1 million, and cash increased to $43.0 million, even after making the initial $10 million payment for the Goldstrike acquisition. The company's San Agustin mine reached steady-state production, and its La Colorada operation continued to generate cash, strengthening the operating base that supports Heliostar's development pipeline.
The company's principal growth project remains Ana Paula, which is targeted for a feasibility study in the second quarter of 2027. An underground permit submission is expected in Q3, with first gold targeted before the end of 2028. The Expansion Zone at Ana Paula provides potential upside beyond the current development case, but permitting and project financing remain key execution variables.
Goldstrike, acquired earlier this year, adds 1.065 million ounces of attributable gold resources along with emerging antimony optionality. Surface work has confirmed mineralization at Antimony Ridge and identified a new target, Antimony Knoll, located 1.7 kilometers west. An initial drilling program of approximately 1,500 meters of reverse circulation is underway, with results expected in the fourth quarter of 2026. While Goldstrike broadens Heliostar's longer-term pipeline, Stonegate notes that the remaining staged purchase consideration should be reflected consistently in valuation.
Near-mine reserve growth should improve visibility beyond 2026, while key markers to watch include reserve conversion, execution at the Veta Madre vein, and Ana Paula permitting. The improved cash position and steady-state operations provide a stronger foundation as the company advances its development projects.
