Heliostar Metals (TSXV: HSTR) has completed a preliminary economic assessment for the potential underground mine development of their Ana Paula Project in Mexico. The study has outlined a net present value of $426 million alongside an internal rate of return of 28.1% and a payback period of 2.9 years using a 5% discount rate and a gold price of $2,400 an ounce.
At $3,800 an ounce gold, that NPV is said to rise to $1.0 billion, while the IRR climbs to 51.3% and the payback drops to just 1.9 years.
The study itself outlines an underground operation with a life of mine of nine years boasting average annual production of 101,000 ounces of gold. That estimate is based on an operation that would process 1,800 tonnes per day at average grades of 5.37 g/t gold, although years one through four are expected to see higher grades, averaging 6.64 g/t gold.
That gold is expected to be produced at average cash costs of $923 an ounce, and with all in sustaining costs of $1,011 an ounce. Initial capital costs meanwhile are estimated at $300.1 million, alongside sustaining capital costs of $73.2 million.
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The economics from the study have proven to be strong enough that Heliostar intends to speed run the development of the underground project at Ana Paula. A 15,000 metre drill program is currently ongoing in support of a feasibility study, which is also ongoing. Permitting work is meanwhile being completed to amend the current open pit permits to include underground extraction, with submissions expected in the first quarter of 2026.
The 400 metre decline that currently exists is expected to see 1,200 metres of development through 2026 at a cost of $15.0 million as part of an early works program, which is to be funded via free cash flow. Free cash flow is expected to fund the entire development of Ana Paula, alongside a supporting project financing facility. A formal construction decision is expected in the first half of 2027.
“Today’s PEA demonstrates Ana Paula can be a low CAPEX, high margin gold mine. Ana Paula is expected to drive the Company’s transition to mid-tier status in 2028 by significantly expanding our production profile at one of the industry’s lowest cost bases. As we proceed with the Feasibility Study, the current 15,000m drill program, engineering and metallurgical programs all have the potential to improve the mine’s economics and are being advanced with the aim of confirming a mine life of at least 10-years. The Company plans to accelerate key development steps to bring Ana Paula forward including a restart of decline development in 2026,” commented Charles Funk, CEO of Heliostar Metals.
Heliostar Metals last traded at $1.78 in the TSX Venture.
Information for this story was found via the sources and the companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
