Mexico's Heliostar to Invest US$150 Million in Ana Paula Over Two Years

en.Wedoany.com Reported - Heliostar Metals disclosed that the feasibility study for the Ana Paula underground gold mine in Guerrero State, Mexico, is 34% complete, with completion planned for the second quarter of 2027 and a construction decision to be made in mid-2027. The company plans to use approximately US$150 million in after-tax cash flow generated over the next roughly two years from its two producing gold mines, La Colorada and San Agustin, to fund part of the construction, with the remaining construction capital to be addressed through new project debt. As of June 30, Heliostar held US$43 million in cash with no debt on its balance sheet.

The 2025 preliminary economic assessment for Ana Paula proposed initial capital expenditure of US$300 million. Heliostar management currently expects that, as inflation and items not included in the PEA stage are incorporated into subsequent design, the final capital requirement may rise to approximately US$330 million, a figure that remains subject to confirmation following completion of the feasibility study in the second quarter of 2027. The company has engaged Hannam & Partners to advance debt financing arrangements and plans to evaluate non-equity financing options in the fourth quarter of 2026.

The engineering plan is also continuing to be adjusted during the feasibility study stage. The project's base processing capacity is planned to increase from 1,800 tonnes per day in the PEA stage to 2,000 tonnes per day, with major equipment configured at a 2,500 tonnes per day scale to maintain output if ore grades change later. The company is also studying a dual-ramp option, with a crusher and conveyor system installed underground, to reduce truck haulage and ventilation requirements. The metallurgical flowsheet has been largely finalized, and BIOX bio-oxidation-related testing is continuing.

Ana Paula's current target output is approximately 100,000 ounces of gold per year. The 2025 PEA indicated average annual production of approximately 101,000 ounces during the steady-state production period, with all-in sustaining costs of approximately US$1,011 per ounce. Heliostar plans to proceed with main construction after the construction decision in 2027 and has set a first gold target for before the end of 2028. No formal production decision has yet been made, and the feasibility study, financing, and permitting processes remain to be completed.

Permitting work is proceeding in parallel. Ana Paula previously held an environmental permit for an open-pit mine. Heliostar has now adjusted the development plan to underground mining and plans to submit a new MIA-R environmental permit application to Mexico's Ministry of Environment and Natural Resources in September to October 2026, covering underground mining and related surface facilities. The company stated that there have been no material delays in the permitting schedule to date.

On equipment procurement, Heliostar is advancing supplier quotations for the primary crusher, secondary crusher, ball mill, and power transformers, and plans to place formal orders for certain long-lead items in the fourth quarter of 2026 using its existing balance sheet and operating cash flow. The company has earmarked nearly US$15 million for the relevant long-lead equipment to reduce delivery-cycle pressure during the subsequent construction phase.

The main operating assets supporting Ana Paula's construction funding are La Colorada and San Agustin. Heliostar's 2026 gold production guidance is 50,000 to 55,000 ounces. La Colorada restarted open-pit mining at Veta Madre in August, and the company plans to continue generating cash from the two producing mines to fund Ana Paula's feasibility study, underground development, and subsequent construction.