Heliostar Announces Improved Economics for La Colorada Mine in Updated Technical Report

10/17/2025 – 06:30 AM

Heliostar Metals Reveals Updated La Colorada Technical Report: Enhanced Economics and Resource Expansion

Vancouver, British Columbia – Heliostar Metals (OTCQX: HSTXF), a company focused on gold production and resource development in Mexico, has released an updated technical report on its La Colorada Mine, showcasing improved economic metrics and significant resource growth. This announcement, made on October 17, 2025, highlights the potential for La Colorada to be a robust, high-margin operation.

Key Economic Highlights:

• Base Case Scenario: At a gold price of US$2,300 per ounce, the report outlines an after-tax Net Present Value (NPV) at a 5% discount rate of US$66.2 million, an Internal Rate of Return (IRR) of 24.4%, and a payback period of 3.4 years.
• Upside Scenario: With gold prices at US$3,500 per ounce, the after-tax NPV5 jumps to US$243.3 million, with a compelling IRR of 168.4%.
• Reduced Initial Capital Expenditure: The required initial capital now stands at US$44.5 million, a 17% decrease compared to the January 2025 technical report. This reduction is attributed to optimized mine planning and efficient capital allocation.
• Life of Mine (LOM) Metrics: The study projects a 6.1-year mine life, with average All-In Sustaining Costs (AISC) of US$1,626 per gold equivalent ounce and a recovery of 286,000 ounces of gold.

Resource Growth and Exploration Upside:

• Increased Indicated Resources: Indicated mineral resources have increased by 62,000 ounces to a total of 513,000 ounces, grading 0.79 grams per tonne. This growth underscores the ongoing success of Heliostar’s drilling programs.
• Expansion Potential: Further drilling is planned in Q4 2025 to potentially convert up to 28,000 ounces from the Veta Madre Plus area into mineral reserves. This exploration targets a larger pit design, which could significantly boost production.

Permitting and Operational Strategy:

• Leach Pad Expansion Permits: Heliostar received permits in August and September 2025 to expand the leach pad at La Colorada. This expansion facilitates increased processing capacity and supports the mine’s production ramp-up.
• Operational Roadmap: The updated life-of-mine plan incorporates production from three distinct deposits, prioritizing the Junkyard Stockpile, followed by the Veta Madre pit expansion, and finally, the El Crestón pit expansion. This sequenced approach aims to maximize operational efficiency and cash flow generation.

Challenges and Opportunities:

While the technical report paints a largely positive picture, it also acknowledges some challenges. Conservative pit wall angles, necessitated by the recognition of faults, have resulted in a marginal decrease in probable mineral reserves, now at 376,200 ounces. Furthermore, pre-stripping activities are expected to result in a maximum projected negative cash flow of US$117.6 million at the base gold price.

Despite these challenges, Heliostar is keen on the opportunities Veta Madre Plus offers. If resources can be converted to reserves via drilling, expansion of a pit will be likely. A larger pit at El Crestón might allow steeper pit walls, increasing conversion at this deposit.
The company also said that drilling beneath the current pit boundary at El Crestón revealed widths and grades that may be amenable to underground mining, for which extensions of high-grade mineralization at depth will be explored.

Management Commentary:

“Today’s results show that the La Colorada mine can continue to be a high-margin, low CAPEX operation with a 6.1-year mine life,” says Charles Funk, CEO of Heliostar Metals. “This updated study is focused on the open pits at La Colorada, demonstrating positive economics at conservative gold prices and a compelling opportunity at current gold prices.”

Technical Analysis:

The updated technical report underscores the strategic importance of operational efficiency and judicious capital management. The projected reduction in initial capital expenditure, coupled with increased resource estimates, signals a more robust and sustainable operational profile for La Colorada. However, it’s essential to factor in the projected negative cash flow during the pre-stripping phase and the impact of external market variables such as gold price fluctuations. Heliostar’s performance remains closely tied to prevailing gold prices, as highlighted in the gold price sensitivity analysis. Investors should also monitor the progress of permitting processes and the successful conversion of inferred resources into proven reserves.

Investor Takeaway:

Heliostar Metals’ updated technical report on the La Colorada Mine presents a compelling case for a valuable asset with robust economics, significant resource upside, and sound operational planning. While challenges exist, the company’s focus on cost efficiency, resource expansion, and strategic exploration positions it well for continued success in the Mexican gold mining sector. The market will closely watch the upcoming drilling results and the company’s ability to effectively manage costs and execute its operational strategy.