Stonegate Capital Partners has updated its coverage on Heliostar Metals Ltd (TSXV: HSTR), highlighting that the company's Q2 results have improved its forward outlook by strengthening the operating cash-flow bridge to its flagship Ana Paula project and clarifying the earnings capacity of its producing assets. The update comes as Heliostar reported record production and a record cash balance, driven by San Agustin achieving steady-state operations and continued low-cost production from La Colorada.
In Q2 2026, Heliostar's gold production increased 26% quarter-over-quarter to a record 14,803 ounces, while revenue reached $56.5 million. Mine operating earnings stood at $31.1 million, and the company's cash balance grew to $43.0 million despite a $10 million initial payment for the Goldstrike acquisition. The sequential decline in net income was attributed to the annual option grant, higher taxes, and foreign exchange effects, rather than weaker mine performance, according to Stonegate.
The company's operating base is now providing stronger support for its development pipeline. San Agustin's steady-state production and La Colorada's cash generation are key contributors to this stability. Near-mine reserve growth is expected to enhance visibility beyond 2026, while the Ana Paula project remains the principal step-change growth opportunity. The Feasibility Study for Ana Paula is targeted for the second quarter of 2027, with an underground permit submission expected in the third quarter of 2026 and first gold targeted before the end of 2028. The Expansion Zone at Ana Paula offers potential upside beyond the current development case, but permitting and project financing remain critical execution variables.
Stonegate also noted that the Goldstrike acquisition 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 is underway, with results expected in the fourth quarter of 2026. This acquisition broadens Heliostar's longer-term pipeline, although the remaining staged purchase consideration should be reflected consistently in valuation.
Key markers for Heliostar moving forward include reserve conversion, execution at the Veta Madre vein system, and Ana Paula permitting. Stonegate's update underscores the improved financial footing that positions the company to advance its development projects while maintaining operational momentum.
