News Summary
On December 18, 2025, Heliostar Metals announced the recommencement of mining, crushing, conveying, and stacking of ore at its San Agustin mine in Durango, Mexico. This restart delivers on the company’s previous guidance for a Q4 2025 restart.
The company expects to produce 45,000 ounces of gold from the current reserve at a high All-In Sustaining Cost (AISC) of US$1,990 per ounce. CEO Charles Funk noted that at a US$3,000 gold price, this operation is expected to generate US$40 million in cash flow.
Alongside the restart, Heliostar is undertaking a 10,000-15,000 metre drill program aimed at extending the mine life at San Agustin. The CEO stated this milestone positions the company for a significant increase in consolidated gold production in 2026 and allows it to continue funding its growth portfolio on a per-share basis.
Material Impact
This news is a material and positive catalyst, confirming management’s ability to execute on its stated timeline. The restart of a second mining operation is a significant operational step that transitions the asset from a cost center to a cash-flow generator.
Reviewing the historical news flow provides crucial context:
– Q1-Q2 2025: Transition and Fortification: Heliostar began the year by filing technical reports for its newly acquired Mexican assets (Jan 13), repaying its US$5M acquisition loan ahead of schedule (Feb 13), and completing a C$19.5M financing at C$1.00/share with participation from Eric Sprott (Mar 28). This quickly established the company as a debt-free producer with a strengthened balance sheet and institutional backing.
– Q2-Q3 2025: Execution and Cash Flow: The company posted strong quarterly results, demonstrating positive cash flow from its La Colorada mine (Q1 results Apr 28, Q2 Sep 2, Q3 Nov 20). As of September 30, 2025, the company had a robust cash position of US$34.6 million, validating its strategy to internally fund near-term growth initiatives.
– San Agustin Restart Plan: The plan to restart San Agustin was explicitly detailed on July 22, 2025, guiding for a Q4 restart to produce 45,000 ounces of gold. Today’s announcement is the successful culmination of that plan.
– Systematic De-risking: Throughout the year, Heliostar has systematically advanced its entire asset portfolio. It released a positive PEA for its flagship Ana Paula project (Nov 6), a positive PFS for Cerro del Gallo (Dec 11), and has received positive commentary on permitting for the La Colorada expansion (Dec 15).
Assessment: The restart of San Agustin is not a surprise, but it is a critical deliverable. The primary risk associated with this asset is its high AISC of US$1,990/oz, which leaves a thin margin at current gold prices and exposes the company to operational volatility or a drop in the gold price. However, management’s strategy is to use the cash flow from San Agustin and La Colorada not as a primary value driver itself, but as a non-dilutive funding source for advancing its true company-maker, the high-grade, low-cost Ana Paula project (PEA AISC of US$1,011/oz).
This announcement solidifies Heliostar’s status as a two-mine producer and reinforces the credibility of its “produce-and-grow” model. The market has rewarded this execution, with the stock appreciating significantly throughout the year. This news validates that appreciation and supports the current valuation.
Catalysts
– Formal 2026 Guidance: The company has stated it will provide formal consolidated production and cost guidance in January 2026. This will be the first key indicator of the full impact of having both mines operational.
– Drilling Results: Assay results from the 10,000-15,000 metre drill program at San Agustin will be critical. Positive results could extend the mine’s short 1.2-year life, turning it into a more sustainable cash-flow source.
– Permitting at La Colorada: Formal receipt of the permit to expand the Veta Madre open pit is expected in Q1 2026. This is key to executing the mine plan laid out in the October 17 technical report.
– Ana Paula Feasibility Study: Progress updates on the Feasibility Study for Ana Paula, including any new drill results from the expanded 20,000-metre program, will be closely watched as this project represents the company’s long-term future.
– Q4 and Year-End 2025 Financials: These will show the full year’s performance and provide an updated look at the company’s cash position heading into a year of expanded production and development.
Materiality Conclusion
The restart of mining at San Agustin is a material, positive event. It confirms execution, adds a new production stream, and provides the internal funding necessary to advance the company’s high-value development pipeline with minimal shareholder dilution. While the project’s economics are marginal, its strategic importance as a funding vehicle for the low-cost Ana Paula project is significant.
