Heliostar Metals Ltd.

Thank you, everyone, for joining us today for the Helio Star Metals Q1 quarterly update covering our financial and operating results for the first three months of 2026. With me today is our CEO, Charles Funk, our COO, Greg Bush, and CFO, Vitalina Lisun, who will be presenting the results and giving an update of the business and the path forward for the remainder of the year. With that, I'll hand it over to you, Charles.

Yeah, perfect. Thank you, Stephen. Very pleased to present our quarter this year for two reasons. One, it was a very strong quarter for us. Records on a number of fronts, including step up in our production profile, in the revenue and the mine operating earnings, the bit that actually matters. We were able to invest considerably in our assets, as we'll explain throughout the presentation. And we were able to keep our costs well under control for the quarter. a very strong quarter for us as we deliver on our plan for the company. If we move forward, please, Stephen, through the slides. I think the most pleasing part of what we've done for the quarter is our strategy is really clear. We are maximising cash flow, why the gold price is strong this year and next, and we're using that to build Annapoola, which is the next major build we have in plan that we plan to commence in the second half of next year. and take us to a long stated goal of being a 500,000 ounce a year producer. We're doing that on the back of very strong production, as now Stephen's caught up, thanks for the slides, on that quarter for gold and silver. And we'll go through the details that breaks down the records that we got in earnings, income, and our working capital, a big step up in our working capital. For those who don't know the company very well, the next slide breaks down our assets. We had strong production. Our largest production by mine was at La Colorada for the quarter with some quite innovative approaching to the injection leaching that's delivering a lot of fairly relatively low cost gold, as Greg will touch on. Very pleasing to have restarted San Augustine. And we'll talk about particularly Annapola Progress and Goldstruck, which we purchased in the quarter. Moving ahead, Stephen. So I'll hand over to our CFO, Vitalina, if you could run through the high-level financial numbers and then we'll move to Greg for an asset-by-asset discussion.

Thank you, Charles. So Heliostar had a very strong quarter of 2026. We had production of 11,743 ounces of gold, which was sold 9,980 ounces. And we're on track for our production for the guidance for the year. The production was from both mines, with La Colorada completing stockpile mining in the quarter, while San Agustin achieved steady state production from the mining activities that restarted in late December. The cash costs of just over 1,600 per ounce of gold sold and the ASIC of 1,996 per ounce of gold sold are well below our guidance, so we're well on our way to be within guidance for the year. Next, please. Operationally, you can see that Q1 of this year was our record quarter as we continued production from both mines. As mentioned, the stockpile mining at La Corada has now completed. with successful ramp up of mining at San Agustin and was fairly stable cost to date. We also continued with investments in exploration and advancing our projects as well as acquisition of gold strike project in Utah from Liberty Gold in April, just subsequently to the quarter end. On the financial side, we had record revenues of 54.4 million, and mine operating earnings of $30.9 million, which led to net income of $14.1 million, or $0.05 per share. As Charles also mentioned, we significantly increased our working capital from $49 million to $70 million, of which $38.7 million was in cash and $11.7 million in sales receivable, the majority of which was received in April, and we continue being debt-free.

We'll just jump in and provide a bit of colour on the working cap and the cash number. So for those who follow the gold price closely, we always like to get our gold sold within the quarter so that matches our production numbers. Although it was about a week or 10 days before the end of the quarter end that the war on Iran commenced. It led to a pretty significant drawdown in the gold price, I think at its lowest around below $4,200 gold. Before the end of the quarter, that rebounded above $4,700 gold. So we just chose not to sell into that weakness. We then subsequently sold that gold before the quarter end. in and around that $4,700 range. So we've got a better outcome for selling that gold by just being a bit more patient. That's why you see the disconnect between the working cap going up because those funds were received, I think on April 6th, I think we received them all by. And so for anyone sort of tracking that difference, the difference between the cash balance being relatively flat And the big jump in working cap is just timing for us. We're not like new model Barrick that sells every day. We sell three or four times a month. So picking those windows is particularly important. And we did it to achieve a higher overall gold sale price. We remain on track as Vitalina forecast on our 50 to 55,000 ounces of gold production this year. We're well on track. It's always nice to start ahead of the curve from a cost perspective. below the bottom end of our cash cost and all in sustaining cost range, we expect to be able to deliver on that production guidance. Greg will touch on it, but we really only saw about two months of production from the restart at St Augustine. So that bodes very well for Q2 and for us achieving our guidance throughout the year. So I'm pleased to reiterate our guidance remains the same. If we can move ahead, please, Stephen. Thank you. And Greg, I'll hand over to you for some detail at each of the operations. Okay. Thanks, Charles.

Good morning, everyone. So at La Colorado, we had a good quarter. There were no reportable injuries in the quarter. We continued to process stockpile material a bit longer than we anticipated when we put out our guidance. We found some additional material that we put on the pad. So we wound that down in the latter half of March. And in the same period, we were ramping up the production from the injection leaching. And so kind of the impact on the cost of that was we spent a lot of money drilling out the production wells for the injection process. So we saw those costs hit in the quarter plus some, some mining costs that were not in the budget because there was more, we say we put, we put a bit more on the pad. Uh, so the, uh, the, on, on the cost side, I touched on the, it said we, we spent, we spent a bit more money on, on the mining side and, and, uh, and also on the JECs. So our site costs were a bit above what we anticipated for the quarter, but it was offset by the fine sales at the end of the quarter. We expect to be back on track on the site costs by the end of this coming quarter or this current quarter. So looking forward, if we can, can we switch to the next slide there, Charles? Yeah. So looking forward, I just wanted to touch on the Betamadri pit. We anticipate starting up there in the early part of Q3, and the reason we're delaying that a little bit is the pit got a fair bit larger with the higher mold price, and so we ended up with a pit design that was added to volumes where we had insufficient... geotech information. We're doing some infill drilling and we're doing some geotech drilling. We're just waiting to finish that off, update the resource model and the pit high wall design. Other than that, we'll be ramping up. For the remainder of the year, our production is going to come from you know, from this injection, from the injection leaching at La Colorado. So.

Before I move to the exploration there, Stephen, if you can go back a slide. Yeah, I think there's two things that Greg covered. The Vader Madro Plus. Sorry, it's always nice to look at the site layout, Stephen, in slide 11, please. is the Veda Madre Plus will have additional ounces, we believe, above and beyond the technical report. So that's why we're doing that work. We think we're going to make more money by mining the larger pit that we call Veda Madre Plus there. And then for those who aren't familiar with injection leaching, it's technology that's quite commonly used in the copper space, particularly companies like Freeport McMurrin using it in Arizona. We see considerable residual gold in the leach pad. It's a very clean draining leach pad with quite coarse gold, many grains over many multiple millimetres. And so if you can keep the active solution in contact with the gold for longer, or you can get active solution deeper into the leach pad, you can recover relatively low cost gold ounces. So the team led by Greg did all the design and study work. We've been doing it for about four months. We drill holes into the leach pad. We inject that solution in such that we can saturate more of the column for longer and we can get more active solution deeper into the leach pad. And it's proving to be a very low cost, very successful way to produce gold. So incredibly at La Colorada, you know, from the original 80 million capex that was going to be required for the Creston pit, give or take, We've gone from stockpiles to injection leaching to the smaller Vadovat drape pit to the larger Creston pit. And we found a way to put a six-year mine life together at just under 50,000 ounces of annual production without any external capex, which is a credit to Greg and the team at LaColorada. It's probably surprised us how well we've been able to tic-tac-toe at this asset to scale up production. And so right now the focus is on drilling the geotechnical work at Veda Madre. And in the second half of the year, it'll move to exploration. So as Stephen moves to the next slide, nearly all of the drilling, there's about two and a half million ounces if you look at mine history and resources in that main mine trend. There's very, very little drilling outside of that. It's one of the most immature brownfield environments that I've seen in a long time. There's many, you know, plus one gram rock chip sample areas that haven't seen drilling. There's soils anomalies above the cutoff grade of the pit. We'll probably start initially at the Los Duendes target and move out from there. So we've got about $5 million allocated to exploration at La Colorado in the second half of the year. And so once we bed down Veda Madre, look for that to be a focus. So continuing ramp up of production, the advancement of the Veda Madre pit, and to look to exploration as the focus going forward at the Colorado.

Okay. Yeah. So, so at San Augustine, things went, you know, pretty much according to plan for the, for the quarter. We did have one recordable safety incident in the quarter. We, Charles already mentioned we basically got production out of the fresh ore for the last two months of the quarter. So we were a little bit delayed on the startup last year. So that just pushed the production curve out almost a month. So the mine so far, I think the most significant development at San Augustine the quarter or with the amador corner is the the reconciliation has outperformed you know significantly that's had that's had several you know consequences for for the operation one and one one is is you know the we've had you know we're having to move a lot less waste to get the ore on the pad uh so we've got a savings in the mining cost uh It does, however, put us a little bit behind topographically from where we should be at this state. So that means the grade ramps up as we mine down into that. So it put us a little bit behind on the number of ounces we placed on the pad. We're rapidly catching up now during this quarter. So... Yeah, so anyway, so where that left us at the end of the quarter, we're, you know, we spent less money. We got a bit lower ounces on the pad, but that's just, you know, like I say, it's just a dislocation in the topography. So that'll be rectified. And the other, you know, forward looking, I think we're wrapping up the capital construction for the phase 4B leach pad project. Uh, so that will be that that's the last major expenditure we had related to the, to the restart. Um, and the other benefit, the benefit of having all that, that phase four B leech pad and available to us is we'll, we'll be able to stack the ore on lower lifts. So we'll get a better response time. So that's been part of, you know, part of it's delayed a bit, the production, the fact that we've had to put so much material up on top of the leech bed. Um, and other than that, I said, we're continuing to drill. I had Charles to talk about a little bit about it, but we're continuing to drill. Uh, outside of the, you know, basically a long strike criminalization for the indoor corner. I'll hand it back over to Charles.

Yeah, thank you, Greg. No, I think St Augustine continues to deliver for us as a company. I think what Greg's saying is, and we did identify it before we started mining, that there was the potential that we would have positive reconciliation, to be taught plainly, that there'd be more ounces than the reserve model showed. And net-net, that's a great positive for us. We're going to recover additional ounces. than the mine plan suggested, which goes straight to profitability and cash build for us as a company. There's slightly delayed gratification in Q2 relative to Q1 for some of that. But no, I think we're set up for a very strong Q2 at St Augustine and a longer mine life than the current tech report supports there. Above and beyond that growth within the reserve, we also in the quarter started doing the first step out drilling, looking to expand the mine life beyond the current study. And so if you sort of work back at the envelope that we're making at current gold price environments around $50 million a year from St Augustine, it's generating significant operating cash flow for us. Being able to extend that is incredibly powerful. Greg's given a nod to an extension within the current reserve area. And these results we put out in the quarter speak to potential beyond that. Over 200 metres beyond the edge of the pit, We're hitting, broadly speaking, the same grades and the same widths at the same depths that we're currently mining. So it's giving us a lot of confidence that we're going to be able to extend that mine life. I don't think the market's giving us a lot of value for it because right now they look like relatively low-grade oxide drill results. But if we could add another six, 12, 18 months of production, 12 months is going to be an approximately additional $50 million in cash flow. So I think it's kind of a bit underrated in our share price what the cash flow generation from Anipol is doing. Right now, we're in the middle of a $10 million program throughout this year at St. Augustine that's doing reserve drilling to look to bring this into the mine plan, as well as some exploration drilling on new oxide and sulfide targets. So it's receiving significant expenditure as we believe that we can extend the mine life, which we think is going to add strong cash flow for us in the pre-Anapola period. So I think that's one that I'd like to believe the market isn't paying attention to that internally. We're very excited about.

That's a great segue into, uh, Ana Paula and an update and an overview here. Um, as you recall, last quarter, we put out the economics for the first time on the Ana Paula underground project, as we've, we've re-imagined it since, uh, acquiring it, uh, showing a hundred thousand ounces a year over a nine year mine life at a $1,000 per ounce, all in sustaining cost. Annapolla still remains a key goal for us with the cash generated from the operations at St. Augustine and LA Colorado, supporting about half of the project financing as we envision it right now, if not more, if the gold price remains elevated. You can see in our quarterly results that that strategy is being borne out quarter over quarter with our cash balance building and building towards being able to bring Annapolla online. We see this as a really major step change for the company as we're able to bring this into production, still remaining on track to come online, ramping up to that 100,000 ounce per year mark in the second half of 2028. Just quickly to go through what Ana Paula is, it's a project that's had $100 million invested into it, significant infrastructure that allowed us to get a really good head start here. As Helio started, we've reimagined the project from what was a permitted open pit project now to a compact, high-grade bulk tonnage underground, which drives the significant economics of the Ana Paula mine as we showed in that PEA. We're still on track for a feasibility study for the first half of 2027, supported by our ongoing drill programs, which have both been focused on infill drilling The afforded resources to be able to move from the PEA stage and include those resources at the M&I category in a feasibility study, as well as a success driven 100,000 meters that we've added beyond that looking at step out and more specifically step down mineralization, continuing to chase the high grade system at depth.

Yeah, I think so. The corporate priority is the feasibility study. You'll note that we've reorganised our internal structure a little bit and we've moved to Nandurado as our VP of operations now that we've kind of got them bedded down and performing at the steady state that we set out last year. And we're giving Greg some more capacity to focus on the Annapoola feasibility and ultimately build next year. So internally, the reorganisation to focus on Annapoola and deliver that feasibility is our biggest priority. focus going forward. And I'll touch at the end on what I think are some different valuation comps and why Annapool is so important for what it does to our share price. So separate to the feasibility study, and as Stephen said, we've drilled about 25,000 metres focused on inferred to reserve conversion in that study. We spent $4.6 million in the quarter at Annapola. So what I really like about our quarter is the working cap increase, the cash flow generation, despite significant spends at Annapola and our exploration properties. It's the power of this market for growth companies like ours in that you can do more, more quickly to bring forward value. And so We've got a 10,000 metre drill program ongoing beyond the scope of the feasibility study drilling. And that's because of some of these deeper results we've hit. So, you know, we've consistently been drilling, you know, the 20 to 70 metre wide intercepts at 10 grams plus in the high grade panel as we've done the conversion drilling. And, you know, they speak to why Annapool is going to be such a high margin producer. But we'd also had some inferred resources. The top right graphic is looking to the north. The bottom left graphic is looking to the west. And you can see that we're going to complete the decline and use that for production, focus mostly on the high-grade panel. But we're also going to put an elbow down and then spiral down to some inferred resources deeper. And so we initially were drilling those off to come into the feasibility study. but we're always excited to drill deeper because it was open. In our first holes down deep at the expansion zone, we stepped out 70 metres and we hit 25 metres at over 8 grams per tonne. So a really impactful first hit. And then we followed up with another six results about three weeks ago, headlined by 101 metres at 5.3 grams per tonne from the expansion zone. These are incredible grades and widths. The upper 30-odd metres was from an inferred stope and the 70 metres of that intercept was down below that and it remains open and we're currently drilling that. So maybe strictly speaking or in a tougher price environment, we might not do that expansion drilling, but it's pretty hard to not try and grow Annapoola when you know it's going to add to mine life and you can see the exciting grades and widths that we're hitting. So we've got more drilling coming as we look to step out down deep in parallel with the focus on the feasibility study that we're doing. So Ana Paula continues to deliver on both fronts, moving forward through the engineering de-risking phase, moving to what's the best part of the Lausanne curve as you go into construction and production, but we're also still continuing to look at growth because we're able to fund that ourselves. The other asset that we acquired in the quarter was the gold strike project. Again, you know, I think it fits our DNA to kind of find off Broadway ideas that aren't being well valued. And we identified this from Liberty Gold. Liberty's advancing a project in Idaho. And my interpretation is that they're demonstrating, trying to demonstrate to the market that they don't need equity. So they were happy to monetize what was a non-core asset. We look at GoldStrike through two lenses. We think that it represents an excellent growth opportunity in around five years to be another 100,000 ounce a year producer for us with some geographical diversity, with some antimony upside, which I'll talk about in a second. Or alternatively, the development pipeline we have gives us great redundancy and optionality as we build Annapoola. So As long as in our view, we're buying, you know, paying less than a dollar for assets we believe to be a dollar, we think we can make money for shareholders and Goldstrike firmly fitted that. It has a very friendly acquisition price structure, 72 and a half million staged over five years that fits our cashflow profile. We think the system has considerable upside with nearly all of the drilling less than 200 meters in the classic stratigraphy for Carlin deposits for those who know the deposit type. And so right now, we've got a team on the ground working out the next steps for particularly the antimony target. And we also step back and are focusing on what we need to do to put a PFS on GoldStrike. Broadly speaking, early next year, we haven't said exactly what that timing will be, but we'll work up and show the economics of what we believe to be a very attractive project. that we're able to acquire on very cheap terms that continues to build out our growth pipeline that we think we can organically fund by going Annapoola first, Ceratogaia second, and then Goldstrike third. We believe that we have an absolute peer-leading development pipeline. We think if you look at sub-100,000 oz a year producers, we're by some margin one of the cheapest producers in that bracket, meaning that we're making more money from the gold that we produce So we think with one of the best growth pipelines in the industry, we're unique that we can fund it ourselves and space it. Now, we've always said we reserve the right if we can buy producing assets or grow resources to issue equity. But our plan and our main focus is on getting to Annapoola without having to issue any further shares. and in this gold price environment with the production profile that Greg's presentation of the quarter shows that we're delivering on, sets us up extremely well as a company to deliver what I like to consider per share performance, which is really the only metric that matters. If we look forward, I've sort of broken our catalysts down to drill result focused over the next couple of months. We've got more results to come from Annapoola, from La Colorada and San Augustine. We're spending $27 million on exploration this year. We think that's going to be able to grow resources across all of our projects. And then in the second half of the year, I think the development catalysts become the focus that will move our share price. The pre-strip of Ada Madre, the engineering progress, the long lead time item purchases for Annapola. And as I touched on before, as we move through the classic value generation part of the Lausanne curve, as Annapola comes online with the feasibility study in Q2 next year, commencement of construction and ultimately bringing into production at the back of 2028. We continue to deliver quarter in, quarter out. And I'll take this opportunity to thank the team internally at Heliostar for all your work and for that very strong quarter. I'll close from a value perspective before we ask questions. And I'll note before I make this statement, there's a chat function that you can click in and ask questions and Stephen will then present them to us. I think there's three ways to value, you know, growing, you know, developer slash producer companies. The first of them is that discount to the value of your assets. We're trading at around 0.25, 0.3 on analyst consensus, which is around that developer bracket despite that cash flow. I suspect that's because of the sort of staged process of the way we're generating our cash flow. Internally, we're just happy to generate significant cash flow and deliver on our goals. And we understand that sort of holding us back a little bit until Annapoola comes online. When that comes online, we should be trading at 0.6, 0.8. So that's a clear re-rate in our stock as we deliver on Annapoola. The other one is you look at where we're going in our production profile. If you look at any comp doing 100, 150, 200, 300,000 ounces of annual production, they're many billions of dollars of market cap larger than us. So on just a basic metric, we think we've got a long way to go. Or the last one is to read through what the profitability of Annapoola can be for us in 28 onwards. If you've got a mine producing 100,000 ounces a year at $3,500 margin, the free cash flow of that is incredible. And coming up to only one or two times our current market cap. And we know that that should be many multiples of that. So Any way you look at our growth trajectory and our valuation, any of your preferred metrics, I think we can perform very strongly against as long as we continue to deliver as a management team. And this is now our fifth quarter in a row of being able to deliver, and we look forward to continuing to do so for the remainder of the year, knowing that if we do, we should be able to make a heliostar share worth more. So thank you all very much for your attendance in our quarterly update. Happy to take questions. Look forward to providing more drill results, more engineering progress throughout the remainder of the year.

Thank you, Charles, and the rest of the team. I'll echo that again. There is a Q&A chat function. If you could please type your questions in there, I'll present them live now. We have a question around the timing of the decline into Annapola, something we've talked about before, and wondering what the status of that project is. Yeah. Charles, yeah, sorry, I'll direct that to you probably is best to take.

Sorry, I'll wait next time to be. But, yeah, jumping in. So our plan is to complete the decline in the second half of this year. We're working through, again, for a bit more detail, Annapoola has an open pit mining permit that was given to it about five years ago. We're in the process of changing that to an underground permit. You do let certain ancillary aspects of that retire out as we move to the new plan. So we believe that we will commence that decline in the second half of this year. We know that there's a few more regulatory steps that we want a bit of clarification on before we 100% commit to that. I was probably a bit stronger on it in January that we definitely were. We don't want to delay any aspect of actually building the mine. And interestingly, Annapoola The limitation to building Annapoola is actually building the surface infrastructure, not doing the decline development, which is quite uncommon. Most mines are limited by the underground development. It's because Annapoola is so shallow. So our plan is to commence the decline in the second half of this year. I'm giving myself and the team a slight out while we move through a couple of those permitting steps to make sure that we don't interrupt or delay the permitting timelines. So Slightly weaker than I presented in January, but still our plan to commence in H2 this year. Great.

Thank you, Charles. I have another question here on the remaining capital requirements for the year. If you could note some of the major items where we'll spend money to continue to reinvest and grow in the business and anything you can provide on the timing of those.

Yeah, so I think there's three big steps. There is the commencement of the pre-strip of Veda Madre. In total, that's a $35 million pre-strip, as we see it at the moment, that's going to commence in July. That will be spread over the second half of this year and early the following year. We, in our budget and model and all the numbers we've presented for Annapoola, are funding that internally. We'll have the decline when we commence that at Annapoola of about $15 million that will be spread over the back end of this year into next year. And we're approximately a third of the way through the $27 million exploration spend we're talking about this year. They would be the three big capital steps. And again, it's what I kind of love about the proposition that we're laying out is that we're able to fund all this and still build that cash balance. Next year, we expect to be a strong cash flow harvesting year for us. And despite doing all the work, still a cash flow harvesting year for us this year. I think as a rule of thumb and treat it as this, at about $3,800 gold, I think we would generate around $100 million this year and next year to go towards Annapoola. At $5,000 gold, we'd generate about $200 million. So the $150 million number is sort of a middle-of-the-range number based on a conservative gold production profile and a middle-of-the-range gold price, which we've certainly been seeing for the last quarter plus. So we're strongly positioned to deliver on that. The $150 million of capital for Annapoola is above all our G&A, all our expiration, all our capex spends on our existing operations. And if gold price stays at these levels, I think we can potentially outperform that as well.

Thank you for that, but 1 more question here in the chat just asking about this, the state of kind of late labor relations in Mexico and and around Ana Paula specifically if you could just kind of comment on on what that situation for Helio start looks like specifically.

I think, Greg, we might hand that over to you. We have annual meetings and presentation. I think more broadly, I expect to see pressure on labour costs, particularly later this year and next year. Every company in our industry has funding at the moment as a gross statement. That's going to lead to demand for skilled labour. So I expect to see, like we saw in sort of 6, 7, 8 in the last cycle, pressure on salaries. But Greg, I'll hand it over to you to talk specifically relationships with unions and a view to Annapoola looking forward. Okay.

Yeah, I mean, as far as the two operating lines, in April we wrapped up our negotiations with the unions and subsequently with the employees on site. Um, so we've got, we've got our, you know, we, we've got our, our, our pay structure going forward for, uh, you know, for the, for, for this year and into, you know, into May of next year. So we, you know, we were pleased with, uh, with the outcome, the unions were pleased. Uh, so we don't anticipate any, any unrest on, on that front. Uh, with Ana Paula, you know, it's early, it's, it's kind of early days. Uh, you know, I'm, I'm not anticipating that we're going to have, you know, given what's been happening with some of the other, you know, big headline mines there in the district, I don't anticipate that we're going to have a big difficulty in, you know, in attracting, you know, underground mining talent and, you know, operators that, you know, mechanics, that sort of thing. So, but at this point, you know, we're we're not in a hiring mode really other than supporting the exploration programs.

Great. Thank you. Thank you, Greg. I see no further questions in the chat. So thank you, Charles, Greg and Vitalina for the presentation today to give us an update on what is a record setting quarter and the path forward for the rest of the year and beyond. Thank you everyone for joining us today. If you have any additional questions, please send us an email at info at heliostar.com and happy to continue the conversation there and through our social media. Thank you everyone and have a great day.