[music] This is the Investing News Network and I'm Georgia Williams here with you at the 51st edition of the New Orleans Investment Conference. Joining me today is Steven Suk, vice president of investor relations and development at Helioar, which trades on the TSXV under the ticker symbol HSTR. Thank you for being with me today, Stephen. No, it's a pleasure to be here. >> Um, how are you enjoying the conference so far? >> Uh, it's great. It's my first time here. First time at the conference and New


Orleans. So, uh, it's been a lot of great uh, great people coming by the booth, meeting lots of of good uh, good investors, seeing a few good presentations, and enjoying the city. >> Awesome. Um, could you give us a little overview of Helioar for those that might not be familiar with the company? >> Yeah, absolutely. So, we're a uh junior gold producer uh on track to um go from 30,000 ounces this year to 300,000 ounces a year by the end of the decade. Uh so, we our strategy is powered by the


fact that we are a producer. Uh but we really are a development and growth company. So, think of us less as a junior producer and more as an organically funded developer is how I like to frame it. Uh we picked up the um portfolio of Mexican assets from Argonaut Gold. Uh first the Anapola project uh in 2023 and then uh the whole rest of their portfolio including two producing mines and two additional development projects down there uh all for $15 million. So it was uh kind of the deal of a lifetime but right timing,


right situation, uh right contrarian view on on Mexico. Uh this was about a you know a year or two years ago when sentiment on mining in Mexico was at an all-time low. We thought the pendulum had swung too far uh and have been borne out as things have really uh improved greatly and been able to get a number of permits and approvals to be able to um restart the mines and uh and have that power our the growth of our business. >> So that's very exciting. >> Yeah, it's been a great time to be with


the company. >> Absolutely. And um your recent quarterly results show progress towards cash flow generation. How does your current cash flow and capital allocation strategy support both short-term operational needs and longerterm project development priorities? >> Well, I mean, I've got to give a little bit of credit to the gold price here. Uh we had a solid strategy uh and we were comfortable executing that at, you know, $2,800 gold. Uh the fact that gold's 4,000 really affords us the ability to


tackle a bunch of our things concurrently. Uh right now, uh our operations are making about $15 million uh a quarter in operational cash flow. Now, we are right now sinking that back into the business and these near-term growth opportunities that we see. Um, there's a number at LA Colorado in terms of processing stockpiles. We've been able to restart uh expanding an open pit that we think will be able to um start that cut back next year. An early works program at Anapala and we're actually


restarting our uh our St. Augustine mine going from residual leeching where we've been making good money over the last couple of months back into primary mining uh doing a cut back there. So, you know, that's kind of the short-term allocation with the idea that investing in these near-term growth projects uh being about net cash neutral, I'd say, until uh midway through next year, at which point we expect to generate significant free cash flow. The idea is that we'll be able to use that free cash


flow onto our balance sheet to be able to fund the equity portion of the Anipala construction financing. Uh so, we're unique in the way that we'll be able to grow, you know, to 10x our our production potentially without issuing another share. So you don't get that sort of uh equity dilution that goes along with your standard development trajectory. >> Right. And um Helioar has outlined steps to grow NAV across the portfolio. Can you share which initiatives you see as the most immediate value creators for


shareholders? >> Definitely. Uh the first one um we've kind of checked off. We up put out an updated study for our LA Colorado mine. Uh showing an optimized resequencing and uh the impact of drilling that we did earlier in the year. So that was our first call it nav growth step. Uh the next one that I'm really excited about is we're going to put out uh PEA for our Anapollola project. It'll be the first time uh the market will see the the economics uh for the bulk tonnage high-grade underground project as we


envisioned it. Uh recall this was a project that was previously scoped as a big uh lowgrade open pit uh with marginal economics and a complicated flow sheet. Um we said we had no interest in that and credit to Sam Anderson our technical team uh saw the potential that 80% of the economics were contained in in you know this high-grade core. uh so completely reimagined the geological model, reimagined what the mine would look like uh and we progressed down that path with great success. So being able to show uh the


impact of that rethinking the economics to the market, I think would be really exciting. Uh we've been, you know, saying we think it'll be uh around 100,000 ounces a year, probably 8 to 9 years in the pea uh at about $1,000 all in sustaining cost. Uh pretty incredible margins costing about 300 million to build. So something very manageable for Helios start to to finance, you know, between internally generated cash flow and project level financing. So that's kind of our next major now growth step


that I think uh will surprise the market to the upside. Um and then the last one that we're looking at this quarter is uh an updated prefeasibility study for our Sarah Deio project. Uh this is more of a pipeline development project, but we think that'll uh be the next 100,000 ounces we bring on after Anapola. Uh right now there's 2.9 million ounces in combined resources there that we have to treat as historic because we just haven't had time to put out the study, put our own stamp on it, refresh those


numbers. Uh the study was last done in uh 2020 um with uh you know very different gold price environment in uh in the economics. So I think that'll be a fun one and that's uh due to come out before the end of the year as well. So those are our major NAV growth steps uh in the near term. Lot lots to come. Uh and then the big one will also be the Anopala feasibility study. you know, we we've always targeted a feasibility study in call it Q1 2027 sort of thing. Um, and you know, the PEA was a nice way


to kind of put a bow on some of the early work we've been doing, be able to present it to the market and not ask them to wait uh, you know, a year uh, for those numbers. Uh, give kind of an intram in data point, if you will. >> Yeah, that's a lot of exciting developments. >> It is. Yeah, we've uh, it's great to have a large growth pipeline. Uh, so it gives us a lot to work on all the time. We're we're certainly never bored, that's for sure. And uh it's it's fun to


be able to show that to the market and see uh you know demonstrate where that growth comes from. >> Absolutely. And in balancing exploration upside with near-term cash flow, how do you prioritize projects across your portfolio? >> Yeah. I think you can kind of think of um our our strategy in three levels. Uh over the past year, we've really spent time betting down production. We have a solid production plan. Get cash the assets cash flowing, have that base from which to work from. Then we look at


immediate resource growth. So across the portfolio what are the the lowhanging fruit opportunities where with a little bit of drilling a little bit of money uh we can add to mine life we can you know find um ways to bring cash flow forward from opportunities within the portfolio. So uh we are doing a lot of drilling to that that end right now. Um so you know at LA Colorado we're we're drilling off something we call VA Madre Plus. Uh this is another pod of about 30,000 ounces um that actually is in our our M&I category


uh but hangs together on just two high grade drill holes. So, you know, we take a fairly conservative technical view. So, we want to do another five or six holes, confirm it's there before an adjustable cut back. Um, at Anapaloa, we're midway through a 15,000 m drill program focused on upgrading inferred resources. Uh, so, you know, that's kind of the main focus there and a little bit of step out and delineation drilling to be able to support that feasibility study next year. And at St. Augustine,


we've got uh, you know, oxide expansion opportunities just around the area that uh, we got the the new permit to expand into. Um so that's kind of the the the resource growth layer and then across the portfolio then there's some bigger shots you want to take as you mentioned on kind of the true exploration right um so at LA Colorado there's been virtually no exploration outside the immediate mind trend it's a large land package with lots of historic showings and good soil sampling trends some of which have


never seen a drill hole uh it's kind of incredible just speaks to the mindset of the previous operators and we have a you know a bit of a more explorationist mindset to apply um at Lac or sorry excuse me at anapol There's a few areas near the deposit, a few hundred meters away from planned infrastructure that we want to tackle. So, stay tuned for that. And then at St. Augustine, uh there's a large poly metallic sulfide deposit uh under the oxides. Um now that we want to really chase some of the higher grade uh


structures, some brees, some feeder structures within that. Uh but again, that's an exploration shot. So that that's kind of the three layers, you know, we've got production bedded down, resource growth, and then the uh the exploration sizzle on top. >> Yeah, it's like a one-stop shop. >> That's our [laughter] plan. Um, your recent drill programs have generated promising results. You were talking a little bit about them. Which discoveries or zones are most significant in terms of potential


near-term production and economic impact? >> Yeah, I think uh the VA Madre Plus uh that's one that's already near a planned uh uh cutback. Um, so I think if we're able to prove that out quickly, uh, we could really expand the mine plan there, um, in short order and be able to pull that, uh, exploration opportunity into near-term cash flow potentially as soon as, uh, you know, next year. Uh, so I think that's one we we really want to tackle quickly and put a plan around. Um, as I mentioned at uh, at Anapala,


some of these, uh, new new zones kind of near planned infrastructure. Um, you know, still early days on those. Uh, the the geos are excited. I haven't seen the numbers yet, but I can tell you when the geos get excited, there's usually a good reason. Uh, so that's another one that, you know, won't make it into the pea obviously. U but could be an opportunity and feasibility study to show uh kind of an expanded mine life and add ounces, um, that are, you know, come in at low cost because we've already already


planned to put the underground infrastructure in. So, I think those are the two that are the the most exciting on the discovery uh, on the discovery side. And as we wrap up, you know, um, 2025 and head into 2026, what should investors be looking for in terms of news coming out of, um, the company? >> Yeah, I touched on a few of them. Uh, the Anapola PEA is the next one in short order. Uh, following that, we'll have our Q3 results. Uh, you know, results don't always get everyone excited, but


it does show that you kind of we're executing our business plan. We are generating cash flow. Uh, and uh, you know, we are we are growing as a business, and you can see that in the numbers. So, that I think will be a nice data point for the market. uh the serio prefeasibility study should be out uh early December. Um and then uh from there you know drill results across the portfolio as I said those will have a steady stream of those. Uh the last thing that I think investors should watch for is we're planning to extend a


decline at Anapalola. Previous operators put in a 400 meter decline uh and then stop when the company was taken out for a different asset. uh we really want to get back in there uh now that we have certainty of cash flow from the rest of the portfolio uh push that into the or body start to uh derisk that and do some of the downplunge exploration at anal. So that's a little bit longer that will support both exploration and de-risking the path of production. So that's one that could generate a lot of news uh


through through next year. >> Yeah, absolutely. Well, thank you very much for taking the time to speak with me today. This is Steven Suk of Helioar and I'm Georgia Williams. I hope you enjoy the rest of your um conference. >> Thanks. You too. [music]