All right. Hello, everybody, and thank you for joining us. I'm Steven Sook, Vice President, Investor Relations and Development for Heliostar Metals. Thanks for joining us for our Q3 Quarterly Update For The Results End of the Three Months on September 30th. With me today are CEO Charles Funk, our CEO Greg Bush, and our CFO, Vitalina Lysoun, all to present the results as we go through the deck. We will have an opportunity for Q&A as well, so please put your questions in the chat, and they'll be addressed at the end of the presentation. We will be making forward-looking statements over the course of this discussion, and you're welcome to review this in more detail at your leisure. Over to you, Charles, to give an introduction and take it from there.
Thanks, Steven. I think we can look quite proudly at what we've achieved as a company in Q3. We've met the promises that we'd made to ourselves and to the market. We grew our production profile. We sold that gold for a higher dollar-per-ounce price. That meant we generated more revenue. We were able to use that to continue to grow our exploration programs, significant spends across our assets in Ana Paula. We were able to deliver some pretty significant studies: the La Colorada Technical Report in the quarter and the Ana Paula study immediately after the quarter end. Our ambition, as it says here, is to still be a 500,000-ounce-a-year producer at the end of the decade. We think we have a pathway to get to nearly 300,000 of those organically with our current portfolio.
We have been working really hard to try and grow and bring forward that production profile with little to no equity dilution. This quarter really speaks to that plan. We have generated significant operating cash flow, and we have deployed that in the business such that we are able to spend the money we generate from our mines to expand production, to restart San Agustín, and to bring Ana Paula forward. We will talk a little bit about each of those steps throughout this presentation today. First, I will also hand over to Vitalina to go through the financial numbers for the quarter.
Thank you, Charles. Heliostar had another strong quarter. We produced 9,165 gold-equivalent ounces, and we sold 7,709 of them in the quarter. We had a realized sales price of $3,486 per ounce, which led to a $1,661 profit margin per each ounce, which is a fantastic result for the quarter. We continue having no debt at $35 million in cash, as well as just under 1,700 gold ounces at the end of the quarter. Next, please. Of the 7,709 gold-equivalent ounces that sold during the quarter, we had cash costs of $1,500 per each gold-equivalent ounce and AISC of $1,825, which is well within our guidance. This led to mine-operating earnings of $14.2 million in the quarter, and we continue to be in line with our guidance for the rest of the year.
We do expect our San Agustín AISC to increase to about the $3,000 mark over the last quarter of the year with the restart. We have started the restart, and we'll speak more to it in the presentation. Thank you.
Greg, if I can ask you to present the La Colorada in terms of the assets' performance, and then we'll talk about some of the steps forward. Greg, you're on mute.
Yeah. For the quarter, 4,500 or 5,500 equivalent ounces produced for the quarter, we continue to be in line with our guidance for the year. We had one lost-time incident recorded at La Colorada for the quarter. The stockpile that we're processing, it continued to, there've been no surprises on the grade. I'd say that during the quarter, the production was down a little bit in terms of tons processed just due to some weather-related outages on the general outages in Sonora with power. I guess the pleasant surprise at La Colorada has been the re-leaching that we've increased the cyanide concentration a bit in solution. The old areas of leach pad are continuing to surprise us. We're maintaining our 2025 guidance. We issued the technical report, the updated technical report for Creston and Veta Madre in Q3.
We expect to have all of our permits in Q1 to start on the Veta Madre pit. Also, with the higher gold prices, we're looking at an expanded version of that Veta Madre pit. Next slide, Steven. Do you want to take this, Charles?
I'll take that, Gregg, as I think touched on. The year-to-date plan for La Colorada had been Gregg and the team bedding down that production profile. We were looking for the best ways to maximize cash flow for minimum CapEx from the asset. The technical report that we put out really lays out that plan. We were able to restructure it to reduce the CapEx into about $44.5 million starting in Veta Madre, which we intend to start in Q1 next year. That study shows a six-year mine life producing just under 300,000 ounces of gold. It'll average just under 50,000 ounces. It is quite lumpy in the profile, but it'll average about 50,000 ounces of gold at a sub-$1,650 all-in sustaining cost. If you look at either the base case or the upside case, it's a very attractive project for us.
It's a credit to the team in how they've been able to find additional ounces with the drill program that we've done, be able to look for ways to maximize cash flow from the stockpile mining. That means we think we can fund the Veta Madre expansion from the cash flows we get at La Colorada and San Agustín. Through the back end of 2026, 2027, we see significant free cash flow generation from Veta Madre in particular. I think even more exciting, Steven, if we move the slide forward, is beyond that study, we identified an additional opportunity that we call Veta Madre Plus. What you're seeing here in the graphic is the current pit in gray on Veta Madre, then the study showing the pit in blue, a larger pit that supports the economics that I just explained. We recognized an opportunity in green.
There was a higher-grade zone. You can see it labeled there on the left-hand side of the graphic in the green area where the pit was pulled down either at a higher gold price or on these indicated resources. We're in the middle of a drill program just confirming those resources are there, regardless of these higher gold prices. We're very confident that we can pull a larger pit. We're doing a drill program based on a bit more resource drilling and a little bit of geotechnical work on a larger pit that would allow us to add about another 28,000 ounces to the pit into that reserve. We expect to complete that for a start of mining in late Q1, which means we'll see the first production from Veta Madre in Q4 next year.
We were very pleased with the economics that we see from Veta Madre, and we're working on a slightly additional opportunity, this Veta Madre Plus, which we think can generate even more cash flow. It kind of speaks to the potential of La Colorada. These resources are all still open at depth. There's considerable exploration upside beyond that. Looking forward at La Colorada, we expect consistent performance in Q4. We look to deliver the Veta Madre Plus improvement before we make the go decision next year. Next year, I think we can pivot to exploration upside. We think there's underground potential and exploration potential beyond the current mine plan. We will look to unlock that in 2027 beyond production and growth. Now, if we move forward to San Agustín, please, Gregg.
Okay. Yeah. San Agustín production certainly started to taper off in this quarter. Roughly 3,700 equivalent ounces from re-leaching activities on the leach pad. In our guidance, we were anticipating having production a little bit earlier than we're going to from the Amador corner. We'll be under the guidance from the new production, but we're certainly over our guidance for what we've gotten from re-leach. I think it's going to come out in the wash. There were no reportable incidents, either safety or environmental, for the quarter. I already mentioned the re-leaching mining activities. We expect to have the mining contractor on site next week or actually later this week. I expect them to be, I think they'll be working starting next week. We've got one of the two crushing lines already reconditioned. Yeah.
Yeah. I think we can talk to that, Greg. All the folks at San Agustín, and Greg and I were there last week seeing it firsthand. You can see on the image on the left, the vegetation and topsoil clearing underway in the corner area. The crushing circuit has gone through the maintenance steps that Greg talked about. We expect to be mining next week, crushing and stacking through December, and we do expect our first gold production at the end of December. It is pretty exciting for us at San Agustín to move from that tailing off residual production to a full-scale restart on this corner area. It is going to drive significant free cash flow. If you look at the $3,000 base case in our study, it is $40 million in cash flow. It is closer to $65-$70 million at current gold prices.
It generates a lot of free cash flow for us next year. I'll note, as we put out into the quarterly presentation, we've been relatively low- cost for Q1, Q2, and Q3 at both La Colorada and San Agustín. We do expect a material spike in cost at San Agustín related to the CapEx and the stripping before the gold starts coming, stripping and stacking before the gold starts coming out of the leach pad. Do not be surprised with a one-off higher cost in Q4. We expect that to stabilize to lower-cost operations again throughout 2027. It is great to be able to show the moving of the road, the moving of the power line, the stripping of the vegetation, and the preparation for restart in the crushing facility at San Agustín. We've also commenced drilling. We've drilled off the MKT area to the northwest.
We're near about to complete the phase three southwest area. There's a 10,000-15,000 meter drill program underway looking to expand the oxide footprint. The idea being that every quarter, every six months, every 12 months that we could add to the oxide life would be very beneficial for our free cash flow generation ahead of Ana Paula. It's going to be a tight window to get all those areas drilled off to get results back should they be successful, then to permit an expansion. We kind of kept our corporate discipline that we weren't going to invest here at San Agustín until we knew that we could expand the mine. Now that we are moving into the corner area, we're looking forward to seeing results early next year that will decide whether we see an expanded oxide mine life at San Agustín.
That drill program is well underway, been going for a couple of weeks, and we're making good progress at San Agustín. Now that San Agustín's restarted mining, it's great to see a bit of growth risk capital going into seeing if we can expand the cash flow that we can generate in Durango. The two operating assets are performing quite well. As we've always talked about as a company, we're using that cash flow to bring on Ana Paula as quickly and from a least dilution perspective as possible. Steven, I'll ask you to present where we've got to with the study and what that means for Ana Paula.
Thanks, Charles. Yeah, a few weeks ago, we put out our inaugural preliminary economic study on the underground project as we envision it for Ana Paula, showing what can only be described as phenomenal economics. Hitting 100,000 ounces a year production run rate after a ramp-up at an all-in sustaining cost, just a hair over $1,000 an ounce, which would put this mine in the bottom 13% of the global cost curve if it were operating today. We refer to this as a full-cycle asset where, regardless of the gold price or margin environment, Ana Paula will continue to produce significant amounts of cash flow once it's up and running. Base case economics show that cash flow at just under $100 million per year, supporting a three-year payback period at base case economics of $2,400 an ounce.
However, if you move that up to the upside case at $3,800 an ounce, it's more like $170 million, payback period under two years, and with an IRR north of 50% and a billion-dollar NPV. This, as Charles mentioned, is where we intend to put the cash generated from our ongoing operations to use to continue to drive growth in the company. With that growth, also providing us with a very high-quality asset once in production. We continue to advance this apace by looking forward to advancing the underground decline. There is 400 meters of established production scale decline here. Now that, as Charles mentioned, we've got certainty in the cash flow from San Agustín through 2026, we'll advance that as part of an early works program that'll allow us to get into the deposit and start to do those de-risking activities as well as additional drilling.
That should allow us to continue to investigate some of the further upside opportunity beyond what was shown in the PEA. As shown in the PEA, we have a very good 100,000-ounce-a-year mine for about a nine-year mine life that'll produce phenomenal economics over that time period from the upper reaches of this deposit. However, we do have good indications that it continues at depth with potential for much larger scale. Maybe I'll kick it over to Charles to kind of explain why we're excited to be able to get underground and start to investigate that.
Yeah. Thanks, Steven. In the quarter, we spent $3.9 million on Ana Paula. We expect that number to grow in Q4. We actually spent $6.4 million total on exploration and development, which is incredible that we can spend that money and advance these assets and still add cash to our balance sheet. That $3.9 million is focused on an inferred drill program. Today, we just announced that we're expanding that to a 20,000-meter drill program. We've got three rigs at site at the moment doing that work. You can see in the graphic on the bottom-` left as you look to the west or the graphic in the top- right as you look to the north. The core high-grade panel area is the bulk of the focus.
Today, we put out some exceptional drill results as we continue to convert inferred ounces to M&I, headline hole of nearly between 80 and 90 meters at just over 17 grams per ton. Ana Paula, the high-grade panel, is exceptional. We think that there's some opportunities around the margins to expand that, which is why we're doing these systematic sections of north to south holes. We also see a number of inferred zones around the high-grade panel. You can see a zone called the northern zone in the bottom left and an expansion zone at depth, which we're looking to be able to bring into the mine plan. What the real power of the study that we put out is, is showing that low AISC is a reflection of low costs. Low costs means that you can bring more lower-grade material into the mine plan and make money from it.
We recognize that if we can lower the cutoff grade from 2.5 grams to 2.1 grams, as the PEA envisages, then there's a lot more potential inferred material that can come into measured and indicated. That is why we've expanded the program to capture that material, to put more ounces into the feasibility study that we're working on. Steven, if you go back a slide and look at the resource chart from the PEA, there's currently over 500,000 inferred ounces that this current drill program is focused on converting. The bulk of the program is attempting to convert this 514,000 inferred ounces into the M&I category for the feasibility study. If you skip back forward, we are also doing a little bit of exploration drilling in this northern zone.
You can see as you step to the north of the main zones and the main workings or main planned workings, there's kind of these poorly defined zones that are a function of a lack of drilling and we believe might also be a function of east-west drilling for east-west mineralization and bodies of mineralization. The expanded program is to expand the inferred resource drilling, but also to look into this northern- zone and see whether we can have some exploration success to grow the resource there as well. We look forward to those drill programs and seeing whether we can grow that northern zone in particular. We think right now converting the inferred across is a great target. There's some really close proximal resource targets. There's exploration targets beyond that.
As Steven touched on, getting the decline down allows us to go deeper where we know the resource is open to depth. If you're looking at the neighboring deposits, that's where the bulk of their mineralization is. Focus systematically on what we can put into the FS, then looking for resource growth shallow beyond that, and then looking at depth is the plan for Ana Paula. That leads us to some of the sort of spends next year and the timeline. If we move forward, please, Steven. We're bulk of this year into the very beginning of next year doing that infill and step-out drilling. We're going to submit the permit to change from the open pit to the underground in Q1. The material we collect will give us the feasibility level metallurgical work. Principally, that's variability testing.
One of the nice things about Ana Paula is how consistent it is. From a feasibility perspective, we have multiple bulk samples that we can define the metallurgy across the life of mine. We have the funding with the progress we're making at San Agustín and La Colorada to advance the decline. We want to, in late Q2, restart and push that decline down. It is a lovely de-risking step for the asset that gives us the ability to do infill drilling, be able to put your hands on the ore body for confidence as we go through the mine plan, and then ultimately as a platform for that deeper drilling. In parallel, while we're pushing the decline down, while we've got the underground permit underway, we're going to be talking to our financing partners.
We think we can generate between $100 million and $150 million in cash flow before we build Ana Paula from our operating assets. We think we'll need somewhere in the order of $150 million-$200 million in project financing. The idea is to get to Q1 next year and have that all ready to make the construction decision such that we can be in commercial production in 2028 at Ana Paula. As you look at what that means more broadly for us as a company, we're in a very fortunate position that we can do a lot of things at once. Pleased to see that quarterly execution if I jump to the bottom with the Q3 results. We've been able to meet the promises that we've made to the market, and we expect to be able to do that going forward through the remainder of Q4 and next year.
We've got some big steps with the first ore at San Agustín in December, the Veta Madre approval for the restart in Q1. We've put out two of the three big NAV growth steps. We put out La Colorada, and we put out the first underground economics that Steven explained for Ana Paula. The next one we have to come, which we're aiming for December this year, is a PFS for Ceredigaya. Ceredigaya has been largely ignored in our portfolio. It's a historic 2.9 million-ounce resource that had very attractive economics at a $1,350 gold price. We are very much looking forward to bringing those out to current. I expect them to near double the resources we have as a company and shows considerably attractive economics for the mine that we plan to build after Ana Paula.
Because we've been able to have this cash flow, we haven't had to compromise. We're drilling actively at Ana Paula, at San Agustín, and La Colorada as we speak. We even did a small drill program at Unga in Q3 that we're residing results for. We expect to have more results from Ana Paula in December. We expect to see the first results from San Agustín in Q1. We expect the last of the stockpile results and the first of the Veta Madre plus results in Q1 at La Colorada as well. We've been able to kind of balance systematic performance as a company. That shows that we've been able to generate cash flow. We've been able to demonstrate that the value of La Colorada and Ana Paula is more than the analyst consensus had for us. I think we'll be in a similar position with Ceredigaya.
We have really attractive opportunities with the drill bit, be that more oxides at San Agustín, be that Veta Madre plus, be that drill results like we're able to put out today at Ana Paula and starting to layer in some exploration there. The mission stays the same as our company plan. It's to maximize the cash flow from our operating assets to bring Ana Paula online with little to no equity dilution. We still reserve the right to issue equity if it adds to our resource profile or if it brings production forward. We're being very disciplined with that plan. This news flow lays out what that'll look like through Q4 and next year. We've started the year where we thought maybe we'd need equity to execute our plan, and we found the junkyard stockpile.
That gave us the cash flow with San Agustín that we did not need to do that. We have had an incredible tailwind that we have been able to sell our gold for materially more than we thought we were going to at the beginning of the year. That has given us the ability to move a lot of things forward. It has meant that we have been able to fund the San Agustín restart from our balance sheet. We intend to fund the restart of Veta Madre and the decline next year from the cash that we are generating from opportunities. We may look at some project financing steps if we think that gives us more flexibility. Fundamentally, we do not believe that we need equity to do the decline at Ana Paula or to do the restart of the Veta Madre cut at La Colorada. It sets us up for a really strong 2026.
We look forward to continued performance from La Colorada in Q4. To repeat, we will have higher cost at San Agustín in Q4 due to that restart. That becomes a cash engine for us next year. We have really stabilized our production, and we are aggressively looking for ways to bring Ana Paula forward as quickly as we can. We have a unique opportunity that we are not constrained to financing in that we are using the cash flow to bring forward those steps. I think Q3 we can look back on as a very strong quarter, good- mine operating earnings, adding cash to the balance sheet, funding our expansion of our production that sets us up for next year, and really looking forward to bringing Ana Paula forward. I think the team, I congratulate our team internally and all the contractors and stakeholders that help us.
Steven, maybe turn it back for questions on any particular aspect of our quarter or forward plans.
Perfect. Thank you very much, Charles. As I mentioned, please, if you have any questions, type them into the Q&A box here, and we will attempt to address them. Our first one here is how much of the one-off sustainable CapEx to get San Agustín going will be spent in Q4, I believe, as opposed to if any was spent in Q3 and any to drip over into Q1. Maybe Charles and/or Vitalina best to answer that one.
Yeah. We did spend a little bit more in Q3, but mostly the spend will be constrained to Q4. I would personally like all of the, we think it's around about $10 million. The technical study is $4.2 million of direct costs, but that doesn't count keeping labor on for a period before it doesn't take the time before the leach pads get up to consistent production in Q1. Net net, we think we'll need about $10 million. I don't have a breakdown of how much of that will be in Q4 other than the vast majority of it will be. There might be a small bleed into Q1 next year, but from my perspective, we'll try not to do that because I'd rather have all the CapEx spend in Q4 so that we see the benefit of a return to normal AISC in Q1.
I would say we spent less than $1 million in Q3. We'll spend probably $7-$8 million in Q4 and around $1-$2 million, depending on whether there's any hangover next year, would be an approximate breakdown of that $10 million that we're going to spend to restart San Agustín.
Perfect. Thank you very much. We have a question here clarifying the increase in our AISC, mostly as respect to as it addresses our change in methodology and how we switched kind of from Q2 and what we included in our headline numbers for Q3. Maybe I can address this one. I think as we've now got operations at steady state through the first part of the year, we looked at what our peers were doing and the best way to represent our all-in sustaining costs. I wouldn't say we saw an actual uptick in unit operating costs. However, what we did do was include our expense to exploration as well as our corporate overhead G&A in our fully loaded AISC number, as is common across the industry. To clarify, our all-in sustaining cost guidance was more at the asset level.
We remained very much on track to achieve that by all metrics in quite a strong way. However, on a go-forward basis, we include these additional corporate items, which did show on a headline basis an increase in our AISC, let's say, but will kind of reset to an industry norm in Q3. That is how we intend to report going forward. Vitalina, I'm not sure if there's anything else you wanted to add.
Yeah, I'll add a little bit to that. As Steven said, we did add the corporate G&A as well as the stock-based compensation, which is fairly uniform throughout the industry in Q3 as opposed to what we had in Q2. In terms of expense to exploration, we actually had significantly more of that in Q3 than we did in Q2. That led to an increase in Q3 as well.
I think the key there is we probably made an ongoing start of the year. You could interpret we did not break our guidance down to cash cost by GEO and cash cost by gold ounce. A mistake that we will correct next year. You are actually looking at a co-product guidance here. If we had published it as byproduct as we did in Q2, it would look lower. I think Steven's point is right. The assets continued on quite nicely. It is a maturation of our business and trying to very clearly meet the guidance we put out in the start of the year for the way that we showed it.
I think the key thing is we are very comfortable that we are on track to meet our full year guidance from a cost basis and from a production basis this year.
Thank you both. I see no further questions here. Unless anyone has a last-minute addition, I think we'll call it for the day. Appreciate everyone's time logging on to hear us talk about our Q3 results and our go-forward plans through the rest of the year and beyond. Thank you, Charles. Thank you, Greg, and thank you, Vitalina, for your discussion and color and sharing with everyone our spectacular results for Q3.