Heliostar Metals (HSTR.V) recently closed the acquisition of the Mexican assets of Florida Canyon Gold and is now in a position to provide an official production guidance for the rest of this year.
The company now expects to produce 19,350-19,750 ounces of gold and 20,000-20,250 gold-equivalent ounces in the six month period between July and December. The anticipated all-in sustaining cost is approximately $1650-1750 per ounce so even if we would use the higher end of that range, the net margin using a gold price of $2,500/oz is approximately $750/oz for a net sustaining free cash flow of close to US$15M on a pre-tax basis (on the mine level basis, this does not include the corporate overhead).
As per the acquisition agreement, the production (and cash flow) is attributable to Heliostar Metals since the announcement of the acquisition on July 11th.
We have spent the past few days in Mexico with the Heliostar management visiting La Colorada and Ana Paula, and will publish our site visit report soon.
Disclosure: The author has a long position in Heliostar Metals. Heliostar is a sponsor of the website. Please read the disclaimer.
