New Need for a Mining Reform

In today’s mining industry organic growth seems to be a thing of the past. Inorganic growth is one of the only ways to generate and sustain the required development companies need to remain competitive. “In the past two years, we have acquired two companies that have allowed us to continue building internally and organically,” shares Robert Eadie, President and CEO of Starcore International Mines. The company's first acquisition was the El Crestón molybdenum project in Sonora that had gone into bankruptcy, with the belief that it was an undervalued asset, which, once the commodity prices pick up again, can be a very lucrative business option. “We might find a company that specializes in molybdenum and we would focus on the gold by either selling or trading it,” he reveals.

The second acquisition was the El Altiplano processing plant, which needed financing and did not have the ability to raise funds. “When we acquired it, it had some drums and a couple of buildings,” Eadie boasts. “We built the facility from the ground up in the middle of the desert.” This processing plant will help small and medium sized miners convert their production into doré bars. However, there will be a steep learning curve for the small operators because according to Eadie, they expect more than just support to produce their product as they are accustomed to financial aid from the government. El Crestón is currently at the pre-feasibility stage, meaning there has been a large amount of engineering work carried out, which entailed approximately 50km of drilling. It is an advanced project missing only one more outstanding study before it is ready to go into production. “All the information from that project is digitalized, and as soon as the ejido issue we have there is resolved, then we can resume our activities,” Eadie explains.

Starcore is proud of its dry tailings stack with a relative moisture level of 20 percent that is installed at its San Martín mining operations. This is possible because the company extracts between 75-80 percent of the chemicals from waste for recycling. “Our mine is one of two in Mexico that recycle all the used chemicals, and people tend not to understand the concept until they see the innovation involved in the tailings,” Eadie comments. “Regarding operations, safety is a priority for us so we make sure that all procedures are followed.” Starcore also has a greenhouse to grow vegetables that are used in its kitchen daily, and the excess the mine accumulates is sold below cost to the people working at the mine. Additionally, Eadie shares that the operator negotiates with local retailers to ensure discounts for mine workers, which allows the mine to work as a family.

Eadie believes that the digital databases used by the company are not only making it more competitive but that this phenomenon is becoming an industry standard. Moreover, Starcore also uses lights with lithium batteries, creating greater efficiencies, an extended lifecycle, and very little wasted energy. “From a safety perspective, we are rolling out an initiative to identify each worker with a tag so we will be able to locate everyone underground,” he shares. “Finally, we have a trained rescue team that recently rescued two miners after the federal government requested our assistance in a mercury mine collapse.”

Eadie explains that Starcore brought litigation against the government after the mining tax was imposed, and he believes that the tax will be revoked. “I believe that the tax has affected the image of stability in the country, and when added to insecurity issues the country currently faces, this creates a negative perspective of Mexico,” he laments. “Mining companies like Starcore International have always aimed to provide sustainable growth for communities. Moreover, I do not believe that the government stepping into the process will help them.” He claims that compared to the oil and gas industry, mining accidents are insignificant. “Nevertheless, I understand the reason behind the imposition of the mining tax under the Energy Reform because this was needed to improve the country’s performance,” he concedes. “The Energy Reform is the turning point for the country in many ways but the authorities should also consider a mining reform."