Salvador García
Director General
COO of Starcore International Mines
View from the Top

Organic Growth Resource Optimization Stepping Stones for Success

Mon, 10/22/2018 - 16:43

Q: To what extent do you believe gold prices will increase?
A: We believe they are set to go up throughout 2018. The problem we have identified with the gold price trend is its inherent fluctuation. We are gold and silver producers and, although both have suffered inconsistency in their variations, we maintain a great deal of confidence in both minerals. This price instability is challenging and complex to adapt to. The price levels of base metals such as copper, lead and zinc have remained suitable for our purposes, with greater stability compared to gold and silver. Our perception is that lead and zinc prices will continue increasing.
Q: How has Starcore modified its business strategy to position itself at the forefront of the industry?
A: In August 2017, we set in motion an intensive program of exploration and development, critical to maintain our San Martín mine within the expected production level and more importantly to prolong its lifecycle. To date, we are tripling the mine’s original development plans in terms of production capacity. These measures have brought about new reserves and better results in the short, medium and long terms.
Q: Could you elaborate on your Letter of Intent to acquire Sinaloa’s Santa Fe property?
A: This property is located an hour away from Mazatlan in Sinaloa’s Rosario municipality. Global Kompas is undertaking the relevant PEA for this project, set to conclude by April 2018. The PEA will be decisive in our final decision to enter production. This project is quite advanced in terms of permitting, with the Environmental Impact Assessment granted, explosives use authorized and it is fully electrified. A third party will oversee the construction phase while we have yet to decide if we will cover the mine’s development or if we will use another contractor.
Q: Sinaloa and Queretaro lack a mining track record. Why choose these locations to develop mines?
A: Attractive projects care little for territorial delimitations. As gold and silver producers, we are mandated to bring to life interesting projects, wherever they may be. We continuously scout for economically viable opportunities and have no preference to one state over another. For instance, we have our Altiplano plant in San Luis Potosi’s Matehuala municipality, where we treat precious metals concentrates. It is a strategic location to attract clients or concentrate suppliers to obtain gold and silver precipitates. Queretaro’s mine is 25 years old. Starcore acquired it in 2006 and we have worked there ever since. The state is magnificent in terms of security and economic development.
Q: In these times of low prices and fiscal challenges, what can the mining industry learn from Starcore’s optimization?
A: Careful economic and human resource optimization is at the core of our optimization strategy as any slight change in any variable of our business model equation can have a snowball effect, whether positive or detrimental. We established a department for operational excellence where principles such as adequate use and cost optimization in explosives use, blast efficiency and day-to-day operations, scoop type or mining fundamentals, are always upheld, especially in the face of uncertainty.
Q: What is the next stage of Starcore’s growth?
A: While Santa Fe is the next project we will be focusing on to ensure our growth, we are also scouting for viable projects nationwide to continue growing. We are fully aware that a single operation is not sustainable in the long-term, so we are looking to expand our portfolio to another two or three and diversify. We have a couple of projects in the US, but we still consider Mexico as our main market and source for growth, despite the hurdles. Mexico has great potential and we only lack the proper incentives to regain the interest of both local and international investors of all sizes because our geological potential remains tremendous.