STORY INLINE POST
Q: What factors have contributed to the company's success and its competitive advantages in this market?
A: Starcore has a modest position in Mexico due to our relatively low gold production volume, ranging from 1,000 to 1,500AuEq per month, which amounts to about 12,000-15,000AuEq/y. However, we have several competitive advantages. Firstly, we are a debt-free company, consistently generating profits month after month for the past five years, which is significant for any business. Another crucial factor is our highly capable and proven workforce. Additionally, we operate only one mine, San Martín, located in Queretaro, just five minutes from Peña de Bernal. The region is conflict-free and one of Mexico's safest areas. This safety aspect is of utmost importance nowadays.
Q: What were the key reasons behind Starcore's decision to terminate its US reporting obligations? How does this decision align with the company's overall strategy?
A: The company faced a significant administrative burden, perhaps even greater when making filings in the US, as there were few investors interested in the company within that jurisdiction, making it less relevant. With changes in reporting platforms, the costs increased by around US$60-70,000 annually due to higher expenses for the reports, climbing to over US$100,000 given the required operational reports, such as the 43.101 report and related filings. These operational requirements led to a total cost of over US$200,000 per year. Considering the minimal benefits for the company and the limited number of investors in the US, we decided to terminate our presence there.
Q: What are the benefits and improvements that have resulted from investing in advanced technology, specifically in terms of operational efficiency and productivity?
A: Two years ago, we started using a well-known software called Leap Pro for geological modeling of mineral bodies, which has brought us significant benefits. Our geologists now have a better interpretation of mineral bodies, which is crucial for exploration to identify extensions and new deposits. It has truly been instrumental.
We are open to adopting new technology. We have an upcoming battery project to store electricity during off-peak hours. We consume electricity from CFE and during peak hours, from 6 p.m. to 10-11 p.m., the rates are very high. The plan is to store cheaper energy during low-cost periods and use it during peak hours, which could result in substantial savings — estimated at 40%. Since electricity represents 12% of our total operational costs, this optimization could lead to significant cost savings.
Q: Your 4Q results mention the possibility of future mergers with smaller mines near San Martin. What opportunities have you detected?
A: Starcore has a promising outlook and it is seeking projects near its mine to expand. There are many small miners in close proximity that have approached us recently. With current price levels at US$25/oz for silver and US$1,970/oz for gold, mergers are highly attractive. We already have a plant that has been operating for 30 years, so people are approaching us and we are considering the possibility of additional growth beyond our current mine.
The company could potentially collaborate with some of these small miners and it is closely examining three areas, two of which are located two hours from the mine, in the municipality of San Joaquin, Queretaro, and the other in Pinal de Amoles.
Q: How does Starcore demonstrate its commitment to sustainable practices within the mining industry?
A: There is a UN program in collaboration with the Ministry of Economy to measure the sustainability or best practices of companies, based on the 2030 guidelines implemented by the federal government here in Mexico. Five companies, including mines and projects, were chosen to participate in this sustainability pilot plan. We have already gone through the project and although the results have not been disclosed yet, we were in a process of change that lasted about six months. During this time, we received visits and filled out questionnaires for the evaluation.
Q: What are some examples of social responsibility programs or contributions to local development that Starcore has undertaken to benefit the communities in which it operates?
A: As part of our social responsibility and commitment to contribute to the local development of the community where we operate, we have implemented an education program in collaboration with the National Institute for Adult Education (INEA). Through this program, several of our workers and members of the community are pursuing primary and secondary education.
Additionally, we offer the CONEVyT program, which provides training and educational opportunities, including high school and university studies, for those who wish to continue their education. Moreover, our ICATE programs aim to provide alternative employment options beyond mining-related jobs. These diverse programs cater to both men and women and cover a variety of fields, such as makeup, culture and beauty, baking, as well as blacksmithing and electrical work. Many individuals rely on this training to start their own businesses and they are closely connected to the jobs we create in the mine, resulting in a win-win situation.
We embrace the circular economy through our local supplier program. We engage with small contractors that offer different services to the company, such as meals and accommodation for workers in the mining area. These local suppliers are often community members, which contributes to creating local employment opportunities.
Overall, our inclusive social responsibility initiatives extend not only to the immediate community but also to the broader region in which we operate.
Q: What is Starcore's growth strategy and what plans does the company have for expanding its mines or undertaking new projects in the near future?
A: Starcore is searching for other projects throughout Mexico and has visited projects in Durango and Jalisco to expand its operations. The company is highly interested in expanding because prices are very attractive and the company believes this will continue due to ongoing global developments. With an increasing population, there will always be a higher need for resources and metals are becoming even more in demand.
Starcore International Mines deals in precious metals production with a focus on Mexico. Its base of producing assets is complemented by exploration and development projects throughout North America.