The case for Starcore First of all, it is a mistake to presume that a so-called "small" mine won’t make big money in a PM bull market. Quite the contrary. Smallness or bigness is a concept that only matters relative to market cap for an investor. To explain what I mean, if you buy Starcore (say) for a 3x multiple and it later trades at a 30x multiple (as it actually did in 2016), then you've made 10x. And that's simply looking at increase on multiple in the frenzy of a miner bull market, not the increase in share price relative to multiple on the basis of an increased price in the underlying product (gold and silver).
The Starcore financials are ridiculously good, once you accept the risks inherent in any junior mining stock. As tovitekovich says: "Net income for the fiscal year per share is $0,06, so in other words, Starcore is trading currently at a price to earnings ratio of 4.33. Total cash on hand is $4.4 million Canadian dollars as of April. Total shareholding in IM exploration is 4,100,000 shares currently valued at $650,000. So cash and indirect cash we are standing at $5,000,000."
That share-structure is also ridiculously good: see the Investor’s Presentation. 49,646,851 issued and outstanding, but only 49,896,851 fully diluted; a mere 250,000 warrants!
https://starcore.com/site/assets/files/5921/starcore_presentation_july_2021.pdf
As @22882288 says: “I for one am completely shocked that the bond holders did not exercise their warrants which were well in-the-money during the holding period and even near expiration. They left quite a bit of money on the table! We as shareholders should consider this as a very generous donation by them.”
https://ceo.ca/sam?dc08bf426b04
Presumably, exploration will be funded with production rather than dilution, since there appears to be no real need for dilution.
Some people have been scared away from Starcore because Eric Sprott sold some of his shares a while ago. However as @fasttrack says: “He didn't sell "uncontrollably," it was parcels of varying size over several months. The stock price was 25c when he started and 33c when he finished. Over that period, the stock price tracked GDXJ very closely. People exaggerate Sprott a lot. FYI, Sprott has 12%, management and Italpreziosi have about 15%.”
https://ceo.ca/sam?8643c1906b34
The flagship asset of Starcore, as is well known, is San Martin, a gold-silver property in Mexico. It does not have a massive proven reserve; but @Fasttrack insists that "processed ore is progressively replaced by in-mine exploration drilling: this has been going on for 20 years. San Martin has consistently had a 10+ year mine life in front of it in the several decades it's been operating.”
https://ceo.ca/sam?ba9bfe0b7a86
But Starcore is not simply San Martin. They have a molybdeum property, also in Mexico, called El Creston, acquired for a mere $2 million after the bankruptcy of the previous owner, who had paid $194 million for it four years earlier. @Fasttrack points out: “Moly prices have doubled in the last few months, and I only just realized. Price/lb is now around $19, up from around $9 last year, which would give Starcore's El Creston deposit an NPV of almost exactly $1bn, based on the old PEA.”
https://ceo.ca/sam?769c40714ffa
Officially, El Creston is molybdeum/copper. But the company thinks that there might be gold there, which was not discovered simply because previous owners never went looking for it. The CEO gives his intention to drill for gold at El Creston here:
https://youtu.be/NCmjYr4JShA?t=545
The company also has 100% interest in a (Canadian) property, Ajax Molybdenum. So some kind of jurisdictional exposure outside of Mexico. It doesn’t get any mentions on ceo.ca, not sure why.
https://starcore.com/en/operations/exploration-for-joint-venture/ajax-molybdenum-project/
"The property is located on the eastern flank of Mount McGuire, 60 km south of Stewart, B.C., 15 km northeast of Alice Arm. Alice Arm, a summer hamlet, is located on the north side of the east arm of Observatory Inlet. Kitsault, a semi-abandoned townsite located on the south side of the arm is on the B.C. Power Grid. There is good road access between Kitsault and Terrace 100 km to the south. In the 1960’s, there was a tote road from Alice Arm to the property that is no longer usable. Access is presently by helicopter."
This is the general case for molybdenum:
"Molybdenum has a very high melting point, which enables it to form strong, stable carbon compounds in alloys such as steel. The vital role that molybdenum plays in aircraft, nuclear power and other industries ensures that the commodity will remain an important one on the world stage.”
Other uses for molybdenum are "A catalyst in refining petroleum products, filament materials in electronics, fertilizers, and lubricants.”
"Several important catalysts for molybdenum prices could occur in China. If the nation puts stricter curbs on molybdenum production, then supplies could become constrained and prices would likely rise. Similarly, China will almost certainly play an important role on the demand side of the equation. If industrialization and urbanization expand in the country, demand for engineering steels will pick up again, and this should lift molybdenum prices. Traders should pay careful attention to Chinese molybdenum inventories and economic growth for clues about the direction of prices."
“https://commodity.com/precious-metals/molybdenum/
Starcore also owns 1/4th of the shares in another company, IM Exploration, which has the Toiyabe gold project. You have to go to https://www.imexploration.ca/ to learn about it. Toiyabe is in Nevada USA, near the Cortez Hills mine of Barrick Gold and has 173,000 ounces of gold.
"The Project is comprised of 165 contiguous unpatented mining claims totalling approximately 3,300 acres, and is located 125 kilometers south-southwest of Elko, Nevada, on the Battle Mountain - Eureka Trend. This 280 by 40-kilometer corridor is known for being one of the most prolific gold mining districts in the world, and hosts multiple large Carlin-style deposits. The Project is 14 kilometers south of Barrick and Newmont's Cortez Mine and 22 kilometers south of Barrick's North Pipeline Mine, two of the largest on the trend. In the immediate property area, the Project is adjacent to First Mining Gold's Turquoise Canyon Project (currently under option to Momentum Minerals Ltd.) to the east, and Barrick's past-producing Toiyabe Mine to the south."