Is Starcore about to get "discovered"? If any real money flows into this stock, it will go up
a lot.
The full list of Stonegate reports can be found here:
https://www.stonegateinc.com/SCP-Research-Reports.html Stonegate Capital Partners Initiates Coverage on Starcore International Mines Ltd. (TSX:SAM)
DALLAS, TX / ACCESSWIRE / September 8, 2021 / Starcore International Mines Ltd. (TSX:SAM): The full report can be accessed by clicking on the following link: https://stonegateinc.com/SAM.TO Initiation.pdf.
COMPANY DESCRIPTION
Starcore International Mines is engaged in precious metals production and exploration with a focus and experience in Mexico. The Company's principal property, the San Martin Mine, is located in Queretaro, Mexico, where it engages in extracting and processing gold and silver. The San Martin Mine is the company's primary source of cash flows. This base of producing assets is complemented by exploration and development projects throughout North America, including the El Creston project, the Teocuitla Claims, and the Ajax Project. The El Creston Project is located in Sonora, Mexico and hosts a porphyry-style molybdenum copper mineralization, The Teocuitla Claims are located in Sonora, Mexico, northwest part of the El Creston property and hosts similar mineralization, and the Ajax Project is an undeveloped molybdenum deposit in the advanced stage of exploration located in British Columbia, Canada. Starcore International Mines Ltd. was founded in 1980. The company was incorporated in 1980. The company was formerly known as Starcore International Ventures Ltd. and changed its name to Starcore International Mines Ltd. in 2008.
SUMMARY
Ongoing gold production - Starcore's flagship property, the San Martin Mine, produces silver and gold and generates cash flow, mining ~650 tonnes per day. It is estimated that the property contains a total of 267,306 Oz of AuEq with a current mine life of 10+ years.
Low risk exploration exposure - In addition to the principal producing property, Starcore also possesses 100% ownership interest in two additional properties: El Creston, a large molybdenum project located in Mexico, and the Ajax Molybdenum Project, a 1,718-hectare property hosting a porphyry molybdenum deposit.
Operational transformation - Starcore has been focused on streamlining its operations through strategic asset sales, increased workforce efficiency, and decreases in management salaries. As a result, the company has seen overall mine costs reduced from $74/t in FY19 to $60/t in FY20.
Simplified capital structure - The Company has no long-term debt, and currently has $4.4M in cash. Additionally, ~20% of shares are held by management and/or a strategic shareholder.
Responsible mining practices - The Company engages in socially responsible business practices and seeks to create initiatives that will encourage community development and pride. These initiatives are designed to sustain environmental sensitivity, inspire everyone to be mindful of the economic, environmental, and social issues that will impact the community's future.
Experienced management team - Collectively, Starcore's management brings over 100 years of experience to the business of mineral exploration and development and offers a unique combination of technical, geographic, and capital markets experience.
Valuation - We are using a DCF on our mine model for the San Martin mine. Using a 10% discount rate and incorporating a sensitivity analysis to gold prices we arrive at a valuation range of CAD$0.35 to CAD$0.50 with a mid-point at CAD $0.40. We note that we have not applied any value to additional non-producing assets, El Creston Project, Ajax Project, or its recently acquired Teocuitla claims, all of which would represent upside. See page 7 for further details.
About Stonegate Capital Partners
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.