Starcore International Mines (SAM-T) hit a bottom at 13.5 cents at the end of a descent that began with the stock trading as high as 45.5 cents in October 2012. As the stock was finding its low, production was picking-up at Starcore’s San Martin Mine in Queretaro, Mexico. Through its wholly-owned subsidiary, Compañia Minera Peña de Bernal, S.A. de C.V., the San Martin Mine is the principle asset of Starcore. The mine has Proven and Probable Reserves totaling 705,998 tonnes at a grade of 2.53 grams gold/tonne and 23.6 grams silver/tonne. Additionally, an Inferred Mineral Resource is estimated at 1,005,000 tonnes at an approximate grade of 2.17 grams gold/tonne and 20 grams silver/tonne. The company is planning a 5,000-metre drill program this year to build upon previous drilling that shows additional mineralization outside the immediate mine and to expand on the resources.
During the 2013 calendar year, a total of 306,941 tonnes was milled at San Martin at an average grade of 2.66 g/t gold and 24 g/t silver, resulting in production of 24,425 gold equivalent ounces. That bested production in 2012 by 27 percent.
Impressively, this small miner posted solid profits in the fiscal first quarter ended October 31, 2013. Revenue for the quarter was $8.75 million. Earnings from mining operations were $3.12 million, or 36 percent of gross revenue. Net profits for the quarter were $2.3 million, or 2 cents per share, compared to a net loss of $346,000 in the year prior quarter. Investors will be looking for the results from the second quarter (which ended on January 31) because unlike some of its bigger brethren, the company is operating profitably. On that point, Starcore is trading at a paltry P/E ratio of only about 4:1, arguably a very low ratio.
If steady and increasing production is any barometer, it should have been another solid quarter at Starcore. The company said on Monday (and retransmitted on Tuesday) that 78,509 tonnes were milled at San Martin during the latest quarter at an average grade of 2.55 g/t gold and 21 g/t silver. This resulted in production of 6,028 gold equivalent ounces, representing a 21-percent improvement over the second quarter a year earlier.
It was the third straight quarter with production in excess of 6,000 gold equivalent ounces. In the first fiscal quarter, 6,920 gold equivalent ounces were produced. If the second half of the year matches the first half, production will rise by 6 percent from 2013 to 25,896 gold equivalent ounces.
The improved results are taking shares of SAM higher, including breaking through a technical resistance at 24.5 cents with the news this week. Shares are up 6.12 percent at 26 cents in early afternoon action on Tuesday, with a session high of 27 cents, the highest point for the stock since January 2013.
By: Dylan Sikes
AllPennyStocks.com |
