Starcore Reports Second Quarter Production Results
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On November 19, 2025, Starcore reported production results for the first fiscal quarter ended October 2025 (this corresponds to Q2 of their fiscal 2026 year). The year-to-date (six months) production was 3,991 gold equivalent (AuEq) ounces from 106,207 tonnes milled. Key metrics for the period were a gold grade of 1.4 g/t, silver grade of 13.66 g/t, gold recovery of 77.31%, and silver recovery of 51.94%.
The company attributed the lower metal production to ongoing processing challenges, specifically a "preg-robbing" effect caused by clay and contamination from carbon fines. To address these issues, Starcore states it has optimized its Carbon-in-Leach (CIL) plant, installed filter presses, and is constructing a cyanide destruction module. The COO, Salvador García, commented that the company will need to utilize different processing methods for multiple ore sources to produce profitable ounces.
This news is materially negative. It reveals that the severe operational issues reported in the previous quarter have not been resolved and, in some respects, have worsened.
- Declining Production: Based on the previously reported Q1 FY2026 production of 2,130 AuEq ounces (from the Sept 15, 2025 financial release), the current quarter's (Q2) production was only 1,861 AuEq ounces. This is a sequential decline of 13% and is significantly below the production levels of ~2,300 ounces per quarter seen in the second half of fiscal 2025.
- Persistent Operational Failures: In August and September 2025, management claimed the processing issues related to clays and "preg-robbing" were identified, being adjusted, and would be resolved. This report confirms the problems are persistent and ongoing, which severely damages management's credibility. The continued poor performance negates the optimism built around the new CIL circuit that was supposed to enhance recoveries and allow for the processing of higher-grade carbonaceous ore.
- Deteriorating Metrics: The reported year-to-date gold grade of 1.4 g/t and gold recovery of 77.31% are poor. For comparison, fiscal year 2025 saw an average gold grade of 1.58 g/t and recovery of 83.1%. The trend is negative on all key operational metrics.
- Unsustainable Costs: While costs for this quarter were not provided, the prior quarter (Q1 FY2026) had an All-In Sustaining Cost (AISC) of US$3,081 per ounce. Given that production and recoveries have declined further, it is highly probable that Q2 AISC will remain at unsustainable, cash-burning levels.
- Contradiction to Narrative: The stock price rallied significantly from March to October 2025 on a narrative of production improvements from the new CIL plant, a new high-grade silver project lease (Tortilla), and diversification into Africa. This operational update fundamentally undermines the core of that narrative, which was a turnaround at the San Martin mine.
The company's lifeline is the CAD $5 million financing that closed in late October. Without it, their cash position of just $863,000 as of July 31, 2025, combined with the operational cash burn, would have led to a liquidity crisis. While the financing provides breathing room, it does not fix the broken operation.
Starcore International Mines is a junior precious metals producer whose primary asset is the San Martin underground gold and silver mine in Queretaro, Mexico. The company has been focused on implementing a new CIL circuit to process previously unrecoverable carbonaceous ores to extend the mine life. Starcore is also attempting to diversify its portfolio with the recent lease of the past-producing San Juan Nepomuceno (Tortilla) silver project, also in Mexico, and a portfolio of gold exploration permits in Ivory Coast, which it intends to spin out into a separate company. The company's stated production guidance is approximately 10,500 AuEq ounces annually, a target it is on pace to miss significantly in fiscal 2026.