In an exclusive preview of the 2019 edition, Mexico Mining Review, Salvador García, Director General and COO of Starcore International Mines gave his projections for the future of gold prices and suggests improvements that would make the the Mining Trust Fund more effective.
Q: To what extent do you believe gold prices will increase?
A: We believe they are set to go up throughout 2018. The problem we have identified with the gold price trend is its inherent fluctuation. We are gold and silver producers and, although both have suffered inconsistency in their variations, we maintain a great deal of confidence in both minerals. This price instability is challenging and complex to adapt to. The price levels of base metals such as copper, lead and zinc have remained suitable for our purposes, with greater stability compared to gold and silver. Our perception is that lead and zinc prices will continue increasing.
Q: How has Starcore modified its business strategy to position itself at the forefront of the industry?
A: In August 2017, we set in motion an intensive program of exploration and development, critical to maintain our San Martín mine within the expected production level and more importantly to prolong its lifecycle. To date, we are tripling the mine’s original development plans in terms of production capacity. These measures have brought about new reserves and better results in the short, medium and long terms.
Q: Sinaloa and Queretaro lack a mining track record. Why choose these locations to develop mines?
A: Attractive projects care little for territorial delimitations. As gold and silver producers, we are mandated to bring to life interesting projects, wherever they may be. We continuously scout for economically viable opportunities and have no preference to one state over another. For instance, we have our Altiplano plant in San Luis Potosi’s Matehuala municipality, where we treat precious metals concentrates. It is a strategic location to attract clients or concentrate suppliers to obtain gold and silver precipitates. Queretaro’s mine is 25 years old. Starcore acquired it in 2006 and we have worked there ever since. The state is magnificent in terms of security and economic development.
Starcore feels strongly supported by Queretaro’s government and have built solid relations with the state’s Colon municipality. As a source of employment, local communities are fully aware of the benefits that the mining industry in general and this mine have provided over the last 25 years.
Q: What impact has the tax had on community development?
A: We recognize the tax has provided infrastructure works to the visible benefit of local communities. Some aspects should be improved, however. Certain municipalities, such as Peñasquito’s Mazapil community of 1,500 inhabitants, or Cananea, receive close to MX$200 million per year, which is more money than they know what to do with as in some instances it exceeds the total budget of the municipality or even the state government. Some projects are also poorly planned, do not address the community’s direct needs or suffer from heavy regulation to get from the planning to the execution stage.
This is an exclusive preview of the 2019 edition of Mexico Mining Review. If you want to get all the information, plus other relevant insights regarding this industry, pre-order your copy Mexico Mining Review or access our digital copy of the 2018 edition.