Starcore closes financing for San Martin acquisition (February 26, 2007)

Vancouver — Starcore International Ventures (SAM-V, SHVLF-O) stands poised to enter the producer’s league following closure of an $18.7-million financing earmarked for the acquisition of the San Martin gold-silver mine in Queretaro state, Mexico.

The non-brokered financing of 37.4 million subscription receipts at 50 apiece gives Starcore the funds to finalize its purchase of San Martin from Goldcorp (G-T, GG-N) subsidiary Luismin. Terms of the deal call for a cash payment of US$24 million to the major plus US$2 million in Starcore shares issued at 60 apiece.

In addition to the equity financing, Starcore recently secured US$13 million of debt financing from Investec Bank by way of a convertible loan plus a gold hedging agreement to support repayment terms. A maximum of 50% of projected gold output will be sold forward during the life of the loan.

San Martin consists of two underground mines that have been operated by Luismin since 1993. Operating figures for 2005 show average mill throughput of 856 tonnes per day with annual production of 32,819 oz. gold and 349,073 oz. silver. Recoveries of 92.4% and 56.7% were reported for gold and silver, respectively.

A recent independent technical report commissioned by Starcore reviewed proven and probable reserves of 894,615 tonnes grading 4.05 grams gold and 47 grams silver per tonne at San Martin. The cutoff grade was based on total operating costs of US$26.15 per tonne and used metal prices of US$400 per oz. for gold and US$6 per oz. for silver.

Additional inferred resources of 1.97 million tonnes of 3.83 grams gold and 63 grams silver have also been tabled for the San Martin deposits. The San Perdito deposit, located about 50 km west of the mine and also part of the acquisition, is estimated to contain about 1.125 million inferred tonnes grading 0.63 gram gold and 221 grams silver.

Starcore shares recently rallied to around $1.15, a new 52-week high, following closure of the financing and final shareholder approval of the San Martin mine purchase.