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SHVLF~ UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 6-K



REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934



For the month of September, 2020



Commission File Number 000-50922



STARCORE INTERNATIONAL MINES LTD.

(Translation of registrant’s name into English)



Suite 750 – 580 Hornby Street, Vancouver, B.C., Canada V6C 3B6

(Address of principal executive office)



Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.



Form 20-F [X] Form 40-F [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]




EXHIBITS



Exhibit No.

Description

99.1

Consolidated Financial statements for the three months ended July 31, 2020.

99.2

Management Discussion & Analysis for the year ended July 31, 2020

99.3

Certification of Interim Filings – CEO

99.4

Certification of Interim Filings - CFO



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





STARCORE INTERNATIONAL MINES LTD.



Date: September 14, 2020

By:



/s/ Gary Arca
Gary Arca
Chief Financial Officer













































Starcore International Mines Ltd.



Condensed Interim Consolidated Financial Statements



For the three months ended July 31, 2020



(Unaudited)















NOTICE TO READER OF THE UNAUDITED CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS















































The unaudited condensed interim consolidated financial statements for the three months ended July 31, 2020 have been prepared by and are the responsibility of the Company’s management. These financial statements have not been reviewed or audited by the Company’s auditors.







Starcore International Mines Ltd.

Condensed Interim Consolidated Statements of Financial Position
(in thousands of Canadian dollars) – (Unaudited)









July 31,

April 30,

As at



2020

2020









Assets















Current







Cash and cash equivalents



$1,257

$2,105

Amounts receivable (note 3)



1,863

2,250

Inventory (note 4)



1,584

1,663

Prepaid expenses and advances



378

282









Total Current Assets



5,082

6,300









Non-Current







Mining interest, plant and equipment (note 5)



34,141

35,302

Right-of-use assets (note 7)



1,573

1,844

Exploration and evaluation assets (note 6)



6,069

5,976

Reclamation deposits



165

165

Deferred tax assets



4,743

4,826









Total Non-Current Assets



46,691

48,113









Total Assets



$51,773

$54,413









Liabilities















Current







Trade and other payables



$3,136

$2,441

Current portion of lease liability (note 7)



579

617

Current portion of loans payable (note 8)



-

3,196









Total Current Liabilities



3,715

6,254









Non-Current







Rehabilitation and closure cost provision (note 9)



1,054

1,014

Lease liability (note 7)



896

1,083

Deferred tax liabilities



8,397

8,758









Total Non-Current Liabilities



10,347

10,855









Total Liabilities



$14,062

$17,109










The accompanying notes form an integral part of these condensed interim consolidated financial statements.

3





Starcore International Mines Ltd.

Condensed Interim Consolidated Statements of Financial Position
(in thousands of Canadian dollars) – (Unaudited)









July 31,

April 30,

As at



2020

2020









Equity















Share capital (note 10)



$50,725

$50,725

Equity reserve



11,349

11,349

Foreign currency translation reserve



3,476

4,732

Accumulated deficit



(27,839)

(29,502)









Total Equity



37,711

37,304









Total Liabilities and Equity



$51,773

$54,413



Commitments (note 12)



Approved by the Directors:



“Robert Eadie” Director“Gary Arca” Director


The accompanying notes form an integral part of these condensed interim consolidated financial statements.

4



Starcore International Mines Ltd.

Condensed Interim Consolidated Statements of Operations and Comprehensive Income
(in thousands of Canadian dollars except per share amounts) – (Unaudited)



For the three months ended July 31,



2020



2019







Revenues





Mined ore

$8,090

$6,389







Cost of Sales





Mined ore

(4,101)

(5,536)

Depreciation and depletion

(1,063)

(803)







Total Cost of Sales

(5,164)

(6,339)







Earnings from mining operations

2,926

50







Financing costs (note 8)

(66)

(139)

Foreign exchange loss

(476)

(30)

Management fees and salaries

(395)

(297)

Office and administration

(156)

(285)

Professional and consulting fees

(181)

(302)

Shareholder relations

(20)

(21)

Transfer agent and regulatory fees

(22)

(15)







Earnings (loss) before taxes and other losses

1,610

(1,039)







Other Loss







Sale of Altiplano (Note 5)

-

(36)





Earnings (loss) before taxes

1,610

(1,075)





Income tax recovery





Deferred

53

244







Earning (loss) for the period

1,663

(831)







Other comprehensive loss





Item that may subsequently be reclassified to income (loss)





Foreign currency translation differences

(1,256)

(338)







Comprehensive income (loss) for the period

$407

$(1,169)







Basic earnings (loss) per share (note 14)

$0.03

$(0.02)







Diluted earnings (loss) per share (note 14)

$0.03

$(0.02)










The accompanying notes form an integral part of these condensed interim consolidated financial statements.

5



Starcore International Mines Ltd.

Condensed Interim Consolidated Statements of Cash Flows
(in thousands of Canadian dollars) – (Unaudited)







For the three months ended July 31,





2020

2019











Cash provided by









Operating activities









Profit (loss) for the period





$1,663

$(831)

Items not involving cash:









Depreciation and depletion (note 5)





1,084

863

Discount on long-term debt (note 8)





15

29

Interest on long-term debt (note 8)





23

90

Income recovery





(53)

(244)

Sale of Altiplano (note 5)





-

36

Rehabilitation and closure cost accretion (note 9)





20

23

Share-based payments (note 10)





124

48











Cash inflow from operating activities
before working capital changes



2,876

14











Change in non-cash working capital items









Amounts receivable





181

935

Inventory





126

(379)

Prepaid expenses and advances





(88)

(53)

Trade and other payables





443

(1,193)











Cash outflow (inflow) from operating activities





3,538

(676)











Financing activities









Loan payment (note 8)



?

(2,999)

-

Interest paid (note 8)





(235)

(240)

Lease payment and accretion (note 7)





(175)













Cash outflow from financing activities





(3,409)

(240)











Investing activities









Investment in exploration and evaluation assets (note 6)





(121)

(135)

Purchase of mining interest, plant and equipment (note 5)





(262)

(433)

Proceeds from sale of Altiplano (note 5)





269

656











Cash (outflow) inflow from investing activities





(114)

88











Total increase (decrease) in cash





15

(828)











Effect of foreign exchange rate changes on cash





(863)

300











Cash, beginning of period





2,105

2,549











Cash, end of period





$1,257

$2,021























The accompanying notes form an integral part of these condensed interim consolidated financial statements.

6





Starcore International Mines Ltd.

Condensed Interim Consolidated Statements of Changes in Equity for the periods ended July 31, 2020, 2020 and April 30, 2020

(in thousands of Canadian dollars except for number of shares) – (Unaudited)











Foreign







Number of





Currency







Shares

Share

Equity

Translation

Accumulated





Outstanding

Capital

Reserve

Reserve

Deficit

Total















Balance, April 30, 2019

49,646,851

$50,725

$11,349

$2,835

$(25,873)

$39,036















Foreign currency translation differences

-

-

-

(338)

-

(338)

Loss for the period

-

-

-

-

(831)

(831)















Balance, July 31, 2019

49,646,851

50,725

11,349

2,497

(26,704)

37,867















Foreign currency translation differences

-

-

-

2,235

-

2,235

Loss for the period

-

-

-

-

(2,798)

(2,798)















Balance, April 30, 2020

49,646,851

50,725

11,349

4,732

(29,502)

37,304















Foreign currency translation differences

-

-

-

(1,256)

-

(1,256)

Loss for the period

-

-

-

-

1,663

1,663















Balance, July 31, 2020

49,646,851

$50,725

$11,349

$3,476

$(27,839)

$37,711



The accompanying notes form an integral part of these condensed interim consolidated financial statements.

7



Starcore International Mines Ltd.

Notes to the Condensed Interim Consolidated Financial Statements
(in thousands of Canadian dollars unless otherwise stated) - Unaudited



July 31, 2020



1.

Corporate information



Starcore International Mines Ltd. is the parent company of its consolidated group (the “Company” or “Starcore”) and was incorporated in Canada with its head office located at Suite 750 – 580 Hornby Street, Vancouver, British Columbia, V6C 3B6.



Starcore is engaged in exploring, extracting and processing gold and silver through its wholly-owned subsidiary, Compañia Minera Peña de Bernal, S.A. de C.V. (“Bernal”), which owns the San Martin mine in Queretaro, Mexico. The Company recently completed the sale of Altiplano GoldSilver S.A. de C.V (“Altiplano”), which owns the gold and silver concentrate processing plant in Matehuala, Mexico (see note 5).



The Company is also engaged in acquiring mining related operating assets and exploration assets in North America directly and through corporate acquisitions.



2.

Basis of preparation





a)

Statement of compliance



These unaudited condensed interim consolidated financial statements for the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These unaudited condensed interim consolidated financial statements, for the three month period ended July 31, 2020, have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting, and do not include all the information required for full annual financial statement.



These condensed interim financial statements should be read in conjunction with the Company’s April 30, 2020 audited annual financial statements.



The financial statements were authorized for issue by the Board of Directors on September 10, 2020.





b)

Basis of measurement



The consolidated financial statements have been prepared on a historical cost basis, except certain financial instruments, which are measured at fair value, as explained in the Company’s accounting policies discussed in note 3 of the Company’s April 30, 2020 audited annual financial statements.



The consolidated financial statements are presented in Canadian dollars, which is also the parent company’s functional currency, and all values are rounded to the nearest thousand dollars, unless otherwise indicated.

The preparation of consolidated financial statements in compliance with IFRS requires management to make certain critical accounting estimates. It also requires management to exercise judgment in applying the Company’s accounting policies. The areas involving a higher degree of judgment of complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 4 of the Company’s April 30, 2020 audited annual financial statements.





8



Starcore International Mines Ltd.

Notes to the Condensed Interim Consolidated Financial Statements
(in thousands of Canadian dollars unless otherwise stated) - Unaudited



July 31, 2020



2.

Basis of preparation – (cont’d)





c)

Basis of Consolidation



These consolidated financial statements include the accounts of the Company and all of its subsidiaries, which are entities controlled by the Company. Control exists when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from the entity’s activities. Subsidiaries are included in the consolidated financial results of the Company from the effective date of acquisition up to the effective date of disposal or loss of control. The Company’s wholly-owned subsidiary Bernal, along with various other subsidiaries, carry out their operations in Mexico, U.S.A. and in Canada.

All intra-group transactions, balances, income and expenses are eliminated, in full, on consolidation.



3.

Amounts receivable





July 31,

2020

April 30,
2020







Taxes receivable

$1,035

$1,152

Trades receivable

738

736

Sale of Altiplano (Note 5)

-

279

Other

90

83



$1,863

$2,250



4.

Inventory





July 31,

2020

April 30,

2020







Carrying value of inventory:





Doré

$678

$680

Work-in-process

79

185

Stockpile

12

43

Supplies

815

755



$1,584

$1,663







9



Starcore International Mines Ltd.

Notes to the Condensed Interim Consolidated Financial Statements
(in thousands of Canadian dollars unless otherwise stated) - Unaudited



July 31, 2020



5.

Mining interest, plant and equipment





Mining Interest

Plant and Equipment Mining

Plant and Equipment Altiplano

Corporate Office Equipment

Total













Cost













Balance, April 30, 2019

$68,430

$25,469

$2,046

$715

$96,660

Additions

1,613

251

-

10

1,874

Sale of Altiplano

-

-

(2,137)

-

(2,137)

Effect of foreign exchange

2,733

883

91

-

3,707













Balance, April 30, 2020

72,776

26,603

-

725

100,104

Additions

196

66

-

-

262

Effect of foreign exchange

(2,731)

(337)

-

-

(3,068)

Balance, July 31, 2020

$70,241

$26,332

$-

$725

$97,298



Depreciation























Balance, April 30, 2019

$43,936

$14,493

$-

$613

$59,042

Depreciation for the year

1,374

1,851

-

78

3,303

Effect of foreign exchange

1,814

643

-

-

2,457













Balance, April 30, 2020

47,124

16,987

-

691

64,802

Depreciation for the period

347

516

-

5

868

Effect of foreign exchange

(1,926)

(587)

-

-

(2,513)

Balance, July 31, 2020

$45,545

$16,916

$-

$696

$63,157













Carrying amounts











Balance, April 30, 2020

$25,652

$9,616

$-

$34

$35,302

Balance, July 31, 2020

$24,696

$9,416

$-

$29

$34,141



Sale of Altiplano Facility



In August, 2015, the Company acquired Cortez Gold Corp. in an all-share transaction completed pursuant to a court approved Plan of Arrangement under the Business Corporations Act (British Columbia), which owned Altiplano and its facility, which processes third party gold and silver concentrate in Matehuala, Mexico. The Company accepted an offer on July 5, 2019, to purchase 100% of the shares of Altiplano for US$1.6 million payable in quarterly installments to May 31, 2020 (full payment received). As a result, the Company recorded an impairment of $4,804 to the Statements of Operations and Comprehensive Loss during the year ended April 30, 2019, and $39 expensed to the income statement in the year ending April 30, 2020.



6.

Exploration and evaluation assets





a)

American Consolidated Minerals (“AJC”) properties



Toiyabe, U.S.A



Pursuant to the Acquisition of AJC, the Company acquired the rights to a 100% undivided interest in the Toiyabe property, subject to a 3% NSR, consisting of 165 mining claims located in Lander County, Nevada, United States of America , from MinQuest Ltd. (“MinQuest”), a mineral exploration and project development company.



10



Starcore International Mines Ltd.

Notes to the Condensed Interim Consolidated Financial Statements
(in thousands of Canadian dollars unless otherwise stated) - Unaudited



July 31, 2020



6.

Exploration and evaluation assets – (cont’d)



Toiyabe, U.S.A – (cont’d)



Consideration for the Toiyabe interest is USD$900 (payable over 5 years commencing October 19, 2018) and incurring total exploration expenditures of at least USD$1,025 on the property by October 19, 2018 (incurred) as agreed by MinQuest. Annual payments commencing October 19, 2018 are $60 (paid), $80 (paid), $100 (deferred to May 31, 2021), $120, $140 and $400 respectively.



The optionor has also granted the Company the right to purchase up to one-half of the NSR (or 1.5%) on the basis of USD $2,000 per each 1% of the royalty.



b)Creston Moly (“Creston”) properties



Pursuant to the Acquisition of Creston the Company has acquired the rights to the following exploration properties:



i)El Creston Project, Mexico



The Company acquired a 100% interest in the nine mineral claims known as the El Creston molybdenum property located northeast of Hermosillo, State of Sonora, Mexico, which has completed a Preliminary Economic Assessment on the property based on zones of porphyry-style molybdenum (“Mo”)/copper (“Cu”) mineralization. The mineral concessions are subject to a 3% net profits interest.



ii)Ajax Project, Canada



The Company acquired a 100% interest in six mineral claims known as the Ajax molybdenum property located in B.C.





AJC
Properties

Creston Properties

Total

Acquisition costs:







Balance, April 30, 2020 and July 31, 2020

$36

$2,001

$2,037

Exploration costs:







Balance, April 30, 2019

$1,860

$1,614

$3,474

Maintenance

147

280

427

Exploration cost

1

-

1

Foreign Exchange

-

37

37









Balance, April 30, 2020

$2,008

$1,931

$3,939

Maintenance

-

121

121

Foreign Exchange

-

(28)

(28)

Balance, July 31, 2020

$2,008

$2,024

$4,032

Total Exploration and evaluation assets







Balance, April 30, 2020

$2,044

$3,932

$5,976

Balance, July 31, 2020

$2,044

$4,025

$6,069















11



Starcore International Mines Ltd.

Notes to the Condensed Interim Consolidated Financial Statements
(in thousands of Canadian dollars unless otherwise stated) - Unaudited



July 31, 2020



7.

Leases



Effective May 1, 2019, the Company adopted IFRS 16 using the modified retrospective approach and accordingly the information presented for the year ended April 30, 2019 has not been restated. Comparative amounts for the year ended April 30, 2019 remains as previously reported under IAS 17.



On initial application, the Company has elected to record right-of-use assets based on the corresponding lease liabilities. Lease liabilities have been measured by discounting future lease payments at the incremental borrowing rate at May 1, 2019. The incremental borrowing rate applied was 8% per annum and represents the Company's best estimate of the rate of interest that it would expect to pay to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in the current economic environment. On adoption of IFRS 16, the Company recognized lease liabilities in relation its head office in Canada and machinery in Mexico. Using a discount rate of 8%, the Company recognized additions to right-of-use assets of $0 (April 30, 2020 - $2,302). The right-of-use asset was amortized on a straight-line basis of $216 (April 30, 2020 - $533) and there was a foreign exchange loss of $55 (April 30, 2020- gain of $75). The following is a reconciliation of the changes in the lease liabilities:



Starcore

Bernal

Total

Opening balance, April 20, 2020

$269

$1,430

$1,699

Additions

-

-

-

Lease accretion

5

27

32

Payments

(16)

(190)

(206)

Foreign exchange

-

(50)

(50)

Lease liabilities, July 31, 2020

$258

$1,217

$1,475





8.

Loans payable



Bonds



On June 10, 2020, the Company repaid secured bonds, due June 17, 2020, in the aggregate principal amount of $3,000 (the “Bonds”) plus outstanding interest calculated at 8% per annum, for a total payment of $3,235.



The Company issued 3,000,000 warrants to the bond holders as a fee, each warrant entitling the bond holders to acquire one share of Starcore at a price of $0.20, expiring on June 18, 2021. The Company determined a value of $171 on the warrants, which was included in the Discount, based on the Black-Scholes model using a then stock price of $0.017; a 3 year expected life; expected volatility of 56%; and, a risk-free rate of 1.45%.



Secured Loan



During the year ended April 30, 2018, the Company borrowed $1,282 (USD $1,000) (the “Loan”) which was secured against certain assets of the Company and carried interest at 8% per annum, compounded and paid annually. The interest on the loan was paid to the lender on October 25, 2019, and the lender agreed to extend the loan for additional 6 months to April 25, 2020. On April 25, 2020, the loan amount was repaid along with interest for a total repayment of US$1,040,000.








12



Starcore International Mines Ltd.

Notes to the Condensed Interim Consolidated Financial Statements
(in thousands of Canadian dollars unless otherwise stated) - Unaudited



July 31, 2020





8.

Loans payable – (cont’d)



Changes to the loans payable balance during the year ending April 30, 2020 and the period ending July 31, 2020 are as follows:



Principal

Interest

Discount

Total











Balance, April 30, 2019

4,341

377

(130)

4,588











Discount

-

-

115

115

Interest paid on bond

-

(514)

-

(514)

Interest accrual

-

349

-

349

Loan repayment

(1,411)

-

-

(1,411)

Foreign exchange adjustment

69

-

-

69











Balance, April 30, 2020

2,999

212

(15)

3,196











Discount

-

-

15

15

Loan repayment

(2,999)

-

-

(2,999)

Interest paid on bond

-

(235)

-

(235)

Interest accrual

-

23

-

23











Balance, July 31, 2020

$-

$-

$-

$-





July 31, 2020

April 30, 2020

Current

$-

$3,196

Non-Current

$-

$-









$-

$3,196



9.

Rehabilitation and closure cost provision



The Company’s asset retirement obligations consist of reclamation and closure costs for the mine. At July 31, 2020, the present value of obligations is estimated at $1,054 (April 30, 2020 - $1,014) based on expected undiscounted cash-flows at the end of the mine life of MXN$17,740 or $1,068 (April 30, 2020 - $1,028), which is calculated annually over 5 to 10 years. Such liability was determined using a discount rate of 8% (April 30, 2020 – 8%) and an inflation rate of 3.5% (April 30, 2020 – 3.5%).



Significant reclamation and closure activities include land rehabilitation, demolition of buildings and mine facilities, closing portals to underground mining areas and other costs. Changes to the reclamation and closure cost balance during the period are as follows:





July 31, 2020

April 30, 2020







Balance, beginning of period

$1,014

$1,254

Accretion expense

20

72

Foreign exchange fluctuation

20

(312)









$1,054

$1,014








13



Starcore International Mines Ltd.

Notes to the Condensed Interim Consolidated Financial Statements
(in thousands of Canadian dollars unless otherwise stated) - Unaudited



July 31, 2020



10.

Share capital





a)

Common shares



The Company is authorized to issue an unlimited number of common shares, issuable in series.



The holders of common shares are entitled to one vote per share at meetings of the Company and to receive dividends, which may be declared from time-to-time. All shares are ranked equally with regard to the Company’s residual assets.



During the period ended July 31, 2020, the Company did not issue any common shares.





b)

Warrants



A summary of the Company’s outstanding share purchase warrants at July 31, 2020 and April 30, 2020 and the changes during the period ended is presented below:





Number of warrants

Weighted average exercise price







Outstanding at April 30, 2020 and July 31, 2020

3,250,000

$0.21



During the period ending July 31, 2020, no new warrants were issued.



A summary of the Company’s outstanding share purchase warrants is presented below:



Number of

Exercise



Warrants

Price

Expiry Date

250,000

$0.30

March 7, 2022

3,000,000

$0.20

June 18, 2021







3,250,000

$0.21







c)

Share-based payments



The Company, in accordance with the policies of the TSX, was previously authorized to grant options to directors, officers, and employees to acquire up to 20% of the amount of stock outstanding. In January 2014, the Company’s shareholders voted to cancel the Company’s option plan and, as a result, the Company’s Board of Directors may not grant further options. The Company’s management and directors are reviewing alternative compensation arrangements for the Company’s employees and directors.



There were no options outstanding, for the periods ending July 31, 2020, April 30, 2020 and April 30, 2019.







d)

Deferred Share Units (“DSU”) & Restricted Share Units (“RSU”)



Effective August 1, 2016, The Board of Directors approved the adoption of a Restricted Share Unit and Deferred Share Unit Plan (the “RSU/DSU Plan”) as part of the Company’s compensation arrangements for directors, officers, employees or consultants of the Company or a related entity of the Company. Although the RSU/DSU Plan is share-based, all vested RSUs and DSUs will be settled in cash. No common shares will be issued.











14



Starcore International Mines Ltd.

Notes to the Condensed Interim Consolidated Financial Statements
(in thousands of Canadian dollars unless otherwise stated) - Unaudited



July 31, 2020



10.

Share capital – (cont’d)





d)

Deferred Share Units (“DSU”) & Restricted Share Units (“RSU”) – (cont’d)



RSU



The RSU plan is for eligible members of the Board of Directors, eligible employees and eligible contractors. The RSUs vest over a period of three years from the date of grant, vesting as to one-third at the end of each calendar year. In addition to the vesting period, the Company has also set Performance Conditions that will accompany vested RSUs.



The Performance Conditions to be met are established by the Board at the time of grant of the RSU. RSUs that are permitted to be carried over to the succeeding years shall expire no later than August 1st of the third calendar year after the year in which the RSUs have been granted and will be terminated to the extent the performance objectives or other vesting criteria have not been met. The RSU share plan transactions during the period were as follows:



Units

Outstanding at April 30, 2019

1,031,875

Expired

(701,875)





Outstanding at April 30, 2020

330,000

Expired

(220,000)





Outstanding at July 31, 2020

110,000



Management has determined that 50% of the RSU’s will be deemed payable on the vesting dates based on current performance criteria measures. As such only 50% of the previously granted RSU’s have been valued at fair value of $0.22 per share. The liability portion for the period ended July 31, 2020 is $21 (April 30, 2020 - $30) which has been included under Trades and Other Payables on the Statement of Financial Position. No RSU’s were granted in the current fiscal period.



DSU



The Company introduced a DSU plan for eligible directors. The DSUs are paid in full in the form of a lump sum payment no later than August 1st of the calendar year immediately following the calendar year of termination of service. DSU Awards going forward will vest on each anniversary date of the grant over a period of 3 years. The DSU share plan transactions during the period were as follows:







Units

Outstanding at April 30, 2019, April 30, 2020 and July 31, 2020





1,010,000



Based on the fair value of $0.22 per share, the Company has recorded a liability of $222 (April 30, 2019 - $90) under Trades and Other Payable on the Statement of Financial Position. No DSU’s were granted in the current year.



11.

Financial instruments



All significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the consolidated financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Cash and cash equivalents are carried at their fair value. There are no material differences between the carrying values and the fair values of any other financial assets or liabilities. In the normal course of business, the Company’s







15



Starcore International Mines Ltd.

Notes to the Condensed Interim Consolidated Financial Statements
(in thousands of Canadian dollars unless otherwise stated) - Unaudited



July 31, 2020



11.

Financial instruments – (cont’d)



assets, liabilities and future transactions are impacted by various market risks, including currency risks associated with inventory, revenues, cost of sales, capital expenditures, interest earned on cash and the interest rate risk associated with floating rate debt.





a)

Currency risk

Currency risk is the risk to the Company's earnings that arises from fluctuations of foreign exchange rates and the degree of volatility of these rates. The Company does not use derivative instruments to reduce its exposure to foreign currency risk.



At July 31, 2020, the Company had the following financial assets and liabilities denominated in CAD and denominated in MXN$:





CAD

MXN$







Cash

$256

$17

Other working capital amounts - net

(203)

9,553



At July 31, 2020, US dollar amounts were converted at a rate of $1.3411 Canadian dollars to $1 US dollar and MXN$ were converted at a rate of MXN$22.2841 to $1 US Dollar. A 10% increase or decrease in the US dollar exchange may increase or decrease annual earnings from mining operations by approximately $790. A 10% increase or decrease in the MXN$ exchange rate will decrease or increase annual earnings from mining operations by approximately $292.





b)

Interest rate risk



The Company’s cash earns interest at variable interest rates. While fluctuations in market rates do not have a material impact on the fair value of the Company’s cash flows, future cash flows may be affected by interest rate fluctuations. The Company is not significantly exposed to interest rate fluctuations and interest rate risk consists of two components:





(i)

To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk.





(ii)

To the extent that changes in prevailing market interest rates differ from the interest rates in the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk.





c)

Credit risk



Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is exposed to credit risk with respect to its cash and cash equivalents, the balance of which at July 31, 2020 is $1,257 (April 30, 2020 - $2,105).



Cash of $153 (April 30, 2020 - $953) are held at a Mexican financial institution, cash of $880 (April 30, 2020 – $905) is held at a US financial institution and the remainder of $224 (April 30, 2020 - $247) are held at a chartered Canadian financial institution; the Company is exposed to the risks of those financial institutions. The taxes receivable are comprised of Mexican VAT taxes receivable of $968 (April 30, 2020 - $1,073) and GST receivable of $67 (April 30, 2020 - $79), which are subject to review by the respective tax authority.





16



Starcore International Mines Ltd.

Notes to the Condensed Interim Consolidated Financial Statements
(in thousands of Canadian dollars unless otherwise stated) - Unaudited



July 31, 2020



11.

Financial instruments – (cont’d)





d)

Liquidity risk



Liquidity risk arises from the excess of financial obligations over available financial assets due at any point in time. The Company’s objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements. The Company accomplishes this by achieving profitable operations and maintaining sufficient cash reserves. As at July 31, 2020, the Company was holding cash of $1,257 (April 30, 2020- $2,105).



Obligations due within twelve months
of July 31,

2020

2021

2022

2023and beyond

Trade and other payables

$3,136

$-

$-

$-

Reclamation and closure obligations

$-

$-

$-

$ 1,068



The Company’s trade and other payables are due in the short term. Long-term obligations include the Company’s reclamation and closure cost obligations, other long-term liabilities and deferred income taxes. Management believes that profits generated from the mine will be sufficient to meet its financial obligations.





e)

Commodity risk



Mineral prices and marketability fluctuate and any decline in mineral prices may have a negative effect on the Company. Mineral prices, particularly gold and silver prices, have fluctuated widely in recent years. The marketability and price of minerals which may be produced and sold by the Company will be affected by numerous factors beyond the control of the Company. These other factors include delivery uncertainties related to the proximity of its resources to processing facilities and extensive government regulations related to price, taxes, royalties, allowable production land tenure, the import and export of minerals and many other aspects of the mining business. Declines in mineral prices may have a negative effect on the Company. A 10% decrease or increase in metal prices may result in a decrease or increase of $809 in revenue.



12.

Commitments and Related party transactions



Except as disclosed elsewhere in these interim condensed consolidated financial statements, the Company has the following commitments outstanding at July 31, 2020:





a)

The Company has shared lease commitments for office space of approximately $144 per year, expiring at various dates up to April 2025, which includes minimum lease payments and estimated taxes, but excluded operating costs, taxes and utilities, to expiry.



b)

The Company has a land lease agreement commitment with respect to the land at the mine site, for $132 per year which is currently being renegotiated. The Company also has ongoing commitments on the exploration and evaluation assets of approximately $260 per year increasing over the next 5 years for the AJC properties (see Note 9).



c)

The Company has management contracts to officers and directors totaling $450 per year, payable monthly, expiring in April 2022 and US$236 per year, payable monthly, expiring in August 2021.






17



Starcore International Mines Ltd.

Notes to the Condensed Interim Consolidated Financial Statements
(in thousands of Canadian dollars unless otherwise stated) - Unaudited



July 31, 2020



13.

Capital disclosures



The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders. The Company considers the items included in the consolidated statements of changes in equity as capital. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares through private placements, sell assets to reduce debt or return capital to shareholders. The Company is not subject to externally imposed capital requirements and there were no changes to the capital management in the period ended July 31, 2020.



14.

Earnings per share



The Company calculates the basic and diluted income per common share using the weighted average number of common shares outstanding during each period and the diluted income per share assumes that the outstanding vested stock options and share purchase warrants had been exercised at the beginning of the year.

The denominator for the calculation of income per share, being the weighted average number of common shares, is calculated as follows as 49,646,851 shares for July 31, 2020 and April 30, 2020. As at July 31, 2020 and April 30, 2020, all stock options and warrants outstanding were excluded from dilutive weighted average shares outstanding as they were anti-dilutive.



15.

Segmented information



During the period ended July 31, 2020, the Company earned all of its revenues from one customer. As at July 31, 2020, the Company does not consider itself to be economically dependent on this customer as transactions with this party can be easily replaced by transactions with other parties on similar terms and conditions. The balance owing from this customer on July 31, 2020 was $738 (April 30, 2020 - $736).









18



Starcore International Mines Ltd.

Notes to the Condensed Interim Consolidated Financial Statements
(in thousands of Canadian dollars unless otherwise stated) - Unaudited



July 31, 2020





15.

Segmented information– (cont’d)



The Company operates in three reportable geographical and one operating segment. Selected financial information by geographical segment is as follows:





Mexico





Canada

USA

July 31, 2020



Bernal

Cortez/

Altiplano

Other

Total





Total

Revenue















Mined Ore

$8,090

$-

$-

$8,090

$-

$-

$8,090

Cost of sales:















Mined Ore

(4,101)

-

-

(4,101)

-

?-

(4,101)

Depreciation

(1,063)

-

-

(1,063)

-

-

(1,063)

Earnings from operations

2,926

-

-

2,926

-

-

2,926

Corporate costs and taxes

(623)

-

(15)

(638)

(644)

19

(1,263)

Earnings (loss) for the period

2,303

-

(15)

2,288

(644)

19

1,663

Mining interest, plant and equipment

34,111

-

-

34,111

30

-

34,141

Non-Current Assets

38,107

-

3,186

41,293

3,189

2,209

46,691

Total assets

$42,329

$48

$3,388

$45,765

$3,789

$2,219

$51,773

















Mexico





Canada

USA

July 31, 2019



Bernal

Cortez/

Altiplano

Other

Total





Total

Revenue















Mined Ore

$6,389

$-

$-

$6,389

$-

$-

$6,389

Cost of sales:

?













Mined Ore

(5,536)

-

-

(5,536)

-

?-

(5,536)

Depreciation

(803)

-

-

(803)

-

-

(803)

Earnings from operations

50

-

-

50

-

-

50

Corporate costs and taxes

(172)

(9)

(7)

(188)

(665)

8

(845)

Sale of Altiplano

-

(36)

-

(36)

-

-

(36)

Mining interest, plant and equipment

34,298

-

-

34,298

88

-

34,386

Non-Current Assets

38,037

-

3,186

41,223

2,999

2,062

46,284

Total assets

$42,980

$102

$3,572

$46,654

$5,382

$2,116

$54,152





































19













MANAGEMENT DISCUSSION & ANALYSIS

For the period ended July 31, 2020







Directors and Officers as at September 11, 2020:



Directors:



Gary Arca

Robert Eadie

Jordan Estra

Salvador Garcia

Tanya Lutzke

Cory Kent

Ken Sumanik

Federico Villaseñor





Officers:



Executive Chairman, Chief Executive Officer & President – Robert Eadie

Chief Operating Officer - Salvador Garcia

Chief Financial Officer – Gary Arca

Corporate Secretary – Cory Kent





Contact Name:Gary Arca



Contact e-mail address:garca@starcore.com



TSX Symbol:SAM





Suite 750 – 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6

Telephone: (604) 602-4935 Fax: (604) 602-4936 e-mail. info@starcore.com website: www.starcore.com



Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 2



Form 51-102-F1





STARCORE INTERNATIONAL MINES LTD.



MANAGEMENT DISCUSSION & ANALYSIS

For the period ended July 31, 2020





1.

Date of This Report



This MD&A is prepared as of September 11, 2020.



This Management Discussion and Analysis (“MD&A”) should be read in conjunction with the unaudited consolidated financial statements of Starcore International Mines Ltd. (“Starcore”, or the “Company”) for the period ended July 31, 2020.



Monetary amounts throughout this MD&A are shown in thousands of Canadian dollars, unless otherwise stated.



This MD&A includes certain statements that may be deemed “forward-looking statements”. Such statements and information include without limitation: statements regarding timing and amounts of capital expenditures and other assumptions; estimates of future reserves, resources, mineral production and sales; estimates of mine life; estimates of future mining costs, cash costs, mine site costs; estimates of future capital expenditures and other cash needs, and expectations as to the funding thereof; statements and information as to the projected development of certain ore deposits, including estimates of exploration, development and production and other capital costs, and estimates of the timing of such exploration, development and production or decisions with respect to such exploration, development and production; estimates of reserves and resources, and statements and information regarding anticipated future exploration; the anticipated timing of events with respect to the Company’s minesite and; statements and information regarding the sufficiency of the Company’s cash resources. Such statements and information reflect the Company’s views as at the date of this document and are subject to certain risks, uncertainties and assumptions, and undue reliance should not be placed on such statements and information. Many factors, known and unknown could cause the actual results to be materially different from those expressed or implied by such forward looking statements and information. Such risks include, but are not limited to: the volatility of prices of gold and other metals; uncertainty of mineral reserves, mineral resources, mineral grades and mineral recovery estimates; uncertainty of future production, capital expenditures, and other costs; currency fluctuations; financing of additional capital requirements; cost of exploration and development programs; mining risks, risks associated with foreign operations; risks related to title issues; governmental and environmental regulation; and the volatility of the Company’s stock price. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements.



2.





Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 3



Overall Performance



Description of Business



Starcore is engaged in exploring, extracting and processing gold and silver through its wholly-owned subsidiary, Compañia Minera Peña de Bernal, S.A. de C.V. (“Bernal”), which owns the San Martin mine in Queretaro, Mexico. The Company is a public reporting issuer on the Toronto Stock Exchange (“TSX”). The Company is also engaged in acquiring mining related operating assets and exploration assets in North America directly and through corporate acquisitions. The Company has interests in properties which are exclusively located in Mexico, USA and Canada.



Financial Highlights for the period ended July 31, 2020:







Cash and short-term investments on hand is $1.3 million at July 31, 2020 compared to $2.1 million at April 30, 2020;





Gold and silver sales of $8.1 million for the period ended July 31, 2020 compared to $6.4 million for the period ended July 31, 2019;





Earnings from mining operations of $2.9 million for the period ended July 31, 2020 compared to $50 for the period ended July 31, 2019;





Earnings of $1.7 million for the period ended July 31, 2020 compared to a loss of $0.8 million for period ended July 31, 2019;





Equivalent gold production of 3,259 ounces in the period ended July 31, 2020 compared to production of 3,711 ounces in the period ended July 31, 2019;





Mine operating cash cost is US$929/EqOz for the period ended July 31, 2020 compared to cost of US$1,234/EqOz for the period ended July 31, 2019;





All-in sustaining costs of US$1,220/EqOz for the period ended July 31, 2020, compared to costs of US$1,465/EqOz for the period ended July 31, 2019;





EBITDA(1) of $2,502 for the period ended July 31, 2020 compared to $(86) for the period ended July 31, 2019.



Reconciliation of Net Income to EBITDA





For the period ended July 31,

2020

2019

Net income (loss)

$1,663

$(831)

Sale of Altiplano

-

36

Deferred income tax income

(53)

(244)

Interest

24

90

Depreciation and depletion

868

863

EBITDA

$2,502

$(86)

EBITDA MARGIN(2)

30.93%

(1.3)%



(1) EBITDA (“Earnings before Interest, Taxes, Depreciation and Amortization”) is a non-GAAP financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another Corporation. The Corporation uses this non-GAAP measure which can also be helpful to investors as it provides a result which can be compared with the Corporation market share price.



(2) EBITDA MARGIN is a measurement of a company’s operating profitability calculated as EBITDA divided by total revenue. EBITDA MARGIN is a non-GAAP financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another Corporation. The Corporation uses this non-GAAP measure which can also be helpful to investors as it provides a result which can be compared with the Corporation market share price.




Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 4



3.

Selected Annual Information



The highlights of financial data for the Company for the three most recently completed financial years are as follows:





Twelve months ended

April 30, 2020

Twelve months ended

April 30, 2019

Twelve months ended

April 30, 2018

Revenues

$24,820

$32,795

$27,807

Cost of Sales

(22,836)

(32,759)

(32,735)

Earnings (loss) from mining operations

1,984

36

(4,928)

Administrative Expenses

(4,396)

(4,284)

(5,291)

Allowance for receivables

-

(441)

-

Impairment of Mining Interest, plant and equipment

-

(4,804)

(6,713)

Loss on disposal of E&E asset

-

(82)

(1,013)

Write off Altiplano

(39)





Income tax (expense)/ recovery

(1,178)

(2,229)

5,945

Total loss







(i) Total loss

$(3,629)

$(11,804)

$(12,000)

(ii) Loss per share – basic

$(0.07)

$(0.24)

$(0.24)

(iii) Loss per share – diluted

$(0.07)

$(0.24)

$(0.24)

Total assets

$54,413

$57,005

$64,451

Total long-term liabilities

$10,855

$13,063

$10,609



4.

Results of Operations



Discussion of Acquisitions, Operations and Financial Condition



The following should be read in conjunction with the unaudited consolidated financial statements of the Company and notes attached thereto for the period ended July 31, 2020.



4.1San Martín Mine, Queretaro, Mexico



The San Martin Mine, located approximately 50 km east of the City of Queretaro, State of Queretaro, Mexico, consists of mining concessions covering 6,299 hectares and includes seven underground mining units and four units under exploration. Luismin (now “Goldcorp Mexico”) operated the mine from 1993 to January, 2007, when it was purchased by the Company. The Company expects to continue to operate the mine based on the current expected conversion of known resources, and exploration is able to maintain proven and probable reserves replacing those mined with new reserves, such that the total resource remains relatively constant from year to year.



Starcore has staked additional claims near its principal producing gold property, the San Martin gold mine, in Querétaro, Mexico. The geology department has completed a staking initiative that includes new claims to the west of the current mineral rights of the San Martin mine on private property, that holds exploration and development upside. The new surface area covers approximately 710 Ha. The Company has reduced its mineral rights on Ejido land by 7,403 Ha from the previous 12,992 Ha package due to limited mineral discovery potential and to compliment overall cost cutting strategies.






Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 5



Reserves



The Company completed a Resource estimate “RESERVES AND RESOURCES IN THE SAN MARTIN MINE, MEXICO AS OF SEPTEMBER 30, 2019”, as filed on December 2, 2019, prepared by Erme Enriquez. (the “Technical Report”), which is also available on the Company website www.starcore.com.



Starcore's updated mineral reserve and resource estimate for San Martin contains 14% higher tonnes with 5% lower grades compared to the previous reserve/resource estimate of 2018. This was largely due to Starcore using more conservative estimation parameters consistent with the reserve/resource estimates for the San Martin mine.



All assumptions are listed at the bottom of the reserve and resource table.





1. Reserve cut-off grades are based on a 1.66 g/t gold equivalent.

2. Metallurgical Recoveries of 88% gold and 55% silver.

3. Minimum mining widths of 1.5 meters.

4. Dilution factor of 20%.

5. Gold equivalents based on a 1:81 gold:silver ratio.

6. Price assumptions of $1300 per ounce for gold and $16 per ounce for silver.

7. Mineral resources are estimated exclusive of and in addition to mineral reserves.



Erme Enriquez C.P.G., BSc., MSc., is an independent consultant to the Company. He is a qualified person on the project as required under NI 43-101 and has prepared this technical information.



Production



The following table is a summary of mine production statistics for the San Martin mine for the three months ended July 31, 2020 and the comparable three months ended July 31, 2019 and the year ended April 30, 2020:

(Unaudited)

Unit of measure

Actual results

Actual results

Actual results

3 months ended

3 months ended

12 months ended

31-Jul-20

31-Jul-19

30-Apr-20

Mine production of gold in dore

thousand ounces

2.9

3.3

11.8

Mine production of silver in dore

thousand ounces

32.5

36.1

121.8

Total mine production – equivalent ounces

thousand ounces

3.3

3.7

13.1











Silver to Gold equivalency ratio



97.2

89.2

90.3











Mine Gold grade

grams/tonne

1.70

1.99

1.82

Mine Silver grade

grams/tonne

29.2

31.7

30.5

Mine Gold recovery

percent

88.8%

85.1%

87.7%

Mine Silver recovery

percent

56.5%

58.4%

54.4%











Milled

thousands of tonnes

59.1

60.8

229.8

Mine development, preparation and exploration

meters

1,973

1,867

7,744











Mine operating cash cost per tonne milled

US dollars/tonne

51

75

66

Mine operating cash cost per equivalent ounce

US dollars/ounces

929

1,234

1,149











Number of employees/contractors at minesite



240

303

248



Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 6





During the quarter ended July 31, 2020, the mill operated at a rate of approximately 642 milled tonnes/calendar day. Gold and silver grades during the quarter ending July 31, 2020 were 1.70 g/t and 29.2 g/t, respectively, compared to prior period comparable grades of 1.99 g/t and 31.7 g/t, respectively. Overall equivalent gold production from the mine during the period ending July 31, 2020 of 3,259 ounces was lower than the previous comparable period’s production of 3,711 due to planned production tonnage decrease to 59,098 tonnes compared to 60,822 during the prior comparable period and to lower ore grades, offset partially by slightly higher recoveries. Overall development meters have increased slightly in the current year, to 1,973 meters, compared to 1,867 meters in the prior period ended July 31, 2019. The development has been consistent with the current calendar year production tonnage budgeted.



Production cash costs of the mine for the three months ended July 31, 2020 were US$929/EqOz compared to US$1,234/EqOz in the prior comparable period ending July 31, 2019, which averaged US$51/t, due mainly to the planned 32% reduction of staff and related processing costs which were made and expensed in the first and second quarters of the prior year totalling approximately US$600,000. The mine plan has been developed to ensure the mine is properly developed and mined so as to ensure a constant supply of ore in accordance with currently planned production capacity and ore grades. Changes to the plan that may involve production and capital investment are continually being assessed by management. Currently, the Company is continuing underground exploration in order to identify higher grade ore zones and has allocated an adequate budget to support year-long exploration.



During the period ended July 31, 2020, the Company incurred approximately US$274 in mine capital expenditures, which includes mine development drifting and drilling, machinery and equipment leases and purchases, and construction and tailings dam remediation, compared to US$427 in the prior comparable period ending July 31, 2019.



4.2 Property Activity



San Martin properties – Queretaro, Mexico



The San Martin mine properties are comprised of mining concessions covering 6,299 hectares. In addition to the ongoing mine exploration and development that is currently being performed in development of the mine, management is continually assessing the potential for further exploration and development of the San Martin properties and continually modifying the exploration budget accordingly.



The mine operates three underground and one surface drill rigs to provide information to assist with mine planning in addition to exploration, with the intent of increasing the reserves and resources on the property, and the Company is budgeting targets of approximately 10,000 metres of underground development and exploration drilling in calendar 2020.



Salvador Garcia, Chief Operating Officer, is the Company’s qualified person under NI 43-101, and has reviewed and approved the scientific and technical disclosure on the San Martin Mine disclosed in this MD&A.



Santa Elena properties – Queretaro, Mexico



The Company has completed a surface exploration drilling program of 3,846 meters on the Santa Elena target next to our San Martin mine in Querétaro, Mexico. The Company conducted an exploration program consisting of 10 holes targeting the Santa Elena vein, which is thought to be a mirror of the San Martin vein(s), a typical epithermal gold-silver deposit characterized by low sulfation. While no economic resources have been determined, exploration continues on the target.



The structure of Santa Elena is a tabular body of silicified massive breccia of quartz between the shales in the foot wall with the limestone breached on the hanging wall. Both belong to the Soyatal Formation of the Upper Cretaceous. The mineralization at the San Martin mine was previously thought to be associated with a dome of rhyolitic composition, and that the structure was repeated towards the east portion of that dome. New studies have detected that mineralization is associated with the stratification of the rocks. The new geological model shows the similarity of Santa Elena and the current operation area of San Martin geometrically correspond to a classic anticline, with Santa Elena being the western part of the crease flank.




Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 7



Sale of Altiplano Processing Plant, Matehuala, Mexico



In August, 2015, the Company acquired Cortez Gold Corp. in an all-share transaction completed pursuant to a court approved Plan of Arrangement under the Business Corporations Act (British Columbia), which owned Altiplano and its facility, which processes third party gold and silver concentrate in Matehuala, Mexico. The Company accepted an offer on July 5, 2019, to purchase 100% of the shares of Altiplano for US$1.6 million payable in quarterly installments to May 31, 2020 (full payment received). As a result, the Company recorded an impairment of $4,804 to the Statements of Operations and Comprehensive Loss during the year ended April 30, 2019, and $39 expensed to the income statement in the year ending April 30, 2020.



American Consolidated Minerals Corp.



On December 1, 2014, the Company, by plan of arrangement, acquired American Consolidated Minerals Corp. (“AJC”). Pursuant to the acquisition of AJC, the Company acquired the right to properties, of which one is still owned and maintained as follows:



Toiyabe, Nevada, USA



The Company acquired the right to a 100% undivided interest, subject to a 3% NSR, in 165 mining claims located in Lander County, Nevada, United States of America (“Toiyabe”) from MinQuest Ltd. (“MinQuest”). Consideration to be paid for the interest is USD$900 (payable over 5 years commencing October 15, 2018) and the Company incur total exploration expenditures of USD$1,025 on the property (incurred) as agreed by MinQuest. Annual payments commencing October 15, 2018 are $60 (paid), $80 (paid), $100 (deferred to May 31, 2021), $120, $140 and $400 respectively. The optionor has also granted the Company the right to purchase up to one-half of the NSR (or 1.5%) on the basis of US$2 million per each 1% of the royalty.



During the period ending October 31, 2016, the Company completed Phase 1 drilling on the Toiyabe property. A total of 3,011 meters of RC/core were drilled in 15 holes. Shallow RC drill holes have identified a possible extension of the near-surface resource and the first deep core hole has identified high-grade gold mineralization (1.5 m of 12.9 g/t Au) at depth.



Reverse Circulation (RC) drilling, including two pre-collar holes, consisted of fifteen holes for a total footage of 2,537 meters. Core drilling totalled 474 meters in two holes. A summary of assay results received to date and a map of drill hole locations can be found on the Company website https://www.starcore.com .



Assays from T-1601C, the first deep core hole, show a broad mineralized zone from 254 to 294 meters (40 m) which averages 1.3 g/t Au. This zone includes 3 meters of 7.7 g/t Au (255.4-258.4 m) or 1.5 meters of 12.9 g/t Au (255’4-256.9 m). The mineralized intervals coincide closely with highly altered breccia within broad fault zones.



The RC program targeted a combination of resistivity high anomalies as well as offsets and extensions to mineralization associated with the Courtney fault zones. A near-surface NI43-101 resource of 173,562 contained ounces of gold was published in 2009. Fifteen of the initially proposed RC holes were completed for a total drilling footage of 2,537 meters. Seven of the fifteen RC holes were lost short of targeted horizons. Even with these drilling limitations, fourteen of the fifteen RC holes encountered anomalous gold values as shown in the table above.



All RC drilling samples are collected in 1.5 meter intervals, logged and securely shipped to ALS Chemex Labs Inc. in Reno, Nevada to be analyzed for gold and silver by fire assay. A second sample split is kept on site for possible re-testing or future metallurgy. Standards and blanks are included with the sample submittals and numerous repeat assays conducted. The core is logged, sample intervals marked on the core either in 1.5 meter lengths or geologic/structural breaks, sawed and half core assayed the same as the RC procedure mentioned above.



Paul D. Noland, Certified Professional Geologist (#11293) is the Qualified Person who has prepared and reviewed the technical information on the Toiyabe property in accordance with NI 43-101 reporting standards.











Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 8



Creston Moly



On February 19, 2015, the Company acquired all of the shares of Creston Moly from Deloitte Restructuring Inc. in its capacity as trustee in bankruptcy of Mercator Minerals Ltd. at a purchase price of CDN $2 Million. In June, 2011, Mercator Minerals Ltd. (“Mercator”), a TSX listed company, acquired Creston Moly in a cash and shares deal valuing Creston Moly at approximately $194 million. BMO Capital Markets, financial advisor to Creston Moly and its Board, provided a fairness opinion to the effect that the consideration (of $194 million) was fair, from a financial point of view, to the shareholders of Creston Moly.1 The most significant asset in this acquisition was the El Creston project in Sonora, Mexico which had been advanced to a completed Preliminary Economic Assessment ("PEA"). Creston Moly is a British Columbia company that owns, through its subsidiaries, a 100% interest in the following properties:



Ajax, British Columbia, Canada2

Ajax Molybdenum Property is comprised of 11,718 hectares and is located 13 km north of Alice Arm, British Columbia. The Ajax Property, one of North America's largest undeveloped molybdenum deposits occupying a surface area of approximately 600 by 650 metres, is a world class primary molybdenum property in the advanced stage of exploration.

El Creston Project, Sonora, Mexico3

The El Creston molybdenum property is located in the State of Sonora, Mexico, 175 kilometres south of the US Border and 145 kilometers northeast of the city of Hermosillo. In 2010, a PEA was prepared on the property based on zones of porphyry-style molybdenum (“Mo”)/Copper (“Cu”) mineralization by an independent consulting firm. The result of this study indicated that the El Creston molybdenum-copper deposit had a US $561.9million net present value after tax (using an 8% discount rate). The internal rate of return (after tax) was calculated to be 22.3% and a capital cost payback was calculated to be four years. Other highlights of the report include:





Large moly-copper deposit in a mining-friendly jurisdiction. Total Measured and Indicated Resources of 215 million tonnes grading 0.071% Mo and 0.06% Cu, containing 336 Mlbs Mo and 281 Mlbs Cu. Mineral resources that are not mineral reserves do not have demonstrated economic viability;





Initial Capital cost: US$655.9million with payback of 4 years, based on metal prices of $15/lb Mo and $2.60/lb Cu. Metal recoveries were estimated at 88% for Mo and 84% for Cu;





Low Operating Cost: operating cost of $US4.12/lb Mo, net of copper credits, 0.84:1 waste to ore strip ratio within an optimized pit containing an additional 7.6 million tonnes of Inferred Resources responsible for $20M of the NPV;





Excellent infrastructure: Road accessible with a 230kV power grid within 50 km;





Apart from the PEA, recommendations have been made to test known mineralization below the current pit-limiting “Creston Fault” where results such as drill hole EC08-54 returned 241.4m at 0.083% Mo and 0.059% Cu to a depth of 495m in the Red Hill Deep zone.

David Visagie, P.Geo., an independent consultant, is the Company’s qualified person under NI 43-101, and has reviewed and approved the scientific and technical disclosure on the El Creston Project disclosed in this report.







1

The information in this report relating to the acquisition of Creston Moly by Mercator has been drawn from documents filed under the Creston Moly Corp. issuer profile on SEDAR, more specifically: Creston’s Management Information Circular dated May 9, 2011 and filed on SEDAR on May 16, 2011, and Creston’s news release of June 6, 2011 as filed on SEDAR on June 7, 2011.

2

Technical information in this report relating to the Ajax Project is based on the NI 43-101 Resource Estimate Press Release entitled “Tenajon Announces 75% Increase in Indicated Molybdenum Resources at Ajax Project”, dated May 15, 2008 and the technical report entitled “Update of Resource Estimation, Ajax Property, Alice Arm, British Columbia”, dated April 18, 2007, both of which are filed under the Tenajon Resources Corp. issuer profile on SEDAR.

3

The technical information in this MD&A relating to the El Creston Project is based on the technical report entitled “Preliminary Economic Assessment, El Creston Project, Opodepe, Sonora, Mexico”, dated December 16, 2010, filed under the Creston Moly Corp. issuer profile on SEDAR.. Information regarding the effective date of the mineral resources, key assumptions, parameters and methods used to estimate the mineral resources, and known risks that materially affect the mineral resources can be found in the technical report.



Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 9



Impairment of Mining Interest



In determining the recoverable amounts of the Company’s mining interests, the Company’s management makes estimates of the discounted future cash flows expected to be derived from the Company’s mining properties, costs to sell the mining properties and the appropriate discount rate. The projected cash flows are significantly affected by changes in assumptions about gold’s selling price, future capital expenditures, changes in the amount of recoverable reserves, resources, and exploration potential, production cost estimates, discount rates and exchange rates.



4.3

Results of Operations



The Company recorded earnings for the period ended July 31, 2020 of $1,663 compared with loss of $831 for the comparative period ended July 31, 2019. The details of the Company’s operating results and related revenues and expenses are as follows:



For the period ended July 31,

2020

2019

Variance









Revenues







Mined ore

$8,090

$6,389

$1,701









Cost of Sales







Mined ore

(4,101)

(5,536)

1,435

Depreciation and depletion

(1,063)

(803)

(260)









Total Cost of Sales

(5,164)

(6,339)

1,175









Earnings from mining operations

2,926

50

2,876









Financing costs (net)

(66)

(139)

73

Foreign exchange loss

(476)

(30)

(446)

Management fees and salaries

(395)

(297)

(98)

Office and administration

(156)

(285)

129

Professional and consulting fees

(181)

(302)

121

Transfer agent and regulatory fees

(22)

(15)

(7)

Shareholder relations

(20)

(21)

1









Earnings (loss) before taxes and other losses

1,610

(1,039)

2,649









Other Losses







Sale of Altiplano

-

(36)

36









Income tax recovery







Deferred

53

244

(191)









Earnings (loss) for the period

$1,663

$(831)

$2,494









Overall, revenue from mining operations increased by $1,701 for the period ended July 31, 2020 compared to the comparative year ended April 30, 2019, due mainly to higher gold and silver prices, partial offset by lower metal production from lower tonnage and ore grade processed in the current period compared to the prior comparable period.



Sales of metals for mining operations for the period ended July 31, 2020 approximated 3,012 ounces of gold and 35,002 ounces of silver sold at average prices in the period of US$1,738 and US$17.40 per ounce, respectively. This is a decrease in sale of gold ounces and an increase in silver ounces when compared to the prior comparable period ended July 31, 2019 where sales of metal approximated 3,192 ounces of gold and 33,887 ounces of silver, sold at much lower average prices of US$1,382 per ounce for gold and US$15.17 per ounce for silver.





Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 10



The total cost of sales above includes non-cash expenses for depreciation and depletion of $1,063 compared to $803 in the prior comparable period ending July 31, 2019, which is calculated based on the units of production from the mine over the expected mine production as a denominator. This calculation is based solely on the San Martin mine proven and probable reserves and a percentage of inferred resources in accordance with the Company’s policy of recognizing the value of expected Resources which will be converted to Proven and Probable Reserves, as assessed by management. The increase is largely due to an increase in amortization of the leases on mobile equipment in accordance with the change to IFRS 16, offset partially by the reduction of production tonnage calculated over the total resource.



For the period ending July 31, 2020, the Company had gross profit of $2,926 from mine and concentrate operations compared to gross profit of $50 for the period ended July 31, 2019. The higher gross profit was due mainly to the cost savings measure taken in the first two quarters of the prior year, as discussed previously, whereby the Company reduced its staff by 125 people at the San Martin Mine incurring severance costs of approximately US$600,000 related to the staff reduction. Also, despite the combination of lower tonnes processed and lower recovery for gold, the higher overall metal prices during this period combined with the lower overall mine processing costs resulted in higher gross profit from mined ore.



Costs per ounce for the period ended July 31, 2020 was US$929/EqOz, which is much lower than the average operating cash cost of US$1,234/EqOz. during the comparable period ended July 31, 2019.



Other Items



Changes in other items for the year ended July 31, 2020, resulted in the following significant changes from the period ended July 31, 2019:







Financing costs during the period decreased by $73 primarily due to repaying the US$1,000 loan in the prior year fourth quarter and the repayment of the $3,000 principal of Bonds outstanding in June of this quarter;





Office and administration decreased by $129 due to lower corporate costs relating to general regulatory administration in the current year and due to the sale of Altiplano;





Management fees and salaries increased by $98 mainly due to the increase in RSU/ DSU liability accrued based on the increased price of the Company’s shares on the TSX;





Foreign exchange loss increased by $446 for the period ended July 31, 2020. The increase relates primarily to the fluctuations of the Mexican peso and Canadian dollar in relation to the US dollar, the functional currency of the mining operations, and may be realized or unrealized at the period end;





Professional and consulting fees decreased by $121 to $181 for the period ended July 31, 2020. Professional fees relate primarily to charges in relations to legal, tax and audit fees and decreased mainly due to costs related to the sale of Altiplano in the prior year;





Deferred Income Tax (“DIT”) decreased by $191 due mainly to the difference in asset base of the underlying amounts that determine the temporary differences from year to year.



Sustaining Costs



In conjunction with a non-GAAP initiative being undertaken within the gold mining industry, the Company has adopted an “all-in sustaining cash cost” (“AISC”) non-GAAP performance measure that the Company believes more fully defines the total costs associated with producing gold; however this performance measure has no standardized meaning. As the measure seeks to reflect the full cost of equivalent gold production from current mining operations, new project capital is not included in the calculation. This measure includes San Martin mining operations coupled with related capital costs. Accordingly it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The Company reports this measure on a sales basis based solely on sales of metal from the San Martin mining operations:



Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 11





(In Canadian Dollars unless indicated)

Sustaining Costs

(in 000’s)

Sustaining Costs Per Ounce

(in $/oz)

For the period ended July 31,

2020

2019

2020

2019











Total cost of sales cash costs1

$4,101

$5,536

$1,219

$1,553

Total corporate and administration cash costs1,2

753

920

224

258

Foreign exchange gain / (loss)

476

30

142

8

Reclamation and closure accretion

20

23

6

6

Sustaining capital expenditures and exploration

262

427

78

120











All-in sustaining cash costs

5,612

6,936

1,669

1,945

Foreign exchange adjustment

(1,509)

(1,715)

(449)

(480)











All-in sustaining USD cash costs

$4,103

$5,221

$1,220

$1,465











Total equivalent ounces sold

3,363

3,564







1 Excludes non-cash depletion and depreciation of $1,084 from cost of sales and from corporate and administration costs for the period ended July 31, 2020 (July 31, 2019: $803).

2 Includes share-based compensation of $124 for the period ended July 31, 2020 (July 31, 2019: $48).



The AISC of US$1,220/EqOz is lower than the prior period comparable amount of US$1,465/EqOz due mainly to the cost of reducing employees by 32% in the first and second quarters of the previous year in order to reduce production tonnage while processing higher grade ore.



Cash Flows



Cash inflow from operating activities was $3,538 during the period ended July 31, 2020, compared to a cash outflow of $676 for the comparative period ended July 31, 2019. Cash flows from operating activities were determined by removing non-cash expenses from the earnings and adjusting for non-cash working capital amounts. Financing activities resulted in an outflow of $3,409 due to the repayment of the Bonds and to lease payments and the associated interest. Cash outflow from investing activities was $114 due to the Company spending $262 on investment in mining interest, plant and equipment, $121 on investment in exploration and evaluation assets, offset by proceeds from the sale of Altiplano of $269. Overall cash decreased during the period ended July 31, 2020 by $848.



Investor Relations Activities



During the period ended July 31, 2020, the Company responded directly to investor inquiries.



Financings, Principal Purposes & Milestones



During the period ended July 31, 2020, the Company did not have any financings.



5.

Summary of Quarterly Results



The following is a summary of the Company’s financial results for the eight most recently completed quarters:



Q1

31-Jul-20

Q4

30-Apr-20

Q3

31-Jan-20

Q2

31-Oct-19

Total Revenue

$8,090

$6,352

$6,275

$5,804

Earnings (loss) from mining operations

$2,926

$885

$1,269

$(220)



Earnings (loss) for period

$1,663

$(1,758)

$22

$(1,062)



Per share – basic and diluted

$0.03

$(0.03)

$0.00

$(0.02)



Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 12





Q1

31-Jul-19

Q4

31-Apr-19

Q3

31-Jan-19

Q2

31-Oct-18

Total Revenue

$6,389

$6,897

$6,564

$8,711

Earnings (loss) from mining operations

$50

$(125)

$(131)

$(381)



Earnings (loss) for period

$(831)

$(1,880)

$(1,417)

$(8,126)



Per share – basic and diluted

$(0.02)

$(0.04)

$(0.03)

$(0.16)

Discussion

The Company reports earnings of $1,663 for the quarter ending July 31, 2020 compared to a loss of $831 in the comparative quarter ended July 30, 2019. For more detailed discussion on the quarterly production results and financial results for the quarter ended July 31, 2020, please refer to Sections 4.1 and 4.3 under “Results of Operations”.

6.

Liquidity and Commitments



The Company expects to continue to receive income and cash flows from the mining operations at San Martin (section 4.1). Management expects that this will result in sufficient working capital and liquidity for the Company for the next twelve months.



As at July 31, 2020, the Company had the following commitments:





a)

The Company has shared lease commitments for office space of approximately $144 per year, expiring at various dates up to April 2025, which includes minimum lease payments and estimated taxes, but excluded operating costs, taxes and utilities, to expiry.



b)

The Company has a land lease agreement commitment with respect to the land at the mine site, for $132 per year which is currently being renegotiated. The Company also has ongoing commitments on the exploration and evaluation assets of approximately $260 per year increasing over the next 5 years for the AJC properties.



c)

The Company has management contracts with officers and directors totaling $450 per year, payable monthly, expiring in April 2022 and US$236 per year, payable monthly, expiring in August 2021.

Obligations due within twelve months
of July 31,

2021

2022

2023

2024 and beyond











Trade and other payables

$3,136

$-

$-

$-

Reclamation and closure obligations

$-

$-

$-

$1,068



7.

Capital Resources



The capital resources of the Company are the mining interests, plant and equipment, with an amortized historical cost of $34,141 as at July 31, 2020. The Company is committed to further expenditures of capital required to maintain and to further develop the San Martin mine which management believes will be funded directly from the operating cash flows of the mine.



8.

Off Balance Sheet Arrangements



The Company has no off-balance sheet transactions.



9.

Transactions with Related Parties



N/A





Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 13



10.

First Quarter



Due to mine operating activity of the San Martin mine discussed throughout this MD&A and as detailed in Section 4.1, the operations and activities are similar to previous quarters which are discussed in Section 4.3 – Results of Operations.



11.

Proposed Transactions



N/A



12.

Critical Accounting Estimates



The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.



The effect of a change in accounting estimate is recognized prospectively by including it in the Company’s profit or loss in the period of the change, if it affects that period only, or in the period of the change and future periods, if it affects both.



Information about critical judgements in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the consolidated financial statements within the current financial period are discussed below:





a)

Economic Recoverability and Profitability of Future Economic Benefits of Mining Interests



Management has determined that mining interests, evaluation, development and related costs incurred which have been capitalized are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefit including geologic and metallurgic information, history of conversion of mineral deposits to proven and probable reserves, scoping and feasibility studies, accessible facilities, existing permits and life of mine plans.



b)Rehabilitation Provisions



Rehabilitation provisions have been created based on the Company’s internal estimates. Assumptions, based on the current economic environment, have been made which management believes are a reasonable basis upon which to estimate the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed regularly by management. Estimates are reviewed annually and are based on current regulatory requirements. Significant changes in estimates of contamination, restoration standards and techniques will result in changes to provisions from period to period. Actual rehabilitation costs will ultimately depend on future market prices for the rehabilitation costs, which will reflect the market condition at the time the rehabilitation costs are actually incurred. The final cost of the currently recognized rehabilitation provision may be higher or lower than currently provided for. The inflation rate applied to estimated future rehabilitation and closure costs is 3.5% and the discount rate currently applied in the calculation of the net present value of the provision is 8%.

c)Impairments



The Company assesses its mining interest, plant and equipment assets annually to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the fair value less costs to sell and value in use. These assessments require the use of estimates and assumptions such as long-term commodity prices, discount rates, future capital requirements, exploration potential and operating performance.



d)Income Taxes



Significant judgment is required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The company recognizes liabilities and contingencies for anticipated tax audit issues based on the Company’s current



Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 14



understanding of tax law. For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities.



In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses can be utilized. However, utilization of the tax losses also depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recuperated.



e)Mineral Reserves and Mineral Resource Estimates



Mineral reserves are estimates of the amount of ore that can be economically and legally extracted from the Company’s mining properties. The Company estimates its mineral reserve and mineral resources based on information compiled by Qualified Persons as defined by Canadian Securities Administrators National Instrument 43-101 Standards for Disclosure of Mineral Projects. Such information includes geological data on the size, depth and shape of the mineral deposit, and requires complex geological judgments to interpret the data. The estimation of recoverable reserves is based upon factors such as estimates of commodity prices, future capital requirements, and production costs along with geological assumptions and judgments made in estimating the size and grade that comprise the mineral reserves. Changes in the mining reserve or mineral resource estimates may impact the carrying value of mineral properties and deferred development costs, property, plant and equipment, provision for site reclamation and closure, recognition of deferred income tax assets and depreciation and amortization charges.



f)Units of production depletion



Estimated recoverable reserves are used in determining the depreciation of mine specific assets. This results in depreciation charges proportional to the depletion of the anticipated remaining life of mine production. Each item’s life, which is assessed annually, has regard to both its physical life limitations and to present assessments of economically recoverable reserves of the mine property at which the asset is located. These calculations require the use of estimates and assumption, including the amount of recoverable reserves and estimate of future capital expenditure. Changes are accounted for prospectively.



g)Shared-based Payments



The Company measures the cost of equity-settled transactions with employees, and some with non-employees, by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant.



This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share option, expected forfeiture rate, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in the notes.



13.

Changes in Accounting Policies



N/A



14.

Financial and Other Instruments



All significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the unaudited consolidated financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.



In the normal course of business, the Company’s assets, liabilities and forecasted transactions are impacted by various market risks, including currency risks associated with inventory, revenues, cost of sales, capital expenditures, interest



Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 15



earned on cash and the interest rate risk associated with floating rate debt.



Currency risk is the risk to the Company's earnings that arises from fluctuations of foreign exchange rates and the degree of volatility of these rates. The primary currency the Company exposed to is the United States dollar which is also the functional currency of the San Martin Mine. The Company does not use derivative instruments to reduce its exposure to foreign currency risk. At July 31, 2020 the Company had the following financial assets and liabilities denominated in CDN and denominated in Mexican Pesos:



In ‘000 of

CAD$

MXN$







Cash

$256

MP 17

Other working capital amounts - net

$(203)

MP 9,553



At July 31, 2020, US dollar amounts were converted at a rate of $1.3411 Canadian dollars to $1 US dollar and MP were converted at a rate of MP22.2841 to $1 US Dollar.



Other



15.1

Disclosure of Outstanding Share Capital as at September 11, 2020





Number

Book Value

Common Shares

49,646,851

$50,725



There are no options outstanding nor any granted subsequent to July 31, 2020.

The following warrants were outstanding and exercisable to purchase one common share for each warrant held:



Number of

Exercise



Warrants

Price

Expiry Date







250,000

$0.30

March 7, 2022

3,000,000

$0.20

June 18, 2021







3,250,000

$0.21





15.2

Disclosure Controls and Procedures



The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures. Based upon the results of that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by the Company in reports it files is recorded, processed, summarized and reported, within the appropriate time periods and forms.



Internal Controls Over Financial Reporting



The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, are responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision of the Chief Financial Officer, the Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of audited consolidated financial statements for external purposes in accordance with IFRS. The Company’s controls include policies and procedures that:







pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;





provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with IFRS; and



Starcore International Mines Ltd.

MD&A

July 31, 2020

Page 16







provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the annual consolidated financial statements or interim financial statements.

There has been no change in the Company’s internal control over financial reporting during the Company’s period ended July 31, 2020 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.



Limitations of Controls and Procedures



The Company’s management, including the Chief Executive Officer and Chief Financial Officer, believe that any disclosure controls and procedures or internal controls over financial reporting, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.



Form 52-109F2

Certification of Interim Filings

Full Certificate



I, Robert Eadie, Chief Executive Officer of Starcore International Mines Ltd., certify the following:

1.

Review: I have reviewed the interim financial report and interim management discussion and analysis (“MD&A”) (together, the “interim filings”) of Starcore International Mines Ltd. (the “issuer”) for the interim period ended July 31, 2020.



2.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.



3.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.



4.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.



5.

Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings





(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that





(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and





(ii)

information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and





(b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.



5.1

Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission.



5.2

N/A



5.3

N/A



1



6.

Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on May 1, 2020 and ended on July 31, 2020 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.



Date: 14th day of September, 2020





(sgd) “Robert Eadie”
Robert Eadie, Chief Executive Officer



2



Form 52-109F2

Certification of Interim Filings

Full Certificate



I, Gary Arca, Chief Financial Officer of Starcore International Mines Ltd., certify the following:

1.

Review: I have reviewed the interim financial report and interim management discussion and analysis (“MD&A”) (together, the “interim filings”) of Starcore International Mines Ltd. (the “issuer”) for the interim period ended July 31, 2020.



2.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.



3.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.



4.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.



5.

Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings





(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that





(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and





(ii)

information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and





(b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.



5.1

Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission.



5.2

N/A



5.3

N/A



1



6.

Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on May 1, 2020 and ended on July 31, 2020 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.



Date: 14th day of September, 2020





(sgd) “Gary Arca”
Gary Arca, Chief Financial Officer



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