News

May 10, 2012

Starcore Secures $11 Million Loan to Buy Out the Hedge

Vancouver, B.C. - Starcore International Mines Ltd. (“Starcore” or the “Company”) is pleased to announce that it has entered into an agreement dated May 10, 2012 with Sprott Resource Lending Corp. (“Sprott Lending”) pursuant to which Sprott Lending will provide the Company with an $11 million credit facility (the “Facility”), to be applied to settle Starcore’s forward sales contracts with Investec Bank plc (“Investec”).

The Facility bears interest at 11% per annum, compounded and payable monthly, with monthly principal payments to be made by Starcore commencing May 31st, 2012, with the final payment due on or before April 30, 2013. The Facility may be repaid in full without penalty after October 30, 2012. In consideration for the Facility, Sprott Lending was paid a structuring fee of $110,000 and issued one million common shares of the Company. The common shares are subject to a hold period expiring September 11, 2012. All amounts outstanding under the Facility will be repayable in the event of a change of control of the Company.

The Facility is guaranteed by the Company’s wholly owned subsidiary Compañia Minera Peña de Bernal, S.A. de C.V. (“Bernal”), and will be secured by a fixed and floating charge and specific registration over all of the assets of the Company and Bernal, including the San Martin gold and silver mine in Queretaro, Mexico, and a pledge of all of the shares of Bernal held by the Company.

The Facility will be used to repay outstanding gold forward sales contracts between Bernal and Investec originally entered into in January 2007, when Starcore acquired Bernal and the San Martin mine. Repayment of the outstanding contracts is expected to occur on May 11, 2012. Upon repayment of the forward sales contracts, the Company will be released from all commitments to Investec under the January 31, 2007 convertible loan acquisition facility agreement.

“The Company’s Board and management fully support the move to close out the hedge contracts to take advantage of the current gold market conditions as well as to allow the Company to move away from the restrictive covenants contained in our agreement with Investec that were limiting our ability to move forward,” said Robert Eadie, CEO and Interim President of Starcore. “The Company expects to generate significant cash flow in the future and will be in a position to utilize this cash to further advance exploration on our property with a view to increasing reserves and resources and future production at San Martin.”

ON BEHALF OF STARCORE INTERNATIONAL
MINES LTD.


Signed “Robert Eadie”
Robert Eadie, Executive Chairman, Interim President and
Chief Executive Officer

FOR FURTHER INFORMATION PLEASE CONTACT: Telephone: 1-604-602-4935
Toll Free: 1-866-602-4935 / Facsimile: 1-604-602-4936

The Toronto Stock Exchange has not reviewed nor does it accept responsibility for the adequacy or accuracy of this press release.

This press release includes certain statements that may be deemed “forward-looking statements”. All statements in this release, other than statements of historical facts, including the plans for the use of the net proceeds of the Facility are forward-looking statements. Although Starcore believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include fluctuations in the price of gold which result in the proceeds of the Facility being insufficient to cover the amount of the forward sales commitments, and general economic, market or business conditions. 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. For more information on the Starcore, investors should review Starcore’s Annual Information Form and annual Management Discussion & Analysis in Canada available on the SEDAR website at www.sedar.com. Starcore does not undertake any obligation to release publicly any revisions to any “forward-looking statement” to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Investors should not place undue reliance on forward looking statements.

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