Miner combines cash-flowing production with potential exploration growth in Mexico

Disseminated on Behalf of: Luca Mining Corp.

• Aspiring mid-tier mining companies usually need to strike a balance between producing metal and exploring for more of it
• Luca Mining is busy both optimizing throughput at its two Mexican mines and actively drilling them to grow resources
• Luca Mining’s game plan positions the company to pay off debt and outperform peers in a volatile market

Relatively few metal deposits globally become operating mines, and those that do become mines can struggle to achieve profitability.

Mining is a tough business, and getting mines to consistently achieve cash flow is no easy task. That’s why those that persevere and run mines that generate profits often get rewarded by investors.

In metals production, there is often a need to expand resources to feed the ore-hungry mills at those mines. This growth most often comes through drilling on and around the mines to outline additional resources.

This situation is exactly the one Luca Mining Corp. (TSXV: LUCA | OTCQX: LUCMF | Frankfurt: Z68) finds itself in. The company has an operating gold-zinc-copper-silver-lead mine called Campo Morado and another operating gold-silver mine called Tahuehueto that is in the process of ramping up to commercial production. Both projects are in Mexico.

Luca Mining is in the process of optimizing production at both Campo Morado and Tahuehueto and trying to extend the resources of both with drilling. Management hopes this effort will lead it toward an even larger market capitalization.

Our goal is to be thought of as a company that continuously sets and achieves reasonable goals while continuing to build toward a billion-dollar market cap.

—  Dan Barnholden, CEO, Luca Mining

Throughput Improves at Campo Morado

Campo Morado lies in Guerrero State, Mexico and contains a measured and indicated resource of 16.6 million tonnes of 4.01% zinc, 0.80% copper, 0.93% lead, 123 g/t silver, and 1.70 g/t gold. This resource is enough for at least 10 years of underground mining.

Luca Mining estimates the mine produced between 39,000 and 46,000 gold equivalent ounces in 2024, with that production ramping up markedly toward the end of the fourth quarter.

The company recently announced it had achieved 2,000 tonnes per day (tpd) of mill throughput in December 2024 and in January 2025.

Luca Mining’s CEO, Dan Barnholden, comments: “The mill at Campo Morado is a 2,400 tpd mill, so the next obvious goal is to continue to ramp up production at Campo Morado and ultimately filling the mill at its nameplate capacity.” The replacement value for the mine’s infrastructure is US$500 million.

The mine currently produces zinc and bulk copper, and the company is working to optimize the mine’s flowsheet to produce three concentrates: zinc, copper, and bulk-lead with precious metals credits.

Tahuehueto Ramping Up to Commercial Production

While optimization continues on Campo Morado, Luca Mining is nearing commercial production at its Tahuehueto gold-silver-zinc-copper-lead project in Durango State, Mexico.

This mine is also an underground mine. It hosts enough resources for a 10-year mine life and contains a measured and indicated resource of 425,000 ounces gold, 273 million pounds zinc, 36 million pounds copper, 9 million ounces silver, and 123 million pounds lead.

The mill at Tahuehueto has a 1,000 tpd throughput capacity and has crushing, milling, and flotation circuits. Construction on the plant was completed in July 2024. Barnholden notes: “Over the course of the upcoming weeks, we’ll be in position to declare commercial production there.”

The mine is producing zinc and lead concentrates with precious metals. Full year 2024 estimated production was between 16,000 and 19,000 gold equivalent ounces.

Luca Mining Moves Aggressively to Pay Off Debt

To fund its operations in Mexico, Luca Mining has taken on a good deal of debt. However, thanks to cash flow from operations and an influx of cash from warrant exercises, it was able to work a deal in January that reduced that debt by US$5.8 million.

Luca Mining achieved that by buying back a convertible debenture. Total debt was reduced from US$18.2 million to US$11.1 million. Barnholden says: “My goal is to pay that back as quickly as possible. I believe we can do it by July of 2026.”

Getting debt free opens up Luca Mining’s options. They could potentially buy back stock, return capital to shareholders through dividends, or engage in mergers and acquisitions activity.

Exploration Could Grow Resources at Both Projects

Luca Mining is actively exploring both Campo Morado and Tahuehueto to grow their existing in situ resources.

Campo Morado has seen a lot of exploration work over the past 25 years. That work has generated a lot of data that has not been sufficiently analyzed. Luca Mining is leveraging AI to reanalyze all of the data.

Barnholden is excited about the team of geologists Luca Mining has brought on board to conduct this work. “It’s a very exciting opportunity for them to sink their teeth into a very major exploration project,” he says. The company is drilling Campo Morado for the first time since 2011.

Meanwhile at Tahuehueto, Luca Mining is on the cusp of releasing first assays from drilling there. The goal is to find near-mine orebodies that are at or above the existing resource grade. Barnholden adds: “There’s very much a focus to extend and expand the mineable resources, particularly on the veins that we are already working.”

In short, both projects, robust as they are, have the potential to grow larger with more drilling and exploration.

Long-Term Goal: A $1 Billion Market Cap

Potential catalysts for Luca Mining’s share price include improvements at the Campo Morado mine, improvements in recoveries and payabilities at the Campo Morado mill, exploration at both projects, completion and then expansion at Tahuehueto, and becoming debt free.

In the market that Luca Mining sees developing for both base and precious metals, it believes it can become a 200,000-ounce-per-year gold equivalent producer.

Barnholden concludes: “Our goal is to be thought of as a company that continuously sets and achieves reasonable goals while continuing to build toward a billion-dollar market cap.”

To learn more about Luca Mining, visit their website or follow them on social media:

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