Luca Mining is the operator of the Campo Morado and Tahuehueto mines in Mexico. In this interview, CEO Dan Barnholden and I talk about if this mid-tier producer can actually make durable and sustained returns for shareholders. Over the course of the conversation we walk through Luca’s claimed passage through the Lassonde “valley of death”, unpack the latest Q3 2025 financials, and probe why consolidated profitability still lags despite rising throughput and mine-level margins. I asked Barnholden about operational efficiencies, grades, recoveries and concentrate quality at both mines, the economics and accounting impact of the Empress silver stream, and the company’s timeline to consistent free cash flow and a repaired balance sheet. The discussion also covers a newly announced US$25 million exploration program, potential M&A in Mexico, jurisdictional and community risk in Durango and Guerrero, management incentives and dilution, and the circumstances under which Luca might ultimately be built into a mid-tier producer (or… sold?).

TLDR

1. Profitability
   – – – – –
   Luca Mining is still firmly in the “prove it” phase, where operations are ramping up, but consistent profitability is not yet there. Management has cut 2025 net free cash flow guidance from US$30-40 million to US$5-10 million. Dan described Q2 and Q3 as “disappointing”, as all-in sustaining costs have spiked because grades underperformed and capex remained high. The CEO did say that Q3 was the low point, Q4 should be better, and that those who wait for clean, repeatable free cash flow might have to pay a higher price, but he accepts that credibility now depends on delivering several solid quarters in a row, not on guidance or narratives.
2. Gold Recoveries
   – – – – –
   Campo Morado is the highest-impact technical swing in the Luca Mining story. The future of the mine hinges on improving the gold recoveries. While throughput, zinc-equivalent production and unit cash costs have improved, the mine still recovers only about 25-30% of the contained gold, leaving most of the value in the tailings. Luca is working with Ausenco on a “Campo Morado improvement project” involving finer grinding, bulk flotation and potential cyanidation, targeting 60-70% gold recoveries and a full pre-feasibility study by mid-2026. If the metallurgy works, Campo Morado’s economics could change materially.
3. The Silver Stream
   – – – – –
   Tahuehueto, the company’s other mine, is a growing gold producer but currently weighed down by mine sequencing and the Empress silver stream. Throughput is increasing and per-tonne mining costs are coming down, yet lower-grade stopes, commissioning issues and the 100% silver stream have pushed AISC towards US$4,000/oz on a gold-equivalent basis. Luca’s plan going forward is to mine into higher-grade zones, complete a new copper-lead separation circuit to improve payabilities, and aggressively deliver silver into the stream to step it down to 20% and eventually extinguish it by 2031. Until the combination of better grades, improved recoveries and reduced financing drag shows up clearly in the income statement and cash flow, Tahuehueto remains a work-in-progress.
4. Exploration
   – – – – –
   Exploration is being treated as non-negotiable and is sized to matter, not just to generate news releases. Luca has committed roughly US$25 million over three years for about 80,000 metres of drilling across its two mines, including 38 high-priority targets at Campo Morado (such as Reforma Deeps and El Rey) and extension drilling on the Crestón, Perdido and Santiago structures at Tahuehueto. The company is also layering in AI targeting via VRIFY on top of 30 years of historical data. Management’s view is that near-mine discoveries can add low-capex ounces and extend mine life, delivering the best risk-adjusted value, but the burden is now on them to show that this spend translates into reserve additions and life-of-mine improvements rather than just a stream of attractive intercepts.
5. Growth
   – – – – –
   Strategically, Luca is positioning itself as a Mexico-focused emerging mid-tier with real operating leverage but not without jurisdictional risk. The company is deliberately staying in Mexico to leverage an 18-person head office in Mexico City, existing permitting and community relationships, and a team the CEO has largely hand-picked. Their growth model is to fix the existing mines, then add “second or third-tier” Mexican assets it believes it can upgrade, while keeping G&A roughly flat and avoiding empire-building deals that depend on higher metals prices to work. At the same time, Barnholden is clear that a sale of the company remains on the table if the rerating gap versus other Mexican producers opens up.

Luca Mining interview with CEO Dan Barnholden

VERY IMPORTANT WARNING

Please note that although none of the companies mentioned herein have paid Resource Talks for the creation of this content, this website is a business that charges for the creation and publication of content. This means there will always be a potential conflict of interest which means you can never rely on anything said herein.

By consuming this content, you acknowledge that Resource Talks and/or its affiliates and/or their personnel may own, have owned, or will own interests in and/or may have a business relationship with some or all companies/entities mentioned/featured in this publication.You further acknowledge that entities which may be referenced or featured in this publication or their related parties may hold an interest in Resource Talks or its affiliates, which may create further conflict of interest.

The information provided herein is general & impersonal in nature and meant for entertainment purposes only. The reader acknowledges and agrees that the information does not constitute a solicitation of an offer to buy or sell any security or instrument or to participate in any trading strategy. The author is not a licensed investment advisor. He is just another talking head on the internet. He might own shares of companies mentioned in this publication. Always assume he doesn’t know much more than a potato does. The mining & exploration space is among the riskiest sectors to invest in. The risk of anything mentioned in this publication is 100% loss of capital. If you don’t read the official documents provided by the company on http://www.SedarPlus.ca, you will lose all of your money.