New Drilling Initiatives Uncover High-Grade Potential in Colombia
Soma Gold Corp. (TSXV:SOMA; OTC:SMAGF; WKN:A2P4DU) has initiated the mobilization of a surface diamond drill rig to its El Limon Mine in Zaragoza, Antioquia, Colombia. Read why the exploration team is so excited about these results and future prospects.
Soma Gold Corp. (TSXV:SOMA; OTC:SMAGF; WKN:A2P4DU) has initiated the mobilization of a surface diamond drill rig to its El Limon Mine in Zaragoza, Antioquia, Colombia. The goal of the program is to investigate high-grade gold intercepts in the hanging wall and footwall of the mine, identified from historical drill results. The company will focus on determining whether the vein extends between intercepts, with the potential for a parallel vein system near the existing underground workings.
Chris Buchanan, Soma's Vice President of Exploration, highlighted the potential for additional vein discoveries, stating in the news release, "Our exploration team is excited to have identified the potential for parallel veins near the current underground workings." Historical drill results include a notable intercept of 30.2 grams per tonne (g/t) gold (AU) over 1.0 meter, including 50.4 g/t Au over 0.6 meters, as well as other high-grade gold findings. In addition to El Limon, Soma continues exploration at its other sites, including La Aurora and Cordero mines, and is actively engaging with the local community as part of its ESG initiatives.
The Gold Sector's Steady Ascent
As 321 Gold noted on September 17, "Gold is in a sweet spot where gamblers can buy, and investors who buy only weakness should simply enjoy their core positions ride." This favorable market condition, alongside expectations of continued rate cuts, suggested a potential rise in gold prices. Analysts at Goldman Sachs also forecasted increased ETF buying, carrying weight with high-net-worth investors and funds, contributing to the bullish outlook for the sector. Furthermore, as 321 Gold stated, "Western ETF buyers . . . could trigger a parabolic blowoff, but one that could see gold rise . . . to US$4000 or US$5000."
On September 7, John Newell of John Newell & Associates wrote that Soma Gold Corp. offered a compelling value proposition for investors in the junior gold market.Kitco reinforced this positive outlook on September 26, emphasizing that "gold is making new highs" and is "just 1.3% away from its upside target" of approximately US$2,730 (current price - US$2667). These indicators signaled that the gold sector remained strong, with significant opportunities for growth. Radomski, from Kitco, also stated that "the greatest potential is currently in the precious metals sector," highlighting the sector's continued relevance.
According to the AP on September 25, analysts maintained bullish outlooks for the price of gold, driven by ongoing "economic uncertainty and geopolitical tensions." FxPro senior market analyst Michel Saliby explained that gold has maintained its status as a "safe haven" investment, with many investors keeping gold in their portfolios to hedge against potential economic turbulence. Furthermore, strong demand from central banks, as noted by Joe Cavatoni of the World Gold Council, was "well-above the five-year average," reflecting growing concerns over inflation and economic stability.
Key Drivers Behind Soma's Growth
Soma Gold's ongoing exploration efforts at El Limon Mine and other key assets present potential growth drivers for the company. The El Limon drilling program is focused on defining additional resources, particularly high-grade intercepts that could extend the existing vein system. The company's dewatering efforts at the deeper levels of the mine will allow for more detailed geological mapping and the potential identification of new ore zones. Additionally, Soma's focus on expanding its district-scale land package along the Ot? fault system, which holds significant high-grade gold potential, could increase its resource base.
Soma's corporate presentation underscores plans to grow into a mid-tier gold producer, with the company targeting an annual production rate of 85,000 ounces by 2028. Expansion of milling capacity at both El Limon and El Bagre is planned to reach a combined 1,400 TPD, further positioning the company for long-term production increases.
Industry Insights on Soma's Potential
*On September 7, John Newell of John Newell & Associates wrote that Soma Gold Corp. offered a compelling value proposition for investors in the junior gold market. Newell highlighted Soma's dual advantage as both a gold producer and an exploration company. He pointed out that Soma's El Bagre mine provided steady production, supported by two Merrill Crowe mills with a combined capacity of 725 TPD, expandable to 1,400 TPD.
This flexibility positioned the company well to increase output as additional resources were discovered. Newell also emphasized Soma's exploration potential, noting that the company's holdings in Colombia and Brazil provided investors "exposure to both steady income from production and potential upside from exploration success."
Newell also noted Soma's financial strength, stating that the company's strong cash flow allowed it to fund exploration without heavily diluting shareholders. He remarked that Soma's management and insiders owned approximately 67.45% of the company, demonstrating their confidence and alignment with shareholder interests.
Streetwise Ownership Overview*
Soma Gold Corp. (TSXV:SOMA; OTC:SMAGF; WKN:A2P4DU)
*Share Structureas of 9/3/2024Source: Thomson Reuters & Soma Gold Corp.Ownership and Share Structure
Headquartered in Vancouver, B.C., Soma Gold Corp. has a market cap of US$40.19 million and trades in a 52-week range of CA$0.30 and CA$0.74. As of December 31, 2023, it had CA$1.8 million in the bank, with a monthly exploration budget of CA$330,000.
As a profitable company, it has no burn rate.
According to Reuters, 67.45% of the company is held by management and insiders.
CEO and Chairman Geoffrey Hampson has 17.17% and 0.56% through his wholly owned companies Hampson Equities Ltd. and Lake Forest Development Corp., Vice President Jean-Francois Meilleur has 0.52%, Director Glenn Walsh has 0.31% directly and 44.07% through his wholly owned company, Conex Services Inc., and CFO Greg Hayes has 0.12%.
A further 0.70% of control is vested in institutions.
Palos Management Inc. has a 0.27% stake, and Marmite Capital AG has one comprising 0.33%. Strategic investor Eric Sprott owns 750,000 shares bought in a private placement (0.82%).
2.26% is with strategic investors.
The rest is with retail investors.
| Want to be the first to know about interestingGold investment ideas?Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
Important Disclosures:
Soma Gold Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. In addition, Soma Gold Corp. has a consulting relationship with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay a monthly consulting fee between US$8,000 and US$20,000.As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Soma Gold Corp.James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.For additional disclosures, please click here.
* Disclosure for the quote from the John Newell article published on September 7, 2024
For the quoted article (published on September 7, 2024), the Company has paid Street Smart, an affiliate of Streetwise Reports, US$1,500.Author Certification and Compensation: [John Newell of John Newell and Associates] was retained and compensated as an independent contractor by Street Smart for writing this article. Mr. Newell holds a Chartered Investment Management (CIM) designation (2015) and a U.S. Portfolio Manager designation (2015). The recommendations and opinions expressed in this content reflect the personal, independent, and objective views of the author regarding any and all of the companies discussed. No part of the compensation received by the author was, is, or will be directly or indirectly tied to the specific recommendations or views expressed.John Newell Disclaimer
As always it is important to note that investing in precious metals like silver carries risks, and market conditions can change violently with shock and awe tactics, that we have seen over the past 20 years. Before making any investment decisions, it's advisable consult with a financial advisor if needed. Also the practice of conducting thorough research and to consider your investment goals and risk tolerance.