Sonoro Gold is aiming to develop 15,000 tonnes per day at its heap leach mining operation in Sonora, Mexico where it is currently advancing its production. Noting the company’s “speculative high-risk”, equity analysts have been pointing to $SGO experienced management, singling out its VP Jorge Diaz.
Diaz is an original Glamis Gold mine developer and more recently designed and oversaw the construction of, and put into production, Alamos Gold Inc's Mulatos mine. Alamos was trading around $0.50 when Jorge began designing the mine and once it was in production, its shares immediately embarked on an eight-year ascent to $21.58.
Recent PEA on the company’s Cerro Caliche Project established the initial phase of production had a pre-tax NPV of $ 68.7 million with an IRR of 52.7% using a USD $1759 gold price and a 5% discount rate.
Sonoro’s fully diluted market capitalization is currently ~US$32 million. What’s worth emphasizing is that SGO’s leverage on the price of gold, once it gets closer to becoming a producer, is considerable. For example, should gold’s price rise to US$2,300 per ounce, SGO’s initial cash flow would exceed US$67 million and its implied market capitalization at 3 times cash flow would be US$201 million or on a per share basis $1.00 per share.
Worth noting is in $SGO’s recent $3 million private placement, the company’s chairman, CEO, and VP Operations subscribed for a combined 20% of the funding.
$SGO.V currently stands at $.155 on the TSXV and is valued at a staggeringly low market cap of $18.49 given it’s current speculative potential.
https://ceo.ca/@nasdaq/sonoro-announces-closing-of-3000000-private-placement