I decided to go read through the Soma Q3 MD&A and found something quite Bullish. Today trading at C$0.25 the market cap is C$23 million (US$17 million). Last quarter they had a mine strike that resulted in cutting Septembers gold production in half. Soma has a new contract with the miners. They sold 5500 gold equivalent ounces at an average US price of $1726 and Soma reported break-even earnings and C$3.8 million in EBITDA for the quarter. The cash costs was US$990.
On Page 4 at the bottom of the page they say:
The Company anticipates Cordero reaching its initial production target of approximately 450 TPD at anaverage head grade of 6.5 grams per tonne (“gpt”) in Q1 of 2023 – fully supplying the El Bagre mill. Subsequent to this first milestone, the Company intends to continue ramping up production to 600 TPDwhich will allow Soma to restart the El Limon mill.
I don't believe I have ever seen a company be so specific with guidance. Hence, Q1, 2023 that begins in a little over three weeks Soma expects production of 8,500 ounces of Gold for the quarter. We are looking at 3,000 ounce increase over Q3, 22 numbers. Furthermore, they will be ramping up the El Limon mill in 2023 to boost daily throughput from 450 - 600 TPD. Based on 600 TPD and the quoted head grades I calculate 11,400 ounces/quarter. I should point out that El Limon does have a capacity of 675 TPD so Soma is giving us conservative numbers.
I already have a big chunk of my portfolio into Soma but now I'm strongly considering adding more. Even if Gold stays stuck here in the $1700's, Somas's annual cash flow (EBIDTDA) next year could be much more than today's market cap.