Soma Gold Corp V.SOMA

Soma now at 52-week high

[tobinator01]

At 40.5 cents, that equals their 52 week high.  The 20-month high is 43.5 cents.  It's nice to see the price firm up the last three weeks, but volume is weak.  Grinding higher is actually better than rapidly shooting up and then crashing.

One of my biggest complaints about the team there is the lack of promotion of their story.  The vast majority of miners over-promote themselves as they have to live off the equity market before they achieve sustaining cash flow positive status.  Soma is cash flow positive and doesn't need to issue equity.  This does not mean you don't promote yourselves at all.

I spoke with the Company.  They said there are various mining conferences they are going to this year.  I believe there was on later this month.  With the average AISC of the top 25 GDX and GDXJ miners at US$1400, I'd think investors would latch onto a miner with estimated AISC below US$900 and growing production by 50% year over year.  The indication from the conversation and recent events tells me they are now putting energy into telling their story to the market.

My guess is a junior mining company would love to merge with or gobble up Soma at its present depressed valuation.  Only time will tell.  Long and strong.

[ThelastSilverR]

If they give a dividend next year, this will automatically come into the picture of investors.   Rather not spend too much or invest time on promotion but they need to focus on reaching production numbers, generating cash flow and thereby buying more land, acquisitions and investing aggressively in exploration.   Management knows this is now a cash cow for the next 10+ years and

[tobinator01]

I by and large agree with your opinion concerning the cash flow and earnings growth potential of Soma over the long haul.  I'd prefer Soma pay down their high interest debt first to clean up their balance sheet.  Share price growth is a priority if they want to fund expansion of their milling capacity to the full 1475 tpd.  With Soma over $1, they could fully fund mill and the

[ThelastSilverR]

Why do you think this needs dilution? Plan is to go to 1,250 TPD. I think this will cost a maximum of C$10M and they can pay this with the cash flow. This year alone there will be C$15M cash left with gold around US$1800 if they meet the production target (35,500 oz). In the annual meeting management indicated that they will accelerate the repayment of the debt. C$600K per month starting in July

[tobinator01]

I'm an investor for capital appreciation and dividends are secondary to me.  It's great insiders own over 70% of the outstanding shares but it also means the float is extremely small.  Using equity to fund the mill expansion and the fleet of the new mining equipment, would result in Soma using institutions to raise the capital.  That would open the float up and bring more

[ThelastSilverR]

The last thing I want to say about it is this: They don't need external money. The operation is profitable and it will bring more profit every year. When an institutional investor want to get in (which I doubt, this operation is too small for them) management can also do a cross trade with part of their shares and then make a deal that this party also buys x shares on the public market. They