New Funding Secured to Boost Gold Exploration and Production in 2024

Soma Gold Corp. (TSXV: SOMA) has amended its offtake agreement with Goldlogic Corp., securing an additional US$3 million to enhance the 2024 exploration budget and complete development at the Aurora Mine, aiming to start production in Q3 2024.

The new funding will be repaid with monthly gold deliveries over 36 months, starting in June 2024. Soma also finalized the purchase of Otu Centro properties, now owning 100%, and plans extensive exploration based on new geological interpretations.

All That Glitters: Is Gold Worth The Investment?

The gold market continues to hover above US$2,000 an ounce, indicating a potentially lucrative future for the yellow metal despite the Federal Reserve's indications of maintaining current interest rates.

Barry Dawes of Martin Place Securities suggested in February that gold is "ready to break higher against bonds" and that investor sentiment in gold stocks "is close to a bottom," signaling a possible rally.

"Gold stock investors and speculators have been ground into a pulp over the past few years, but there is still hope for a better future," he explains, noting that many technical indicators suggest a breakout is imminent.

That same month, Rick Mills of Ahead of the Herd highlighted that the biggest beneficiaries of rising gold prices will be gold miner stocks, which he describes as "dirt-cheap and mostly forgotten today."

Today, gold remains a critical monetary metal worldwide, historically resilient, and continually valuable. The international geopolitical climate's volatility can significantly impact the accessibility and profitability of gold mining.

As Ernst & Young's report on mining and metals suggests, the geopolitical race for minerals and metals, driven by the energy transition, has led to new government incentives and restrictions.

"Resource nationalization and more taxes, royalties, and restrictions mean miners should expect tougher operating conditions in some countries," the report states. However, regions like Colombia offer more stable and accessible opportunities for Western investors compared to more unstable jurisdictions like Russia or China.

Echoing these sentiments, Katsusa Research wrote of gold's potential, "This golden bull market will be fueled by a combination of factors, including central banks’ reckless monetary policies, geopolitical tensions, and dwindling gold reserves."

Catalysts From This News

Soma Gold Corp. has recently secured several pivotal catalysts to drive its growth. First is the additional US$3 million secured in the above amended offtake agreement. These funds will be utilized for the Aurora Mine's development and to enhance the 2024 exploration budget. Soma also completed the acquisition of the Otu Centro properties, now owning 100% of the sites that feature significant mineralized quartz veins.

Soma's geological team has re-interpreted the regional geology, identifying new "en echelon" parallel veins and expanding exploration targets.

Soma's President and CEO, Geoff Hampson, emphasized, "Soma values its longstanding and mutually beneficial relationship with the Sun Valley Group. We are very pleased to continue our partnership with a company and neighbor that possesses profound insights into both the industry and the local environment in Antioquia, Colombia." These developments highlight Soma Gold's strategic initiatives to enhance production and exploration potential, positioning the company for substantial growth in the near term, the company noted.

What Experts Are Saying...

At the start of 2024, Technical Analyst Clive Maund updated his assessment of Soma Gold Corp. from August 2023.

He wrote, "With its gold production set to ramp up substantially this year and in years to come so that increasing revenues rapidly reduce outstanding debt, the outlook for Soma Gold Corp. could scarcely be brighter. The company is already benefiting from substantial margins at current gold prices."

Technical Analyst Clive Maund summarized, "The conclusion is that the charts for Soma Gold present a very favorable outlook for all timeframes, which is for a sustained and substantial bull market, and thus, the current dip is viewed as presenting an opportunity to pick it up at a very good price."

Maund highlighted that "Whilst the fact that management currently owns about two-thirds of the stock rules out a hostile takeover, their big investment in the company is certainly a vote of confidence and, in addition, the company's large land holdings in a gold-rich district hold out the strong possibility of additional discoveries of high-grade ore."

He continued, "Therefore, the sharp dip in the company's stock price over the past week or so, which was occasioned by the CEO of the company stepping down temporarily for personal reasons coupled with a dip in precious metal stocks generally, is viewed as presenting an excellent opportunity to buy the stock at a good price for as we will proceed to see as we examine the charts, the technical outlook for the stock is excellent."

Maund further explained, "We can see that the sharp drop over the past week or so, which was occasioned largely by the news about the CEO, crashed a support level and brought the price down close to a zone of stronger support, which is expected to limit any further downside and this drop has resulted in the stock becoming quite heavily oversold, as shown by the MACD indicator."

"This," he concludes, "is a good place for it to turn higher again, perhaps after some stabilization in this area, as the market starts to appreciate that, given the outlook for the company and for gold itself, the business relating to the CEO is little more than ‘a storm in a teacup' that it will soon take in its stride."

Maund summarized, "The conclusion is that the charts for Soma Gold present a very favorable outlook for all timeframes, which is for a sustained and substantial bull market, and thus, the current dip is viewed as presenting an opportunity to pick it up at a very good price."

Ownership and Share Structure

Headquartered in Vancouver, BC, 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 18.27% 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.

Important Disclosures:

1. 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. 
2. In addition, Soma Gold Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
3. 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
4. James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
5.  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. 

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Contributing Author Disclosures

1. Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing this article. Maund received his UK Technical Analysts’ Diploma in 1989.  The recommendations and opinions expressed in this content accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed

Clivemaund.com Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be  only be construed as a recommendation or solicitation to buy and sell securities.