Cordero Mine Delivers High-Grade Gold with 68-Meter Vein Extension

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Soma Gold Corp. (TSXV:SOMA;  OTC:SMAGF;  WKN:A2P4DU) has announced the successful extension of the strike length of the high-grade quartz veins at Level 1 of its Cordero Mine by 68 meters to the south. This extension was achieved through its ongoing 2024 diamond drilling program in the central Colombian Bagre Project. The results include twelve additional drill holes. Adding these to the previously reported results from the first nineteen drill holes. Among the highlights are notable high-grade gold intercepts, such as 1.7 meters at 25.0 grams per tonne (g/t) gold (including 0.65 meters at 35.4 g/t and 0.4 meters at 41.6 g/t gold). Drilling Highlights include:

CORDDH-24-014 1.4m at 2.3 g/t Au incl. 0.4m at 7.9 g/t Au

CORDDH-24-019 1.6m at 9.1 g/t Au incl. 1.0m at 14.3 g/t Au

CORDDH-24-023 1.2m at 22.3 g/t Au incl. 0.4m at 66.2 g/t Au

CORDDH-24-027 1.6m at 5.2 g/t Au incl. 0.55m at 9.2 g/t Au

CORDDH-24-029 1.7m at 25.0 g/t Au incl. 0.65m at 35.4 g/t Au and 0.4m at 41.6 g/t Au

CORDDH-24-030 1.15m at 8.7 g/t Au incl. 0.5m at 18.2 g/t Au

Chris Buchanan, Soma's Vice President of Exploration, commented on this announcement in the company press release, "We are pleased to be able to extend the strike length of the Level 1 quartz veins at Cordero Mine by 68 m to the south. This trend remains open to the south and will continue to be the focus for further development of the deposit."

These findings support the potential for further resource expansion. They also reinforce the exploration team's focus on evaluating the up-dip continuation of the gold-bearing "Cordero Vein" for further opportunities.

Today's Gold Mining Sector

As prices have risen above US$2,600 per ounce, the gold sector has continued to experience significant momentum. According to Warwick Smith, CEO of American Pacific Mining in a September 18 Kitco report, "momentum in the gold market is creating significant value in the mining sector as prices push above US$2,600 an ounce." He noted that while the higher prices are encouraging, the market still requires renewed investor optimism in order to realize further growth opportunities. Smith remarked, "We've been saying for some time, since before US$2,000 gold, that it's great prices are moving higher, but we need to see a risk-on market."

A report from BullionVault, written on September 16, further emphasized the improving fundamentals in the gold mining sector. The report explained that as gold outperforms cyclical commodities, the bottom-line potential for gold miners is expanding. As was highlighted, "Gold's ratios to cyclical markets are grinding into place quite nicely."

Additionally, as 321Gold wrote on September 17, gold is positioned in a favorable environment where "investors who buy only weakness should simply enjoy their core positions ride." This sentiment reflects the broader optimism, hoped for by Warwick Smith, surrounding the precious metals sector.

Soma's Golden Catalysts

According to the company's investor presentation, Soma Gold Corp. has plans to increase its production capacity and resource base significantly over the next few years. The work being done at the Cordero Mine showcases the company's ability to execute on its growth strategy with the expansion of high-grade veins. Soma aims to ramp up production to 500–550 tonnes per day (T/D) by Q4 2024, with longer-term goals of reaching 1,400 T/D by 2028. Soma Gold's strategic location in the prolific Antioquia region further supports its potential for long-term growth.

By focusing on resource expansion and operational efficiency, Soma aims to produce approximately 85,000 ounces of gold annually by 2028. This would mark a significant increase from current production levels. That steady growth trajectory, coupled with its commitment to reducing costs and increasing cash flow, makes Soma a compelling player in the gold mining sector.

Analysts Analyze Soma Gold

*John Newell of John Newell & Associates, in a report on September 7, observed that Soma Gold Corp. offers "a unique value proposition as both a gold producer and an exploration company." Newell emphasized that the company provides a rare opportunity in the junior gold market by combining stable production from its high-grade mines with significant exploration upside from its prospective land holdings. The El Bagre mine in Colombia, with existing infrastructure allowing for future scalability, has been identified as a consistent producer of high-grade gold. Newell also noted that the company's recent funding for the development of its Aurora Mine will bolster its production profile. That project is expected to begin production in Q3 2024.

Soma's strong exploration potential was another key factor highlighted by Newell. The company's Otu Centro properties in Colombia, which include promising mineralized quartz veins, present significant upside, with ongoing drilling efforts aimed at increasing its resource base. Additionally, Soma's exposure to Brazil's Tucuma Copper-Gold Project further diversifies its asset base, adding value beyond gold production.

Newell praised Soma's financial strength, stating that the company's "strong cash flow allows it to fund exploration without diluting shareholders excessively," and noted the high level of insider ownership, with management and insiders holding approximately 67.45% of the company. Newell rated Soma Gold Corp. as a "Buy," based on these factors. He cited its steady production, exploration potential, and strong financial position.

Ownership and Share Structure

Headquartered in Vancouver, B.C., Soma Gold Corp. has a market cap of US$47.90 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 18.15% and 0.55% through his wholly owned companies Hampson Equities Ltd. and Lake Forest Development Corp., Vice President Jean-Francois Meilleur has 0.55%, Director Glenn Walsh has 0.31% directly and 43.71% through his wholly owned company, Conex Services Inc.

A further 0.70% of control is vested in institutions.

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.