New Drilling Initiatives Uncover High-Grade Potential in Colombia

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Soma Gold Corp. (TSXV:SOMA;  OTC:SMAGF;  WKN:A2P4DU) has initiated the mobilization of a surface diamond drill rig to its El Limon Mine in Zaragoza, Antioquia, Colombia. The goal of the program is to investigate high-grade gold intercepts in the hanging wall and footwall of the mine, identified from historical drill results. The company will focus on determining whether the vein extends between intercepts, with the potential for a parallel vein system near the existing underground workings.

Chris Buchanan, Soma's Vice President of Exploration, highlighted the potential for additional vein discoveries, stating in the news release, "Our exploration team is excited to have identified the potential for parallel veins near the current underground workings." Historical drill results include a notable intercept of 30.2 grams per tonne (g/t) gold (AU) over 1.0 meter, including 50.4 g/t Au over 0.6 meters, as well as other high-grade gold findings. In addition to El Limon, Soma continues exploration at its other sites, including La Aurora and Cordero mines, and is actively engaging with the local community as part of its ESG initiatives.

Key Drivers Behind Soma's Growth

Soma Gold's ongoing exploration efforts at El Limon Mine and other key assets present potential growth drivers for the company. The El Limon drilling program is focused on defining additional resources, particularly high-grade intercepts that could extend the existing vein system. The company's dewatering efforts at the deeper levels of the mine will allow for more detailed geological mapping and the potential identification of new ore zones. Additionally, Soma's focus on expanding its district-scale land package along the Otú fault system, which holds significant high-grade gold potential, could increase its resource base.

Soma's corporate presentation underscores plans to grow into a mid-tier gold producer, with the company targeting an annual production rate of 85,000 ounces by 2028. Expansion of milling capacity at both El Limon and El Bagre is planned to reach a combined 1,400 TPD, further positioning the company for long-term production increases.

Industry Insights on Soma's Potential

*On September 7, John Newell of John Newell & Associates wrote that Soma Gold Corp. offered a compelling value proposition for investors in the junior gold market. Newell highlighted Soma's dual advantage as both a gold producer and an exploration company. He pointed out that Soma's El Bagre mine provided steady production, supported by two Merrill Crowe mills with a combined capacity of 725 TPD, expandable to 1,400 TPD.

This flexibility positioned the company well to increase output as additional resources were discovered. Newell also emphasized Soma's exploration potential, noting that the company's holdings in Colombia and Brazil provided investors "exposure to both steady income from production and potential upside from exploration success." 

Newell also noted Soma's financial strength, stating that the company's strong cash flow allowed it to fund exploration without heavily diluting shareholders. He remarked that Soma's management and insiders owned approximately 67.45% of the company, demonstrating their confidence and alignment with shareholder interests.

Ownership and Share Structure

Headquartered in Vancouver, B.C., 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 17.17% 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.