Beyond Projections: High-Grade Gold Unlocks New Opportunities

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. In addition, Soma Gold Corp. has a consulting relationship with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay a monthly consulting fee between US$8,000 and US$20,000.
2. 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.
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* Disclosure for the quote from the Clive Maund article published on December 27, 2024

1. For the quoted article (published on December 27, 2024), the Company has paid Street Smart, an affiliate of Streetwise Reports, US$1,500.
2. 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 the article quoted. Maund received his UK Technical Analysts’ Diploma in 1989.  The recommendations and opinions expressed in the article 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 quoted article 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.

Soma Gold Corp. (TSXV:SOMA; OTC:SMAGF; WKN:A2P4DU) has announced its gold production for 2024, totaling 27,460 ounces of gold equivalent (AuEq). Sales for the year reached 27,668 AuEq ounces, achieving 92.4% of the company's budgeted production target for its Cordero mine. Despite challenges, including unplanned mechanical shutdowns and a community blockade, Soma Gold's production remained steady, underscoring operational resilience.

CEO Geoff Hampson noted in the news release, "We are pleased to have achieved 92.4 percent of our projected 2024 production at the Cordero mine despite several unplanned mechanical shutdowns and a blockade by the local community, which negatively affected production."

Soma is also advancing its partnership with Denarius Metals Corp. to source up to 200 tonnes per day (TPD) of mineralized rock from the Zancudo mine for processing at Soma's El Limon mill. This facility, located in Zaragoza, has a capacity of 225 TPD, permitted to expand to 400 TPD. Currently undergoing recommissioning, the El Limon mill is expected to resume operations in the coming months. According to Hampson, "There are a lot of synergies between Soma and Denarius that make sense for both companies to fully utilize El Limon's capacity while Soma ramps up production at the company's mines."

Soma's operational progress aligns with its goal of ramping up milling capacity to 1,400 TPD by 2028, supported by investments in exploration and strategic partnerships. The company's financial highlights for the first half of 2024 include revenue of US$42.03 million and adjusted EBITDA of US$13.87 million, reflecting the strength of its Colombian operations.

Sector Highlights: Trends and Insights in Gold Mining

On January 4, Mining.com reported that global gold production increased by 0.5%, reaching approximately 87.3 million ounces. The outlet projected a further 1.5% increase, bringing total output to approximately 88.6 million ounces. Jeffrey Christian of CPM Group noted, "Gold prices averaged US$2,391 per ounce, 23% higher than the previous year." Christian also projected an additional 13% increase in average gold prices to US$2,730 per ounce.

On December 27, Clive Maund, a technical market strategist, provided an in-depth analysis of Soma Gold, describing it as an "Immediate Strong Buy."

On the same day, Ahead of the Herd highlighted the undervaluation of gold mining stocks relative to their profits. Adam Hamilton remarked, "Gold-stock prices need to normalize with underlying profits, which is likely." He emphasized that despite gold's 27.2% price gain, the major gold mining ETF, GDX, increased by only 9.4%, significantly lagging its historical leverage to gold prices. Hamilton attributed this disconnect to investors underestimating gold miners' record earnings.

In a January 6 post, Reuters discussed the relationship between gold prices and macroeconomic factors. Nitesh Shah, a commodity strategist at WisdomTree, stated, "We expect a US$3,050 per ounce target based on a ‘consensus' economic view of dollar depreciation and falling bond yields." Shah added that heightened geopolitical tensions, such as those in the Middle East, could further elevate prices. Meanwhile, rising U.S. Treasury yields placed temporary pressure on gold, with spot prices settling at US$2,647.40.

The following day, on January 7, 321Gold presented a bullish outlook for gold miners. Stewart Thomson commented, "A range trade for gold could see the miners and silver stage numerous 20% surges." He noted that the current economic environment, including elevated debt levels and geopolitical uncertainty, creates a favorable setup for sustained demand in the mining sector. Thomson also highlighted that while gold itself remains strong, "it's silver bullion and the mining stocks where the big profits can be made in a relatively short period of time."

Catalysts Supporting Soma Gold's Future Development

Soma Gold's strategic initiatives position the company for significant growth, according to the company's investor presentation. Key near-term catalysts include the recommissioning of the El Limon mill, which is expected to enhance cash flow by processing ore from the Zancudo mine. Additionally, the company plans to increase its production capacity to 650 TPD by restarting the mill and integrating ore from its Machuca deposit, a fully permitted site that requires minimal capital expenditure.

Longer-term, Soma aims to expand its gold production to 85,000 ounces annually by 2028 through a combination of resource expansion at existing properties and operational upgrades. The Cordero mine, with its ongoing exploration program, is expected to double its current resource base of 260,000 ounces. Similarly, the Nechi and Aurora deposits are undergoing development and permitting processes, with both projects targeting resource increases exceeding 250,000 ounces.

Soma's commitment to sustainability further supports its competitive positioning. The company operates renewable hydroelectric power at its mills and has received environmental awards in Colombia. As Soma formalizes small-scale miners and integrates advanced ore-sorting technology, it is well-positioned to achieve cost reductions and operational efficiencies, supporting long-term profitability.

By balancing production growth with sustainable practices, Soma Gold continues to establish itself as a key player in Colombia's gold mining sector.

Positive Evaluations Position Soma Gold as a Strong Buy

*On December 27, Clive Maund, a technical market strategist, provided an in-depth analysis of Soma Gold, describing it as an "Immediate Strong Buy." According to Maund, the company is poised to benefit from its extensive property in Colombia, located on the same trend as significant deposits, which "augurs well for further important discoveries." He highlighted the company's flagship Cordero Mine, which began production in early 2023, as a critical revenue driver. Maund also noted Soma's plan to bring the El Limon Mill back online to accommodate increased production, further supporting the company's growth trajectory.

Maund emphasized Soma's impressive technical setup, stating, "The case for buying Soma Gold at this juncture could not be clearer — it is at the tail end of a giant base pattern and looking set to break out into a new bull market." He underscored the bullish accumulation of volume and a strong Accumulation line, which suggested robust investor confidence. He concluded that Soma Gold is "close to starting higher and breaking out of a very large base pattern into a major bull market."

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 September 30, 2024, it had CA$3.0 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 0.15% and 17.66% 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 44.02% 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.