Soma Gold Corp. (TSXV: SOMA) has secured US$3 million to enhance the 2024 exploration budget and advance development of the Aurora mine.
Soma Gold Corp. has amended its offtake agreement with Goldlogic Corp., securing an additional $3 million to enhance the 2024 exploration budget and complete the development of the Aurora mine, with the aim of starting production in the third quarter of 2024.
The new financing will be repaid by monthly gold deliveries over 36 months, starting in June 2024. Soma has also completed the purchase of the Otu Centro properties, now 100% owner, and plans in-depth 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 indications from the Federal Reserve to maintain current interest rates.
Barry Dawes of Martin Place Securities suggested in February that gold was “poised to move higher against bonds” and that investor sentiment toward gold stocks “was near a bottom,” signaling a possible rally.
“Investors and speculators in gold stocks have been beaten to a pulp in recent years, but there is still hope for a better future,” he explains, noting that many technical indicators suggest that a breakout is imminent.
The same month, Rick Mills of Ahead of the herd Underlines that the biggest beneficiaries of rising gold prices will be shares of mining companies, which he describes as “very cheap and mostly forgotten today”.
Today, gold remains an essential monetary metal around the world, historically resilient and still valuable. The volatility of the international geopolitical climate can have a significant impact on the accessibility and profitability of gold mining.
As the Ernst & Young Mining and Metals report suggestsThe geopolitical race for minerals and metals, driven by the energy transition, has led to new government incentives and restrictions.
“Nationalization of resources and increased taxes, royalties and restrictions mean that miners should expect stricter operating conditions in some countries,” the report said. However, regions like Colombia offer more stable and accessible opportunities to Western investors than more unstable countries like Russia or China.
Echoing these sentiments, Katsusa Research writes about the potential of gold“This golden bull market will be fueled by a combination of factors, including reckless monetary policies by central banks, geopolitical tensions and dwindling gold reserves.”
Catalysts of this news
Soma Gold Corp. recently secured several key catalysts to drive its growth. The first concerns the additional $3 million guaranteed in the amended drawdown agreement above. These funds will be used for the development of the Aurora mine and to enhance the 2024 exploration budget. Soma also finalized the acquisition of the Otu Centro properties, now owning 100% of the sites containing significant mineralized quartz veins.
The Soma geological team has reinterpreted the regional geology, identifying new parallel “echelon” veins and expanding exploration targets.
Soma President and CEO Geoff Hampson noted“Soma values its long-standing and mutually beneficial relationship with Sun Valley Group. We are very excited to continue our partnership with a company and neighbor that has extensive knowledge of the industry and local environment in Antioquia, Colombia. » These developments highlight Soma Gold's strategic initiatives to enhance production and exploration potential, thereby positioning the company for substantial growth in the near term, the company noted.
What the experts say…
Early 2024, technical analyst Clive Maund update its valuation of Soma Gold Corp. from August 2023.
He wrote: “With its gold production expected to increase significantly this year and in the coming years so that increasing revenues will quickly reduce outstanding debt, Soma Gold Corp's outlook will be limited. could hardly be more brilliant. The company already enjoys substantial margins at current gold prices. »
Technical analyst Clive Maund summarized: “The conclusion is that the Soma Gold charts present a very favorable outlook for all time frames, consistent with a sustained and substantial bull market, and therefore the current decline is considered to be presenting an opportunity to choose it. at a very good price.”
Maund emphasized that “while the fact that management currently owns approximately two-thirds of the shares rules out a hostile takeover, their significant investment in the company is certainly a vote of confidence and, furthermore, the company's extensive land holdings company in a gold mining area. A rich district offers a strong possibility of additional high-grade ore discoveries.
He continued: “Therefore, the sharp decline in the company's stock price over the past week, caused by the temporary resignation of the company's CEO due to personal reasons, coupled with a decline in precious metals stocks in In general, is considered to present a great opportunity to buy the stock at a good price because, as we will see when looking at the charts, the technical outlook for the stock is excellent.
Maund further explained: “We can see that last week's sharp decline, driven largely by the CEO news, broke down a support level and brought the price back close to a more supportive area. strong, which is expected. to limit any further decline and this decline resulted in the stock being heavily oversold as shown by the MACD indicator.
“This,” he concludes, “is a good time for it to start rising again, perhaps after some stabilization in this area, as the market begins to understand that, given the company's prospects and gold itself, the CEO's activities are little more than a 'storm in a teacup' that he will soon take in his stride.
Maund summarized: “The conclusion is that the Soma Gold charts present a very favorable outlook for all time frames, consistent with a sustained and substantial bull market, and therefore the current decline is considered to present an opportunity to do so. resume at a higher level. very good price.”
Ownership and structure of shares
Based at Vancouver, BC, Soma Gold Corp. has a market capitalization of US$40.19 million and trades in a 52-week range of CA$0.30 to 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 business, it has no burn rate.
According to Reuters, 67.45% of the company is owned by management and insiders. CEO and Chairman Geoffrey Hampson owns 18.27% and 0.56% through his wholly owned companies Hampson Equities Ltd. and Lake Forest Development Corp., vice-president Jean-François Meilleur owns 0.52%, director Glenn Walsh owns 0.31% directly and 44.07% through his exclusive interest. the company owned by Conex Services Inc. and CFO Greg Hayes owns 0.12%.
Another 0.70% of control is entrusted to institutions. Palos Management Inc. has a 0.27% stake and Marmite Capital AG has a 0.33% stake. Strategic investor Eric Sprott owns 750,000 shares purchased in a private placement (0.82%).
2.26% are with strategic investors.
The rest belongs to individual investors.
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Important Disclosures:
- Soma Gold Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee of between US$4,000 and US$5,000.
- Additionally, Soma Gold Corp. maintains a consulting relationship with an affiliate of Streetwise Reports and pays a monthly consulting fee of between US$8,000 and US$20,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their households) own securities of Soma Gold Corp.
- James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- This article does not constitute investment advice and does not constitute a solicitation for any investment. Streetwise Reports does not provide general or specific investment advice and the information contained in Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult their personal financial advisor and conduct their own comprehensive investment research. By opening this page, each reader agrees to Streetwise Reports' terms of use and full disclaimer. Streetwise Reports does not endorse or recommend the activities, products, services or securities of any company.
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Contributing Author Disclosures
- Certification and remuneration of authors: (Clive Maund of clivemaund.com) is compensated as an independent contractor by Street Smart, a subsidiary of Streetwise Reports, for the writing of this article. Maund qualified as a British Technical Analyst in 1989. The recommendations and opinions expressed in this content fairly reflect the personal, independent and objective views of the author regarding all 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 opinions 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 do not constitute a recommendation or offer to buy or sell any security. Because trading and investing in any financial market may involve significant risk of loss, Mr. Maund recommends that you consult a qualified investment advisor, licensed by the appropriate regulatory bodies in your jurisdiction, and make your own due diligence and your own research when making any kind of transactions. of a transaction with financial consequences. Although qualified and experienced securities analyst, Clive Maund is not a registered securities advisor. Therefore, Mr. Maund's opinions on the market and stocks should not be construed solely as a recommendation or solicitation to buy and sell securities.