I made Sonoro Gold (OTCMKTS: SMOFF; CSE: SGO) as my top stock pick of the month to kick off January 2021. You can find my in-depth first post on the company by going here. The company has a great property in Mexico, a heap leach pilot operation (HLPO) at its flagship property, the Cerro Caliche gold project. It is scheduling to begin mine construction in May and have it producing gold by year end. In my years of investing I have found that small cap mining stocks going into production often end up being my top gaining stocks in a gold bull cycle.
Sonoro Gold also did a financing in the fall of last year to fund its activities in 2021, which include a drill program to further measure its resources, and hopefully increase their value. The company actually began to execute on this when it revealed in a January 5, 2021 press release that it was able to “report continuing favourable results from eight reverse circulation (RC) drill holes at the premier Buena Suerte and Japoneses gold mineralized zones located in the central region of the Company’s Cerro Caliche gold project in Sonora State, Mexico.”
According to the release, “The latest drill results and the Company’s plan to increase the conceptual throughput for a proposed mine plan up to 20,000 tonnes per day (tpd) are the culmination of what management considers an exceptionally productive second half of 2020. This achievement was in part the consequence of a comprehensive geological review and planning based on the Cerro Caliche project’s extensive data set. The results of the review followed by the proposed drill campaign and the mine proposal enabled the successful closing of an $8 million financing, supported by Palisades Goldcorp Ltd. a leading Canadian merchant bank specializing in the resource sector.”
“The financing was immediately followed by the execution of a two-pronged drilling campaign. The first focused on exploring and developing the current shallow oxide gold zones, while the second tested multiple higher risk, potential high-grade gold targets. Details regarding this initial campaign can be viewed on the Cerro Caliche project page of the Company’s website. Based on the subsequent flow of positive drill results, Sonoro is now examining a materially larger mine development proposal with a conceptual throughput of up to 20,000 tpd. The proposed design of a larger operation is a consequence of the work of Sonoro’s technical team in Mexico which has kept the project on time and within budget.”
David Skarica of addictedtoprofits.net did an interview with the CEO and Chairman of the company a few days ago that you can watch below, to give you a really detailed presentation of the company and its plans for this year.
What is clear is that this is a company setup for high odds of positive news flow for the rest of this year. With gold consolidating and most big cap stocks like Newmont mining going sideways, shares of Sonoro have been trading in a range since August too.
The sideways trading range is making it so buyers here have a good entry point instead of buying as an act of chasing something going straight up, causing buys to be risky. Here you got a setup as you can see from the above chart, in a mining stock with a market of less than $15 million USD that is positioned to go into production.
Disclosure: Mike Swanson owns shares of Sonoro Gold Corp. Because it is a small cap stock with a market cap of less than $100 million he has put himself in a trading blackout on the stock and will not buy or sell a share of it for at least 30-days from the date of this post. Wallstreetwindow.com, is owned by Timingwallstreet, Inc., which is being compensated by a third party (Leadgopher LLC DBA Pinnacle Ad Network) to conduct an investor awareness advertising and marketing campaign for Inca One Mining. This third party paid Timingwallstreet Inc., $10,000 to produce and disseminate this and other similar articles and send traffic to them through paid advertising campaigns for 30-days from the date of this post (1/04/2020). This compensation should be viewed as a major conflict with our ability to be unbiased, more specifically: This communication is for entertainment purposes only. Never invest purely based on our communication. For more on trading risks read our policy statement by clicking here.