Yesterday, Sonoro Gold (OTCMKTS: SMOFF), which I did a post about last week in an update about its excellent recent drill results, announced a new step towards ultimate gold production. The company issued a press release stating that it was going to do a private financing at 18 cents a share to raise up to $2 million CAD. Each share comes with a 30 cents warrant to potentially raise over an additional $3 million CAD. This financing will fully fund all of the companies plans for the rest of this year to mark another step forward to eventual gold production. Kenneth MacLeod, President and CEO of Sonoro stated, “We are pleased to report that metallurgical testing by McClelland Laboratories has been progressing on schedule, with completion of the column leach tests anticipated by July, together with the completion of the updated 43-101 resource report and a Preliminary Economic Assessment (“PEA”) for the Cerro Caliche project. The private placement will provide sufficient capital to conclude the current phase of the drilling program and complete the independent technical reports and position the Company for the next phase of development as we advance toward a production decision at Cerro Caliche.”
The stock trades as SMOFF on the US OTC and as SGO on the Canadian stock exchange. Check out the chart.
With the financing at what is basically the current price of the stock it isn’t really dilutive for current shareholders and those that decide to get in at this level. If all of the company’s outstanding warrants were exercised the company would have over $18 million CAD on its balance sheet after this private placement. The stock is currently trading with a market cap of around $15 million CAD or $12 million USD, so it isn’t factoring much of its value at all, much less cash flow that will come in from future gold production. It also is surrounded by larger operating gold mining companies so could become an attractive buyout target in the future, as you can see from this map from its website.
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 Sonoro Gold Corp. This third party paid Timingwallstreet Inc., $10,000 to produce and disseminate similar articles as this one 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.