A few days ago I did a blog post about my top stock pick for July – Sonoro Gold. You can read that post here. Sonoro trades on the TSXV as SGO and on the US OTC as SMOFF.
Yesterday, the shares closed at 33 cents on the TSXV.
This week the folks at Zurich based Equity Research put out a report, using fundamental valuation and cash flow metrics, that caused them to put a price target of $1.16 on the stock. That’s more than a triple in price from here would be a massive gain.
There are reasons for their analysis and you can read their full report here. The Sonoro discussion is on pages 17-20.
They compare with what is going on with Sonoro with Ivanhoe and when it went from $2 a share to $10 and Minera Alamos. The project Sonoro has been exploring is that good. “In the next few weeks, it is expected to disclose the economics of its planned mining operation and though its planned mine is considerably smaller, the levitating effect of becoming a cash flowng metals producer on its share price should be no different, especially given that the project’s internal rate of return is apt to be a multiple of the Kamoa Kaku-la’s and the payback on the Cerro Cali-che’s capital costs is likely to be measured in months rather than years,” they write about Sonoro in regards to Ivanhoe.
Minera Alamos went from 10 cents a share to 78 cents. Of that they write, “It has three projects: its flagship, Santana, which has just gone into production and two exploration projects: the Cerro d’Oro, which has to date outlined a 630,000 oz/Au resource averaging 0.41g/t Au, and the La Fortuna, which has a 300,000 ounce resource averaging around 3.5 g/t Au. Minera Alamos has 462 million shares outstanding fully diluted, so nearly three times Sonoro’s fully diluted number of shares. Mineras Alamos fully diluted market capitalization at $0.70 is CAD $323 million, compared to Sonoro’s current fully diluted CAD $50 million.”
Read the whole report here.
In case you missed it I posted a video up yesterday about the action in the bond market and how it basically has moved opposite to commodities in the past six weeks, for a short-term move. I actually went long a bond ETF and sold it for a trade yesterday.
To learn more about my trading methods grab my book Strategic Stock Trading.
-Mike
Disclosure: Mike Swanson owns shares of Sonoro Gold. Because it is a small cap stock with a market cap of less than $100 million USD he has put himself in a trading blackout on Sonoro Gold and will not buy or sell a share of its stock for at least 30-days from the date of this post (07/06/2021). 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. This third party paid Timingwallstreet Inc., $12,000 USD 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 (7/06/2021). 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.
