My stock pick of the month for July was Sonoro Gold, which trades on the US OTC as SMOFF and on the TSXV and SGO. The stock had a tremendous run in July and just tested making a new high yesterday. I still own it and still think it can go higher from here. Yes, it will have down days within a strong rally trend, but it has succeeded so far in executing its corporate plans.
In my analysis, though, I’m mainly a chart guy and look at broad factors in a stock. I’m really not an expert geologist and have never been to a mining property. The thing is, if I went to one, I wouldn’t really know what I was looking at. So, I stay within the lane of what works for me. Sonoro’s plans are to put a mine into production and I have found in my experience that small cap miners that go into production tend be the best performing stocks in the mining space.
All that said, Sonoro has been garnering more and more attention. This week a research report was released about the company by Anthony Garson and Associates Inc., based in Toronto, Canada.
In this report Garson writes, “Under a scenario of a 5.5-year mine life and annual production rate of 50,000 oz. of gold, it is this opinion that the current share price (C$0.36) is substantially below valuation metrics tabulated in Table 5 below. De-risking the Cerro Caliche project should close ratio discrepancies implying a near-
term to post-commercial price target of C$0.45-C$0.60 and C$0.60-C$1.20, respectively. A higher share price can be achieved if aggressive exploration is undertaken to expand known reserves to target 70 million-100 million mt containing more than 1-1.5 million oz. of gold. This can be determined over the next 2-3 years. If successful, open-pit mining operations might undertake expansion in the third year of production. Production rates could be increased to 20,000 mt/day from 15,000 mt/day to produce 80,000 oz. of gold per year and provide a mine life of 12-14 years.”
This report contains a comprehensive fundamental analysis of the company including its balance sheet. You can access it by clicking here.
-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 on 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 (08/06/2021). Wallstreetwindow.com, is owned by Timingwallstreet, Inc., which was compensated by a third party (Leadgopher LLC DBA Pinnacle Ad Network) to conduct an investor awareness advertising and marketing campaign for Sonoro Gold in July. This third party paid Timingwallstreet Inc., $12,000 USD to produce and disseminate similar articles as this one and to send traffic to them through paid advertising campaigns for Sonoro Gold during the month of July. 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.
