Sonoro Gold Corp (TSX-V:SGO, OTCQB:SMOFF) chairman John Darch told shareholders that the company has “the essential components to be successful” amidst a challenging backdrop for junior resource companies.
In a shareholder letter, Darch reflected on the company’s milestones in 2023 and looked ahead to Sonoro’s plans to develop the Cerro Caliche gold project in Mexico.
“Our management and technical teams have extensive expertise in developing mineral deposits and remain committed to bringing Cerro Caliche into production,” Darch wrote.
Sonoro Gold chairman John Darch
“A recently filed (preliminary economic assessment) confirms the potential economic viability of the project and with only 30% of the mineralized zones drilled and assayed, there is significant potential for resource expansion. Insiders currently control 25% of the issued shares and the company maintains a strong, loyal international shareholder base across Canada, USA, Germany, and Switzerland.”
Sonoro Gold’s flagship Cerro Caliche gold project in Sonora, Mexico, saw significant developments in 2023. A mineral resource estimate revealed 19.5 million tonnes of indicated mineral resources and another 10.5 million tonnes of inferred mineral resources, showcasing the project’s substantial upside potential.
That led to an October 2023 Preliminary Economic Assessment (PEA) that outlined an initial nine-year mining operation, projecting an average annual gold production of 33,000 ounces. With an after-tax Net Present Value of US$47.7 million (at a gold price of US$1,800 per ounce), the project demonstrates economic viability, Darch noted. Sensitivity analysis suggests an after-tax NPV5 of US$77.02 million with a 63% after-tax Internal Rate of Return (IRR) at a gold price of US$2,000 per ounce.
Darch acknowledged the challenges faced by the mining sector in 2023, attributing the struggles to global economic uncertainties, inflation, and political instability.
“Despite the price of gold remaining relatively high and now consistently above USD $2,000 per ounce, the economic slowdown and global uncertainty has led to a lack of investor confidence in the capital markets resulting in a significant sell-off amongst most junior mining stocks. Fortunately, Sonoro has continued to successfully secure equity financing and has benefitted from insider support to fund concession payments, listing fees and overhead.”
Despite the turbulent environment, the chairman expressed gratitude for continued shareholder support and understanding.
To read the full shareholder letter, click here.