- Soma is generating positive cash flow from its operations
- The Antioquia district of Colombia, in modern times, has produced over 18 million ounces of gold
- Experienced management
What Soma Gold Corp does:
Soma Gold Corp (CVE:SOMA) is a producing gold miner, generating precious metal from two mines, La Ye and Los Mangos, at its El Bagre project in the Antioquia district of Colombia, an area, the company says, has generated over 18 million ounces of the yellow metal in modern times.
Average monthly production is between 1,400 ounces and 1,500 ounces of AuEq (gold-equivalent), which the company aims to grow to between 1,800 and 2,000 ounces by the second half of 2021, with a third portal at Cordero-Balvina currently being built.
Last year, the group produced 17,170 ounces of gold and it is forecasting 22,500 ounces for 2021. Soma closed its acquisition of Operador Mineras (which owned the Bagre underground gold operation) in summer, 2020.
The company aims to commission and begin to produce from its El Limon mine and mill (10 kilometres from the El Bagre mill) in the district in the first quarter of this year. The combined current capacity for both mills would be 675 tonnes per day (tpd).
It also owns 100% of the Nechi project in the district, where first production is planned for 2022.
Soma is focused on scaling up production and increasing the size of its resources in Colombia, and currently has 221,000 ounces of gold at the El Bagre and Nechi projects, with a reserve of 60,800 proven and probable ounces. Recent additional drilling indicates a northern extension at the Cordero-Balvina deposit.
In terms of exploration, Soma has identified targets for a potential further 750,000 ounces of gold at its 29,000 hectare ground position and has a fully funded US$2.6 million drilling program for 26,000 metres (m) targeting 240,000 ounces of gold at 8.2 grames per ton (g/t).
It has plans for a four-year US$10 million program to be funded out of cash flow using in house rigs, at under US$100 per metre.
How is it doing:
On February 3, Soma announced that January 2021 gold production at the company’s Operadora subsidiary exceeded the planned 1,361 ounces by 22.2%, with a total production of 1,663 ounces of gold
In addition, Soma said the Fenix Portal, which will give the company access to the Cordero-Balvina deposit, is approximately 35% of the way to reaching the ore body at Level 3.
This first phase of the decline totals 890 meters. The decline will then continue for an additional 610 meters to provide access to lower mine levels. The company anticipates commencing mining on Level 3 in the second quarter of 2021.
The average grade in Cordero-Balvina is 6.2 grams per ton (g/t) versus the 3.6 g/t the company has been mining at the Los Mangos and La Ye deposits. The group said mining will be fully ramped up in the third quarter when it expects monthly gold production to increase proportionately.
Soma reported its first quarterly net profit - for the three months to September 30, 2020, - in November last year. Income for the period came in at C$667,691, on revenue of around C$11 million. In the statement, the company said Operadora had “performed better than anticipated”.
In December, the group had updated on its 2020 drilling and construction programs at the Cordero-Balvina project, saying the new portal for accessing the deposit had been completed, and the decline had advanced 118 metres (m), including 72m in bedrock
In January this year, the company released its 2020 production figures, showing output of 17,179 gold-equivalent ounces for the year, ahead of a budgeted 15,479 gold – equivalent ounces - a near 11% improvement. Milled was 146,738 tonnes of ore.
The year saw the company complete 16,850 meters of exploration and resource expansion drilling, expanding to the north and down-dip of the Cordero-Balvina deposit and testing theories on the underexplored, on-trend portion of the company’s property.
- More progress on the new Cordero-Balvina mine
- Next financial results
- Precious metals moves
What the boss says:
In January this year, Javier Cordova, Soma’s CEO, said in a statement about last year’s gold output: “2020 was an excellent year for Soma Gold Corp. The acquisition of Operadora Minera in June has been a ‘game changer’.
“We closed the year with gold production, revenue and exploration drilling ahead of plan, access to a new deposit at Cordero-Balvina underway and good insight into the geology of our 29,000 Ha property where there has been extensive artisanal mining, indicating additional resources. We now have a number of high priority targets for further drilling in 2021.”
Contact the author at [email protected]
Story by ProactiveInvestors
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