Analysts at Couloir Capital believe a new mineral resource estimate (MRE) for Sonoro Gold’s flagship Cerro Caliche project in Mexico has highlighted the significant potential of the site, raising their fair value per share estimate for the stock.
“The average grade of Indicated Resources increased from 0.41 grams per tonne (g/t) gold to 0.44 g/t gold and Inferred Resources almost doubled from 71,000 gold ounces to 140,000 gold ounces,” the analysts wrote in a note to clients.
“We note that, to date, just over 30% of the known mineralized zones within the 1,400-acre property have been drilled and assayed, leaving room for further resource expansion potential.”
The analysts noted multiple near-term catalysts for the project over the next six to 12 months, including the completion of the environmental permitting process, filing of an updated Preliminary Economic Assessment, and advancement around project financing.
“The projected timeline from SGO indicates the mine to become operational in early to mid-2024,” they noted.
Based on their analysis and valuation models, Couloir’s analysts reiterated their ‘Buy’ rating for Sonoro Gold stock and increased their fair value per share estimate to C$0.32 from $0.26, a projected upside of almost 260%. Sonoro Gold’s shares are currently trading at C$0.08.
“Despite an updated MRE and the prospect of major catalysts in the near term, SGO’s share price has languished which implies substantial opportunities for investors should the trend reverse,” they wrote.
“We believe that this creates an opportunity for investors to shore up their positions at a lower level, given several potential valuation-altering catalysts in the next 12 months.”
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