Canadian Gold Producer Gives Q1/25 Update

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Soma Gold Corp. (SOMA:TSX.V; SMAGF:OTC; A2P4DU:WKN) made noteworthy developments in Q1/25 pertaining to several of its in-progress initiatives, announced in a news release.

"Management is very pleased with the progress we have made on our properties in Colombia," President and Chief Executive Officer Geoff Hampson said in the release. "We are on track for a strong 2025 and beyond."

Here are the highlights of Soma's accomplishments during Q1/25:

Production: At its El Bagre Gold Mining Complex, encompassing the Cordero mine and El Bagre mill, Soma produced 6,643 ounces of gold equivalent during Q1/25, consistent with guidance of 6,635 ounces. It mined a total of 75,093 metric tons, 52% of which was ore and the other 48% of which was waste material.

The average grade during the quarter was lower than in Q4/24 because development work was being done to afford access to higher-grade stopes in the Upper Cordero and Lower Venus areas. The company achieved an average gold price during Q1/25 of US$2,848 per ounce (US$2,848/oz), up year over year from US$2,033/oz.

El Limon Mill: Mill rehabilitation is on schedule and under budget. The project's updated budget is 30% lower than the original one, at CA$980,000 versus CA$1.4 million (CA$1.4M), due mostly to Soma's team doing more of the needed work in house. The company expects to have the mill up and running by mid-June. Initial production is anticipated to be 100 tons per day (100 tpd), ramping up to 200 tpd. Permitted capacity is 400 tpd.

"The company is tracking to plan, and will soon benefit from added production at the rehabilitated El Limon mill," Hampson noted.

Feed for the mill will come from excess production at Cordero, from the soon-to-be-producing Aurora mine at Machuca and from two formalized small miners on the property. Currently the Diamentina and Lemoncito Norte mines are preparing to transport material to the El Limon mill once rehabilitation is finished. If all 28 formalization contracts under review are approved, Soma could receive between 600 and 1,000 tons per day of external ore to process.

The El Limon mill is at the site of the permitted, past-producing mine of the same name. At the project, Soma is drilling a recently discovered new parallel vein.

Tax Incentive: The Colombian government approved Soma for a tax program that allows companies to spend federal income tax due on capital programs that directly benefit the community. Soma and other regional companies including Mineros SA, plan to pave a 2.8-kilometer (2.8-km) main road through the village near Cordero. The total cost is about CA$5.1 million (CA$5.1M), of which Soma will contribute CA$1.8M.

Loan Payment: Soma made a $2.5M principal repayment on its Conex loan. A balloon payment is due on July 31, 2030 and accrues at 12% annually.

Thanks to the higher gold price, Soma has been able to bolster its cash reserves beyond what it needs for operations, exploration and capex. The company intends to use these monies to reduce its debt as fast as possible while maintaining sufficient cash reserves to finance its accelerated exploration program at Cordero to expand the company's total resource.

"We are actively exploring several promising prospects using soil sampling, geophysics and diamond drill hole drilling, and early results are encouraging," Hampson said in the release. "In addition, we are acquiring additional adjacent properties where mineralized trends have been identified."

Expanding Production, Resource

Headquartered in British Columbia, Soma Gold Corp. is a gold explorer-producer with 41,000 hectares of mineral rights concessions extending 100+ km along Colombia's prolific Otú fault, according to its April 2025 Corporate Presentation. The district-scale property is on trend with the 5,500,000 ounce (5.5 Moz) Segovia underground gold mine and the 6 Moz Gramalote gold deposit.

Along with the El Limon mine and mill in Antioquia, Colombia, Soma also owns the adjacent El Bagre Gold Mining Complex encompassing the producing Cordero mine and El Bagre mill. They have a current capacity of 675 tpd and expansion capacity of up to 1,400 tons per day (1 Ktpd). At the complex, Soma is targeting production of 25,000–30,000 ounces (25–30 Koz) per year, from development of six to eight working faces. With a mill expansion, production could be increased to 85–100 Koz per year.

"We are looking forward to working through the relatively low-grade areas we are currently mining and accessing the higher-grade zones in Upper Cordero and the Venus Gap," Hampson said in the release.

The total resource stands at 526 Koz of gold. Of this, 404 Koz are NI 43-101 compliant, 122 Koz are noncompliant. Soma is working to expand the resource with 18,000–20,000 meters (18,000–20,000) of drilling per year, using internally generated funds to finance this regional exploration work. The vein system remains open at depth and along strike. So far, 310,000m have been diamond drilled at the property.

Soma is targeting total gold production of 37 Koz this year and 42.5 Koz in 2026, the company said.

Another of its assets is the Nechi deposit, 25 km north of the El Bagre Gold Mining Complex, features the same types of host rock as the nearby Segovia mine. Some mine development has been done and 42,000m of drilling have been completed at Nechi, which has an existing resource of 49 Koz of 4.9 grams per ton (4.9 g/t) gold in the Indicated category and 85 Koz of 6.5 g/t gold in the Inferred. Permitting is underway.

The Machuca deposit, 10 km south of the El Limon mill, is associated with many adjacent parallel and perpendicular veins. Along with historical resources, channel sampling and drilled returned grades above 25 g/t gold. Soma is carrying out regional exploration and drilling at Machuca. The Aurora mine there is permitted and awaiting final inspection.

In Brazil, Soma owns 100% of the copper-gold Tucuma exploration project in the Carajas metallogenic province in the state of Pará. Currently, Tucuma is under option to Ero Copper Corp.

Outlook on Gold Still Bullish

Gold's completion of a massive 12-year cup-and-handle pattern signals that its bull market has "much further to run" even from current levels, above US$3,300 per ounce (US$3,300/oz), purported Jesse Colombo of The Bubble Bubble Report.

"If history is any guide, major gold breakouts like this don't fade quickly; they tend to kick off bull markets that last a decade or more," the precious metals analyst wrote on April 17.

Growth is forecasted for the global gold market through at least 2030 at a 5.1% compound annual growth rate, according to Research and Markets on March 14. By then, the market's size is projected to reach 6,300 tons (6.3 Kt), up from 4.7 Kt in 2024.

However, the market has a current undersupply of about 900 tons, and this is expected to increase to 1,200 tons (1.2 Kt) by Q4/25, wrote John Zadeh in an April 17. This growing supply deficit bodes well for higher gold prices.

"Soma Gold is therefore viewed as an immediate Strong Buy and Hold for a long time," Technical Analyst Clive Maund wrote. 

In the Discovery Alert article, Zadeh pointed out that most major financial institutions recently raised their gold price targets for 2025. The forecast now of many is US$4,500/oz by Q1/26 or even sooner.

Technical Analyst AG Thorson also believes gold is in for a substantial long-term rally, possibly even surpassing US$8,000/oz by 2030E, he wrote in an April 18 article on FX Empire. However, he also thinks a pullback below US$3,000/oz is highly likely.

"I believe gold is nearing a major peak and is likely headed for a 20% correction that could unfold over the next three to six months," Thorson wrote. "That said, if silver surprises to the upside and breaks above US$35/oz in the coming days, the rallies in gold and mining stocks could extend beyond April."

Jana Kane, editor-in-chief of the LiteFinance trading blog, reported on April 21 that analysts' gold price forecasts for 2027 to 2030 generally are favorable. Their projections have the price landing somewhere between US$4,988.99 and US$5,194/oz by 2030.

Whereas longer-term forecasts, for 2040 to 2050, are less certain due to numerous factors, most analysts' gold price estimates remain bullish, between US$8,243 and US$10,000/oz during that period, Kane added.

Newsletter Writer Brien Lundin highlighted on April 21 that even though gold's current ascent seems "unstoppable," most mining stocks have not started recognizing the yellow metals' bull market. The largest, most profitable gains have yet to be realized.

With the gold price soaring, now is the time to take or add to positions in mining stocks that either have not moved yet or have moved but still have a significant upleg ahead, Technical Analyst Clive Maund noted on April 11.

The Catalyst: Production Restart

Soma expects a number of potential stock-moving events to happen over the next 12 months, the company noted. Notably, restart of the Limon mill is slated to occur in mid-June. Once production is underway at El Limon, management anticipates gold production to grow in H2/25 due to a higher average grade of ore mined, the release noted.

Also anticipated in the short term are results of the regional exploration drilling underway.

In early 2026, an update to Cordero's current resource estimate is slated for release.

Breakout of Stock Imminent

Soma is a mining stock that has not broken out yet despite gold's recent significant, rapid ascent, Maund wrote on April 11. Thus, now is "an excellent time" to establish a position in it because a "breakout appears to be imminent."

The gold producer's 14-year chart shows the stock is completing a large, five-year-long cup and handle base pattern forming since 2020. On the 3-year chart, the handle of the giant cup and handle base has taken the form of a large rectangular trading range.

"Soma Gold is therefore viewed as an immediate Strong Buy and Hold for a long time," Maund wrote. "Dithering around in the hope of shaving a few cents off your entry price could very well result in you missing the breakout and then having to chase it to Buy."

The stock rose 38% in March, Editor Christopher Ecclestone noted in the last performance review of Hallgarten & Co.'s Resources Portfolio. On April 22, SOMA reached Hallgarten's CA$0.85 per share target price on it.

Ownership and Share Structure

According to Refinitiv, 18.13% of the company is held by management and insiders.

CEO and Chairman Geoffrey Hampson has 17.25%.

Stategic entities hold 44.24% with Conex Services Inc owning 43.68%.  A further 0.29% of control is vested in institutions. The rest is with retail investors.

Soma has 34.68 million free float shares, a market cap of CA$42.54 million and a 52 week range of CA$0.42 to 0.76.