Sonoro – A Case Study of a Safe Gold Play
When considering to whom to give our hard earned cash, how do we know who is capable and trustworthy? Quick financial decisions have, on many occasions, emptied bank accounts never to be refilled, but a well thought out placement of funds can reap not only extensive gains to equity, but to experience and often one’s own network. Right now, gold and silver plays are looking favourable since the world is constantly on the brink of one disaster or another, and personally, I’m searching for good geology overseen by people so deep-rooted in the mining industry that my decision is not one of faith but of sincere confidence.
In steps Sonoro Metals Corp. (TSXV: SMO | OTCQB: SMOFF) (“Sonoro”), an exploration and development company with a portfolio of precious metals properties in Sonora, Mexico and Alaska, USA. Sonoro’s highly skilled exploration team in Mexico is headed by expert geologist Melvin Herdrick, with 45 years of mine related experience, including 10 years as Chief Geologist for Phelps Dodge in Mexico, followed by 7 years as Vice President of Exploration for Pediment Gold (also Mexico) until its takeover by Argonaut Gold in 2011. And last but certainly not least, Sonoro’s Chief Geologist and Qualifying Person, Stephen Kenwood, has over 20 years of experience in mineral exploration and development.
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When I spot a company with such talent, I am compelled to investigate further; driven by a desire to know what caught their attention when assembling their particular portfolio of assets. It is no secret that Mexico has been the world’s largest silver producer for quite some time, but it also holds the title of 8th largest producer of gold, outputting 125 metric tons last year. In fact, mining makes up 21% of Sonora state’s entire GDP, and the region in which the company’s most advanced projects are located produced 35t of gold and 360t of silver in 2015. The area is so prolific that 221 foreign mining companies operate within its boundaries; no surprise, then, that Sonoro decided to crack ground here.
In Sonora, the Chipriona project yielded results of 189 g/t silver and 0.71 g/t gold over 19.9m and 100 g/t silver and 0.40 g/t gold over 20m. Sampling at the lowest underground level, 80m below surface, returned values in one crosscut of 460 g/t silver and 0.64 g/t gold over 20m. With results such as these, the company quickly sold the Chipriona project for C$4m and a 1% Net Smelter Return in order to provide the funds to fully explore their remaining resources. Drilling is scheduled at the San Marcial project for this year, and since this project is located on the infamous (in geology circles, anyway) Sonora-Mojave Megashear, I’m expecting solid results, but impressive sampling is already emerging from the company’s Alaskan Hilltop project.
Located 75 km in two directions from two extremely successful existing mines, and contiguous to Northern Empire’s Richardson property, the Hilltop project is promising indeed. Rock samples collected in magnetic lows have returned gold values up to 27.11 g/t Au, an trenching and drilling confirm the presence of gold mineralization below the surface. In the past, drilling has returned up to 4.73 g/t Au over 1.09m (3 holes by US Gold 2011), and rock grab samples graded up to 26.55 g/t Au. So far, the best 1m sample has graded a mouth-watering 19.5 g/t Au.
So here we have a company overseen by people with fairly extreme levels of experience, working on properties with pretty intense preliminary results, and having already made a significant lump sum from one property after only four years of existence. Confidence doesn’t come much firmer than this, and with today’s world barely holding onto its axis, a safe bet is exactly what most of us need.
Lara Smith has spent over a decade covering commodity markets. She started her career as a buyside analyst in South Africa where she covered soft ... <Read more about Lara Smith>