Hard work, luck and a secular gold bull market have created a classic low-risk opportunity in Sonoro Gold Corp. (SGO.V; SMOFF.OTC), as it transitions from a successful gold explorer to a high-growth gold producer.

Dear Fellow Investor,

Thomas Edison famously said “opportunity is missed by most people because it’s dressed in overalls and looks like work.”

In the resource sector, the few that know opportunity when they see it typically have track records of making investors massive profits.

The résumés of Sonoro Gold’s (SGO.V; SMOFF.OTC) exploration team are a good case in point.

Sonoro’s exploration chief Mel Herdrick has been discovering and developing major gold and copper deposits in the southern U.S. and northern Mexico for the past four decades.

His work on the San Antonio and La Colorada projects resulted in Pediment Gold being taken over in 2011 at nearly 10 times its 2009 share price.

Working closely with him is Sonoro’s head of operations, Jorge Diaz, who has been building and operating mines since the 1980s.

Diaz is a Glamis Gold alumnus, a company that started in 1980 with a small heap leach mine. By 2006 it was taken over by Goldcorp for a not so small $8.6 billion.

More recently Diaz quarterbacked Alamos Gold’s giant Mulatos Mine in Sonora State, which produced its two millionth ounce of gold in March 2019.

Here’s why all this is important: In Cerro Caliche — Sonoro Gold’s nearby flagship project — Diaz sees the opportunity to begin repeating Mulatos’ success.

Indeed, Cerro Caliche and Sonoro Gold show all the signs of being the next big winner on these gentlemen’s résumés.

Near Term Gold Production:
A Low-Risk Path To Profits

Key to Cerro Caliche’s potential to deliver outsized shareholder gains is its ability to transition from an oxide gold deposit into an operating mine — and we’re not talking years down the road, but in a relative flash.

Companies with assets like that are rare finds, and when you do find them, it’s a near sure way to make serious profits. But again, they can be very hard to find.

This is where Sonoro Gold, with its clear path toward becoming a high-growth and profitable gold producer, stands out from the crowd of junior gold companies.

A good example of Sonoro’s potential is Glamis, which rocketed from C$0.80 to C$5.00 in a matter of months when its first heap leach mine, Picacho, started producing gold.

K92 Mining provided a more recent example when it acquired a mothballed mine from Barrick in 2016. K92 went on to put the mine back into production…and became one of the Toronto Stock Exchange’s best performing stocks.

But it was not always that way. Prior to the mine’s reopening and highly successful exploration and production expansion, K92’s shares languished in the C$0.40-range.

Critically, Sonoro appears to be at a similar inflection point.

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Cerro Caliche Ticks All The Boxes

Cerro Caliche possesses all of the elements required to build a highly successful mining operation.

It is located in Sonora State, where more than 30 gold mines already operate.

Sonora is an ideal mining jurisdiction — known for its easy logistics, mining friendly government, low operating costs and a large pool of skilled miners.

With Cerro Caliche, Sonoro is planning low-cost, open-pit bulk mining of near-surface oxide gold zones — beginning with the 201,000 gold-equivalent ounce* inferred resource it reported in 2019.

Now get this: Production is scheduled to begin before the end of next year.

That’s one path toward a major share-price re-rating.

But here’s another: Management expects the initial resource to increase substantially as results from ongoing drilling on the project come in.

Exploration and development of 12 square kilometers of gold mineralization at Cerro Caliche will probe no less than 17 zones of gold mineralization, encompassing eight former high-grade gold mines.

Some of these targets have already been mapped and partially drilled, so the growth potential is clear.

And this potential was made even more clear with the recent news that drilling had intercepted 45 meters of 0.97 g/t gold, beginning at surface, yet another substantial indication that the resource size and grade could greatly exceed expectations.

A Blockbuster Year Ahead For Sonoro

Sonoro’s next 12 months feature one major milestone after another, including:

• Obtaining environmental permit (the application is being finalized for submission to SEMARNAT, Mexico’s environmental review agency)

• Completing advanced metallurgical tests (also underway)

• Releasing a preliminary economic assessment

• Securing debt financing (Sonoro has already signed MOUs with three major engineering companies for the mine’s financing and development).

• Beginning mine construction

• Gold production

Knocking out this to-do list is where Sonoro’s diverse and highly skilled management comes in.

This is a group that has discovered, developed and operated more than a dozen gold or copper deposits or mines in the region — and on a global basis the total’s even higher.

There is every reason to expect Cerro Caliche will be their next major mining success.

Drilling Hitting Mineable Grades And Probing For High Grades

Drilling results at Cerro Caliche have already enabled Sonoro to upgrade production planning from a smaller, pilot-sized heap leach operation to a full-fledged mine.

And the opportunity at Cerro Caliche includes high-grade potential as well.

Sonoro is conducting a high-impact drilling campaign to find the high-grade gold vein systems potentially responsible for the project’s shallow gold mineralization. The science is based on a classic low-sulfidation epithermal model.

The nearby Mercedes high-grade gold deposit is interpreted to have been supplied by the same epithermal system that formed the deposits at Cerro Caliche.

If that interpretation bears out, it could add a lucrative new exploration chapter to the production story developing on the project.

A Compelling Low-Risk, High-Reward Investment

No matter how this high-grade campaign turns out, other potential share price catalysts lie directly ahead.

They begin early in 2021 — just a few months from now — with a new 43-101 resource estimate for Cerro Caliche that will be based on roughly 70 recently drilled shallow holes.

By April, the project’s PEA is expected.

A considerable amount of work was done to ascertain the project’s potential during 2019, which led to the signing of the finance, engineering and construction MOUs. So there is already good reason to expect that the PEA will be exceptional.

Following that report will come news on the project finance and mine construction fronts, with initial gold production targeted for next December.

What is the upside? The operational team of Herdrick and Diaz are aiming for a repeat of Pediment Gold’s historical performance. And that company made a lot of money for its shareholders.

Gold’s current weakness is providing a perfect entry point for those looking for the potential to ride Sonoro Gold to such lofty heights in 2021.

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