Sonoro Gold Corp.
Advancing a Low-CAPEX Gold Project Amid Mexico’s Mining Revival – Resuming Coverage
Published: Dec 17, 2025
Author: FRC Analysts
Disclosure: Sonoro Gold Corp. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Company Details
Sector – Basic Materials / Industry – Other Industrial Metals & Mining
Trading Information
Ticker & Exchange – SMOFF: NASDAQ SGO.V: TSX
Report Highlights
- We are resuming coverage on Sonoro Gold. The company’s portfolio includes the advanced-stage Cerro Caliche gold project, and the pre–resource stage San Marcial gold–silver project, in Mexico. SGO plans to spin out San Marcial into a new publicly listed entity, with shareholders receiving free shares in the new company.
- Mexico’s mining sector is rebounding under President Sheinbaum, with 100 of 175 pending permits already approved, signaling renewed investor optimism.
- Cerro Caliche is strategically located near operating mines owned by Bear Creek Mining (TSXV: BCM/MCAP: $152M) and Goldgroup Mining (TSXV: GGA/MCAP: $327M), as well as an exploration project by Agnico Eagle (NYSE: AEM). Regional M&A opportunities are emerging as GGA’s mine nears depletion, positioning SGO as an attractive target if and when Cerro Caliche receives its environmental permit. In 2028, SGO will control the surface rights over GGA’s operations, forcing GGA to negotiate directly with SGO to continue mining. We believe this situation could push both parties toward an M&A deal.
- Cerro Caliche is a low-CAPEX, open-pit project that is currently in the permitting stage. The project could reach production within 13 months of SGO receiving approval of its Environmental Impact Statement (MIA), which management expects in Q1 2026.
- A 2023 Preliminary Economic Assessment (PEA) suggested the project could be advanced to production at a very low CAPEX of US$32M (US$16M upfront), with cash costs of US$1,295/oz. The study returned an after-tax NPV5% of US$77M vs a current MCAP of only US$44M, and a high after-tax IRR of 63%, based on US$2,000/oz gold (spot: US$4,309/oz).
- Management plans to complete a resource update, and an updated PEA, by Q1-2026. With higher gold prices, the resource update will use a lower cut-off grade, which we believe should result in a 50–100% increase in resources, and significantly improved project economics. Additionally, there is resource expansion potential, as only 30% of the property’s known mineralized zones have been drilled.
- With gold near record highs, we anticipate robust M&A activity over the next 12 months as larger companies target juniors. We remain positive on gold prices, supported by US$ weakness, and strong safe-haven demand amid economic and geopolitical uncertainty.
- SGO recently strengthened its balance sheet through equity financings totaling $8M. Upcoming catalysts include an updated resource, PEA, permitting, and the San Marcial spin-off.
Risks
- Metal prices
- Permitting
- Exploration and development
- Access to capital and potential share dilution
- FOREX
Price and Volume (1-year)
|
|
YTD |
12M |
| SGO |
133% |
110% |
| TSXV |
52% |
56% |
| GOEX |
160% |
148% |
| Gold |
67% |
64% |
* Qualified Person: Stephen Kenwood, P.Geo., Director of Sonoro Gold Corp.
* Sonoro Gold Corp. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Portfolio Summary
Source: Company
Fundamental Research Corp. Equity Rating Scale:
Fundamental Research Corp. Equity Rating Scale (ratings are not a recommendation to acquire, dispose of, or take no action regarding a security; the definition of our ratings are explained below):
- Buy – Fair value is 12% above the current market price; or risk and reward is favorable
- Hold – Fair value is between 5% to 12% above the current market price
- Sell – Fair value is 5% above, or less, than the current market value; or risk and reward is unfavorable
- Suspended or Rating N/A – Coverage and ratings suspended until more information can be obtained from the company regarding recent events.
Fundamental Research Corp. – Risk Rating Scale:
- (Low Risk) – The company operates in an industry where it has a strong position (for example a monopoly, high market share etc.) or operates in a regulated industry. The future outlook is stable or positive for the industry. The company generates positive free cash flow and has a history of profitability. The capital structure is conservative with little or no debt.
- (Below Average Risk) – The company operates in an industry where the fundamentals and outlook are positive. The industry and company are relatively less sensitive to systematic risk than companies with a Risk Rating of 3. The company has a history of profitability and has demonstrated its ability to generate positive free cash flows (though current free cash flow may be negative due to capital investment). The company’s capital structure is conservative with little to modest use of debt.
- (Average Risk) – The company operates in an industry that has average sensitivity to systematic risk. The industry may be cyclical. Profits and cash flow are sensitive to economic factors although the company has demonstrated its ability to generate positive earnings and cash flow. Debt use is in line with industry averages, and coverage ratios are sufficient.
- (Speculative) – The company has little or no history of generating earnings or cash flow. Debt use is higher. These companies may be in start-up mode or in a turnaround situation. These companies should be considered speculative.
- (Highly Speculative) – The company has no history of generating earnings or cash flow. They may operate in a new industry with new, and unproven products. Products may be at the development stage, testing, or seeking regulatory approval. These companies may run into liquidity issues and may rely on external funding. These stocks are considered highly speculative.
Definition of FRC’s Fair Value Estimate – Our fair value estimate is the theoretical value of the company’s equity using widely accepted methods of valuation such as discount cash flow or comparables. IT IS NOT A TARGET PRICE or PREDICTION OF THE FUTURE STOCK PRICE.
Disclaimers and Disclosure
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Any “forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or correctness. There is no guarantee that our forecasts will materialize. Actual results will likely vary. The analyst and Fundamental Research Corp.
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The distribution of FRC’s ratings are as follows: BUY (69%), HOLD (3%), SELL / SUSPEND (28%). Yorkton Equity Group Inc.
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