Interview with Kenneth MacLeod, President & CEO of Sonoro Gold Corp.

Recording date: 18th October 2024

Sonoro Gold (TSXV:SGO) represents a timely opportunity in Mexico's gold sector, developing the Cerro Caliche project in Sonora State with particularly favorable timing given two key catalysts: Mexico's improving stance toward mining investment and strong gold prices above $2,600/oz.

The company's Cerro Caliche project is advancing toward becoming a 12,000 tonnes-per-day open-pit heap leach operation, with the October 2023 PEA outlining a 9-year mine life producing approximately 33,000 ounces of gold annually. Critically, the current resource represents less than 30% of known mineralized zones, suggesting significant expansion potential from the current 500,000 ounces to a potential 2 million ounces.

A standout feature is the project's modest initial capital requirement of $15.5 million, positioning it as a relatively low-barrier entry into production. The company has completed its environmental review process and anticipates receiving permits within six months, following previous delays during the AMLO administration. The project benefits from strategic advantages including:
Location in an established mining district surrounded by producing mines
Oxide mineralization to 200m depth ideal for heap leach processing
No significant contaminants complicating environmental permits
Access to skilled labor and infrastructure
Strong project economics enhanced by current gold prices

The macro environment has improved significantly with incoming President Claudia Sheinbaum removing the threat of an open-pit mining ban and actively courting foreign investment. As CEO Ken McLeod notes, "President Sheinbaum convened a meeting in Mexico City of 200 CEOs from the US-Mexico forum and assured these CEOs that Mexico is open for foreign investment. When you disclose that to over 200 foreign CEOs with billions of dollars worth of investment in Mexico waiting on the sidelines, I think we can safely assume that we will be able to flourish in Mexico through this administration."

Sonoro Gold's management team brings significant relevant experience, having collectively built 11 mines in Mexico over the past 40-50 years. Their growth strategy encompasses:
Near-term production from initial oxide resource
Resource expansion through drilling of known higher-grade zones
Potential underground development targeting deeper mineralization
Development of their second 100%-owned property, San Marcial
Evaluation of additional acquisition opportunities

The project's economics, originally modeled at $2,000/oz gold, appear considerably enhanced at current gold prices around $2,700/oz. The company plans a phased approach to development, using initial cash flow to fund resource expansion drilling.  Near-term catalysts include environmental permit approval expected within 6 months, resource expansion drilling results, potential strategic investment as Mexico reopens to mining investment, and project financing and construction decisions

For investors seeking exposure to gold production with significant resource growth potential, Sonoro offers a compelling combination of near-term catalysts, experienced management, and macro tailwinds from both strong gold prices and improving Mexican mining policy.

View Sonoro Gold's company profile: https://www.cruxinvestor.com/companies/sonoro-gold

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