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.
Risks
Price and Volume (1-year)
* 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
Two gold projects in Mexico: the advanced-stage Cerro Caliche gold project (flagship asset), and the early-stage San Marcial gold-silver project
Management plans to spin-off the San Marcial project into a new publicly listed company – Oronos Gold Corp.
Near several well-known operating mines
Mexico’s mining sector, previously constrained by regulatory uncertainty and permitting delays, is showing renewed optimism since President Claudia Sheinbaum took office in 2024. The new administration has signaled a more balanced approach, supporting economic growth while maintaining environmental oversight and accelerating permit approvals.
Mexico Mining Sector: Renewed Momentum
To date, 100 of the 175 pending mining permits have been approved, with the Ministry of Economy estimating up to US$7B in potential investment once all outstanding permits are authorized.
Notably, Mexico has begun approving open-pit mining projects . Recent approvals, including Silver Tiger Metals’ (TSXV: SLVR) El Tigre Project in Sonora, highlight this policy shift. This development is particularly positive for SGO , which is currently awaiting an environmental permit for its Cerro Caliche open-pit gold project.
Cerro Caliche Gold Project (100% interest)
SGO’s flagship project is in Sonora, one of Mexico’s leading mining states producing gold, silver, copper, iron and non-metallic minerals.
Cerro Caliche vs. Nearby Producing and Exploration Gold Projects
Source: FRC / Various
Cerro Caliche is located near several established projects, and within close proximity to two operating mines owned by Bear Creek Mining and Goldgroup Mining, and an exploration project held by Agnico Eagle
Regional M&A opportunities are emerging as GGA’s mine nears depletion, positioning SGO as an attractive target if Cerro Caliche receives its environmental permit
The Cerro Caliche p roject comprises 15 contiguous mining concessions, all 100% owned by SGO. In Mexico, mining rights are government-controlled, while surface rights belong to the landowner. SGO holds a 25-year surface lease over 3,908 ha, covering the area within the black outline on the map below, except for the 1,009 ha in red, where GGA’s Cerro Prieto mine is located. In 2028, the lease will expand to include the red area, increasing SGO’s total controlled land to 5,007 ha. At that point, GGA will need to negotiate surface rights with SGO, creating another potential M&A catalyst.
Surface Rights Lease
Source: Company
Located three hours south of Tucson, Arizona
Existing infrastructure in place, including access to roads, power, and skilled workforce
Only 30% of the Cerro Caliche concessions (1,350 ha) have been assayed and drilled to date, with 498 holes totaling 55,360 m completed. Exploration has confirmed a low- sulphidation epithermal gold-silver system, with over 25 gold-mineralized zones, extending at least 200 m along strike.
Resource Estimate and PEA
In October 2023, SGO completed a Preliminary Economic Assessment (PEA) based on a 12,000 tpd open-pit, heap-leach operation. 20 2 3 Resource Estimate
(QP Stephen Kenwood, P.Geo., Director of Sonoro Gold Corp.)
Source: Company
To date, SGO has delineated a medium-tonnage, low-grade oxide gold-silver deposit
Open-pit operations
The PEA was based on a nine-year mine life, producing 41 Koz AuEq per year, making it a mid-sized junior gold producer
AT-NPV5% of US$77M, and a high AT-IRR of 63%, using US$2,000/oz gold (spot: US$4,309/oz)
Sensitivity Analysis
(QP Stephen Kenwood, P.Geo ., Director of Sonoro Gold Corp.)
Source: Company
Moderate OPEX of US$1,295/oz and low CAPEX of US$32 M (US$16 M upfront), reflecting its small open-pit/heap-leach design
NPV and IRR are sensitive to gold prices
Resource Expansion Potential
The company is updating its resource estimate with higher gold prices, and a lower cut-off grade. With the previous estimate at US$1,800/oz, and the new one likely at US$3,000/oz or higher, we believe resources could rise 50–100%, materially improving project economics.
In addition, a 2023 study by SRK Consulting estimated potential to add 125–285 Koz AuEq (0.26–0.39 g/t) of lower-grade resources by drilling beyond the current pit shells.
Resource Expansion Potential
We see potential for resource expansion, as only 30% of the property’s identified mineralized zones have been drill-tested
Source: Company
Several additional targets remain to be explored
SGO is planning a 56-hole, 8,890 m resource expansion drill program in 2026, with a budget of approximately $9M
Permitting and Upcoming
Plans SGO has submitted an Environmental Impact Statement ( Manifestación de Impacto Ambiental, or MIA) , including a mine plan, environmental baseline studies, and socio-economic assessments. MIA approval is required before construction or mining can begin. Management expects a decision in Q1-2026 , though we note that delays are possible given the current backlog of applications.
MIA approval is the final major regulatory step before advancing to construction
In addition to the MIA, SGO plans to submit applications for a Change of Land Use permit and a Water Use permit in H1-2026. We note that these approvals are relatively straightforward, and should be granted within a few months of submission.
Permitting underway
Management’s Projec ted Timelines
Source: Company
Management is aiming to complete an updated resource and PEA by Q1-2026
Following MIA approval, SGO expects to move quickly to construction and begin production within 13 months
San Marcial Gold -Silver Project (100% interest)
This pre-resource stage project covers 1,015 ha across four contiguous mining concessions, located 30 km southwest of Cerro Caliche . It includes the historic San Marcial and Soledad mines within the Cucurpe district, a significant gold-producing region known for high-grade veins and large open-pit deposits.
Project Location
Source: Company
Located 20 km east of the currently inactive San Francisco open-pit gold mine, the project historically produced high-grade gold from quartz veins
Management plans to spin out the project into a new publicly listed company, with SGO shareholders receiving free shares. For conservatism, we are not assigning any value to this project at this time.
Management and Board
Share Ownership
Management and board own 25% of SGO’s equity
Source: Sedi/ Company/ FRC
Three out of six directors are independent
Financials
Strengthened balance sheet through equity financings totaling $8.10M since Q3-2025
Expecting $2.10M VAT refund by Q1-2026
Source: FRC / Company
Can raise up to $6.25M from in-the-money options and warrants
FRC DCF Valuation
Our DCF valuation, based on a 10-year operation producing approximately 49 Koz AuEq annually, is $0.70/share
Source: FRC
We are resuming coverage with a BUY rating, and a fair value estimate of $0.70/share. We base our valuation solely on a DCF model, as few projects offer a similar low-CAPEX, quick-to-production profile. We are positive on SGO given Cerro Caliche’s low-CAPEX profile, strong project economics, and strategic location near operating and depleting mines, which could drive near-term M&A interest.
Risks
We believe the company is exposed to the following key risks (not exhaustive):
We are assigning a risk rating of 5 (Highly Speculative)
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