Home > Featured Content > Soma Gold (SOMA.V) hits all its milestones, eliminates debt, raises fat cash
Soma Gold (SOMA.V) hits all its milestones, eliminates debt, raises fat cash
Soma Gold Corp. (SOMA.V) has closed the first tranche of its previously announced non-brokered private placement under the Listed Issuer Financing Exemption (LIFE), raising $15.5 million to advance its Colombian gold operations, and that comes with a twist.
The company issued 13,489,566 units at $1.15 per unit, generating gross proceeds of approximately $15.51 million, including a partial greenshoe exercise.
Geoff Hampson, CEO, told me the company currently sits at around 80% insider ownership, and that he and others who had loaned the company much of its debt converted said debt into equity in the financing, giving a real vote of confidence in the company’s future, removing its borrowing overhang, and adding cash to help get the company leveled up.
“We are very pleased to have completed the first tranche of the LIFE offering and are grateful for the continued support from both new and existing shareholders,” said Hampson in a news release. “The participation of various strategic investors further validates our long-term vision and growth strategy.”
He ain’t lyin’.
Proceeds of the raise will support mill expansion, ore sorting infrastructure, accelerated exploration and development of the Nechí mine, as well as working capital.
The debt-to-equity conversion worked on the same terms as the financing units. Soma intends to close a second tranche pending full greenshoe exercise, which would throw a few more million or so into the till if all goes well.
The brass tacks
Hampson told me Tuesday, “This capital raise positions Soma for organic growth; it allows us to pursue other properties nearby, of which we have a few in mind already – we just announced one of those in fact – we just got the 2nd mill going, and we see that helping us to achieve near term productivity improvements that will raise our revenue output almost immediately.”
The Soma boss says he expects permits for the Nechi mine – Soma’s second mine after the Cordero – to be good to go by the end of the year or early next, then eight months will be needed to build out the mine to productivity, which will then hopefully hit 25k oz per year in 2027, and 50k-60k oz projected the year after that – if all goes to plan.
“This extra capital let’s us move forward at an accelerated pace,” he said.
Time to acquire
Merger and acquisition transactions would get Soma to scale quickly, says Hampson, “So the value for shareholders is for us to get to 120k oz per year by rolling up properties and compaetitors, partners and JVs, which would allow us to be properly re-rated based on considerable cash flow. The balance sheet improvements we just did and having access to $22m in cash makes us a good potential partner. “
There have been a number of companies that have had talks with Soma as this financing had neared, as other producers are also experiencing a decoupling of their value to the commodity price of gold proper.
“The timing of the cycle is good for us as other producers are in the same boat, throwing revenue but not getting the market credit for it. Once we gain scale and momentum, be that by ourselves or with others, we believe 100k-120k oz per year is where the market finally sees you.”
A Growing Colombian Producer
Soma Gold operates more than 43 square kilometres of mineral concessions along the prolific Otu Fault in Antioquia, Colombia. Its fully permitted El Bagre mill (450 tpd) is in production, while its El Limon mill (225 tpd) is targeted for restart in Q3 2025. Combined, the company has a milling capacity of 675 tonnes of ore per day.
In addition, Soma holds an exploration property in Pará state, Brazil, currently under option to Ero Copper Corp. The company emphasizes sustainability and community engagement as key pillars of its growth strategy.
Not a straight line
Hampson admits Soma didn’t get to this happy place without hiccups.
“We set out 18 months ago to do what we’re doing now,” he says. “It’s gratifying that it’s come together but it was not a straight line to get here.”
The CEO says he probably should have done more drilling in the Cordero mine before it went to production.
“It turns out, it’s quite a complicated deposit, we thought it was continuous but it was more of a fractured style than we anticipated, so more drilling would have helped us really upgrade our numbers. but it also would have taken us longer to get to a place where we’re earning money. Folks want you to get in and produce faster so, the lesson learned is, we’ll do more drilling on the next one.
“I’m really pleased with my team,” he says, adding, “Not only did we make a discovery but we constructed the mine ourselves, we operated it ourselves, we’ve proven we can operate efficiently. Good promoters can’t always transition to running an actual mine, but we feel we’ve proven we can work it on both sides of the spectrum.”
Soma is currently milling low grade material to get the new mill up to speed, and expects full production in next the quarter to be around 4k oz per month, working up to 6k subsequently.
“The bottom line is, now we’re largely in control of our own destiny, we have the facilities and projects to generate more revenue, and the cash in hand to acquire more revenue generation beyond that. We’re feeling pretty good today.”
— Chris Parry
FULL DISCLOSURE: No commercial interest. We spotted this in the wild and have followed as it has delivered, and we’re buying on dips.
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