Cerro Caliche PEA: $224M NPV, 50% IRR
Sonoro Gold Corp.'s Cerro Caliche in Sonora State, Mexico has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of $224M, an after-tax IRR of 50%, and initial capital of $83M. The proposed mine plan runs 10 years.
Sonoro Gold Corp.'s Cerro Caliche has reported Preliminary Economic Assessment (PEA) results for the gold project in Sonora State, Mexico. The study headlines an after-tax net present value of $224M at a 8% discount rate. It reflects Sonoro Gold Corp.'s (SGO.V) latest disclosed economics for the asset.
Economics. The after-tax NPV is $224M using a 8% discount rate. After-tax IRR is 50%. Initial capital expenditure is estimated at $83M, with life-of-mine sustaining capital of $26M. The study models a payback period of 1.7 years. All-in sustaining costs are pegged at 1902 USD/oz. Economics are based on Gold $3,500/oz.
Production and mine plan. The project envisions an open-pit, heap leach operation. Life of mine is 10 years.
These figures are extracted from Sonoro Gold Corp.'s technical disclosures and reflect the most recent PEA on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Reserves & Resources
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Measured | 9.7 Mt | 0.43 g/t AuEq | 133,000 oz AuEq |
| Indicated | 42.1 Mt | 0.38 g/t AuEq | 511,000 oz AuEq |
| Inferred | 8.8 Mt | 0.34 g/t AuEq | 97,000 oz AuEq |
Our Analysis
- IRR after-tax
- 50%
higher than 69% of 123 projects we track
- NPV after-tax
- $224M
higher than 31% of 197 projects we track
- Initial capex
- $83M
37% of NPV
costlier than 24% of 185 projects we track
- Payback
- 1.7yrs
slower than 33% of 108 projects we track
- Mine life
- 10yrs
- Discount rate
- 8%
- Study price assumption
- Gold $3,500/oz
- Spot gold today
- $4,083.60/oz
Sonora is one of Mexico's established mining states, with a deep service base and a long record of gold production, so the operating assumptions in this PEA deserve less jurisdictional discount than a frontier address would earn. That does not solve the problem that matters. The initial build costs $83M, about 2.4x the company's entire US$35M market cap, and for a nano-cap with one of 2 projects we track, that is a financing question before it is a geology question.
Realistic cheque writers are few. Conventional project finance typically wants about 15% after-tax IRR, and 20%+ from a thinly diversified junior like this one, so the 50% after-tax IRR (higher than 69% of the 123 gold projects we track) clears that hurdle comfortably. But lenders will not advance debt against a scoping-level study. They will want a feasibility study first, and equity has to cover the work in between. The likely paths are a strategic or mid-tier producer buying in or acquiring the asset, a streaming or royalty financier taking a slice of future production, or a heavily dilutive equity raise. With a market cap this small, any of the equity-based routes could mean existing holders own a much smaller share of the project by the time construction starts. A takeover may be the cleanest outcome for shareholders, but the premium would be set by a buyer who knows the company needs them.
The economics give the project a reason to attract that capital. After-tax NPV is $224M, about 6.5x market cap, though only higher than 31% of the 197 gold projects we track, so the appeal is the size of the value relative to a tiny equity base, not the absolute scale. That gap cuts both ways: it may be an unpriced asset, or the market may be discounting financing, dilution and the preliminary nature of the study. Payback of 1.7 years is fast, and capex at 37% of NPV is lighter than at 76% of peers, but the PEA's capital estimate can carry a plus or minus 50% band, and a cost overrun would hit a company this small hard. The study uses $3,500/oz gold against live spot of $4,083.60/oz, which leaves cushion if prices hold, though a 10-year mine life is modest.
The deciding question is whether the company can reach a feasibility study and a funding partner without giving away most of the equity value that the NPV-to-market-cap gap implies.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.
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