Vancouver-based Soma Gold Corp. (TSXV: SOMA) (WKN: A2P4DU) (OTC: SMAGF) has confirmed that the first shipment of mineralized material from the formalized Diamantina mine has been received at the El Limon mill in Zaragoza, Antioquia. This delivery follows a formalization process that lasted more than five years under Colombian law. The contractual agreement allows the company to purchase material from small-scale miners in exchange for a percentage of the gold contained in each shipment.

The Diamantina mine is currently permitted to produce up to 40 MT per day. The company intends to reach this production rate by mid-year, while 1,700 MT of existing stockpiled material is being moved to the mill for processing. This site is the first of 24 small mines on the 43,000-hectare property currently in various stages of the formalization process. These 24 mines represent a portion of the approximately 60 small-scale operations located on the company’s concessions. Management expects additional mines to complete the process and begin supplying the El Limon facility later in 2026.

“Formalization of small miners has been a key part of our strategy for many years, and it is gratifying to see the first one complete.” — Geoff Hampson, CEO of Soma Gold Corp.

To support the increased volume from both company-owned assets like the Aurora and Escondida mines and third-party formalized miners, the El Limon mill was restarted in the third quarter of 2025. Material may also be processed at the El Bagre mill, where new ore-sorting equipment is being installed. This equipment arrived in Colombia recently and is expected to be operational by the second half of 2026. Once commercialized, the ore-sorting system is projected to increase the throughput at El Bagre from 450 TPD to a range between 700 and 750 TPD.

Development at the Nechi mine is also progressing, with the Programa de Trabajos y Obras (PTO) application expected to be submitted in April 2026. If approved by the end of the year, the Nechi mine is projected to provide an additional 250 TPD to the El Bagre facility, potentially adding approximately 25,000 AuEq ounces to annual production.

Total gold equivalent production for 2025 was 18,670 ounces. This figure was below previous projections, which the company attributed to a two-month work stoppage and subsequent difficulties in hiring qualified personnel and addressing mechanical issues during the restart phase. In a separate corporate development, the board of directors approved the grant of 1,118,334 stock options at an exercise price of $2.06 CAD per share, along with 159,910 restricted share units and 76,756 deferred share units to directors and employees.

Soma Gold Corp. operates mineral concessions along the Otu fault in Antioquia, maintaining two mills within 25 kilometers of each other with a combined capacity of 675 TPD. The company also maintains an exploration property near Tucuma, Para, Brazil, which is under option to Ero Copper Corp. (TSX: ERO) (NYSE: ERO).

The mining company says it has been engaged in negotiations and recently presented an offer that included significant increases in wages, benefits, living allowances, additional days off, and a meaningful signing bonus. Nevertheless, the union declined to respond to the latest proposal and initiated strike action, resulting in the suspension of operations at both the Cordero Mine and the El Bagre Gold Complex.

Geoff Hampson, Soma’s CEO, states, “Soma remains committed to continuing good faith negotiations and to reaching a fair and mutually beneficial resolution. Our most recent offer reflects our sincere intent to support our workforce, improve conditions, and ensure long-term stability for the operation and the community. While we are disappointed by the decision to strike, we respect the union’s rights and remain open and available to resume discussions at any time. We have proposed binding arbitration as a path forward, which was declined by the union.”

Soma Gold. Photo credit: Soma Gold/X.

The transaction was structured through the sale of 13,489,566 units at a price of $1.15 CAD per unit. The offering was conducted under Canada’s Listed Issuer Financing Exemption (LIFE), a regulatory framework that allows publicly traded companies to raise capital more efficiently by reducing the extensive disclosure requirements of a full prospectus. The total raised includes a partial exercise of the “greenshoe option,” a common feature in stock offerings that allows a company to sell more shares than originally planned if investor demand is high.

A second tranche of the offering is anticipated as the company works toward the full exercise of this option. Both the placement and the debt settlement are pending final approval from the TSX Venture Exchange (TSXV).

Each unit sold in the offering consists of one common share of Soma Gold and one-half of one common share purchase warrant.

A warrant is a financial instrument that gives the holder the right, but not the obligation, to purchase a company’s stock at a fixed price (known as the “exercise price”) for a specific period. It is similar to a long-term call option. In this case, each whole warrant allows the holder to buy one additional Soma Gold common share at an exercise price of $2.00 CAD at any time within the next 36 months.

The warrants also include an Accelerated Exercise Provision. This clause stipulates that if Soma’s shares trade above $3.00 CAD for 30 consecutive days, the company can accelerate the expiry date of the warrants. Warrant holders would then have 30 days’ notice to either “exercise” their warrants (buy the shares at $2.00 CAD) or let them expire worthless. For the company, this provision is a mechanism to encourage the conversion of warrants into shares—and thus provide the company with additional cash—if the stock performs well.

“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. The participation of various strategic investors further validates our long-term vision and growth strategy,” said Geoff Hampson, CEO of Soma Gold Corp.

Companies in capital-intensive sectors like mining often raise funds through private placements to finance growth without taking on additional interest-bearing debt. By issuing new shares and warrants, a company can secure capital for expansion, exploration, and operational needs.

Soma Gold has stated that the proceeds will be used for:

• Ongoing expansion of its milling operations.
• Installation of new ore sorting infrastructure.
• Accelerated exploration and development at its Nechi mine project.
• General working capital.

Simultaneously, the conversion of $10 million CAD of existing debt into equity units is a strategic move to strengthen the company’s balance sheet. This deleveraging process reduces liabilities and cash outflows that would otherwise be used for debt service payments.

In connection with the offering, Soma Gold paid approximately $930,780 CAD in cash commissions and issued 808,473 “finder’s warrants” to third parties who helped secure investors for the placement. These finder’s warrants have the same terms as the warrants included in the units.

El Limon Mine in Colombia. Photo credit: Soma Gold/X.

The Colossa Mine, a small-scale artisanal operation previously exploited in the 1800s, lies within a mineralized trend along the Otú Fault, covering multiple historical mines across a 1.8 km corridor. Soma says that its ongoing exploration indicates high-potential gold zones, further evidenced by stream sediment results and recent channel samples.

The Colossa Mine’s quartz veins, positioned in a unique orientation relative to the Otú Fault, resemble the configuration of veins at Aris Mining’s El Silencio mine in Segovia, raising expectations of further vein extensions. Soma Gold has scheduled an initial 500-meter diamond drill program in late 2024 to further explore these zones.

Since 2023, all Soma exploration samples have been processed by ALS Lima for standardized fire-assay and ICP-MS analysis due to lab improvements at Soma’s Operadora mine lab. Soma’s properties in Antioquia now cover over 56 km of the Otú Fault, including other significant mines along the district’s mineralized trend.

Soma Gold Corp. holds mining interests in Antioquia, Colombia, and Para State, Brazil. The company’s El Bagre Mill is currently operational, with funds from production directed toward regional exploration efforts.

Above photo: Stream sediment samples collected in the vicinity of the Colossa Mine. (CNW Group/Soma Gold Corp.)

According to the company, this is expected to be a temporary move to “attend to personal matters,” and Cordova will continue in his roles as president and a director.

Executive chairman of Soma Gold’s board, C. Geoffrey Hampson, is acting as interim CEO of the Vancouver-based company, which owns two mining properties in Antioquia.

“The board of directors maintains full confidence and support for Mr. Cordova and will work with him to ensure continuity of management while he works through these matters,” said Hampson in a statement. “We look forward to his returning to his role as soon as possible.”

Photo credit: Soma Gold

It will trade under the symbol SMAGF on the new market, which the firm says it has now qualified for after sufficiently demonstrating compliance with relevant securities laws in addition to following required corporate governance and financial standards.

“We are delighted to have met the stringent requirements set by the OTCQX Market, reflecting our dedication to upholding the highest standards of corporate governance and financial reporting,” said Geoff Hampson, executive chairman of Soma Gold, in a statement.

“The move to the OTCQX Market is a crucial step in our ongoing development to foster increased confidence among current and prospective investors,” added Hamposon.

We remain committed to creating value as we continue to grow and expand our operations and presence in the market.”