Soma Gold Reports Weaker Earnings And Production Decline in Q3 2024
Soma Gold (TSXV: SOMA) has released its financial results for the third quarter and the nine months ending September 30, 2024. Revenue posted was $22.4 million for the quarter, a slight decrease from $22.8 million in Q3 2023 and a 1.6% decline from the $22.8 million reported in Q2 2024.
This drop in revenue is attributed to lower gold sales, which totaled 6,612 ounces in Q3 2024 compared to 9,383 ounces in Q3 2023, a stark 29% reduction.
For the first nine months of 2024, revenue stood at $64.4 million, representing a 4.5% year-over-year decline from $67.4 million during the same period in 2023. Year-to-date, the company sold 20,845 ounces of gold equivalent, down 17% from 25,106 ounces in the first nine months of 2023.
Gold production totaled 6,570 ounces for the quarter, down 30% from 9,313 ounces in Q3 2023 and 16% lower than the 7,831 ounces produced in Q2 2024. The company cited narrower and fragmented veins at its Cordero operations as the primary reason for lower grades and higher dilution, compounded by unplanned development work to access high-grade zones at Upper Cordero and the Venus Gap.
Total cash costs per ounce of gold sold in Q3 2024 rose to $1,256, up sharply from $929 in Q3 2023 and a 12% increase from $1,122 in the previous quarter. This upward trend in production costs, exacerbated by disruptions such as an eight-day blockade at the Cordero mine and El Bagre mill, has significantly narrowed margins despite higher gold prices.
The average realized price of gold in Q3 2024 was $2,528 per ounce, a substantial 32.6% increase from $1,906 per ounce in Q3 2023. This pricing advantage helped improve the company’s average realized cash margin to $1,272 per ounce in Q3 2024, compared to $977 in Q3 2023, but the benefit was partly offset by higher dilution and lower head grades.
Net income for Q3 2024 was particularly underwhelming, just $1.2 million for the quarter, down sharply from $3.2 million in Q3 2023 and $2.4 million in Q2 2024. On a per-share basis, net income was $0.01, a significant decline from $0.04 in Q3 2023 and $0.02 in Q2 2024.
Soma posted EBITDA of $9.1 million for Q3 2024, down from $10.0 million in Q3 2023 and a 5.3% drop from $9.6 million in the previous quarter. The adjusted EBITDA figure for Q3, which excludes one-time items, was $9.14 million, relatively flat year-over-year but lower than the $9.6 million adjusted EBITDA from Q2 2024.
Year-to-date net income totaled $587,541, a steep drop from $8.1 million during the same period in 2023. On a year-to-date basis, EBITDA reached $22.7 million, lower than the $25.9 million in the same period last year.
Soma’s decision to defer principal and interest payments on a subordinated note to 2030 provided some financial flexibility during the quarter but also highlights liquidity concerns. The company amended the terms of its subordinated note with Conex Services Inc., allowing it to prioritize exploration and development activities. While this work is now largely complete, and production from these zones is expected to improve in Q1 2025, the delays have already affected 2024 output significantly.
Soma Gold last traded at $0.59 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
