Sonoro Gold - The mineral wealth report by anthony garson and associates

The Mineral-Wealth Report August 2021 Sonoro Gold Corp.
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Gold and Silver Heap Leach Deposits
Share Price Evaluation/Opinion
Sonoro Gold Corp.
SGO-TSX-V, C$0.36
Anthony Garson and Associates Inc.
Toronto, Ontario, Canada
garson@uniserve.com
416-845-9939

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Table of Contents
Page
Highlights ............................................................................................................................ 3
Opinion and Reference Base …………………………………………………………………………………………. 4
SUMMARY DATA: Tables 1-5 ………………………………………………………………………………………… 4-6
Table 5: Share Price vs Asset Value & Implied Share Price Target ..................................... 6
Project Status ……………………………………………………………………………………………………………….. 6
Diagram 1 Plan View Mineralized Zones ………………………………………………………………………… 7-8
Diagram 2 Plan View Locations of Recent Drill Program ……………………………...................... 9
Diagram 3 Plan View of Future Drilling Targets in the Southern Corridor .......................... 10
Diagram 4 Northeastern and Southern Corridors: Future Drill Target location ................ 10-12
Project Economics …………..……………………………………………………………………………………………. 12
Reserves, Annual Production, Insitu Value ……………………………………………………………………. 12
Operating Costs …………………………………………………………………………………………………………….. 13
Waste Impact on Mining Costs ……………………………………………………………………………………… 13
Life-of-Mine Net Operating Profit …………………………………………………………………………………. 13
Capital and Sustaining Costs …..……………………..………………………………………………………........ 14
FINANCING THE PROJECT ………………………….………………………………………………………….......... 14
PROJECT CASH FLOW:
-Base Case Projections .…………………………………………………………………………………………………. 15
-Gold versus Silver ………………………………………………………………………………………………………… 15
-Discount Rate ………………………………………………………………………………………………………………. 16-17
PROJECT VALUATION .......................................................................................................... 17
Chart 1 NPV vs Discount Rate.............................................................................................. 18
Chart 2 Sensitivity................................................................................................................ 19
Chart 3 Payback................................................................................................................... 20
Valuation Metrics and Share Price Outlook ........................................................................ 20
Table 6 NPV & NAV ............................................................................................................. 21
Market Cap vs US$/oz Insitu................................................................................................ 21-22
Price/Free Cash Flow........................................................................................................... 22
Table 7 Summary of Valuation Metrics & Share Price Outlook........................................... 22
Conclusion........................................................................................................................... 22-23
Risks..................................................................................................................................... 23
Disclaimer............................................................................................................................ 24

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52 Week High-Low C$0.16-C$38 Current Share Price C$0.33 Courtesy STOCKWATCH.com
Highlights:
Base Case: Gold US$1700/oz. Silver US$25/oz.
Share price expected to re-rate on delivery of a Preliminary Economic Assessment report July-August 2021.
Price Range during compilation of this opinion: C$0.27-C$0.37
Near-term target price: C$0.45-C$0.60
Post Commercial Production target price: C$1.20
Avg Daily Share Volume (3 months): 347,813
Balance Sheet March 31, 2021
Cash: C$397K
Working Capital: C$(100.4K)
L.T. Debt: C$0
Capital Structure: July 2021
Current Shares Outstanding: 102.6 million
F.D. Shares: 168.5 million
Options: 9.95 million Wt’d Avg Price C$0.25
Warrants: 56.2 million Wt’d Avg Price C$0.30
Current Share Price: C$0.36
Current Market Cap: C$36.8 million
Model Calculations completed at C$0.36/share
Enterprise Value: C$36.7 million
After-Tax NPV8%/Share Project: US$70.4 million/C$85.1 million/C$0.83
After-Tax NAV8%/Share Corporate: US$73.8 million/C$89.5 million/C$0.87

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Opinion
Under a scenario of a 5.5-year mine life and annual production rate of 50,000 oz. of gold, it is this
opinion that the current share price (C$0.36) is substantially below valuation metrics tabulated in
Table 5 below. De-risking the Cerro Caliche project should close ratio discrepancies implying a near-
term to post-commercial price target of C$0.45-C$0.60 and C$0.60-C$1.20, respectively. A higher
share price can be achieved if aggressive exploration is undertaken to expand known reserves to
target 70 million-100 million mt containing more than 1-1.5 million oz. of gold. This can be
determined over the next 2-3 years. If successful, open-pit mining operations might undertake
expansion in the third year of production. Production rates could be increased to 20,000 mt/day from
15,000 mt/day to produce 80,000 oz. of gold per year and provide a mine life of 12-14 years.
Reference Base
This report has been prepared prior to the release of a Preliminary Economic Assessment (PEA)
technical report due in mid-August 2021. Input data is based on best estimates derived from, corporate
filings, and general management discussions. Factors such as projected grades, production levels,
operating costs, capital and sustaining costs could vary widely with respect to the upcoming PEA. Data
tables (1-5) below provide input assumptions, production output, cash flow analysis and share price
outlook.
SUMMARY DATA
Metal Price Assumptions: Gold US$1700/oz and Silver US$25/oz through Life of Mine (LOM)
Table 1: Production Data
Cero Caliche Annual Factor Avg LOM
9m Mo.
2022 2023 2024 2025 2026 2027 LOM
Daily Production mt/d 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000
Total Ore (Kt) mt 4,316 3,810 4,950 4,950 4,950 4,950 2,285 25,895
Total Waste (Kt) mt 9,749 7,430 11,880 11,880 11,385 10,890 5,027 58,492
Total Material (Kt) mt 14,065 11,240 16,830 16,830 16,335 15,840 7,313 84,387
Grade Au g/mt 0.50 0.5200 0.5200 0.4950 0.4950 0.4950 0.4950
Grade Ag g/mt 4.3 4.3 4.3 4.3 4.3 4.3 4.3
Gold Contained oz 63,697 82,756 78,778 78,778 78,778 36,367 419,154
Silver Contained oz 526,727 684,330 684,330 684,330 684,330 315,920 3,579,968
Recovery Au 72% 72% 72% 72% 72% 72% 72% 72%
Recovery Ag 30% 30% 30% 30% 30% 30% 30% 30%
Total Recovered Au oz 49,435 40,684 59,584 56,720 56,720 56,720 26,185 296,611
Total Recovered Ag oz 176,809 140,175 205,299 205,299 205,299 205,299 94,776 1,056,145

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Table 2: Direct Operating and All in Sustaining Cost (AISC)
Production Costs: 2022 2023 2024 2025 2026 2027 LOM
Cash Operating US$/mt ore treated $12.28 $12.96 $12.96 $12.81 $12.66 $12.66 $12.72
Cash Operating US$/oz $1,059 $1,025 $1,074 $1,061 $1,049 $1,049 $1,057
Total Operating US$/mt ore treated $12.67 $13.38 $13.36 $13.21 $13.06 $13.06 $13.21
Total Operating US$/oz $1,148 $1,112 $1,166 $1,153 $1,140 $1,140 $1,142
AISC US$/oz $1,161 $1,151 $1,204 $1,184 $1,171 $1,289 $1,193
Table 3: After-Tax Net Income Projections
-1 1 2 3 4 5 6 7
Yr 1 2021 2022 2023 2024 2025 2026 2027 2028 LOM
Rev $0 $73,602 $104,298 $99,525 $99,525 $99,525 $45,946 $0 $522,421
CoG $0 $46,790 $64,157 $64,143 $63,400 $62,658 $28,926 $0 $330,073
Royalty $0 $1,472 $2,086 $1,990 $1,990 $1,990 $919 $0 $10,448
Deprec'n $0 $3,133 $4,724 $4,777 $4,989 $5,344 $3,487 $0 $26,455
EBIT $0 $22,207 $33,330 $28,615 $29,146 $29,533 $12,614 $0 $155,444
Int. Exp. $0 $0 $0 $0 $0 $0 $0 $0 $0
EBT $0 $22,207 $33,330 $28,615 $29,146 $29,533 $12,614 $0 $155,444
Tax $0 $8,327 $12,499 $10,730 $10,930 $11,075 $4,730 $0 $58,291
Net Inc. $0 $13,879 $20,832 $17,884 $18,216 $18,458 $7,884 $0 $97,153
per share
US$ $0.000 $0.136 $0.203 $0.175 $0.178 $0.180 $0.077 $0.000 $0.16
per share
C$ $0.000 $0.164 $0.247 $0.212 $0.216 $0.219 $0.093 $0.000 $0.19
Table 4: Free Cash Flow Projections (FCF)
Year 2021 2022 2023 2024 2025 2026 2027 2028 LOM
EBIT $0 $22,207 $33,330 $28,615 $29,146 $29,533 $12,614 $0 $155,444
Net Op.
Aft. Tax $0 $13,879 $20,832 $17,884 $18,216 $18,458 $7,884 $0 $97,153
Dep. $0 $3,133 $4,724 $4,777 $4,989 $5,344 $3,487 $0 $26,455
w/c 0.0 -$4,644 0 0 0 0 $4,644 $0 $0
Capex+
Reclam. $22,205 $550 $1,220 $970 $520 $520 $1,020 $2,000 $29,005
FCF -$22,205 $11,819 $24,336 $21,692 $22,685 $23,282 $14,995 $2,000 $94,603
Cumm -$22,205 -$10,386 $13,949 $35,641 $58,326 $81,608 $96,603 $98,603 $0.92
FCF/Sh
o/s $US -$0.22 $0.12 $0.24 $0.21 $0.22 $0.23 $0.15 $0.02 $0.19
FCF/Sh
o/s $C -$0.26 $0.14 $0.29 $0.26 $0.27 $0.28 $0.18 $0.02 $0.23
s

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Table 5: Share Price vs Valuation Metrics & Implied Share Price Target
Factor NPV NAV P/CF (LOM)
$/oz
Insitu
EV $/oz Insitu _ _ _ $65
Industry-middle range _ _ 2.5x-6x $80-$200
SGO possible range _ _ _ $70-$90
US$mm $70.20 $74.8 _ _
C$mm $85.33 $90.7 _ _
C$/sh. $0.83 $0.88 _ _
C$/sh. F.D. $0.51 $0.54 _ _
Avg C$/sh. $0.67 $0.70 _ _
Avg Price/NPV 0.54 _ _ _
Avg Price/NAV _ $0.51 _ _
Target Ratio 0.7 0.7 _ _
Target Sh. Pr. C$ $0.35-$0.60 $0.50-$0.62 $0.50-$1.20 n/a
PROJECT STATUS
• Project Name/Location/Ownership: Cerro Caliche/1400 hectares/Sonoro State/Mexico/150 km
northeast of the state capital, Hermosillo. Option to purchase 100%.
• Technical Report NI 43-101 completed July 2019 identified an Inferred resource of
11.5 million mt grading 0.5g/mt of gold and 4.3 g/mt of silver containing 201,000 oz of gold at
a 0.545 g/mt gold equivalent grade.
• Historical/Recent Data Compilation: 47,500 m of drilling/433 drill holes/surface
mapping/Geochem. sampling in preparation for a Preliminary Economic Assessment (PEA)
technical report, expected by mid-August 2021.
• Significance of Work-To-Date: Confirmed a material expansion and strategic extension of four
major parallel northwest trending gold bearing zones. Diagram 1
The gold bearing zones are expected to substantially increase the size and classification of the
resource and support a proposed heap leach mining operation with an operating capacity of up to
15,000 metric tons per day over a minimum mine life of at least 5 years.

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Diagram 1: Illustration of 4 mineralized zones and selected high-grade intercepts within parallel zones.
(Source: Sonoro Gold Corp)
Additional gold mineralization has also been identified in at least four other less developed satellite
locations surrounding the above major zones. A promising target is the San Marcial property.
San Marcial Project
“The 100% owned San Marcial project covers over 1,000 hectares (2,471 acres), located 30 km
southwest of Cerro Caliche and 20 km east of Magna Gold’s San Francisco mine. The concessions
surround the sites of the original mine workings of the San Marcial and Soledad mines that were active
in the early 1900s. Both mine areas have yielded samples showing “high-grade gold and silver
mineralization, with broader low-grade zones of disseminated to stockwork forms of mineralization”.
(Sonoro Gold Corp).

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Additional Background - Cerro Caliche
As described above, 200,000 oz of gold mineralization was determined within the central portion of the
Cero Caliche property that included the areas represented in Plan View Diagram 1 above.
Inferred resources must be converted (upgraded) to an Indicated or Measured mineral resource to be included in
an economic evaluation. The July 2019 NI 43-101 Technical Report did not include resources in the Measured or
Indicated categories.
It was observed in compiling the Inferred resources that many of the mineralized zones remained open
along strike and at depth implying that further extensions to the resource base was possible. In addition,
new mineralized zones had been identified by surface mapping and surface geochemical rock sampling.
In 2020 and based on advice contained in the NI 43-101 Technical Report and internal management’s
assessment, Sonoro Gold began a 25,000 m reverse circulation (RC) exploration infill drill program (less
than 100 meters between drill holes) with a view to converting Inferred resources to Indicated status
and to test expansion of current resources. Sonoro Gold also undertook step-out drilling to explore
continuity of known mineral zones along strike and at depth.
Infill drilling was undertaken along adjacent boundaries of two of four major zones noted in Diagram 1
above. The Company investigated the potential of merging the Japoneses and Buena Suerte zones into
a single body of shallow (70m-80m) oxide gold mineralization. Drill results indicate that the two zones
appear to coalescence over a minimum length of 400 meters. This was supported in a recently reported
(June 1, 2021) drill hole SCR-262 that cut multiple intervals of gold mineralization over a 52-meters
interval from surface. The interval included 1.53 meters averaging 2.171 g/mt gold. Apart from the
high grade of this drill hole, the significance is that it was collared in the center of the 150 meters gap
between Buena Suerte & Japoneses zones supporting the potential of a single open pit overlapping
these two zones.
In a June 1, 2021-press release, Sonoro reported that the Japoneses and Buena Suerte zones may be
linked to a central Buena Vista zone (Diagram 2) that could ultimately extend the above length
(400 m) to 700 meters and width to 650 meters. Additional infill drilling will be required to confirm
this. If confirmed, the resource may eventually prove to contain 80 million mt containing 1.3
million oz of gold and 11 million oz of silver.

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Diagram 2: Plan View of Cerro Caliche Historical and Current Drill Locations.
Source: Sonoro Gold Corp.
Diagram 3 illustrates future drilling targets in the Southern Corridor in proximity to El Colorado, Buena
Suerte and Japaneses parallel zones that are noted in Diagram 2 above.

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Diagram 3 Plan View: Potential Expansion of the Southern Corridor.
Please see Diagram 4 below to identify zones in the following discussion.
“A subsequent news release on July 20, 2021 announced the results from an ongoing sampling and
mapping program in two areas Sonoro identifies as the Southern and Northeastern mineralized
corridors. Both areas represent significant extensions to the already mapped and drilled zones of gold
mineralization. They are in areas not previously explored due to a lack of access, soil cover and rugged
terrain. Most of the samples were taken from bedrock exposed as access roads were built during the
past year. The Southern Corridor results have extended the previous southern limits of the El Colorado
and Buena Suerte zones by 750 meters. Samples taken from road cut exposures include 23.7 meters
averaging 1.7 grams of gold per tonne (“g/t Au”), including 5.5 meters averaging 6.0 g/t Au. In the
rugged northeastern La Magdelena - La Española corridor, elevated silver values were reported including
a one-meter chip sample which assayed 1,230 g/t Ag with 6.6 g/t Au. The robust grades reported from
these new mineralized corridors add further to the potential for a Cerro Caliche operation to be

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extended considerably beyond the current projected 5-year mine-life. A drill program to test multiple
targets generated by the mapping and sampling program is expected to commence this September–
October.”
Diagram 4: Northeastern and Southern Corridors: Future Drill Target Locations

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Subsequent Development Events
In moving the Cerro Caliche project forward, as per a June 1, 2021-press release:
• Sonoro Gold engaged Micon International Ltd. to prepare a revised NI 43-101 Technical Report
on estimated resources on all drilling data completed to April 15, 2021.
• The Company engaged D.E.N.M. Engineering Ltd. to prepare a Preliminary Economic
Assessment (PEA) on a heap leach mining operation by assessing the project’s capital and
operating costs that would support an initial operating capacity of approximately 15,000
mt/day. Sonoro Gold expects delivery of the PEA by early August 2021.
• Subject to a positive technical report and completion of financing requirements, Sonoro plans
to begin construction in the last quarter of 2021 and commission mine start-up by mid-2022.
PROJECT ECONOMICS
The BASE CASE opinion expressed in this report is modelled and derived on the following input
parameters: Gold Price US$1700/oz, Silver US$25/oz and a long-term dollar exchange rate of $US
vis-a-vis $CDN of 1.21. Noninflated over the mine life.
Reserves, Annual Production/Insitu Value
Prior to the completion of a Preliminary Economic Assessment (PEA) or pre-feasibility study, it is difficult
to estimate mineable reserves for a project. Sonoro is optimistic that a resource supporting a minimum
mine life of 5 years at a 15,000 mt/day rate will be established in the upcoming PEA. This rate of
production points to an economic reserve requirement of 25-30 million mt.
A review of the two main parallel mineralized zones, Buena Suerte and Japoneses, suggest that there
could be an overlap at the northern end of these zones that includes a middle extension known as
Buena Vista (Diagram 2). An assumed length 450 m x width 325 m x depth 75 m and a 2.5 mt/cubic
meter specific gravity would imply a potential 27.4 million mt reserve. This model applies a grade of
0.5g/mt of gold and 4.3 g/mt of silver to this reserve.
There is a possibility that a slightly higher than average grade starter pit could be utilized in the first year
of production. This model allows for a starter grade of 0.52 g/mt gold for 24 months commencing in
Q2/2022 before reducing to 0.495 g/mt in the remaining 3.5 years.
• The gross insitu value of ore amounts to about US$31/mt., containing 419,000 oz of gold and
3.5 million oz of silver.
• Sonoro Gold plans commercial production to begin Q2/2022.

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• This model utilizes a recovery rate of 72% that coincides with the July 2019 NI 43-101 Technical
report. However, preliminary metallurgical bottle roll test work confirms mineralization is
amenable to cyanide leaching with recoveries averaging 80.3%. Column testing is also now
underway.
• 15,000 mt/day operating 330 days/year for a 5.5-year mine-life to produce an average annual
output of 4.95 million mt of ore and 50,000 oz of gold and 176,000 oz of silver.
• On account of the delayed leaching cycle of newly stacked ore, and late start-up, gold recovered
in 2022 is projected at about 40,000 oz.
• Life of Mine production amounts to 296,000 oz. of gold and 1.06 million oz. of silver.
OPERATING COSTS, ALL-IN SUSTAINING COSTS
Operating Costs
• In perspective, Life-of-Mine operating revenue averages US$20.15/mt.
• The model utilizes unit operating costs from Company literature and comparative operations
located in Sonoro state. Comparing operating costs with other producers can be problematic;
however, we have applied the following key unit costs per mt of ore mined:
• Mine operating US$1.50/mt, processing US$6.80/mt., ranging between US$6.50-$7.00/mt, G&A
US$1.00/mt (US$0.50- US$1.00). A silver credit has been applied towards the Refining and
Transportation costs. Life-of-mine total direct operating costs average US$12.72/mt. of ore
mined or US$1,057/gold equivalent oz produced. The All-In Sustaining Cost (AISC) averages
US$1,193/oz.
Waste Impact on Mining Costs
Removing waste material affects the cost per tonne of mined ore, cash flow and payback period. The
waste to ore mined strip ratio is estimated to average 2.3:1 over the life-of-mine (LOM). However, it will
vary in each production year. Hopefully the starter pit will have a lower-than-average strip ratio which
in this analysis is set at 1.95:1 during the first year of production. A lower ratio in the early years will
reduce the payback period. Thereafter, the applied ratio ranges between 2.2-2.4:1.0. Based on the
applied strip ratio, the average LOM operating cost amounts to US$4.86 per metric ton of ore mined.
The life-of-mine Net Operating Profit averages US$7.43/mt or US$615/equivalent oz of gold.

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Capital and Sustaining Costs
The capital costs discussed below are used to value the Net Present Value (NPV) of the project. Sonoro
plans to utilize a contractor. A contractor reduces the amount of capital financing required by the
Company which in turn could reduce share dilution.
The main direct project costs are tied up in crushing equipment, conveying equipment, mining
equipment, leach pads, water system, treatment plant and refinery (adsorption, desorption, refinery
plant) and the transmission power supply system. Including other ancillary or discretionary costs such
as: assay lab, storage facilities, miscellaneous. buildings, accommodations, furniture, computer
equipment, health and safety and consultants. The total direct capex is estimated at US$25.5 million.
This amounts to about US$1,700 per mt of daily production.
• At this early stage of development, the above capital cost estimate could vary by +/- 30%. The upcoming
PEA will shed light on this estimate.
• The mine life is modelled for 5.5 years. Sustaining costs over the production life are estimated at a
minimum US$500,000/year.
• End of the mine life US$2.5 million for demobilization and mine closure.
• Mine closure costs are included because the mine is modelled to close in 5.5 years.
• Cash flow from operations are projected to sufficiently meet sustaining costs.
FINANCING THE PROJECT
The Company plans to commission a contractor to carry out the mine operation. A main consideration
is that the contractor will provide the necessary fleet of mining vehicles to operate the project. Not all
aspects of the operations will be covered by the contractor. Terms of the contractor and Company
responsibilities are presumably under negotiation. Utilizing a contractor will lower the amount of
capital that Sonoro will need to finance the project. We estimate this amount to be in the order of
US$20 million.
Funds need to be raised during 2021 to meet the production target of April 2022. An equity financing at
the current price of approximately C$0.30 would be highly dilutive. Initially there were 65 million
warrants exercisable at prices ranging between C$0.15 and C$0.30. The total value of the warrants on
exercise amounts C$16.6 million. One might assume that most, if not all, warrants would be exercised
between C$0.40-C$0.60. This would raise sufficient funds to meet immediate working capital
requirements and partial capital requirements. However, this is not guaranteed. It will be prudent and
necessary for Sonoro to seek other sources of capital that could minimize share dilution. The fully
diluted share position on exercise of all outstanding warrants and options results in about 168.5 million
outstanding shares.

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Working capital requirements in the first 1.5 months of production amounts to US$7.6 million. Due to
production ramp up during the leaching cycle, it might be prudent to raise this amount for working
capital purposes. This could be satisfied from exercise of the warrants. Alternatively, an equity raise is a
possibility.
Sonoro could seek other sources of capital that minimize share dilution. One such consideration might
be a Gold Loan (Streaming) arrangement. Under this scenario, Sonoro would deliver a fixed amount of
gold and silver production monthly, possibly at a price discount, to satisfy the loan repayment schedule.
At US$1,700/oz gold and US$25/oz silver, approximately 11,000 oz - 12,000 oz of gold and 37,000 oz of
silver could repay the loan in approximately 15 months.
PROJECT CASH FLOW
Base Case Projections
Under the Base Case assumptions and at a gold price of US$1,700/oz and silver price of US$25/oz, the
gross insitu value of ore in the ground amounts to about US$31/mt. The insitu resource would contain
more than 419,000 oz of gold and 3.5 million oz of silver. At a mining rate of 15,000 mt/day (330 d/y),
the resulting mine life amounts to 5.5 years.
Gold versus Silver Contribution to Value
Gold dominates the value of the insitu ore. On a relative value basis, silver represents only 11% of the
insitu ore value. After recovery of the silver, the gold equivalent ounces over the LOM amounts to
about 15,000 oz of gold, representing about 5% of the silver contribution to cash flow and provides a by-
product credit towards Smelter & Transportation costs.
Annual after-tax Free Cash Flow over the mine life averages US$19.7 million or about C$0.19 per issued
and outstanding share. It ranges as high as US$24.6 million or about C$0.24 per share.

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Figure 1 below illustrates the relative composition of recovered metal values. Silver recovery is an
estimated 30%.
Figure 1
Discount Rate
There is considerable subjective judgment when applying a discount rate to determine a project’s Net
Present Value (NPV). In recent times, there has been a tendency towards a unanimous 5% rate used to
compare diverse mining start-up operations. It appears that the low discount rate used in current
literature reflects record low global real interest rates. The discount rate should at least reflect
corporate risk based on a review of key factors that could affect the operating and economic outcome of
the operation. Once again, such applied risks can be quite subjective. Some of these considerations
follow:
1. Low Risk: Security of Tenure is always a major factor. We are not aware of any recent
history of mine confiscations in Mexico. The Company through its Mexican subsidiary has
an Option Agreement to acquire a 100% interest in the Cerro Caliche Concessions over a 72-
month period for a total consideration of $US2.98 million, payable in instalments. These
instalments are up-to-date and terminate in January-March 2024.
2. Medium to High Risk: Mexico’s president, Andres Manual Lopez Obrador, has warned the
international mining community that there will be closer scrutiny of environmental issues
with respect to open-pit mining operations. Permitting of the project is on track. With
completion of a positive PEA report, management is confident the Environmental Impact
Assessment (EIA) and project approvals will be secured in Q4/2021 and that construction
can be undertaken with production timed for Q2/2022.
3. Low Risk: Operations are not located near villages or ejidos (system of communal land
tenure). Proximity could require noise and dust abatement policies, increased
environmental considerations or land payments to the ejidos.
94.9%
5.1%
%
RELATIVE VALUE OF RECOVERABLE METAL
Gold Oz Silver Oz

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4. Low Risk: Proximity to drug cartel operations could be an issue but does not appear to be
problematic in this region of Sonora State. However, this does not rule out protocol
concerning safety and security issues.
5. Low Risk: Executive and corporate management come from extensive backgrounds in
leadership, financial fund-raising ability and technical expertise. Both Ken MacLeod
(President, CEO, Director) and John Darch (Chairman, Director) have a rich background in
the financing and completion of projects worldwide. Management’s experience in
building and operating gold heap leach projects in Mexico will be extremely helpful to the
success of this project. In addition, one cannot underestimate the importance in
management’s understanding of the local cultural, regulatory and political framework of
Mexican society.
6. Medium to High Risk: The tax system has been in steady state for some years but as the
bullion price rises (and net earnings), there could be pressure to increase corporate tax
payments. Currently, the federal tax rate is 30% with a 7.5% state tax. Management is not
aware of any move to increase tax rates from either jurisdiction. The president of Mexico
has stated that mining companies should pay their fair share of taxes. However, the Mexican
government is aware of the hard currency contribution of the mining industry to Mexico’s
foreign currency reserve base. It appears that workers are satisfied with working conditions
at mine sites in Sonora State. We estimate a minimum of 150 workers at the Sonoro site.
In conclusion, it is this opinion that application of a 5%-10% discount rate represents a fair range. This
model applies an 8% discount rate in deriving the project Net Present Value (NPV). A sensitivity analysis
utilizing low to high end discount rates can be applied to test the robustness of the project.
PROJECT VALUATION
In summary and applying the input data of this model to a 5.5-year mine-life:
We note that an Inferred resource is not included in a Net Present Valuation.
The main uncertainty in evaluating the project lies in the conclusions of the Preliminary Economic
Assessment (PEA) due in early August 2021. The PEA represents the first economic assessment of the
project and generally ranks behind the detailed analysis of a Pre-Feasibility or Bankable Feasibility
report.
Much of the cost data base applied in this model is derived from comparative heap leach operations
both in Mexico and elsewhere and best “guesstimates” concerning the size of economic reserves that
might be reported in the PEA.

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Chart 1 below illustrates NPV vs various discount rates. The project remains robust at discount rates
approaching 20% suggesting a high Internal Rate of Return (IRR).
Chart 1: (13 iterations of 8% to 20% at +1% each year)
The pre-tax NPV8% of the project amounts to US$114.3 million or C$1.35 per issued and outstanding
share (102.4 mm).
• The after-tax NPV8% of the project amounts to US$70.4 million or C$0.83 per issued and
outstanding share. IRR ~100%
• The after-tax NAV of the project is estimated at US$89.4 million or C$0.87 per issued and
outstanding share.
0%
5%
10%
15%
20%
25%
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
1 2 3 4 5 6 7 8 9 10 11 12 13
NPV vs Discount Rate
NPV ($US mm) Discount Rate Sensitivity

19
Sensitivity to Inputs
Chart 2 below demonstrates the respective impact of key variables on project NPV on an after-tax basis.
• The project is sensitive to the gold price. Silver impact is small but does provide a credit towards
smelter and transportation costs.
• The project is sensitive to changes in operating costs. Mining costs are borne by the contractor,
but the overall impact is clear.
• Grade is somewhat synonymous with metal price. Grade control practice will be important
during the open pit mining operation.
• The project NPV is not highly leveraged to the capital expenditure. There is latitude but share
structure during the financing period will be most affected by the final capex figure.
• The tax rate impacts payback and return on capital.
Chart 2: Sensitivity Ranking of Input Variables +/-
$94.0
$54
$90
$68 $66
$70.2
$118
$38
$51
$65
$75
$46.6
$86
$63
$22.9
$102
$78
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
A
u
P
r
.
%
+
1
0
/
+
2
0
/
-
1
0
/
-
2
0
O
p
.
E
x
%
+
1
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/
+
2
0
/
-
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-
2
0
G
r
.
+
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a
p
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+
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+
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T
a
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%
+
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-
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B
a
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e
C
a
s
e
NPV (US$mm)
Sensitivity to Key Input Data

20
• Payback of the project occurs in about 21 months from commercial start-up.
Chart 3: Project Payback
Valuation Metrics & Share Price Outlook
NPV
The Net Present Value (NPV) is based on a discounted cash flow analysis utilizing a non-inflated gold
price of US$1700/oz and a silver price of US$25/oz over the life of the mining operation. NPV amounts
to US$70 million discounted at 8%.
Based on NPV & NAV
Balance sheet adjustments that consider receivables, exploration credits, working capital, pre-
production expenses and option/warrants in the money provide an asset value approaching
C$90 million or C$0.87 per share outstanding (F.D. C$0.53) or 1.5x the current F.D. share price.
At this stage of development, the NAV is volatile and would be leveraged by option and warrant
exercise, long term debt and metal price appreciation. The current market capitalization to NPV & NAV
is about 0.42x. We think the price/NAV should trade in the 0.60x-0.75x range supporting a share price
target of C$0.50-C$0.65 per share. P/NAV can range to more than 1:1-times but only in more advanced
production companies. Table 6 tabulates both NPV and NAV outcomes.
-40
-20
0
20
40
60
80
100
2021 2022 2023 2024 2025 2026 2027 2028
Project Payback
Undiscounted Cash Flow
Capex Cumm

21
Table 6: NPV & NAV
US$ mm Base Case
Project Economics: (after-tax) NPV8%
Base Case-NPV Cerro Caliche $70.2
IRR Approx. 100%
Return on Capital 255%
Sonoro Gold Valuation: Base Case (US$mm)
NPV8% $70.2
Vat Receivables1
$1.8
Exploration Credit1
$2.8
Total Value $74.8
Company Valuation (C$ mm) $90.7
Add: Adjustments (US$mm)
Working Capital1
-$0.1
Option & Warrants (In the money)2
$0.9
Pre-Production Expenses3
-$0.8
Project Financing (Equity + Streaming Loan)4
$0
Corporate Value $0.0
Company Valuation (US$ mm) $74.8
Company Valuation (C$ mm) $90.7
Company Valuation (C$/share) $0.87
Company Valuation (C$/F.D. share) $0.54
P/NAV Current 0.32
P/NAV (FD) 0.52
Note 1 As at Mar 31, 2021
Note 2 As at June,2021
Note 3 Estimate
Note 4 As at June,2021 not completed.
Note 5 EV = (Mkt Cap.-w/c + LTD)
Enterprise value (EV) vs US$/oz Insitu
This is a weak metric. The ratio can fluctuate considerably based on market conditions, perceived
operational risks, jurisdiction risk and general robustness to changing conditions. This value is applied
when considering takeover bids utilizing enterprise values (EV). The current EV is about C$37 million and
is approximately equal to the current market capitalization of Sonoro Gold.
• The model assumes 25-30 million mt containing some 472,000 gold-equivalent oz. or 314,000
recoverable oz at a gold price of US$1700/oz. The Enterprise Value is trading at US$65 per insitu
ounce. Near term, we think that it could trade in the range of US$70-$90/oz as the project is de-
risked and reserves are expanded. In this opinion, at this present stage of corporate
development, a DCF analysis of the project is a superior valuation metric in determining share
price targets.

22
Price/Free Cash Flow
• The LOM average annual cash flow amounts to US$19.8 million or about C$0.20 per current
share outstanding or 0.55x the current share price. Industry observers suggest that share
prices can trade at 2.5x-6x or more cash flow. This would imply a Sonoro Gold share price
target range of C$0.50-C$1.20/share. The higher ratio value implies that a strong cash flow
can be utilized to increase shareholder value through reserve expansion, possible acquisitions
or even become a friendly/predatory target.
Table 7 below provides a summary of valuation metrics and implied share price targets.
Factor NPV NAV P/CF (LOM)
$/oz
Insitu
EV $/oz Insitu _ _ _ $65
Industry-middle range _ _ 2.5x-6x $80-$200
SGO possible range _ _ _ $70-$90
US$mm $70.20 $74.8 _ _
C$mm $85.33 $90.7 _ _
C$/sh. $0.83 $0.88 _ _
C$/sh. F.D. $0.51 $0.54 _ _
Avg C$/sh. $0.67 $0.70 _ _
Avg Price/NPV 0.54 _ _ _
Avg Price/NAV _ $0.51 _ _
Target Ratio 0.7 0.7 _ _
Target Sh. Pr. C$ $0.35-$0.60 $0.50-$0.62 $0.50-$1.20 n/a
Conclusion
In this opinion, there is a high probability that an open pit heap leach mining operation will be
developed and brought into production at Cerro Caliche.
• The above Table 7 ratios indicate that the current share price is trading below NPV of the
project, NAV, and projected P/CF ratios. De-risking the project’s resource and production
potential should support a re-rating of the share price to a near term target range of C$0.45-
C$0.60 and a higher target range of C$0.50-C$1.20 upon successful commercial production.
• The above ratios do not fully reflect value attributable to the land package under Sonoro’s
ownership (or near ownership). The values above do not account for the potential to expand
resources along strike and at depth in the immediate area of the main parallel mineralized
zones.
• Locally, less than 20% of Cerro Caliche’s mapped gold mineralized zones have been drilled and
assayed. After completing the recent exploration program, Sonoro has developed a good
understanding of mineralization controls at Cerro Caliche. The infill and expansion program
results will provide a complementary new data base to define additional economic resources in
the upcoming PEA.

23
Sonoro is aggressively seeking to expand resources to 70-100 million mt. containing in excess of
1.0 million oz of gold. It will take time but there may well be a decision made by the second or third
year of production to expand mining operations. Sonoro’s second property, San Marcial, may yield an
additional independent standalone open-pit operation. Mel Herdrick, Sonoro’s VP of Exploration, and
Jorge Diaz, Sonoro’s VP Operations, have been active in the region since the 1980s and may add
additional projects to Sonoro’s portfolio once the Cerro Caliche mine is up and running. In short, this
5.5 year projected mine life may be just the beginning (Phase I) of a prolonged mining operation that
could extend to 12-15 years of production, while other similar opportunities are advanced. This is a
predatory industry. Any potential merger with an established producer may well carry a premium to the
current valuation.
_____________________________________________________________________________________
Risks to Meeting Valuation and Price Targets:
• Sonoro Gold Corp. relies on financial markets to achieve financing for this project. Success will
be based on perception of project feasibility (outlook of up-coming PEA). Market sentiment
towards pre-development mining companies can be volatile due to metal prices, foreign
exchange rates, interest rates and general performance of the equity markets.
(Impacts both ways).
• The per share valuation metrics may vary under unexpected share price dilution. Forced
equity financing at depressed equity prices may occur. Financing the required capital with
minimal equity dilution is a major consideration in meeting valuation targets.
• Assumptions regarding development capital and operating costs may differ from estimates
made in this report. Delays in permitting or capital procurement. Health issues can impact
operational efficiencies (Covid-related).
• Operational performance can be affected by unforeseen changes in mine sequencing plans,
mineralogy, ground conditions, grade control or changes of waste to ore ratios.
• Regulatory changes are always problematic and can impact environmental requirements.
Delays in permitting or taxation changes can impact the future cash flow projections of this
model.

24
Disclaimer
• THIS OPINION IS NOT A SOLICITATON TO BUY OR SELL SECURITIES.
• ANTHONY GARSON IS NOT A REGISTERED INVESTMENT ADVISOR.
• THE WRITER OF THIS REPORT (ANTHONY GARSON) OWNS SHARES IN SONORO GOLD CORP.
• THIS REPORT WAS PREPARED INDEPENDENTLY BY ANTHONY GARSON AND ASSOCIATES INC.
• SONORO GOLD CORP. PAID NO FEES DIRECTLY OR INDIRECTLY FOR THE PUBLICATION OF THIS REPORT.
• The Mineral-Wealth Report is a newsletter published by Anthony Garson and Associates Inc. “AGA” and is intended
for informational purposes only.
• AGA is not registered as an investment firm or broker/dealer. Readers should conduct their own research and due
diligence and obtain professional advice before making any investment decision pertaining to opinions expressed
in this publication.
• Actual corporate results may differ significantly from opinions expressed in Mineral-Wealth publications.
• The author of this report is not responsible for updating the information in this report going forward.
• Opinions expressed in this publication are derived and composed from corporate public sources of information and
may or may not be reviewed by the companies in discussion.
• AGA may receive compensation from companies discussed in The Mineral-Wealth Report.
• Principals and employees may from time to time buy/sell or hold positions in companies discussed in The Mineral-
Wealth Report.
• AGA will not be liable for any loss or damage caused by a reader’s reliance on information obtained in
Mineral-Wealth reports.
AWG
Toronto,
Canada

Sonoro Gold - The mineral wealth report by anthony garson and associates

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