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Strikepoint Gold Inc. is acquiring a 100% interest in the Cuprite gold project located in Nevada's Walker Lane gold trend from Orogen Royalties Inc.
strikepoint gold inc. (skp:tsx.v; stkxf:otcqb) has signed a purchase and sale agreement with Orogen Royalties Inc. (OGN:TSX.V) and a subsidiary to acquire a 100% interest in the Cuprite gold project located in Nevada's Walker Lane gold trend.
The company said Cuprite is similar to AngloGold Ashanti Ltd.'s newly discovered Silicon gold project 75 kilometers away. A maiden resource of 3.4 million ounces gold (Moz Au) has been defined at Silicon.
Catalyst: Culprite a District-Scale Opportunity
Technical analyst Clive Maund of CliveMaund.com said, 'We shouldn't expect any fireworks soon,' but Strikepoint looks like a good value.
'It is down in a zone of strong support and oversold,' Maund said. 'On the long-term chart, I see that its accumulation line hasn't dropped much on the decline from the early 2021 peak. So, with volume light, this looks like a good zone to accumulate, and I certainly wouldn't be a seller here.'
Cuprite is a district-scale opportunity with more than 20 square kilometers of advanced argillic alteration, making it one of the largest steam-heated cells in Walker Lane, the company said.
While Strikepoint also has its Porter and Willoughby projects in British Columbia's Golden Triangle, company President and Chief Executive Officer, Michael Allen said the drilling season can be much shorter in Canada.
'We can now do work and create value for our shareholders year-round,' Allen told Streetwise Reports.
'Exciting Time' in Gold Industry
After hitting its highest level in nine months, gold remained in neutral territory at US$1,945.80 an ounce Friday afternoon after the U.S. Department of Commerce said its Personal Consumption Expenditures price index increased 0.3% in December after rising 0.2% in November.
Allen said he thinks gold is going to appreciate dramatically in 2023.
'I think that (gold) is a good space to be in,' he said. 'We could be pushing all-time highs by the end of the year. It's a very exciting time to be in the gold industry.'
Project in a Great Neighborhood
Allen said he was involved with another project on the Walker Lane trend when he was CEO of junior explorer Northern Empire Resources Corp. He said he had driven past the Cuprite site dozens of times but became interested when AngloGold revealed the Silicon discovery and Cuprite came on the market.
According to orogen , Cuprite is one of the largest alteration cells in the Walker Lane trend, and prospective feeder structures are untested by historical drilling.
AngloGold Ashanti's Silicon gold discovery is 'in a similar geological and alteration setting' to Cuprite, Allen said.
In the last year, anglogold ashanti also acquired Corvus Gold Inc. for US$370 million and the Sterling Project (the one formerly owned by Northern Empire) from Coeur Mining Inc. (CDE:NYSE) for up to US$200 million. Centerra Gold Inc. (CG:TSX; CADGF:OTCPK) also bought the Gemfield project, about 15 miles northeast of Cuprite, for US$206.5 million.
'These transactions highlight the conviction that world-class mining companies have of the prospectivity of the Walker Lane in the vicinity of the Cuprite project,' according to Allen.
The Cuprite project is about 15 kilometers south of Goldfield and 75 kilometers northwest of Beatty.
The next step is to take soil and geophysical samples, to explore Cuprite further, and identify possible spots to drill. Allen said drilling could start as soon as the third quarter.
StrikePoint will acquire a 100% interest in the Cuprite Gold Project by issuing 6,428,571 common shares of StrikePoint with a deemed value of CA$450,000, reimbursing US$35,208 on project-related costs, and granting a 3% NSR royalty to Orogen, through which 0.5% of the NSR royalty can be purchased for US$2.5 million.
Orogen also retains a 1.5% NSR royalty on any after-acquired internal claims held by third parties. Orogen will hold a 1-kilometer Area of Interest around the Cuprite project, and additional claims staked within that area will be subject to the 3% NSR.
The TSX Venture Exchange must still approve the agreement.
Ownership and Share Structure
Some of the industry's biggest players are shareholders in StrikePoint, including Eric Sprott, who owns about 14.5%. Institutions own about 46.7% of the company, management and insiders own about 4.8%, and 33.9% is retail.
StrikePoint's market cap is CA$14.5 million with 213.78 million shares outstanding, 175.3 million of them free-floating. It trades in a 52-week range of CA$0.15 and CA$0.05.
1) Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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