Technical Report Lays Out Exploration for Nevada Gold Project

StrikePoint Gold Inc. (SKP:TSX.V; STKXF:OTCQB) has filed a National Instrument 43-101 report for its newly acquired Cuprite gold project in Nevada's Walker Lane gold trend.

StrikePoint acquired a 100% interest in Cuprite from Orogen Royalties Inc. (OGN:TSX.V) in January. The company believes the project is an analog to AngloGold Ashanti Ltd.'s (AU:NYSE; ANG:JSE; AGG:ASX; AGD:LSE) Silicon gold project 75 kilometers away, where a maiden resource of 3.4 million ounces gold (Moz Au) has been defined.

StrikePoint has carried out no exploration work at Cuprite yet and there are no mineral resource estimates, noted the report's author, geologist Steven I. Weiss.

"The Cuprite property includes areas of intense, steam-heated, advanced-argillic alteration with potential for gold-silver mineralization at depth, and the author believes that the Cuprite project is an initial-stage project of merit," Weiss wrote. "To advance the Cuprite project, the author recommends a Phase I exploration program with estimated costs of US$1.225 million."

Weiss recommended a 2,000-meter diamond-core drilling program for the project. Other parts of Phase I would include geologic mapping, geochemical surveys, an IP/resistivity survey, and a reconnaissance gravity survey.

The Catalyst: Cuprite

Cuprite consists of about 574 unpatented claims covering 44 square kilometers about 15 kilometers south of Goldfield, Nev., and 75 kilometers northwest of Beatty, within the Walker Lane Trend.

Technical analyst Clive Maund told Streetwise Reports that "we shouldn't expect any fireworks soon," but StrikePoint looked like a good value.

It's a district-scale opportunity with more than 20 square kilometers of advanced argillic alteration visible at surface, constituting one of the largest steam-heated cells in the Walker Lane Trend, the company said.

The project is underlain by Miocene and Oligocene tuff and is located on the western flank of the Stonewall Mountain Caldera. Several nearby gold deposits and mines are in similar locations within calderas of the Walker Lane Trend, including the Goldfield District Deposit, now owned by Centerra Gold Inc. (CG:TSX; CADGF:OTCPK)

At the time of the original Cuprite announcement in January, the company's share price was CA$0.07. Technical analyst Clive Maund told Streetwise Reports that "we shouldn't expect any fireworks soon," but StrikePoint looked like a good value.

"It is down in a zone of strong support and oversold," Maund said.

The stock has sunk as low as CA$0.045 since then, but it was CA$0.08 on Tuesday afternoon.

A Lucrative Trend

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.

"The Cuprite property surrounds and overlaps a large area of steam-heated advanced-argillic alteration in the eastern portion of the Cuprite district," Weiss wrote in the NI 43-101 report. "This alteration zone is exposed for a minimum of 4.8 (kilometers) north-south, by about 2.2 (kilometers) in an east-west direction."

The Walker Lane belt itself is "a broad, northwest-southeast oriented zone of strike-slip and trans-tensional deformation between the Sierra Nevada and Basin and Range geologic provinces of Nevada and California," he wrote.

Weiss also noted the proximity of AngloGold Ashanti's Silicon gold discovery to Cuprite.

Allen said drilling at Cuprite could start as soon as the third quarter.

It's "a similar geological and alteration setting" to Cuprite, StrikePoint President and Chief Executive Officer Michael Allen has said of the project.

In the last year, AngloGold Ashanti also acquired Corvus Gold Inc. for US$370 million and the Sterling Project (formerly owned by Northern Empire, which was headed by StrikePoint Gold's CEO) from Coeur Mining Inc. (CDE:NYSE) for up to US$200 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.

Allen said drilling at Cuprite could start as soon as the third quarter.

In Canada, a Historic National Instrument 43-101 technical report estimated StrikePoint's Porter project in British Columbia has 11 Moz silver (Ag) at a grade of 868 grams per tonne (g/t) and inferred resources of 1.7 Moz Ag at a grade of 595 g/t.

StrikePoint acquired Willoughby, which is about 6 kilometers east of Ascot Resources Ltd.'s Red Mountain, in 2019 for US$85,000. The company said it had found a massive new sulfide mineralization that was previously under ice at the project.

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.

Some major institutional investors include Crescat Capital LLC, with 4.99% or 10.67 million shares, and U.S. Global Investors Inc., with 1.29% or 2.75 million shares.

Major insider shareholders include Board Executive Chairman and Director Shawn Khunkhun with 0.56% or 1.17 million shares, and Director Ian Harris with 0.29% or 0.61 million shares.

StrikePoint's market cap is CA$17.1 million, with 213.78 million shares outstanding, according to the company. It trades in a 52-week range of CA$0.12 and CA$0.045.

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Disclosures

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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