Gold Co.'s Share Consolidation Effective This Week

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StrikePoint Gold Inc. (SKP:TSX.V; STKXF:OTCQB) announced its planned share consolidation will become effective at market open on October 18.

The rollback will consolidate the company's common shares on the basis of 10 pre-consolidation shares for one post-consolidation share.

Following the consolidation, StrikePoint will have 26,389,420 common shares issued and outstanding, the company said.

StrikePoint's name and trading symbol will remain unchanged, but the new Cusip number will be 86332K400, and the new international securities identification number will be CA86332K4000, the company said.

StrikePoint recently announced that visible gold was found in three locations at its Hercules project, which is in Nevada's Prospective Walker Lane Gold Trend just 20 kilometers east of the Comstock Lode where 14 million ounces gold (Moz Au) were produced.

"One of the significant outstanding features of the Hercules Gold Project is the scale of the gold and the scale of the property," President and Chief Executive Officer Michael G. Allen said. "Visible gold has been documented at surface at three separate widely spaced locations.

Previous geophysical surveys also indicated the presence of "an extensive alteration zone that is approximately 13 kilometers long and 6 kilometers wide that is coincident with the known mineralization, all of this is contained within the 100-square-kilometer property," he said.

Necessary for a 'Significantly Better Position' for Co.

The consolidation of shares will "better position the company to develop its existing assets and evaluate other investment opportunities that the company continues to review," Allen said. "This reverse stock split is a necessary step to move the company to a significantly better position to succeed and finance its multi-asset gold exploration projects in Nevada."

When the company announced the rollback earlier this month, it also announced a private placement for up to CA$3 million to pay for continued exploration activities at its Nevada-based projects, including Hercules and its flagship Cuprite Gold Project, also in the Walker Trend.

The private placement consists of up to 15 million units of the company at a post-consolidation price of CA$0.20 per unit. Each unit shall be comprised of one post-consolidation common share and one post-consolidation common share purchase warrant, with each warrant exercisable into one post-consolidation common share at an exercise price of CA$0.30 cents for a period of 24 months from closing, StrikePoint said.

The warrants will be subject to an acceleration clause stipulating that should the post-consolidation shares close at or above CA$0.40 cents for 10 consecutive trading days, they will be called for exercise within 30 days of the company providing notice by way of regular news release or will expire.

Analyst Expects 'Significant Reversal'

Fortunes generated by the Comstock Lode in the 19th century played a big role in the growth of Nevada and San Francisco.

Results released in June from an inaugural 3,100-meter drilling program by StrikePoint at Cuprite this year found gold and silver mineralization over five holes, including one hole that intersected 12.19 meters of 0.46 grams per tonne gold (g/t) Au and 10.10 g/t silver (Ag), including 6.1 meters of 0.74 g/t Au and 14.75 g/t Ag.

Technical Analyst Clive Maund wrote on September 3 that Cuprite and Hercules are "big reasons" to look at the stock.*

Maund noted that given the positive news of the Hercules acquisition and the "bright outlook for gold itself," a significant reversal to the upside can be expected for the company.

"It is clear that investors are being presented with an exceptional opportunity here with StrikePoint Gold being at very low level and on the point of reversing to the upside," he wrote. "We, therefore, stay long, and the stock is rated an Immediate Strong Buy; in addition, this is a stock that is considered to be worth going overweight on."

The Catalyst: Teasing Record Highs

On Wednesday, gold teased record highs as gains in non-yielding bullion were bolstered by weakness in U.S. bond yields and expected rate cuts by major central banks, with additional safe-haven support from ongoing geopolitical conflicts, Reuters reported.

Spot gold rose 0.7% to $2,681.50 per ounce, just shy of the record of $2,685.42 set on Sept. 26. U.S. gold futures gained 0.7% to $2,698.20.

"Expectations of a 25-basis-point rate cut by the U.S. Federal Reserve in November are solidifying, weaker inflation data in Europe and the UK have increased expectations for more aggressive easing from the central banks, leading to generally lower yields which have lifted gold," Peter A. Grant, vice president and senior metals strategist at Zaner Metals, told Reuters' Anushree Ashish Mukherjee.

"There's even an outside chance we could see close to $3,000, and that's probably more of a Q1 2025 target," Grant said.

According to another report by Reuters, gold is on-track for its best quarter in four years.

Gold is even falling into more consumer hands as Costco said its gold bares are flying off the shelves, according to Bloomberg. A survey of stores in 46 states found it was hard for the retailer to keep gold products stocked right now.

"Costco's one-stop shopping convenience is bringing gold buying to the masses by offering prices that undercut traditional precious metals dealers and extra rewards for its most loyal customers," Bloomberg author Yvonne Yue Li wrote. "Add to that gold's appeal as a safe haven and hedge against inflation, and it's easy to see why bullion buyers are turning to the warehouse retailer."

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and shares structure, where management and insiders own approximately 1.49% of the company.

According to Reuters, Executive Chairman Shawn Khunkhun owns 0.44% of the company, President and CEO Michael G. Allen owns 0.72%, Director Ian Richard Harris owns 0.11%, and Director Adrian Wallace Fleming owns 0.03%.

Reuters reported that institutional and strategic investors own approximately 22.37% of the company, as mining financier Eric Sprott owns 11.3% of the company, Pathfinder Asset Management Ltd. owns 7.6%, U.S. Global Investors Inc. owns 1.04%, and Sprott Asset Management LP owns 0.95%.

According to Reuters, there are 263.89 million shares outstanding before the consolidation. The company has a market cap of CA$7.92 million and trades in a 52-week range of CA$0.02 and CA$0.09.