A Gold Exploration Stock With Big Upside and Very Little Downside
Contributed Opinion

1. StrikePoint Gold Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
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StrikePoint Gold Inc. (SKP:TSX.V; STKXF:OTCQB) is viewed as being a most attractive stock at this juncture because the downside is almost nil whilst the upside is relatively unlimited after its long bear market from its early 2021 highs when it was 20 times the current price. Whilst the continued drop in the stock price recently has doubtless been due to a succession of financings, the company has nevertheless been advancing towards its goals with this year seeing the acquisition of 152 claims at the Cuprite property in Nevada and the acquisition of the Hercules Gold Project also in Nevada at a very good price.

The company has four properties — two on the prolific Walker Lane trend and two lesser properties in British Columbia.

The map on the following slide from the company's October investor deck shows the locations of the two Walker Lane properties in Nevada and also the relative proximity of big finds along the trend by other companies, which, of course, increases the chances that Strikepoint's properties will harbor significant reserves.

The following slide gives some details of the recently acquired Hercules Property. An important advantage that the company has with this property is that it has been explored in the past with significant quantities of gold having already been found — some 300 drill holes were made, and the company has the data from these.

Below is a table showing historic drill intercepts at Hercules, which show significant gold grades being encountered.

The following slide shows the locations and extent of the various targets across the Hercules property and details of what has already been discovered at some of the targets.

This slide below gives details of the company's other main gold exploration property on the Walker Lane trend, Cuprite.

There are two especially important points made on this slide. The first is that Cuprite was originally acquired by the company because of its similarities with Anglogold's expanded Silicon Project, which was only 75 kilometers to the south, where a multi-million-ounce discovery was made. The other point is that Cuprite was off-limits for exploitation up until relatively recently, and so by Walker Lane standards, it is relatively "virgin" territory with big discovery potential.

This next slide is interesting as it highlights the similarities between Cuprite and Anglogold's Silicon big discovery.

Although the company's Nevada properties should probably be considered to be its "flagship" properties because of their outstanding discovery potential, it is worth keeping in mind that it has two other significant properties in BC's Golden Triangle that also have significant discovery potential. They are the Porter and Willoughby gold-silver projects.

Some details of the Porter Silver project are here:

Some details of the Willoughby gold-silver Project are here:

This last slide shows the share structure. The company still has a relatively modest number of shares in issue, at 26.4 million, of which Eric Sprott holds 11.3% and Pathfinder Asset Management 7.6%.

Now, we will proceed to examine the company's latest stock charts. Strikepoint Gold has been in a long and severe bear market since the start of 2021, but now, having erased 95% of the stock's value, it has run its course.

On the 5-year chart, we can see this bear market in its entirety and how it has been moderating in stages defined by a 3-arc Fan pattern with a more moderate downtrend becoming established from mid-2022 onwards, which is bringing the price closer and closer to the third fan line. Normally, a breakout above the third fan line ushers in a new bull market, and this is made more likely by the overall positive divergence of the Accumulation line, which is shown at the top of the chart.

The increased volume from the middle of this year also makes a new bull market more likely because it indicates that a correspondingly greater quantity of stock has been rotating from weaker to stronger hands, which is obvious since most of the sellers are selling at a significant loss while the buyers will be less inclined to sell until they have turned a profit. It is thus interesting for potential buyers here to observe that the price is currently at the lower boundary of the large downtrend channel from mid-2022, which makes it more attractive here even though it has yet to break out above the third fan line.

Having established by means of the long-term chart that Strikepoint Gold is very good value here and is likely to start higher soon, we will now proceed to look at recent action in more detail on shorter-term charts, starting with the 1-year chart.

On this chart, we can see that, following the nasty sharp drop at the start of June, it ground lower into early August when it arrived at support at the downtrend channel line shown, which is the bottom rail of the downtrend that we looked at on the 5-year chart. Even though it continued to drift lower, making new lows until late last month, it continued to find support at this channel line with downside momentum (MACD) showing overall moderation.

The 6-month chart opens out recent action still further and enables us to see that even though it made a new intraday low late last month, on a closing basis, that low looks like it made a Double Bottom with the October low and further than that, the modest rally off the second low has been followed by the price dropping back again over the past several days to make what looks like the second low of a much smaller Double Bottom.

Whilst this may seem like abstract theorizing, it has very practical implications because if this line of reasoning is correct, we could scarcely have a better entry point for Strikepoint Gold, which has the potential to make huge percentage gains from the current price.

This is, therefore, considered to be an excellent point to buy or add to positions in Strikepoint Gold.

Strikepoint Gold's website.

StrikePoint Gold Inc. (SKP:TSX.V; STKXF:OTCQB) closed for trading at CA$0.165, US$0.1049 on December 12, 2024.