Gold and Silver Updates



Erik Wetterling, aka “The Hedgeless Horseman,” gives his funding thesis for StrikePoint Gold.

On this article I’ll clarify why I personal StrikePoint Gold Inc. (SKP:TSX.V; STKXF:OTCQB) and why I used to be glad to have the corporate on as a passive banner sponsor.

My Case For StrikePoint Gold in Brief:

  1. Two semi-advanced gold and silver tasks within the well-known Golden Triangle
    1. Confirmed high-grade gold and silver in each tasks
    2. Willoughby Undertaking historic drilling highlights:
      1. North Zone: 53.21 g/t Au and 211.08 g/t Ag over 5.5 m
      2. North Zone: 20.08 g/t Au and 1,250.83 g/t Ag over 3.0 m
      3. North Zone: 120.30 g/t Au and a couple of,434.84 g/t Ag over 3.5 m
      4. Wilby Zone: 12.66 g/t Au and 59.34 g/t Ag over 12.0 m
      5. Wilby Zone: 7.62 g/t Au and 1.43 g/t Ag over 11.70 m
      6. Wilkie Zone: 14.66 g/t Au and 31.93 g/t Ag over 3.7 m

    3. Porter Undertaking has a useful resource of 12.7 Moz of silver at very excessive grades (595-868 g/t Ag)
  2. Backed by Ascot Sources and Skeena Sources (potential future patrons)
  3. Owns 22 properties throughout the Yukon territory besides

Backside Line:

For round C$35 M (@ 0$0.19/share) you get round C$5 M in money, two semi-advanced flagship tasks with confirmed high-grade gold and silver endowment, and the Porter Undertaking already has a silver useful resource with bonanza-grades. Which means there’s meat on the bones already and Strikepoint can have beta to gold and silver. I believe that is vital as a result of I hate the considered ending up with no gold or silver in a valuable steel bull market. The truth that each are positioned in one of many hottest and finest tier #1 jurisdictions is icing on the cake. With that mentioned it’s after all exploration which is the principle attraction with the corporate. That there’s exploration potential at Porter is clear given that every facet of the mountain has seen historic mining and if the corporate is ready to join the high-grade hits at Willoughby then that undertaking might get actually thrilling. Lastly, the corporate has an enormous portfolio of early stage tasks in Yukon which might be bought, JV’d or labored on in a hopefully crimson scorching valuable steel market.

I see StrikePoint has having some margin of security on account of already having confirmed silver assets and confirmed high-grade mineralization at each of the corporate’s flagship tasks. If additional success is made at one or each tasks then there’s clearly some severe upside potential from this valuation stage. Having two bigger corporations invested in Strikepoint is an efficient kicker as a result of a) Votes of confidence and b) Pure acquirers in case StrikePoint hits it massive.

With a really spectacular pipeline of tasks it signifies that StrikePoint can have their fingers full and never be pressured to exit and purchase new tasks in a probably highly regarded market when valuations is perhaps “stretched.” On this regard I salute Shawn Khunkhun for having been very pragmatic (acquired tasks on a budget throughout downturns) and ahead wanting (loading the corporate with tasks BEFORE the mania section of the bull market).

Meat and Potatoes

1. World Class Jurisdiction:

StrikePoint’s two flagship tasks are positioned within the well-known Golden Triangle district of British Columbia, Canada. That is an space that has seen quite a lot of mining and there are a number of mines up and working as we communicate. Personally I’ve am comparatively choosy on the subject of jurisdictions these days so I actually do want to put money into tier #1 jurisdictions on account of a) I need to have the ability to maintain regardless of the firm finds and b) I need bigger corporations to be snug buying (taking danger) and jurisdictional danger is clearly an enormous issue for a long run funding.

… As you can see in the slide above there are many players involved in this area and that includes Newmont, Hochschild and Newcrest. This signals that majors are indeed interested in mining operations in this area, which is very good. It is also worth pointing out that Ascot Resources and Skeena Resources, who both own a stake in StrikePoint, have projects nearby. This means that there should be potential for synergies if StrikePoint finds something material, which obviously would hike up the implied value in terms of a takeover.

2. The Art of Value Creation

The next slide is a testament to how business savvy Shawn Khunkhun and Strikepoint have been:

… The company has been picking up projects for pennies on the dollar during short term downturns in the metal space. This is a sign of people who are well aware that their job is to create as much value as possible to shareholders. The acquisitions would have costed a lot more if they were done today. Forward looking, strategic thinking are traits one wants to see in the stewards of one’s capital.

3. The Flagship Projects

Both of StrikePoint’s flagship projects are close to one another as well as close to Ascot Resources’s Premier Mine and Red Mountain Project:

… As stated earlier this beneficial both from a strategic and tactical stand point since it increases the implied value of the projects through the potential of becoming satellite deposits as well as the likelihood of being bought in the future. Furthermore it helps from a tactical stand point to have more people working in the area.

3.1 Willoughby

Willoughby seems to be located in the “right place” in that the current targets are proximal to an important stratigraphic marker that is “linked to most major deposits” as per:

As you will see in the slide below there have been some really great historical intercepts which hit high-grade gold and silver across multiple zones and the million dollar question is if some of these zones will end up being connected:


Willoughby Gold-Silver Property

The principle goals of the 2020 exploration program on the Willoughby gold-silver property has been to enhance continuity of high-grade and to check broad zones of disseminated gold and silver mineralization encountered in earlier drilling and floor sampling. Floor exploration commenced on July 29, 2020 and drilling started on August 10, 2020. The Property is positioned on the east facet of the Cambria Icefield, seven kilometers east the advanced-stage Pink Mountain Gold Deposit owned by Ascot Sources.

The Property is underlain by Higher Triassic Stuhini rocks and Decrease Jurassic Hazelton volcanic and sedimentary rocks which were intruded by an early Jurassic-aged hornblende-feldspar porphyry, much like and probably comagmatic with the Goldslide Intrusive suite at Pink Mountain. Intrusive-related mineralized zones encompass robust pyrite mineralization with lesser pyrrhotite, sphalerite, galena, chalcopyrite, and native gold. Eight gold and silver mineralized zones have been recognized to-date over the mineralized development which extends onto Decade/Teuton Sources’ Del Norte Property.

Intensive floor sampling has been accomplished, concentrating on high-grade newly uncovered mineralization with 262 floor samples collected, with all assays at the moment pending. As well as, over 1,700 meters of drilling in seven holes have been accomplished so-far in 2020, with all holes submitted for assay.

3.2 Porter Undertaking

The second flagship undertaking is the one known as the “Porter Undertaking,” which accommodates two previous producing high-grade silver mines and a historic useful resource:

Similar to Willoughby the million dollar question here is if the veins that have been mined on opposite sides of Mt. Rainey will prove to be connected. The following snipped is from the previously mentioned news release:

Porter Silver Property

On the high-grade Porter Silver Property, the main focus of the 2020 exploration season will likely be linking the two-past-producing high-grade silver mines on the property: the Silverado (northwest) and Prosperity/Porter Idaho (southeast) mines that outcrop 2,000 meters aside on the other sides of Mount Rainey, overlooking the city of Stewart, BC. Upcoming work will embody exploration for brand spanking new veins which were recognized outdoors of the historic assets and previous producing areas. The Silverado glacier has retreated considerably over latest years, with prospecting deliberate in newly uncovered areas. In steeper areas of the Property, skilled mountaineering crews and climbing geologists will likely be employed to pattern new exposures. A drill program based mostly out of Stewart has been deliberate to focus on high-grade silver veins beforehand reported by historic stoping, drilling, floor sampling in addition to latest exploration applications by StrikePoint.

3.3 The Yukon Portfolio

StrikePoint even have a number of different aces up their sleeve within the type of a really massive portfolio of tasks positioned within the Yukon Territory, Canada:

… I think none of these are reflected in the current valuation of the company and I think they might end up providing positive surprises when the market gets hot again. In other words I think there will be appetite for these projects when the bull market wakes up for real again and that Strikepoint might be able to sell, JV and/or to work on them when the time is right. I mean picture a scenario where gold, silver and miners are finally on fire. When this happens Strikepoint will be sitting on a Yukon portfolio that is big enough for multiple companies to split between them.

Take the massive Pluto Project for instance (23 km at its widest level). This one has a number of areas with very excessive gold in soul numbers:

… Or how about the Golden Oly Project (observe the size):

… Again, I think nothing of the Yukon portfolio is reflected in the current valuation and that Shawn and the team will reward shareholders through value creation when the time is right. Nothing beats having a bunch of very large projects (with obvious golden smoke) in a tier #1 jurisdiction in a raging gold bull. Just because the market forgets about this side of the intrinsic value of StrikePoint doesn’t mean that you must do it as well. With that said, this value will probably take time before it is unlocked but in light of the company’s Enterprise Value which is around US$23 M, I reckon it could be very meaningful for current holders with a long term view.

Bottom Line

In StrikePoint Gold you get a focused team that have shown to be very smart in terms of creating value for shareholders and I know Shawn and his team will do everything within their power to make all shareholders happy. If I had to choose a few aspects of StrikePoint to press on it would be a) Both flagship projects are already confirmed to host high-grade gold and silver which decreases risk, b) StrikePoint has beta via its historical silver resource, c) The exploration potential at both flagship projects is obvious in terms of connecting already confirmed zones of mineralization, d) Hidden value in the Yukon portfolio which will probably be unlocked one day, and e) Both flagship projects are proximal to other development assets held by larger companies in a tier #1 jurisdiction.

Additional things to consider:

  • Backed by Ascot Resources, Skeena Resources and Eric Sprott
  • Proximity to the larger companies above
  • Satellite deposit potential in a tier 1 district
    • Decreasing the threshold in terms of reaching critical mass
    • Increases the likelihood of being monetized

  • Crescat Capital (Quinton Hennigh) has given StrikePoint thumbs up which goes a long way in my book

Lastly I would say that even though I don’t necessarily see tier #1 exploration potential in StrikePoint this belief is offset by the combination of the projects being de-risked (not grassroot exploration stage), close to larger projects and being in one of the best jurisdictions around. In other words I think “even” satellite deposits in this neighborhood could end up being worth quite a bit in a gold and silver bull. Especially if Tom Kaplan is correct in terms of his theory that companies operating in tier #1 jurisdictions might end up becoming a bubble within a bubble in the future. It’s also very nice to know that the company already has high-grade silver on the books which means there is no chance of the company ending up in a silver bull without any silver at least. Furthermore I got the sense from talking to Shawn that he wants StrikePoint to be very aggressive with the drill bit in 2021.

As always there are no guarantees of success but only good or bad risk/reward. Personally I think the risk/reward in StrikePoint is very good mostly thanks to the company’s (Shawn’s) ability to pick up a bunch of projects on the cheap in preparation for the most exciting stage of the bull market. Therefore I own shares of the company. I have no idea what the coming results will be from Willoughby but I don’t base my case on any single (smallish) drill campaign and not much in terms of success is priced in right now anyway.

Lastly, make up your own mind as always and don’t put all your eggs in one basket (spread your bets).

Upcoming Catalysts

Some TA

Food for thought…

Best regards,

Erik Wetterling, aka “The Hedgeless Horseman”

Comply with me on twitter:

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Be aware: This isn’t funding recommendation. I’m not a geologist nor am I a mining engineer. This text is speculative and I can not assure 100% accuracy. Junior miners will be very unstable and dangerous. I’ve purchased shares of StrikePoint Gold within the open market and I participated within the newest personal placement. I can purchase or promote shares at any cut-off date. I used to be not paid by any entity to jot down this text however the firm is a passive banner sponsor of The Hedgeless Horseman. Subsequently you need to assume I’m biased so at all times do your personal due diligence and make up your personal thoughts as at all times.



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