If you’re buying a house, most real estate agents will preach just one mantra: location, location, location.
StrikePoint Gold Inc. (SKP:TSX.V; STKXF:OTCQB) CEO and Director Shawn Khunkhun thinks he has a nice “fixer upper” in a trendy neighborhood.
“Think of this as real estate: We're in a neighborhood where we're surrounded by $5 to $10 million homes, and our home is trading at $500,000 or $600,000 valuation – and there's a reason for that. The reason is we haven't done as much work as a company like Skeena Resources Ltd. (SKE:TSX; SKE:NYSE),” Khunkhun tells Streetwise.
“But then you look at some of the other neighbors where we have done as much work or if not more, and we're trading at a lower valuation, I think there's a tremendous opportunity.”
The “neighborhood” is northern British Columbia’s Golden Triangle, witness to more than 100 years of mining and home to the highest-grade mine ever discovered in North America: Barrick Gold Corp. (ABX:TSX; GOLD:NYSE)'s past-producing Eskay Creek.
Over the course of 14 years, Eskay Creek produced 3.3 million ounces (3.3 Moz) gold at an average grade of 45 grams per tonne (45 g/t) and roughly 160 Moz silver at around 2,220 g/t.
The triangle has also witnessed roughly $4.8 billion in mergers and acquisition activity over the last three years or so.
Pretium Resources Inc. (PVG:TSX; PVG:NYSE) and its high-grade Brucejack gold mine recently found itself in the crosshairs of a US$2.8-billion all-cash takeover bid from Australia’s Newcrest Mining Ltd. (NCM:ASX; NCM:TSX; NCM:PNGX).
That deal came about two years after Newcrest unloaded US$804 million to buy Imperial Metals’ Red Chris polymetallic mine at the Golden Triangle’s northern tip.
Six months earlier, in March 2019, Ascot Resources Ltd. (AOT:TSX.V) acquired IDM Mining and its Red Mountain gold-silver project (not to be confused with Red Chris).
Ascot plans to bring the past-producing Premier gold mine, acquired in a separate deal in 2018, back into production late in 2022 before bringing Red Mountain into production at some point down the road. Ascot also owns about 5% of Strikepoint.
Strikepoint acquired Willoughby, located about 6 km east of Red Mountain, in 2019 for $85,000 cash and issuing Arcwest Exploration 3 million shares. Willoughby had about 119 holes drilled on it in the 1990s by now-defunct companies like Camnor Resources and Gold Giant Minerals.
Khunkhun believes Red Mountain is in a gold system that's part of a much larger gold system.
An April 2020 feasibility study pegged reserves at Red Mountain at 2.5 million tonnes grading 6.52 g/t gold and 20.6 g/t silver or 534,000 oz gold and 1.7 million oz silver, while reserves at Premier are 3.6 million tonnes grading 5.45 g/t gold and 19.1 g/t silver or 637,000 oz gold and 2.2 million oz silver.
“There was a significant amount of work done on (Willoughby). And we inherited a tremendous drill database that highlighted some very high-grade gold and silver intercepts,” Khunkhun tells Streetwise. “Without a doubt I knew this was one of the premier properties in the Golden Triangle. The question that I'm trying to answer is, ‘Can we prove continuity between these high-grade zones?’ If we can prove continuity, we've got a mine on our hands.”
Not far south of Brucejack, which initially had difficulties with continuity of its mineralized systems, Strikepoint is not just whistling Dixie. Channel samples taken from well-exposed bedrock along steep terrain at the Icefall zone at Willoughby show promise.
Highlights include 94 g/t gold and 31.04 g/t silver (3.38 g/t gold-silver equivalent) over 15 meters, which includes an interval of 11.5 g/t Au and 69.4 g/t silver or 12.53 g/t gold-silver equivalent over 2 meters.
Another sample returned 21 g/t gold and 16.61 g/t silver or 3.45 g/t gold-silver equivalent over 12 meters, including 4.46 g/t gold over 5 meters and 31.23 g/t silver (4.82 g/t gold-silver equivalent) over 3 meters.
Strikepoint also drilled 23 holes on Willoughby in 2021 but has only reported four holes – with gold-silver mineralization encountered in all of them.
Among the highlights: Hole W21-109 hit 7.34 g/t gold and 202.85 g/t silver (10.24 g/t gold-silver equivalent) over 6.16 meters. That hole was a step-out of approximately 25 meters down-dip from 2020 intercept W20-106, which intersected 10.04 g/t gold and 5.61 g/t silver (10.12 g/t gold-silver equivalent) over 7.72 meters within a broader interval of 4.19 g/t gold and 18.28 g/t silver over 27.78 meters.
Strikepoint hopes to publish the 19 remaining drill holes and additional channel sampling results in the coming weeks as assay labs everywhere attempt to process backlogged drill core.
“Once we get all of those definitive assays, and we model those 2021 results with the drilling the Strikepoint did in 2020 and 2019. And then we will factor in the historical drilling that was predominantly done in the ‘90s, and we'll come up with a model. And we'll go out and drill some serious meters in 2022,” Khunkhun says, adding that an initial resource estimate will likely follow this year’s drill program.
Some of the biggest players in the junior mining sector are Strikepoint shareholders. Eric Sprott owns about 16.5%, while Skeena Resources owns 6%. Other institutions with significant positions include Denver-based Crescat Capital, Vancouver-based Delbrook Capital Advisors, and Calgary-based Middlefield Capital.
Strikepoint has about 207 million shares outstanding and trades in a 52-week range of $0.12 and $0.325.
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1) Brian Sylvester compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He and members of his household are paid by the following companies mentioned in this article: None. His company has a financial relationship with the following companies referred to in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Strikepoint Gold Inc. and Pretium Resources. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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