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How is it possible for a gold (“Au”) company to be trading 46% below its 52-week high with Au futures at ~$4,620/oz?!? Was there excessive equity dilution? NO. Is the flagship project in a sketchy jurisdiction? NO. High technical risk? NO. High op-ex/cap-ex? NO. Mediocre management team/board? Nope.

Strikepoint Gold (TSX-v: SKP) / (OTCQB: STKXF) has one knock against it. The Company is an early-stage, pre-maiden resource junior. Some investors feel they can’t screen it for relative value. However, therein lies the opportunity to build a position BEFORE a maiden (Inferred) resource shows (mid-point of exploration target) 919,500 troy ounces.

To be clear, if one believes the team will not deliver 800K+ (up to 1.02M) low-risk ounces later this year, then one should stop reading this article. In speaking at length with CEO Michael Allen, I believe the ounces are there, and eventually the stated possibility of a lot more.

Please see the following chart. In many ways it sums up the compelling investment case. Strikepoint has an exploration target of ~920K ounces grading between 0.48 to 0.63 g/t Au. Readers should note that today’s 0.48-0.63 is like 1.0 to 1.2 g/t 15-16 months ago…

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Why? Au has doubled! The mid-point of 0.56 g/t at US$4,620/oz would be US$83/tonne rock. How strong is US$83/t? Quite attractive in a shallow, open pit, heap leach setting. In western Canada copper is mined at 0.30%, equal to ~US$40/t rock.

But wait, it gets better. This is not in Africa, or a project at 3,500+ meter elevation in S. America that locals don’t want built.

Importantly, as a prospective heap leach operation, this isn’t rocket science. Hercules is a low-risk, low-cap-ex opportunity with (presumably) a reasonable strip ratio (the deposit outcrops on surface). Turning back to the chart, if Hercules has what management thinks, it’s in the sweet spot on grade.

Most, but not all, of the mines & projects in the above chart are heap leach. In my view, it’s meaningfully riskier to develop a low-grade project, especially in less favorable places than Nevada, requiring a mill & tailings facility (a lot more equity dilution to fund cap-ex).

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In fact, in a world-class mining destination like Nevada (often ranks #2 of 80+ mining jurisdictions in the annual Fraser Institute Mining Survey), heap leach operations are clearly superior — in numerous ways — for low-grade mines.

As can be seen in the following table, recoveries for heap leach are much lower than those from a mill, but significantly higher op-ex & cap-ex (typically) allow heap leach operations to enjoy stronger margins.

With Au so high — and probably climbing further — not next month or next year, but in coming decades, residual Au (25%-40% remains on pads) can be reprocessed at extremely low cost to boost overall recovery from 60%-75% to perhaps 75% to 85%.

Heap leach in safe, prolific mining jurisdictions is superior…

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That incremental recovery might not seem impressive compared to mill recoveries of 90%-95%+, but it’s like printing money due to the continued low risk, low cost and, no tailings associated with secondary processing on the pads.

Only a high strip ratio or remote locations requiring infrastructure builds like roads & power lines can derail heap leach projects. Strikepoint’s Hercules is very near roads, power, workers, equipment & mining services. Speaking of workforce, labor requirements are quite limited, keeping op-ex low.

It would be difficult to overstate how undervalued Strikepoint is at just C$13/resource target oz. Could we see a re-rating upon a maiden mineral resource? I think so. In the following table I demonstrate why I believe Strikepoint has such considerable upside.

Notice that the top 3 names have EV/oz figures in red. I don’t include those juniors in the peer average of C$87/oz, but show them for illustrative purposes. Over time, Strikepoint could be valued at a multiple of C$13/oz. after delivering a PEA, then a PFS, on a larger resource.

I don’t think it will take years for a re-rate if one is indeed coming! M&A is going to be intense this year and next, driving valuations up. It makes far better sense to acquire ounces vs. exploring for them in an EPIC bull market, especially low-risk ounces in Nevada.

How much larger could Hercules be? The corporate presentation says “multi-million” ounce potential, which is tremendous. Not all heap leach assets have the potential to top two million ounces, most don’t. Having said that, it’s early days to think about 2M+ before we see 1M…

Speaking of expansion, last year management reported a robust drill hole of 117.4 m of 0.47 g/t Au, incl. 12.2 m of 2.2 g/t Au. Targets are open to the south. This year, management is planning 27 holes, ~2,620 meters at an approximate cost of US$1.0-$1.5M.

Drilling is expected to start in the Spring. Please note, these are shallow, low-risk holes (Nevada’s infamous for much deeper widow-maker holes). There are multiple targets to explore.

The Sirens Target at Hercules is a shallow, drill-ready epithermal gold system with visible gold. It’s largely untested along strike and at depth, included in the 2026 drill program, and could add ounces to the Hercules resource, supporting the ~1 Moz inferred resource goal. 

Pony Meadows is a newly permitted, drill-ready satellite target at Hercules. It features shallow epithermal Au mineralization, and is also largely untested along strike and at depth. It will be drilled this Spring.

Como Comets is yet another shallow, drill-ready prospect with visible gold reported. The Cuprite project in Nevada’s Walker Lane is an under-explored, drill-ready epithermal target with steam-heated alteration located near major discoveries, offering potential to find a large-scale system.

Importantly, Strikepoint need not be acquired itself, as long as peers are, a rising tide lifts ALL boats. It has C$3M in cash, enough to comfortably last into 2H 2026. Readers are encouraged to take a look at this excellent corporate presentation.

Management does a great job with a few case studies depicting M&A last year. For example, they cite AngloGold Ashanti’s acquisition of Augusta Gold for ~C$103/oz, announced in mid-July of 2025.

Notably, that deal would have been negotiated & finalized with Au around $3,200-$3,300/oz vs. today’s $4,620. If done today, I bet over C$150+/oz would have to be paid.

Augusta’s Reward project had a Bank Feasibility Study (“BFS”) on it. It was far more advanced than Hercules. Still, C$150+/oz vs. Strikepoint valued at C$13/oz… For a more apples-to-apples view, assume Strikepoint triples its share count to reach BFS-stage. It would be valued at C$39/oz.

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The Augusta transaction is especially interesting. The acquired resources are in Nevada and had almost exactly the same anticipated grade as Strikepoint’s Hercules. I find it enlightening that giant AngloGold would acquire such a small company. It proves good assets command premium valuations.

In another Nevada deal, from 2022, Centerra Gold acquired a company with an 817K ounce project grading ~0.65 g/t Au. It paid over C$320/oz when the Au price was under $2,000/oz! Note, at the time of that deal, there was not yet a maiden resource on the acquired project.

Even if AngloGold & Centerra overpaid for their Nevada expansions, Strikepoint should, (in my opinion) be worth A LOT more than C$13/oz to a motivated buyer, of which there could be more than one!

Strikepoint Gold should not be trading at C$0.18, a 46% discount to its 2025 high of C$0.335. This is a company that checks a lot of investment boxes, yet is valued at just C$12M. Although early-stage, it’s years ahead of a green field un-drilled property.

Strong Mgmt. team/board for a C$13M company!

Who might want to partner on Hercules or acquire Strikepoint outright (but not anywhere near current levels!)?

Prospective acquirers include; Nevada Gold Mines (a JV between Newmont/Barrick), AngloGold, Pan American Silver, Fresnillo, Coeur, Hecla, Kinross, Equinox Gold, Hycroft Mining, I-80 Gold, SSR Mining, and Americas Gold & Silver.

Some of those names are too large, but there are many smaller players that could/should care, mid-tier producers looking to beef up to be acquired themselves. Bottom line, the outlook could hardly be brighter for Strikepoint Gold. Readers are invited to take a closer look!

Corporate Presentation

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