Gold & silver prices had a wild ride over the past several weeks, but seem to have stabilized. In my view, the bull market in precious metals remains intact. One of the best ways to gain leverage to gold is through low-risk juniors in SAFE jurisdictions like the U.S.
Nevada is the epicenter of heap leach gold mining globally, combining scale, geology, infrastructure, and regulatory predictability. The State hosts dozens of operating & past-producing oxide gold deposits, as well as up-and-coming projects ideally suited to heap leach processing.
Near-surface mineralization, arid climate, and well-understood metallurgy can translate into straightforward, low-risk project development. Nevada has repeatedly demonstrated that low-grade oxide systems can generate robust margins.
Heap leach operations in Nevada benefit from established permitting pathways, experienced contractors, and a deep local workforce familiar with this mining method. Infrastructure advantages lower both capital intensity & operating risk.
Nevada’s heap leach mines enjoy shorter construction timelines, modest upfront cap-ex relative to milling operations, and rapid payback periods. With gold > $5,000/oz, projects can deliver very attractive margins, especially with low strip ratios & simple flowsheets.
From a technical standpoint, heap leaching is viewed as lower risk than conventional milling for oxide deposits. Metallurgy is typically well understood through column testing, and recoveries are lower than milling, but predictable. Operations can be scaled in phases.
Importantly, tailings management for heap leach mines differs materially from that of milling operations. Instead of large tailings dams requiring long-term water management, heap leach facilities rely on lined pads and dry, stacked ore.
This reduces long-term environmental liabilities and greatly simplifies mine closing requirements. Speed to market is also critically important in a bull market. In many cases, heap leach mines can be fast-tracked compared to more complex milling operations.
A Nevada-focused company I continue to believe is meaningfully undervalued is Strikepoint Gold (TSX-v:SKP) / (OTCQB: STKXF). It’s flying under the radar as a pre-maiden resource company, but that will change later this year.
A 3,000 meter drill program starts in less than a month, and there’s a database of over 300 holes. In the week ended February 9th, I interviewed Strikepoint’s CEO Mike Allen to get an update on the Company’s plans. 2026 will be an impactful year.
Please give readers the latest snapshot of Strikepoint Gold?
StrikePoint Gold is a Nevada Gold Exploration company focused on the Walker Lane trend. I have been focused on Walker Lane for 15 years, buying, advancing, and selling assets for a total value of $250M.
Soon we will be drilling out the final holes for a maiden resource on the Hercules Gold project. The program is estimated to be ~30 holes, ~3,000 meters, starting in late February or early March, depending on the weather and rig availability.
Assuming Strikepoint can report 800K+ troy ounces this year in a maiden resource, the Company’s valuation as measured by (EV)/oz is quite low. What pushback are you getting from investors? Any misconceptions?
I think the biggest misconception is a lack of awareness about the Company and the true potential of the Hercules project. Our market capitalization is so low that people overlook us. It leads to an interesting opportunity for those who see the potential early.
As we execute, more investors will become aware of the Company, see the resource potential in a great jurisdiction, and jump in. It doesn’t get much better than relatively low technology risk, low cap-ex & low op-ex heap-leach mining in Nevada, USA.
Nevada is one of the best places on earth to explore & develop gold projects, but it can take considerable time to get permitted. Please comment on doing business in Nevada.
Nevada has been very good to us. The jurisdiction is second to none as it has a very strong mining history & culture. Even if regulators haven’t worked in mining themselves, they generally have been touched by it and understand it. They have relatives in the industry.
Permitting is best described as “regimented”, the questions that need to be answered are well known, we as the proponent provide clean, clear data, the regulators look at it, we address their questions, collectively consult with the public, then permits get issued.
There are known timelines, which is nice from an investment perspective. The other part is the business ecosystem, whether it’s skilled contractors, equipment, engineers & consultants — in Nevada it’s all there to support the mining industry.
Assuming Hercules can show 800k-900K ounces in a maiden resource, how large is that compared to other Nevada heap leach amenable projects?
That’s an interesting question. Nevada hosts some of the largest gold projects in the world. AngloGold Ashanti has been working on a new discovery in the Walker Lane and it’s enormous — 16 million ounces and growing. Not every deposit is like that obviously.
Last summer it acquired another Nevada company, Augusta Gold, which had two projects totaling ~1.5m ounces — in the ballpark of what we eventually expect for Hercules. Also, Centerra Gold made a construction decision on its Goldfield Project, also in the Walker Lane.
That resource is ~800,000 Au at 0.67 g/t, comparable to what we expect for Hercules as an initial estimate. So, similar in grade & scale and they’re building it, which is telling.
Could Strikepoint selectively mine higher grade zones at Hercules in the initial years while you continue to drill out the deposit?
As selectively as you can when you’re doing open pit mining! Based on what we see of the data right now, there’s a near-surface, high-grade portion of the mineralization within the exploration target.
That’s where we would most likely start, get cash flowing with higher grade material, then move to lower-grade material once we’ve achieved payback. In terms of drilling out the rest of the deposit, you want a pretty solid plan before you turn on a mine.
The mine will have things approved to do, and things not permitted. If you radically change the mine — say a new pit — regulators demand new studies. We’ll be drilling to extend mine life until it’s shut down, but it’s not something you can quickly change course on.
Given your current cash position + planned spending, what is the Company’s funding strategy? Will you pursue further equity raises, partnerships, or strategic investors?
The world has changed a lot in the last month or two for junior explorers. Gold pushed through $5,500 and has pulled back to $5,000. New investors are moving into the space. The simple answer is that we’re open for business in any way that increases value to our shareholders.
Equity financings are flying off the shelves, strategics are being inquisitive, and M&A is only going to increase. So, although tough to give a definitive answer, it’s a sellers’ market. A sellers market in a bull market with no end in sight.
We are still at an early-stage. We plan to grow & de-risk Hercules this year. As we do, investors will hopefully recognize what I see as an undervalued company in one of the world’s best jurisdictions.
Thank you Mike for a timely & insightful interview. I look forward to updates on drilling in the near future.
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