StrikePoint Gold (TSXV: SKP) has closed its acquisition of the Northumberland gold project in Nevada’s Walker Lane from Newmont Corporation (NYSE: NEM), handing over US$70 million in cash on Tuesday.
Newmont stands to collect another US$50 million down the road through two contingent payments of US$25 million each, the first due within 120 days of a completed feasibility study and the second within 120 days of the project reaching certain commercial production milestones.
The upfront cash came from a C$190 million bought deal private placement led by Canaccord Genuity, which priced 95 million subscription receipts at C$2.00 each following a 10-for-1 share consolidation. Tembo Capital took 20.3 million of the receipts, giving it roughly 19.9% of the company, and separately paid US$10 million for a 0.5% net smelter return royalty on Northumberland that StrikePoint can halve by paying US$25 million.
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Northumberland is a past producing Carlin-style deposit, most of which sits on private land. Oxide mineralization discovered there in the 1930s was mined on and off until 1991, after which the property changed hands several times before landing with Newmont through its 2011 takeover of Fronteer. It has seen no exploration since around 2010.
Drawing on more than 1,500 historical drill holes, Strikepoint has assembled an initial resource estimate for the project outlining 2.86 million indicated gold equivalent ounces at 1.33 g/t, alongside 1.57 million inferred gold equivalent ounces at 1.58 g/t.
That estimate however is viewed as a starting point. With the deposit open in multiple directions and five drill permits already in hand, StrikePoint doesn’t plan to wait long to get rigs turning for further exploration.
“We anticipate commencing drilling within a month at the project with the goals of expanding and infilling the existing resource,” said Michael Allen, president and CEO, adding that the team will also evaluate several greenfields targets that could be drilled in 2027.
The closing also brings a change at the top of the board, where Alan Pangbourne, who previously ran Guyana Goldfields through its 2020 sale to Zijin Mining, takes over as chairman from Shawn Khunkhun, who remains a director.
Strikepoint Gold last traded at $0.165 on the TSX Venture, although trading has been halted since August 18 and is expected to resume tomorrow.
