StrikePoint Gold: How a Small Newmont Deal Led to $70M Northumberland Acquisition

0:00Thank you.

0:30Mike Allen: million ounces of inferred gold equivalent. I talked to CEO Mike Allen during the project tour in late October about how the deal came about and when drills start turning. Here's my conversation with Michael Allen. Michael, welcome to Mining Stock Daily. Thank you very much. Good to be here. Now, you announced that you closed the$190 million transaction this summer and paid$70 million to acquire the Northumberland project. I do want to get into the deal in a minute because it's fascinating how it came together. First, what is Northumberland?

1:01Alan Pangbourne: Northumberland is a project that we've obviously acquired from Newmont. It's a combination of private and public land, but the key feature that attracted us to the project is obviously the resource and the geology. Northumberland geologically is a Carlin-type gold system, so gold within carbonate sediments and it's really interesting in that it is classic carlin classic units roberts mountain formation hanset formation in an unusual location it is within the the walker lane so between las vegas and reno but it's a it's a classic carlin great big system uh in the southern part of nevada as I say, in a bit of an unusual location.

1:55Mike Allen: How did the deal come together?

1:57Alan Pangbourne: There's a lot of things that came together to make this deal happen. And it's one of those moments where it is lightning in a bottle. There's, in simple terms, the key spark for it was in January of 2026, StrikePoint started to do a deal with Newmont on another project in Nevada. And it was internal to our old Hercules project. And that was a discussion that got us a conversation with Newmont. And we did the deal on what's called the Como piece of ground and closing the deal up. And the Newmont gentleman said, well, we'll keep you in mind for any additional projects that come out of the portfolio.

2:57Alan Pangbourne: Newmont's been doing a series of divestures. And I turned around and asked the guy, well, what about Northumberland? and that came from a combination of the history and people that we've got involved with uh with straight point my history with the with the project and the newmont guy said well yeah that's going to be coming out of the portfolio and that was the moment and that's how the deal started that was the spark that got it all all together then obviously we did all the things that we that We need to do due diligence on the asset and whatnot. But that was the spark that started it all.

3:37Mike Allen: Now, the other piece that came with it is Alan Penguin, who is one of the executives with SSR as well, too. Talk about his piece regarding Northumberland.

3:48Alan Pangbourne: Well, I mean, Alan Panborn is a really interesting guy. And he is now the chair of StrikePoint post the deal getting done. And as you said, he was COO of SSR, the old Silver Standard Mining here. He was part of the team that put together the Marigold transaction here in Nevada and a few other deals associated with it. And in Allen's history, he took a shot at Northumberland. And ultimately, due to circumstances beyond Allen's control, that deal fell apart and Newmont walked away from it. So, I had my history with the project, Alan had his history with the project, and when there was that moment with Newmont that said, hey, this thing's available, we were able to act quite quickly because we knew what it was.

4:45Alan Pangbourne: And so, we were able to spool ourselves up into transaction mode very, very quickly.

4:51Mike Allen: Now, this project I've been sitting within Newmont, tell us how much work had been done on the project up to date.

4:58Alan Pangbourne: I mean, there is a tremendous amount of work. There is just under 200 kilometers of drilling, I believe the number is 1 ,544 holes into the project. It is a past producer, so if you ever get on site, there's obviously all the old pits, the old leach pads, the old waste rock dumps that you that you see there um frontier when they had it frontier gold when they had it drove uh on underground into it um and so there's been a tremendous amount of work that was done up till about 2010 and and in 2011 newmont and frontier or well uh newmont bought frontier for the Long Canyon project in northeastern Nevada.

5:50Alan Pangbourne: And this asset became dormant within Newmont. It wasn't the target of that transaction. And Newmont, ultimately, they retained it. And people tried to get it out of them over the years. But they never advanced it. It just wasn't Newmont sized. And then another part of the situation here in Nevada is Newmont and Barrick created an entity called Nevada Gold Mines. And they put together all of their assets into one org structure or operating company. It's the Nevada Joint Venture or Nevada gold mines. And so because of Allen taking a shot at Northumberland, it didn't actually go into the JV. It was isolated that way.

6:50Alan Pangbourne: That was the timing of that. It just got left alone outside of the JV. And when the JV came together, Nevada gold mines came together, the operator is Berwick. So there is not a lot of Newmont in Nevada and so truly, truly orphan project in there. And we were due to my history with the project, Alan's history with the project. When we recognized what it was, it was like, yes, that's something that we can get out of that big company and bring into the capital markets and something that hasn't been seen in a decade and a half.

7:32Mike Allen: Now, with all of that drilling work that had been done, you were able to release a resource on the project. And then, you know, the way that you're going to be looking at the project is going to be quite different with these elevated gold prices. I believe that you have a$3 ,500 in there for right now for the gold. How are you looking at the metallurgy right now and eventual options in terms of processing this?

7:54Alan Pangbourne: Well, there's a lot. And this is where one of the magical things about this transaction is Alan is a metallurgist by background, and so he brings a lot of knowledge to the asset. Historically, in Nevada, there's heat leach projects, and then there's not heat leach projects. And when Northumberland was in production, it was a heat leach, and there's a little bit of remnant oxide there. We had to talk about this and think about this asset and we actually spoke a lot with one of the the former Newmont metallurgists, a gentleman here in Nevada and he made the comment to us, you know, when we were there we logged it as oxide and refractory, milling material.

8:51Alan Pangbourne: and he's like the concept of transition transitional material did not exist and he made the comment that you're going to find a lot of transitional material there okay that's that's that's interesting and i i remember the call you could sort of see alan lean into this and it's just like okay i'm not a metallurgist by background i'm a geologist i know the terms but i don't know them intimately like Alan does. And so we looked at the data, the 2006 technical report done by Frontier mentioned that there was discontinuous partial oxidation of the mineralization down to about 800 feet from surface.

9:38Alan Pangbourne: And I found this in the technical report and I showed it to Alan. And he's like, that sounds like transitional material. I'm like, well, Alan, help me understand. What does this mean? And he's like, if it works, what you often see with transitional materials is if you start to mill them, they behave in a mill more like oxide. And it's just like, well, okay, tell me, all right, now let's get into this. And he's like, yeah, you can process the refractory material, but if you can process the transitional zone cheaply, it defers your capital. And so when we think about things that may happen with Northumberland, there may be a low capex starter pit associated with it, that first 800 feet of the operation.

10:33Alan Pangbourne: we might be a CIL plant. Obviously, there's got to be a lot of test work that needs to be done with it. How does this stuff actually perform in a mill? What are the recoveries and whatnot? And then the other part of it is, there's been 20 years or 15 years worth of metallurgical work or technological advances that were never tested on Northumberland. There's things like the Albion process, which is a Glencore technology, it's essentially ultra-fine grinding and tank oxygenating the material. That is done quite commonly. There's about 20 different operations around the world that use this. It's never been tested on Northumberland.

11:20Alan Pangbourne: So we need to do a metallurgical program in addition to exploration and define our metallurgical domains of the mineralization and then how do we tackle this asset as we go forward.

11:35Mike Allen: Now, you did announce that you're going to do a November drill program. You're going to do 15 ,000 meters. That's going to be leading to a PEA by 2027. Talk about what type of drilling you're going to be doing.

11:47Alan Pangbourne: So the PEA is 2028. So we're six weeks away from... Sorry to hurry you up. Dear Lord.

12:01Alan Pangbourne: No, and so the type of drilling, it's sort of like there's a lot of work that needs to be done. And that's just sort of where the company is very, very interesting right now. I'm a geo by background, and I've sort of evolved my career that the hunting I do or the exploring that I do is for assets like Northumberland, but I have that bent to me. We need to explore, we need to understand, we need to expand the resource. Alan, obviously, with his background, it brings another dimension to the company. We need to be thinking about metallurgy and getting that stuff understood early, and then with more production vent.

12:46Alan Pangbourne: So the company has got those two main focuses. So there's going to be an exploration component to it. There's going to be a metallurgical component to it. And so it's a combination in that program. And ultimately, that's what this asset needs for a PEA in 2028, if we go that route, is we need to understand the metallurgy so we can start putting numbers in for preliminary costing. And then we also need a better understanding of the resource. And one of the things that Alan and I have been conscious of is the exploration potential of Northumberland is quite significant. And there is a possibility that the exploration really becomes the star of the show.

13:35Alan Pangbourne: And if that starts to happen, we start to put out big intercepts, new zones getting discovered and delineated, the PEA might be pushed off because we want to get new discoveries to resource. And it might just evolve into a drill story. Obviously, we're just getting started with the project. We were joking yesterday, we've just got the wrapper off the prize here. And we're starting to unpack and understand what it is. And so there's a bit of operational flexibility that we have to have as a company, nimbleness, to make the best use of shareholder dollars and the best return for shareholders on this.

14:20Mike Allen: Now, I believe right now you have one drill rig on site right now. Like, how many drill rigs will they get up to? And then how long is the November expiration program that you have?

14:30Alan Pangbourne: So, I mean, it's a November start is the best way to describe this. And I don't think that that rig's coming off for quite some time. How many rigs will we get to? That's an interesting question. It really becomes a question of how smart can we be and how many people can we get? But right now we've got a crew coming to site that can handle the one rig. And that's fine. We've got a program laid out of intelligent holes in front of that one rig. We need to get together, Keith, the exploration manager, the consultants and I, we need, you know, Alan, all the different groups, all the different needs need to be addressed in a more comprehensive program and just say, okay, what are we doing here?

15:26Alan Pangbourne: How many rigs do we need? How many people can we get? And then there's also things just on interest, interesting things like supply chain issues. You know, there's a lot of demand for rigs, people, and even funny things like steel. Keith was trying to, you know, wanting to get geared up for the program, and there's not casing to be had in Nevada for another six weeks. And so, well, there's no point in bringing in an RC rig if you can't case the hole. So we've got the core rig there, an intelligent program, but we're going to be sort of deferring until we can get ourselves lined up for intelligent work on the project.

16:10Mike Allen: Staying with the metal or chaining byproducts?

16:12Alan Pangbourne: There is a silver credit when you look at the resource. And so it's a modest amount. it's not a significant economic driver and this project it's not like some of the other projects that are coming on stream right now where there's antimony in there and those sorts of things. So yeah it's just the the silver that drives this right now.

16:42Mike Allen: Now again your amounts are closed of the 190 million transaction and then after you paid Newmont you have roughly capital of like 90 million Canadian. Why raise that amount of capital right now?

16:54Alan Pangbourne: Well, that was an interesting thing. When we were going out and raising the money, we initially announced a bought deal of$140 million Canadian with an upsized green shoe of 15%. And the feedback that we got from some of the larger institutions was their experience was there were sort of two buckets of juniors. Those were essentially well-financed and not. And they said, we like the project, we like the people, and we think that if you only raise$140 million, you're not going to be well-financed. And so it's like, we want you to raise more. So that was the feedback from the market that we got.

17:44Alan Pangbourne: And so, okay, if you guys want us to raise more money and you're willing to write the check to get us there, sure. And these are large institutions that came into the financing and were able to encourage us. And ultimately, they kept their end of the bargain and they wrote the checks to get us the upsize to$190 million Canadian.

18:12Mike Allen: I believe Tembo has a 19.9 % stake as well as a royalty on the project? That's correct. Okay.

18:19Alan Pangbourne: So Tembo is the single largest shareholder of the company at this point. And the big three is Tempo, a family office in London called Ithaca, and then it's BlackRock, actually, the big UK fund. I believe one of the largest private funding groups in the world. And yeah, those are the big three. And then to get back to the other part of your question, yes, Tembo, as part of their investment, we sold them a royalty for$10 million American. The design on that was they wanted to invest$40 million into the project. That's how much they liked it,$40 million U.S. And to go pure equity on that, we couldn't get the math to math.

19:18Alan Pangbourne: They also want it to be at 19.9. And to do that, we would have had to push the math of it all to raise beyond the$190 million Canadian. We would have been somewhere in the$250 range. We just thought that the market wouldn't support that valuation. and so to get them to their desire of investing$40 million U.S. into the project, there was the royalty for$10 million U.S. There's a buy-down on that that we can exercise within the next five years and it's a$25 million buy-down to buy half of that royalty back. It's within the next five years or 120 days post-commercial production, whichever comes first.

20:06Mike Allen: How's the water situation there?

20:09Alan Pangbourne: The water situation at the, so because it's a past producer, it had water rights assigned to it. And those obviously transfer over as part of the sale. As part of our due diligence efforts, we did look at the water situation. and there's two basins that we draw from, Big Smoky Valley and the Monitor Valley. That's where we've got rights for right now. Those basins, the term is not fully allocated, meaning that if you apply for a water rate and have an obvious use for it, you should get it. And it's not, in Nevada, what you often see is the basins are fully allocated. So mining companies wind up either buying out ranchers or leasing water rights from the people that have them.

21:06Alan Pangbourne: And the situation that we're in, it's more of an application to the state to use those water rights. And so that process has been kicked off. And I'm told it's a relatively simple process. It takes some legal and some permitting work, but it should be relatively straightforward. And that's something that we've kicked off, and hopefully we can get that turned around and settled relatively quickly.

21:35Mike Allen: The other piece of work that you're doing right now is putting in some key hires at this point. So why are you engaged in this work right now, just given that you're kind of just kicking off the drill program?

21:45Alan Pangbourne: I mean, there's, well, the key person that we hired to date, and this has been announced, is Keith Witt. He's an exploration manager for the project. We need that person. We need to get drilling to collect all the data to get to the point that we want to do. It all comes down to the data or the geology. So we needed to get that person into place. But there's a lot more that needs to be done. And right now, the company is transitioning from essentially a one-man band or a two-man band, myself and Paulo Santos, the CFO, to that big exploration company, Junior. We need a study manager, somebody to manage the PEA.

22:31Alan Pangbourne: We need permitting people to keep on top of the permitting process, keep the existing permits up to satisfied, and get us the new stuff, water rights, for example, and other things associated with the project. It just needs to grow. Even simple things like accounting. One strike point before the transaction, it's a relatively straightforward thing. We have an accounting services company, but is that adequate? We now have U.S. payroll. Keith is online down here. So we need to get payroll services sorted out. There's all sorts of growth that needs to happen for the company right now, everywhere.

23:18Alan Pangbourne: And even at the advisory level, we put out a news release when we announced Keith. A gentleman by the name of Stephen Quinn joined us as an advisor. Fantastically intelligent individual, deeply experienced, you know, helping Alan and I on all sorts of fronts, whether it's geology, ESG, compliance issues, all sorts of wonderful things that Alan and I, more on the technical side, get to tap into Stephen's expertise on. So it really is a fun, exciting time for the company to be around and all the different people that we get to bring in. And for me, I get to set the culture for a company. It's actually really, really interesting.

24:08Alan Pangbourne: Like, you know, try and get the best people in terms of skills for the job and then good matches that we can all work together. because there's a tremendous amount of work coming to advance this great asset.

24:25Mike Allen: Top factors right now that you want to de-risk right now? I mean, we did talk about the metallurgy. We also talked about the water issue. But is there anything else right now as you kind of march to that 2020 APA that you kind of need to get your hands around?

24:42Alan Pangbourne: Yeah, those are definitely the top. Well, actually, I would say that the metallurgy, I don't think it's much of a risk. I think it's more of an opportunity to actually look at this with a 2026, 2027 lens on it. There's an opportunity here to do something new and exciting and change the state of Nevada. I think that the processing of these refractory ore bodies is the way of the future. You look at actually the consulting firms here in Nevada that all used to be heap leach experts. They're actually moving their business to processing these more refractory mineralization because that's all that's left down here.

25:28Alan Pangbourne: So it's interesting. In terms of the other factors that are interesting, I think that probably our biggest risk is actually people. it's busy down here getting good people to do the work, and that is everything from consultants to our own people to getting good drillers and getting that stuff sorted out, making sure that we've got a team that can execute a program in a reasonable factor, in a reasonable execution from a technical point of view, but also from a safety point of view. I mean, you know, we work with the groups here, the drillers on site, very safety conscious. And those are the things that we like to see because it's the way that the world is now.

26:18Alan Pangbourne: This is the demand that you have to live with. And obviously, you know, safety being a big thing, nobody ever wants to see anybody hurt. It just is awful. And so that's working with the contractors to ensure as best we can that we've got a safe program. And that's what, again, comes back to Keith. Good connections, good people, all that stuff.

26:42Mike Allen: Northumberland is going to be your flagship. What happens with the remaining assets at StrikePoint?

26:47Alan Pangbourne: The board needs to take a moment and assess. We have two other assets in the company. The Hercules that sort of kicked off the conversation with Newmont. and then coop right. And so we need to sit down and assess those situations. We were drilling towards, with the goal of producing a resource estimate on Hercules when the Northumberland transaction got traction. And so we sort of downed tools on that effort. The board, given where StrikePoint is today, Do we want to pick up that effort? And there's pluses and minuses of it. Do we want to spend the money away from Northumberland because that's our flagship?

27:45Alan Pangbourne: Do we want to do that resource estimate because it's going to be efficient use of shareholder capital for getting a return to shareholders? That's a debate that needs to be had at the board level and no decision has been made. um coop right is is another matter i mean that's that's one that that we are are monitoring this the situation there you know i come back to the geologist in me and when you look at at what coop right is it's a big alteration zone there big steam heated alteration looks an awful lot like Anglo Gold's discovery and their gold in it, I think it needs a bit more work before we decide what to do with it.

28:32Alan Pangbourne: But again, it comes back to that fundamental question, same as Hercules, is that the right use of our dollars for shareholders to get the maximum return? And I go back to that comment, the board needs to take a breath and have a thought. and quite frankly, I need to take a breath and have a thought to make a recommendation to the board as to how we advance the portfolio. And that ultimately comes from me to make that recommendation working with the board.

29:06Mike Allen: Lastly, news flow over the next 6-12 months.

29:10Alan Pangbourne: I think that the best way to describe it is probably about a six to one ratio of drilling news releases combined with one metallurgical release. We need to get samples collected via drilling, and then they have to go off obviously for assay, and then they have to be sent off for metallurgical testing. So in my mind's eye, it's going to be about six exploration news releases, drill hole results for every metallurgy on Northumberland, plus a smattering of what are we doing with Cooprite, what are we doing with Hercules, permitting updates, things like that as they get done, more things that reflect the full scope of the company as it stands today.

30:10Mike Allen: Michael, thanks for speaking with Mining Stock Daily. No worries. Thank you for taking the time. The information presented should not be considered investment advice. Mining Stock Daily Yance affiliates are not responsible for any loss arising from any investment decision in connection with the material presented herein. Please do your own research or speak with a licensed financial representative before making any investment decisions.