President’s Letter
Over the past year inflation has risen to its highest level in 40 years. Federal governments are behind tempering the inflation curve leading to rapidly climbing interest rates. The tightening monetary policy has impacted global markets with the DOW, S&P and NASDAQ declining 19%, 23% and 30% since the beginning of the year.
Alternatively, higher interest rates have elevated the US dollar index to a 20 year high. Geopolitical tensions, increasing physical demand and safe haven buying have enabled gold to out perform other assets. Historically, in the face of such US dollar momentum, gold would sharply retreat and take cover. However, the gold price has managed to relatively hold its ground and is down 8% thus far in 2022.
Gunpoint’s balance sheet was strengthened this year with a $1.5 million private placement. Most of the financing was subscribed by new board members and officers. In addition, the Company’s equity holdings from joint ventures and monetizing its Mexican properties have a current market value of $800,000. We remain confident a bull gold market is ahead and will have the opportunity to capitalize on the upside exposure in these gold equities.
We are excited about the recent transaction with Newcrest Resources, a senior gold mining company, to explore and advance the Appaloosa property. Appaloosa is an unexplored broad and extensive hydrothermal system with a 7 kilometer strike length. Appaloosa is situated within our Talapoosa project’s land package located in Nevada.
Newcrest can earn up to a 75% interest in Appaloosa by paying Gunpoint US$5 million in staged payments, incurring US$35 million in exploration expenditures and delineating a minimum indicated resource of 1.0 million ounces. Appaloosa’s district scale footprint requires significant capital for exploration and development. The equity markets are challenging to raise capital especially for junior explorers. The Newcrest earn-in agreement will not be share dilutive to shareholders.
Since the equity financing, Gunpoint has completed data compilation and evaluated technical reports on Talapoosa spanning over 30 years. Field work has followed up on areas with encouraging historic drill intercepts outside the known resource. Going forward, our focus is to expand Talapoosa’s mineral resource hosting over 1.1 million ounces of gold and 15 million ounces of silver. Several step-out drill targets have been identified.
We look forward to advancing our flagship Talapoosa project together with Newcrest’s program to explore Appaloosa’s untested large hydrothermal system. I truly believe Gunpoint has an exciting future and thank our long term, loyal shareholders for their support.
GUNPOINT EXPLORATION LTD.
P. Randy Reifel
President
September 28, 2022