Graphite and Gold = Perfect Hedge?

Share Price: 28 cents

Shares O/S: 30 Million 

Market Cap: 8.4 Million

Rating: Strong Buy

Ticker Symbol: SRK

Onthis week’s edition of Resource Corp I will be featuring a hot newcompany that has their hands in pretty much every basket. Strike Gold, amajor player in the graphite industry, has recently acquired a gamechanging project from Canaco Resources.

 Canaco + Strike Gold 

Inaddition to the current Satterly Lake property in Ontario, Strike Goldannounced yesterday that they will be entering into a joint venture withCanaco Resources. For those of you unfamiliar with Canaco, they are akey player in Tanzania. An updated resource estimate for Canaco iscurrently in the works, but based on my analysis, it can be estimatedeasily to the tune of 5 million ounces.

In addition, the Boma property in Tanzania is accessible by pavedhighway; always an unexpected delight to those familiar with Africanexploration.

TheBoma property has never been drilled or mapped with modern geologicaltechnology which means this property has blue sky potential.  Multi-millionounce deposits are the norm in the surrounding region, making thisproperty the quintessential property of elephant territory.

The geological landscape of Boma is very similar to the Handeni property, Canaco’s flagship project.  Based on preliminary assessments, Boma is expected to hold yields similar to those of Handeni  Property.

TheBoma property is also along the same corridor that currently hosts twoactive gold mines. Scaling in at nearly 562 square kilometers, the Bomaproperty is massive.  This property truly has the potential to be multi-million ounce project.  Naturally,with Canaco on board, Strike Gold will have no issues dealing with theauthorities in Tanzania, which is always attractive to investors.

Iwill be following this project very closely as more geological work,specifically airborne surveys and on-the-ground sampling becomesavailable. I will be updating the blog regularly. I truly believe thatthis property has the potential to be a multi-million ounce deposit.

  Project highlights:

Inaddition to this new property, Strike Gold has also made advancementsin Ontario, which includes the Satterly Lake Project. There has beenmuch historic drilling on this property which is not yet NI 43101compliant.

Highlight drill hole to date:

Therehas also been very positive grab samples, Ontario is having arenissance simlar to the gold rush with companies like Augen Gold,Trelawney, and Gold Canyon which I recently featured in an ariticle afew months ago. The property hosts sulfides that are all usually goldbearing;the geological landscape of this project looks similar tospringpole lake. The Bircho-Urchi greenstone belts are similar to RedLake, where Goldcorp has a flagship-mining prokect. The red lake miningproject has one of the lowest cash costs coming in at 288 dollars a oz. 

The Next Critical Metal?

StrikeGold also hosts two great high grade graphite deposits, for those ofyou guys thinking WTF is graphite? I have a paragraph below explainingthe importance of this metal.

Graphite 101

A key reason that I like Strike Gold is in addition to the gold isbecause the company has 2 world class graphite exploration plays. Thedemand for graphite is rising at astronomical rates. The need forlightweight and high strength Carbon fibre is creasing as the worldmoves to more fuel efficient cars/jets for example the new Boeing dreamliner is made almost entirely out of carbon fibre. This is supposed tobe the replacement for the aging 747. Graphite is also used in nuclearreactors, fuel cells, batteries, solar cells, and most importantly inhockey sticks used by the NHL greats!

With great demand like this, I can see China curbing their exports.  Thisis an highly expected move by China because they also curbed theirexports of Rare Earth Metals in the past year. North America is becomingconsiderably more aware of factors such as these so I believe they willbe working hard to secure critical supply of these niche metals.

Recently Graphite prices have hit $3000 dollars/ton.  Althoughthey have pulled back recently with this bear market, they have madegreat moves that can only be matched by the tremendous rise in goldprices. Graphite is clearly in a bull market rally I believe this trendwill continue as we become more sophisticated and more aware of theenvironment.

Iwill not get into detail about the Graphite deposits at this time buthere are the highlights for more information on them check out the Powerpoint Presentation 

Nowis a great time to buy Strike Gold as there will be a sister companyknown as Strike Graphite, with a market cap like this it is clear theGraphite assets are being valued at ZERO, so a spin out will get thegraphite projects the value they deserve.

The Hunt For The Next 10 bagger! 

Thecompany trades with a tiny market cap of about 8.4 million, for acompany with 4 world class exploration projects I think this is verylow. Expect a gradual rise in share price as the company matures, thisis a very new company that was recently formed and with more promotionand awareness things are going to change QUICK! This company over higherthan 10 bagger potential! It still only has a market cap of 84 millionas if it were ten bags! Not often do you get a chance to get in at theground floor! Now is your chance to grab it by the horns! If you act nowyou will get a FREE share of Strike Graphite!

Inconclusion to this short blog, I rate Strike Gold a screaming buy, thegraphite and gold projects hedge each other out very well in my opinion.Graphite is a play on the industrial strength of the economy while goldis a great hedge to have if the economy goes in the gutter again! Youcan't lose on this one folks.