Hawkeye Systems Inc (OTCMKTS:HWKE) was one of the biggest stock gainers on Wednesday as the stock soared 124%, extending its weekly gains to 162%. So why did the stock jump? here is a quick recap.
Trading Data
On Wednesday, HWKE stock moved up 124.14% to $0.0650 with 3.48 million shares, compared to its average volume of 69K shares. The stock moved within a range of $0.0549 – 0.1199 after opening trade at $0.0549.
About The Company
Technology holding company, Hawkeye Systems Inc (OTCMKTS:HWKE), focuses on innovative technology, services, and pandemic management products. The firm made the decision in the present environment to become a diversified gold producer with the first asset being Blue Gold in Ghana.
Hawkeye Systems enters into a Letter of Intent to Acquire Blue Gold International Limited
Hawkeye Systems Inc on July 6, 2022, announced entering a Letter of Intent for the acquisition of Blue Gold International Limited. The entity is valued at US $250,000,000, in a share exchange, which will result in a reverse takeover of Blue Gold. Shareholders of Blue Gold International will hold more than 95% of Hawkeye post-acquisition.
The 90% owner as well as operator of Bogoso Prestea goldmine in Ghana, Blue Gold owns a significant gold concession in the Ashanti gold belt. The company is a diversified gold mining operator aiming to acquire more prospective gold properties in Africa. Blue Gold will harness the management expertise as well as the strong balance sheet.
The transaction is subject to due diligence and is expected to close on October 31, 2022, by all parties. Both Blue Gold and Hawkeye are looking to complete a $6 million funding arrangement before July 31, 2022. This would be invested in Blue Gold and would be the working capital during the due diligence period. Furthermore, Hawkeye has terminated all other discussions LOIs with alternative opportunities it was evaluating. The company believes that Blue Gold has robust upside potential for shareholders.
Hawkeye Chief Executive Officer Corby Marshall said that post-analysis, the company passionately believes that the transitioning strategy for becoming a diversified gold producer will enable it to capitalize on inflationary and rising interest rate macroeconomic trends. It will also give a basis for growing sustainable business.
The project is located in Ghana’s significant gold area and the Ashanti belt can build significant long-term shareholder value. The CEO added that the project has produced about twelve million ounces of gold since 1912.
Dan Owiredu, Chief Executive Officer, Blue Gold said that the firm is glad on foraying again into the capital markets with a primary listing in the US through the transaction with Hawkeye. Owiredu added that the firm is actively seeking on leveraging equity capital markets, especially due to the higher interest in gold. The CEO believes that the company can create a robust platform for fully developing the proven sulfide resource as well as significant unexplored strike.
The company appointed James Kerby and Christopher Mulgrew to the Board of Directors of Hawkeye in support of the transaction. During the due diligence period, the company aims on completing a one-for-ten reverse stock split as well as change the name and ticker symbol. Furthermore, the firm is looking at rebranding, finalizing the go-to-market plan, modifying the board of directors, and recruiting a new management team.
Key Quote
Hawkeye Chief Executive Officer Corby Marshall commented, “Following extensive analysis, we believe transitioning our strategy to become a diversified gold producer will enable the Company to capitalize on the inflationary and rising interest rate macroeconomic trends and provide the basis for a growing sustainable business. Given the project’s location in Ghana’s historically significant gold area, the Ashanti gold belt we are confident in our ability to build significant long-term shareholder value. The project has produced approximately 12 million ounces of gold since 1912.”
Technical Data
HWKE stock is trading above the 20-Day and 50-Day Moving averages of $0.0310 and $0.0323 respectively. Moreover, the stock is trading above the 200-Day moving average of $0.0508. The company has a total market capitalization of 1.62 million with 25.09 million outstanding shares. Moreover, the company has 77.95% or 19.56million floating shares. The stock is up 150% over the past month.
