Junior Co. Might Be on the Cusp of a Large Discovery

Earlier last month, Dakota Gold Corp. (DC:NYSE American) released drill results and announced the discovery of the new Unionville Zone at the Maitland Gold Project. 

Highlights of this included:

• Drill Hole MA22C-009, which intersected 0.104 oz/ton Au over 119.7 feet (3.58 grams/tonne over 36.48 meters), was designed to test the continuity of Tertiary breccia hosted gold mineralization encountered in MA22C-001 and MA22C-002.
• MA22C-001 had previously intersected 0.195 oz/ton Au over 16.4 feet (6.69 grams/tonne over 5.0 meters) and MA22C-002 intersected 0.340 oz/ton Au over 9.2 feet (11.66 grams/tonne over 2.8 meters). MA22C-001 and MA22C-002 are located 1,220 feet apart in plan view, suggestive of potential strike length. Follow-up drilling will continue to test the continuity and thickness.
• MA22C-003 intersected 0.292 oz/ton Au over 10.4 feet (10.03 grams/tonne over 3.17 meters) at 5,039.3 feet (1,535.98 meters) within the Homestake Formation.

Gold on the Rise

Dakota Gold is a junior mining company based in South Dakota. Backed by the industry giant Barrick Gold Corp. (ABX:TSX; GOLD:NYSE), it has purchased 46,000 acres of historic mining camps that closed decades ago when gold prices dropped to less than US$300/ounce au. Now, with gold hovering at around US$1,900/ounce au, these shuttered mines have strong potential for revitalization.

Experts are interested in this prospect due to the land’s historical production of over 45 million ounces au, and Matt Badiali, geologist and investment analyst, said "the best place to find a new gold mine is in the shadow of the head frame of an existing gold mine" in reference to Dakota Gold’s current exploration drilling programs.

Matt Badiali, geologist and investment analyst, said "the best place to find a new gold mine is in the shadow of the head frame of an existing gold mine" in reference to Dakota Gold’s current drilling explorations.

While many people consider gold a commodity most often used for jewelry, it is also a vital resource for today’s most advanced industries. Due to gold’s resistance to rust and corrosion, as well as its dependable status as an electrical conductor, industries such as healthcare and technology have come to rely on it.

Gold has become essential in the construction of computer electronics, satellite communication technologies, green technologies, and healthcare devices.

One of the most compelling aspects of Dakota Gold is its management team. Robert Quartermain, Co-Chairman of the company with over 40 years of experience in mining, was recently inducted into the Canadian Mining Hall of Fame for his success in and contributions to the mineral exploration and mining industry. Quartermain’s experience is paired with Dakota Gold’s President and CEO, Jonathan Awde, who has raised over US$600 million for various private companies throughout his career.

Badiali points to leadership as one reason he is watching the company, stating that "We want to back people who have been there and done that. We don’t want to pay for someone’s tuition to be a mining executive."

Revitalizing Catalysts

In mid-2022, Dakota Gold launched a US$15 million exploration program to assess mineral deposits in the Homestake District, basing their drilling efforts on 140 years of data sets available from the previous mining operators in the area. With current information technology, the company is currently digitizing and systemizing this information for optimal drilling predictions. The exploration is still in the early days, but Dakota Gold assures that its initial results are promising. They plan to release additional results throughout 2023 as they become available. 

Investment analyst Badiali finds management’s high ownership percentage a sign of good faith, saying "we want to see management put their money where their mouth is."

The most important catalyst, however, lies in the company’s efforts to conduct infill and step-out drilling to convert historic drilling at the Richmond Hill Gold Project into an SK 1300 compliant resource.

President and CEO Jonathon Awde told Streetwise Reports that the company is "going to try and establish strike length and the geophysicality within the next phase of drilling with Maitland. We are planning half a dozen drill holes, which shall tell us what we are dealing with going forward."

Awde stated that Dakota Gold is "extremely encouraged by this prospect." The company currently has four rigs turning on its properties, two of which are at the Maitland Gold Project, and some of the drills have been hitting mineralized Home Stake Formation.

Awde assured investors of the company’s optimism by saying, "We believe we are on the cusp of vectoring toward higher grades and on making a discovery with Maitland." Much of the land owned by Dakota Gold has not been explored in nearly 30 years, leading experts toward the hope of a large discovery.

In a February 23, 2023 research note, Michael Fairbairn of Canaccord Genuity touched on Dakota Gold's potential, writing "We reiterate our SPECULATIVE BUY rating and US$5.00 target price. Our target remains predicated on a 1.0x multiple applied to our forward curve-derived operating NAV less net debt and other corporate adjustments."

Ownership & Share Structure

According to the company, approximately 30% of the company's shares are with management and insiders. Out of management, Co-Chairman Robert Quartermain holds the most shares at 10% or 7.34 million shares. 

President and CEO Jonathan Awde is next at 9%, with 6.71 million, while COO Jerry Aberle holds 6%, with 4.21 million. The remainder of the 30% is held by other members of management and the board of directors.

Investment analyst Badiali finds management’s high ownership percentage a sign of good faith, saying "we want to see management put their money where their mouth is."

Per Reuters, 26.36% of the shares are with institutional investors. Notable institutions who own shares consist of Van Eck Associates (3.8%), BlackRock Fund Advisors (3.6%), CI Investments (3.6%), Fidelity Management (3.5%), The Vanguard Group (3.2%), Barrick Gold Corporation (3.0%), Medalist Capital (2.4%), Delbrook Capital (2.0%), and Sprott Asset Management (2.0%).

Reuters notes 27.41% is with strategic investors. The largest holding is with Marin Katusa + KCR LLC, which owns 4.9% of the shares. These shares were acquired by the investor during the JR and DTRC private placements in 2020.

Dakota Gold’s capital structure currently consists of 72.1 million shares outstanding, 3.8 million stock options, 0.4 million restricted share units, 7.6 million warrants outstanding, and 84.4 million fully diluted shares.

As of September 2022, Dakota Gold held a cash balance of US$28 The company currently has no potential sellers and has 7.6 million warrants.

Dakota Gold has a market cap of US$250 million and trades in the 52-week range between US$2.78 and US$8.47.

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Disclosures:

1) Cori Rupe wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. They or members of their household own securities of the following companies mentioned in the article: None. They and members of their household are paid by the following companies mentioned in this article: None.

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4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Dakota Gold Corp., a company mentioned in this article.