Gold Corp. Strikes Highest-Grade Intercept to Date

For those unfamiliar with Dakota Gold Corp. (DC:NYSE American), it's a gold exploration and development company explicitly focusing on revitalizing the Homestake District in Lead, South Dakota.

Dakota Gold focuses on acquiring, exploring, and developing mineral properties in the United States, with gold mineral properties covering over 46 thousand acres surrounding the Homestake Mine.

Jonathan Awde, President and CEO of the company, noted, "After the closing of our recent $17 million financing with Orion Mine Finance, our exploration program is fully funded for 2024, and we look forward to exciting results from the four drills we have operating at our Maitland and Richmond Hill Gold Projects."

The company's Maitland Gold Project encompasses some 2,175 acres in the western portion of Lawrence County, South Dakota, United States, within the Black Hills mountain range. The Richmond Hill Gold Project is located 2.3 miles west of Maitland and 1.5 miles north of Coeur Mining, Inc.'s Wharf Mine.

The Catalyst: Great Drilling Results, More in January

On November 21, the firm issued a report on six new drill holes from the Richmond Hill Gold Project. Of these, drill sample RH23C-059 returned 0.575 oz/ton Au over 7.3 feet (19.73 grams per tonne over 2.2 meters) within a larger interval of 0.249 oz/ton Au over 19.5 feet (8.55 grams per tonne over 5.9 meters)

According to the release, "This intercept is outside the known historical resource boundary of the Richmond Hill Breccia Pipe and is the highest-grade intercept returned to date from Dakota Gold's drilling campaign at Richmond Hill, proving that higher grades are possible throughout the very large, Richmond Hill Breccia Pipe Complex."

On October 26, CapitalCube released a Fundamental Analysis of Dakota Gold. "Based on their recent filings," it explained, "the company has enough money to finance their operations for a year and does not need to raise capital in the immediate future. "

The release goes on to explain that "The drill hole was collared in oxidized and altered Precambrian greenstone basement rocks located on the shoulder of and in between the Richmond Hill Breccia Deposit and the Turnaround Breccia Target where these rocks were exposed to increased structural preparation and hydrothermal fluid flow caused by the emplacement of the two breccia bodies. Other similar relationships are seen elsewhere on the property and may hold similar high-grade opportunities for future exploration."

Assay results for eleven more drilled holes are expected in early January 2024.

According to Dakota Gold VP Exploration James Berry, "The results from RH23C-059 are telling us there are high-grade opportunities at Richmond Hill. It is a large and complex geologic system, and we are learning about the important controls over gold deposition with each drill hole completed."

"We are starting to see a common pattern of higher gold grades, which we will apply in future exploration targeting and resource development work."

Why this sector? On-shore Gold with Proven In-Ground Holdings

Why buy shares in a gold-mining operation? Jonathan Awde, Dakota Gold President and CEO explains, "Although gold is more commonly recognized as a commodity to trade and for jewelry to wear, it also plays a very important role in technology and healthcare because it is resistant to rust and corrosion."

"Gold is the most reliable and durable electrical conductor, making it essential for computer electronics and satellite communications technologies. It has vital uses in green technologies, healthcare, and our digital world," he continues.

"We believe gold will remain strong and become increasingly important in the future. Dakota Gold is focused on gold exploration and development in South Dakota, a tier-one, mining-friendly jurisdiction, which puts us in a great position for future growth and to meet the rising demand for responsibly mined minerals."

More recently, Peter Bell of Canaccord Genuity put out a report this week in light of this news, where he gave the company a Speculative Buy rating and a US$5 target price. 

This last point is critical, as much of the planet's remaining in-ground gold can only be found in unstable states where extraction and refinement face considerable risks.

As INTERPOL pointed out in a 2022 report, much of the world's easily minable gold is not available to white market actors. According to Cindy Buckley, Acting Assistant Director of INTERPOL's Illicit Markets division, "In the context of COVID-19, illegal gold mining has been lining criminals' pockets more than ever before, allowing crime groups to funnel money into other illicit activities while destroying the local environment."

Even in jurisdictions where health concerns are a priority, mining can remain quite dangerous. Henry Wilkins reported for The Voice of Africa in 2021 that "Terror attacks on gold mining operations in Burkina Faso are becoming a regular occurrence," and that is far from the only jurisdiction where miners can face banditry.

So, while a fair amount of gold remains to be mined, only a little of it turns up in relatively safe and stable jurisdictions like South Dakota, deep in the American heartland.

Why This Company? Right Expertise in the Right Location

Carling Gaze, Dakota Gold's VP of IR and Corporate Communication says, "Gold is what we know best. Our Co-Chairman of the company, Robert Quartermain, was inducted into the Canadian Mining Hall of Fame for his significant contributions to the Canadian and International mining industry over his 40+ career."

"With Dr. Quartermain's guidance, our President and CEO Jonathan Awde's knowledge of raising capital, and the wealth of experience of our technical team has in the Homestake Mining.

District of South Dakota, we feel we have the right expertise in the right location."

"Not only is Dr. Quartermain an expert in geology and a legend in the gold mining space," says Gaze, "but we also have our President and CEO, Jonathan Awde, who has extensive experience with the capital markets, having raised over $600M over the past 15 years for public and private companies. Additionally, we have a senior technical team that has direct experience working for the historical Homestake Mine before it closed, as well as at the Coeur Wharf Mine, a current producer in the Homestake District."

"We are 100% focused on advancing exploration in the Homestake District of South Dakota, which means our focus and attention is not diluted," Gaze continues, noting that "The Homestake District is a mining friendly, tier one jurisdiction that has been underexplored and is home to the largest iron formation gold deposit in the world. Much of the land had been tied up in Barrick's closure group since 2000; we have now done three purchase agreements and options with Barrick to revitalize and consolidate this district."

"With these agreements, we have exclusive access to 145 years of exploration and mining data from the 40 thousand oz gold producer, the Homestake Mine that closed when gold prices were sub $300/oz Au. We are now following up where they left off in the 90s to find new deposits in the area, which could now be economical under the lens of $1,900/oz Au."

Why Now? The Right Place at the Right Price

As Gaze explains, "The price of gold is strong, and we have made excellent progress in our drilling this year. Drilling commenced at the Maitland Gold and Richmond Hill Gold Projects in the spring of 2022 and has encountered significant gold mineralization at both projects, including two new discoveries, the Unionville Zone and the JB Gold Zone at Maitland. As well, drilling at Richmond Hill to date has delineated an extensive gold system more than a mile in length from north to south, with gold mineralization open in all directions."

"More drill results will continue to be released into 2024 as they become available. We have made two early discoveries and are now following up on those early discoveries and are in the process of vectoring towards a large discovery for higher grades of gold and the centroid of the mineralization now."

On October 26, CapitalCube released a Fundamental Analysis of Dakota Gold. "Based on their recent filings," it explained, "the company has enough money to finance their operations for a year and does not need to raise capital in the immediate future. It has a moderate working capital position (less than the operating expenses of the past four quarters)." 

More recently, Peter Bell of Canaccord Genuity put out a report this week in light of this news, where he gave the company a Speculative Buy rating and a US$5 target price. He commented, " Drilling continues to expand the footprint of mineralization at Richmond Hill. The highlight of the release was held RH23C-059, where almost all the mineralization occurred in the wall rocks adjacent to, but not within, the Richmond Hill Breccia (Figure 1). Similar results were found with holes RH23C-054 and RH23C-056, which could serve to provide further validation that higher-grade mineralization is possible beyond that of the Richmond Hill Breccia. The occurrence of strong gold grades outside the breccia itself provides a potential new target for exploration."

Ownership and Share Structure

According to the company, approximately 25% of its shares are with management and insiders.

Out of management, Co-Chairman Robert Quartermain holds the most shares at 8.5% or 7.34 million shares, Reuters said. President and CEO Jonathan Awde is next at 6.8%, with 5.93 million, while COO Jerry Aberle holds 4.8%, with 4.2 million. The remainder of the 25% is held by other members of management and the board of directors.

About 26% of the shares are with institutional investors, according to Yahoo Finance and Edgar filings. A few of the top institutional holders include Fourth Sail Capital with 5.3%, Van Eck Associates with 3.5%, Blackrock Institutional Trust Co. with 3.4%, The Vanguard Group Inc. with 3.9%, Fidelity Management and Research Co. LLC with 2.9%,  CI Investments, Inc. with 2.8%, and 1832 Asset Management LP with 2.4%.

About 16.5% is with strategic investors, including Orion Mine Finance, which owns 7.7%, Marin Katusa and KCR LL, who together own 4.2%, Barrick Gold Corp., which owns 2.5%.

The rest is retail.

Dakota Gold has a market cap of US$238 million, with 86.7 million shares outstanding. It trades in a 52-week range of US$3.95 and US$2.33.

Important Disclosures:

1. Dakota Gold Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. 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.
3. Owen Ferguson wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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