Dakota Gold Corp. (DC:NYSE American) is about to see its share price break out to the upside, according to one technical analyst, who rates it immediate Strong Buy. This U.S.-based gold mining company is exploring its sizable and prospective land package in South Dakota's Homestake District for new mineral discoveries.
"Investors in Dakota over the past two years have only known a bear market, but this looks like it is changing fast," wrote Technical Analyst Clive Maund in an April 4 report. "Dakota is done falling and is now in position to take off higher."
Maund explained that DC's movement has formed the pattern of a cup base during the past six months and appears to be in the process of reversing out of its downtrend. He indicated that before breaking out, the stock "may pause for a while to mark out a handle to complement the cup."
The analyst cited two key reasons Dakota Gold's share price is poised to move higher. One is that gold has started a major bull market. The other is the company's recent positive news, that drill results showed high-grade gold in another zone at one of its flagship assets, Maitland.
The standout results, from the JB zone specifically, Analyst Peter Bell with Canaccord Genuity reported in an April 4 research report, included:
- 25.03 grams per ton (25.03 g/t) gold over 4.4 meters (4.4m) from 608.4m in hole MA24C-038
- 9.36 g/t gold over 2.6m from 621.8m in hole MA24C-036
"These strong intercepts [at Maitland]. . .highlight the prospectivity for a substantial Homestake-style deposit," Bell wrote. "The continued advancement of Homestake-style targets adds excitement and optionality to the Richmond Hill deposit." Richmond Hill is a second project, 2.3 miles to the west of Maitland, Dakota Gold has been actively drilling since spring 2022.
"The combination gives investors exposure to an advancing development project, with high-grade exploration sizzle," added Bell.
Bell reiterated his Speculative Buy rating and target price on Dakota Gold, the latter of which implies a 102% return for investors given the company's current share price.
Chris Temple, editor/publisher of The National Investor, also likes Dakota Gold, categorizing it as a growth-oriented stock to buy. In his coverage of the explorer last month, he highlighted that a Richmond Hills resource estimate is due out soon, that the Richmond Hills deposit remains open and that exploration upside exists across Dakota Gold's properties.
"I sense more tantalizing news is ahead on the old Homestake workings as well, including a BRAND NEW aspect to that whole story!" Temple wrote.
Outstanding Place, Projects, People
Headquartered in Lead, S.D., Dakota Gold is "a revitalized entity, spearheaded by seasoned mining entrepreneurs roughly two years ago," describe John Newell, who also views the explorer-developer favorably. Newell, president and chief executive officer (CEO) of Golden Sky Minerals, has more than 35 years of experience in the investment industry, as an officer, director and portfolio manager of a global precious metal fund.
Dakota Gold's leadership team boasts Robert Quartermain as co-chairman, a mining professional and Canadian Mining Hall of Fame inductee with a 40-plus-year career in the industry. Dakota Gold's President, CEO and Director Jonathan Awde, also the cofounder and former CEO and president of Gold Standard Ventures, is well-skilled in corporate development, asset acquisition, joint ventures, and procuring and raising capital. Dakota Gold's technical team, collectively, has extensive geological and exploration experience.
Newell noted that Dakota gold is exploring "within the historic Black Hills of South Dakota. . .renowned for hosting the Homestake mine (60,000,000 ounces), once the largest gold mine in America, signaling a rich prospecting heritage." The company's mission, he added, "leverages this historical backdrop, aiming to uncover significant gold deposits by applying modern exploration techniques and knowledge to this historically gold-rich area."
Around this past-producing mine, Dakota Gold owns numerous gold properties that collectively span more than 48,000 acres. Along with Maitland and Richmond Hill, they include City Creek, Blind, Tinton, Paleoplacer, West Corridor, Ragged Top, Whistler Gulch and Poorman Anticline.
Gold in Major Bull Market
The consensus among Wall Street analysts and precious metals experts is that a major gold bull market is underway.
Adam Hamilton, principal of Zeal LLC, described it in an April 5 note: "Over the past five weeks or so, gold has blasted higher in a magnificent breakout rally! It was born as March dawned when a top Fed official hinted at more quantitative-easing Treasury monetizations. . .Midweek gold was challenging $2,300, and its total upleg since early October had grown to 26.3%!"
The gold price is expected to continue climbing. This is due to several factors, wrote Mark Reichman, Noble Capital Markets senior research analyst of natural resources, in an April 1 research report. Reasons include "expectations of one or more [real interest] rate cuts in 2024, continued geopolitical uncertainty, concerns about the growth in U.S. deficit spending and the national debt, and increasing investments in gold by central banks."
All of this is good news for gold equities that have not risen in tandem with the gold price but, rather, have lagged it, added Reichman.
Now, according to Hamilton, gold stocks are "finally building steam after being overlooked for years" and are "only getting started." He continued, "They have a long ways higher to mean revert merely to reflect today's prevailing gold prices, let alone where their metal is heading."
As for which of the equities will do the best, it is the fundamentally sound juniors, like Dakota Gold, and smaller mid-tiers, noted Hamilton.
"And gold stocks' upside potential is massive," he wrote.
The Catalysts: Drill Results, Resource Estimate
The events that could boost Dakota Gold's share price in the near term include additional drill results, expected to be released on an ongoing basis.
Another catalyst is completion of a mineral resource estimate on Richmond Hill, anticipated this quarter. This resource will encompass results of 800 historical drill holes plus results of Dakota Gold's own drilling at the property.
Analysts and experts are bullish on this South Dakotan company, they said, which is continuing to aggressively drill and advance its projects and which now has in its favor, macroeconomic tailwinds and upcoming events.
Ownership and Share Structure
As for ownership of Dakota Gold, Reuters reports, 10 strategic entities hold 22.52%, or 19.75 million (19.75M) shares, of it. The five investors with the greatest interest, all insiders, listed from most to least, are Co-chairman Robert Quartermain with 8.49% or 7.45 million shares, President, CEO and Director Jonathan Awde with 6.86% or 6.01M shares, Chief Operating Officer and Director Gerald Aberle with 4.88% or 4.28M shares, Co-chairman Stephen O'Rourke with 1.04% or 0.91M shares and Chief Financial Officer Shawn Campbell with 0.41% or 0.36M shares.
As well, 97 institutions own 39.1% or 34.30M shares of Dakota Gold. The Top 5 are Orion Resource Partners LP with 7.6% or 6.67M shares, Fourth Sail Capital LP with 5.27% or 4.62M shares, Van Eck Associates Corp. with 3.97% or 3.48M shares, BlackRock Institutional Trust Co. with 3.65% or 3.2M shares and The Vanguard Group Inc. with 3.15% or 2.77M shares.
Retail investors hold the remaining 38.38%.
In terms of share structure, Dakota Gold has 87.7M outstanding shares and 61.29M free float traded shares.
It has a market cap of US$242.06 million and a 52-week trading history ranging from US$1.95–$3.95 per share.
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