Gold Co.'s Drill Results Support Expansion
Research Report

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Disclosures for Canaccord Genuity, Dakota Gold Corp., November 14, 2024

Analyst Certification Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research, and (iii) to the best of the authoring analyst’s knowledge, she/he is not in receipt of material non-public information about the issuer. Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity LLC and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. Sector Coverage Individuals identified as “Sector Coverage” cover a subject company’s industry in the identified jurisdiction, but are not authoring analysts of the report. Investment Recommendation Date and time of first dissemination: November 14, 2024, 09:24 ET Date and time of production: November 14, 2024, 09:24 ET Target Price / Valuation Methodology: Dakota Gold Corp. - DC Our target price is based on a 1.0x multiple applied to our forward curve-derived operating NAV less net debt and other corporate adjustments. Risks to achieving Target Price / Valuation: Dakota Gold Corp. - DC Commodity price risk: As a precious metals exploration and development company, Dakota’s future revenue is dependent on the price of gold. Mining risk: Dakota faces the typical risks inherent to mining companies relating to operating and capital costs, availability of capital, permitting requirements and timelines, technical and operating parameters, reserve and resource models, social license and community relations, taxation and royalty regimes, and regulatory and political risks. Development risk: Dakota Gold has various properties in South Dakota, USA, and is engaging in exploration activities to possibly advance them to a producing mine in the future. The company faces risks associated with developing the project, including capital and operating cost risk, financing, project permitting and timelines, and technical risks to achieve the planned operating rates. Exploration risk: Our model assumes continued exploration success in the Homestake District, as it assumes completed drill results will be brought into a NI 43-101 / S-K 1300 compliant mineral resource/reserve estimate and eventually converted into a producing mine. If the company does not find additional success with the drill bit, there is material downside to our base case valuation. Permitting risk: The properties in the Homestake District are in a very early stage, and, as such, has yet to engage in permitting outside of those required for exploration. As such, the company may not be able to proceed with the project as it is currently envisaged if the required permits to mine on the property are not received. Financing risk: As a pre-cash-flow development company, Dakota is reliant on the capital markets to remain a going concern. At present, the company has a cash position of US$35M (as of June 30, 2022), which positions it well in the near term to continue to advance its portfolio of exploration-stage projects. We note that there is no guarantee that Dakota will be able to access capital markets in the future, as the result of potential changes in market sentiment/pricing and/or concerns involving project feasibility. As such, there is no guarantee that the company will be able to secure the required funds to advance its projects in the Homestake District, including but not limited to debt/equity financing and/or a strategic investment.

Delineation of gold resources: We currently model a conceptual resource, which is not considered economic as defined by 43-101 / S-K 1300. Conversion of drill hole intercepts into mineral resources and subsequently to reserves is largely a product of drill density as well as the applied economic parameters, which include commodity price and cut-off grades applied to the resource. Should the company not be able to find the conceptual resource we project, or not be able to convert the resources to reserves, this would decrease our life of mine and therefore economics for the project, all else equal. With such a preliminary conceptual mine plan, we caution investors that risk is high. Dakota has yet to achieve even a maiden resource for this project and has only performed a limited amount of drilling. Based on our industry experience coupled with historic drill results, and the drilling performed to date, we have utilized a volume-weighted average mass-based tabulation of available data (grade multiplied by width). This is a crude resource calculation method and presents considerable risk to our base case. We do not have access to all drill hole intercepts and do not employ 3D modelling software such as DataMine or LeapFrog.

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Canaccord Genuity analyst Peter Bell, in a research report published on November 14, 2024, maintained a Speculative Buy rating on Dakota Gold Corp. (DC:NYSE American) with a target price of US$7.25. The report follows Dakota's release of results from 15 additional drill holes at its Richmond Hill Gold Project in South Dakota.

Bell highlighted key drill results, including "Hole RH24C-106: 1.48 [grams per tonne gold] g/t Au over 38.1m from surface (infill)" and "Hole RH24C-100: 1.33 g/t Au over 11.7m from 75m (step-out)." The analyst noted particular encouragement from the step-out hole RH24C-100, "which was a step-out hole outside of the resource, returning 1.33 g/t Au over 11.7m."

The analyst viewed these results positively, stating, "The results are from Chism Gulch, located at the northeast corner of Richmond Hill, where there has been limited drilling by DC. Drilling continues to confirm the presence of near-surface mineralization at Richmond Hill, with many of the holes returning thicker-than-average intervals with higher-than-average grades."

Regarding the project's potential, Bell noted that "Richmond Hill currently showcases a global resource of 109.9Mt grading 0.70g/t Au containing 2.46Moz of gold" and that the company plans a resource update for Q1/25.

Canaccord Genuity's valuation methodology for Dakota Gold is based on a NAV multiple approach. Bell explained, "Our target is predicated on a 1.0x multiple applied to our forward curve-derived operating NAV less net debt and other corporate adjustments."

In conclusion, Canaccord Genuity's maintenance of their Speculative Buy rating and US$7.25 target price reflects confidence in Dakota Gold's exploration success and resource expansion potential. The share price at the time of the report of US$2.22 represents a potential return of approximately 226% to the analyst's target price.