Gold Co. Releases Maiden Resource Estimate for Historic SD Project

Source: Streetwise Reports 04/30/2024

Dakota Gold Corp. DC has released its initial assessment maiden resource estimate for its Richmond Hill Gold Project in the historic Homestake District of South Dakota, news that sent its stock price up at least 5 cents per share.

The S-K 13000 Initial Assessment for the project noted an Indicated Resource of 51.83 million tonnes (Mt) at 0.8 grams per tonne gold (g/t Au) for 1.33 million ounces (Moz) and an Inferred Resource of 58.06 Mt at 0.61 g/t Au for 1.13 Moz.

"It's been two years since Dakota first began drilling Richmond Hill, and at first glance, the effort has paid off in this initial resource estimate, in our view" Canaccord Genuity analyst Peter Bell noted in an updated research note. "Richmond Hill showcases a global resource of 109.9 Mt grading 0.70g/t Au containing 2.46 Moz of gold."

Bell pointed out that the report noted mineralization is very shallow, with portions of the resource exposed at the surface.

"We await more detail on the plan for processing the mineralization including the lower recovery hypogene material" Bell wrote. "Pending further review of the technical report, we are positive on the results."

The maiden resource was derived from a historical database containing 69,401 gold assays from more than 900 drill holes, including 57 drill holes from Dakota Gold's current drill program, the company said.

But there is high-grade expansion potential, as drilling done post cutoff for the report on Oct. 5, 2023, has included 22.9 meters of 1.99 g/t Au, 42.8 meters of 1.71 g/t Au, and 60.9 meters of 1.68 g/t Au.

"The mineralization is consistent, near surface with portions of the resource exposed at surface and contains significant oxide mineralization" said Dakota President, Chief Executive Officer, and Director Jonathan Awde. "Richmond Hill benefits from being on private land and close to well established infrastructure. There is significant opportunity for improvement and expansion of the resource with additional work to position Richmond Hill as a high-quality, advanced-stage exploration asset in the U.S."

Dakota noted that with 17 holes drilled since the cutoff, there was growth potential open in all directions, with the possibility of more recoveries from additional drilling and metallurgical work on the project.

"In less than 20 months, we've outlined a multimillion-ounce maiden resource" Awde said Tuesday during a webcast with analysts and shareholders.

The Catalysts: History, Experience, Resources

The company is exploring the 48,000 acres it has acquired and consolidated over the past decade surrounding the Homestake Mine, including the Richmond Hill and Maitland projects.

Once called the "Richest 100 Square Miles" on Earth, Homestake was discovered in 1876 and consolidated by George Hearst. Over 126 years, miners extracted 41 Moz Au and 9 Moz silver (Ag) from the site. The company is also backed by industry giant Barrick Gold Corp. GOLD

Headquartered in Lead, S.D., 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. Awde, also the co-founder 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, including direct experience in the Homestake District and historic Homestake mine.

"The Homestake District was put on the global mining stage because of the legendary Homestake Mine" Awde said Tuesday. "In the past, Homestake controlled the entire district, and we have taken a page from their playbook by consolidating much of the district."

Richmond Hill 'Important Component' of Strategy

Bell with Canaccord noted that Richmond Hill is "an important component of Dakota Gold's exploration strategy for the Homestake District."

"The Richmond Hill property contains the past-producing Richmond Hill mine and the Carbonate District mines" Bell wrote. "Looking ahead to 2024, Dakota has a ~$30 (million) exploration program underway for its Richmond Hill and Maitland projects."

"The initial drill program at Richmond Hill confirmed historical drilling and demonstrated that the mineralization is more extensive than we anticipated" said Dakota Vice President of Exploration James Berry.

"We have been conservative in our methodology and are confident that the resource will expand with additional exploration and infill drilling" Berry said. "With inclusion of the significant silver component, and optimization of recoveries, we think the future of Richmond Hill is exceptional and a great beginning for our assets in the Homestake Gold District."

Chris Temple, editor/publisher of The National Investor, has recommended Dakota Gold as a growth-oriented stock.

"This is another (of quite a few still) I have been following . . . sitting on . . . and mulling over until I thought the time was right" Temple wrote in March.

Bullish Trend to Continue for Yellow Metal?

Gold continues to be on the upswing this year, with many investors turning to it to counter high inflation and economic uncertainty, CBS News reported. April saw record gold prices of just over US$2,400 per ounce, although it was at US$2,333.06 on Tuesday morning.

"Gold is an uncertainty hedge and historically performs well during times of war" Chris Gaffney, president of world markets at EverBank told the network. "Gold is also traditionally viewed as an inflation hedge, and the stubbornly high inflation levels have encouraged investors to add this hard asset to their investment portfolios as a way to protect against rising prices."

Gaffney predicted that gold would approach US$2,500 per ounce by the end of the year.

"I view the recent pullback in gold price as a healthy reset in a continued bull market for precious metals and expect additional volatility in prices as the year progresses" he said. "However, the overall bullish trend should continue, given all of the factors which have propelled gold to these recent highs."

Ownership and Share Structure

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

Out of management, Quartermain holds the most shares at 8.43%, Awde is next at 6.82%, while COO Jerry Aberle holds 4.85%, according to Reuters.

About 26% of the shares are with institutional investors, according to Yahoo Finance and Edgar filings. Top institutional holders include Fourth Sail Capital with 5.27%, Van Eck Associates with 3.97%, Blackrock Institutional Trust Co. with 3.65%, The Vanguard Group Inc. with about 3.15%, Fidelity Management and Research Co. LLC with 2.71%, and CI Global Asset Management with 2.63%, Reuters reported.

About 16.5% is with strategic investors, including Orion Mine Finance, which owns about 7.6%, and Barrick Gold Corp., which owns about 3%. The rest is retail.

Dakota Gold has a market cap of US$229.26 million, with 87.7 million shares outstanding. It trades in a 52-week range of US$3.95 and US$1.95.

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. and Barrick Gold Corp.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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