Drill Bit Hits 25 G/T Gold at South Dakota Project

Source: Streetwise Reports 04/09/2024

New positive drill results plus a hot sector bode well for this U.S. gold company’s stock. Learn more about why analysts like and recommend buying it.

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 an 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 a 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 early 2022.

“The combination gives investors exposure to an advancing development project, with high-grade exploration sizzle,” added Bell.

Technical Analyst Clive Maund wrote, “Dakota is done falling and is now in a position to take off higher.”

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.

As for Maitland, the company recently announced it had found three distinct ledges of high-grade Homestake Mine-style gold mineralization at its Maitland Gold Project in the Black Hills of South Dakota.

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,” describes 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 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.

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.

Dakota Gold’s technical team collectively, has extensive geological and exploration experience, including direct experience in the Homestake District and historic Homestake mine.

Newell noted that Dakota Gold is exploring “within the historic Black Hills of South Dakota . . . renowned for hosting the Homestake mine (40,000,000 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 Gold, 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 US$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, which are expected to be released on an ongoing basis.

Another catalyst is the completion of a maiden 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 macroeconomic tailwinds and upcoming events in its favor. [OWNERSHIP_CHART-7442]

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 8.49% or 7.45 million shares, President and CEO Jonathan Awde is next at 6.86%, with 6.01 million shares, while COO Jerry Aberle holds 4.88%, with 4.28 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. 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 Investments Inc. with 2.63%.

About 16.5% is with strategic investors, including Orion Mine Finance, which owns about 7.7%, and industry giant Barrick Gold Corp., which owns about 3%. The rest is retail.

Dakota Gold has a market cap of US$227.41 million, with 87.7 million shares outstanding. It trades in a 52-week range of US$3.95 and US$1.95.

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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. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
4. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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( Companies Mentioned: DC:NYSE American, )