Analyst: 'Good Things Come in Threes' at Historic SD Mine

Source: Streetwise Reports 06/21/2024

Dakota Gold Corp. (DC:NYSE American) announced it has intersected more high-grade Homestake Mine-style gold mineralization at its Maitland Gold Project in South Dakota’s historic Homestake District. Find out why one analyst wrote, “Good things come in threes.”

Dakota Gold Corp. (DC:NYSE American) announced it has intersected more high-grade Homestake Mine-style gold mineralization at its Maitland Gold Project in South Dakota’s historic Homestake District.

The company said a “growing array” of drill holes at the JB Gold Zone at Maitland has produced multiple high-grade gold intercepts in at least three distinct ledges: 34 Ledge, 35 Ledge, and 36 Ledge.

Drill hole MA24C-050 returned 9.46 grams per tonne gold (g/t Au) over 6.4 meters in the 36 Ledge, a 66.1-meter lateral offset towards the north and a 51.2-meter vertical offset above previously released hole MA24C-038, which assayed 25.03 g/t Au over 4.4 meters.

“These results further support our belief that Homestake Mine-style gold mineralization in the JB Gold Zone at Maitland is analogous to the gold mineralization found in the ‘West Ledge’ system at the historic Homestake Mine that produced approximately 6 million ounces (Moz) of gold,” said Vice President Exploration James Berry. “In the West Ledge, the best grades were encountered at depths that Dakota Gold’s exploration programs have yet to drill test at Maitland.”

Canaccord Genuity Capital Markets Analyst Peter Bell, pointing to the three ledges encountered at the project, entitled his updated research note on Thursday: “Good things come in threes.”

Canaccord Genuity Capital Markets Analyst Peter Bell, pointing to the three ledges encountered at the project, entitled his updated research note on Thursday: “Good things come in threes.”

“Dakota continues to extend and better understand the high-grade mineralization at Maitland,” the analyst wrote. “Having identified three distinct ledges within the JB Zone, the company continues to drill within tighter spacings in order to further delineate the mineralization within these ledges.”

The results were “in line with what we have come to expect at JB” and “demonstrate the prospectivity for a substantial Homestake-style deposit and underscore the continuity of mineralization at JB.”

“In our view, the continued advancement of Homestake-style targets adds excitement and optionality to the Richmond Hill deposit located to the west,” Bell wrote.

Four Drills on Site at Properties

Dakota noted that other reported drill holes intersected Homestake Mine-style mineralization within the 36 Ledge including MA23C-021, MA23C-024, MA23C-024A, MA23C-024B, MA23C-024C, MA23C-024E, MA23C-025, and MA24C-049. Drill holes MA23C-031, MA24C-037 and MA24C-046 appear to be in an east limb of the 35 Ledge system.

Drilling at Maitland continues to transition from wider spacing of approximately 250 meters to tighter spacing to further delineate the mineralization within identified ledges, which remain open along strike and to depth, the company said.

Agentis Capital Analyst Michael Gray, in an updated research note on Thursday, said Dakota is “continuing to tighten drill spacing (at Maitland) as it defines mineralized zones forming Homestake Mine-style folded ‘Ledges.’”

The Maitland Mine produced more than 200,000 ounces of Tertiary gold before 1945 when it was closed because of World War II. According to the company, numerous structures, including the historical Maitland Mine structure, remain untested along strike and illustrate the larger potential of the project.

The historic Homestake Mine, about 3 miles south of Maitland, produced 41 Moz Au and 9 Moz silver (Ag) over 126 years. The company has 48,000 acres of holdings surrounding the original Homestake Mine, which was first discovered in 1876 and consolidated by George Hearst.

Dakota currently has four drills at its properties in the district, including Maitland and Richmond Hill 2.3 miles to the west.

Agentis Capital Analyst Michael Gray, in an updated research note on Thursday, said Dakota is “continuing to tighten drill spacing (at Maitland) as it defines mineralized zones forming Homestake Mine-style folded ‘Ledges.’”

“Mineralized ore ledges only occupy ~3% of the Homestake Fm (formation) within the +40 Moz Au past-producing Homestake Mine, and we think it is very compelling to observe mineralized Homestake Fm in new target areas,” Gray wrote. “As DC vectors to thicker Homestake Fm, we think there is potential to demonstrate both grade and scale.”

The Catalyst: Gold Trading on Reputation as Safe Asset

The price of gold hit a new all-time high of US$2,449.89 per ounce on May 20. It was at US$2,333.33 on Friday, but some analysts are predicting a prolonged and substantial gold bull market.

Analysts at investment bank UBS believe the market is entering a “seasonally quieter period,” according to Investing.com, but noted it as an opportunity for gold investors.

“We think any setbacks during this period should offer opportunities to build gold positions,” the strategists said.

According to Investing.com, “Gold prices have been outperforming across various asset classes and on a macroeconomic level. It is implicitly trading on its reputation as a safe asset with no counterparty risk, rather than the opportunity cost associated with holding a zero-yield asset.”

The site said Central Bank buying of the yellow metal is also still tracking above reported levels, suggesting “sustained institutional interest in the precious metal.”

Jay Taylor of Hotline noted that gold is “winning out as the ultimate safe haven, even in U.S. markets,” and is even more true for non-NATO countries like Russia, India, and China.

“There are dozens of other nations that are seeking to get out from under the tyrannical rule of the U.S.,” he wrote. “Hyperinflation of the dollar becomes ever more likely every day . . . Gold miners rose 1,330% in the bull market stimulated by money printed from the 2008 crisis.” [OWNERSHIP_CHART-7442]

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 4.12%, Blackrock Institutional Trust Co. with 3.72%, The Vanguard Group Inc. with about 3.27%, Fidelity Management and Research Co. LLC with 2.7%, and CI Global Asset Management with 2.55%, 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$212.25 million, with 87.7 million shares outstanding. It trades in a 52-week range of US$3.25 and US$1.95.

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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. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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( Companies Mentioned: DC:NYSE American, )