Drill Results Point to Resource Expansion of SD Gold Project
Dakota Gold Corp. (DC:NYSE American) announces results from 15 additional drill holes from its ongoing drilling program to expand the maiden resource for its Richmond Hill Gold Project in South Dakota's historic Homestake District. Find out why one analyst is "encouraged" by the results.
Dakota Gold Corp. (DC:NYSE American) announced results from 15 additional drill holes from its ongoing infill and step-out drilling program to expand the maiden resource for its Richmond Hill Gold Project in South Dakota's historic Homestake District.
"The results are from Chism Gulch, located at the northeast corner of Richmond Hill, where there has been limited drilling by DC," wrote Canaccord Genuity Capital Markets Analyst Peter Bell in an updated research note. "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."
Bell continued, "We are particularly encouraged by hole RH24C-100, which was a step-out hole outside of the resource, returning 1.33 g/t Au (grams per tonne gold) over 11.7 meters. Additional step-out drilling returned results consistent with the resource at Richmond Hill."
The updated S-K 1300 resource estimate is planned for Q1 2025 and an S-K 1300 Initial Assessment with cash flow analysis is planned for Q2 2025, the company said in a release. The expanded resource is expected to include an additional 88 new drill holes totaling 17,000 meters.
Highlights of assay results released Thursday include:
Hole RH24C-106 (infill): 1.48 g/t Au over 38.1 meters from surfaceHole RH24C-104 (infill): 1.03 g/t Au over 33.8 meters from surfaceHole RH24C-100 (step-out): 1.33 g/t Au over 11.7 meters from 75 metersHole RH24C-107 (infill): 1.67 g/t Au over 6.4 meters from 3.7 metersThe maiden S-K 1300 resource, announced in April, outlined an Indicated Resource of 51.83 million tonnes (Mt) at 0.80 g/t Au for 1.33 million ounces (Moz) and Inferred Resource of 58.06 Mt at 0.61 g/t Au for 1.13 Moz., the company said.
"Overall, we are encouraged by these (Thursday's) results, which we believe provide support for expansion in the upcoming resource estimates," Bell wrote.
Resource Open in All Directions
In a release, the company said the "resource remains open in all directions and has potential for improvement with additional drilling, metallurgical work to improve recoveries, and incorporation of silver in the resource. We continue to have significant opportunities with infill, where the original resource block model contained gaps, as well as in step-out areas to expand the initial resource."
"It is particularly exciting to see that the resource area is already showing expansion at Chism Gulch where we have only just begun step-out drilling," said Vice President of Exploration James Berry. "(We) have more results that we will be announcing as they are processed over the coming weeks."
In an update note, BMO Capital Markets Analyst Andrew Mikitchook noted that last week, Dakota "released similar results from the Richmond Hill program with management highlighting that the results were consistent with the existing drilling included in the block model. With drilling ongoing, we expect a steady stream of results in the near term. Dakota also continues to drill Homestake-style mineralization at JB Gold Zone and Tertiary epithermal gold mineralization in the Unionville Zone at Maitland."
A 'Super-Giant' Deposit
The historic Homestake Mine produced 41 Moz (million ounces) Au and 9 Moz silver (Ag) over 126 years. The company has 48,000 acres of holdings surrounding the original mine, which was first discovered in 1876 and consolidated by George Hearst.
Areas surrounding "super-giant deposits" like Homestake are believed to contain significant additional gold resources, wrote John Newell of John Newell & Associates for a recent Streetwise Reports piece on the legacy of the famous mine.
"Super-giant deposits are characterized by clusters of geologically similar deposits within several hundred square kilometers, defining profoundly mineralized regions," Newell wrote. "It is believed that at least twice that amount of gold exists in the neighborhood of these super giants. If that is true, then there are at least 100 Moz of gold left to be found in this vastly underexplored precious metal district of South Dakota."
This proximity to a super-giant "suggests a high potential for similar deposits," Newell wrote. "Being in the shadow of many old mines increases the probability of finding significant mineral resources."
The Catalyst: Gold Pauses, But for How Long?
Gold prices hit a two-month low on Thursday, "pressured by a strong dollar rally, though traders have not lost confidence in a December rate cut following the latest U.S. economic data, Reuters reported.
Spot gold fell 0.1% to US$2,570.05 per ounce, touching its lowest level since Sept. 12. U.S. gold futures settled 0.5% lower at US$2,572.90.
The recent slide gold has declined in six of the seven sessions since Trump's victory follows a series of record-breaking milestones for bullion over the past year.
"There's a pause in the bull market in gold and silver, and that may continue for the next couple of weeks or so," Citi's global head of commodities research Maximilian Layton said, according to a report by CNBC.
Gold prices are likely to trade lower as U.S. equities rally on prospects of lower taxes and regulations. Trump's return to the White House had sent U.S. stocks to record highs though the rally has taken a breather.
Most experts agree the gold bull market is not disappearing. Ian Salisbury wrote for Barron's that "most of the arguments gold bulls make and have been making throughout 2024 look stronger after Trump's win."
Streetwise Ownership Overview*
Dakota Gold Corp. (DC:NYSEAmerican)
*Share Structureas of 11/18/2024Source: Dakota Gold Corp."We are still relatively constructive on gold," said Taylor Krystkowiak, investment strategist at Themes ETFs, according to Salisbury's report. "Why does gold go up? It's geopolitical uncertainty, it's deficit spending, and it's inflation. Right now, all those stars are aligned."
Ownership and Share Structure
About 25% of the company's shares are with management and insiders, including Co-chairman, Director, President and Chief Executive Officer Robert Quartermain, who holds the most shares at 7.9%, while COO Jerry Aberle holds 4.5%, the company said.
About 26% of its shares are with institutional investors. Top institutional holders include Fourth Sail Capital with 3.9%, Van Eck Associates with 3.7%, Blackrock Institutional Trust Co. with 3.9%, The Vanguard Group Inc. with about 3.6%, Fidelity Management and Research Co. LLC with 2.8%, and CI Global Asset Management with 2.4%.
About 16.5% is with strategic investors, including Orion Mine Finance, which owns about 9.6%, and Barrick Gold Corp., which owns about 2.3%. The rest is retail.
Dakota Gold has a market cap of US$206.8 million, with 93.7 million shares outstanding. It trades in a 52-week range of US$3.25 and US$1.84.
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Important Disclosures:
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.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. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.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.For additional disclosures, please click here.