The financial services firm, Canaccord Genuity, initiated coverage on Dakota Gold Corp. (DC:NYSE American) with a Speculative Buy rating and a $5.25 per share target price, reported analyst Michael Fairbairn in a September 12, 2022 research note. In comparison, this gold exploration company, led by Dr. Robert Quartermain and Jonathan Awde, is trading at around $3.93 per share.
Investors can expect "a steady stream of catalysts in the company's hunt for a big discovery next door to this prolific mine," purported Fairbairn.
"We like Dakota Gold for its strong leadership and exploration teams, quality jurisdiction with low geopolitical risk, clear focus on ESG [environmental, social and governance], and major exploration potential offering the possibility of a multimillion ounce, high-grade discovery," Fairbairn wrote then addressed each compelling factor," wrote Fairbairn.
As for exploration, Fairbairn highlighted, Dakota owns about 45,000 acres, including some 10-odd projects, around the historic Homestake mine in the "legendary" Homestake District in South Dakota's Black Hills, a safe and mining-friendly jurisdiction. The Canadian-headquartered firm has a 30,000-meter drill program underway, $35 million in cash to complete it, and 145 years of historical regional data from Barrick Gold.
Investors can expect "a steady stream of catalysts in the company's hunt for a big discovery next door to this prolific mine," purported Fairbairn.
An exploration bonus, Fairbairn wrote, is the good chance Dakota could make a major discovery, and thus, "upside potential could be significant." This is because the Homestake area has been underexplored, and the many high-grade discoveries identified in the past did not get further attention. The Homestake mine, for instance, produced about 40,000,000 ounces of gold, making it the largest iron formation-hosted gold deposit ever discovered in the U.S.
The analyst also pointed out that when Dakota consolidated a Black Hills land package, it secured Maitland and Richmond Hill, two highly prospective projects from Barrick, and Barrick "closure group" assets such as these generally have outperformed. K92 Mining and Skeena, for example, have done much better than the GDXJ after they transacted closure asset group deals with the gold major.
Dakota Gold boasts top-tier, experienced management and geology teams and a strong board of directors, indicated Fairbairn, assembled by Co-chairman Quartermain, recent Canadian Hall of Fame inductee and builder of Pretium Resources and SSR Mining who came out of retirement for the Dakota opportunity, and Chief Executive Officer (CEO) Awde, former president, CEO, director and co-founder of Gold Standard Ventures.
James Berry, vice president of exploration, and Jerry Aberle, chief operating officer, lead the local team, the members of which together have more than a century of experience with Homestake District geology and exploration.
Also favorable, according to Fairbairn, is that about 30% of Dakota is owned by members of its executive suite and board, indicating the company's interests mirror those of shareholders.
Lastly, noted Fairbairn, Dakota has been focused on ESG and strong community relationships since its genesis, specifically on setting, meeting, monitoring, and measuring goals in that regard. A report published earlier this year summarized the company's ESG efforts to date.
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Disclosures For Canaccord Genuity Corp., Dakota Gold Corp., September 12, 2022
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.
Required Company-Specific Disclosures (as of date of this publication): Canaccord Genuity or one or more of its affiliated companies is a market maker or liquidity provider in the securities of Barrick Gold Corporation or in any related derivatives. Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Dakota Gold Corp., Barrick Gold Corporation, K92 Mining Inc. and Skeena Resources Ltd. in the next three months. An analyst has visited the material operations of Dakota Gold Corp. and Skeena Resources Ltd.. Partial payment was received for the related travel costs.
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