At the start of this year, Dakota Gold Corp. (DC:NYSE American) got a 5% lift in its target price by Canaccord Genuity after the financial services firm updated its gold price forecast, reported analyst Michael Fairbairn in a Jan. 19 research note.
The new target price is US$5 per share, previously US$4.75. This takes into account Canaccord's revised long-term gold price of US$2,048 per ounce, up from US$1,922 per ounce.
Dakota Gold remains a Speculative Buy.
Prospective, Underexplored Property
In his report, Fairbairn reviewed the recommended investment. He reiterated that this U.S. gold company, headed by Robert Quartermain and Jon Awde, is exploring its 45,000 acres surrounding the historic Homestake mine, which it acquired and consolidated over the past decade.
"Dakota Gold is now seeking to revitalize this legendary district in hopes of making a material discovery on its land package proximal to the mine," Fairbairn wrote.
The chances of discovery are good, the analyst added, given multiple historical high-grade discoveries were never pursued further and given no exploration was done there for at least 20 years, Fairbairn noted.
The analyst added that "upside potential could be significant." This is because the ore ledges in the historical Homestake mine typically held more than 1,000,000 ounces (1 Moz) of high-grade gold. Main Ledge, for example, produced about 19 Moz.
Other Notable Factors
Investors should also know, Fairbairn wrote, the following about Dakota:
- Its exploration team, led by Chief Operating Officer Gerald Aberle and Vice President of Exploration James Berry, brings more than 100 years of Homestake experience to the table.
- Dakota has a high level of insider ownership, about 30%, which includes Quartermain, co-chairman, and recent Mining Hall of Fame inductee, and other company executives.
- South Dakota is an "excellent" jurisdiction, offering low geopolitical risk, an extensive mining history, and a deeply embedded mining culture.
- The company is well funded, having US$28 million in cash as of Sept. 30, 2022.
- Dakota commenced a phase one drill campaign last year at its Richmond Hill (7,000 meters) and at its Maitland (31,000 meters) projects, and initial results from both were positive.
- Upcoming catalysts include additional drill results, including those pending from 2022, on an ongoing basis.
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1) Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures For Canaccord Genuity Corp., Dakota Gold Corp., January 19, 2023
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 intend to seek or expect to receive compensation for Investment Banking services from Dakota Gold Corp. in the next three months. An analyst has visited the material operations of Dakota Gold Corp.. Partial payment was received for the related travel costs.
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The authoring analysts who are responsible for the preparation of this research are employed by Canaccord Genuity Corp. a Canadian broker-dealer with principal offices located in Vancouver, Calgary, Toronto, Montreal, or Canaccord Genuity LLC, a US broker-dealer with principal offices located in New York, Boston, San Francisco and Houston, or Canaccord Genuity Limited., a UK broker-dealer with principal offices located in London (UK) and Dublin (Ireland), or Canaccord Genuity (Australia) Limited, an Australian broker-dealer with principal offices located in Sydney and Melbourne.
The authoring analysts who are responsible for the preparation of this research have received (or will receive) compensation based upon (among other factors) the Investment Banking revenues and general profits of Canaccord Genuity. However, such authoring analysts have not received, and will not receive, compensation that is directly based upon or linked to one or more specific Investment Banking activities, or to recommendations contained in the research. Some regulators require that a firm must establish, implement and make available a policy for managing conflicts of interest arising as a result of publication or distribution of research. This research has been prepared in accordance with Canaccord Genuity’s policy on managing conflicts of interest, and information barriers or firewalls have been used where appropriate. Canaccord Genuity’s policy is available upon request.
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