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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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.
General Disclaimers: See “Required Company-Specific Disclosures” above for any of the following disclosures required as to companies referred to in this report: manager or co-manager roles; 1% or other ownership; compensation for certain services; types of client relationships; research analyst conflicts; managed/co-managed public offerings in prior periods; directorships; market making in equity securities and related derivatives. For reports identified above as compendium reports, the foregoing required company-specific disclosures can be found in a hyperlink located in the section labeled, “Compendium Reports.” “Canaccord Genuity” is the business name used by certain wholly owned subsidiaries of Canaccord Genuity Group Inc., including Canaccord Genuity LLC, Canaccord Genuity Limited, Canaccord Genuity Corp., and Canaccord Genuity (Australia) Limited, an affiliated company that is 80%-owned by Canaccord Genuity Group Inc.
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.
The information contained in this research has been compiled by Canaccord Genuity from sources believed to be reliable, but (with the exception of the information about Canaccord Genuity) no representation or warranty, express or implied, is made by Canaccord Genuity, its affiliated companies or any other person as to its fairness, accuracy, completeness or correctness. Canaccord Genuity has not independently verified the facts, assumptions, and estimates contained herein.
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From time to time, Canaccord Genuity salespeople, traders, and other professionals provide oral or written market commentary or trading strategies to our clients and our principal trading desk that reflect opinions that are contrary to the opinions expressed in this research. Canaccord Genuity’s affiliates, principal trading desk, and investing businesses also from time to time make investment decisions that are inconsistent with the recommendations or views expressed in this research. This research is provided for information purposes only and does not constitute an offer or solicitation to buy or sell any designated investments discussed herein in any jurisdiction where such offer or solicitation would be prohibited.
As a result, the designated investments discussed in this research may not be eligible for sale in some jurisdictions. This research is not, and under no circumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. This material is prepared for general circulation to clients and does not have regard to the investment objectives, financial situation or particular needs of any particular person. Investors should obtain advice based on their own individual circumstances before making an investment decision. To the fullest extent permitted by law, none of Canaccord Genuity, its affiliated companies or any other person accepts any liability whatsoever for any direct or consequential loss arising from or relating to any use of the information contained in this research.
