Dakota Gold - Richmond Hill Exploration Results And Timeline Of Key Development Catalysts For 2026 Through First Pour In 2029

Hello and welcome into the K.E. report.

Shad and Corey here is your host,

and today we're getting an update on Dakota Gold.

Dakota Gold is traded on the NYSE American

under the ticker D.C.

And I'm joined today with the president and CEO,

Jack Henry, and the Chief Financial Officer,

Sean Campbell, Jack, Sean.

Great to have you guys on the show as always.

Jack, what a thought over to you first.

We talked maybe a month ago and did a deep dive

into all the initiatives the company has in stake

at the home stake district in South Dakota.

Obviously the main flagship project here

being the Richmond Hill Oxide Heat Bleach Project,

but you also have the Matlin Gold Project

and we'll talk about both of those during the discussion here.

But you had some results out to the marketplace

just here last week, that's why I reached out.

But I think it's worth noting that you just finished up

a major drill program just a couple of days ago,

and you're actually gonna have a string of results coming out.

So maybe let's just pick it up there

that at Richmond Hill, you've got the drilling done

and now the fun begins, the assays.

Yeah, Chad, thanks for that.

Yeah, we just completed our infill in some step out work

that we had planned for 2026 in preparation for the PFS work.

And as you saw in those drill results

that we just recently released,

you're seeing grades that are three times up

to almost five times of the average grade of the deposit,

which is really exciting because those results

in particular were infill drilling

to convert inferred to indicated material.

And it's coming in at significantly higher grade

than the average grade.

Difficult to move the average grade of the deposit

as large as the deposit is with 170 million tons

in the M&I category.

But that really, really dump tails into the work

that we're doing as we work towards PFS

and the tradeoff studies.

What that indicates to us is while the average grade

as indicated in the initial assessment

that was 0.56 grams per ton,

we're seeing again, these grades that are quite a bit higher,

it gives us the opportunity to look at the tradeoff work,

sub-faising, mind sequencing,

to see if there's opportunities to pull this grade forward

as we work towards PFS to sub-phase

to focus on higher value bits that have higher grade

and lower surpratios in the early years of the mind life.

So real exciting for us

and these drill results fit quite nicely into the work

we're doing to frame the PFS.

So, Jack, I was curious.

You mentioned some of the higher grade areas

that are higher grade pits.

These recent drill results,

were they broadly from some of these higher grade areas

or is this coming on to the radar

as maybe new high grade areas?

No, these are essentially infield drilling.

So if you think about the blocks initially were inferred,

so we're carrying them in the block model

at lower grade than the average grade than the deposit.

So the ones we reported in particular,

when you drill those to confirm that the material is there,

when you get the upside surprise of the grade,

yeah, unanticipated that we were gonna get

those kind of grades in those areas,

we expected it to be more kind of in the average grade range.

So really gives us an opportunity

as I spoke to for sub-faising and optimization

as we move towards PFS.

Yeah, it's an interesting dynamic to see

such high grade compared to the average reserve grade.

It's almost three times as much.

So Sean, let's get you in the mix here.

You had made a point to us off mic

that this is just one of the areas.

There's so many different areas that could be expanded

when you do more infield drilling and or step out drilling.

And so we focused a lot on the northeast area

and how that grade is improving.

But maybe just remind people of the scope and scale

of this project and how there could be more areas

just like this that raised the grades.

So as we're talking, our co-founder,

Robert Quartermane is the largest shareholder

of the company.

We've got a significant management and insider ownership.

And so we have always focused on being very prudent

with our capital.

And so when we did our IAVIT cash flow similar to a PEA,

we looked at the mine sequence

and we identified that the likely area we would start mining

is in that northeast corner.

And so when we raised our financing,

we made the decision that we would focus

in fill and expansion drilling really

on the areas that we could see mining first.

And then the results of that, as Jack laid out,

is that it's getting significantly bigger.

And we see this higher grade opportunities.

But what I want to remind people of is

that when we published our study, we had one mine plan

that had measured and indicated material.

And that was about 170 million tons.

And then we had a measured, indicated, and inferred plan

that had another 100 million tons,

so a total of 270 million tons.

And so as we move forward and as the cost of capital

reflects a company in later stage development,

there's a chance to go back and infill

not just in this area of the northeast corner

and convert some of this material and expand beyond it.

But there's a lot of areas in this deposit

where you have that kind of an opportunity

to be targeting conversion of infill

and also expansion beyond that.

And a 100 million tons of material

is a more than 50% greater than what

was in that measured and indicated plan.

And we're excited to be putting those programs together.

But being prudent with capital as large shareholders,

we're going to wait till the cost of capital reflects

an appropriate rate.

John, can you just simplify it for us in terms of ounces then

in terms of the upcoming PFS and the updated resource

will go with that.

How many ounces are you targeting to convert into that M&I

from inferred here and now?

So we really haven't given guidance on specifically

the update and the pre-feasibility study.

We have shared a fair bit of drilling

that has gone into it.

There's also going to be a number of other changes

when we look forward to the PFS.

And Jack can talk about the trade-off studies

on throughput, on processing, that change some of those inputs.

We've also seen the gold price increase

considerably beyond the 2350 that we used in that IOT cashflow.

So a number of changes going into that PFS

that we're excited about as we get to the second half

of this year.

In terms of the ounces in that opportunity,

when you look at the measured and indicated plan,

we had a life of mine gold payable of 2.6 million ounces.

Overall, across the entire deposit,

when you add in the inferred,

you get to measured, indicated, and inferred

life of mine gold payable of 3.9 million.

I guess actually 4.0 million ounces of gold.

So it adds a considerable amount of potential gold production

from that inferred material subject to the conversion.

Well, we'll keep tabs on some of that inferred converting

over to indicated in future work.

And you still have a lot of drill results to put out

from this year's program.

So we may see some changes there before the resource

and the PFS come out in the second half of the year.

Jack, just to the point that Sean just made,

you are entertaining different trade-off studies,

different ideas on throughput and expansion

and how you would mine this.

So maybe talk about some of those studies going into the PFS

and how there may be some ways to optimize the project.

Yeah, you know, so really two main areas of focus we're doing,

there's numerous trade-off studies

and work that we're doing right now, Chad.

But you know, two main areas of focus,

the first one I spoke to earlier was really about sub-faising

and the opportunity to bring great forward

in the early years of the mine life.

And the other trade-off that really has the ability

to move the needle for us is, you know,

when we did the initial assessment with cash flow,

we looked at a 30,000 ton a day operation.

One of the trade-offs we're looking at,

again, because we have such a large resource,

you know, as Sean spoke to the M&I,

there's 170 million tons of the M&I,

and there's 270 million tons.

So an opportunity to potentially increase throughput

or placement rate, in the case of heap-leach operation,

which we are, of course.

We're looking at, you know, pivoting from a jaw on the front end

to a gyro, which would allow us to ramp up

from that 30,000 ton a day rate all the way up to 60,000 tons

per day, potentially, or any place in between

where, as we work through the studies,

where that optimal rate will be.

But if you think about it, you know,

we did 30,000 tons a day in the initial assessment of cash flow,

10 million tons per year, and equated to about 153,000 ounces

per year, average goal production.

If we have the ability to increase placement rate,

crushing rate, in combination with pulling higher

grades forward, which we've seen with the press releases

with our infill work that we just spoke about,

pretty compelling schedule as we move forward,

particularly in the early years of the mind life.

So those are really the two main areas of focus,

and there's subsequent work that we're doing as well,

but those are the two real main areas of focus for us.

One other question that a lot of, I know,

listen as always, ask is, when will you be in production?

Can you speed up the timeline to production?

What do you guys have to say to that?

Is there any chance of taking advantage

of these higher metals prices by speeding up the work

getting into production or development quicker?

So Corey, what I would tell you, you know,

our timeline is informed.

We are fortunate enough, just two miles to the south

of our operation is the core dwarf operation.

It's been an operation for 40 years.

They have been permitting open pit expansions

for that 40 year timeframe, and the reason that's key,

you know, they've been working with the local

and state regulators, Lawrence County and status

out the Coda, and if you look at the mining permits

that they operate under, they're currently operating

under six mining permits.

Now, if you look at the average timeframe from them

to get a permit, it's usually 18 to 24 months

working with the state, and that's from, you know,

publishing the notice of intent until

when we get the permit application.

So a lot of work in flight, meaning that baseline work

to prepare for that notice of intent,

which again, we plan on submitting late this year,

but we feel our timeline is pretty well informed.

So if you think about filing that first paperwork,

notice of intent late this year, about 18 to 24 months,

you know, if we get the permits in 2028,

we envision about a 12 to 15 month timeframe

for construction of the operation.

So first gold pour in the fourth quarter of 2029

is what we currently envision.

And we think, Corey, we believe that's aggressive,

but certainly doable and informed

by real life permitting in an operation two miles

to the south of this.

One, Sean, I wanna bring you back in the mix here

as far as you mentioned, the prudence of the companies

on the financial side and taking things in stride

as key shareholder to yourselves.

Anything else you wanna say as far as all the work going

into the PFS that also dovetails

into the feasibility study, the FS,

because you're really doing some work,

like some of the geotechnical drilling you have coming up

and some of the network you're doing,

that's really gonna be used in both studies

to optimize the dollar.

So anything else you wanna say about the work

going into the pre feasibility study out later this year?

So when we step back and in early January and February,

we made a decision to raise some capital.

So we raised $75 million, and along with some warrants,

that brings our total cash to a little over $100 million,

$105 million in the bank.

And we did that because when we talk about this timeline

production by having that cash available to us,

right now what we're executing on,

and you can see in our timeline chart,

is some of the engineering and EPCM work

in order to identify and put deposits down

for long lead time items.

So I think when we look at what the strategy

of the company is, and Jack mentioned

an aggressive timeline that we can execute on,

this is about how do we get to first production.

And along the way, we're gonna do all the work necessary

to bring a mine into production.

And it just so happens as part of that,

we'll publish a couple of studies.

But really critical path for us is that production in 2029,

and doing everything we can now,

and now that we have that money in the bank,

we're able to buy a power substation.

We're able to secure components for a crushing circuit.

So again, being prudent, but by raising that capital,

putting it starts by ourselves in a position

that continues to de-risk that timeline through to production.

One other point being the drilling,

let's just get a timeframe on the geotechnical drilling,

and then when you move the drill over to that

MATELAND project, please.

So yeah, Corey, the drill program for the geotechnical work,

we think we'll wrap that up late summer, early fall,

and then we'll move into some areas of MATEL

and with the schedule being to complete by year end.

So, and that can move just dependent on drill rates

and the work that happens,

because it does vary quite a bit on the project area,

but that's our schedule currently,

as we currently envision it.

So the project is to quick follow up on that.

Do you think that you'll do an update to the resource

at MATELAND after that drilling,

or maybe just remind people where things are?

There's a lot of historic work here.

I just don't know if it could be included yet or not.

Yeah, so the historic work would be included

with some of the work we're planning on doing

with this program that we've outlined this year

that we're gonna do at MATELAND.

We're just looking for a little bit of continuity

and provide drill spacing to define a maiden resource.

And yeah, we intend to move towards a maiden resource

once we get the drill results from this program

that we expect to finish late in the year.

All right, final.

Point then that we should get to Sean,

maybe just remind everybody what the news is coming,

the key catalyst and the overall value proposition

as you move towards that 2029 pour.

Yeah, so you saw our press release

on the recent drill results

and we're able to talk a lot more about

what that's gonna mean in terms of potential

for higher grade, in terms of expansion.

And really all of that along with the metallurgy

is feeding into this PFS in the second half of the year.

So really excited to be able to talk about

the culmination of all this drilling,

our current drill database for the resource has

just over 1,000 holes will be adding 250 from 25,

100 from 26.

So over 30% more holes to that database,

the successful completion of those trade-off studies,

metallurgy, all of that,

that's what allows us to declare a reserve

on the back of a PFS study in the second half of the year.

When we look at the overall timeline

and we talked about production potentially in 2029,

I step back and right now Dakota Gold is trading at,

depending on the day, 60 to $70 an ounce.

When we look at peer companies that have been able

to go through these different de-risking events,

whether it's establishing a reserve,

submitting a permit, feasibility study,

obtaining that permit, fully financed,

there's an opportunity to take that value

on a per ounce basis and change it dramatically

from where we are today in the 60 to $70 range

to, you see, Visla at 384 and a gold equivalent,

you see Schina at 531.

So I'm really excited about that trajectory

and that's executing on these coming two to three years

in order to see the company valued more

as a late stage development company

as opposed to an early stage resource only

or early study stage.

Well, I think that's a great place to wrap it up for the day

and yeah, Sean, to the point you just made,

we just saw Rupert resources taken out

for $680 an ounce in the ground by Agnico Eagle.

So somewhere between 60 to $70 an ounce in the ground

and $680 to $700 an ounce in the ground,

there's probably some room for rewriting there

and definitely great to have both you and Jack on the show today

to really go over all of the drilling initiatives

in place, the de-risking, there's network,

there's trade-off studies,

all building towards the PFS later this year,

there's gonna be a slew of exploration results coming out

from Richmond Hill and then the drilling kicks off at maintenance.

So a lot of news on tap for the Dakota Gold story,

for those of you listening in,

if you wanna follow along with that news,

definitely click on the link below down in the show note

it takes you over to the Dakota Gold website,

straight to their new section

and you can follow along with the updates there

and have them hit your email inbox

and guys will be getting you back on the show

for updates regularly because there's gonna be

a lot of drill news on tap

and as always, looking forward to our next conversation.