Dakota Gold (DC) - 2023 Q4 - Annual Report

Part I Financial Statements (unaudited) Dakota Gold Corp. reported a net loss of $9.3 million for Q1 2023, significantly higher than the $2.2 million loss in the prior year, primarily due to increased exploration expenses Condensed Consolidated Interim Balance Sheets Total assets decreased to $101.6 million from $105.0 million, primarily due to a reduction in cash and cash equivalents, while stockholders' equity also declined Condensed Consolidated Interim Balance Sheets Highlights | Balance Sheet Highlights | March 31, 2023 ($) | December 31, 2022 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | 20,273,152 | 23,911,722 | | Total current assets | 21,241,782 | 24,637,991 | | Mineral rights and properties | 78,757,287 | 78,737,287 | | Total assets | 101,598,146 | 105,022,719 | | Total liabilities | 3,540,074 | 3,846,981 | | Total stockholders' equity | 98,058,072 | 101,175,738 | Condensed Consolidated Interim Statement of Comprehensive Loss Net loss for Q1 2023 was $9.3 million, a significant increase from a $1.3 million net income in Q1 2022, driven by higher exploration expenses Condensed Consolidated Interim Statement of Comprehensive Loss Highlights | Income Statement Highlights (Three months ended March 31) | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | Exploration expenses | 6,837,759 | 1,217,212 | | General and administrative expenses | 2,737,421 | 6,420,954 | | Loss from operations | (9,575,180) | (7,638,166) | | Net loss and comprehensive loss | (9,266,031) | (2,194,295) | | Net income (loss) attributable to Dakota Gold Corp. | (9,266,031) | 1,259,605 | | Basic and diluted profit (loss) per share | (0.13) | 0.04 | Condensed Consolidated Interim Statements of Cash Flows Net cash used in operating activities significantly increased to $8.5 million, with financing activities providing $4.9 million, resulting in a net cash decrease Condensed Consolidated Interim Statements of Cash Flows Summary | Cash Flow Summary (Three months ended March 31) | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (8,461,825) | (2,760,928) | | Cash used in investing activities | (72,022) | (2,628,438) | | Cash provided by financing activities | 4,895,277 | 0 | | Net change in cash and cash equivalents | (3,638,570) | (5,389,366) | | Cash and cash equivalents, end of period | 20,273,152 | 41,401,116 | Notes to the Condensed Consolidated Interim Financial Statements Notes clarify the company's exploration-stage status, management's going concern confidence, mineral property valuation, and financing details - Management believes its cash balance of approximately $20.3 million at March 31, 2023, and its ability to utilize its ATM program alleviate doubt about the company's ability to continue as a going concern[21] - The carrying cost of the Company's mineral properties, aggregated as the Black Hills Property, totaled $78,757,287 as of March 31, 2023[30][32] - During Q1 2023, the company raised gross proceeds of approximately $5 million by issuing 1,886,800 shares of common stock through its ATM program[39] - Total stock-based compensation expense for Q1 2023 was $1,292,734, comprising $647,649 for stock options and $645,085 for RSUs and PSUs[15][45][57] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discussed increased exploration activities and new discoveries, with planned $30 million expenditures for 2023, contributing to a higher net loss Overview and Strategy The company's strategy focuses on acquiring and exploring gold properties in South Dakota's Homestake District, aiming to build a dominant land position - The company's goal is to create stockholder value through acquisition, exploration, and development of gold properties in the Homestake District of South Dakota, leveraging its team's extensive experience in the region[75] - Dakota Gold has built a dominant land position covering 45,752 acres in the Homestake District, believing the area outside the historic mine is underexplored[31][77][78] Drill Programs and Planned Activities The company operated four drill rigs, completing 77,994 feet of drilling in Q1 2023, leading to new discoveries and planning $30 million in expenditures - In Q1 2023, the company operated four drill rigs and completed 77,994 feet (23,773 meters) of core drilling across its Maitland, Richmond Hill, and Cambrian Unconformity projects[80] - Significant discoveries were announced, including the Unionville Zone and the JB Gold Zone, the latter of which showed mineralization style similar to the historic Homestake Mine[81][82] - The company anticipates expenditures of approximately $30 million for the calendar year 2023, which will require raising additional capital, but can scale down the program if funding is not secured[85] Liquidity and Capital Resources As an exploration-stage company, Dakota Gold relies on equity financing, holding $18.8 million in working capital and raising $4.9 million from its ATM program - As of March 31, 2023, the company had working capital of approximately $18.8 million[88] - In Q1 2023, the company raised approximately $4.9 million in net proceeds from its ATM program, along with an additional $30,757 from the exercise of stock options and warrants[89] Results of Operations Loss from operations increased to $9.6 million in Q1 2023 due to higher exploration expenses, while general and administrative expenses decreased to $2.7 million - Exploration expenses increased from $1.2 million in Q1 2022 to $6.8 million in Q1 2023, primarily due to an increase in drilling activity from one to four operating drills[93] - General and administrative expenses decreased from $6.42 million in Q1 2022 to $2.74 million in Q1 2023, mainly due to lower stock-based compensation and reduced professional and consulting fees[95] Quantitative and Qualitative Disclosures About Market Risk This section is not applicable to the company for the reporting period - Not applicable[102] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes in internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2023, the Company's disclosure controls and procedures were effective[103] - There were no changes in internal control over financial reporting during the three months ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, the Company's internal controls[105] Part II Legal Proceedings The company reported that there were no legal proceedings during the period - None[107] Risk Factors There have been no material changes from the risk factors previously disclosed in the company's Transition Report on Form 10-KT - No material changes from the risk factors previously disclosed in the Company's Transition Report on Form 10-KT[108] Unregistered Sales of Equity Securities and Use of Proceeds The company did not sell any equity securities that were not registered under the Securities Act of 1933 during the three months ended March 31, 2023 - The company did not have any unregistered sales of equity securities in Q1 2023[109] Defaults Upon Senior Securities This section is not applicable - Not applicable[110] Mine Safety Disclosure For the three months ended March 31, 2023, the company's exploration properties were not subject to regulation by the Federal Mine Safety and Health Administration - The Company's exploration properties were not subject to regulation by the Federal Mine Safety and Health Administration during the quarter[111] Other Information There was no other information to report for the period - None[112] Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO and XBRL data files