Dakota Gold (DC) - 2023 Q4 - Annual Report

Part I Business Dakota Gold Corp. is an exploration-stage company focused on acquiring and developing mineral properties in South Dakota's Homestake District, with no revenue generated to date - The Company is in the exploration stage and has not yet realized any revenues, with a strategy to advance projects from exploration to production[24] - Dakota Gold owns 11 mineral properties in the Homestake District, comprising 2,044 unpatented claims and covering approximately 48,006 acres[25] - To date, the company has not established any Mineral Resources or Mineral Reserves under S-K 1300 standards[26] - In October 2023, the company entered a strategic partnership with Orion Mine Finance, which invested $17 million[28] - As of December 31, 2023, the Company had 41 full-time employees[50] Risk Factors The company faces significant risks associated with its financial condition, business operations, and common stock, including limited operating history, no revenue, and dependence on gold prices - The company has a limited operating history, no revenue, and a history of losses, making it dependent on raising additional capital to continue operations[57][58] - Financial viability is substantially dependent on the price of gold, which is subject to fluctuations from factors beyond the company's control, such as central bank policies, market speculation, and global economic conditions[60][67] - Operations are subject to extensive and evolving environmental regulations, including those related to climate change, which could make exploration prohibitively expensive[70][71] - Title to mineral properties, particularly unpatented mining claims, is not guaranteed and may be subject to challenges, which are not covered by insurance[72] - The company's properties are in the exploration stage, and there is no assurance that any mineral reserves in commercially exploitable quantities will be established[91] - As of March 28, 2024, directors and officers as a group hold approximately 22% of the outstanding common stock, allowing them to influence stockholder votes[112] Unresolved Staff Comments The company reports that there are no unresolved staff comments - Not applicable[116] Cybersecurity The company integrates cybersecurity risk management into its overall framework, overseen by the Board, with no material incidents identified in 2023 - The Board of Directors oversees the risk management process, including cybersecurity threats, and receives periodic updates from management[119] - Management is responsible for operational oversight of cybersecurity strategy and policy, assisted by third-party service providers[121] - During the year ended December 31, 2023, no cybersecurity incident with a material impact on the business or financial statements was identified[122] Properties Dakota Gold holds 100% ownership of 11 mineral projects, aggregated as the 'Black Hills Property,' covering approximately 48,006 acres in South Dakota's Homestake District - The company has 100% ownership of 11 mineral projects in the Homestake District, covering a total of approximately 48,006 acres[132] - The Homestake District is known for three unique gold deposit types: Proterozoic-age Homestake iron-formation hosted, Tertiary-age replacement, and Cambrian paleoplacer gold deposits[134] - A maiden S-K 1300 compliant mineral resource estimate for the Richmond Hill property is planned for release in 2024[129][148] - Drilling at the Maitland Project led to the discovery of the Unionville Zone (Tertiary-age epithermal gold) and the JB Zone (high-grade, Homestake-type mineralization)[152] Richmond Hill Project Dakota Gold has an option to acquire 100% of the Richmond Hill Property from Barrick, where significant drilling has occurred, with a maiden S-K 1300 resource estimate planned for 2024 - The company has an option agreement to acquire 100% of Barrick's interest in the 2,615-acre Richmond Hill Property, with the option period extended to March 7, 2026[143] - By the end of 2023, the company completed 71 drill holes for a total of 123,573 feet (37,665 meters) at the Richmond Hill Project[146] - Key goals for 2024 include completing an S-K 1300 compliant maiden resource estimation and conducting expansion and exploration drilling[148] Maitland Project The Maitland Project, totaling 2,374 mineral acres, is a key component of the company's strategy, covering the Homestake iron formation, with recent discoveries of the Unionville and JB Zones - The Maitland project now totals 2,374 mineral acres, including land acquired from Barrick, which retained a 2.5% net smelter returns royalty[150] - By the end of 2023, 36 drill holes totaling 123,000 feet (37,490 meters) were completed at Maitland[152] - In 2023, the company announced the discovery of the Unionville Zone and the high-grade, Homestake-type JB Zone[152] Other Properties The company holds several other key properties including Barrick Option, Blind Gold, and City Creek projects, with plans for data compilation and reconnaissance work in 2024 - The Barrick Option covers 4,261 acres of surface rights and infrastructure from the historic Homestake Mine, with the option extended to March 7, 2026[155] - The Blind Gold Project (3,433 acres) is located on a structural trend with the Homestake Gold Mine and is a target for Homestake iron-formations[159][163] - The City Creek Project covers approximately 7,687 acres and is a target for Homestake iron-formation hosted gold mineralization, located one mile northeast of the Homestake Open Cut[178][182] - The South Lead / Whistler Gulch project is the company's largest, comprising 783 unpatented claims covering approximately 13,443 mineral acres[206] Legal Proceedings The company states that, to its knowledge, there are no material pending legal proceedings to which it is a party or of which its property is the subject - To the company's knowledge, there are no material pending legal proceedings[214] Mine Safety Disclosure For the fiscal year ended December 31, 2023, the company's exploration properties were not subject to MSHA regulation, thus no mine safety disclosures are reported - During the fiscal year ended December 31, 2023, the Company's exploration properties were not subject to MSHA regulation[215] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock is listed on the NYSE American under 'DC', with 548 record owners as of December 31, 2023, and no dividends paid or anticipated - The company's common stock is listed on the NYSE American under the symbol "DC"[217] - As of December 31, 2023, there were 548 record owners of the common stock[218] - The Company has not paid any dividends and does not anticipate paying any in the foreseeable future[220] Management's Discussion and Analysis of Financial Condition and Results of Operations Dakota Gold is an exploration-stage company that advanced drilling programs in 2023, incurring a net loss of $36.45 million, and anticipates $30 million in 2024 expenditures requiring additional capital - In 2023, the company completed 89 holes for 174,659 feet of core drilling, primarily at the Maitland and Richmond Hill Projects[236] - The company plans to release an inaugural S-K 1300 compliant resource for its Richmond Hill property in 2024[239] - As of December 31, 2023, the Company had a cash balance of approximately $25.55 million and working capital of $21.74 million[245][248] - The Company anticipates expenditures of approximately $30 million for the calendar year 2024 and will need to raise further capital or scale down its exploration program[242] Results of Operations | | Year Ended | Nine months ended | | :--- | :--- | :--- | | | December 31, 2023 ($) | December 31, 2022 ($) | | Operating expenses | | | | Exploration expenses | 28,345,452 | 13,749,359 | | General and administrative expenses | 9,690,940 | 7,929,819 | | Loss from operations | (38,036,392) | (21,679,178) | | Other income (expenses) | | | | Foreign exchange gain (loss) | (44,304) | (87,070) | | Interest income | 414,168 | 159,615 | | Total other income (expenses) | 369,864 | 72,545 | | Loss before income taxes | (37,666,528) | (21,606,633) | | Income tax expense - current | (29,457) | (55,749) | | Deferred income tax benefit | 1,246,786 | 2,380,905 | | Net loss | (36,449,199) | (19,281,477) | | Basic and diluted loss per share | (0.47) | (0.27) | | Weighted average number of basic and diluted shares of common stock outstanding | 78,251,025 | 72,090,163 | Quantitative and Qualitative Disclosures About Market Risk This section is not applicable to the company - Not applicable[265] Financial Statements and Supplementary Data This section presents the company's audited consolidated financial statements for the fiscal year ended December 31, 2023, including balance sheets, statements of operations, cash flows, and notes Consolidated Balance Sheets As of December 31, 2023, the company reported total assets of $108.2 million, total liabilities of $4.7 million, and total stockholders' equity of $103.5 million Consolidated Balance Sheets (as of Dec 31) | | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | Total current assets | 26,224,393 | 24,637,991 | | Mineral rights and properties | 79,344,304 | 78,737,287 | | Total assets | 108,202,540 | 105,022,719 | | Total current liabilities | 4,486,242 | 2,514,863 | | Total liabilities | 4,666,089 | 3,846,981 | | Total stockholders' equity | 103,536,451 | 101,175,738 | Consolidated Statements of Operations and Comprehensive Loss For the fiscal year ended December 31, 2023, the company reported a net loss of $36.45 million, driven by increased exploration expenses Consolidated Statements of Operations and Comprehensive Loss | | Year Ended Dec 31, 2023 ($) | Nine Months Ended Dec 31, 2022 ($) | | :--- | :--- | :--- | | Exploration expenses | 28,345,452 | 13,749,359 | | General and administrative expenses | 9,690,940 | 7,929,819 | | Loss from operations | (38,036,392) | (21,679,178) | | Net loss and comprehensive loss | (36,449,199) | (19,281,477) | | Basic and diluted loss per share | (0.47) | (0.27) | Consolidated Statements of Cash Flows For the fiscal year ended December 31, 2023, net cash used in operating activities was $31.20 million, with a net increase in cash of $1.64 million from financing activities Consolidated Statements of Cash Flows | | Year Ended Dec 31, 2023 ($) | Nine Months Ended Dec 31, 2022 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (31,197,716) | (18,415,624) | | Net cash used in investing activities | (1,759,911) | (1,296,528) | | Net cash provided by financing activities | 34,594,278 | 2,222,758 | | Net change in cash and cash equivalents | 1,636,651 | (17,489,394) | | Cash and cash equivalents, end of year | 25,548,373 | 23,911,722 | Notes to the Consolidated Financial Statements The notes detail the company's accounting policies, liquidity position, and specifics of its financial accounts, including capital raised through ATM and Orion investment - Management believes the company's cash balance of $25.5 million as of Dec 31, 2023, and its ability to use the ATM program and scale down exploration, alleviate doubt about its ability to continue as a going concern for the next 12 months[295] - In FY 2023, the company raised net proceeds of approximately $17.95 million by issuing 6,470,564 shares through its ATM program[341] - In October 2023, Orion Mine Finance purchased 6,666,667 shares for gross proceeds of $17 million[342] - As of December 31, 2023, there were 4,201,910 stock options and 7,603,093 warrants outstanding[356][358] Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[376] Controls and Procedures Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2023 - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of December 31, 2023[377] - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2023, based on the COSO framework[379] Other Information The company reports no other information - None[382] Disclosures Regarding Foreign Jurisdictions that Prevent Inspections The company reports no disclosures regarding foreign jurisdictions that prevent inspections - None[383] Part III Directors, Executive Officers and Corporate Governance The information required for this item will be incorporated by reference from the company's definitive proxy statement - Information is incorporated by reference from the upcoming proxy statement[385] Executive Compensation The information required for this item will be incorporated by reference from the company's definitive proxy statement - Information is incorporated by reference from the upcoming proxy statement[386] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required for this item will be incorporated by reference from the company's definitive proxy statement - Information is incorporated by reference from the upcoming proxy statement[387] Certain Relationships and Related Transactions and Director Independence The information required for this item will be incorporated by reference from the company's definitive proxy statement - Information is incorporated by reference from the upcoming proxy statement[388] Principal Accountant Fees and Services The information required for this item will be incorporated by reference from the company's definitive proxy statement - Information is incorporated by reference from the upcoming proxy statement[389] Part IV Exhibits and Financial Statement Schedules This section provides an index of all exhibits filed as part of the Form 10-K report, including corporate documents and agreements - This section contains the index of exhibits filed with the Form 10-K[390][391] Form 10-K Summary The company reports no Form 10-K summary - None[390]