Dakota Gold Corp

Previous wording

This Quarterly Report on Form 10-Q and the exhibits attached hereto contain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements concerning our anticipated results and developments of our operations in future periods, planned exploration and development of our properties, plans related to our business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

Current wording

This Quarterly Report on Form 10-Q and the exhibits attached hereto contain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements related to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

Previous wording

estimates and future assumptions set forth in the mineral resource estimate for the Richmond Hill property; and

Current wording

estimates and future assumptions set forth in the mineral resource estimate for the Richmond Hill property;

Previous wording

the potential lack of proven and probable mineral reserves pursuant to S-K 1300;

Current wording

the potential lack of proven and probable mineral reserves as defined under S-K 1300;

Previous wording

This management's discussion and analysis should be read in conjunction with the Company's financial statements and notes thereto as set forth herein. Readers are also urged to carefully review and consider the various disclosures made by the Company, which attempt to advise interested parties of the factors that affect its business, including without limitation, the disclosures made under "Risk Factors" of its most recent Form 10-K.

Current wording

This management's discussion and analysis ("MD&A") should be read in conjunction with the Company's financial statements and notes thereto as set forth herein and the Company's annual audited financial statements. Readers are also urged to carefully review and consider the various disclosures made by the Company, which attempt to advise interested parties of the factors that affect its business, including without limitation, the disclosures made under "Risk Factors" of its most recent Form 10-K.

Previous wording

Since the Company is an exploration stage company as defined under S-K 1300 and has not generated revenues to date, its business is subject to numerous contingencies and risk factors beyond its control, including exploration and development risks, competition from well-funded competitors, and its ability to manage growth.

Current wording

As the Company is an exploration stage company as defined under S-K 1300 and has not generated revenues to date, its business is subject to numerous contingencies and risk factors beyond its control, including exploration and development risks, competition from well-funded competitors, and its ability to manage growth.

Previous wording

The Homestake District has historically yielded approximately 44.6 million ounces of gold production as of June 30, 2024 with most of it coming from within a small geographic area. The production ledges of the Homestake Mine define a cumulative surface projection area of less than three square miles. Homestake Mining Company's historic gold production and exploration in the Homestake District was overwhelmingly focused on the underground mine. Modern statistical studies of ore deposit trends and understanding of the distribution of large gold camps around the world indicates that large gold deposits generally form in distinct camps and normally occur in clusters that show predictable distributions (Zipf's Law Applied to Ore Deposits). The Company believes this might be true for the Homestake District. Outside of the mine area, the Homestake District has been underexplored and heretofore has not been the subject of modern exploration efforts required to search for other deposits, especially under the cover of younger rocks that dominate the surface.

Current wording

The Homestake District has historically yielded approximately 44.8 million ounces of gold production as of September 30, 2024 with most of it coming from within a small geographic area. The production ledges of the Homestake Mine define a cumulative surface projection area of less than three square miles. Homestake Mining Company's historic gold production and exploration in the Homestake District was overwhelmingly focused on the underground mine. Modern statistical studies of ore deposit trends and understanding of the distribution of large gold camps around the world indicates that large gold deposits generally form in distinct camps and normally occur in clusters that show predictable distributions (Zipf's Law Applied to Ore Deposits). The Company believes this might be true for the Homestake District. Outside of the mine area, the Homestake District has been underexplored and heretofore has not been the subject of modern exploration efforts required to search for other deposits, especially under the cover of younger rocks that dominate the surface.

Previous wording

Permitting and site preparations were initiated for the first drilling program on the iron-formation target and other Tertiary-age replacement targets in the Maitland area and drilling commenced in early 2022. The Company has since expanded its drilling operations to the Richmond Hill Project and has had up to four drill rigs operating on Dakota Gold properties. Dakota Gold has completed permit applications and environmental field work for exploration on several target areas and currently has nine active permits in place: four on the Maitland Project, three on the Richmond Hill Project, one on the City Creek Project and one on the Cambrian Unconformity Project. Permitting for targets for some of the other Dakota Gold Properties may be advanced for drilling as exploration activity continues throughout the year.

Current wording

Permitting and site preparations were initiated for the first drilling program on the iron-formation target and other Tertiary-age replacement targets in the Maitland area and drilling commenced in early 2022. The Company has since expanded its drilling operations to the Richmond Hill Project and has had up to four drill rigs operating on Dakota Gold properties. Dakota Gold has completed permit applications and environmental field work for exploration on several target areas and currently has twelve active permits in place and with one further permit expecting approval in fourth quarter 2024. Of these thirteen permits, five are on the Maitland Project, six are on the Richmond Hill Project, one is on the City Creek Project and one is on the Cambrian Unconformity Project. Permitting targets for some of the other Dakota Gold Properties may be advanced for drilling as exploration activity continues throughout the year.

Previous wording

In total, Dakota Gold has completed 145 drill holes for 318,836 feet (97,181 meters) since drilling started in 2022. The Company completed 24 holes for 78,339 feet (23,878 meters) of core drilling on three projects in 2022. The areas drilled were the Maitland Project (44,710 feet; 13,628 meters), the Richmond Hill Project (27,503 feet; 8,383 meters), and the Cambrian Unconformity Project (6,126 feet; 1,867 meters). The Company then completed 89 holes for 174,659 feet (53,236 meters) of core on two projects in 2023; the areas drilled were the Maitland Gold Project (78,589 feet; 23,954 meters) and the Richmond Hill Project (96,070 feet; 29,282 meters). The Company has also completed 32 holes for 65,837 feet (20,067 meters) of core on two projects in the first half of 2024; the areas drilled were the Maitland Gold Project (59,073 feet; 18,006 meters) and the Richmond Hill Project 6,764 feet; 2,062 meters).

Current wording

In total, Dakota Gold has completed 188 drill holes for 360,829 feet (109,947 meters) since drilling started in 2022. The Company completed 24 holes for 78,339 feet (23,878 meters) of core drilling on three projects in 2022. The areas drilled were the Maitland Project (44,710 feet; 13,628 meters), the Richmond Hill Project (27,503 feet; 8,383 meters), and the Cambrian Unconformity Project (6,126 feet; 1,867 meters). The Company then completed 89 holes for 174,659 feet (53,236 meters) of core on two projects in 2023; the areas drilled were the Maitland Gold Project (78,589 feet; 23,954 meters) and the Richmond Hill Project (96,070 feet; 29,282 meters). The Company has also completed 73 holes for 108,130 feet (32,948 meters) of core on two projects during the first 3 quarters of 2024; the areas drilled were the Maitland Gold Project (84,185 feet; 25,652 meters) and the Richmond Hill Project (23,945 feet; 7,296 meters).

Previous wording

On February 8, 2023, the Company announced the discovery of the Unionville Zone in MA22C-009, which intercepted mineralized, Precambrian hosted, Tertiary-age, epithermal gold mineralization in a structurally controlled breccia. On May 4, 2023, the Company announced the discovery of the JB Zone in MA23C-017, which intercepted significant high-grade, Homestake-type, Precambrian mineralization over potentially mineable widths that has since been followed up with multiple gold intercepts in multiple limbs of Homestake iron formation, the geometry of which is analogous to the West-Ledge system at the Homestake Mine. The Company continues to intersect both Homestake-type and Unionville Zone-type mineralization and released drilling and assay results in press releases on May 23, 2024, June 20, 2024, and on July 9, 2024.

Current wording

On February 8, 2023, the Company announced the discovery of the Unionville Zone in MA22C-009, which intercepted mineralized, Precambrian hosted, Tertiary-age, epithermal gold mineralization in a structurally controlled breccia. On May 4, 2023, the Company announced the discovery of the JB Zone in MA23C-017, which intercepted significant high-grade, Homestake-type, Precambrian mineralization over potentially mineable widths that has since been followed up with multiple gold intercepts in multiple limbs of Homestake iron formation, the geometry of which is analogous to the West-Ledge system at the Homestake Mine. The Company continues to intersect both Homestake-type and Unionville Zone-type mineralization and released drilling and assay results in press releases on May 23, 2024, June 20, 2024, July 9, 2024, and August 22, 2024.

Previous wording

On April 13, 2023, the Company announced the commencement of an infill and step-out drilling program at the Richmond Hill property to convert and expand known gold mineralization identified by more than 900 historical drill holes, and expanded by new Dakota Gold drilling, into the maiden technical report summary for the Richmond Hill property. On September 27, 2023, the Company announced commencement of an infill drilling program at the Unionville Zone on the Maitland Project for the purpose of advancing to a S-K 1300 compliant resource for 2025. On April 30, 2024, the Company announced the completion of the inaugural S-K 1300 compliant technical report summary for the Richmond Hill property, which was filed as an exhibit to the Company's Current Report on Form 8-K. This report does not include the infill drilling program at the Unionville Zone on the Maitland Project.

Current wording

On April 13, 2023, the Company announced the commencement of an infill and step-out drilling program at the Richmond Hill property to convert and expand known gold mineralization identified by more than 900 historical drill holes, and expanded by new Dakota Gold drilling, into the maiden technical report summary for the Richmond Hill property. On September 27, 2023, the Company announced commencement of an infill drilling program at the Unionville Zone on the Maitland Project for the purpose of advancing to a S-K 1300 compliant mineral resource estimate in the future.

Previous wording

The Company's planned activities in fiscal 2024 will be focused on advancing exploration and resources development drilling on its Maitland and Richmond Hill projects. Additional field work, specifically data compilation, sampling and mapping, are planned for Dakota Gold's West Corridor, Blind Gold and Poorman Anticline properties in 2024.

Current wording

The Company's planned activities in fiscal 2024 will be focused on advancing exploration and resources development drilling on its Maitland and Richmond Hill projects. Additional field work, specifically data compilation, sampling and mapping are planned for Dakota Gold's West Corridor, Blind Gold and Poorman Anticline properties during the balance of 2024.

Previous wording

Specifically at Richmond Hill, gold mineralization remains open in all directions and at depth. Additional drilling will be conducted within the resource area, defined in the inaugural resource estimation, where significant mineral potential exists but where drilling was of insufficient density to be included in the maiden resource. The additional drilling and the inclusion of silver will be incorporated into future resource estimates.

Current wording

Specifically at Richmond Hill, gold mineralization remains open in all directions and at depth. Additional drilling will be conducted within the resource area, defined in the inaugural resource estimation, where significant mineral potential exists but where drilling was of insufficient density to be included in the initial mineral resource estimate. The additional drilling and the inclusion of silver will be incorporated into future resource estimates.

Previous wording

In addition, exploration will be conducted on targets outside the Richmond Hill resource area where untested targets exist or where potential mineralized structures and breccias project under Paleozoic and Tertiary cover rocks.

Current wording

In addition, future exploration will be conducted on targets outside the Richmond Hill resource area where untested targets exist or where potential mineralized structures and breccias project under Paleozoic and Tertiary cover rocks.

Previous wording

Also at Richmond Hill, work will continue on understanding the rare earth mineralization announced earlier this year, through additional assay and metallurgical investigation and a preliminary geologic model.

Current wording

Also at Richmond Hill, work will continue on understanding the rare earth mineralization announced on January 31, 2024 through additional assay and metallurgical investigation and a preliminary geologic model.

Previous wording

At Maitland, infill and step out drilling will continue in the JB and Unionville discovery areas for both Precambrian and Tertiary-age gold mineralization with the goal of completing initial resource estimations for these systems in the future.

Current wording

At Maitland, infill and step out drilling will continue in the JB and Unionville discovery areas for both Precambrian and Tertiary-age gold mineralization with the goal of completing initial mineral resource estimations for these systems in the future.

Previous wording

The Company continues to utilize its proprietary geophysical data sets to evaluate both regional and project specific targets. The Company continues to locate and compile historic data sets useful to the Company's regional exploration programs.

Current wording

The Company continues to utilize its proprietary geophysical data sets to evaluate both regional and project specific targets. The Company continues to locate and compile historic data sets useful to the Company's regional exploration programs and has initiated field programs on several of its properties outside of Maitland and Richmond Hill areas in hopes of defining additional drill targets for future exploration programs.

Previous wording

The Company's projects are all at the exploration stage and do not generate revenues. Other than the mineral resource estimate contained in the technical report summary for the Richmond Hill property, the Company has not established that any of its properties or projects contain mineral resources or mineral reserves, as defined under S-K 1300. Expenditure projections are subject to numerous contingencies and risk factors beyond the Company's control, including exploration and development risks, competition from well-funded competitors, and the Company's ability to manage growth and assessments of ongoing exploration activities and results. The Company cannot offer assurance that its expenses will either meet or exceed its projections.

Current wording

The Company's projects are all in the exploration stage and do not generate revenues. Other than the mineral resource estimate contained in the technical report summary for the Richmond Hill property, the Company has not established that any of its properties or projects contain mineral resources or mineral reserves, as defined under S-K 1300. Expenditure projections are subject to numerous contingencies and risk factors beyond the Company's control, including exploration and development risks, competition from well-funded competitors, and the Company's ability to manage growth and assessments of ongoing exploration activities and results. The Company cannot offer assurance that its budgeted expenses will fall within its projections.

Previous wording

As of June 30, 2024, the Company had working capital of approximately $10.66 million and a retained deficit of approximately $60.41 million. The Company had a net loss for the six months ended June 30, 2024, of approximately $17.75 million.

Current wording

As of September 30, 2024, the Company had working capital of approximately $8.35 million and an accumulated deficit of approximately $70.51 million. The Company had a net loss for the nine months ended September 30, 2024, of approximately $27.84 million.

Previous wording

On June 26, 2024, the Company entered into a binding agreement with certain entities managed by Orion Mine Finance ("Orion"), for an investment of approximately $5.86 million in the Company. On July 2, 2024, Orion purchased 2,344,836 shares of common stock of the Company at a price of $2.50 per share for aggregate gross proceeds of $5,862,090 in a registered direct offering (the "Orion Equity Investment"). Concurrent with the consummation of the Orion Equity Investment, the Company sold to Orion a 1% net smelter return royalty interest on certain properties held by the Company for total consideration of $182,758.

Current wording

On June 26, 2024, the Company entered into a binding agreement with certain entities managed by Orion Mine Finance ("Orion"), for an investment of approximately $5.86 million in the Company. On July 2, 2024, Orion purchased 2,344,836 shares of common stock of the Company at a price of $2.50 per share for aggregate net proceeds of approximately $5.71 million in a registered direct offering (the "Orion Equity Investment"). Concurrent with the consummation of the Orion Equity Investment, the Company sold to Orion a 1% net smelter return royalty interest on certain properties held by the Company for total consideration of approximately $0.18 million.

Previous wording

During the twelve months ending December 31, 2024, the Company anticipates cash expenditures of approximately $34 million.

Current wording

During the twelve months ending December 31, 2024, the Company anticipates cash expenditures of approximately $34 million, including approximately $24.45 million that has already been incurred through September 30, 2024.

Previous wording

Based on the Company's cash balance at June 30, 2024 of approximately $16.08 million and the anticipated ability to utilize the ATM program during the year, the Company believes that it will have sufficient funds to fund its activities for the next twelve months. The actual timing of expected expenditures and fundraising is dependent upon several factors, including the management of variable exploration expenditures.

Current wording

Based on the Company's cash balance at September 30, 2024 of approximately $14.70 million and the anticipated ability to utilize the ATM program during the year, the Company believes that it will have sufficient funds to fund its activities for the next twelve months. The actual timing of expected expenditures and fundraising is dependent upon several factors, including the management of variable exploration expenditures.

Previous wording

Should it be unable to raise sufficient capital, the Company plans to scale down the exploration program to maintain greater than 12 months of funding from the date of these financial statements.

Current wording

Should it be unable to raise sufficient capital, the Company plans to scale down the exploration program to maintain sufficient funds through September 30, 2025.

Previous wording

The Company had losses from operations for the quarters ended June 30, 2024 and 2023 totaling approximately $9.23 million and $10.18 million, respectively, losses before income tax of approximately $9.16 million and $10.14 million respectively, leading to net losses of approximately $9.15 million and $9.82 million.

Current wording

The Company had losses from operations for the quarters ended September 30, 2024 and 2023 totaling approximately $10.23 million and $8.86 million, respectively, losses before income tax of approximately $10.11 million and $8.80 million respectively, leading to net losses of approximately $10.09 million and $8.54 million, respectively.

Previous wording

During the quarters ended June 30, 2024 and 2023, exploration expenses totaled approximately $6.43 million and $7.60 million, respectively. The Company's main driver for exploration expenditure relates to the number of drills operating at our projects. While the Company alternated between three and four drills operating during both periods, the Company has been able to reduce the cost per foot of drilling. Partially offsetting the reduction in drilling costs were higher study costs relating to the completion of the technical report summary for the Richmond Hill property. Included in exploration costs were non-cash exploration-related stock-based compensation expenses of approximately $0.17 million and $0.21 million for the quarters ended June 30, 2024 and 2023, respectively.

Current wording

During the quarters ended September 30, 2024 and 2023, exploration expenses totaled approximately $7.80 million and $6.94 million, respectively. The Company's main driver for exploration expenditure relates to the number of drills operating at our projects. While the Company alternated between three and four drills operating during both periods, the Company averaged more drills on site in the third quarter of 2024 than in the same quarter of 2023. In addition, the Company used a specialist directional drilling company in 2024 which further increased costs. Included in exploration costs were non-cash exploration-related stock-based compensation expenses of approximately $0.16 million for each of the quarters ended September 30, 2024 and 2023, respectively.

Previous wording

Our general and administrative expenses for the quarters ended June 30, 2024 and 2023, were approximately $2.80 million and $2.58 million, respectively. These expenditures were primarily for legal, accounting, professional fees, investor relations, and other general and administrative expenses necessary for our operations. The increase was primarily due to increased investor relations expenses of approximately $0.36 million for the quarter ended June 30, 2024 (compared to approximately $0.05 million for the quarter ended June 30, 2023) as the Company increased investor related activities to support the capital raising through the ATM and announced the Orion financing (see Note 1), increased support costs included in general and administrative costs of approximately $1.34 million for the quarter ended June 30, 2024 (compared to $1.22 million for the quarter ended June 30, 2023) and increased professional fees of approximately $0.21 million for the quarter ended June 30, 2024 (compared to $0.16 million for the quarter ended June 30, 2023), partially offset by decreased stock-based compensation allocated to administration expenses of $0.80 million for the quarter ended June 30, 2024 (compared to approximately $1.05 million for the quarter ended June 30, 2023) and decreased consulting fees of $0.03 million for the quarter ended June 30, 2024 (compared to approximately $0.04 million for the quarter ended June 30, 2023).

Current wording

Our general and administrative expenses for the quarters ended September 30, 2024 and 2023, were approximately $2.43 million and $1.92 million, respectively. These expenditures were primarily for legal, accounting, professional fees, investor relations, and other general and administrative expenses necessary for our operations. The increase was primarily due to increased support costs included in general and administrative costs of approximately $1.06 million for the quarter ended September 30, 2024 (compared to $0.84 million for the quarter ended September 30, 2023), investor relations expenses of approximately $0.13 million for the quarter ended September 30, 2024 (compared to approximately $0.03 million for the quarter ended September 30, 2023) as the Company increased investor related activities to support the capital raising through the ATM and the Orion financing, professional fees of approximately $0.22 million for the quarter ended September 30, 2024 (compared to $0.18 million for the quarter ended September 30, 2023), stock-based compensation allocated to administration expenses of $0.92 million for the quarter ended September 30, 2024 (compared to approximately $0.74 million for the quarter ended September 30, 2023) and consulting fees of $0.04 million for the quarter ended September 30, 2024 (compared to approximately $0.01 million for the quarter ended September 30, 2023).

Previous wording

The Company earned interest income from bank accounts of approximately $0.35 million and $0.10 million and incurred interest expense of approximately $0.08 million and $Nil related to the VMC purchase for the six months ended June 30, 2024 and 2023, respectively.

Current wording

The Company earned interest income from bank accounts of approximately $0.17 million and $0.07 million and incurred interest expense of approximately $0.06 million and $nil related to the VMC purchase and the sale of the royalty for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

The Company had losses from operations for the six months ended June 30, 2024 and 2023 totaling approximately $18.02 million and $19.75 million, respectively, losses before income tax of approximately $17.78 million and $19.68 million respectively, leading to net losses of approximately $17.75 million and $19.09 million. The decrease was primarily due to decreased stock-based compensation related to administration expenses of $1.48 million for the six months ended June 30, 2024 (compared to approximately $2.14 million for the six months ended June 30, 2023).

Current wording

The Company had losses from operations for the nine months ended September 30, 2024 and 2023 totaling approximately $28.25 million and $28.61 million, respectively, losses before income tax of approximately $27.88 million and $28.48 million respectively, leading to net losses of approximately $27.84 million and $27.63 million, respectively.

Previous wording

During the six months ended June 30, 2024 and 2023, exploration expenses totaled approximately $12.97 million and $14.44 million, respectively. The Company's main driver for exploration expenditure relates to the number of drills operating at our projects. While the Company alternated between three and four drills in operation during both periods, the Company has improved cost efficiency. The Company also took a longer drilling during January 2024 in comparison to 2023, which reduced drilling and related costs including assays and core cutting. Partially offsetting the reduction in drilling costs were higher study costs relating to the completion of the technical report summary for the Richmond Hill property. Included in exploration costs were non-cash exploration-related stock-based compensation expenses of approximately $0.31 million and $0.41 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

During the nine months ended September 30, 2024 and 2023, exploration expenses totaled approximately $20.78 million and $21.38 million, respectively. The Company's main driver for exploration expenditure relates to the number of drills operating at our projects. While the Company alternated between three and four drills in operation during both periods, the Company averaged fewer drills in 2024 and the Company has improved cost efficiency which has reduced the overall costs. The Company also took a longer break from drilling during January 2024 in comparison to 2023, which reduced drilling and related costs including assays and core cutting. Partially offsetting the reduction in drilling costs were higher study costs relating to the completion of the technical report summary for the Richmond Hill property and higher costs as a result of having a specialist company supporting the directional drilling. Included in exploration costs were non-cash exploration-related stock-based compensation expenses of approximately $0.47 million and $0.57 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Our general and administrative expenses for the six months ended June 30, 2024 and 2023, were approximately $5.04 million and $5.32 million, respectively. These expenditures were primarily for legal, accounting, and professional fees, investor relations, and other general and administrative expenses necessary for our operations. The decrease was primarily due to decreased stock-based compensation allocated to administration expenses of $1.48 million for the six months ended June 30, 2024 (compared to approximately $2.14 million for the six months ended June 30, 2023), support costs included in general and administrative costs of approximately $2.49 million for the six months ended June 30, 2024 (compared to $2.68 million for the six months ended June 30, 2023) and consulting costs of approximately $0.03 million (compared to $0.05 million for the six months ended June 30, 2023), partially offset by increased investor relations expenses of approximately $0.55 million for the six months ended June 30, 2024 (compared to approximately $0.07 million for the six months ended June 30, 2023) as the Company increased investor related activities to support the capital raising through the ATM and announced the Orion financing (see note 1) and professional fees of approximately $0.37 million (compared to approximately $0.25 million for the six months ended June 30, 2023).

Current wording

Our general and administrative expenses for the nine months ended September 30, 2024 and 2023, were approximately $7.47 million and $7.23 million, respectively. These expenditures were primarily for legal, accounting, professional fees, investor relations, and other general and administrative expenses necessary for our operations. The increase was primarily due to investor relations expenses of approximately $0.67 million for the nine months ended September 30, 2024 (compared to approximately $0.11 million for the nine months ended September 30, 2023) as the Company increased investor related activities to support the capital raising through the ATM and Orion financing, professional fees of approximately $0.59 million (compared to approximately $0.43 million for the nine months ended September 30, 2023) and consulting fees of approximately $0.08 million (compared to $0.06 million for the nine months ended September 30, 2023), partially offset by decreased stock-based compensation allocated to administration expenses of $2.39 million for the nine months ended September 30, 2024 (compared to approximately $2.88 million for the nine months ended September 30, 2023) and support costs included in general and administrative costs of approximately $3.54 million for the nine months ended September 30, 2024 (compared to $3.52 million for the nine months ended September 30, 2023).