Barrick-backed Dakota Gold seeks Homestake-style lode

Dakota Gold (NYSE-A: DC) intersected more high-grade gold mineralization at the Maitland gold project in South Dakota showing similarities to the nearby former Homestake mine that produced 40 million oz. over more than a century.

Drill hole MA24C-050 cut 6.4 metres grading 9.46 grams gold per tonne from 506.2 metres depth within the 36 Ledge, one of three ledges (or fold structures) in the JB zone at Maitland, the company said on Thursday. The interval is a 66.1-metre lateral northward offset and a 51.2-metre vertical offset above hole MA24C-038 that intersected 25.03 grams gold over 4.4 metres, Dakota reported April 4.

“Mineralization in the JB gold zone at Maitland is analogous to the gold mineralization found in the West Ledge system at the historic Homestake mine,” James Berry, vice-president of exploration, said in a release. “In the West Ledge, the best grades were encountered at depths that Dakota Gold’s exploration programs have yet to drill test at Maitland.”

Shares in Dakota Gold rose 6% by mid-afternoon Thursday in Toronto to US$2.44 apiece, valuing the company at US$333 million. They’ve traded in a 52-week range of US$1.95 to US$3.25.  

Barrick Gold (TSX: ABX; NYSE: GOLD) holds 2.5% of Dakota after the junior in 2020 acquired Maitland, which is about 6 km northwest of the former Homestake mine. During its heyday from the late 1870s to 2001, it was the largest and deepest mine in the Western Hemisphere.

Quartermain

Dakota’s co-chairmen are Robert Quartermain, the Canadian Mining Hall of Famer who advanced the Brucejack mine now held by Newmont (NYSE: NEM; TSX: NGT) in British Columbia, and former BHP (LSE: BHP; NYSE: BHP; ASX: BHP) senior executive Stephen O’Rourke. Quartermain is the company’s largest shareholder with 8.5% while New York-based Orion Mine Finance holds 7.7% and has promised US$300 million in development financing.  

The area, including historical sites Lead where Dakota is based, Deadwood, Rapid City and Mount Rushmore, is some 300 km west of state capital Pierre. Part of the Homestake mine has been used as a neutrino observatory because of its depth.

Dakota has drilled high-grade gold intercepts at the 34 and 35 ledges in Maitland’s JB Gold zone that remain open along strike and to depth. Drilling is tightening spacing to less than 250 metres to delineate the mineralization, the company said.

The company is also drilling the Tertiary epithermal gold mineralization in the Unionville zone at Maitland and conducting infill and step-out drilling at the Richmond Hill gold project to update a resource estimate by mid-next year, the company said. They are part of the roughly 195 sq. km of property Dakota holds around the former Homestake mine.

Richmond Hill holds 51.8 million indicated tonnes grading 0.8 gram gold per tonne for 1.33 million oz. and 58.1 million inferred tonnes at 0.61 gram gold for 1.1 million oz., the company reported in an initial S-K 1300 resource on April 30. The resource is open in all directions and has potential for improvement, it said.

— This article has been updated to correct the location of Orion Mine Finance’s headquarters.