An analyst from BMO Capital Markets has given Dakota Gold Corp (NYSEAMERICAN: DC) an outperform rating and a share target price 167 per cent higher than what the stock is currently trading for.
Andrew Mikitchook believes that the company’s JB Gold Zone in South Dakota’s Homestake mining district will be a money maker in the coming years. The zone resides about 3.5 miles from the past-producing Homestake Mine. Between 1876 and 2002, the prolific asset produced over 40 million ounces.
“The proximity and geological similarities to the long-running Homestake mine suggest potential for scale at the JB Gold Zone,” Mikitchook explained. He says the best place to find a new mine is next to an old one. Mikitchook also has faith in the management and exploration team at Dakota Gold.
“Dakota’s management team has strong ties to the Homestake district and relevant experience in advancing exploration projects,” he said.
Other analysts say that Dakota will not be generating worthwhile profits for at least the next year and that the enthusiasm surrounding the JB zone indicates long-term investment potential.
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Homestake was North America’s #1 gold asset
During its production years, the mine was the deepest and largest in the entire continent. It was one of the first gold operations to use cyanide for extraction before it became the most prevalent method in the early 20th century.
When operations at the mine ceased in the early 2000s due to low gold prices South Dakota was no longer a significant influence in the industry.
Interestingly, once the mine closed, it became the site of the deepest underground laboratory in the United States. The Sanford Underground Research Facility is a massive lab 4,850 feet below the surface.
Research undertaken has been focused on dark matter, neutrino physics and other complex scientific fields.
“We host world-leading experiments deep underground, seeking answers to some of the most profound mysteries of the universe,” the South Dakota Science & Technology Authority says.
Gold expected to continue rising
Recent assessments, such as those made by Goldman Sachs Group Inc (NYSE: GS) and India’s Angel One Ltd (NSE: ANGELONE), have determined that the spot price of gold will continue to rise even higher in the new year.
They believe it will be worth somewhere around US$2,750 per ounce in the early months of 2025.
Other American gold miners like Calibre Mining Corp (TSE: CXB) (OTCMKTS: CXBMF), Nevada Gold Mines and Kinross Gold Corp (TSE: K) have been ramping up activities to capitalize on the current momentum.
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