Dakota Gold Corp. Announces $6 Million Orion Mine Finance Investment with a Potential Increase To Up To $9 Million

Rhea-AI Summary

Dakota Gold Corp. (NYSE American: DC) announced a $6 million investment from Orion Mine Finance entities. This investment will increase Orion's stake in Dakota Gold to approximately 9.9%. The deal involves the purchase of 2,344,836 shares at $2.50 per share. An additional investment up to $8.8 million is possible, subject to market conditions. The equity investment will be registered under the Securities Act of 1933 and is expected to close around July 3, 2024. Additionally, a royalty agreement will be established, giving Orion a 1% net smelter returns royalty over certain Dakota Gold properties in exchange for $182,758.20.

Positive

• Orion Mine Finance's increased investment of $6 million into Dakota Gold.
• Potential additional investment of up to $8.8 million from Orion.
• Orion's increased ownership to 9.9% of Dakota Gold's shares.

Negative

• The additional investment is not guaranteed, being subject to market and other conditions.

Financial Analyst

The investment of $6 million by Orion Mine Finance in Dakota Gold Corp. represents a significant capital infusion that could potentially increase to $9 million. This provides a robust boost to Dakota Gold's financial stability and liquidity. The stock price of Dakota Gold was set at $2.50 per share, which indicates confidence in the current valuation of the company. The resulting 9.9% ownership by Orion places a substantial stake in the hands of a major industry player, which could lead to enhanced investor confidence.

Additionally, this equity investment will be registered under the Securities Act of 1933, ensuring compliance with regulatory requirements. This move is likely to reassure investors about the legitimacy and transparency of the transaction. If the potential additional investment materializes, the financial impact could be even more pronounced, further strengthening Dakota Gold's balance sheet.

In the short-term, this investment will likely stabilize the stock price, given the backing of a reputable financier. In the long-term, the relationship with Orion could lead to more strategic collaborations, potentially driving growth and development in Dakota Gold's operations.

Market Research Analyst

The strategic partnership with Orion Mine Finance is noteworthy for Dakota Gold's overall market positioning. Orion's decision to invest and acquire a 9.9% stake signals a strong vote of confidence from a respected investor in the mining sector. This can be perceived as an endorsement of Dakota Gold's business strategy and potential for future growth, which might attract further interest from institutional investors.

The additional royalty agreement for a 1% net smelter returns royalty over certain properties represents an innovative way to secure additional funds. Though the immediate financial benefit of $182,758.20 is relatively small, it provides an interesting income stream linked directly to operational performance, offering a potential upside as production ramps up. This will be particularly beneficial if the company can effectively increase its mining output.

For retail investors, this deal enhances the attractiveness of Dakota Gold's stock, as it highlights a commitment to securing strategic partnerships and diversifying income streams. However, the dependence on actual mining performance to realize the full benefits of the royalty agreement introduces some operational risk that should be monitored.

Lead, South Dakota--(Newsfile Corp. - June 26, 2024) - Dakota Gold Corp. (NYSE American: DC) ("Dakota Gold" or the "Company") is pleased to announce an investment of $6 million by OMF Fund IV SPV A LLC and OMF Fund IV SPV C LLC, entities managed by Orion Mine Finance Management LP (collectively, "Orion") in Dakota Gold.

Jonathan Awde, President, CEO and a Director of the Company, commented: "I am very pleased to announce our continued strategic partnership with Orion. Orion's ownership of Dakota Gold, together with their prior investment from 2023, will increase to a total of 9.9% share ownership. Orion is a respected investor and lender in the mining industry and we value their support and look forward to continuing to work together as we revitalize the Homestake District."

Orion Equity Investment

Orion has agreed to purchase 2,344,836 shares of common stock of Dakota Gold (each a "Share") at a price of $2.50 per Share for aggregate gross proceeds of $5.9 million (the "Orion Equity Investment"). The Company anticipates Orion will own approximately 9.9% of its issued and outstanding shares of common stock following the closing of the Orion Equity Investment.

Orion remains supportive of the Company and is considering making a further equity investment thereby increasing the total aggregate gross equity proceeds to the Company to up to $8.8 million subject to market and other conditions, although Orion has not committed or otherwise agreed to any such further equity investment.

The Orion Equity Investment will be registered under the Securities Act of 1933, as amended (the "Securities Act") pursuant to the Company's shelf registration statement on Form S-3 (File No. 333-266155), as supplemented by a prospectus supplement relating to the sale of the Shares (the "Prospectus Supplement"). The Orion Equity Investment is anticipated to close on or about July 3, 2024.

Royalty Agreement

In addition, Orion and the Company will enter into a royalty agreement for a 1% net smelter returns royalty over certain of the Company's properties (the "Royalty"). Dakota Gold will receive total consideration of $182,758.20 for the Royalty.

This press release is for informational purposes only and is not an offer to sell nor the solicitation of an offer to buy any Shares, which is made only by means of a prospectus supplement and related prospectus. There will be no sale of Shares in any jurisdiction in which the offer, solicitation of an offer to buy or sale would be unlawful.

About Dakota Gold Corp.

Dakota Gold (NYSE American: DC) is a South Dakota-based responsible gold exploration and development company with a specific focus on revitalizing the Homestake District in Lead, South Dakota. Dakota Gold has high-caliber gold mineral properties covering over 48 thousand acres surrounding the historic Homestake Mine.

The Dakota Gold team is focused on new gold discoveries and opportunities that build on the legacy of the Homestake District and its 145 years of gold mining history.

Subscribe to Dakota Gold's e-mail list at www.dakotagoldcorp.com to receive the latest news and other Company updates.

Shareholder and Investor Inquiries

For more information, please contact:
Jonathan Awde, President and Chief Executive Officer Tel: +1 604-761-5251
Email: JAwde@dakotagoldcorp.com

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "believe," "expect," "may," "should," "will" and similar references to future periods. These forward-looking statements are neither historical facts nor assurances of future performance and instead are based on assumptions and expectations that may not be realized and are inherently subject to numerous risks and uncertainties, which could cause actual results to differ materially from these statements. These risks and uncertainties include, among others, (i) the size, price and timing of the Orion Equity Investment; (ii) the execution and timing of our planned exploration activities; (iii) our ability to achieve our strategic goals; (iv) the state of the economy and financial markets generally and the effect on our industry; and (v) the market for our common stock. The foregoing list is not exhaustive. For additional information regarding factors that may cause actual results to differ materially from those indicated in our forward-looking statements, we refer you to the risk factors included in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as amended, as updated by annual, quarterly and other reports and documents that we may file with the SEC. We caution investors not to place undue reliance on the forward-looking statements contained in this communication. These statements speak only as of the date of this communication, and we undertake no obligation to update or revise these statements, whether as a result of new information, future events or otherwise, except as may be required by law. We do not give any assurance that we will achieve our expectations.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/214546

FAQ

What is the recent investment made in Dakota Gold (DC) by Orion Mine Finance?

Orion Mine Finance invested $6 million in Dakota Gold Corp. by purchasing 2,344,836 shares at $2.50 per share.

How much of Dakota Gold (DC) does Orion Mine Finance now own?

Following the recent investment, Orion Mine Finance's ownership in Dakota Gold will increase to approximately 9.9%.

Is there potential for further investment in Dakota Gold (DC) from Orion Mine Finance?

Yes, Orion Mine Finance may increase its total investment in Dakota Gold to up to $8.8 million, subject to market conditions.

When is the Orion investment in Dakota Gold (DC) expected to close?

The investment is anticipated to close on or around July 3, 2024.

What is included in the royalty agreement between Dakota Gold (DC) and Orion Mine Finance?

The agreement includes a 1% net smelter returns royalty over certain Dakota Gold properties for a total consideration of $182,758.20.