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Dakota Gold (NYSE: DC) has entered a strategic partnership with Orion Mine Finance that would see the US-listed gold explorer receive an equity investment of $17 million, plus further financial support to grow its South Dakota-based assets.
As part of an agreement sealed Thursday, a fund managed by Orion will purchase over 6.6 million common shares of Dakota Gold at $2.55 per share. Upon closing, Orion would own approximately 7.78% of its issued shares.
Orion has agreed to provide up to $300 million in financing support for the construction and development of Dakota Gold’s assets, or for the acquisition of new assets by the company. Orion also has the right to match the terms of any future financings.
Following the equity investment, Orion will then purchase a 1% net smelter returns royalty over certain public land covered by Dakota Gold’s projects that is administered by the US Forest Service or Bureau of Land Management.
The royalty excludes the company’s private land, where it is currently active with four drills at the Maitland and Richmond Hill projects, as well as certain claims forming part of the the Blind Gold project. Dakota Gold will receive total consideration of $1 million for the royalty.
Dakota Gold’s mineral properties cover 186 sq. km. of land centred around the historic Homestake mine, currently under option from Barrick Gold. The option agreement, valid until 2024, provides for the opportunity to acquire 17.2 sq. km. of surface rights along with access to 145 years of mining data.
The company said it believes that potential exists for the project and its remaining infrastructure to be repurposed for future gold operations, contingent on successful exploration in surrounding project areas such as Richmond Hill and Maitland, also acquired/optioned from Barrick.
