One and welcome everybody to another smart money circle show.
I'm Adam, sorry. And with me today is Jonathan
Aude, who serves as President, CEO and Officer at the Dakota
Gold. Ticker symbol is DC.
Jonathan, thank you so much for coming on the show today.
It's a pleasure to be here. Thank you very much.
So Jonathan, I always like to begin.
Can you tell us a little about yourself and how you got to
where you are today, please? Sure.
So my background is is Capital markets and finance.
Double major in economics and finance and I spent over 20
years in the mining industry, had 3 1/2 years at a brokerage
firm in Vancouver that really had a historical presence in
financing small cap metals and mining.
In 2010, I founded a company called Gold Standard Ventures,
which was recently just acquired by Orla Mining.
It's got an oxide E leach project in Nevada.
And then in 2000, late 2020, early 2021, Co founded Dakota
Gold Corp with Bob Quartermain, mining legend and Jerry Abilene.
And we are a NYSC listed company with a very specific focus on
revitalizing the home state district in Leeds, South Dakota.
Beautiful. Well that's a great story.
Thank you so much for sharing it.
I love the transition from capital markets or traditional
finance to gold specifically. Just out of curiosity, what led
you to gold and not somewhere else?
Well, so I've I've always actually had an interest in in
collecting coins and cards like hockey cards, baseball,
football, basketball. So that's where I've always kind
of parked some money. And it's it's more of a hobby
where I've always, when I was starting on my 3rd and have a
lot of money, you know, I would buy you know 1/2 ounce coin or
A1 oz coin. But I do believe in having you
know some kind of insurance. And you know I've always felt
very strongly that gold is a good store of value.
And you know when you look at what's happening in the world
right now with you know debt situations and and governments
not able to balance budgets when you have.
When you're at or near full employment, really interesting.
And I think every portfolio should have some exposure to
gold. Yeah, I love that.
I couldn't agree with you more. I just read somewhere.
Hold on, let me show it to you. To your point, it said it's been
60 hours since the US debt crossed 33 trillion and it's
already up another 50 billion with a B.
That means we've added $833 million in debt per hour since
the US debt crossed 33 trillion. I mean, it's just mind boggling.
So I'm a big fan of gold as well.
Go ahead if you, If you. And and you know when you look
at what's happened with interest rates, it's it's the fastest
tightening cycle in in almost 50 years.
And now the US just the service is debt has crossed through a
trillion dollars a year just to service its debt.
So if if if we do go into a soft landing or God forbid to go into
a hard landing and rates are still at these levels.
You know, you could be spending upwards of $1.5 trillion
annually just to service your debt.
So at some point, at some point that's going to need to rectify
itself and you're seeing this major shift away from gold being
owned in the West to to the east.
You're seeing record central bank buying and and China and
India. And you know, you're seeing
these countries say, you know what, we're not going to buy US
treasures anymore. And there's been this, this
shift away from. Settling transactions in the US
dollar, you know, even though the US dollar is, you know, will
still be the world's preserve currency for several decades.
But you'll see a gradual erosion of transactions settling U.S.
dollars. Yeah.
And then it replaces with gold and other things that that's
what you're saying, correct. Yeah.
OK, beautiful. So what Let's talk about Dakota
again. Let's talk about some specific
competitive advantages. I know that you're still tell
people if you can early stages in developmental phase, the
exploration phase, please speak to tell us about Dakota please.
Sure. So, so you know, the Homestake
mine in Leeds, South Dakota is still to this day the largest
single gold mine in the history of the US.
So 40 million ounces of gold came out of this mine.
And so when we put this company together, we merged with a
company called Dakota Territory Resource Corp that was a public
company. We had a small land package
about four and a half, five miles north of the old mine.
But what it had was the last mine manager, the Vice President
of exploration. So you had this local knowledge
and expertise that that just didn't really have access to
capital. So we saw an opportunity to to
to merge with this public company, but then also to grow
the land package significantly from about 5000 acres to almost
50,000 acres and very importantly.
We have 14,000 acres of our 50,000 acre land package that's
on private ground. So from a permitting standpoint,
permitting on private ground is by far the most advantageous
from a timing perspective because you're seeing now on US
Forest Service or BLM where you have to involve the federal
government. We're getting a permit can take
five, 6-7 years. So having again having a private
land. We're having a project that has
a grant farther permit that requires a simple amendment puts
you in a much stronger position than others who are on US Forest
Service or PLM. I love that.
And then from a valuation standpoint, our research hence
is connecting was you guys are extremely undervalued.
You've got a tremendous amount of room for growth.
Let's say Fast forward if you can, five years or 10 years,
things hit even at current gold prices.
Forget the fact that gold is extremely undervalued as well
and likely to go higher. Can you talk to us about
potential or what could happen or what could unfold?
Sure. So we we completed the merger on
April 5th of 2022. We changed the name from Dakota
Territory Resource Corp to Dakota Gold Corp up listed to a
nicey American because we felt this opportunity was befitting a
full blown US listing and when we started drilling last year.
Our, our number one objective was, you know proof of concept.
We wanted to prove to the market that there was mineralized
Homestake formation along this corridor.
Our Maitland project, which was the first transaction we did
from Berwick is contiguous with the old mine and we did that.
And then we've made two discoveries, 2 very key
discoveries out of Maitland project, which again is
contiguous with the old Homestake mine.
So we we've discovered this this zone that we called the JV zone.
Which is in their lives home state formation to the same host
to what home state was mining for 125 years and similar
grades. And but I think potentially as
interesting or more interesting, we found a a new discovery, a
second discovery in a different rock type that typically sits
much shallower and closer to surface and we called that the
Unionville zone. Which was actually the original
name of the of that plane in 1876.
So with every drill hole we drill on our Maitland project we
have, we have an opportunity to hit both kinds of mineralization
which is fantastic. And again Maitland is on is on
private ground and it's contiguous with this 40 million
ounce generational orbit. And then what about the cost of
the gold coming out per oz? What does that look like?
Cuz I know with oil a lot of big talk is out cost them $30.50
dollars whatever it is. How does that work with gold?
So again, so right now we're still in the expiration
development phase, but this was an iconic gold mine that
produced for 125 years, so from you know, 19. 90 to 2000 when
bull was that sub $300.00 really challenging time for the gold
industry. You know they kept chasing this
ore body down below 8000 feet, so they ultimately decided to
shut the mine down in 1996. The last production came in 2001
and you know it, it basically sat so.
So Barrick, the second largest gold mining company in the
world, bought Homestake Mining in 2001.
The transaction closed in O2. And right away went into
barracks closure group. So we bought these assets from
Barrack out of their closure group.
And this will be the third transaction in the last five
years that Barrack has done out of the closure group under the
newly combined Rangold barrack led by Mark Bristow with the
other two companies being Skena and K92.
Skena is just under a billion dollars and K 92 is about 1.5
billion and. But again, just having the
opportunity to somewhat control your own destiny by having
private ground in a previously disturbed area historical mining
community is hugely advantageous.
Yeah, No, I fully couldn't agree with you more from a dollar
standpoint, you're talking about a rough estimates, not you
specifically industry wide to pull the mine out of the ground,
what are the norm, is it half of words trading, is it a third, is
it at what is trading just so understand the margins and the
potential for growth. So I would say the, you know the
companies with with high margin assets in the lowest quartile
would be you know sub $900 what's called ASIC.
So all in standing, cash loss. So that's where the Creme de la
creme, so you've got $1000 margin with with best deposits.
Some of the higher margin assets are in that 14 to $1500.
So you still have say a 20% margin which is which is not
bad. Yeah.
But this was a high grade bond and it's, it's a very like
contiguous ore body. So once you get into it, it's
then a function of following it north-south, east or West.
And that's kind of really what we're doing now.
We made this discovery. We're utilizing what's called
directional drilling. So we'll have much tighter
spacing. But again, with every hole we
draw on our mainland project, we have an opportunity to hit this
tertiary epithermal discovery and then homestay formation
underneath it, which is, which is fantastic.
Yeah. And that gold is trading above
1900 an ounce, but you're talking about just big, big
money there that that makes a perfect plan.
Thank you for that. So let's shift the conversation
a little bit and talk about some timeless lessons you've learned
along the way. You come from finance,
background investing. You also CEO of publicly traded
company. You've done M and A mergers and
acquisitions. You've bought something.
I'm interested to see what you have to share with us please.
Yeah. So, so is as, as you know, this
is a very simple business, right.
So the time to buy assets is when everybody wants to sell
them. But that's also the most
challenging time to raise capital because it can be in
your cost of capital can be more expensive.
So one of the lessons that I learned very early on was was
you know one of the reasons why a lot of companies fail in this
industry is being undercapitalized and and that's
less you can apply to almost any industry.
And, you know, so I was involved with a company earlier on in my
career that ran into some financial difficulties and the
company was in a heap of financial trouble.
And that's where I, you know that lesson of being you know
almost overly capitalized because the mining industry
things you know kind of take longer, they cost more and you
just you just don't know what can happen.
And so being flat footed and undercapitalized again is is
something that I just I when I got into running Gold Standard
and then Dakota Gold it was I always wanted to be in a strong
financial position relative to my entire peer group and we are
in that category today. And also aligning yourself with
the right people. You know, I was very fortunate
enough to have met Bob Quartermain back in 2010.
So Bob was founder, president, CEO of Silver Standard, which he
grew from two and a half million to 2 1/2 billion.
He left in 2010. It's currently a $4 billion
company. And then one of the more
oppressive things that you'll see anywhere in the world in the
mining industry is. 2010 Eleven Bob acquired an asset called
Bruce Jack from Silver Standard formed a company called Prettium
and from acquisition to discovery to gold pour in under
seven years and came in and bought new Newmont came in and
bought well new Crest but new Crest bought this Prettium for
3.5 billion you know so having an opportunity to learn with and
partner with someone like Bob Quartermain who's one of our Co
chairs. And a lot of sheller is, is
fantastic and just surrounding yourself with the right people.
And because I'm not a geologist or mining engineer, surrounding
yourself with people who let the data do the talking and don't
get influenced by, you know, bankers and and and just tell
you the truth, There's a lot of promotion.
There's a lot of arm wave. There's a lot of trying to make
an asset work where it shouldn't and that's where I think.
You know Bob's one of his principles is just if you test
the target and it's not there, why are you, you know, why do
you keep drawing so, so being being aligned with shareholders,
you know having skin in the game, you know there's far too
many management teams that don't have any money at risk.
So I think, I think you know management of of Dakota owns
over 25% of the company and. You know we've got two
phenomenal Co chairs and and and Bob Quartermain and Steve
O'Rourke. So Steve actually equally as
impressive he ran global expiration for BHP where he had
annual budgets for petroleum annual budgets that were in the
billions. So you've got this large
commercial expertise, you've got M and A capital markets.
So you know 22 excellent resources to to have my
fingertips. So very blessed to have them
involved and just understanding that this is a long term
business and you have to understand how to navigate
cycles. But when you're buying assets,
when you buy assets is really, really important.
So having capital, having people who will support you in addition
to the your own capital you're going to put in is really,
really important. I love that.
That's really, really powerful. And what about some timeless
mistakes you've made and and or seen other people make and how
do you avoid them besides being undercapitalized because that's
happened to me and countless others.
And the fact that you've been able to come through that by the
way, you know I'm still standing like Elton Johnstone that that
that's what I love that. So by all means.
Don't don't ask me the other day, all right?
If you were to go back in time for you know mistake that you
would eat and own for gold standard, what would it be?
So we made, we made three discoveries at our lab package
in the Carla Trenton, Nevada for gold standard and we had an
opportunity to buy water rights back in late 2015, early 16.
We've just gotten into this new oxide discovery that was
exciting and I had a budget from my board of I think up to
4,000,000 bucks, maybe a 3 1/2 or 4,000,000 bucks.
And so we're negotiating for these water rights.
And Sky wanted, you know, 10 million bucks.
Oh my gosh, And just just couldn't get there.
And I think I convinced the board maybe get me to 6 but then
I went to six, he went to 12. And you know now the company
that that acquired gold Standard Ventures is a is a multi billion
dollar company, phenomenal operators they they built a mine
during COVID on time under budget and you know they're
they're still looking for you know to to to secure the water
rights and it'll be likely several times what what was what
we were looking at. But again, big company that
afford it. So I think just with with things
like that that you need, you know I shouldn't have wasted
time, but at at the time I think we had $25 million in the bank.
So it would have been a significant portion of our cash.
They weren't willing to take shares.
So understanding those kinds of key items that you need to
permit, build a mine, don't waste time, just do smart.
Yeah, the KPI is like the key metric that you need to look at.
If it's necessary, just hit it and do it and then move forward,
yeah. Because in some jurisdictions,
sometimes the water is worth as much more than the gold, right?
Right. That was a key lesson for me.
And just the more I get involved in this industry, there's so
many key parts of what makes something successful.
And when you're looking at expiration, again, I talked
about being capitalized. Understanding again particularly
if you're in the US or in Canada, there's you know, First
Nations, Native American issues, you have to understand what that
looks like. And again because this is a very
long term business, you don't want to make it longer by taking
on unnecessary permitting risk. So I think you know, staying
away from, you know, especially in the states, staying away from
areas where there's proximity to water, I think when you look at
dealing with federal lands close to water it's it's almost
becoming a no fly zone. And that's why South Dakota is
such a great place to be. I mean this is, this is a really
significant, you know gold area, one of the largest
concentrations of gold anywhere in the planet.
So it's, you know, it's people, it's it's capital, it's
jurisdiction, land, tenure permitting.
And with ESG now it's it's if you don't have strong community
ties, great reputation in in in the community, you're not going
to get a social license to operate.
So I think, I think SG is really, really important for any
jurisdiction, but but obviously having a bias particularly in
the US, I love that. That's really, really powerful.
What about leadership? Let's shift gears and talk about
leadership. What makes a great leader?
And what are some lessons you've learned about leadership that
you'd like to share with the audience, please?
Well, hiring really, really smart people and not
micromanaging, making sure that your overall strategy and the
strategic outcomes you're looking to achieve, you're all
aligned. But I mean, you look at someone
like James Berry, who's our Vice President of Exploration.
James is an orified, James has found gold everywhere he's gone.
You know, James was vice president of exploration for a
company called Remark on Minerals that did sort of a
similar thing in in South Carolina and that was bought by
Oceana Gold for almost a billion dollars.
So you know, James and I will talk almost every day.
You know, Jerry Abery was the last mine manager when the mine
shut down. So this is, this is someone who
understands, you know how to develop something in this
district as good or better than anyone on the planet.
You know, I brought over Patrick Malone from Barrack who was
running their closure group to, you know, be our Chief
Sustainability Officer. So this is an environmental
lawyer who understands how to navigate liaise with with
different state and federal agencies.
Just a wonderful resource and then having having two cochairs
like Bob and and you know quarter man and Steve O'Rourke
you know they they both put the shareholder first.
You know it's it's imperative for them to look at is this the
best allocation of our resources and are we aligned with our
shareholders because if you if you do those things over time
these, these are magnifiers, but just hiring amazing people.
Making sure that you're aligned and not micromanaged.
And one of my a book that I read that really helped change the
way I I look at how to run a company or how to run my life
because I'm married with four kids Is is was book called The
Principles by Ray Dalio. I love that book.
It's. One of my favorites.
Oh my. And it's, well, radical truth.
Radical transparency, but also meritocracy.
Just because I'm the CEO and a big shareholder, Jerry or Bob,
you know sometimes there's always a a, you know, a more
efficient way or a better way to do things and there's being able
to tell someone, hey, I disagree with you for For these reasons.
You talk, you work through it and you move on and you don't
get all sensitive and entitlement and and there's
there's a lot of that in the world today able to have a
transparent discussion with someone for the for, for, for
the greater good of the company, right.
I think it's something that, you know that's certainly principles
that I live by. And then just cost of capital,
cost of capital the mining industry needs to come down.
So we're really focused on that because I mean for example, we,
we did a $50 million financing 2 years ago.
We chose not to pay a Commission and that saved the company $2.5
million. Wow.
I know that makes perfect sense. I love principles.
It's one of my favorite. I always tell people the best
idea wins, right? So it's the matter comes from
the janitor. If it comes from the moon, it
just, you know, what's the best idea and what's wrong with it.
I love that and ultimately the mining industry, but
particularly the exploration development.
So there's there's a constant competition for capital.
So if you've got 10 targets, you might not be able to drill all
10 targets. You have to, you know, be
extremely disciplined and allocate your capital to where
you're having success, right? And if you're not having
success, well, make some adjustments and move on.
And that's okay. But sometimes people get married
to an idea and they keep chasing and pushing it, and that's what
makes some people great. But sometimes, in my opinion,
the great explorers or the great mind builders are able to be
they know when to factor and when to stop and when to keep
pushing and when to stop so. I love that okay.
Beautiful. Let's talk about adversity and
some obstacles. How do you handle adversity and
what are some obstacles that you had to overcome that you'd like
to share with the audience? Look, I think when it comes to
adversity, I mean, I sort of take a head on.
I kind of think I thrive in it. I think in the past I would say
that I wouldn't have gone at it head on.
But I think again you do this long enough and you kind of you
know you really understand these cycles and and you know money
flowing in money flowing out and just that whole sometimes we we
don't listen to those little voices or when that you know
intuitive side of you was saying we shouldn't do this or we
should do more of it. Yeah.
And again, I, I, I talked to you about that company.
I was, I was, I was involved with early in my career that
that ran into money problems. And it did so because because,
you know, there's a principle in the company that didn't want to
take a financing that was deemed to be expensive, but it was, it
would have been a lifeline that would have brought them over,
you know, over the line. No, I love that.
OK, beautiful. So what you're saying with
adversity is just tackle it like deal with it, lean into it
opposed to putting your head in the sand and then it just
compounds and gets bigger and bigger and I love that.
Yeah. OK, final question for you.
What's the best piece of advice you'd like to share with the
audience or give your 30 year old self you know be your true
authentic self? You know, I I love what I do so
I don't really consider it work, although my wife and my children
do. But so it's so you know,
constantly be learning, constantly be growing.
You know, surround yourself with amazing people who have had
success and or have learned from failures.
But just be your true authentic self and everything will work
out. But well, Jonathan, thank you so
much for coming on the show. Everybody, this is Dakota, Gold
picker symbol is DC and hopefully Jonathan will speak to
you again soon. Really fantastic.
Thank you very much. Appreciate it.