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.