Taking Stock of DTRC’s Risk Factors Post FY2021 Results


Dakota Territory Resources Corp. (DTRC) is an exploration stage company that engages in the acquisition, exploration and development of gold properties in the United States. Let us take a look at the company’s financial performance and what has changed in its key risk factors that investors should know.

Dakota Territory Resource Risk Factors

According to the new Tipranks Risk Factors tool, DTRC’s main risk category is Finance & Corporate, which accounts for 53% of the total 32 risks identified. The next two major risk factor contributors are Production and Legal & Regulatory at 28% and 9%, respectively.  Since March, the company has added nine new risk factors and removed two.

Under Finance & Corporate risk category, the company acknowledges that some of DTRC’s directors and executive officers may have interests in transactions that are different from the interests of the company’s investors.

In May, DTRC entered into a merger agreement with JR Resource Corp., which is its largest investor (The combined entity will be called Dakota Gold Corp.). If the merger does not get completed in a timely manner, it may impact DTRC’s shares, business and financial condition. While this merger is pending, DTRC remains exposed to certain business uncertainties and contractual restrictions.

Additionally, any future litigation may prevent this merger from occurring or adversely affect the company. If the merger is not completed on or before December 31, 2021, either of the parties may terminate the agreement.

Another key risk added by the company is under Tech and Innovation category. In the present scenario, cyberattacks are getting increasingly complicated and sophisticated. This threat poses a risk to DTRC’s systems, data, business, and relationships with third parties.

Financial Performance

DTRC is in the exploration stage and does not generate revenue from operations yet. In fiscal 2021, its exploration costs increased to $674,000 from $100,000. Its general and administrative expenses were $1.16 million versus $1 million a year ago. DTRC’s net loss in fiscal 2021 was $3.16 million compared to $1.11 million in fiscal 2020.

For fiscal 2022, DTRC expects to incur total exploration expenditures of $13.4 million. Of this, $3.8 million is for property acquisitions and $6.2 million for drilling and field programs. (See Dakota Territory Resource stock chart on TipRanks)

Bottomline

Compared to the sector average Finance & Corporate risk factor of 35.5%, DTRC’s is at 53.1%. This indicates that owning the stock is risky versus the broader sector. Shares have gained 197% so far this year.

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