Dateline reloads with $35m to fast-track US gold play
Brought to you by BULLS AND BEARS
Doug Bright
Dateline Resources has sent a clear signal to the market that it means business by locking in a $35 million placement as the company looks to complete a bankable feasibility study (BFS) and accelerate its Colosseum gold project in California toward production.
According to the term sheet, the company issued 112.9 million new shares at 31 cents each; This represents a modest 7.8 percent discount to the 10-day volume weighted average price (VWAP).
Shaw and Partners acted as sole bookrunner, and the issue was well supported by existing shareholders and institutional investors, according to Dateline.
The new funds were allocated for completion of the fiduciary feasibility study, early site studies, long-term items, hiring of senior executives and general working capital.
Dateline Resources managing director Stephen Baghdadi said: “This capital enables us to act decisively to advance development, expand drilling and test deeper targets while advancing the potential U.S. listing strategy. Our focus remains on direct execution and creating value for shareholders.”
The company’s Colosseum project is shaping up to be a textbook example of location, timing and leverage all aligning with the stars.
Located just north of MP Materials’ Mountain Pass operation (the only mine producing rare earths in the United States), the facility benefits from a mining-friendly jurisdiction with infrastructure, workforce and history to boot.
However, the gold price, which hit an all-time high of US$4940 (AU$7224) per ounce last night, is likely to shape the project’s narrative in the near future.
The company’s wholly owned mine hosts a solid gold resource of 27.1 million tonnes grading 1.26 grams per tonne (g/t) gold and contains approximately 1.1 million ounces of gold; More than two-thirds of this is in higher confidence measured reserves and specified resource categories.
More importantly, the latest drilling is doing exactly what investors want to see; it expands the mineralization beneath existing pits and provides strong cutbacks that suggest the system may have much more to offer.
Delivered in cores, the drill bit outlines high-grade hits of 62 meters at 2.5 g/t from 26 metres, including a stunning 10.7 meter section grading 7.3 g/t, as well as extensive near-surface runs of approximately 300 meters at just over 1 g/t gold. Together, the results point to a robust, scalable open pit operation.
A scoping study published last year laid the groundwork for the development by outlining a simple open-pit mining operation feeding a two million tonnes per annum conventional leached carbon processing plant. The simplicity of setup will likely support a low-risk path towards production.
During the scoping exercise, an assumed long-term gold price of US$2,900 ($4260) per ounce was used; this yielded a pre-tax net present value of US$550 million ($821 million) with a pre-tax internal rate of return of 61 percent and a discount rate of 6.5 percent.
Additionally, updated figures show a production of 635,000 ounces and total revenue of US$827 million (approximately AU$1234 billion) over the 9-year mine life; It is inevitable that these figures will attract attention in every market.
Since then, the gold price has fallen and rose to US$4940 (AU$7224) per ounce. This increase alone materially improved the economics of the project and added real shine to an already attractive development scenario.
Metallurgical studies also yielded products confirming gold recovery of 91 to 92 percent on a relatively coarse grind size, consistent with historic mining at the Colosseum.
All these factors will de-risk the flowsheet and support the company’s upcoming BFS, which is on track for completion towards the end of this year.
On the exploration front, Dateline plans to continue exploring the broader system for additional breccia pipes and gold extensions, considering the rare earth potential that comes with being adjacent to Mountain Pass.
What adds extra weight to the story is the growing support from the US government. The Colosseum has been flagged as strategically important, and the high-level appreciation underlined the project’s relevance to domestic supply chains at a time when the United States is eager to secure critical minerals, including rare earths and precious metals, on its own soil.
With permits available, a strong economy, rising gold prices and a strengthened balance sheet, Dateline is moving closer to a construction decision.
If the momentum continues, the Colosseum could soon transform from an advanced work to one of the more intriguing short-term gold development stories to emerge from California in recent years.
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Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
