- Dateline Resources (DTR) has signed an agreement with Barrick Gold subsidiary LAC Minerals to acquire the Colosseum Gold Mine in California
- The mine is located near multiple significant discoveries and lies just 10 kilometres from America’s only rare earths mine
- Terms of the acquisition include Dateline replacing US$756,880 (roughly A$976,443) in reclamation bonds and paying US$1.5 million (roughly A$1.9 million) after it completes a bankable feasibility study or begins site development to extract ore
- To support the buy, Dateline is launching a $1 million private placement which will issue 400 million shares at 0.25 cents
- In addition, the company has reached advanced discussions to secure a US$6.8 million (roughly A$8.78 million) credit facility from a U.S. lender to support drilling and development at its Gold Links Property in Colorado
- Dateline is up 16.7 per cent and shares are trading at 0.4 cents
Dateline Resources (DTR) is set to acquire the Colosseum Gold Mine in San Bernardino County, California.
The gold miner has struck an agreement with Barrick Gold’s wholly owned subsidiary, LAC Minerals, to acquire the 83 mining claims that host the Colosseum Gold Mine and surrounding areas.
The mine
The Colosseum Gold Mine is located on the Walker Lane Trend which hosts multiple substantial discoveries such as Equinox Gold’s 6.5-million-ounce Castle Mountain gold mine. Colosseum is also situated just 10 kilometres from MP Materials’ Mountain Pass Mine which is America’s only rare earths mine.
Between 1988 and 1993, the gold mine produced 344,000 ounces of gold at an estimated head grade of 2.5g/t gold.
In the early 1980s, BP Minerals conducted exploration at the mine, which included 166 reverse circulation drill holes and three diamond holes with multiple holes ending in mineralisation within the breccia pipes.
“The acquisition of the Colosseum offers the company a significant opportunity to develop a substantial additional resource base,” Managing Director Stephen Baghdadi said.
The terms
Under the agreement, Dateline will deposit US$500,000 (roughly A$645,045) into an escrow account by March 21, 2021. This amount will be released to LAC if Dateline terminates the agreement or if the transactions don’t close by October 21, 2021.
Further terms include Dateline providing the relevant authorities with US$756,880 (roughly A$976,443) in reclamation bonds and paying Barrick US$1.5 million (roughly A$1.9 million) by the time it either completes a bankable feasibility study (BFS), begins site development for the extraction of ore, or sells the properties.
Barrick is also entitled to a 2.5 per cent net smelter return royalty on all future production of any metals from the mine.
In addition, the ASX-lister has agreed to issue the facilitators of the Colosseum Gold Mine with 95 million shares, 150 million options exercisable at 0.6 cents by February 28, 2022, if it gets drilling approval and a further 100 million options exercisable at 0.8 cents by the same date if Dateline delivers an indicated resource of at least one million ounces of gold.
Private placement and credit facility
To support the acquisition, Dateline Resources is planning to raise $1 million through a private placement to sophisticated and professional investors. Up to 400 million new shares will be issued at 0.25 cents by no later than March 19, 2021.
Dateline is also in discussions with a U.S.-based lender to secure a US$6.8 million (roughly A$8.78 million) credit facility. This facility will allow the company to complete underground development work and a drilling program at its wholly owned Gold Links Property in Colorado.
“Negotiations with a financial institution to obtain a US$6.8 million credit facility are at closing stage and when completed will enable the company to advance the development of the Gold Links Project in Colorado,” Stephen said.
Exploration plans
Once the acquisition has been completed, Dateline will review historical data, conduct survey and geophysical work and complete drilling to confirm the estimation of resources and test the depth and extent of mineralisation.
Dateline is up 16.7 per cent and shares are trading at 0.4 cents at 1:28 pm AEDT.