Dateline sells Gold Links to focus on Colosseum gold and REE project
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Dateline can now focus on its strategy to accelerate exploration and development of its Colosseum gold and rare earths project after executing an agreement to sell its Gold Links mine for up to US$7.775m (AUD $11.6m).
The sale of Gold Links gold mine and the associated Lucky Strike processing plant to MW Sorter for a cash consideration of US$2.275m (AUD $3.42m) and performance payments of up to US$5.5m (AUD $8.2m) strengthens the company’s balance sheet, ensuring it is funded to carry out operations at the Colosseum project in San Bernardino County, California.
And to make the deal even more attractive for Dateline Resources (ASX:DTR), MW Sorter will be picking up all liabilities associated with Gold Links and Lucky Strike, a not insignificant amount totalling US$11.8m (AUD $17.75m).
“The new transaction structure for Gold Links significantly simplifies the operating environment for both parties,” managing director Stephen Baghdadi said.
“For Dateline, the removal of all liabilities associated with the Gold Links and Lucky Strike, coupled with new cash, allows us to move forward with a clear plan to accelerate exploration and development plans for the Colosseum Gold Project in San Bernardino County, California, and the Rare Earths prospects on the Company’s property there.”
Nor does MW Sorter’s interest in the company end there.
It has established an affiliated company, MW Sorter Pty Ltd, in Australia that will purchase a 5% stake (worth $955,000) in Dateline via shares that were available as part of the recent Rights Issue shortfall.
Drilling is currently underway at Colosseum with an initial goal of testing for the extensions of the known gold mineralisation location in the breccia pipe.
This work has been encouraging to date and assays are expected soon.
The company also intends to drill REE targets that were identified by surface mapping and gravity survey after it has completed its eight hole drilling program for gold extensions.
Colosseum is located in the Walker Lane Trend in East San Bernardino County and currently has a JORC 2012 resource of 20.9Mt at 1.2g/t for 813,000oz of gold.
Significantly, a substantial portion of this resource is in the highest confidence Measured category (258,000oz or 32%) while another 39% (or 322,000oz) is in the next highest Indicated category, both of which have enough drill density to be converted to reserves at the right gold price and mine plan.
The Walker Lane Trend hosts a number of major gold discoveries, including the 1.7Moz Mother Lode Deposit and the 6.5Moz Castle Mountain gold mine.
Adding further interest, the project is less than 10km north of the Mountain Pass Rare Earth mine, one of the largest in the world outside China.
This article was developed in collaboration with Dateline Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.