Dateline Resources has announced a massive gold acquisition, picking up the historic Colosseum gold mine in California from Barrick Gold Corporation.

Colosseum, in San Bernardino County, is a significant addition to Dateline’s (ASX:DTR) North American project portfolio. The company already owns the Gold Links and Green Mountain Projects in Colorado.

In Colosseum, it adds a historic mine which produced approximately 344,000 ounces of gold between 1988 and 1993 from a historically calculated mining reserve of 700,000 ounces, based on a 1.0g/tcutoff grade and a 2.5g/t gold head grade.

The reserve was calculated by a wholly owned subsidiary of BP Minerals, which owned and explored the project between 1979 and 1984.

Gold production kicked off in 1988 under the ownership of Bond International Group, which was later taken over by LAC Minerals who would shutter the project in 1993. The price of gold was below US$350/per ounce when the Colosseum mine stopped production.

The project was mined for just half of its planned nine-year mine life, and LAC was taken over by Barrick in 1994.

Colosseum’s mineralisation is primarily hosted in breccia pipes and is reportedly open at depth. It sits on the Walker Lane trend, which has played host to a number of substantial discoveries including the Corvus Gold-owned 1.7Moz Mother Lode deposit and the 6.5Moz Castle Mountain gold mine owned by Equinox Gold.

The location of the Colosseum gold mine. Pic: Supplied.

America’s only rare earths mine, the Mountain Pass mine owned by MP Materials, sits 10km from Colosseum.

The deal for Colosseum will see DTR acquire the 83 mining claims which host the mine and its surrounding areas – around 1600 acres – in exchange for the following:

  • Dateline will deposit US$500,000 into an escrow account by March 21, with this amount to be released to Barrick in the event Dateline terminates the agreement or the transactions contemplated do not meet the drop-dead date of October 21 this year. This money can also be used to defray certain costs until Dateline replaces the reclamation bonds.
  • Dateline will cover the required reclamation bonds of US$756,880 to the relevant authorities.
  • Dateline will pay Barrick $1.5 million on the earlier of the completion of a bankable feasibility study, the commencement of side development for the extraction of ore, or the sale of the project.
  • Barrick is entitled to a 2.5% net smelter royalty on future production of any metals at Colosseum.
  • The transaction meets standard closing conditions including corporate and government approvals.

Dateline will also issue the facilitators of the deal a fee payable in company shares.

Raising further funds

To help fund the Colosseum acquisition and general working capital, Dateline has received binding commitments to raise around $1 million through a share placement.

The Company has also announced it is in advanced discussions with a US-based lender for the provision of a credit facility worth around US$6.8 million to fund the proposed underground development and drilling program at Gold Links.

Managing Director Stephen Baghdadi said Dateline had made serious strides in its US ambitions.

“The Company has taken significant steps to build shareholder value in North America,” he said.

“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.

“The acquisition of the Colosseum offers the Company a significant opportunity to develop a substantial additional resource base.”

 

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.

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