A bonanza gold hit: Why Dateline Resources sees significant exploration upside

Gold and rare earths explorer Dateline Resources (ASX: DTR) hit a ‘bonanza’ 62.3 metre intersection of 10.28 g/t gold at its Colosseum Mine in the US on Monday. The stock rallied 31% to a fresh year-to-date high of 4.2 cents as the market opened.

The latest drill hit builds on the success of another high-grade hit just twelve months ago, where 100.6 metres at 4.16 g/t gold was intersected.

“The current drilling program is designed to increase the overall gold resource size, both in terms of tonnage and grade. The results from the first hole have yielded a materially higher gold grade than the resource average and bodes well for when the resource is recalculated at the conclusion of the program,” explains Managing Director Stephen Baghdadi.

The Colosseum Project has a Mineral Resource of 813,000 ounces of gold – of which 71% is classified as Measured or Indicated. 

“We recently announced the sale of Gold Links Mine to focus on the Colosseum Mine, and drill intercepts such as this validate the strategy,” he added.

The Colosseum Mine: Building Momentum and Leverage

Earlier this month, Dateline announced the sale of its Gold Links Mine for up to $12 million in cash payments and remove approximately $18 million worth of liabilities (debt and trade creditors).

“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,” Baghdadi said in a statement.

Today’s drill hit coupled with the asset sale has helped Dateline shares almost double in June from 2 cents to 3.7 cents.

Dateline 12-month price chart (Source: Market Index)

Next Steps

The current drilling program consists of eight holes, with the second hole currently scheduled to reach total depth in the coming days. The assays for the second core is expected to be announced over the next 2-3 weeks.

The Colosseum Project is also located less than 10 km north of the Mountain Rare Earths mine, one of the richest rare earth deposits in the world. The company has developed a drill plan to test rare earth targets from last year, subject to the completion of the current gold drilling program. 

If all goes to plan, Dateline says it would be drilling for rare earths in the September quarter.