Dateline Resources (ASX:DTR) has officially begun seeking a JV partner for its Colorado-based US Gold Links mine overlying the Colorado Mineral Belt, a move confirmed by the company’s chairman in an address to Dateline’s 2022 AGM.
In short, the company is seeking to collaborate with a JV partner to allow Dateline access to a greater pool of financial and technical resources to accelerate development of the existing underground mine on-site.
Back in June, Dateline secured a 100% offtake agreement with multinational commodities player IXM; the company now sends the latter its gold-in-concentrate product from Gold Links on a monthly basis to be smelted.
The June order was valued at $1.5m and remains an ongoing revenue stream for the company.
However, Dateline management sees an opportunity to boost annual gold output from Gold Links, and teaming up with another party to develop the underground assets on site is where the crow is flying.
Since last year, Dateline has been working on expanding the underground mine to build accessways for rubber tyred vehicles; underground diamond drilling is already being successfully completed in the mine.
Chairman Mark Johnson was clear in describing unforeseen difficulties at Gold Links, despite ongoing success with sales offtake.
The company moved to an owner operator model early in the year to circumvent issues related to a labour shortage, Johnson outlines, a decision also fuelled by rising contractor costs.
The downside here was that Dateline had to fund its own exploration drill and mining fleet, for which it chose Komatsu as a provider. Supply chain disruptions through the year, however, saw that equipment delivered to site later than expected, not making it to Gold Links until late August.
Underground mining development has been rolling out at a slower pace as a result of this, Johnson added, and added financial strain onto Dateline’s books for H2 of 2022.
The gold mill attached to Gold Links, called Lucky Strike, was also exposed to strife through the year as a selected contractor overseeing underground drilling was eventually subject to a contract termination on failure to comply with original obligations, namely, on how long the job would take.
A protracted development schedule led to Dateline incurring further employee costs.
As a result, “the directors of [the company] believe an organisation with access to greater final, technical and operating resources is required to accelerate the project towards desired production targets,” Johnson said.
“Notwithstanding the challenges faced, productivity in the Gold Links mine is good and increasing, and gold grades per tonne are exceeding expectations.”
Johnson added milling operations towards the targeted 250tpd output remain feasible, assuming the company can bring in a second party to drive progress forward.
The good news (not that any of the above is particularly bad news as far as mines can go) is that Dateline’s other project in California, called Colosseum and boasting a gold resource of 813Koz, continues to run smoothly.
That resource stands to be increased in the near to mid term future, as recent drilling at Colosseum found gold outside the known boundaries of gold deposits on-site that comprise the existing JORC resource.
Drilling towards this end will take place in the first quarter of 2023.
Also worth noting is that Dateline has recently had success finding rare earths at Colosseum, for which it logged multiple drill targets back in August; those targets will be drilltested in the same Q1 2023 campaign.
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