How Does a US$2,900 Gold Price Transform Colosseum’s Value to US$550M NPV?

Project Overview and Resource Base

Dateline Resources Limited (ASX:DTR) has released an updated scoping study for its 100% owned Colosseum Gold Project located in San Bernardino County, California. The project boasts a JORC-compliant mineral resource estimate of 27.1 million tonnes grading 1.26 grams per tonne gold, equating to approximately 1.1 million ounces of gold. Notably, over 67% of this resource is classified within the higher-confidence Measured and Indicated categories, providing a solid foundation for development planning.

The Colosseum deposit is situated within the Walker Lane Trend, a prolific mining district, and lies less than 10 kilometres north of the Mountain Pass rare earth mine. The geology suggests potential for rare earth elements, adding an intriguing dimension to the project’s future exploration upside.

Economic Enhancements from Revised Gold Price

The updated scoping study incorporates a revised gold price assumption of US$2,900 per ounce, up from the previous US$2,200 per ounce used in the October 2024 study. This adjustment has materially improved the project's economic metrics: total sales revenue is projected to increase by 32% to US$1.77 billion, net revenue before tax more than triples to US$827 million, and the before-tax net present value (NPV) at a 6.5% discount rate surges by 234% to US$550 million. The internal rate of return (IRR) also nearly doubles from 31% to 61%, underscoring the project's enhanced financial robustness.

These figures are based on an open pit mining scenario with a planned throughput of 2 million tonnes per annum and an average gold recovery rate of 92%. The mine life is estimated at 8.4 years, with total gold production of 635,000 ounces. Capital expenditure requirements for pre-production are estimated at US$152 million, including working capital, with additional sustaining capital and closure costs factored into the economic model.

Mining and Processing Plans

The preferred mining approach is an open pit operation targeting both the North and South Pipes of the deposit. The study favours selective mining using hydraulic backhoes and articulated dump trucks, supported by a suite of ancillary equipment. The processing plant design builds on the successful carbon-in-pulp (CIP) plant that operated on site from 1988 to 1993, scaled to handle the increased throughput with modern enhancements including filtered tailings co-disposal with waste rock to reduce environmental footprint.

Grade control will be a critical operational focus, employing reverse circulation drilling ahead of mining benches to optimize ore recovery and minimize dilution. The study also explores opportunities to sell previously mined waste rock as aggregate, potentially improving project economics by capitalizing on regional construction demand.

Infrastructure and Approvals

Colosseum benefits from existing vested mining rights and an approved Plan of Operation, facilitating a smoother path to recommencement. The site is accessible via a 16.5-kilometre road from Interstate Route 15, with proximity to regional infrastructure including the Ivanpah Solar Facility, which is expected to supply power via a new 60 kV line. Water supply options are under review, with historical wells in the Ivanpah Valley previously serving the site.

Environmental and social impacts have been addressed in prior Environmental Impact Statements (EIS) and remain a baseline for the project. The company plans to undertake further detailed studies during the Definitive Feasibility Study (DFS) phase to ensure compliance with contemporary standards and community expectations.

Risks and Next Steps

Key risks identified include variability in mining costs, confidence in inferred mineral resources, geotechnical assumptions for pit slopes and waste rock emplacement stability, and the availability and terms of project funding. While the updated scoping study provides a compelling economic case, it remains at a preliminary level with an accuracy of approximately ±35%. The company acknowledges that further drilling, metallurgical testing, and detailed engineering studies are required to advance the project to bankable status.

Dateline plans to proceed with a Project Selection Study followed by a DFS focused on the open pit only scenario. The DFS will refine mine plans, optimize processing, confirm infrastructure requirements, and update financial models. Funding of approximately US$152 million will be sought through a combination of equity and debt, though no formal discussions have yet commenced.

Overall, the updated scoping study significantly strengthens the Colosseum Gold Project’s investment appeal, leveraging a higher gold price environment and existing project infrastructure to outline a clear development pathway.