Dateline Resources (ASX:DTR) is “most likely” to proceed to a Bankable Feasibility Study (BFS) after approving progression to the project selection stage (PSS) for its US-based Colosseum Gold Project.
With total capital costs of US$195 million and a life of mine of 100 months, the project, located in San Bernardino County, California, is forecasted to generate US$398 million in total net revenue and US$1.344 billion in total sales revenue .
With discounted cash flow (6.5%) – NPV6.5 of US$235 million, Colosseum is also expected to have an internal rate of return of 31%. All-in sustaining costs are expected to be US$1,490 an ounce.
Dateline says the completed Scoping Study confirms Colosseum as a robust gold mine development. Recent drilling at the North Pipe and depth extensions outside the mineral resource estimate at the South Pipe “offer opportunities for potential extensions to the mine life, based on infill and extensional drilling to convert into mineral resources”.
Managing Director Stephen Baghdadi says the Scoping Study indicates robust project outcomes using a US$2,200 per ounce gold price.
“The production and development cases assessed were benchmarked against 16 projects with sufficient published information on capital costs and 38 projects for operating costs. Although two cases were assessed, the company is most likely to progress Case 2 to BFS and has commenced discussions with suitable groups in the USA that are capable of completing the BFS,” he says.
“The company will explore ways to further enhance the project economics and capital expenditure during the BFS stage.”
The company says it has reasonable grounds for disclosing a production target given that in the first five years of production, 89% of the mill feed is scheduled from the measured and indicated resource category, which exceeds the economic payback period by 1.75 years.
About 55% of the LOM production target is in the measured category, 26% is in the indicated, and 19% inferred.
Write to Adam Orlando at Mining.com.au
Images: Dateline
