Southern Cross gets stake in Dateline

PERTH (miningweekly.com) – Juniors Southern Cross Exploration and Dateline Resources have struck a deal that will see Southern Cross hold a 43% interest in Dateline, while Dateline will take over Southern Cross subsidiary Gunnison Gold.

Gunnison recently entered into agreements to acquire ownership of CRG Mining and SLV Minerals, which own the old Links mine, in Colorado, and a 50 t/d ore processing mill, respectively.

Gunnison is initially required to make a $200 000 payment for all the issued shares in the two companies, and upon acquiring Gunnison, Dateline will make additional milestone payments of $3-million in two years, and a further $7-million in four years.

Royalties will also be payable to the landowners, indexed to the gold price, but capped at 7% if the gold price is above $1 500/oz. The current net smelter royalty is 1.25%, based on current gold prices.

In exchange for acquiring Gunnison, Dateline will issue Southern Cross with a finders fee of A$250 000 and 25-million options, at a strike price of 4c each, while also reimbursing Southern Cross’s costs.

Dateline will also move to repair its balance sheet by issuing shares to Southern Cross, valued at 1c each, to satisfy the repayment of some A$400 000 owed to the company. Southern Cross will also take 100-million shares in Dateline, also priced at 1c a share, for a total consideration of A$1-million.

Furthermore, Dateline will also undertake a A$850 000 capital rising, priced at 1c a share.

Southern Cross executive director Stephen Baghdadi said on Wednesday that the investment in Dateline was in line with the company’s strategy of pursuing equity investments in precious metals projects and companies, and investing in projects directly.

“The shareholding in Dateline gives Southern Cross very meaningful exposure to a near-term producing gold mine with immediate expansion capacity, and in a proven mining district in Colorado. Significant value can be added by Dateline scaling-up production and undertaking an aggressive exploration programme across the property.”

The transaction is subject to Dateline shareholder approval.