Shares in Dateline Resources Ltd (ASX: DTR) are under pressure on Thursday following the release of a new operational update.
At the time of writing, the Dateline share price is down 7.92% to 46.5 cents.
The decline comes despite the company outlining progress at its Colosseum Gold and Rare Earth Elements (REE) project in California.
Here is what the company announced.
Dateline secures second drill rig
According to the release, Dateline has acquired a second diamond drill rig to accelerate its drilling program at the Colosseum project.
The company said the rig has already been mobilised to site and is undergoing final safety checks ahead of drilling.
The new rig will operate alongside an existing contractor-operated rig. Together, the two rigs are expected to support a 12-hole drilling program targeting rare earths elements.
Dateline said the additional capacity will also allow it to test gold mineralisation at the site, including extensions of the North Pipe area.
The newly acquired rig is track-mounted and capable of drilling to depths of up to 1,200 metres. This is expected to provide greater flexibility to access areas where conventional truck-mounted rigs may be limited.
Focus remains on Colosseum project
The Colosseum project is located in California, near the well-known Mountain Pass rare earths mine.
Dateline owns 100% of the project and is progressing both gold and rare earths exploration activities.
Previous work at the site has defined a JORC compliant gold resource. The company is also assessing the potential to expand this resource while testing for additional rare earths mineralisation.
Management said the addition of a second rig is expected to increase drilling activity and lift exploration output across both commodities.
Strong run despite today’s pullback
While today’s share price decline may draw attention, it follows a period of strong gains.
Dateline shares are up more than 100% since the start of the year. Over the past 12 months, the stock has delivered returns of more than 11,500%.
The company currently has a market capitalisation of around $1.6 billion and has recorded large trading volumes in recent sessions.
What to watch from here
With two rigs now operating, Dateline should generate more drilling data across both gold and rare earths targets. This includes work around the North Pipe area and other parts of the project.
The larger program is also expected to improve coverage across the site as drilling ramps up.
Attention will now turn to updates on drilling progress and results from the expanded program.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.