Highly prospective gold explorer looks to add ounces to development ready project

Matador Mining (ASX: MZZ) is the largest landholder in the highly prospective Cape Ray Shear Zone (CRSZ) in Newfoundland, Canada. They operate a exploration strategy over 120km of continuous strike that involves increasing the size of their already existing resource and drilling new greenfield targets.

MZZ has established a resource of 837koz Au @ 2g/t – which Mr. Forwood stated is a “very nice grade”. Importantly, approximately 96% of the precious metal is less than 150 m from surface. The company completed a scoping study in May 2020. At a US$1,700/oz gold price, the project comes with a US$102 million capex but would yield 65% IRR after-tax with an NPV of $259 million. John stated that the study “shows that the project on its own is economic”, but with gold comfortably trading around US$1,900/oz this year – the numbers would look even better. At all-in sustaining cost (AISC) of just US$776/oz, this would make Matador’s Cape Ray project among the lowest cost producers in the world – significantly lower than the GDX average of US$1,281/oz in Q2 CY22.

The company is delaying production until it further builds up their resource, and given their deposit is along strike from Marathon Gold Corp’s (MOZ.TO) 5.1moz gold project – the company believes it will be able to do so. Central to these exploration efforts is the Malachite prospect, which has been prioritised due to its structural and stratigraphic complexity and compelling geochemistry.

As an old glacial terrain, the Lowell boss highlighted that there is “a lot of till and moraine that covers the bedrock geology”. It’s only a few meters thick, but it does mask what’s underneath.

Malachite was the main reason behind B2Gold’s (TSX: BTO, NYSE: BTG) $3.6 million strategic investment in the company, which also came with first right of refusal on future capital raises and joint ventures. While rock chip samples yielded up to 15.3g/t Au, 74.4g/t Ag and >1% Cu, the first round of diamond drilling came back with 1m @ 1.72g/t Au, 6.27g/t Ag and 0.1% Cu from 34m, with the grade reducing to 1m @ 0.5g/t Au from 112m at a greater depth.

The program consisted of 11 holes on a small section of a 60km2 prospective area, with the goal of not only discovering gold but to also understand the source of significant mineralisation. In this regard the campaign was a success after the identification of a significant hydrothermal system associated with veining, gold and anomalous pathfinder geochemistry. The company completed their objectives of testing the interpreted major structures and intersecting bedrock gold mineralisation.

It is expected that much of the company’s 2023 exploration plan will consist of a larger scale RC and diamond drilling campaign across Malachite, with some extensional drilling at their brownfield project as well.

Click here to view more videos from John Forwood’s The Insider: Meet the Fund Manager session, or click here to view the full The Insider: Meet the CEOs session with Matador Mining CEO & MD Sam Pazuki.

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