2020 was a year like no other, especially for gold prices. Facing economic volatility, investors flocked to gold for its value-holding properties. With gold still trading above US$1,800 an ounce, the trend looks like it’s set to continue through 2021.

Gold fever is good news for Matador Mining Limited (ASX: MZZ), a gold exploration company with a highly prospective tenure on the Cape Ray shear in Newfoundland, Canada. 

“There is an exploration renaissance in Newfoundland, where most of the Canadian gold companies are seeking to get strategic landholdings,” said Ian Chairman, the Executive Chairman of Matador, during his presentation for The Insider.

The catalyst for the renaissance in Newfoundland was a new gold discovery by TSV listed company, New Found Gold Ltd (TSXV.NFG), which has a valuation in excess of C$600m, despite being at an early stage of exploration.  As well as gold developer Marathon Gold (TSX.MOZ), which has a resource of 4Moz Au and a valuation of around C$500m.  Marathon is located on the same shear zone and approximately 50km along strike from the Matador tenements. 

“Fortunately for us, we already own the largest stake on the Cape Ray shear. We have 120 strike kilometres on what’s turning out to be one of the most prospective and most sought after areas in Canada.”

Matador has an existing gold resource of 837,000 ounces. However, this is only in a 15 kilometre strike range. The company is now focused on exploring the additional 105 kilometre of land which remains untested. .

“For example, there’s an area called Benton within our project that has 191 gram per tonne gold from rock chips at surface, however only two historic drill holes.”

The area is highly prospective throughout Matador’s total landholding, however, has lacked systematic exploration historically. Matador is changing this which has already borne success with the discovery of the Angus project in late 2020, the first new discovery in over 20 years.

“We’ve only had this tenement for two years and we made the Angus discovery, the first [in the area] in 20 years. That is because our exploration team has been stepping up and looking at new targets within that belt. The discovery was 20 metres at 2.4 grams per tonne gold.”

The exploration team has also identified 33 new greenfield targets in the Angus area of which up to 12 will undergo testing in 2021.

“We’ve already done a scoping study for Cape Ray that shows our current gold resource is economic. It’s potentially a 7 year mine plan generating just under 100,000 ounces of gold per year. Most importantly, it provides a very quick payback with a very low operating cost,” said Ian.

“We just need to do the structural targeting and exploration work to identify where we’ve got the highest concentration of gold along the shear zone,” he added.

Although there is a lot of excitement around gold exploration on the belt and in Newfoundland as a whole, Matador is still trading at a discount compared to its peers. 

“We’re trading at $54 ounce for the current resources compared to the average of $150 per ounce. We are undervalued. On top of our current resources, we have exploration upside of controlling the largest strike length on Cape Ray shear, said Ian.”

Matador’s Executive Chairman, Ian Murray, recently joined us for our fortnightly webcast ‘The Insider: Meet the CEOs’. This article summarises some of the information he shared with us during the session. You can watch a full recording below, or you can click here to book into our next session where we will be joined by TechGen Metals Limited, Pivotal Systems (ASX: PVS) and Zenith Minerals Limited (ASX: ZNC). 

‘The Insider: Meet the CEOs’ is a great way to hear directly from the CEOs of fast growing Australian businesses. You will get valuable insights to their industries and companies future prospects.

The Insider: Meet the CEOs – Event Details:

Date: Wednesday, 3rd February Time: 12pm AEDT Format: Online, 3 x 15 minute presentations

This is a free event. Click here to book your spot.

Past performance is not a reliable indicator of future performance.

Sources:

• FT Adviser, Investors are flocking to gold amid Covid-19
• Gold Price, Gold Price Chart
• Junior Mining Network, New Found Gold Intercepts 18.1 g/t Au over 6.5m including 38.7 g/t Over 2.95m in New “Sunday Zone” Discovery in the Appleton Fault Hanging Wall, 2 km North of Keats Zone
• Reach Markets, The Insider: Meet the CEOs – Matador Mining (ASX: MZZ)
• Yahoo Finance, New Found Gold Corp (NFG.V)