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Matador Mining Limited (ASX: MZZ) – Large Scale Gold Exploration in Newfoundland, Canada

7 June 2023 16:29

The Matador Mining story has come a long way since our first conversation in April 2020. The developing story is now moving into the next phase as the 2023 field season is beginning.

In this episode of Coffee with Samso Episode 176, we are talking to Justin Osborne, Non-Executive Chair and Crispin Pike, the VP of Discovery, sharing the increasing potential of the Cape Ray Shear Zone.

The main story for me is that the company is being realistic in stepping back and looking at what else could be the main game in the Cape Ray Shear Zone for shareholders. Although there are existing resources that are already established, the bold and very smart move is to realise that there is more value that has not been realised.

The decision is the same strategy taken by the founders of Gold Road Resources where they accepted market discontent on the share price and worked on exploring the region for a bigger prize. That would come as Gruyere which is now over 10 million ounces of gold.

 

The Matador Story

Matador Mining listed on the Australian Stock Exchange (ASX) in March 2017. Like all ASX junior mineral exploration companies, there have been many management changes and many projects. My association came in April 2020 with the first Coffee with Samso with the Matador story.

The story has come a long way with the latest announcement highlighting a new Mineral Resources Estimate (MRE) as seen in Table 1 below. (Source: Matador Mining Updates Mineral Resource Estimates for Cape Ray)

 

TABLE 1: UPDATED 2023 MINERAL RESOURCE ESTIMATE | Coffee with Samso | Samso

TABLE 1: UPDATED 2023 MINERAL RESOURCE ESTIMATE

 

Mineral Resource Notes

(Source: Matador Mining Updates Mineral Resource Estimates for Cape Ray)

 

  • Mineral Resources are reported using a cut-off grade of 0.30 g/t gold for open pit and 2.00 g/t gold for underground, and a gold price of US$1750 based on the assumptions presented in Appendix 1 -Section 3 – Mining Factors or Assumptions.
  • The open pit Mineral Resource is constrained using an optimised pit that has been generated using Lerchs Grossman algorithm with parameters outlined in in Appendix 1 -Section 3 – Mining Factors or Assumptions.
  • The underground Mineral Resources are constrained using a 2.00 g/t gold grade shell below the optimised pit based on the assumptions summarised in Appendix 1 -Section 3 – Mining Factors or Assumptions.
  • The Mineral Resource Statement for the Cape Ray Gold Project has been prepared by Trevor Rabb, P.Geo. who is a Competent Person as defined by JORC (2012).
  • Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
  • The Mineral Resources for the Cape Ray Gold Project have been prepared in accordance with JORC (2012).
  • The number of metric tonnes and contained gold ounces are rounded to the nearest thousand. Any discrepancies in the totals are due to rounding.
  • Mineral Resources for the Cape Ray Gold Project have an effective date of 22 February 2023.

 

One of the most important parts of Matador Mining is that B2 Gold made a strategic investment into the company. A blue ribbon gold miner taking a stake in the story has got to be good news to existing shareholders and those looking at Matador as an investment.

 

The Projects

 

Matador Mining has a portfolio of projects that undoubtedly sits in one of the few Tier 1 regions in the world. The Cape Ray Shear Zone which has a strike of over 120km of potential mineralisation hosts several projects which would have been a flagship project in their own capacity (Figure 1).

Figure 1:  The Cape Ray Shear Zone Project with associated prospects. (Source: Matador Mining Limited) | Coffee with Samso | Samso

Figure 1: The Cape Ray Shear Zone Project with associated prospects. (Source: Matador Mining Limited)

 

According to Crispin Pike, the current exploration season will focus on the Malachite prospect and it should be interesting. The previous exploration phase discovered anomalous gold in surface samples which highlights the perspectivity of the area.

 

One of the points to remember about the Matador projects is that there has not been any serious exploration in the region for decades. For this reason, the opportunity for Matador to make discoveries remains high. The resource at Marathon Gold (5.1M ounces Au) and Big Ridge (0.9 to 1.4M ounces of Au – see Figure 3) is a clear sign that decent mineralisation does occur. Matador owning 800,000 ounces of Au is proof that there will be more to discover.

 

The Hermitage Project (Figure 3) is what makes me think that the exploration strategy that Matador is embarking on is the correct one. Hermitage, in my opinion, could be a multi million ounce project as it has the hallmarks of a fertile system. Structurally, it looks positive, geochemically, the association of Antimony and Arsenic is common in large sulphidic gold systems.

 

As always, the proof is in the pudding and I am keen to see work done on the project. Looking at Figure 3, the magnetic imagery looks promising and from my conversation with Matador, they are excited to get on the ground as well. They can see the potential.

Figure 2:  The Hermitage Project. (Source: Matador Mining Limited) | Coffee with Samso | Samso

Figure 2: The Hermitage Project. (Source: Matador Mining Limited)

 

Samso’s Conclusion

 

What Matador represents for shareholders and potential shareholders is a repeat of the Gold Road story. The strategy of taking a step back to look at exploration to create more value with discoveries to supplement the existing resources is one from the books of Gold Road Resources. It is no surprise as the management are one and the same.

 

When you look at Figure 3, it helps speak the path the company took and the rewards that came with that process.

 

The move to exploration is a bold move but it is the only way to realise the potential of the Cape Ray Shear Zone. Don’t forget the Hermitage Project is soon to come online and that could bring in an injection of value that has not been discussed greatly in the market.

Figure 3: Gold Road share price chart for the last 20 years. (Source: Market Index) | Coffee with Samso | Samso

Figure 3: Gold Road share price chart for the last 20 years. (Source: Market Index)

 

When I look at Matador, I cannot help but think of the long journey and the test of funding to create value from a strike of 120km in an area that has had little to no mineral exploration. There are very few Tier 1 regions in the world where you have this opportunity. It is good to remember that the easy pickings are all gone, which leave many projects isolated and unloved due to the nature of the mineral exploration process.

 

Historically, the discoveries all come from two pools of situation – one is the easy pickings, the projects where explorers literally kicked the mineralised rocks while walking about the project area. The second is from projects that have been overlooked, projects that were labeled as “All the Exploration has been Looked At”, or the area is too expensive.

 

Hence, in conclusion, my thoughts are that Matador has got itself a great project and it seems that corporately, the big boys are finally investing in the story. The introduction of B2 Gold as a strategic partner is a clear sign that there is belief outside management of the perspectivity of Matador Mining Limited.

 

Chapters:

 

00:00 Start

00:20 Introduction

01:25 Overview of Matador’s mining jurisdiction.

02:39 A rundown on Matador Mining’s 2023 exploration program.

04:01 Matador Mining focused on Cape Ray Shear Zone and Hermitage.

06:40 Discussion about pivoting to regional exploration.

15:37 The cover in Malachite.

17:13 The strategy of exploration in Malachite.

21:33 Challenges with seasonal exploration programs.

23:43 How does Matador prioritise projects?

28:28 Geophysics in leading the path to discovery.

30:09 The Hermitage Project.

36:31 News flow.

37:54 Why Matador Mining?

40:24 Conclusion

 

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