Matador Mining aims to maximise value of Cape Ray Gold Project

Matador Mining Ltd (ASX:MZZ) executive chairman Ian Murray believes activities in recent months have been critical in positioning the company to maximise the value of its Cape Ray Gold Project in Canada.

He said: “Completion of a share placement to raise more than $8 million, together with the appointments of highly regarded gold industry professionals Justin Osborne and Mick Wilkes, has put the company on a sound footing as we embark on an extensive 12,000-metre greenfield and brownfield exploration program.”

Immediately after the quarter ended on June 30, the company issued 21.4 million shares at a price of 4.05 cents per share (a 44.5 % premium to the 15-day VWAP) to raise the funds.

Board restructure

Murray was previously Managing Director of Gold Road Resources Ltd (ASX:GOR) where he served for over 10 years and was instrumental in taking Gold Road from early exploration through to the fully funded 8.2 million tonnes per annum Gruyere Gold Project, which is forecast to produce around 300,000 ounces per year in a joint venture with Gold Fields Limited (NYSE:GFI).

Non-executive director Justin Osborne is noted within the mining industry as a gold specialist, highlighted by his key role in the discovery and development of the newly operating tier-one Gruyere Gold Mine in Western Australia with Gold Road.

Non-executive director Mick Wilkes served as President and CEO of OceanaGold Corp (ASX:OGC) for a decade, growing the company from a junior producer into a multinational mid-tier gold producer with four operations across three countries.

Successful scoping study

The scoping study for Cape Ray was based on a proposed 1.2 million tonnes per annum standalone mining and processing operation, demonstrating positive financial metrics over a possible initial mine life of 7 years with capital payback within the first 1.75 years of the Projects life.

The payback period decreases to 1.5 years based at a gold price of US$1,700.

The study also showed:

  • An after-tax IRR of 51% and NPV8 of A$194 million (based on a US$1,550/ounce gold price); and
  • A rapid aftertax payback of 1.75 years decreasing to less than 1.50 years at a US$1,700 gold price.

The key driver for these robust returns is the high-grade open pit ore that is proposed to be mined and processed during the first two years (average 2.72 g/t) and first four years (average 2.5 g/t) of production.

The Cape Ray shear and the major holders

Extensive exploration planned

The primary objective for the company is to expand the resource base and extend the life-of-mine, with a focus on shallow open pit deposits that support the companys overall objective for the Project to be one of the highest grade open pit operations in the world.

After the end of the quarter, Matador set out its exploration strategy to grow the resource base through brownfields expansion and new greenfield discoveries to a size that would support a 10-year gold mining operation.

Mobilisation of two drill rigs to site has been completed and a 12,000-metre drilling campaign targeting resource expansion and greenfield prospects will commence in early August 2020.

The first drill target is at Window Glass Hill where a minimum of 3,000 metres is planned, focused on extensions to the existing mineral resource.

A second main brownfield target is at Isle aux Morts, where around 2,000 metres of drilling will focus on resource extensioRead More – Source