Coffee with Samso Episode 176 is with Justin Osborne, chair and Crispin Pike, VP, discovery of Matador Mining Ltd (ASX:MZZ, OTCQX:MZZMF).
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.
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)
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)
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)
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
PODCAST
About Justin Osborne
Non-Executive Chairman
Mr Osborne has over 35 years experience as an exploration, mining and development geologist, is a Fellow of the Australasian Institute of Mining and Metallurgy and holds a Bachelor of Science, Honours (First Class) from La Trobe University of Victoria.
Up until June 2021 Mr Osborne was Executive Director at Gold Road Resources (ASX: GOR) playing a pivotal role in the discovery, development and construction of the world class Gruyere Gold Mine (8Moz Au) which currently produces approximately 350,000oz Au per annum.
Mr Osborne previously held senior positions on the exploration executive team of Gold Fields Ltd, including Vice President Development Strategy – Growth and International Projects, and General Manager Near Mine Exploration covering all international mining operations; and management roles with WMC Resources at the Kambalda Nickel and St Ives Gold operations. Mr Osborne is also a Non-executive Director at IGO Limited (ASX:IGO) (IGO Limited (ASX:IGO)), Hamelin Gold Limited (ASX:HMG) and Astral Resources NL (ASX:AAR) (Astral Resources NL (ASX:AAR)).
About Crispin Pike
VP, Discovery
Crispin Pike is Matador’s VP Discovery and leads the on-ground exploration activities for Matador Mining in Newfoundland. Following a 9 year career with Inco/Vale working across the Americas he has spent the last 6 years with the Geological Survey of Newfoundland and Labrador. Crispin brings his deep Newfoundland geology expertise and international experience in structural geology and geophysics to Matador’s exploration programs.
About Matador Mining Limited (ASX: MZZ)
Matador Mining Limited (Matador Mining Ltd (ASX:MZZ, OTCQX:MZZMF) / OTCQB:MZZMF / FSE:MA3) is an exploration company focused on making gold discoveries in Newfoundland, Canada. The Company is one of only four gold companies with a defined gold Mineral Resource, currently 837,000 ounces grading 2 grams per tonne.
Matador is well positioned with an extensive land package comprising 120-kilometres of continuous strike along the under-explored, multi-million-ounce Cape Ray Shear, a prolific gold structure in Newfoundland that currently hosts several major mineral deposits.
Additionally, the Company holds 27-kilometres of continuous strike at the Hermitage prospect which is located on the highly prospective Hermitage Flexure.
Matador acknowledges the financial support of the Junior Exploration Assistance Program, Department of Industry, Energy and Technology, Provincial Government of Newfoundland and Labrador, Canada.
The Cape Ray Gold Project
The Cape Ray Gold Project (Cape Ray or the Project) covers approximately 120km of strike along the highly prospective, yet under explored Cape Ray Shear located in Newfoundland, Canada. The Project hosts a current resource of 837,000oz Au at 2g/t Au, across four deposits, all of which are within 15km of strike.
A 2020 Scoping Study (ASX announcement 6 May 2020) highlighted that Cape Ray has the makings of an excellent gold project, with low estimated All In Sustaining Operating costs (US$776/oz Au), strong IRR (51% post Tax) and rapid payback (1.75 year).
These strong outputs were driven by the Project’s high grade, yet shallow gold mineralisation, (average head grade of 2.6g/t au during the first four years of production – 88,000oz Au per annum) that ranks the Project as one of the highest grade, undeveloped open pit projects globally.
However, prior to commencing a Pre-Feasibility Study, the Company identified the requirement to grow the Resource further to ensure the initial 7 years mine life assumed in the Scoping Study is increased. To achieve this, the Company believes a blend of expansion drilling around known deposits as well greenfield exploration to test the vast, yet under explored Project area is the optimal strategy. The Company therefore outlined the most expansive exploration program for the 2021/22 season, including:
- 45,000 metres of diamond drilling;
- Five power auger drill rigs;
- 80 kilometre Heli-Mag program; and
- Inaugural winter exploration program.
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About Samso
Samso is a renowned resource among the investment community for keen market analysis and insights into the companies and business trends that matter.
Investors seek out Samso for knowledgeable evaluations of current industry developments across a variety of business sectors and considered forecasts of future performances.
With a compelling format of relaxed online video interviews, Samso provides clear answers to questions they may not have the opportunity to ask and lays out the big picture to help them complete their investment research.
And in doing so, Samso also enables companies featured in interviews to build valuable engagement with their investment communities and customers.
Headed by industry veteran Noel Ong and based in Perth, Western Australia, Samso’s Coffee with Samso and Rooster Talk interviews both feature friendly conversations with business figures that give insights into Australian Stock Exchange (ASX) companies, related concepts and industry trends.
Noel Ong is a geologist with nearly 30 years of industry experience and a strong background in capital markets, corporate finance and the mineral resource sector. He was founder and managing director of ASX-listed company Siburan Resources Limited from 2009-2017 and has also been involved in several other ASX listings, providing advice, procuring projects and helping to raise capital.
He brings all this experience and expertise to the Samso interviews, where his engaging conversation style creates a relaxed dialogue, revealing insights that can pique investor interest.
Noel Ong travels across Australia to record the interviews, only requiring a coffee shop environment where they can be set up. The interviews are posted on Samso’s website and podcasts, YouTube and other relevant online environments where they can be shared among investment communities.
Samso also has a track record of developing successful business concepts in the Australasia region and provides bespoke research and counsel to businesses seeking to raise capital and procuring projects for ASX listings.
Disclaimer
The information contained in this article is the writer’s personal opinion and is provided for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. Read full disclaimer.
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