Matador Mining Ltd (ASX:MZZ) has increased the mineral resource at the Cape Ray Project in Newfoundland, Canada, by 18% to 1.2 million ounces of gold and 3.9 million ounces of silver.
This increase in the Cape Ray resource to 16.6 million tonnes at 2.2 g/t gold and 7 g/t silver followed the largest drill program in more than 30 years of 12,632 metres completed in 2019.
The cost per gold ounce discovered for the program is US$12 per ounce (A$18/ounce) and the discovery rate is 14 ounces per gold metre drilled.
Around 55% of the mineral resource is classified in the indicated category with 650,000 ounces of gold at 2.9 g/t.
Window Glass Hill
The major focus of the 2019 exploration program was Window Glass Hill (WGH), where the resource grew by 71% to 230,000 ounces of gold from 134,000 ounces.
Gold grade at WGH also increased by 34% to 1.6 g/t from 1.2 g/t.
Discovery cost per ounce at WGH was exceptionally low at a cost of US$7/ounce (A$11/ounce) with a discovery rate of 27 ounces gold per metre drilled.
Around 90% of the resource at WGH is less than 100 metres from surface.
Scoping study progresses
Due to quarantine issues related to the COVID–19 pandemic, the Cape Ray scoping study has been delayed.
However, most of the work has been completed including process design, capital and operating cost estimates, infrastructure design and site layouts.
This work is aimed at assessing the potential for high-grade open pit gold production to target the high-grade shallow gold mineralisation and process it through a conventional carbon-in-leach facility.
The major outstanding piece of work is the mine design, scheduling and final economic analysis.
Opportunities to improve the project’s economic returns have already been identified and may be assessed in the scoping study or in option studies, which are likely to be completed prior to a pre-feasibility study, which Matador expects to release in 2021.
Location of Cape Ray deposits
Gold remains strong
Despite the difficult global economic environment, gold has been one of the few commodities to have seen improvement through 2020.
The gold price in Canadian dollars recently traded at an all-time high to almost C$2,389.76/ounce.
Given the project remains focused on targeting higher-grade ore earlier in the operating life, the current high gold price environment will likely improve the payback period.
Capital raising
On February 17, 2020, Matador received commitments to raise A$5.1 million before costs, including commitments of A$270,000 from the company’s directors, through a placement of shares to institutional, professional and sophisticated investors at a price of 20 cents per share.
As of March 31, 2020, the company had received proceeds of approximately A$4.7 million, which includes $270,000 from directors who subscribed for 1.35 million shares, the issue of which is subject to the approval of Matador shareholders.
A general meeting is expected to be held later in the June quarter.
Proceeds pending
The company is yet to receive proceeds of A$440,000 from one sophisticated investor who subscribed for 2.2 million shares in the placement.
Matador is working with this investor, who is also an existing shareholder, in a bid to ensure that all proceeds from the placement are received, however, has been left with no option other than to seek recovery of the unpaid proceeds through legal means.
As of March 31, 2020, Matador had cash and receivables of A$3.8 million, including the A$270,000 in relation to directors’ participation in the placement.