Matador Mining Ltd (ASX:MZZ) has received a vote of confidence from Canaccord Genuity as drilling continues to expand the mineralised footprints at its Cape Ray Gold Project in Newfoundland, Canada.
The global capital markets division of Canaccord Genuity Group Inc (TSE:CF) has reiterated its price target of 90 cents a share and speculative buy rating for Matador.
The following is an extract from Canaccord’s research update:
Key project milestones in the SepQ’20
Discovery at Angus: During the quarter, MZZ announced a new discovery 1km along strike to the southwest of the existing Window Glass Hill deposit (WGH). MZZ reinterpreted historic IP, and utilised geochemistry and new ground magnetics to test a conceptual target that uncovered a new stockwork style of mineralisation at Cape Ray. Five of the first eight holes into the new Angus prospect returned mineralisation including:
- 12m @ 3.8g/t Au from 85m
- 10m @ 0.7g/t Au from 15m and 35m @ 0.5g/t Au from 34m (depending on internal dilution, could be bulked out to 50m @ 0.5g/t Au)
Window Glass Hill is also growing: Step-out drilling at WGH (232koz @ 1.6g/t Au in resource currently) also returned:
- 1.5m @ 14g/t Au from 40m and 2m @ 4.8g/t Au from 46m
- 3.6m @ 3.5g/t Au from 9m
- 5m @ 1.4g/t Au from 93m and 0.3m @ 45.9g/t Au from 139m
More to come: Across Window Glass Hill and Angus, MZZ last reported that it had at least 16 holes pending assay with drilling ongoing. The initial 12,500m drill program continues to target resource expansion as well as priority greenfields prospects. As well as the 3,000m at Window Glass Hill, 2,000m of drilling is planned to expand the 60koz @ 2.4g/t Au Isle aux Mort resource, and 2,000-7,000m on greenfields targets like Angus, within the company’s 425sqkm of prospective tenure.
Key upcoming newsflow
- Drilling results (ongoing)
Valuation and recommendation
MZZ has recently highlighted that only 20 drill holes have been completed along a 105km portion of its 120km tenement package, suggesting historic exploration has barely scratched the surface. In our view, genuine greenfield discoveries remain likely along the 120km of tenure MZZ holds at Cape Ray. The 4Moz+ Valentine Lake (MOZ-TSX), <150km along strike from Cape Ray is testament to the highly prospective nature of this region.
Our price target (risked, NPV10%) is unchanged at A$0.90/share. Our rating of SPECULATIVE BUY remains unchanged.