Matador eyes more shallow gold with Cape Ray drilling

Matador has kicked off a giant 20,000m drill program at its Cape Ray project in Canada to extend its gold mineralisation footprint and test new greenfield targets.

The company has already completed three holes in the program, which is the largest it has ever undertaken, and expects to continue drilling into the North American winter.

Drilling will initially focus on the brownfield Window Glass Hill to Angus trend with Matador Mining (ASX:MZZ) saying that this has excellent potential to expand its existing resource of 840,000oz of gold at an average head grade of 2.6g/t gold.

However, the majority of the diamond drilling will test high-priority targets that are all located within 15km of the existing resource.

While none of these targets have been effectively targeted due to shallow cover, exploration success at any prospect could change the scope of the exploration program and enhance the project’s potential production profile.

“Similar to previous exploration programs, our primary focus is on shallow gold mineralisation suitable for open-pit mining,” executive chairman Ian Murray said.

“We anticipate in excess of 170 holes to be drilled on targets covering the full spectrum of pipeline stages, with the expectation of new targets being continually generated from our systematic approach.”

He added that the company is advancing other technical aspects related to the Cape Ray project such as environmental permitting, metallurgical testwork and other project development studies.

Matador has also installed a dedicated mobile sample preparation unit next to the company’s core processing facility at Port aux Basque to improve assay turnaround times compared to last year’s program.

Cape Ray gold project

Besides a sizeable existing gold inventory, Cape Ray benefits from having about 96 per cent of its resource sitting within 200m of surface, making the deposit a potential open-pit mine.

With average hole depths of just 120m in 2020, Cape Ray also stands out from peer projects, which typically target deeper mineralisation between 400m and 600m below surface.

A scoping study has already outlined attractive economics for the project including a post-tax internal rate of return of 51 per cent, rapid payback of just 1.75 years and life-of-mine all-in costs of US$776/oz.

This article was developed in collaboration with Matador Mining, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.