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Matador Mining maintains Speculative Buy rating from Canaccord Genuity as Cape Ray Gold Project drilling delivers

Last updated: 01:08 24 Sep 2021 EDT, First published: 00:49 24 Sep 2021 EDT

Matador Mining Ltd - Matador Mining maintained a Speculative Buy by Canaccord Genuity as drilling at Cape Ray Gold Project delivers

Matador Mining Ltd (ASX:MZZ, OTCQX:MZZMF) has maintained a Speculative Buy rating with a A$0.70 price target by Canaccord Genuity (TSX:CF, LSE:CF) as its drilling at the Cape Ray Gold Project in Newfoundland, Canada, delivered on a number of fronts. 

The broker reiterated MZZ’s “straightforward strategy” of incrementally growing its existing 837,000-ounce resource, while testing its extensive tenure for new discoveries.

Encouraged by results

The first two batches of diamond drill results from the company’s 2021 drilling season had initially focused on the Window Glass Hill Granite (WGHG).

Canaccord believes it demonstrates likely resource growth, with a strong intercept and further staked lodes encountered just outside the current 232,000 ounces at 1.6 g/t gold resource.

The drill results are the best ever result at the deposit, it added.

Another reported hole also points to likely resource growth and staked lodes with 8 metres at 5.1 g/t gold from 62 metres, including 1-metre at 36.2 g/t, and 22 metres at 1.2 g/t from 91 metres, including 1-metre at 5 g/t.

The WGHG target is more than 50% drill-tested and the results of six holes targeting a new zone within the granite have all returned mineralisation.

The broker said the new zone demonstrated the large potential endowment of WGHG and relatively untested nature of the target.

Assays are pending for the remaining 13 completed diamond holes and drilling has now shifted to Big Pond and the new Benton greenfield target.

Unlock new targets

It also noted that power auger drilling - a cheap and effective tool -  continues to provide base of till and interface samples to allow refinement of key targets further afield.

Recent bottom of hole results include 55.4 g/t, 3.8 g/t and 1.6 g/t.

Given the wide-spaced nature and ‘blind’ but systematic drilling approach beneath glacial till, these results are extremely encouraging and all fall outside the existing resource area at Big Pond (20,000 ounces at 5.3 g/t).

Exploration intensifies

The broker also noted that preliminary analysis of the Phase 1 high-resolution helicopter-magnetic survey over the Cape Ray Shear Zone had highlighted a number of previously unrecognised and untested structures that were being prioritised for follow-up drilling.

There are now two diamond drill rigs and three power-auger rigs active across the Cape Ray Project.

Outcomes expected

“Clearly resource growth at Window Glass Hill is likely in our view, but we are equally encouraged by the six new results in the previously untested portions of the granite, that have returned mineralisation.

“Given less than 50% of the granite has been adequately drilled, the potential upside remains high at this brownfield target."

Canaccord also highlighted that MZZ is “very well funded” to complete the 45,000 metres drill program and test these compelling targets in a very well-endowed emerging gold jurisdiction.

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