Matador Mining (MZZ) - How to Replicate Marathon Gold Success!

Matador Mining Ltd. is an Australian gold exploration company focused on the advancement of its Newfoundland-based projects. The Cape Ray gold project of the company covers approximately 120 km of strike along the Cape Ray Shear. The shear is underexplored and holds a vast amount of potential. The project holds 0.8 million ounces of gold and also possesses a scoping study which was conducted on it.

The scoping study completed in 2020 shows an all-in sustaining cost of production (ASIC) of USD$ 776 per ounce of gold as well as an internal rate of return (IRR) of 51% after tax. The project’s payback period is estimated to be 1.75 years. The Hermitage project is a regional target identified by the company which lies off the main Cape Ray Shear zone.

Matador Mining Ltd. recently completed a financial placement as well as a private placement resulting in the gross proceeds of AUD$ 5 million towards the company. The proceeds of the fundraising will be implemented towards the exploration of the company’s Newfoundland projects as well as possible M&A activities.

Management restructuring

Matador Mining Ltd. appointed Sam Pazuki to the position of Chief Executive Officer (CEO) on the 1st of May 2022. The change in management and the company’s board consisted at the time of Ian Murray, the company’s previous CEO stepping down to the position of Non-Executive Chairman, the retiring of Mick Wilkes the previous Non-Executive Director of the board and Sam Pazuki commencing his tenure as CEO as well as being appointed the Managing Director of the company’s board. 

Pazuki has more than 20 years of experience in the mining industry and previously served as the Senior Vice President (SVP) of Corporate Development for OceanaGold Corporation. In his time as SVP, he was tasked with managing the company’s investor relations as well as corporate development functions. Pazuki prior to OceanaGold Corporation served as an advisor to various mining companies as part of the Advisory Services division of Ernst and Young in Toronto. Pazuki explains his previous experience as follows:

“This is the first time that I’ve stepped into a CEO role, before Matador, I was with OceanaGold, a dual-listed and a multi-national gold producer. I was in capital markets for them running investor relations, strategy, and M&A. That was a 10-year career with OceanaGold. Prior to that, I had a stint as a consultant working on big projects, helping BHP for example through the Jansen project in Canada. Then prior to that, I was with I believe it’s still Canada’s largest corporation, called Enbridge, which is an oil and gas pipeline company, one of the largest in the world. I started my career there and grew with them before moving on.”

Ian Murray, the company’s previous CEO, currently serves as a Non-Executive Director of the company’s board. Murray has more than 25 years of experience in the Mining Industry including serving as Executive Chairman and Managing Director of Gold Road Resources Ltd. as well as DRDGold Ltd. Pazuki explains the management change as follows:

“Ian is still an integral part of Matador. The board last year began a recruitment process to look for a trial-based Chief Executive Officer. I was approached by a head-hunter they had hired and went through that process with Ian and the board, and became the successful candidate through that process. Ian is still very much involved with the company. When I joined on May 1st and was appointed to the board as Managing Director, Ian stepped down to Non-Executive Chairman from Executive Chairman, and then just yesterday, he stepped down to Non-Executive Director while Justin Osborne, who’s been on the board for the last couple of yards with Ian, has moved into the Non-Executive Chairman role.”

Justin Osborne is the Non-Executive Chairman of the company and brings with him more than 30 years of experience in the mineral exploration industry. Osborne also serves as Executive Director at Gold Road Resources Ltd. He formed an integral part in the development of the Gruyere Gold deposit of the company which is current;y producing approximately 300,000 ounces of gold per year.

The Chief Financial Officer (CFO) of the company is David Gurvey. Gurvey joined the team in July 2022 after the resignation of the company’s previous CFO Chris Bath. He is a financial professional with a track record of financial stewardship, value creation and strategic thinking throughout various industries.

The management team of the company further consists of Dr Nicole Adshead-Bell who serves as Non-Executive Director, Warren Potma as Chief Geologist, Crispin Pike as Exploration Manager, Carol Marinkovich as Company Secretary, Brian Scott as Joint Company Secretary and Eric Hinton as Project Manager.

Pazuki sums up the company’s management team and his role as follows:

“I was tasked to build on the foundation that we currently have. I’m fortunate to have the board that we have, the quality of the board, and the quality of the people that we’ve got within the organisation.”

Projects

The asset portfolio of the company consists of the Cape Ray gold project and the Hermitage gold project, both located in Newfoundland, Canada. Newfoundland is a large island on the eastern coast of Canada which is experiencing an unforeseen amount of gold exploration. The island saw more than 400,000 m of exploration drilling, by various junior mining companies, in 2021. The island is also ranked as the 11th most attractive mining jurisdiction for investment globally and enjoys governmental and communal support.

The Cape Ray gold project of the company is a 120 km strike length project, located on the Cape Ray shear of Newfoundland. The project hosts a JORC-compliant mineral resource estimate, completed in May 2020, which boasts 0.36 million ounces of gold in the Indicated category and 0.48 million ounces of gold in the Inferred category. The project also has a scoping study which was conducted on it in 2020. The scoping study of the project shows a preliminary life of mine of 7 years, with 483,000 ounces of gold supplied throughout the life of the operation. The scoping study further shows an all-in sustaining cost of production (ASIC) of USD$ 776 per ounce of gold as well as an internal rate of return (IRR) of 51% after tax. The project’s payback period is estimated to be 1.75 years.

The Hermitage project is a regional target identified by the company in Newfoundland. The Project covers approximately 27 km of continuous strike length along the Hermitage Flexure, which is a large crustal-scale structure, located off the main Cape Ray Shear Zone.

Funds raise

Matador Mining Ltd. announced in the middle of July 2022, that it has completed a financial placement of AUD$ 2.0 million plus a flow-through raise of AUD$ 2.5 million for the total gross proceeds of AUD 4.5 million to the company. The company after the successful placement also conducted an AUD$ 500,000 private placement which resulted in the gross proceeds to the company totalling AUD$ 5 million.

Pazuki sums up the fundraising of the company as follows:

“I would characterise it as a successful raise. We’ve brought in AUD$ 5 million as part of the hard dollar and flow-through raise. We’ve got a share purchase plan currently ongoing to allow retail investors to participate and AUD$ 5 million allows us to do quite a bit.”

The proceeds of the raise will be implemented by the company towards advancing its greenfield exploration targets to drill-ready status as well as commencing inaugural drilling at the targets. Pazuki explains the company’s intent with the funds as follows:

“I just pivoted the strategy when I joined, moving away from what I call the brownfields exploration where the resource is, to really test the strike potential that we’ve got on the Cape Ray Shear. The company had done some work on an area called Malachite, which is 15 km by 4 km. It’s a larger footprint than Valentine Lake, which hosts Marathon Gold’s 5.1 million ounces. It’s oozing gold and soils, and one of the big drivers for me is to pivot strategy so that we can go and do some follow-up work, which is happening right now, ahead of what I’m hoping is a drill program that will start before the end of the Canadian summer.”

Objectives and future plans

Pazuki explains that the company will follow a similar path to that of Marathon Gold Corp. and its Valentine Lake Mineral System, he states:

“I guess the way to look at us, the analogy for us is Marathon Gold. Our approach will be similar to Marathon Gold. What we believe we have is similar to Marathon Gold, so that’s what we’re looking to do. We’re looking to replicate Marathon Gold and what they have at Valentine Lake.”

The company plans to commence exploration drilling at its Cape Ray gold project in September 2022. The exploration drilling will be aimed at various targets at the project, Pazuki explains:

“The resources we have at Central and Window Glass Hill are around outcrops that I guess would be characterised as the easy stuff. So, sampling through tail cover hasn’t really been done at all in Newfoundland, and that’s something that we’ve been doing, and the company’s been doing well before I joined. That will continue, and one of the things that we’re looking at right now is just again moving beyond the known resource and going to Malachi, going to other areas, if there is any outcropping obviously doing the rock chipping. We’ve been doing bottom hole sampling at Malachite, and we’ll continue doing these things, but the objective reality for us is to get out there to these new areas that have never seen a drill hole and do some diamond drilling.”

The exploration initiative of the company according to Pazuki is the delineation of large mineral systems, he states:

“My objective here, and the discipline that I’m looking to instil at Matador, is that success is measured with Million ounces, so that's what we’re looking for. That’s why we’re here and that’s what investors are backing us for, to discover Million ounces, to build millions of ounces of gold and mineral resources that will one day be a mine.”

Matador Mining Ltd. will also look to list on the Toronto Stock Exchange (TSX) in the near future, with the company believing that this will expose the company to various new investors and unlock new sources of funding. Pazuki, who has experience in dual-listed companies and is based in Canada, explains the company’s intent as follows:

“There’s an opportunity here to make this company a Canadian company as well, do a listing, so one of my strategic initiatives is really looking at the best way to get a TSX listing to compliment the ASX listing, and be able to tap into a larger network here in North America, and I’d say even Europe, that doesn’t really know Matador.”

The company will also investigate possible mergers and acquisitions of various projects in Newfoundland, with Pazuki explaining that the company has a strategy of unlocking shareholder value, he sums up the company’s intent as follows:

“From a corporate perspective, it’s a strategy focused on unlocking shareholder value, looking to complement the ASX listing with the TSX listing. With what’s happening in the broader market, the level of activity in Newfoundland has subsided and that in itself presents an opportunity to really consolidate opportunities on the island and that’s something I’m going to be looking for, just given my commercial and M&A background, is looking to do smart consolidation. There are too many companies on the island - it’s an opportunity for us to really cobble together good land and align ourselves with other opportunities.”

To find out more, go to the Matador Mining website