Matador Mining (ASX: MZZ) has successfully raised $4.5 million to advance greenfield targets and the Malachite prospect, within its 840,000-ounce Cape Ray gold project in Canada’s Newfoundland.
The company has pegged up 120km of continuous gold strike on the region’s underexplored Cape Ray Shear.
Under the two-tranche placement, 36.7 million shares were issued at an average price of $0.123 per share.
The first hard dollar tranche raised $2 million at $0.115 per share, which was an 18.8% discount to Matador’s five-day volume weighted average price to 12 July of $0.1417.
A flow-through placement under the second tranche generated $2.5 million via the issue of shares at $0.13 each.
Board members have also subscribed for a further 1.8 million shares in the company, with this remaining subject to shareholder approval.
Additionally, eligible shareholders in Australia and New Zealand have been given the option to participate in a share purchase plan at $0.115 that will raise a further $1 million.
Matador chief executive officer Sam Pazuki said the placement had received “broad-based” support from existing large shareholders and new institutional investors, along with company directors.
“This demand highlights the support for and confidence in Matador’s revised strategy that focuses on new major discoveries along one of the largest mineral tenement packages of the multi-million-ounce Cape Ray Shear in Newfoundland.”
Mr Pazuki said the company had recently undertaken field work at priority targets within Malachite, with the aim of beginning drilling in late summer.
“We will continue this work at Malachite as well as other top priority areas such as Bunker Hill, Grandy’s and Hermitage to build a pipeline of drill-ready targets.”
Underexplored top-tier jurisdiction
Mr Pazuki noted Cape Ray was within one the world’s “most underexplored top-tier jurisdictions” and the company’s exploration campaign was designed to unlock its “significant value”.
“With a current mineral resource of 837,000oz grading 2 grams per tonne and with nearly all of this resource close to surface, we have a strong foundation in which to grow gold ounces and advance our projects going forward.”
A scoping study on the project in 2020 outlined an initial seven-year mine life and gave the project a post-tax internal rate of return of 51% and a rapid 1.75-year payback.
Cape Ray also has the advantage of proximity to an established town, deep water port, roads, hydro power, airport.
The project has also garnered strong government and stakeholder support.