Matador Exploration Inc.
TSX VENTURE : MXN

Matador Exploration Inc.

June 22, 2005 18:47 ET

Matador Exploration Inc.: Resource Estimates for Redemption Joint Venture, Western Australia

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 22, 2005) - Matador Exploration Inc. (TSX VENTURE:MXN) ("Matador", "MXN" or the "Company") is pleased to announce resource estimates for tenements that will form the basis for its Redemption Joint Venture (RJV) with Western Australia based Austminex Ltd. (ASX:ATX) ("Austminex" or "ATX"), as announced June 14, 2005.



Table 1. Summary of Inferred and Indicated Resources for the RJV
Coolgardie Properties.(i)
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Category Tonnes Gold Grade, Contained Ounces
grams per tonne of Gold (Troy Ounces)
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Total Indicated 5,320,000 1.85 315,720
Total Inferred 13,712,700 2.45 1,080,825
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(i) see attached Table 2 - Summary of Assumptions and
Methodologies Employed


As part of due diligence conducted on behalf of Matador, Mr. D. Besserer, B.Sc., P.Geol. of APEX Geoscience Ltd. (APEX) and Mr. S. Capp, B.Sc., M.Aus.I.M.M. of Exploration, Mining and Resource Services (EMRS), both of whom are considered Qualified Persons and are independent under National Instrument 43-101, were commissioned to review the existing resource models and calculations for both recent and historical data that is part of the contemplated acquisition announced February 23, 2005 and June 14, 2005. The intent of the technical review was to comment on the quality of the models, calculations and existing databases from which the models were created, provide comments as to the quality of the existing resources and, where possible, classify the existing resources based upon "Best Practice Guidelines for the Estimation of Mineral Resources and Mineral Reserves" (Canadian Institute of Mining and Metallurgy, 2003) and "CIM Definition and Standards on Mineral Resource and Mineral Reserves" (Canadian Institute of Mining and Metallurgy, 2004). The details of the review are provided in a technical report titled "Technical Report for the Coolgardie Gold Project, Coolgardie District, Western Australia" by Mr. Besserer and Mr. Capp.

APEX and EMRS report that based upon a review of existing documentation provided by ATX, Herald and Leviathan for the historic resources that will be part of the RJV, the authors conclude that the total estimated resource includes an Indicated Resource of 5.32 million tonnes at an average grade of 1.85 grams gold per tonne (gAu/t) and an Inferred Resource of 13.7 million tonnes at an average grade of 2.45 gAu/t (Tables 1 and 2). APEX and EMRS indicate that none of the mineral resources reviewed constitutes a mining reserve, nor are any of the resources considered economic at this time. However, a number of the resources have potential upside to be expanded and, with future work, converted into economically mineable mineral reserves.

A total of 14 geographically separate deposits on the combined ATX and Herald - Leviathan tenements were reviewed by APEX and EMRS and considered appropriate for the purposes of current resource estimation under National Instrument 43-101. Drilling at these 14 separate deposits consists of approximately 347,000 m in 4,700 drillholes (Table 2). The methodologies of the resource estimation, the techniques used for estimation and a number of the key assumptions in the estimation for each deposit are given in Table 2. Indicated mineral resources are restricted to those prospects on which mining reconciliation data supports the validity of the resource model, and for prospects where the estimate is based upon sufficient density of data that can be shown to be of good quality with appropriate QA/QC and density data. Any historic resource that was in the past quoted as indicated or measured but was not drilled on a minimum 20 m by 20 m pattern, or lacked one or more of statistical based upper cut data, verifiable or good quality QA/QC data, density data or included any form of non-face sampling rotary drilling were down graded to an inferred resource even with the presence of a well checked and verifiable extensive drilling database, along with geological and block models. As a result, a number of mineral resources quoted by APEX and EMRS have been assigned a lower classification than originally assigned by Herald, Leviathan or ATX. Summary details of the mineral resources quoted by APEX and EMRS are presented in Table 2.

A number of the Herald - Leviathan and ATX mineral resources need to be revisited in a consistent regional geological framework looking for potential upside to each of the resources. APEX and EMRS indicate that mineral resources that are currently open in one or more directions and have the greatest potential to be expanded with further drilling and have the potential to yield an economic resource in future include the Empress - Alicia and Countess underground resources, Big Blow, King Solomon - Queen of Sheba, Dreadnought, Norris and the Mount. Other smaller resources that could be expanded with further work, but where the future economics may be in question include Cookes Pit, Friendship and Lord Bob. APEX and EMRS indicate that a significant portion of the existing Brilliant mineral resource of 1.85 million tonnes at an average grade of 2.2 gAu/t exists in the upper 75 m of the resource model, therefore a review of the open pit potential of this resource is strongly recommended by APEX and EMRS. A large proportion of the contained ounces of gold (238,000 indicated ounces and 142,000 inferred ounces) for the RJV are within the Lindsays and Greenfields resource models. APEX and EMRS strongly recommend that the economic potential of these two resources be reviewed in detail, particularly in light of reconciling the existing models with production from these two sources over the last two years.

Background Information - Matador Exploration Inc.

Matador Exploration Inc. (TSX VENTURE:MXN) is a Canadian-listed company with exploration and production operations based in the Coolgardie region of Western Australia., whose mission is to become a significant gold producer.

During 2001, Matador produced slightly more than 10,000 ounces of gold from its Jaurdi Hills property 40 km north of the town site of Coolgardie (and 20 km north of the northern tenement boundary of the Redemption Joint Venture) in the northern extension of the Coolgardie Domain of the Menzies-Norseman Greenstone Belt, which also hosts the Redemption JV tenements.

Matador and Austminex (ASX:ATX) have exercised options to acquire assets of the Coolgardie gold project ("CGP") from Herald Resources Ltd. ("Herald") and Leviathan Resources Ltd. ("Leviathan", formerly known as MPI Gold Pty. Ltd.), laying the foundation for redevelopment of the historically fragmented Coolgardie gold field, including a major new exploration initiative to be solely financed by Matador. The partners will consolidate the CGP assets and certain ATX tenements to become the largest landholders in the Coolgardie gold belt located in the Kalgoorlie-Coolgardie-Widgiemooltha area of Western Australia Western Australia, 560 kilometres east of Perth and 35 kilometres southwest of the "Super Pit" at Kalgoorlie. "Redemption" is a major regional fault structure which hosts some of Coolgardie's best known gold deposits including Dreadnought, Burbanks, Empress, Perseverance, Rose Hill and Baileys.

On completion of the acquisition, Matador Mining Pty Ltd ("MMPL"), a wholly owned Australian subsidiary of Matador Exploration Inc., will be Operator of the Redemption JV, holding a 50% interest in the 1.2 mtpa Three Mile Hill CIL processing plant, and all equipment, licenses and performance bonds. MMPL will have an initial 10% interest in the tenements of joint venture, earning into up to a 50% interest by solely funding AUS$8 million of exploration to be staged over three years, with a first year spending commitment of AUS$2.7 million.

Through the tenements and plant of the RJV, MXN will increase its presence in the Coolgardie region and address a critical production challenge while delivering a competitive advantage to existing operations in Western Australia. The overall objective will be to define sufficient reserves to enable the Three Mile Hill Plant to operate at full capacity with 5 years of scheduled ore treatment. Cash flow generated from operations will enable MXN to pursue an intensive exploration program to unlock the broader potential of the Coolgardie Gold Camp.

The Redemption JV Partners will systematically explore, develop, and mine complementary CGP and ATX tenements and resources in the Coolgardie-Widgiemooltha region, including high-grade gold projects at The Mount and Dreadnought. Under the direction of a management committee with equal representation from the partners, Matador will execute exploration plans designed to build a sustainable long-term gold production business with the Three Mile Hill Plant as a central processing facility for an extensive regional resource base. The initial focus of planned exploration is on high-grade gold deposits such as The Mount and Dreadnought (on Austminex's ground), as well as priority targets within the CGP tenements including extensions to the high-grade Countess mineralization and other high-grade lodes within the Tindalls/Empress mining area, immediately adjoining the Dreadnought Project.

The Redemption JV program is supervised by Mr. Dean Besserer, P.Geol., B.Sc., Vice President of APEX Geoscience Ltd., who is the Qualified Person as defined by National Instrument 43-101. The resource estimate has been reviewed and prepared by Mr. D. Besserer, P.Geol. of APEX Geoscience Ltd. and Mr. S. Capp, MAusMIM., B.Sc., of Exploration Mining and Resource Services, both of whom are Qualified Persons under National Instrument 43-101. The gold resource quoted herein is compliant under both the "2004 JORC Standards" and the "CIM Definition Standards on Mineral Resources and Ore Reserves" dated November 14th, 2004. A detailed 43-101 compliant technical report will be filed on SEDAR within 30 days.

On behalf of the Board

Matador Exploration Inc.

John Williamson, P.Geol., President



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Class- Cont- Lower Upper Compe-
ifica- Grade ained Cut Cut tent
Prospect tion Tonnes (g/t) Ounces (g/t) (g/t) Person
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Austminex
Prospects
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The Mount Inferred 2,090,000 5.5 369,573 1 None A. Hawker
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Dread-
nought Indicated 970,000 2.5 77,966 1 None C.
McCormick
Inferred 2,570,000 1.9 156,992 1 None C.
McCormick
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Norris Inferred 808,000 2.55 66,243 1 23 to P.
78 Schiemer
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Lord Bob Inferred 820,000 1.6 42,182 0.8 None S.Capp
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Total
Austminex
Indicated 970,000 2.5 77,966
Total
Austminex
Inferred 6,288,000 3.14 634,990

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Herald -
Leviathan
Coolgardie
Gold
Prospects
(CGP)
Lindsays Indicated 4,350,000 1.7 237,755 1 18 D.
to Freder-
100 ickson
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Inferred 1,490,000 1.6 76,647 1 18 D.
to Freder-
100 ickson
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Green-
fields Inferred 1,450,000 1.4 65,266 1 15 D.
Freder-
ickson
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King
Solomon/
Queen
Sheba Inferred 1,400,000 2 90,022 1 10 B.
Kirkpat-
rick
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Brilliant Inferred 1,850,000 2.2 130,854 1 13 B.
Kirkpat-
rick
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Cookes Inferred 98,000 1.8 5,671 1 10 B.
Kirkpat-
rick
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Happy Jack Inferred 107,000 1.5 5,160 1 10 B.
Kirkpat-
rick
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Friendship Inferred 100,000 1.43 4,610 1 10 B.
Kirkpat-
rick
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Empress/
Alicia Inferred 550,000 1.55 27,320 1 10 B.
Kirkpat-
rick
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Big Blow
Surface Inferred 180,000 1.6 9,259 1 None A.
Pelliccia
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Big Blow
Under-
ground Inferred 88,000 5 14,146 3 None A.
Pelliccia
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Subtotal 268,000 2.72 23,406 None A.
Pelliccia
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Countess
Under-
ground Inferred 111,700 4.7 16,879 3 None A.
Pelliccia
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Total CGP
Indicated 4,350,000 1.7 237,755
Total CGP
Inferred 7,424,700 1.87 445,836

Total
Redemp-
tion JV
Indicated 5,320,000 1.85 315,720
Total
Redemp-
tion JV 1,080,826
Inferred 13,712,700 2.45

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Model Drill-
Recon- ing (ii) Drill-
ciled Patt Drill- ing
Report to ern Drill hole Meter-
Prospect Company Date Method Mining (m) holes Type age
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Austminex
Prospects
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The Mount Austminex Feb, End No 20x20 118 RC 14,752
05 Area to
Sect- 40x40
ional
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22 DDH 5,457
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Dread-
nought Austminex Jan, (i)MIK No 20x20 209 RC 25,333
05 Recov-
erable
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Austminex Jan, (i)MIK 20x20
05 Recov- to
erable 40x40
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Norris Austminex May, Inverse No 20x20 718 RC 45,460
05 Dist- to /
ance 80x40 DDH
Squared
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Lord Bob EMRS Jun, (i)MIK No 20x20 288 RC 19,910
03 Recov- /
erable DDH
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Aust-
minex
Sub-
total 1,355 110,912
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Herald -
Leviathan
Coolgardie
Gold
Prospects
(CGP)
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Lindsays MPI June, Ordin- Yes 20x20 great- RC great-
03 ary er / er
Kriging than DDH than
2000 144,000
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MPI June, Ordin-
03 ary
Kriging
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Green-
fields MPI June, Ordin- Yes 20x20 91 DDH 4,259
03 ary
Kriging
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King
Solomon/
Queen
Sheba Herald June, Inverse Yes 20x20 129 RC 10,632
98 Dist-
ance
Squared
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Brilliant Herald Aug- Inverse Yes 20x20 650 RAB 45,935
ust, Dist- /RC/
96 ance DDH
Squared
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Cookes Herald Aug- Inverse No 20x40 20 RAB 731
ust, Dist-
98 ance
Squared
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63 RC 2,645
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Happy Jack Herald Oct- Inverse No 20x20 53 RAB 1,907
ober, Dist- to
98 ance 50x40
Squared
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26 RC 1,701
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Friendship Herald Oct- Inverse No 20x20 41 RC 3,584
ober, Dist-
98 ance
Squared
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Empress/
Alicia Herald Aug- Inverse No 191 RAB
ust, Dist- /RC/
98 ance DDH 13,300
Squared
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Big Blow
Surface MPI Aug- Ordin- No 20x40
ust, ary
04 Kriging
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Big Blow
Under-
ground MPI Aug- Ordin- No 20x40
ust, ary
04 Kriging
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MPI Aug- Ordin- No 63 RC 5,307
ust, ary
04 Kriging
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Countess
Under-
ground MPI June, Ordin- No 30x30 14 DDH 2,723
04 ary
Kriging
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CGP
(i)MIK Sub-
equals total 3,341 236,724
Multiple Redemp-
Indic- tion JV
ator Total 4,696 347,636
Kriging

(ii)RC
equals
Reverse
Circul-
Ation
Drill-
hole

(ii)DDH
equals
Diamond
Drill-
hole

(ii)RAB
equals
Roatary
Air Blast
Drill-
hole

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Contact Information

  • Matador Exploration Inc.
    Bernie Kennedy
    Investor Relations Manager
    888-331-2269 or (604) 331-2269
    www.matadorex.com