Communicators

Matsa Resources Ltd.: Significant Gold Acquisition — 385,300 oz Lake Carey Gold Project

21 July 2016

Highlights

-          Lake Carey Gold project acquired including the Fortitude gold deposit (385,300 oz, JORC 2004)

-          Due diligence demonstrates near term production potential and an excellent return on investment based on the following:

o        a potential 40,000 p.a. production plan with strong cashflows over the first 2 years of mine life

o        excellent existing haul roads and near-by processing facilities

o        strong exploration upside potential, near world class deposits

o        fully granted mining licences

o        extensive database and mining information providing a fast track to final feasibility and production

o        purchase consideration and mine development costs can be funded from Matsa’s existing cash and liquid assets

-          Consideration paid is a modest $4.54 per Resource ounce

-          Considerable scope for regional exploration success adding to the project life

-          The Lake Carey gold project is located in an area that hosts a number of world class deposits (Granny Smith, Sunrise Dam, Red October) and adjoins Matsa’s existing Mt Weld gold project thereby creating a substantial gold project area in a highly prolific gold field

Matsa is pleased to advise that it has entered into an agreement to acquire the Lake Carey gold project. The project package includes the Lake Carey, Phantom Well and Wilga projects which contains the Fortitude gold deposit.

The Projects are located approximately 220km northeast of Kalgoorlie-Boulder and 70km south of Laverton within the north-eastern goldfields of Western Australia. The Project area covers 102km2 and is located in the highly productive Laverton Tectonic Zone (LTZ) 25km south of AngloGold Ashanti’s Sunrise Dam gold mine, 60km south of the Granny Smith gold mine and 12 km south of the Red October gold mine.

Figure 1:  Location and Regional Infrastructure of the Lake Carey and Mt Weld Projects

It is Matsa’s intention to develop and mine the Fortitude deposit utilising a local third party processing facility as quickly as possible in order to take advantage of the current high gold prices. All studies and development capital can be funded from existing cash and liquid reserves. Preliminary discussions have already commenced and indicative offers received with nearby processing facilities.

The Lake Carey gold project area consists of 12 tenements and covers an area of 102Km2. There are existing Mineral Resources (JORC2004) located at Fortitude totalling 6.289Mt @ 1.9g/t for 385,300oz (Table 1, Appendix 1).

Strategically, the Lake Carey gold project is an excellent geographical fit with Matsa’s existing Mt Weld gold project which adjoins the northern boundary of the Lake Carey gold project. The combined project area amounts to a total of 277km2 (Figure 1).

Exploration potential within the combined project area is considered excellent. Initial high value targets exist at Bindah and Galant which could increase short term production potential. Historically, regional exploration along the Fortitude and Bindah Shears has been superficial and carried out by wide spaced shallow aircore drilling. Matsa plans to target the regional extents of the Fortitude and Bindah Shears using modern geophysical techniques and drilling.

Table 1: JORC 2004 Mineral Resource Estimate for the Fortitude Deposit

Acquisition Terms

Matsa will acquire the Lake Carey project (consisting of the Lake Carey, Phantom Well and Wilga Gold projects), including all exploration and mining data, for a total consideration of $1,750,000 (ex GST) cash representing a modest $4.54 per ounce of gold consisting of:

-          $250,000 on signing of agreement (paid), refundable if any tenements are forfeited.

-          $1,500,000 upon settlement of the transaction, transfer of tenements.

The offer has general conditions applicable to a transaction of this nature. Matsa will easily fund the acquisition from its existing cash holdings. Settlement is expected this quarter.

Executive Chairman, Mr Paul Poli said “the success in acquiring the Lake Carey gold project is a coup for Matsa at a very attractive price. This project offers an excellent opportunity to transform our company into a producer in the near term. It is feasible that we can be producing 40,000 ounces of gold per annum by early next year. It is extremely pleasing to me that Matsa has acquired this project using existing funds in a very strong gold environment without dilution to shareholders.”

Mr. Poli added “Lake Carey will not distract Matsa from its commitment to existing quality exploration projects where we anticipate exciting discoveries both in Australia and Thailand.”

For further information please contact:

Paul Poli                                                                                   

Executive Chairman                                         

Phone                            +61 8 9230 3555

Fax                            +61 8 9227 0370

Email                            reception@matsa.com.au

Web                            www.matsa.com.au

Mineral Resources and Exploration Results

The information in this report that relates to Mineral Resources and Exploration results, is based on information compiled by Richard Breyley, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy.  Richard Breyley is a full time employee of Matsa Resources Limited. Richard Breyley has sufficient experience which is relevant to the style of mineralisation and the type of ore deposit under consideration and the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Richard Breyley consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 

The information in this report that relates to Mineral Resources is extracted from the report entitled “Resource Update – Fortitude Gold Deposit” released by Hammer Metals Limited (formerly Midas Resources Limited) on 6 May 2010 to the ASX http://www.asx.com.au/asxpdf/20100506/pdf/31q62k3084vy75.pdf. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the competent person’s findings are presented here have not been materially modified from the original market announcement.

To view the entire press release please follow the link:

file:///C:/Users/bb/Downloads/Significant_Gold_Acquisition_385300_oz_Lake_Carey_Gold_Project.pdf