MATSA RESOURCES LIMITED — Capital/Financing Update 2010

Oct 31, 2010

1 November 2010

ASX Announcement

==> picture [136 x 122] intentionally omitted <==

ABN 48 106 732 487

FUTURE COOPERATION AND CAPITAL RAISING HIGHLY POSITIVE FOR DUNDAS IRON PROJECT

HIGHLIGHTS:

• Investment from Significant Hong Kong Iron and Steel Investment Corporation

• Placement done at a premium to current market price

• Off take agreement being drafted for Hematite

Matsa Resources Limited (ASX:MAT, “Matsa” or the “Company”) is pleased to advise that it has raised $1.2 million via the issue of 3 million shares at an issue price of $0.40 each with Rock Resource Ltd (“Rock”). Rock is a Hong Kong based Iron and Steel and Investment Company with strong relationships with a number of Chinese Steel Mills, .

This placement is seen as a symbolic gesture of goodwill and a precursor to progressing the Dundas Iron Project and developing a more meaningful relationship with Rock in regards to,

• Off take agreements,

• Direct project investments and,

• Other co-operation agreements.

The funds raised will be used to assess and progress the hematite and magnetite potential of the Dundas Iron Project.

The Company has had ongoing discussions with a number of interested parties in advancing both the gold and iron ore potential of the Company’s Norseman Gold and Dundas Iron Projects. While these discussions are ongoing with several parties for different aspects of the projects, Rock has shown a strong interest in the hematite potential of the project and as such has made an initial investment in the Company to reflect this interest and its interest in pursuing an immediate off take agreement for hematite. Representatives of Rock, which included its managing director and chief geologists, visited the Dundas Iron Project during September 2010 and confirmed Matsa’s positive opinion for the potential of a small yet highly profitable Hematite project within the Dundas Iron Project.

The Company’s Executive Chairman, Paul Poli said “The investment, while relatively small in amount, is a vote of confidence in the work Matsa is doing on the entire Norseman Project in particular the prospects of the Dundas Iron Project. It illustrates that both parties have confidence in the potential of the project and confidence in the ability of the parties to develop a co-operation agreement and as such we will continue to discuss how to move the Hematite potential within the Dundas Iron Project forward as soon as possible”.

Head Office: Suite 11, 139 Newcastle Street, Perth Western Australia 6000 Tel : +61 8 9230 3555 Fax : +61 8 9227 0370 Kalgoorlie Office: Suite 1, Vosper House, 31-33 Dugan Street, Kalgoorlie 6430 Tel: +61 8 9021 7200 Fax: +61 8 9021 7277 Bangkok Office: Unit 1808, 2 Pacific Place, Sukhumvit Road, Sukhumvit Bangkok Tel : +66 0 2653 0258 Fax : +66 0 2653 0258 reception@matsa.com.au www.matsa.com.au P a g e | 1

P a g e | 1

Matsa will continue discussions although it should be emphasised that no formal off take agreement has yet been reached and all discussions have been informal in nature.

Paul Poli Executive Chairman Phone +61 8 9230 3555 Email reception@matsa.com.au Fax +61 8 9227 0370 Web www.matsa.com.au

ASX 1 November 2010

MATSA RESOURCES LIMITED

Page 2