MATSA RESOURCES LIMITED — Capital/Financing Update 2016

Oct 3, 2016

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LIMITED ABN 48 106 732 487

ASX Announcement

4[rd] October 2016

Settlement of Lake Carey Acquisition

Highlights

• Matsa Resources has now settled the acquisition of the Lake Carey Project and confirms that it now owns 100% of the project

• Feasibility and development studies are continuing with resource definition, metallurgical, geotechnical and water bore drilling underway.

CORPORATE SUMMARY

Executive Chairman

Paul Poli

Director

Frank Sibbel

• Exploration drilling to commence with several prospective targets already identified

Director & Company Secretary

Andrew Chapman

Shares on Issue

144.7 million

Unlisted Options

6.90 million @ $0.25 - $0.30

Top 20 shareholders

Hold 54.66%

Share Price on 4 October 2016

22.5 cents

Market Capitalisation

$32.55 million

Head Office: Suite 11, 139 Newcastle Street, Perth Western Australia 6000 Tel : +61 8 9230 3555 Fax: +61 8 9227 0370 Bangkok Office: Unit 1808, Pacific Place 2, 142 Sukhumvit Road, Klongtoey, Bangkok 10110 Tel : +66 0 2653 0258 Fax : +66 0 2653 0258 reception@matsa.com.au www.matsa.com.au

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Matsa is pleased to advise that it has finalised the acquisition of the Lake Carey Gold Project from the receivers of Fortitude Gold Pty Ltd. The project package includes the Lake Carey, Phantom Well and Wilga projects which contain the Fortitude gold deposit. The project has been acquired on a 100% basis.

Matsa originally advised the market of the acquisition on 21 July 2016 whereby it paid a $250,000 deposit on signing of the purchase agreement. All terms and conditions have now been met and the final payment of $1.5M (plus GST) was paid on 3 October 2016 and the tenements are being transferred to Matsa.

The Lake Carey project in conjunction with the recently purchased two additional Exploration Licence Applications (covering an area of ~38km[2] and located immediately north and east of the Fortitude gold deposit) in the highly prospective Laverton Tectonic Zone now provides the Company a project footprint of approximately 151km[2] .

As previously announce by Matsa on 1[st] September 2016 the Fortitude gold deposit contains a global JORC 2012 Indicated and Inferred Mineral Resource Estimate of 6,289,000t @ 1.9g/t for 385,300 ounces. There has been no material change in the Resource figures since that anouncment.

Fortitude Gold Deposit Mineral Resource Estimate (1g/t Au Cut-off)

Type	Indicated	Inferred	Total
	TonnestAug/tAuOunces	TonnestAug/tAuOunces	TonnestAug/tAuOunces
OxideTransitionalFresh	572,8002.138,700150,9001.88,7002,034,7001.9124,900	221,0001.913,500148,2001.99,1003,161,2001.9190,900	794,0002.051,400299,0001.918,0005,196,0001.9315,800
Total	2,758,0001.9172,000	3,530,0001.9213,300	6,289,0001.9385,300

Matsa Resources is currently carrying out a ~1,500m diamond drilling program which will provide sufficient data and samples to upgrade any Inferred Mineral Resources within the proposed mining area to Indicated, as well as provide metallurgical and geotechnical information required for mine planning and submission of a mining proposal to the DMP. Drilling information obtained from this program will assist Matsa to finalise a toll milling/ore purchase agreement.

On completion of this drilling program the Resource figures will be updated as soon as possible.

Other ongoing site works concurrently underway include:

• Environmental studies, flaura and fauna

• Heritage studies

• Water bore drilling and hydrology

• Metalurgical Studies

• Mining studies and open pit optimization.

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Exploration

Mineralisation at Fortitude is hosted in steeply dipping lodes hosted within the Fortitude shear (Figure 1). An exploration program is to commence to test other shallow structural targets along the Fortitude and Bindah Shear Zones which continue towards the Sunrise Dam and Red October Mines.

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Figure 1: Fortitude Cross Section 6757050mN

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

Competent Person Statement

The information in this Report that relates to Mineral Resources is based on, and fairly represents, information reviewed by Mr Aaron Green, a Competent Person, who is a Member of the Australian Institute of Geoscientists (MAIG). Mr Green is a full-time employee of CSA Global Pty Ltd, an independent consulting company. Mr Green has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity 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’. Mr Green consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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