MATSA RESOURCES LIMITED — Capital/Financing Update 2016

Aug 31, 2016

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Matsa Resources Limited
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LIMITED ABN 48 106 732 487

ASX Announcement

1[st] September 2016

Fortitude Deposit JORC 2012 Resource

Highlights

• Matsa Resources has had a detailed audit completed on the Fortitude mineral resource estimate which has confirmed the resource and as such can now be reported under the JORC 2012 Code

CORPORATE SUMMARY

Executive Chairman

Paul Poli

Director

• Accordingly the Fortitude Gold deposit within the Lake Carey Project is a JORC 2012 compliant resource of 385,300 Au

Frank Sibbel

Director & Company Secretary

Andrew Chapman

Shares on Issue

144.7 million

Unlisted Options

7.8 million @ $0.25 - $0.40

Top 20 shareholders

Hold 52.15%

Share Price on 31[st] August 2016

25 cents

Market Capitalisation

$36.18 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 achieved a JORC 2012 compliant resource estimate for the Fortitude Gold Deposit which forms part of the Lake Carey Gold Project.

A resource estimate for Fortitude was originally completed by Runge Limited (“RPM”) in February 2010 under instruction from the previous owners, Midas Resources Limited (“Midas”). Matsa appointed CSA Global Pty Ltd (“CSA Global”) to conduct an audit of that resource and bring the resource up to a JORC 2012 compliant level.

The Mineral Resource block model and data was imported into Surpac by CSA Global. A detailed audit of the mineral resource estimate was undertaken which included:

• Review of relevant input data

• Review of the geological interpretation

• Review of wireframe construction methods

• Analysis of basic statistics, composite extraction and high grade cuts

• Review of the grade estimation process, block model construction and other methodologies

• Confirmation of the reported Mineral Resource from the block model.

Results

As a result, CSA Global have confirmed the Fortitude Mineral Resource and is reported below in accordance with the 2012 JORC Code.

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

Type	Indicated	Inferred	Total
	Tonnes t Au g/t Au Ounces	Tonnes t Au g/t Au Ounces	Tonnes t Au g/t Au Ounces
Oxide Transitional Fresh	572,800 2.1 38,700 150,900 1.8 8,700 2,034,700 1.9 124,900	221,000 1.9 13,500 148,200 1.9 9,100 3,161,200 1.9 190,900	794,000 2.0 51,400 299,000 1.9 18,000 5,196,000 1.9 315,800
Total	2,758,000 1.9 172,000	3,530,000 1.9 213,300	6,289,000 1.9 385,300

Geology and Geological Interpretation

Gold mineralisation is associated within the Fortitude Shear Zone, a north-northwest striking D3 shear which extends the length of the Lake Carey project. Primary mineralisation is characterised by near vertical, sheeted quartz veins hosted within the Fortitude Shear (Figure 1). Vein intensity is highly indicative of mineralisation tenor, although more carbonate rich veining is much less prospective than quartz dominated veining. Veining is locally brecciated, or laminated in thicker units, but is generally massive. Sulphide minerals include pyrite +/- arsenopyrite. The occurrence of strong quartz veining with sulphide minerals, fuchsite or intense sericite alteration is indicative of better Au grades.

Secondary mineralisation is characterised by flat lying supergene lodes (Figure 2).

Drilling Techniques

Drilling supporting the Mineral Resource was predominantly Reverse Circulation (RC) with a minor number of diamond and aircore (AC) drill holes. The Mineral Resource estimate is based on assay data

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from 17 RC/diamond holes, 173 RC holes and 80 AC holes. AC holes represent 28% of the total drill holes used in the resource, and only 13% of the intersection metres used for the estimate.

Sampling Techniques

For RC drilling the 1 metre bulk samples were collected in plastic RC bags prior to being passed through a Jones riffle splitter. Diamond core was marked up and logged prior to being cut with half the core being submitted for analysis.

Sample Analysis Method

50% of the assays completed were by fire assay with a 50g charge. The remainder was completed by aqua regia analyses. ALS, Genalysis and Ultra Trace laboratories were used.

Estimation Methodology

The deposit was estimated by using Ordinary Kriging (OK) grade interpolation using Surpac software. The wireframes were applied as hard boundaries in the estimate.

The block dimensions used in the model were 12.5m NS by 5m EW by 5m vertical with sub-cells of 6.25m by 1.25m by 1.25m. A high grade cut of 30g/t Au was applied to supergene composites, while a high grade cut of 25g/t Au was applied to the shear hosted mineralisation composites used in the resource.

Bulk densities assigned to the model ranged from 2.0t/m[3] to 2.9t/m[3] based on weathering state and lithology.

Cut-off grades

Wireframe and geological modelling was prepared using a nominal 0.5g/t Au cut-off grade for primary, shear- hosted mineralisation and 0.3g/t Au cut-off for supergene mineralisation. The Mineral Resource has been reported at 1.0g/t Au cut-off and has been based on assumptions about economic cut-off grades for open pit mining from current mining operations in the region.

Mineral Resource Classification

The classification of Indicated and Inferred was made on the basis of continuity of structure and drill spacing. The Mineral Resource estimate appropriately reflects the view of the Competent Person.

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Figure 1: Fortitude Cross Section 6757050mN

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Figure 2: Fortitude Cross Section 6756450mN

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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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Appendix 1 - Matsa Resources Limited

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria	JORC Code explanation	Commentary	Commentary
Sampling	 Nature and quality of sampling (eg cut channels, random chips, or specific		Drilling was conducted by Aurora Gold Limited (Aurora) between 1998
techniques	specialised industry standard measurement tools appropriate to the		and 2002 and since October 2002 by Midas Resources Limited (Midas).
	minerals under investigation, such as down hole gamma sondes, or		Aurora drilled 560 holes (480 Air core (AC), 61 Reverse Circulation
	handheld XRF instruments, etc). These examples should not be taken as		(RC), 6 Diamond core (DD) and 13 RC/DD). Midas drilled 364 holes
	limiting the broad meaning of sampling.		(169 AC, 191 RC, 1 RAB, 3 DD).
	 Include reference to measures taken to ensure sample representivity and the		The sampling methodology is known for Midas drilling only.
	appropriate calibration of any measurement tools or systems used.		RC sampling procedures adopted by Midas varied pre- and post- 2005.
	 Aspects of the determination of mineralisation that are Material to the		Prior to 2005 (FTRC001 – FTRC153) 1m bulk samples were collected
	Public Report.		from the cyclone using plastic bags. A 5m composite was then
	 In cases where ‘industry standard’ work has been done this would be		collected in a calico bag using a metal scoop. Upon receiving assays,
	relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m		the plastic bags containing the bulk samples within the mineralised
	samples from which 3 kg was pulverised to produce a 30 g charge for fire		zones were routinely re-split using a Jones riffle splitter to obtain a 2-
	assay’). In other cases more explanation may be required, such as where		3kg sample (1/8thsplit) for submission.
	there is coarse gold that has inherent sampling problems. Unusual		Post 2005 drilling (FTRC154 – FTRC266) the bulk sample was collected
	commodities or mineralisation types (eg submarine nodules) may warrant		for 1m sample intervals in plastic bags, while sub-samples were
	disclosure of detailed information.		collected in calico bags at the time of drilling by splitting the bulk 1m
			sample through a Jones riffle splitter to get a 1/8thsplit.
			Sampling of AC cores – Drill cuttings were collected every metre in a
			plastic bag. 4m composite samples were collected by using a trowel or
			ridged plastic spear, and the approximate 2kg sample was and sent for
			analysis. Upon receipt of assays the bulk sample within each plastic
			bag in the mineralised zone was then re-sampled using on 1m
			intervals by scooping the sample from the bag.
			DD holes - Once the core was correctly matched, orientation marks
			were drawn onto the drill core and then propagated along the entire
			length. The core was then marked for sampling by the geologist, to
			either 1m length or by geological definitions. The core was cut
			lengthways in a manner topreserve the orientation line. Samplingof

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	Criteria	JORC Code explanation	Commentary	Commentary
				½ core was then completed. The orientation of the cut sample line
				with respect to the shear fabric was not recorded.
	Drilling	 Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast,		RC holes were completed using a standard face sampling hammer, and
	techniques	auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard		drill depth was on average 110m and up to 267m.
		tube, depth of diamond tails, face-sampling bit or other type, whether core		DD holes were completed to an average depth of 250m and up to
		is oriented and if so, by what method, etc).		450m. No information on core size is presently available.
				Core was oriented and metre marked prior to logging. Orientation
				method is not known.
				AC holes were drilled to an average depth of 55m and to a maximum
				of 119m.
	Drill sample	 Method of recording and assessing core and chip sample recoveries and		Actual recoveries from the RC and DD drilling were not provided.
	recovery	results assessed.
		 Measures taken to maximise sample recovery and ensure representative
		nature of the samples.
		 Whether a relationship exists between sample recovery and grade and
		whether sample bias may have occurred due to preferential loss/gain of
		fine/coarse material.
	Logging	 Whether core and chip samples have been geologically and geotechnically		All core, RC and AC chips were logged by either Aurora or Midas
		logged to a level of detail to support appropriate Mineral Resource		geologists. DD core has been wet and dry photographed after metre
		estimation, mining studies and metallurgical studies.		marking and orientation was completed.
		 Whether logging is qualitative or quantitative in nature. Core (or costean,		Qualitative geological logging was completed using a standard set of
		channel, etc) photography.		codes. These codes are considered suitable for use in defining and
		 The total length andpercentage of the relevant intersections logged.		modellingof the depositgeology.
	Sub-sampling	 If core, whether cut or sawn and whether quarter, half or all core taken.		Information is only available for the Midas drilling
	techniques	 If non-core, whether riffled, tube sampled, rotary split, etc and whether		For DD, ½ core is sampled.
	and sample	sampled wet or dry.		For RC drilling, mineralised sample splits from the 1m samples are
	preparation	 For all sample types, the nature, quality and appropriateness of the sample		obtained by Jones riffle splitter to obtain a 2 – 3kg sample for
		preparation technique.		submission.
		 Quality control procedures adopted for all sub-sampling stages to maximise		Wetness information has not been captured in the database.
		representivity of samples.		For AC drilling mineralised sample splits are obtained by metal scoop
		 Measures taken to ensure that the sampling is representative of the in situ		from the 1m sample bags. The size of the sample is not recorded but is
		material collected, including for instance results for field duplicate/second-		assumed to be similar to the RC sampling.
		half sampling.		The majority of sampling completed by Midas was submitted to either
				Ultra Trace or Genalysis laboratories in Perth. Both laboratories abide
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Criteria	JORC Code explanation	Commentary	Commentary
	 Whether sample sizes are appropriate to the grain size of the material being		by a generic sample preparation process where drill samples are
	sampled.		initially dried in an oven at temperatures of approximately 105°C,
			before crushing using a jaw crusher to achieve a product of a
			maximum 3mm size. Samples exceeding 3kg were split to obtain a
			volume that would fit in the LM5 pulveriser bowl with single pass. The
			crushed sample is then pulverised for a specified time in order to
			achieve a nominal 80% to 95% passing 75 micron size.
			A 250g sub-sample was then collected and placed in a pulp envelope
			to be used for analysis.
			The sample preparation technique is considered to be appropriate for
			gold assays.
			The nominal 1/8thsplit providing a 2kg to 3kg sample for RC would
			generally be considered an appropriate sample size for this type of
			deposit. Some scatter is evident in the duplicate sample data that may
			reflect an inadequate sample size due to inherent variability of the
			mineralisation.
			Half-core sampling is accepted routine procedure for sampling of
			diamond core in this style of deposit for gold analysis. No record of
			duplicate analysis from diamond core has been recorded.
Quality of	 The nature, quality and appropriateness of the assaying and laboratory		ALS laboratories were the principal provider of assay services during
assay data and	procedures used and whether the technique is considered partial or total.		the Aurora phase of drilling, while Genalysis laboratories also provided
laboratory	 For geophysical tools, spectrometers, handheld XRF instruments, etc, the		assay services. Analysis was conducted using either Fire Assay or Aqua
tests	parameters used in determining the analysis including instrument make and		Regia, with both methods using a 50g charge. Genalysis also
	model, reading times, calibrations factors applied and their derivation, etc.		conducted both Fire Assay and Aqua Regia analysis, using a 25g charge
	 Nature of quality control procedures adopted (eg standards, blanks,		for the Fire Assay, and a 10g charge for Aqua Regia.
	duplicates, external laboratory checks) and whether acceptable levels of		Ultra Trace laboratories was the major provider of assay services to
	accuracy (ie lack of bias) and precision have been established.		Midas. Assay methods were either Fire Assay or Aqua Regia, with 40g
			charge used in both methods.
			Fire Assay and Aqua Regia analysis methods for gold are appropriate
			gold analysis methods. Roughly 50% of assays were completed by Fire
			Assay methods. No analysis of potential bias between methods has
			been conducted.
			QAQC data is available for Midas drillingonly.

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	Criteria	JORC Code explanation	Commentary	Commentary
				Midas QAQC protocols involves submission of standards, blanks, and
				field duplicate samples. Laboratory repeat analyses have also been
				supplied to Runge and a large number of pulp samples were also
				submitted to a secondary laboratory for independent checks.
				In general all standards returned acceptable results near the expected
				value, however laboratory standard ST06 displayed a bias to under-
				report against the expected value.
				Whilst no bias is evident in the repeat analyses, duplicate samples or
				the inter- laboratory checks, the repeatability is poor, As yet, no
				investigation into the causes of this poor repeatability has been
				undertaken.
	Verification of	 The verification of significant intersections by either independent or		1,206 pulp samples were submitted to a secondary laboratory for
	sampling and	alternative company personnel.		independent checks.
	assaying	 The use of twinned holes.		Six out of the 80AC holes in the resource area have been twinned by
		 Documentation of primary data, data entry procedures, data verification,		RC holes. Intercepts and grades from both hole types are similar, with
		data storage (physical and electronic) protocols.		the AC having slightly lower mean grade.
		 Discuss any adjustment to assay data.		Data re-compilation by Midas Resources Limited upon their
				acquisition of the project involved sourcing all historic laboratory
				assay reports and generation of a project-specific relational database.
				Original data entry and verification protocols are unknown.
				Runge reviewed a selection of laboratory assay files compared to the
				project database and no errors were found.
				No adjustments to assaydata are recorded.
	Location of	 Accuracy and quality of surveys used to locate drill holes (collar and down-		All drill holes used in the resource estimate have been accurately
	data points	hole surveys), trenches, mine workings and other locations used in Mineral		surveyed by contract surveyors using an RTK GPS instrument.
		Resource estimation.		Downhole surveys have been conducted by the drilling company at
		 Specification of the grid system used.		regular intervals using either a single shot or a gyro tool for RC and DD
		 Quality and adequacy of topographic control.		holes. Downhole survey of AC holes was not done.
				The AMG84_51 grid system has been used for all drilling.
				A high accuracy (method unknown)topographic DTM has been used.
	Data spacing	 Data spacing for reporting of Exploration Results.		Drill spacing of approximately 25m (along strike) by 25m (on section)
	and	 Whether the data spacing and distribution is sufficient to establish the		was considered adequate to establish both geological and grade
	distribution	degree of geological and grade continuity appropriate for the Mineral		continuity. Towards the edges of the deposit the drill spacing widens
				to either 50m(alongstrike)by25m(on section)or 50m(alongstrike)
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Criteria	JORC Code explanation	Commentary	Commentary
	Resource and Ore Reserve estimation procedure(s) and classifications		by 50m (on section). This spacing has been sufficient to allow
	applied.		delineation of the narrow lodes and supergene domains.
	 Whether sample compositing has been applied.		Mineralised intercepts were composited to 1m length on the basis of a
			sample length analysis of the database.
Orientation of	 Whether the orientation of sampling achieves unbiased sampling of possible		The orientation of bulk of the drilling is approximately perpendicular
data in	structures and the extent to which this is known, considering the deposit		to the strike of the steeply dipping mineralisation and is unlikely to
relation to	type.		have introduced any significant sampling bias. Some holes have been
geological	 If the relationship between the drilling orientation and the orientation of key		drilled down dip, however these holes were excluded from the
structure	mineralised structures is considered to have introduced a sampling bias, this		resource estimate.
	should be assessed and reported if material.
Sample	 The measures taken to ensure sample security.		Sample security measures are unknown.
security
Audits or	 The results of any audits or reviews of sampling techniques and data.		Not available.
reviews

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

	Criteria	JORC Code explanation	Commentary	Commentary
	Mineral	 Type, reference name/number, location and ownership including		The project containing the Fortitude gold deposit comprises 6 granted
	tenement and	agreements or material issues with third parties such as joint ventures,		Mining leases, 5 Exploration licenses and 1 Prospecting license.
	land tenure	partnerships, overriding royalties, native title interests, historical sites,		All tenements are granted and can be transferred without any issues.
	status	wilderness or national park and environmental settings.		The project is located on Vacant Crown Land.
		 The security of the tenure held at the time of reporting along with any		All tenements except for P39/5293 predate requirement for Heritage
		known impediments to obtaining a licence to operate in the area.		agreements.
	Exploration	 Acknowledgment and appraisal of exploration by other parties.		Exploration drilling was conducted by Aurora Gold Limited (Aurora)
	done by other			between October 1998 and February 2002.
	parties			Midas Resources Limited (Midas) acquired the project from Aurora in
				October 2002. Midas has drilled in excess of 380 drill holes both in and
				around Fortitude to test for extensions to the Fortitude system.
	Geology	 Deposit type, geological setting and style of mineralisation.		The Lake Carey Project of which the Fortitude deposit forms a part is
				situated on the Fortitude Shear,which alongwith the Bindah Shear
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Criteria	JORC Code explanation	Commentary	Commentary
			located just west, forms a narrow corridor of ESE trending greenstones
			which are bounded to the east and west by granitoid terrane. As the
			Fortitude-Bindah system extends north the greenstone pile thickens
			and lies host to numerous large gold mineralisation systems. To the
			south the Fortitude-Bindah system appears to attenuate and
			eventually terminate against granitoids of the Eastern Gneiss Terrane.
			The greenstone sequence located within the Fortitude tenement is
			comprised of highly foliated felsic to intermediate volcanic rocks with
			relatively undeformed mafic volcanic units to the east and west in
			contact with granite. The whole greenstone package varies in width
			from <2km at the southern end of the tenement to approximately
			8km at the northern end. Major north to north-northwest trending
			shear zones occur within the greenstones and the granite to the east,
			in particular along geological contacts. The main structural features
			are the Fortitude Shear along the eastern intermediate-mafic contact
			and the more north- westerly trending Bindah Shear, along the
			western intermediate-mafic contact
			Gold mineralisation is typically associated with the Fortitude Shear
			Zone, a north-northeast striking dextral shear which extends the
			length of the Lake Carey tenement. To the north, it horsetails into the
			Wilga fault system and in the south it continues into the Kirgella
			Gneissic Dome. Gold mineralization is also associated with the Bindah
			Shear, particularly at the old Bindah Mine to the southwest.
			The Fortitude deposit is hosted within sheared felsic to intermediate
			volcanic rocks and minor ultra mafics, and is covered by up to 10m of
			lacustrine clays and aeolian sands surrounding Lake Carey. Gold
			mineralisation occurs within a steeply dipping shear system, and is
			associated with pervasive carbonate-sericite-silica alteration along
			with pyrite-arsenopyrite mineralisation. Remobilisation of gold has
			also resulted in the formation of flat lying zones of supergene
			mineralisation within the regolith. Weathering extends to a depth of
			60-80m.

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Criteria	JORC Code explanation	Commentary	Commentary
Drill hole	 A summary of all information material to the understanding of the		Not reporting exploration results.
Information	exploration results including a tabulation of the following information for all		The company is reporting a Mineral Resource based on historical
	Material drill holes:		drilling information. A summary of the drilling information has been
	o easting and northing of the drill hole collar		provided in Section 1.
	o elevation or RL (Reduced Level – elevation above sea level in metres) of
	the drill hole collar
	o dip and azimuth of the hole
	o down hole length and interception depth
	o hole length.
	 If the exclusion of this information is justified on the basis that the
	information is not Material and this exclusion does not detract from the
	understanding of the report, the Competent Person should clearly explain
	why this is the case.
Data	 In reporting Exploration Results, weighting averaging techniques, maximum		Not reporting exploration results.
aggregation	and/or minimum grade truncations (eg cutting of high grades) and cut-off		No metal equivalent values have been used.
methods	grades are usually Material and should be stated.
	 Where aggregate intercepts incorporate short lengths of high grade results
	and longer lengths of low grade results, the procedure used for such
	aggregation should be stated and some typical examples of such
	aggregations should be shown in detail.
	 The assumptions used for any reporting of metal equivalent values should
	be clearly stated.
Relationship	 These relationships are particularly important in the reporting of Exploration		Mineralisation styles tend to change from narrow vertical lodes in
between	Results.		the north, to shallow dipping supergene-hypogene mineralisation in
mineralisation	 If the geometry of the mineralisation with respect to the drill hole angle is		the south. The shear hosted lode mineralisation strikes at roughly
widths and	known, its nature should be reported.		between 330° and 350° and is vertical to very steeply dipping to the
intercept	 If it is not known and only the down hole lengths are reported, there should		east north-east. The supergene mineralisation is somewhat more
lengths	be a clear statement to this effect (e.g. ‘down hole length, true width not		variable with strike roughly between 330° and north - south and the
	known’).		lenses are generally flat lying or shallow dipping to the east north-
			east.
			The orientation of the drilling is approximately perpendicular to the
			strike and dip of the shear hosted mineralisation and is unlikely to
			have introduced anysignificant samplingbias.

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Criteria	JORC Code explanation	Commentary	Commentary
Diagrams	 Appropriate maps and sections (with scales) and tabulations of intercepts		Not applicable.
	should be included for any significant discovery being reported These should
	include, but not be limited to a plan view of drill hole collar locations and
	appropriate sectional views.
Balanced	 Where comprehensive reporting of all Exploration Results is not practicable,		Not applicable.
reporting	representative reporting of both low and high grades and/or widths should
	bepracticed to avoid misleading reporting of Exploration Results.
Other	 Other exploration data, if meaningful and material, should be reported		Not applicable.
substantive	including (but not limited to): geological observations; geophysical survey
exploration	results; geochemical survey results; bulk samples – size and method of
data	treatment; metallurgical test results; bulk density, groundwater,
	geotechnical and rock characteristics; potential deleterious or
	contaminating substances.
Further work	 The nature and scale of planned further work (eg tests for lateral extensions		Matsa has acquired Exploration License Applications immediately
	or depth extensions or large-scale step-out drilling).		north and east of the currently defined Fortitude gold deposit. Drilling
	 Diagrams clearly highlighting the areas of possible extensions, including the		is planned to test for extensions to the Fortitude deposit at the
	main geological interpretations and future drilling areas, provided this		Fortitude North and Fortitude South targets as described in the ASX
	information is not commercially sensitive.		release dated 23rdAugust 2016.

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Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)

	Criteria	JORC Code explanation	Commentary	Commentary
	Database	 Measures taken to ensure that data has not been corrupted by, for example,		Midas re-constructed the assay table using original laboratory data
	integrity	transcription or keying errors, between its initial collection and its use for		files when it became owner of the tenement.
		Mineral Resource estimation purposes.		To check the validity of some of the assays Runge reviewed a selection
		 Data validation procedures used.		of laboratory assay files and compared them against the project
				database. No errors were found.
				Runge performed initial data audits in Surpac. These checks included:
				Validation that downhole survey or assay values do not extend beyond
				hole depth quoted in the collar file; Hole dips within 0° and -90°; and
				checks for duplicate records. All data loaded correctly into the Runge
				project database.
				Where the downhole survey depth did not correspond with the end of
				hole depth, Runge copied the last measured survey record to the end
				of hole depth. 105 surveyrecords were inserted in this manner.
	Site visits	 Comment on any site visits undertaken by the Competent Person and the		A site visit was undertaken by Runge’s Competent Person (CP) on 19th
		outcome of those visits.		of January 2010. The CP was satisfied that the drill hole collars
		 If no site visits have been undertaken indicate why this is the case.		coordinates in the database accurately reflect the actual holes on the
				ground based on results of hand held GPS collar coordinate and
				relative hole position checks.
				A site visit isplanned for a CP aspart of a future MRE update.
	Geological	 Confidence in (or conversely, the uncertainty of) the geological		DD drilling confirms the shear hosted style of mineralisation in the
	interpretation	interpretation of the mineral deposit.		north of the project area, while the shallow supergene mineralisation
		 Nature of the data used and of any assumptions made.		to the south is well defined by RC and AC holes.
		 The effect, if any, of alternative interpretations on Mineral Resource		An alternate mineralisation interpretation could be suggested for the
		estimation.		zone between 6,756,750mN and 6,756,950mN where some ambiguity
		 The use of geology in guiding and controlling Mineral Resource estimation.		exists between the sub-horizontal supergene and vertical shear hosted
		 The factors affecting continuity both of grade and geology.		mineralisation styles. Further drilling in this region would be required
				to confirm the current interpretation.
				Runge interpreted and constructed wireframes of the ultramafic and
				mafic lithologies. The ultramafic forms narrow steeply dipping zones
				within which the shearingis focussed.
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Criteria	JORC Code explanation	Commentary	Commentary
			Regolith wireframes were created by Runge using the interpreted
			weathering strings as supplied by Midas. Wireframes for the bottom
			of complete oxidation, top of saprock, and the top of fresh rock were
			generated.
			Runge’s resource modelling is within the interpreted gold grade
			envelopes, using a nominal 0.5g/t Au cut-off grade for the shear
			hosted mineralisation, and a nominal cut-off for the supergene of
			0.3g/t Au. These cut-offs were selected as they represent inflections in
			the cumulative population distribution and enabled the mineralisation
			to be captured in a coherent envelope, which agreed with the
			geological model.
Dimensions	 The extent and variability of the Mineral Resource expressed as length		The Fortitude Au deposit extends for approximately 1.5km in a NNW-
	(along strike or otherwise), plan width, and depth below surface to the		SSE direction. The mineralisation extends from just below surface to a
	upper and lower limits of the Mineral Resource.		depth of at least 340m below the surface, while modelling has been
			extended to a maximum of 400m below surface. The individual high
			grade shear hosted lodes are upto 20m wide.

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• Estimation and  The nature and appropriateness of the estimation technique(s) applied and modelling key assumptions, including treatment of extreme grade values, domaining, techniques interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

• The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.

• The assumptions made regarding recovery of by-products.

• Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation).

• In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

• Any assumptions behind modelling of selective mining units.

• Any assumptions about correlation between variables.

• Description of how the geological interpretation was used to control the resource estimates.

• Discussion of basis for using or not using grade cutting or capping.

• The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.

• Statistical analysis was performed on the supergene and shear hosted mineralisation domains respectively using Supervisor software. Based on population histograms and the coefficient of variation statistic it was determined that a high grade cut of 30g/t Au (99[th] percentile) was appropriate for the supergene domain, while a high grade cut of 25g/t Au (99.5[th] percentile) was more appropriate for the shear hosted mineralisation

• The data from the main domains for both supergene (Object 9) and shear hosted mineralisation (Object 101) were each used for variogram modelling.

• Using parameters derived from modelled variograms, Ordinary Kriging was used to estimate average block grades in 4 passes using Surpac software. The wireframes were applied as hard boundaries in the estimate.

• Runge completed an Inverse Distance (ID[2] ) check model and found the OK estimate to be within 1% of the ID model for Au ounces.

• Previous resource estimates were reviewed for comparison by Runge but not factored into the current resource estimate.

• By-product recovery was not included.

• No significant deleterious elements were evident in the assay data.

• Parent block size of 12.5m NS by 5m EW by 5m vertical with sub- cells of 6.25m by 1.25m by 1.25m. The parent block size was selected on the basis of 50% of the average drill hole spacing

• Ordinary Kriging (OK) grade interpolation with an oriented ‘ellipsoid’ search neighbourhood was used to estimate Au in the block model. Search ellipsoid was oriented to the average strike, dip and plunge of the mineralised zones. A first and second pass search radius of 50m and 100m respectively was used with a minimum sample number of 10 and a maximum sample number of 40. The search radius was increased to 200m and 400m for the third and fourth passes respectively. The minimum number of samples was set to 4 for the third pass and 2 for the fourth pass. In passes 1, 2 and 3 a restriction of 5 samples per drill hole was applied, increased to 10 for pass 4. Approximately 54% of the blocks were filled in the first two passes, and 99% in the first three. Cell discretization was 3 (X) by 4 (Y) by 3 (Z).

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	Criteria	JORC Code explanation	Commentary	Commentary
				The geological model was used to check the grade model and assign
				lithological codes, which along with the weathering surfaces were
				used to assign bulk density values.
				Validation was conducted on both the supergene and shear hosted
				domains by pod, elevation and northing. Validation plots showed good
				correlation between the composite grades and the block model
				grades.
				A Uniform Conditioning (UC) estimate was also prepared by Runge. UC
				is a selective technique that adopts similar principles to MIK. The UC
				estimate has reported lower tonnes at a highergrade.
	Moisture	 Whether the tonnages are estimated on a dry basis or with natural		Tonnages were estimated on a dry in situ basis. No moisture values
		moisture, and the method of determination of the moisture content.		were reviewed.
	Cut-off	 The basis of the adopted cut-off grade(s) or quality parameters applied.		The Mineral Resource has been reported at 1.0g/t Au cut-off and has
	parameters			been based on assumptions about economic cut-off grades for open
				pit miningfrom current miningoperations in the region.
	Mining factors	 Assumptions made regarding possible mining methods, minimum mining		It was assumed that the deposit could potentially be mined using open
	or assumptions	dimensions and internal (or, if applicable, external) mining dilution. It is		pit methods.
		always necessary as part of the process of determining reasonable		No assumptions have been made to date regarding minimum mining
		prospects for eventual economic extraction to consider potential mining		widths or dilution.
		methods, but the assumptions made regarding mining methods and
		parameters when estimating Mineral Resources may not always be
		rigorous. Where this is the case, this should be reported with an explanation
		of the basis of the mining assumptions made.
	Metallurgical	 The basis for assumptions or predictions regarding metallurgical		No assumptions have been made regarding metallurgy.
	factors or	amenability. It is always necessary as part of the process of determining		Mining of this gold deposit type is common in the area. The
	assumptions	reasonable prospects for eventual economic extraction to consider potential		metallurgy, processing and waste management of these deposits is
		metallurgical methods, but the assumptions regarding metallurgical		typically simple and well-understood.
		treatment processes and parameters made when reporting Mineral		Results of preliminary metallurgical test work conducted by Aurora in
		Resources may not always be rigorous. Where this is the case, this should be		2001 suggests that the metallurgical characteristics of the Fortitude
		reported with an explanation of the basis of the metallurgical assumptions		deposit are favourable to processing by conventional CIL technology.
		made.
	Environmental	 Assumptions made regarding possible waste and process residue disposal		No assumptions regarding possible waste and process residue disposal
	factors or	options. It is always necessary as part of the process of determining		options have been made. It is assumed that such disposal will not
	assumptions	reasonable prospects for eventual economic extraction to consider the		present a significant hurdle to exploitation of the deposit and that any
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Criteria	JORC Code explanation	Commentary	Commentary
	potential environmental impacts of the mining and processing operation.		disposal and potential environmental impacts would be correctly
	While at this stage the determination of potential environmental impacts,		managed as required under the regulatory permitting conditions.
	particularly for a greenfields project, may not always be well advanced, the
	status of early consideration of these potential environmental impacts
	should be reported. Where these aspects have not been considered this
	should be reported with an explanation of the environmental assumptions
	made.
Bulk density	 Whether assumed or determined. If assumed, the basis for the assumptions.		The in situ bulk density assignment was based primarily on results
	If determined, the method used, whether wet or dry, the frequency of the		obtained from 30 samples tested by Aurora Gold Limited in 2001. Test
	measurements, the nature, size and representativeness of the samples.		work was completed on drill core using the Water Immersion method.
	 The bulk density for bulk material must have been measured by methods		Where no data was available the density of the material was assumed
	that adequately account for void spaces (vugs, porosity, etc), moisture and		based on published information for these rock types.
	differences between rock and alteration zones within the deposit.		Bulk densities used ranged from 2.0t/m3to 2.9t/m3based on
	 Discuss assumptions for bulk density estimates used in the evaluation		weathering state and lithology.
	process of the different materials.
Classification	 The basis for the classification of the Mineral Resources into varying		Classification of the Mineral Resource estimates was carried out taking
	confidence categories.		into account the geological understanding of the deposit, quality of
	 Whether appropriate account has been taken of all relevant factors (ie		the samples, density data and drill hole spacing.
	relative confidence in tonnage/grade estimations, reliability of input data,		The mineralised trends show moderate continuity. A portion of the
	confidence in continuity of geology and metal values, quality, quantity and		drilling is AC and, based on twin RC drilling analysis, may result in
	distribution of the data).		under estimation of in situ resources. The lack of QAQC data for
	 Whether the result appropriately reflects the Competent Person’s view of		Aurora drilling, and poor repeatability in results from Midas drilling
	the deposit.		pose some risk to the estimate.
			The classification of Indicated and Inferred was made on the basis of
			continuity of structure and drill spacing.
			The Mineral Resource estimate appropriately reflects the view of the
			Competent Person.
Audits or	 The results of any audits or reviews of Mineral Resource estimates.		Internal audits were completed by Runge which verified the technical
reviews			inputs, methodology, parameters and results of the estimate.
			CSA Global completed an audit of the resource estimate which verified
			the methodology, parameters and results of the estimate.

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Criteria	JORC Code explanation	Commentary	Commentary
Discussion of	 Where appropriate a statement of the relative accuracy and confidence		The relative accuracy of the Mineral Resource estimate is reflected in
relative	level in the Mineral Resource estimate using an approach or procedure		the reporting of the Mineral Resource as per the guidelines of the
accuracy/	deemed appropriate by the Competent Person. For example, the application		2012 JORC Code.
confidence	of statistical or geostatistical procedures to quantify the relative accuracy of		The Mineral Resource statement relates to global estimates of tonnes
	the resource within stated confidence limits, or, if such an approach is not		and grade.
	deemed appropriate, a qualitative discussion of the factors that could affect		The deposit has not been, and is not currently being mined.
	the relative accuracy and confidence of the estimate.
	 The statement should specify whether it relates to global or local estimates,
	and, if local, state the relevant tonnages, which should be relevant to
	technical and economic evaluation. Documentation should include
	assumptions made and the procedures used.
	 These statements of relative accuracy and confidence of the estimate should
	be compared withproduction data, where available.

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