MATSA RESOURCES LIMITED — Capital/Financing Update 2017

Jul 24, 2017

==> picture [595 x 56] intentionally omitted <==

----- Start of picture text -----

Matsa Resources Limited
----- End of picture text -----

==> picture [132 x 117] intentionally omitted <==

LIMITED ABN 48 106 732 487

ASX Announcement

25[th] July 2017

Mining Commences Fortitude Gold Project

Highlights

• Mining has commenced at the Fortitude Gold Project

• Construction of office blocks, workshops and sediment ponds has been completed

• Projected revenue and costs remain in accordance with the Trial Mining Study showing the trial mining operation is economically viable at a gold price of A$1,600

• Cash surplus $5.2M over 8 months

• Total production 185,000t @ 2.2g/t (12,100 oz)

CORPORATE SUMMARY

Executive Chairman

Paul Poli

Director

Frank Sibbel

Director & Company Secretary

Andrew Chapman

Shares on Issue

144.7 million

Unlisted Options

17.02 million @ $0.25 - $0.30

Top 20 shareholders

Hold 54.64%

Share Price on 24 July 2017

20 cents

Market Capitalisation

$28.94 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

==> picture [596 x 60] intentionally omitted <==

----- Start of picture text -----

Matsa Resources Limited
----- End of picture text -----

Matsa Resources Limited (“Matsa” or “the Company” ASX: MAT) is pleased to advise that mining has now officially commenced at the Fortitude Gold Project in accordance with the Trial Mining Study (MAT announcement to ASX dated 22 February 2017).

Since late June the mining contractor, Quadrio Earthmoving Pty Ltd (QEM) was mobilised to site and site construction including offices, workshops, removal of topsoil and sediment ponds are now complete. The bore field has been commissioned and mine dewatering commenced. Topsoil has been removed and stockpiled from the north pit, offices, workshop and waste dump areas.

Grade control was completed and assays were received for the natural surface on all three trial pit areas. Ore will be trucked and processed at the nearby Sunrise Dam Gold Mine (owned by AngloGold Ashanti Australia Limited) only 35km north of Fortitude where a ore purchase agreement has been entered into for the entire production of the Trial Mine.

Mining has commenced in the North Pit on single shift basis with double shifts expected to commence on 31[st] July.

Executive Chairman Mr Paul Poli said “It is pleasing to announce that mining has commenced at the Fortitude Gold Project which is Matsa’s first production activity. We expect that the revenue and cost projections released in the Trial Mining Study in February 2017 should not have any material changes.”

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

Page 2

==> picture [596 x 60] intentionally omitted <==

----- Start of picture text -----

Matsa Resources Limited
----- End of picture text -----

==> picture [452 x 328] intentionally omitted <==

Figure 1: Overburden Mining in the North Pit

==> picture [452 x 319] intentionally omitted <==

Figure 2: Sediment Ponds

Page 3

==> picture [596 x 60] intentionally omitted <==

----- Start of picture text -----

Matsa Resources Limited
----- End of picture text -----

==> picture [482 x 313] intentionally omitted <==

Figure 3: Ore trucks being part of the mining fleet at Fortitude

==> picture [484 x 334] intentionally omitted <==

Figure 4: Overburden Mining in the North Pit

Page 4