MATSA RESOURCES LIMITED — Capital/Financing Update 2019

Oct 9, 2019

==> 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

10[th] October 2019

Commencement of Diamond Drilling

Red October

Highlights

• An anticipated 6 month programme of diamond drilling at Red October has commenced with an initial 13 hole underground programme occurring over the next 3 weeks

CORPORATE SUMMARY Executive Chairman

Paul Poli

Director

• The focus of this initial drilling programme is to identify extensions to high grade shoots to add to the current mine plan below the current workings, as well as testing for the next panel of mineralisation anticipated to be mined within the next 12 months

• An extensive exploration and resource definition programme will follow this initial programme aimed at providing a new resource contributing to the next production phase

Frank Sibbel

Director & Company Secretary

Andrew Chapman

Shares on Issue

216.93 million

Unlisted Options

~22 million @ $0.17 - $0.30

Top 20 shareholders

Hold 55.68%

Share Price on 9[th] October 2019

14.5 cents

Market Capitalisation

$31.45 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 1801, 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

Matsa Resources Limited

Matsa Resources Limited (“Matsa” or “the Company” ASX: MAT) is pleased to advise that an underground drilling programme has commenced at Red October aimed at providing grade control around the current production area and provide extensions to the existing resources through finding additional high grade mineralised shoots to contribute to the next phase of mining.

This initial phase is expected to be part of a much larger campaign over the next 6 months aimed at significantly increasing the gold resource at the Red October underground gold mine. The recent capital raising undertaken by the Company has allowed for planning to commence for a sizeable and comprehensive diamond drilling programme at Red October.

This first programme targets the Red October Shear Zone (ROSZ) North and consists of an initial 13 holes as follows:

1. The focus of the first eight holes is to get a better understanding and potential for the high grade shoots below the current workings and to test for additional high grade shoots to the north.

2. A further five holes will be drilled based on the results both visually and via assay results from the first eight holes in 1 above. Four of these holes will be infill or grade control holes. The last of these holes is a resource definition hole within the ROSZ.

It is expected that the results of this drilling programme will enable better planning for mine design and open additional areas for mining as part of the longer-term production aim.

==> picture [460 x 330] intentionally omitted <==

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

30g/t
30g/t
30g/t
30g/t
30g/t
30g/t
30g/t
----- End of picture text -----

Figure 1: Long Section view - mine workings, grade control block model ROSZ (>3g/t), planned drillholes

Page 2

Matsa Resources Limited

==> picture [460 x 231] intentionally omitted <==

Figure 2: Long Section view - zoomed in on grade control block model ROSZ (>3g/t), existing holes and planned drillholes

Executive Chairman Mr Paul Poli said “We are now underway in the next stage of underground exploration drilling at Red October. This is the start of a much larger exploration programme aimed at delineating new future mining areas and really opening Red October up. We saw previous drilling result in bonanza grades and we know that previous drilling by Saracen identified many gold targets ranging between 15g/t to 30g/t. If we can continue identifying areas with these high grades as per our last programme (refer ASX announcement dated 1 May 2019) it can only augur well for the next stage of production.”

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 3